Slide 1: 2022 Half Year Results
2022 Half Year Results Ended 31 March 2022 24 May 2022 Commercial in confidence 1 Disclosure Statement TechnologyOne Ltd Half Year Presentation – 24 May 2022 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2022 Half Year results. These slides have been lodged w
Slide 2: Agenda
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 3 Our SaaS business continues to grow strongly SaaS ARR $225.1m up 44% 4 2
Slide 3: SaaS and Continuing Business
714 Enterprise customers on TechnologyOne SaaS up 24% from 576 enterprise customers pcp 5 SaaS and Continuing Business Revenue of $169.5m, up 21% This is now 97%+ of our business 6 3
Slide 4: Record H1 Profit
Record H1 Profit Net Profit After Tax of $33.2m up 18% Net Profit Before Tax of $42.6m up 14% Note: Our half year results are not indicative of the full year 7 SaaS continues to drive our growth Outlook for FY22 is strong Discussed later in more detail 8 4
Slide 5: Interim Dividend up 10%
Over the last 35 years the business has continued to grow strongly during challenging economic environments 9 Interim Dividend up 10% We remain confident about the outlook for the full year Half 1 4.20 cps, up 10% (60% franked1) Up H1 Dividend last 10 years Up 10% Up 10% Payout Up 10% ratio of Up Up
Slide 6: H1 Results Summary
H1 Results Summary H1 FY22 H1 FY21 VAR VAR #039;000 #039;000 #039;000 % Revenue – SaaS & Continuing Business 169,480 140,579 28,901 21% In line with expectations. SaaS Fees Recognised1 96,249 68,818 27,431 40% Our SaaS business continues to grow strongly. Annual Licence Fees 1 39,084 41,410 (2,327) (6%) As e
Slide 7: Scientia Expands our Enterprise Solution; Balance Sheet Strong
Scientia Expands our Enterprise Solution for OneEducation Acquired at the end of 2021 A strategic product - mission critical functionality Provides deeper functionality in our Higher Education vertical market Higher Education is a key global vertical market In a key growth region - UK De
Slide 8: Cash Flow
H1 FY22 H1 FY21 Var Var Cash Flow #039;000 #039;000 #039;000 % Profit Before Tax 42,569 37,289 5,280 14% Depreciation & Amortisation1 17,870 11,792 6,078 52% Cash Flow Generation of $1.6m, up $4.6m Share based payments and other non-cash items 2,564 2,514 50 2% Vs NPAT of $33.2m Changes in working capital:
Slide 9: Profit margin to improve to 35%; H1 FY22 Profit by Segment
Profit margin to improve to 35% in the next few years FY21 Profit Before Tax Margin was 31% Driven by the significant 31% economies of scale 29% 27% from our single instance global SaaS ERP 22% solution 21% 21% 21% 21% 19% 18% 17% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY20 Profit Be
Slide 10: Results Analysis and Key Metrics, H1 FY22
Results Analysis and Key Metrics, H1 FY22 H1 FY22 H1 FY21 Var H1 FY22 H1 FY21 Var $’000 $’000 % $’000 $’000 % Revenue excl interest 172,362 144,537 19% EPS (cents) 10.29 8.80 17% Expenses (excl R&D, interest, D & A) 91,775 78,697 17% Dividend (cents per share) EBITDAR 80,587 65,840 22% Interim divid
Slide 11: TechnologyOne Global SaaS ERP Solution
Continuing strong demand Transforming business, TechnologyOne Global making life SaaS ERP Solution simple 21 Total ERP Solution Human Business Student Performance Property Strategic Asset Syllabus Plus Financials Resources Analytics Management Planning & Rating Management Enterprise & Payroll Enterp
Slide 12: Our SaaS business is growing strongly
Our SaaS business is growing strongly SaaS ARR is growing at 44% One global Massive 2 releases each year 8 active data Defence-in- “From our staff to our codeline economies providing new centres depth students, the shift to TechnologyOne SaaS has of scale functionality security given everyone at La
Slide 13: Customer journey
Customer journey Title here $6.2M+ Total Potential ARR Human Resource Management $2.7M Human Resource Management Future ARR Human Resource Management Human Resource Management DXP LG $3.5M $375k Current Customer Product 11 Relationship ARR Management $210k Strategic Asset Product 10 Management $465k
Slide 14: Net Revenue Retention
99% customer retention Net Revenue Retention across all markets Strong expansion performance of 114% • Our Global SaaS ERP is very broad with 300+ modules • Significant opportunity in our existing customer base • Frictionless – open licence, all modules available on SaaS • Predictable, non-competiti
Slide 15: End of On Premise October 2024
End of On Premise October 2024 29 $142m ARR Runway moving on-premise to SaaS by FY24 120% $280.0m We expect SaaS ARR vs on-premise 90%+ $142m+ 100% $230.0m of on-premise SaaS customers to ARR from move to SaaS 80% $180.0m $225.1m Existing on- by FY26 $192.3m premise $155.8m customers % of on-premise
Slide 16: R&D Significant Investment for future growth
R&D Significant Investment Future for future growth R&D investment of Current For Local For Student Government $41.5m1 • $500m+ invested in R&D over the last 10 years to maintain our leadership in innovation • We provide 2 releases per year 24% • Delivered 2022A to the market, with 468 product enhan
Slide 17: H1 FY22 Summary; Our People
H1 FY22 Summary Record H1 profit and SaaS ARR of Total ARR of revenue, record SaaS ARR $225.1m, up 44% $288.5m, up 23% We will continue to Revenue for our SaaS Total revenue up Profit After Tax of $33.2m, up 18% double in and continuing business of $169.5m, up 21% 19% size every Profit before tax 5
Slide 18: Outlook for 2022 Full Year
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 35 Outlook for 2022 Full Year “War, COVID-19 and floods have all Over the past 35 years we have continued to We will continue to benefit from improving interrupted the supply of certain goods, grow strongly in ch
Slide 19: Outlook for 2022 Full Year
Outlook for 2022 Full Year We expect to see strong continuing growth Net Profit Before Tax growth of 10% to 15% 37 Outlook for 2022 Full Year SaaS ARR growth, which is a key indicator of the strength of the company’s offering in the market, is SaaS ARR expected to be up 40%+ growth of 40%+ As we con
Slide 20: Positioned well for the future
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 39 Positioned well for the future and to continue doubling in size every 5 years • SaaS continues to grow strongly • Harvest substantial opportunities in our customer base • Continuing growth in APAC • Continuing
Slide 21: Total ARR will increase to $500m+ in FY26
update Total Annual Recurring Revenues will increase to $500m+ in FY261 1Total ARR end of H1 FY22 was $288m 41 Drivers for long term growth Increase Product Penetration Increase Market Penetration Expand Geographies 15 Licensable products1 6 Vertical markets APAC & UK Over 350 licensable modules New
Slide 22: Appendixes
43 Appendixes • Appendix A – Consulting Profit • Appendix B – R&D Disciplined and Transparent • Appendix C – Long History of Strong Cash Flow Generation • Appendix D – Glossary 44 22
Slide 23: Appendix A and B: Consulting Profit; R&D Disciplined and Transparent
Appendix A: H1 Consulting Profit of $6.7m Our AMS business for our existing customers is also moving to recurring revenue. Now have $22m locked in recurring revenue not included in our total ARR Company Up 10% Consulting is responsible for APAC Up 2% services in relation to our software Two focussed
Slide 24: Appendix B and C: R&D Table; Long History of Cash Flow Generation
Appendix B: R&D Disciplined & Transparent (continue) Software R&D Development - Percent Amortisation Amortisation Net Expense Investment Capitalised Capitalised Expense Period through P&L (#039;000) (#039;000) % (#039;000) Years (#039;000) FY19 60,083 32,145 53% 555 5 28,493 FY20 68,102 37,069 54% 6,103 5 37,13
Slide 25: Appendix D: Glossary
Appendix D: Glossary APAC Asia Pacific - Includes Australia, New Zealand, Malaysia and the South Pacific ARR Annual recurring revenue Cash Flow Generation Cash flow from Operating Cash Flow less capitalised development costs, capitalised commission costs and lease payments during the period Churn Lo