Slide 1: Investor & Analyst Presentation FY18 H1 Results
Investor & Analyst Presentation FY18 H1 Results For the six months ended 31 December 2017 15th February 2018 Rebekah O’Flaherty-CEO I Jonathan Kenny-CFO
Slide 2: Agenda
Agenda 1 2 3 4 5 6 Overview Strategic FY18 H1 FY18 Q&A Appendices Priorities Financial Outlook Update Results
Slide 3: Overview
Overview FY18 H1 Results Presentation 15 February 2018 1 3
Slide 4: FY18 H1 Results Highlights
FY18 H1 Results Highlights $M FY18 H1 FY17 H1 Mvmt Growth Group Revenue grew by 13%. APAC 13%, EMEA 8% and Americas 18% (EMEA Revenue 28.3 25.1 3.2 13% grew 9% and Americas 23% on a constant currency basis) APAC 17.8 15.7 2.1 13% Underlying Core EBITDA grew by 21%, with all regions expanding EBI
Slide 5: Strategic Priorities Update
Strategic Priorities Update FY18 H1 Results Presentation 15 February 2018 2 5
Slide 6: 3 Year Strategic Priorities
3 Year Strategic Priorities • We have completed year 1 of our 3 year strategic plan. We have completed the globalisation of our operating model and delivered significant opex savings to support investment in growth and improve operational effectiveness. • In FY18 we will continue to strengthen the p
Slide 7: Strategic Priority #1 - Strengthen the Product Portfolio with a focus on Maths and Literacy
Strategic Priority #1 - Strengthen the Product Portfolio with a focus on Maths and Literacy Goal Strategy Progress Multiverse launched for core grades 3-6 K-2 enhanced offering launched focusing on numbers, addition and subtraction Refresh the customer experience and Spanish Mathletics on tr
Slide 8: Evolution of Maths Category
Evolution of Maths Category More targeted product and price offers to improve retention, ARPU and customer acquisition cost Grades 7-10 Grades 5-6 Gr 3-6 Multiverse Grades 3-4 Enhanced Gr 2-6 Enhanced Live Maths K-6 Assessments Enhanced Spanish Enhanced K-2 Ex Americas K-2 Enhanced H1 FY18 H2 FY18 H
Slide 9: Evolution of Literacy Category
Evolution of Literacy Category Aligned with maths category to improve multi product holding, retention and customer acquisition cost Grades 7-10 Grades 5-6 Grades 3-4 Writing Reading Vocabulary Grammar Assessment K-2 Spelling Spellodrome Live H2 FY18 H1 FY19 H2 FY19 FY18 H1 Results Presentation 15 F
Slide 10: Strategic Priority #2 - Develop a Scalable Sales, Service & Marketing Model
Strategic Priority #2 - Develop a Scalable Sales, Service & Marketing Model Goal Strategy Progress Marketing Cloud Evo 1 APAC and Americas launched H1FY18, EMEA to be launched Q4FY18 Service Cloud largely implemented across all • Develop an integrated and automated Digitise and automate our go t
Slide 11: Accelerating growth
Accelerating growth Goal Strategy Progress Readiwriter Phonics – expected launch H2FY18 Readiwriter Writing Junior – expected launch H2FY18 Leverage our installed base and drive up-sell Product Line Expansion Upsell assessment products in design and cross-sell sales phase for launch Q2FY19
Slide 12: Culture and Talent
Culture and Talent Building a High Performance and Great Place to Work Culture Participates in global survey (A Great Place to Work - GPTW) to ensure we benchmark our employee experience externally Based on GPTW results we have developed a multi faceted People and Culture Plan with Executive Own
Slide 13: FY18 H1 Financial Results
FY18 H1 Financial Results FY18 H1 Results Presentation 15 February 2018 3 13
Slide 14: APAC – Expanding market
APAC – Expanding market Key Points APAC Financials $M FY18 H1 FY17 H1 Mvmt Growth Licence revenue growth of 14% benefited by Licence revenue 17.6 15.5 2.1 14% rephasing of ANZ billings $1.2M. Underlying revenue growth of 6%. Copyright fees, sponsorships and other 0.2 0.2 - 0% Total revenue 17.8 15
Slide 15: EMEA – Growing margin and market share
EMEA – Growing margin and market share EMEA Financials Key Points £M FY18 H1 FY17 H1 Mvmt Growth Revenue growth of 9% in GBP Revenue 3.8 3.5 0.3 9% Costs (1.6) (1.5) (0.1) 7% Costs excluding FX declined by £0.2M, comparative EBITDA 2.2 2.0 0.2 10% period benefited by FX movements (FY17H1 gain of
Slide 16: Americas – Efficient and scalable sales model
Americas – Efficient and scalable sales model Americas Financials Key Points US$M FY18 H1 FY17 H1 Mvmt Growth Licence revenue 3.0 2.5 0.5 20% Revenue growth of 20% Other income 0.2 0.1 0.1 100% Total revenue 3.2 2.6 0.6 23% EBITDA now making a contribution of $0.4M in FY18 H1 Costs (2.8) (2.8) -
Slide 17: Learnosity
Learnosity Learnosity Financials Key Points US$ FY18 H1 FY17 H1 Mvmt Growth Revenue growth of 19% to US$7.0M reflecting Revenue 7.0 5.9 1.1 19% growing global demand for online EBITDA** 0.9 0.4 0.5 125% assessment. Strong growth in blue chip EBITDA % 13% 7% 6% customer numbers NPAT 0.5 0.4 0.1 25%
Slide 18: FY18 H1 – Income Statement
FY18 H1– Income Statement $M FY18 H1 FY17 H1 Mvmt Growth Key Points Total Revenue 28.3 25.1 3.2 13% Revenue increased 13% and on constant currency Employee (12.6) (11.7) (0.9) 8% growth was 14%. Marketing (1.1) (0.8) (0.3) 38% Headcount has declined to 258 from 307 at 31 Technology and occupancy
Slide 19: FY18 H1 – Cash flow
FY18 H1– Cash flow $M FY18 H1 FY17 H1 Mvmt Key Points Underlying Core EBITDA 10.3 8.5 1.8 Net cash flows after investments have Non-cash expense (0.4) (0.4) - improved $1.8M due to revenue growth and Change in working capital (14.6) (10.7) (3.9) reduced payment for investments Operating free cash
Slide 20: FY18 H1 – Balance sheet
FY18 H1– Balance sheet $M 31-Dec-17 30-Jun-17 31-Dec-16 Cash and cash equivalents 3.5 3.3 4.2 Key Points Trade and other receivables 28.0 7.0 23.9 Net debt of $16.5M (peaks in December) Income tax receivable - 1.5 - Represents Net Debt/Underlying Core EBITDA ratio Total current Assets 31.5 11.8 28
Slide 21: Investment in Products & Technology Assets
Investment in Products & Technology Assets Intangibles and Amortisation Profile Key Points $M Carrying Value Additions Amortisation Impairment Carrying Value Continued investment in Products 30-Jun-17 31-Dec-17 and Technology Mathletics & Spellodrome 10.0 3.7 (3.1) - 10.6 Readiwriter - 0.5 (0.1) -
Slide 22: FY18 Outlook
FY18 Outlook FY18 H1 Results Presentation 15 February 2018 4 22
Slide 23: FY18 Outlook
FY18 Outlook Continue to deliver revenue growth greater than cost growth. We will largely complete foundation building in FY18 (strengthening the product portfolio around maths and literacy and developing a scalable go to market model) allowing 3P Learning to profitably scale with a focus on 4 g
Slide 24: Q&A
Q&A FY18 H1 Results Presentation 15 February 2018 5 24
Slide 25: Appendices
Appendices FY18 H1 Results Presentation 15 February 2018 6 25
Slide 26: Revenue by Geography and Product
Revenue by Geography and Product Revenue by Geography Revenue split by Geography A$M FY13 FY14 FY15 FY16 FY17 FY18 H1 FY17 H1 Growth APAC 24.2 24.6 30.1 30.8 31.8 17.8 15.7 13% FY18 H1 FY17 H1 EMEA 5.5 8.6 10.3 12.6 13.0 6.5 6.0 8% Americas 2.3 3.3 4.4 5.9 7.7 4.0 3.4 18% 63% 63% Total 32.0 36.5 44.
Slide 27: Licences by Geography and Product
Licences by Geography and Product Licences by Geography Licences split by Geography 000s FY13 FY14 FY15 FY16 FY17 FY18 H1 FY17 H1 Growth APAC 2,496 2,486 2,627 2,664 2,704 2,816 2,807 0% FY18 H1 FY17 H1 EMEA 877 1,295 1,498 1,660 1,737 1,689 1,853 (9%) Americas 358 662 903 1,026 1,001 828 948 (13%)
Slide 28: Statutory EBITDA
Statutory EBITDA Reconciliation of Segment EBITDA to Statutory EBITDA $M FY18 H1 FY17 H1 Mvmt Growth APAC EBITDA 13.9 11.5 2.4 21% Less : Corporate Costs and Development (8.2) (6.5) (1.7) 26% Add : Intersegment royalties 3.9 3.6 0.3 8% Statutory EBITDA 9.6 8.6 1.0 12% EMEA EBITDA 3.8 3.6 0.2 6% Less
Slide 29: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is a summary of 3P Learning Limited’s (‘3P’) activities and results as at the time of preparation, 15 February 2018. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of informati