Technology One Limited · ASX:TNE

Technology One — FY2007 Earnings Presentation

41 slides from Technology One's earnings presentation, Sep 10, 2007

1. Slide 1: Full Year Results Presentation To June 2007

   For personal use only Full Year Results Presentation To June 2007 Adrian Di Marco September 2007 Executive Chairman www.TechnologyOneCorp.com Private and Confidential

2. Slide 2: TechnologyOne Overview

   TechnologyOne Overview For personal use only ƒ TechnologyOne develops, markets, sells, implements and supports a broad range of enterprise applications & services: ƒ TechnologyOne Financials ƒ TechnologyOne Supply Chain ƒ TechnologyOne HR & Payroll ƒ TechnologyOne Works & Assets ƒ TechnologyOne Busi

3. Slide 3: Agenda

   Agenda For personal use only ƒ 2007 Full Year Results ƒ Summary ƒ Analysis ƒ Significant Achievements Last 12 Months ƒ Outlook ƒ Our Strategy for Growth 3 of 40

4. Slide 4: 2007 Full Year Results

   2007 Full Year Results For personal use only ƒ Record Revenue $78.4m, up 18% ($11.9m) ƒ Record Profit Before Tax $19.8m, up 22% ($3.5m) ƒ Profit After Tax $14.8m, up 20%* ($2.5m) ƒ Expect continuing lower tax rate for 12 to 24 months (25.2%) ƒ Expenses excluding R&D $44.8m, up 19% ($7.2m) ƒ Company

5. Slide 5: 2007 Full Year Results

   2007 Full Year Results For personal use only ƒ Operating Cash Flow of $17.7m (vs $14.8m NPAT) ƒ Balance sheet strong ƒ Cash & Equivalents*: $28.8m (vs $22.3m 30/06/07) ƒ Debt/Equity: 4% (vs 3% last year) ƒ Return on Equity 35% ƒ Return on Equity (adjusted for non working capital) 66% ƒ Transparency

6. Slide 6: 2007 Full Year Results

   2007 Full Year Results For personal use only 6 of 40

7. Slide 7: 2007 Full Year Results

   2007 Full Year Results For personal use only Historical 10 year annual compound growth is as follows*: ƒ Revenue: 23% per annum compound ƒ R&D: 22% per annum compound ƒ Net Profit: 27% per annum compound * To June 30 2007 7 of 40

8. Slide 8: 2007 Full Year Results – Analysis

   2007 Full Year Results – Analysis For personal use only ƒ Total licence fees - $18.3m, up 18% ($2.7m) ƒ Initial licence fees - New customers of $14.4m, up 12% ($1.6m) ƒ Initial licence fees - Existing customers of $3.9m, up 42% ($1.1m) ƒ Annual licence fees of $25.6m, up 21% ($4.5m) ƒ Consulting ser

9. Slide 9: 2007 Full Year Results – Analysis

   2007 Full Year Results – Analysis For personal use only ƒ North West region continued strong performance, profit contribution up 28% (up $755k) ƒ Central region turned around, profit contribution up 29% (up $683k) ƒ 3 new state managers appointed ƒ UK loss of $1.3m as expected ƒ An increase loss of

10. Slide 10: 2007 Full Year Results

    2007 Full Year Results For personal use only ƒ Strong result because: ƒ Continuing strong demand for our products (18% increase in Initial Licences - New & Existing) ƒ Strong performance from North West region & Central region ƒ Continued strong investment in R&D at 18% of Revenue fully expensed ƒ G

11. Slide 11: 2007 Full Year Results

    2007 Full Year Results For personal use only ƒ Demonstrates the strength and diversity of our business ƒ Geographical diversity – North West, Central, Asia Pacific, Asia and in future UK ƒ Market diversity – Local Government, State and Federal Government, Financial Services, Higher Education, Health

12. Slide 12: Agenda

    Agenda For personal use only ƒ 2007 Full Year Results ƒ Summary ƒ Analysis ƒ Significant Achievements Last 12 Months ƒ Outlook ƒ Our Strategy for Growth 12 of 40

13. Slide 13: Significant Achievements Last 12 Months

    Significant Achievements Last 12 For personal use only Months ƒ New ‘House of Products’ business transformation ƒ Momentum of the Ci series ƒ Executive Team expanded ƒ United Kingdom ƒ R&D ƒ Developing Services Business ƒ New Systems & Processes ƒ Change of Financial Year 13 of 40

14. Slide 14: 'House of Products'

    ‘House of Products’ For personal use only ƒ Capitalise on our pipeline of products created over recent years: ƒ Financials (well established) ƒ Student Management (well established) ƒ Property & Rating (well established) ƒ Business Intelligence (developing) ƒ Works & Assets (developing) ƒ HR & Payro

15. Slide 15: 'House of Products' Challenges

    ‘House of Products’ For personal use only ƒ Challenges ƒ Round out each product to make ‘best in class’ ƒ Become ‘customer centric’ by product ƒ Move from intensive ‘R&D’ to marketing, sales and distribution ƒ Increase substantially the profit contribution from each product ƒ Capitalise on our exten

16. Slide 16: 'House of Products'

    ‘House of Products’ For personal use only 16 of 40

17. Slide 17: 'House of Products'

    ‘House of Products’ For personal use only ƒ Creation of separate ‘product lines’ driven as individual business units ƒ Dedicated to ‘market leadership’ in functionality and service for each product ƒ Dedicated product/industry specialists by product ƒ General Managers for each product line to drive

18. Slide 18: 'House of Products'

    ‘House of Products’ For personal use only ƒ Substantial restructure & re-alignment of the company ƒ Significant Change Management issues ƒ Over the last 6 months ƒ Continuing for the next 12 months ƒ Significant impact on all our systems & business processes ƒ Senior management team expanded with ap

19. Slide 19: 'House of Products'

    ‘House of Products’ For personal use only ƒ Future focus will see General Managers appointed: ƒ Works & Assets ƒ Business Intelligence ƒ Supply Chain ƒ CRM ƒ Provides us with a powerful ‘model’ to undertake strategic acquisitions that will deliver significant revenue growth ƒ Performance Planning ƒ

20. Slide 20: Momentum of the Ci series

    Momentum of the Ci series For personal use only ƒ Connected Intelligence (Ci) is the new generation of our suite of products ƒ Significant competitive advantage over our competitors ƒ Migration of existing customer to Ci accelerating ƒ 600 customers in total ƒ 300 Customers now committed to Ci ƒ 280

21. Slide 21: Executive Team Expanded

    Executive Team Expanded For personal use only ƒ Executive Team expanded – Operating Officers (OO) as follows: ƒ OO Sales/Marketing (existing) ƒ OO Consulting (existing) ƒ OO R&D (new appointment) ƒ Operating Officer role: ƒ Ensure consistency across products ƒ Drive ‘best practice’ for their respect

22. Slide 22: United Kingdom

    United Kingdom For personal use only ƒ Geographical expansion continued to gain momentum ƒ Feedback continues to be very positive ƒ First sites lives in the UK are now strong references: ƒ Allco Management UK ƒ Bravura Solutions UK ƒ Hereford, Worcester Fire & Rescue ƒ New strategic win : Institute

23. Slide 23: Research & Development

    Research & Development For personal use only ƒ R&D at 18% of revenue, fully expensed ƒ Up 9% to $13.8m, and increase of $1.2m ƒ Connected Intelligence remains main focus ƒ Migration of remaining products to Ci platform to be completed by June 2009 ƒ Strategic initiatives on track ƒ New Business Inte

24. Slide 24: Research & Development

    Research & Development For personal use only ƒ Focus on developing ‘add on modules’ to all our existing products ƒ Customers looking to expand their relationship with us • Programs/Promotions for existing customers • Increase our penetration into our customer base • Increase licence fees from existi

25. Slide 25: Developing Services Business

    Developing Services Business For personal use only ƒ Developing a services business based on: ƒ Project Services business ƒ Integrate One business ƒ New general manager appointed 18 months ago ƒ New strategy & focus ƒ New name: TechnologyOne Plus ƒ Sales team increased ƒ Pipeline of opportunities em

26. Slide 26: New Systems & Processes

    New Systems & Processes For personal use only ƒ New systems & business processes to meet the challenge of: ƒ Strong & continuing growth ƒ International expansion ƒ New ‘House of Products’ Business Model ƒ Acquisitions – integration using our Corporate Shared Services ƒ Objective: streamline, automat

27. Slide 27: New Systems & Processes

    New Systems & Processes For personal use only ƒ Systems & business processes to be upgraded include: ƒ Annual Support Renewals (90% complete) ƒ Time Billing (90% complete) ƒ ‘House of Products’ Management Reporting (80% complete) ƒ Profit Forecasting (80% complete) ƒ Utilisation Management (80% comp

28. Slide 28: Change of Financial Year

    Change of Financial Year For personal use only ƒ Current year end: June 30th ƒ New year end: September 30th ƒ Transition period: July 1 2007 to September 30th 2007 ƒ 3 Months for transition purposes only ƒ Not meaningful period to draw any conclusions ƒ First full year: October 1 2007 to September 3

29. Slide 29: Change of Financial Year

    Change of Financial Year For personal use only ƒ Reasons for change ƒ Government is a major part of our business ƒ Tendencies for deals to close around December & June, which leads to significant licence fee revenues in Nov/Dec and May/June ƒ New AIFRS requires contract signed by both parties before

30. Slide 30: Agenda

    Agenda For personal use only ƒ 2007 Full Year Results ƒ Summary ƒ Analysis ƒ Significant Achievements Last 12 Months ƒ Outlook ƒ Our Strategy for Growth 30 of 40

31. Slide 31: Outlook – Market Conditions

    Outlook – Market Conditions For personal use only ƒ Higher Education/Student Management ƒ Consolidation progressing quickly ƒ TechnologyOne solution well regarded • Tier one universities selecting our solution ƒ Strong pipeline of opportunities over the next 3+ years in Australia ƒ Investigating ove

32. Slide 32: Outlook – Market Conditions

    Outlook – Market Conditions For personal use only ƒ Financials ƒ Enterprise market confusion continues delaying replacement cycle ƒ Opportunities continue to emerge in ‘tier one’ space ƒ Good pipeline of opportunities going forward for new customers ƒ Existing customers licences to increase • Migrat

33. Slide 33: Outlook – Market Conditions

    Outlook – Market Conditions For personal use only ƒ Works & Assets ƒ Customers looking for an integrated solution ‘out of the box’ ƒ New product for TechnologyOne ƒ Compelling business proposition for our existing customers ƒ Strong demand in our existing customer base ƒ Medium term – ‘best of class

34. Slide 34: Outlook – Market Conditions

    Outlook – Market Conditions For personal use only ƒ Australia & New Zealand ƒ Conditions remain good ƒ United Kingdom ƒ United Kingdom 3+ times size of Australian market, with substantial opportunities ƒ First product is Financials – same competitors as Australia ƒ Gaining momentum ƒ Asia ƒ Challeng

35. Slide 35: Outlook 2007/2008

    Outlook 2007/2008 For personal use only ƒ Continuing strong growth: ƒ Continuing strong performance from Student Management ƒ Growth from: • Financials • Property & Rating • Business Intelligence • Works & Assets • Existing customers – new licence fees & services as they migrate to the Ci platform ƒ

36. Slide 36: Outlook 2007/2008

    Outlook 2007/2008 For personal use only ƒ Board Budget for 2007/2008 (after 3 month transition period): ƒ Profit growth of 15% to 20% ƒ Dividend increase of 10% ƒ Manage costs in line with revenue growth ƒ Staff costs ƒ Continued expansion of senior management & executive team ƒ New systems to handl

37. Slide 37: Focus in 2007/2008

    For personal use only Focus in 2007/2008 ƒ Complete the ‘House of Products’ business transformation ƒ Continue the successful migration of all our customers to our new Ci platform ƒ Complete the Ci redevelopment of all our products • Property & Rating • Student Management • Supply Chain ƒ Continue t

38. Slide 38: Long Term Outlook

    Long Term Outlook For personal use only ƒ Financials ƒ Mature market ƒ Opportunities in Tier 1 space ƒ Opportunities arising from consolidation of the market ƒ Overseas expansion will drive sales growth from 2009 ƒ Student Management ƒ Continue to dominate in the Australian market ƒ Overseas expansi

39. Slide 39: Long Term Outlook

    Long Term Outlook For personal use only ƒ Good pipeline of new products with strong earnings profile in Australia: ƒ Business Intelligence – increasing from now ƒ Works & Assets – increasing from now ƒ CRM - in a few years ƒ HR & Payroll - in a few years ƒ United Kingdom – significant market opportu

40. Slide 40: After Word

    For personal use only After Word These slides are now available from our web site: www.TechnologyOneCorp.com under the investor relations section. 40 of 40

41. Slide 41: Full Year Results Presentation To June 2007

    For personal use only Full Year Results Presentation To June 2007 Adrian Di Marco September 2007 Executive Chairman www.TechnologyOneCorp.com Private and Confidential

Technology One — FY2007 Earnings Presentation on 6ix