Wisetech Global Ltd. · ASX:WTC
Wisetech Global — H1 2022 Earnings Presentation
38 slides from Wisetech Global's earnings presentation, February 2022
Slide 1: 1H22 Results
Enabling and empowering the world’s supply chains 1H22 Results © 2022 WiseTech Global
Slide 2: Our Vision and Our Mission
OUR VISION OUR MISSION To be the operating To create breakthrough products system for global logistics that enable and empower those that own and operate the supply chains of the world
Slide 3: Agenda
Agenda 1H 2 2 1 H 2 2 FI N A N C I A L STR A TE G Y & Q&A A P P E N DI C E S H I GH LI GH TS REVIEW OU TLOOK 3 © 2022 WiseTech Global
Slide 4: 1H22 highlights
SECTION 01 1H22 highlights R I C H A R D W H I TE , C E O & FOU N DE R
Slide 5: 1H22 financial highlights
1H22 financial highlights Robust financial performance, strong revenue growth & cash generation reflecting operating leverage Total Revenue $281.0m CargoWise revenue $193.0m EBITDA $137.7m ↑ 22% ex FX (↑ 18% incl. FX) ↑ 33% ex FX (↑ 29% incl. FX) ↑ 54% on 1H21 on 1H21 on 1H21 CargoWise revenue growt
Slide 6: Global supply chain market conditions
Global supply chain market conditions Ongoing COVID outbreaks globally along with strong demand for goods resulting in continued constraints Global trade & freight Structural industry trends • By late calendar 2021 factories in the US and Europe were Continued acceleration of longer-term structural
Slide 7: 1H22 strategic highlights
1H22 strategic highlights Strategic progress on the ‘3Ps’ to accelerate delivery of our vision Product Penetration Profitability • Excellent progress on continued • Two new global rollouts of CargoWise • Strong revenue growth drives further alignment of acquisition development secured in 1H22, bring
Slide 8: 1H22 financial review
SECTION 02 1H22 financial review A NDR E W C A R TLEDG E , CFO
Slide 9: 1H22 results
1H22 results Strong financial performance Total revenue • Total revenue of $281.0m, up 18% on 1H21 % change • $9.2m FX headwind in 1H22 (1H21: $3.6m headwind vs. 1H20) A$m 1H21 1H22 • Excluding FX headwind, total revenue grew 22% (equating to $51.6m growth) CargoWise revenue 150.0 193.0 29% and Carg
Slide 10: 1H22 revenue growth
1H22 revenue growth A$m Total revenue grew $51.6m or 22% ex FX – impacted by $9.2m of FX headwind (1H21: $3.6m) Recurring & non-recurring revenue split (0.0) (0.7) (9.2) 0.2 (9.2) 281.0 1.5 281.0 (0.0) 52.3 Recurring (8.5) 18.8 238.7 49.9 CargoWise (6.8) 238.7 Non-recurring (0.7) Acquisitions (2.4)
Slide 11: 1H22 operating expenses
% of revenue 1H22 operating expenses 1 Expenses (A$m) Cost reductions driving margin expansion Overall operating expenses down 11pp as a % of revenue on 1H21 as operating leverage increased Product design & development (A$m) Sales & marketing (A$m) General & administration (A$m) 21% 19% 19% 14% 20%
Slide 12: 1H22 research and development
1H22 research and development Innovation and product development continues to be a priority Product investment Investment in innovation and product development (A$m) • CargoWise investment increased 20%, mostly offset by a 23% decline across acquisitions reflecting our strategy to align the acquired
Slide 13: 1H22 balance sheet
1H22 balance sheet Strong balance sheet and liquidity providing solid platform for future growth Strong liquidity A$m 30 Jun 21 31 Dec 21 • $380.3m in cash providing financial flexibility and headroom to fund growth opportunities Cash 315.0 380.3 Receivables 74.1 69.2 • Undrawn debt facility of $225
Slide 14: 1H22 cash flow performance
1H22 cash flow performance Highly cash-generative business model delivering strong free cash flow Strong operating cash flow A$m 1H21 1H22 % change • Operating cash flows were $134.7m (1H21: $92.1m), up 46% on 1H21, demonstrating the strength of our highly cash-generative operating model EBITDA 89.2
Slide 15: Strategy & outlook
SECTION 03 Strategy & outlook RICH A R D W H I TE, CEO & FOUNDER
Slide 16: WiseTech's '3Ps' strategy
WiseTech's ’3Ps’ strategy Strategy designed to leverage structural changes and deliver sustainable growth Vision: To be the operating system for global logistics Industry wide structural changes accelerated by the COVID-19 pandemic Demand for integrated Need to replace ageing Logistics providers pur
Slide 17: Product – the CargoWise ecosystem
Product – the CargoWise ecosystem Our product development strategy is designed to enable and empower the world’s supply chains >$625m invested in in-house R&D since 2H17 delivering 4,600+ product features and enhancements (589 in 1H22) Neo (beta) 53% of employees focused on product development Globa
Slide 18: Penetration
Penetration Momentum through existing customer growth & new global rollout wins 2 new global rollouts by Large Global Freight Global rollouts – CargoWise Large Global Freight Forwarders3 Signed post 31 December 20214 Forwarders1 secured since 1 July 2021: BRINK'S • FedEx Contracted and in progress o
Slide 19: Profitability
Profitability Maximizing operating leverage and supporting growth Streamlining processes Internal development of our Optimizing our integrated Allocating resources and teams existing teams cost structures appropriately Operational efficiency initiatives Exceeding cost reduction targets • At our FY20
Slide 20: FY22 revised EBITDA guidance
FY22 revised EBITDA guidance EBITDA guidance increased by $10-$15 million to $275-$295 million, revenue guidance reaffirmed FY22 revenue FY22 guidance assumptions 1 CargoWise: revenue growth of ~30% – 40% (excluding FX) $600m – $635m • Strong momentum from FY21 run rate continues in 2H22 as economie
Slide 21: Strategy execution delivering long-term sustainable shareholder value
Strategy execution delivering long-term sustainable shareholder value 600-635 380.0 EBITDA (A$m) 46-47% 50% Revenue (A$m) EBITDA Margin % $600.0 41% 330.0 507.5 275-295 35% 35% 40% $500.0 429.4 280.0 30% 31% 30% 30% $400.0 348.3 230.0 206.7 180.0 20% $300.0 221.6 1H22: 126.7 281.0 1H22: 130.0 108.1
Slide 22: Q&A
SECTION 04 Q&A
Slide 23: Appendices
SECTION 05 Appendices Slides 24. FY22 guidance assumptions and FX 25. Customer growth and low attrition 26. Revenue growth excluding FX 27. Overview of revenue licensing models 28. Income statement 29. Key operating metrics 30. Reconciliation of statutory expenses to non-statutory expenses 31. Recon
Slide 24: FY22 guidance assumptions and FX
FY22 guidance assumptions and FX Foreign Exchange What is included in the FY22 guidance: FX rates1 vs. AUD FY21 actual 1H22 actual 2H22 guidance 1H22 • Retention of existing customers with CargoWise USD 0.72 0.75 0.75 • 77% of 1H22 revenue in non-AUD currencies, usage growth consistent with historic
Slide 25: Customer growth and low attrition
Customer growth and low attrition CargoWise1 application suite revenue by customer cohort Increasing adoption by Large Global A$m (last 12 months) 400 Freight Forwarders Top 300 customers now deliver ~75% 350 of CargoWise revenue in 1H22 300 250 Customers stay and use more 200 <1% attrition every ye
Slide 26: Revenue growth excluding FX
Revenue growth excluding FX A$m 1H21 1H22 $ change % change Non- Non- Non- Non- Recurring Total Recurring Total Recurring Total Recurring Total recurring recurring recurring recurring revenue revenue revenue revenue revenue revenue revenue revenue revenue revenue revenue revenue Reported revenue Car
Slide 27: Overview of revenue licensing models
Overview of revenue licensing models Total revenue by license type (A$m) 281.0 Other revenue Recurring revenue (93% of revenue)1 268.8 (7% of revenue)1 18.8 238.7 29.1 One-Time 223.5 37.1 On-Demand Licensing Licensing (OTL) OTL & support services Revenue 205.9 20.3 36.1 80%1 maintenance 7%1 27.5 13%
Slide 28: Income statement
Income statement A$m 1H21 1H22 Revenue Recurring On-Demand license 179.4 225.0 Recurring OTL maintenance 39.0 37.1 OTL and support services 20.3 18.8 Total revenue 238.7 281.0 Cost of revenues (35.3) (38.4) Gross profit 203.4 242.6 Operating expenses Product design and development (44.7) (45.2) Sale
Slide 29: Key operating metrics
Key operating metrics 1H21 1H22 1H22 CargoWise1 Total revenue growth vs. prior year 16% 18% 29% Recurring revenue – % of total revenue 91% 93% 99% On-Demand license revenue – % of total revenue 75% 80% 99% Gross profit margin 85% 86% 92% Product design & development – % of total revenue 19% 16% 12%
Slide 30: Reconciliation of statutory expenses to non-statutory expenses
Reconciliation of statutory expenses to non-statutory expenses A$m 1H21 1H22 Cost of Revenues Cost of revenue – statutory 38.9 42.4 Less: Depreciation & amortization 3.6 4.0 Cost of revenues – non-statutory 35.3 38.4 Product design & development Product design & development – statutory 64.1 66.7 Les
Slide 31: Reconciliation of underlying NPAT, NPATA and underlying ETR
Reconciliation of underlying NPAT, NPATA and underlying ETR Net Profit after Tax A$m 1H21 1H22 (NPAT) NPAT 44.4 77.4 Fair value gain on contingent consideration (0.8) (0.1) 1 Underlying NPAT 43.6 77.3 NPAT 44.4 77.4 Fair value gain on contingent consideration (0.8) (0.1) Acquired amortization (net o
Slide 32: Revenue growth drivers
Revenue growth drivers CargoWise recurring revenue delivers 31% CargoWise recurring revenue growth CAGR FY16 to FY21 (constant currency) 31% CAGR FY16 to FY21 A$m • Significant R&D investment driving long-term growth 507.5 • • Revenue growth of $237.4m, ~4X over the last 5 years • Major recurring re
Slide 33: CargoWise recurring revenue growth drivers
CargoWise recurring revenue growth drivers Details on inclusions in each category of revenue drivers CargoWise recurring revenue growth drivers Growth rate FY16 to FY21 (averages per year) What’s included Growth in users and transactions from Large Global Large Global Freight Forwarder rollouts 12pp
Slide 34: Large Global Freight Forwarder rollouts driving revenue growth
Large Global Freight Forwarder rollouts driving revenue growth 36 Large Global Freight Forwarder rollouts are driving long term revenue growth Annual revenue (A$m)1 7 Large Global Freight 29 Large Global Freight Forwarders with rollouts Forwarders are in constant currency ‘Contracted and of CargoWis
Slide 35: Global rollouts
Global rollouts Reconciliation of CargoWise global rollouts In Production1 Contracted1 Total LGFF1 Top 251 As at 30 June 2021 29 7 36 10 FedEx new contract signed - 1 1 - Access World new contract signed - 1 1 - New organic rollouts ‘In Production’: Logistics Plus, 3 - 3 - EV Cargo, Unique Logistics
Slide 36: Glossary
Glossary Abbreviation Definition First reference slide Acquisition (non-CargoWise) - Revenue generated by businesses acquired since 2012 that are not included in CargoWise revenue. 5 revenue ‘Contracted and In Progress’ Contracted and Customers who are contracted and in progress to rolling out Cargo
Slide 37: Important notice and disclaimer
Important notice and disclaimer Content of presentation for information purposes only Preparation of information Visit wisetechglobal.com/investors All financial information has been prepared and reviewed in accordance with Australian Accounting Standards. Certain financial data included in this pre
Slide 38: wisetechglobal.com/investors
wisetechglobal.com/investors