Slide 1: WiseTech Global FY19 Results
WiseTech Global FY19 Results Investor briefing materials – August 2019
Slide 2: Important notice and disclaimer
Important notice and disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Visit www.wisetechglobal.com/investors FORWARD-LOOKING STATEMENTS PREPARATION OF INFORMATION This presentation may contain statements that are, or may be deemed to be, forward-looking All financial information has
Slide 3: Our innovations and global platform
Our innovations and global enable, improve and empower the world’s supply chains. We are a force ee for good, improving productivity, connectivity and resource usage across -S 150 countries worldwide.
Slide 4: CargoWise One… operating system for global logistics
CargoWise One… operating system for global logistics Strong foundation for future technology, seamless rollout, scalable capacity, global solutions scalable to any size of business global reach ~150 countries deeply integrated with real-time visibility reduces risks, costs and data entry d
Slide 5: Our technology is used by the world's logistics providers across ~150 countries
Our technology is used by the world’s logistics providers across ~150 countries 12,000+ logistics organisations globally are customers(1) ~150 countries(2) 50+ billion data transactions in CargoWise One annually(3) 4+ million development hours over two decades 1,840+ valued employees(4) across 50+ o
Slide 6: DHL
43 of the top 50 global third party logistics providers(1) use our solutions across ~150 countries worldwide DHL 1. Armstrong & Associates: Top 50 Global Third Party Logistics Providers List ranked by 2017 logistics gross revenue/turnover.
Slide 7: DHL
25 of the top 25 global freight forwarders use our solutions across ~150 countries worldwide 7 of the top 25 global freight DHL forwarders(1) use CargoWise One in global forwarding rollout exclusively – or are rolling out - including the world’s largest. “We have chosen the CargoWise One single plat
Slide 8: FY19 performance, delivery on strategy and financial results
FY19 performance, delivery on strategy and financial results
Slide 9: WiseTech Global FY19 financial highlights
WiseTech Global FY19 financial highlights Delivered significant, high quality growth while expanding technology lead and global footprint SIGNIFICANT HIGH recurring LOW HIGH innovation LOW sales and PROFITABLE high revenue HIGH quality customer product development marketing EBITDA margin + growth re
Slide 10: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules Innovation + Increase new Stimulate Accelerate and customers on network organic expansion of Geographies Industry the platform effects growth consolidation our global Greater usa
Slide 11: Delivered on strategy
Delivered on strategy Prioritised pipelines for innovation through development, and global expansion through acquisitions Innovation and expansion of Increase new customers Stimulate Accelerate organic growth through Greater usage by existing our global platform on the platform network effects acqui
Slide 12: Logistics execution industry dynamics
Logistics execution industry dynamics Industry pain points and trade changes cycle faster, drive an exponential shift to CargoWise One 3PL industry dynamics vs Impact of Our leading global logistics software, CargoWise and low propensity to switch out of dynamic for open-access, usage-driven busines
Slide 13: Opportunity for the solution to industry pain points is vast
Opportunity for the solution to industry pain points is vast Logistics market size: across 1PL, 2PL, 3PL = ~A$16 trillion(1) Hundreds of billions spent on technology + billions more wasted on sneakerware/people. Yet, industry drowning in paper and high error rates, decimating margins and visibility.
Slide 14: CargoWise One – building out the Cargo Chain and Compliance Chain
CargoWise One – building out the Cargo Chain and Compliance Chain Adding powerful engines, machine learning, new products and execution capability, global data sets Relentless platform expansion with over ~700 enhancements annually 13
Slide 15: Widening our reach, building industry ecosystems
Widening our reach, building industry ecosystems We converge our innovation pipeline and acquisitions to rapidly build our multi-modal capabilities on a global scale 14
Slide 16: Increasing investment in relentless innovation
Increasing investment in relentless innovation Significant pipeline of longer-term innovations across existing verticals and new adjacencies 830+ product upgrades and We are targeting a 30-40% enhancements in FY19 increase in investment in FY20 in innovation and development 32% Major development foc
Slide 17: Globally integrated customs & border compliance platform
Globally integrated customs & border compliance platform Designed to cover 90% of the world’s manufactured trade flows – the G20+20 countries Cross-border compliance is the We buy into leading market positions that We have secured leading technologists, key most complex pain point for would take yea
Slide 18: Strategic acquisitions: geographic expansion – secured key assets swiftly
Strategic acquisitions: geographic expansion – secured key assets swiftly Small targeted acquisitions provide safer, faster, stronger entry to new markets for global customs We are well-progressed, our global customs footprint now covers… 80% GDP 74% imports 30 of 60+ countries(1) 17 1. G20+20 count
Slide 19: Integration process ─ build out of foundation to support efficient growth
Integration process ─ build out of foundation to support efficient growth Evolution of strategic assets involves comprehensive reshaping of commercial model Foothold 12 ─ 36 mths 3 ─ 12 mths 0 ─ 36 mths Adjacencies 3+ years Integrate operations Develop product Grow revenue Platform migration, TECHNO
Slide 20: Case study: Pierbridge
Case study: Pierbridge Developing foundation, creates efficiency, builds on-boarding capability, frees mgmt., engineers and sales to grow Pierbridge now ready for opportunities with 3PL/FF through CargoWise One and to leverage our International Ecommerce Video driven content architectures for Automa
Slide 21: Technology development: International Ecommerce
Technology development: International Ecommerce True international fulfilment, integrated global ecommerce solution …when freight forwarding meets last mile delivery Multi-carrier shipment Consolidation Cross-border Injection into Last mile delivery processing at origin port customs clearance carrie
Slide 22: Ecommerce: global, deeply integrated cross-border
Ecommerce: global, deeply integrated cross-border Scalable, high volume integrated international ecommerce solution for all players • True international fulfilment • Country agnostic • Web-enabled 21
Slide 23: Adjacencies feed into our innovation pipeline to build ecosystems
Adjacencies feed into our innovation pipeline to build ecosystems Targeting key plug-ins to our global development or multi-regional adjacencies that can scale • We accelerate convergence of technologies by adding targeted acquisition of key adjacencies to our innovation pipeline to build valuable e
Slide 24: Global Integrated Platform for the CONSUMERS of logistics services
Global Integrated Platform for the CONSUMERS of logistics services NeXus leverages our: • Designed for the users of logistics services connecting logistics providers, importers, exporters and other logistics users • CargoWise technology • Launched through our 3PLs to make available to their customer
Slide 25: CargoWise One expanding to be the operating system for global logistics
CargoWise One expanding to be the operating system for global logistics Every innovation & acquisition adds to flywheel of growth 24
Slide 26: Regulatory and trade changes are tailwinds
Regulatory and trade changes are tailwinds We invest our regulatory experts and development teams in ensuring CargoWise One fully compliant globally Global trade changes and updates in tariffs and regulations are a positive driver for CargoWise One adoption as we are swift to market with our solutio
Slide 27: Strong growth in revenue continues
Strong growth in revenue continues Significant high quality revenue growth while focusing on innovation and global expansion Revenue $m 348.3 FY19 revenue +57% vs FY18 191.6 +49% CAGR FY15 – FY19 221.6 153.8 128.2 102.8 82.7 70.0 56.7 54.2 156.7 43.0 37.7 93.4 Full year revenue (FY13 and FY14), 2H r
Slide 28: Revenue growth by cohort – all cohorts grew revenue in FY19
Revenue growth by cohort – all cohorts grew revenue in FY19 Our customers stay and grow their revenue over time… more users, modules and transactions • CargoWise One CargoWise One application suite revenue by customer cohort continues significant organic growth during $m, FY14 – FY19 extensive busin
Slide 29: Global rollouts – larger players rolling out, grow more valuable over time
Global rollouts – larger players rolling out, grow more valuable over time Powerful network effect, exponential growth in transactions, revenue over long term The world’s top 25 global freight forwarders move 28 million ocean TEUs + 16 million air metric tons each year and their revenue exceeds $320
Slide 30: Significant revenue growth
Significant revenue growth Strong organic growth with increasing impact of large volume of strategic acquisitions • Organic revenues from our existing and new customers delivered 43% of Revenue our total revenue growth over FY19, $m driven by: o increased usage across our existing customer base, 49.
Slide 31: Strong growth in revenue and EBITDA
Strong growth in revenue and EBITDA Strong organic revenue growth, high CargoWise One EBITDA margin, while building out our platform • 57% revenue growth vs FY18, reflecting both strong 48%(2) 48% organic growth and increased acquisition of 42% 48% EBITDA strategic assets that lay solid CargoWise On
Slide 32: Strong EBITDA efficiency through powerful commercial model
Strong EBITDA efficiency through powerful commercial model Our innovative commercial model and approach to development have been iterated and refined over decades EBITDA efficiency is built from a focused application of our core principles – we apply a disciplined and systems-thinking approach 48% 4
Slide 33: Licensing model – on demand removes constraints to growth
Licensing model – on demand removes constraints to growth Focus on pay for usage, revenue benefits from transition of customers to On-Demand licensing • Excluding acquisitions, CargoWise Revenue by licence type One has achieved 99% recurring % of total revenue revenue, with 98% revenue from customer
Slide 34: Licensing model – transformation ongoing
Licensing model – transformation ongoing Transitioning pre-existing MUL to more sustainable STL progressed rapidly in FY19 • We have well-proven expertise in customer Revenue by licence type licence transition with <1% % of total revenue attrition • We introduced STL in 2014 for all new customers an
Slide 35: Investment in innovation and product development
Investment in innovation and product development Continued high investment in R&D, every $ and every hour build out our technology • FY19 $113.0m, with $309m Investment in innovation and product development invested in R&D and innovation in the last 5 years $m driving our platform Total R&D % of tot
Slide 36: Financial summary
Financial summary Significant growth in revenue and earnings reflects strength of business and execution on strategy $m FY17 FY18 FY19 Change (vs FY18) Total revenue 153.8 221.6 348.3 +57% Gross profit 131.1 187.3 286.4 +53% Gross profit margin 85% 85% 82% (3)pp Total operating expenses (77.2) (109.
Slide 37: Operating expenses
Operating expenses Scaling to support relentless innovation, geographic expansion and business growth Operating expenses focused on strategic levers: Operating expenses % of total revenue • Innovation, product development and 22% 22% maintenance of our global 20% 21% 20% General and platform and exp
Slide 38: Cash flow profile
Cash flow profile Increasing operating and free cash flow • Strong operating performance delivered continuing increase in operating cash flow • Continued high conversion $m FY18(2) FY19 of EBITDA into operating EBITDA 78.0 108.1 Net cash cash flow $m — Non-cash items in Non-cash items in EBITDA 8.1
Slide 39: Summary statement of financial position
Summary statement of financial position Solid capital position to drive further strategic growth $m 30 June 2018 30 June 2019 • Strong balance sheet and healthy Current assets cash generation to support growth Cash and cash equivalents 121.8 260.1 and strategic initiatives Trade receivables 28.0 50.
Slide 40: Strategy and FY20 outlook
WiseTech Global is the best place tobe a developer because you can express your creativity while still achieving your goals. WiseTech Global Italy We a | rT WiseTech GLOBAL Strategy and FY20 outlook
Slide 41: We are moving swiftly and determinedly to grow our moat
We are moving swiftly and determinedly to grow our moat Solved for global platform, high growth commercial model, expanding network foundation Global Vast data Hyper-scalable Network integrated sets efficient foundation platform Global and domestic commercial Nodes + connections machine learning Tho
Slide 42: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules + Innovation Increase Accelerate and Stimulate Industry new organic expansion Geographies consolidation customers network growth of our effects Greater usage by on the through gl
Slide 43: High growth outlook for FY20
High growth outlook for FY20 Execution on strategy to deliver strong growth in FY20 Revenue $m 440-460 FY20 revenue (1) 348.3 $440m - $460m 26% - 32% FY20 growth vs FY19 221.6 FY20 EBITDA (1,2) 153.8 $145m - $153m 102.8 70.0 56.7 43.0 34% - 42% FY20 growth vs FY19 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Slide 44: Appendix and additional information
Appendix and additional information
Slide 45: FY20 guidance and assumptions
FY20 guidance and assumptions Growth in revenue and EBITDA What is included in the guidance: • Retention of existing customers with organic usage growth consistent with historical levels • New customer growth consistent with historical levels • New product and feature launches monetised • Contractua
Slide 46: Global revenues received in a mix of key currencies
Global revenues received in a mix of key currencies Revenues protected with effective natural hedge • 46% of FY19 revenue is in non- FY19 FY20 local currencies, 5pp lower than FX rates v AUD Actual Guidance FY18 (51%) GBP 0.55 0.55 • Natural hedges in some regions with both revenue and expenses RMB
Slide 47: Financial performance summary
Financial performance summary Robust delivery on strategy, business thriving, revenue growing Income statement $m FY17 FY18 FY19 Change (vs FY18) Revenue Recurring On-Demand 127.3 171.0 249.8 46% Recurring OTL maintenance 15.1 27.7 57.8 109% OTL & support services 11.4 22.9 40.7 77% Total revenue 15
Slide 48: Revenue: organic and acquired strategic assets
Revenue: organic and acquired strategic assets Strong organic revenue from CargoWise durable as it derives from many drivers What drives organic revenue growth? When does acquisition revenue become organic? Organic revenue relates to revenue from existing CargoWise customers or As with everything we
Slide 49: Significant revenue growth
Significant revenue growth Strong underlying organic growth demonstrates resilience during extensive business transformation • See page 47 for drivers of Organic Revenue and when Revenue from Acquired 49.3 348.3 Businesses transitions to Revenue organic $m • Total revenue each period contains static
Slide 50: Key operating metrics – including and excluding acquisitions
Key operating metrics – WiseTech Global including and excluding acquisitions FY19 excluding FY17 FY18 FY19 acquisitions(1) Total revenue growth vs prior year 49% 44% 57% Recurring revenue 93% 90% 88% 99% On-Demand revenue 83% 77% 72% 98% Gross profit margin 85% 85% 82% 91% Product design and develop
Slide 51: Income statement
Income statement $m FY17 FY18 FY19 Revenue Recurring On-Demand 127.3 171.0 249.8 Recurring OTL maintenance 15.1 27.7 57.8 OTL & support services 11.4 22.9 40.7 Total revenue 153.8 221.6 348.3 Cost of revenues (22.7) (34.3) (61.8) Gross profit 131.1 187.3 286.4 Operating expenses Product design and d
Slide 52: Reconciliation of statutory operating cash flow to statutory cash flow
Reconciliation of statutory operating cash flow to statutory cash flow $m FY18(1) FY19 • Payments for intangible assets EBITDA 78.0 108.1 reflected internal capitalised Non-cash items in EBITDA 8.1 9.0 development Changes in working capital (4.8) 9.4 Operating cash flow 81.3 126.4 • Acquisition of b
Slide 53: Employees
Employees 50% increase in our diverse, talented workforce in FY19 Employees by function as at 30 Jun 2019 Growth in number of employees General and administration 18% Product design and Technical and development product support 47% 23% Sales and marketing 12% Employees by region 1,838 as at 30 Jun 2
Slide 54: Product commercialisation and monetisation processes and timeline
Product commercialisation and monetisation processes and timeline Rich ideation Innovation cycle Rapid commercialisation Grow usage & revenue Industry expert teams solve Product leads + architects leverage global data, across sectors and Global platform availability of released product/functional en
Slide 55: Capitalised development and amortisation
Capitalised development and amortisation High innovation to commercialisation ratio – product designed for CargoWise One platform + customer base Net book value of capitalised development • Capitalised development comprises: 30 June 2019 o in development – labour and overhead costs relating to the d
Slide 56: Focus on innovation investment, efficient sales and marketing
Focus on innovation investment, efficient sales and marketing We build assets, not churn Relentless focus on innovation aligned with an efficient commercial model deliver minimal attrition by CargoWise One customers – less than 1% every year for last 7 years R&D Sales and marketing expense % of tota
Slide 57: Overview of revenue licensing models, drivers and platform
Overview of revenue licensing models, drivers and platform Customers in transition to On-Demand, ultimately move to transaction-based licensing Nature of revenue: Recurring revenue Other revenue 88% (1) 12% (1) Revenue categories: On-Demand OTL maintenance OTL & support services (1) (1) (1) 72% 16%
Slide 58: Acquisition ─ integration process + value components
Acquisition ─ integration process + value components Stage 1 integration completed swiftly, we focus on long-term product capability and growing revenue Foothold 12 – 36 months 3 – 12 months Adjacencies 3+ years 0 – 36 months Integrate target Develop product Grow revenue Platform migration Technolog
Slide 59: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY15 and FY16 FY17 FY18 Customs Customs Customs Customs Ocean Customs Customs Customs Land Freight carrier tariffs transport forwarding China South Africa Germany Italy Globa
Slide 60: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 Rates Rates Warehouse Customs/ Customs Customs/ Customs Freight management management WMS Freight Freight WMS forwarding forwarding/ forwarding/ WMS WMS Global Global As
Slide 61: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 FY19 Freight Customs Parcel Customs LTL TMS Customs Customs Intermodal Customs/Freight forwarding shipping TMS trucking TMS/ forwarding/ Container TMS tracking Latin Ame
Slide 62: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY19 Customs/ Parcel shipping Customs/ Customs Container Messaging Freight LTL TMS Freight optimisation forwarding/ forwarding/ WMS WMS/ TMS United Australia Sweden Norway/ S
Slide 63: Our history: 25 years and counting
Our history: 25 years and counting 1994 1999 2004 2006 Company founded by Made our first acquisitions to Developed ediEnterprise, our Expanded our operations offshore Richard White and Maree Isaacs grow product capability and second generation global software and shifted focus to multi-regional and
Slide 64: WiseTech difference, transformation track record – PRODUCT
WiseTech difference, transformation track record – PRODUCT Cannibalised AU business by building single source-code, global platform Expanding offshore requires Launched integrated regional platform: AU, NZ, UK, US, SG (2004) bottom up global solution Ultimately created the integrated global logistic
Slide 65: WiseTech difference, transformation track record – REVENUE
WiseTech difference, transformation track record – REVENUE Create pure recurring Early move to On-Demand licensing (2008) Transition existing OTL to On-Demand revenue Launched transaction-based licensing – disciplined application (2014) Transition existing to pure Seat+ Transaction-based licensing C
Slide 66: WiseTech difference, transformation track record – REVENUE
WiseTech difference, transformation track record – REVENUE 348.3 Revenue by Revenue licence type $m % of total revenue 191.6 221.6 On-Demand 71% 72% (recurring) 83% 77% 83% 153.8 128.2 98% 102.8 82.7 OTL 70.0 54.2 156.7 maintenance 16% 26% 13% 37.7 (recurring) 10% 93.4 15% 71.1 1% 56.7 48.6 7% 10% 1
Slide 67: WiseTech difference, transformation track record – COST EFFICIENCY
WiseTech difference, transformation track record – COST EFFICIENCY Build assets, not churn Inversion of product spend vs usual sales & marketing – prioritise asset development Remove consulting: evolve to channel partner organisations Eliminate costly bottlenecks to growth Continuous rollout and exp
Slide 68: WiseTech difference, transformation track record – COST EFFICIENCY
WiseTech difference, transformation track record – COST EFFICIENCY 48%(2) 48% Operating expenses EBITDA 42% excl-acquisitions(1), incl M&A % of total revenue $m costs 30% 120.0 35% 35% 22% 22% 31% 21% 21% 30% 20% 28% 100.0 20% 20% 18% 19% 19% 80.0 15% 15% 60.0 13% 108.1 10% 10% 40.0 78.0 53.9 20.0 3
Slide 69: WiseTech difference, transformation track record – TECHNOLOGY
WiseTech difference, transformation track record – TECHNOLOGY Early deployment 2011 to full cloud – customers transition over 2 years Innovation lead Establish data centres worldwide + fast follower Built “High Volume Low Value” capability 2006, launched ecommerce 2013 2012, GLOW ‘build once archite
Slide 70: Logistics industry – moving goods and data
Logistics industry – moving goods and data Movement of goods requires timely movement of accurate information across the supply chain A myriad of logistics suppliers is needed across the supply chain. Information moves ahead of, alongside and behind the physical goods as they move through the supply
Slide 71: www.wisetechglobal.com/investors
www.wisetechglobal.com/investors