Slide 1: Investor Presentation
Investor Presentation NASDAQ: OTEX | TSX: OTEX January 30, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation, including statements about the focus of Open Text Corporation (“OpenText” or “the Company”) in our fiscal year ending June 30, 2020 (Fiscal 2020) on growth, anticipated benefits of our partnerships and next generation product lines, the
Slide 3: About OpenText
About OpenText The Information Management (IM) Leader About OpenText Value Creation Play Book • #1 in Content Services and Business Networks(1) • Carbonite Enhances Business Mix and Predictability Total Growth Strategy INNOVATION • Cyber Resilience: a strategic and growing market + Recurring Revenue
Slide 4: OpenText is Transforming the World of Decision Making
OpenText is Transforming the World of Decision Making The Information Advantage EIM IM Enterprise Information Information Management Management OpenText Confidential. ©2020 All Rights Reserved. 4
Slide 5: Leader in Large and Growing IM Market
Leader in Large and Growing IM Market (1) Market Area Customer Value Approach OpenText Key Product Families 5 Key Vectors ECM, Business Collaboration, File Sync Content Suite, Documentum, Capture, Supporting new ways to work and Share, Experience Exstream, Extended ECM Business Network, Supply Chain
Slide 6: OpenText: Leader in Content Services
OpenText: Leader in Content Services #1 in Content Services (Platforms) All content is stored, machine readable, tagged and up-to-date CHALLENGERS LEADERS LEADERS OpenText OpenText Newgen Microsoft Software Microsoft Hyland Hyland IBM SER IBM Group Alfresco Alfresco M-Files Nuxeo Software Laserfiche
Slide 7: OpenText: Leader in Business Networks
OpenText: Leader in Business Networks #1 in Business Networks Platform for Global Commerce and Business to Business Integration Customers OpenText LEADERS Infor GT Nexus SPS Commerce E2open Bamboo Rose TrueCommerce Vecco One Network Trading Suppliers MAJOR PLAYERS Partners CONTENDERS PARTICIPANTS De
Slide 8: OpenText + Carbonite: Leader in Cyber Resiliency
OpenText + Carbonite: Leader in Cyber Resiliency Endpoint Protection (EPP) Endpoint Detection and Data Protection Response (EDR) Stronger and smarter than Continuous monitoring and Automated, granular back-up traditional antivirus response to advanced threats and recovery Awards and Recognition Open
Slide 9: Carbonite: Acquisition Closed on December 24, 2019
Carbonite: Acquisition Closed on December 24, 2019 • On December 24, 2019, OpenText completed the acquisition of Carbonite Inc, for Announcement $23.00 per share in cash • Carbonite, a leading provider of cloud-based subscription backup, disaster recovery and endpoint security to small and medium-si
Slide 10: Carbonite Enhances Business Mix and Predictability
Carbonite Enhances Business Mix and Predictability Enhances Revenue Predictability FY’14A FY’20E(1) (% of Total Revenues) (% of Total Revenues) License & Professional Services 33.5% 24.0% Cloud 23.0% 36.0% ARR (Cloud & Customer Support) 66.5% 76.0% 1. FY20 percentages based on midpoint of FY20E targ
Slide 11: Most Trusted Companies Trust OpenText
Most Trusted Companies Trust OpenText e-Invoicing Digital Supply Chain Content & Collaboration Predictive Maintenance Government of Canada Communications & Compliance Digital Citizen Analytics / ML Connected Cars OpenText Confidential. ©2020 All Rights Reserved. 11
Slide 12: Total Growth Strategy
Total Growth Strategy • High Annual Recurring Revenues (ARR), Retain 75.6% (TTM) of total revenues(1) • 90%+ renewal rates(2) • Complete Go-To-Market coverage ◦ Enterprise & Government Information ◦ Double G10K coverage in 3 years(3) (direct and Management Grow partners) ◦ SMB & Consumer – New! • Ac
Slide 13: Retain: Our World Class Customer Base
Retain: Our World Class Customer Base Annual Recurring Key Metrics(1) Benefits & Opportunity Revenue (ARR) (US$ M) $2,220 • Steady consumable stream 90% from our install base 106% Margin for Customer • The Value Advantage: Support ◦ 24 x 7, global support $1,080 ◦ Product and service updates 95% ◦ N
Slide 14: Grow: Through Market Leadership
Grow: Through Market Leadership Three Pillars of Growth Content Management Business Network Cyber Resilience • Content Suite • GXS • Carbonite • Documentum • Liaison • Webroot • Exstream • EasyLink • EnCase • Extended ECM • Covisint OpenText Confidential. ©2020 All Rights Reserved. 14
Slide 15: Grow: Through Cloud Migration
Grow: Through Cloud Migration Trust Managed SaaS IM Services Offerings 99.99% Security Availability Agility Hybrid & Integrated Lower TCO Any 2 Any Compliant & based Private and Public Integration on Standards Cloud Options OpenText Confidential. ©2020 All Rights Reserved. 15
Slide 16: Grow: Through Managed Services in the Cloud
Grow: Through Managed Services in the Cloud (1) • 3,000+ Cloud customers over 3,000+ 5 years • Faster than internal IT • 30% lower TCO(2) • 99.99% - best in class uptime • Highly secure • Never upgrade again 2015 2016 2017 2018 2019 1. Data excludes Carbonite OpenText Confidential. ©2020 All Rights
Slide 17: Grow: Through Innovation - Cloud Edition (CE)
Grow: Through Innovation - Cloud Edition (CE) Significant Business Model Benefits Past Recent April 2020 Future Many Point Products Product Families Cloud Platform Content Management • Standardized services Release 16 CE platform OT2 Cloud Platform • Simplified sales and OpenText CE 20.2 customer
Slide 18: Grow: Through Complete Go-To-Market
Grow: Through Complete Go-To-Market Enterprise Small and Medium (G10K) Government Businesses (SMB) Consumer OpenText Solutions Carbonite Solutions Target Market: Global 10K 16,000 Partners 7M Consumers • 40% covered today (through our • Online • Online direct organization) • Retail • Retail • 3-year
Slide 19: Grow: Recent Partnership Announcements
Grow: Recent Partnership Announcements “New OpenText Content “Google Cloud has “OpenText and “Gained a strong Management Services selected OpenText as its Mastercard Partner to channel partner through to be delivered through preferred partner for Transform Financial the acquisition of SAP® Cloud Pla
Slide 20: Grow: Carbonite SMB Partnerships
Grow: Carbonite SMB Partnerships OpenText Confidential. ©2020 All Rights Reserved. 20
Slide 21: Acquire: Our Criteria
Acquire: Our Criteria Leadership Position Value for OpenText’s Customers Mission Critical In Key Market Segments Financially Compelling Larger Customer Base Long Operating History & IP High Teens ROIC Solid Track Record of High-Teens ROIC and Operating Cash Flows OpenText Confidential. ©2020 All Rig
Slide 22: Acquire: OpenText Business System Creates Strategic Value
Acquire: OpenText Business System Creates Strategic Value Total Growth Integration Total Customer-Driven Innovation Growth Return on Invested Capital Systems, Tools, Methods (ROIC) Strategic Acquisitions Operational Excellence Diligence Best Teams Win Dividend, Capital Investment, Annual Recurring R
Slide 23: Acquire: Track Record of Success
Acquire: Track Record of Success $6.2bn capital deployed since FY’14(2) Content Management Enterprise Content Division 18.7% ROIC in FY ’19(3) HP CEM & CCM Software(1) 1991 Founded out of 1996 University OpenText IPO on Joined of Waterloo NASDAQ TSX60 2012 2014 2015 2016 2017 2018 2019 Business Netw
Slide 24: Proven Durable Business Model
Proven Durable Business Model Annual Recurring A-EBITDA & Margin(1),(2) Operating Cash Flows(2) Revenue (ARR) (US$ M) (US$ M) (US$ M) $2,220 $1,117 38.1% $860 106% 108% 106% $1,080 $538 $417 38.4% 33.1% 33.1% FY'14 Q2 FY'20 TTM FY'14 Q2 FY'20 TTM FY'14 Q2 FY'20 TTM Renewal Rates(3): A-EBITDA Margin(
Slide 25: Total Growth Strategy: FY'20
Total Growth Strategy: FY’20 Total Revenue Growth FY’20 Business Profile (including Carbonite) (US$ M) OpenText Investor Day Post Carbonite Acquisition September 6, 2019 January 30, 2020 $2,935 11% License Constant $ year-over-year Low to mid single digit growth CAGR Cloud High-single digit growth L
Slide 26: FY'20 Target Model
FY’20 Target Model Fiscal 2019 Results Previous FY’20 Model Revised FY’20 Model(3) Revenue Type: Annual Recurring Revenue (ARR) 75.1% 74% - 76% 75% - 77% License 14.9% 13% - 17% 13% - 17% Cloud Services and Subscriptions 31.6% 31% - 35% 34% - 38% Customer Support 43.5% 40% - 44% 38% - 42% Profession
Slide 27: Carbonite Update and Revenue Impact
Carbonite Update and Revenue Impact • Expect revenue for the 2H of FY’20 to be $195m to $200m, after purchase price accounting (PPA) and disruption of up to 10% for typical integration activities • OpenText will recognize $171.5M of deferred revenue over the life of the contracts after PPA adjustmen
Slide 28: FY'22 Long-Term Aspirations
FY’22 Long-Term Aspirations A-EBITDA Margin(1)(2) Operating Cash Flows(2) 38%-40% $1.0B-$1.1B 38.1% $860M +500 bps 106% $417M 33.1% FY'14 Q2 FY'20 TTM FY'14 Q2 FY'20 TTM 1. Please see reconciliation of GAAP to Non-GAAP measures in our historical filings. OpenText Confidential. ©2020 All Rights Reser
Slide 29: FY'22 Long-Term Aspirations & Roadmap
FY’22 Long-Term Aspirations & Roadmap 38% to 40% Adj. EBITDA However, we will remain disciplined while we A-EBITDA margin aspiration of 38% invest:We will remain disciplined, while we invest to 40% is an ideal zone for OpenText We are ranked in the upper quartile performance among peers(1) A-EBITDA
Slide 30: FY'22 Long-Term Aspirations & Roadmap
FY’22 Long-Term Aspirations & Roadmap OCF Target of $1B to $1.1B in FY’22 However, we will remain disciplined while we invest: • Driven by higher profitability, productivity enhancements • Use of AI in collections, higher leverage in procurement and vendor management Operating Cash Flows (US$ M) OCF
Slide 31: Strong Liquidity & Balance Sheet
Strong Liquidity & Balance Sheet Cash Generated for M&A Trended Net Leverage 2.3x leverage post $1.4B acquisition of Carbonite TTM Q2 FY’20 (US$ M) Consolidated Net Leverage Ratio(1) OCF $860 Documentum Acquisition Closing Carbonite 2.6x Acquisition 2.5x Closing Less: Principal $10 2.4x 2.3x 2.3x 2.
Slide 32: Experienced Executive Leadership Team (ELT)
Experienced Executive Leadership Team (ELT) Mark J. Madhu Muhi Gordon Ted James Craig Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Stilwell CEO and CTO EVP, EVP, EVP, EVP, EVP, EVP, CFO Chief Product Officer CLO & Corporate Sales Customer Operations SMB & Consumer Sales Development Patt
Slide 33: OpenText Confidential. ©2020 All Rights Reserved.
OpenText Confidential. ©2020 All Rights Reserved. 33
Slide 34: Thank you
Thank you www.opentext.com OpenText Confidential. ©2020 All Rights Reserved. 34