Slide 1: 2018 Full Year Results Presentation
For personal use only Appen Limited 2018 Full Year Results Presentation
Slide 2: For personal use only
For personal use only The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as
Slide 3: Company snapshot
Company snapshot Appen provides high quality data for machine learning For personal use only Appen’s customers include the world’s leading technology companies, automakers and 364.3 governments Data includes speech and natural languages data, from 130 countries and in 180 languages, 166.6 Revenue im
Slide 4: FY2018 highlights (A$M)
FY2018 highlights (A$M) For personal use only Revenue Appen’s strong growth continues 364.3 • Revenue up 119% to $364.3M • Underlying EBITDA of $71.3M up 153%, statutory EBITDA up 206%1 166.6 • Underlying EBITDA margins improved from 16.9% to 19.6% • Underlying NPAT of $49.0M up 148%, statutory NPAT
Slide 5: Strong divisional performance (A$M)
Strong divisional performance (A$M) Substantial 2H for Language Resource High revenue growth and margin For personal use only delivers record annual revenue expansion for Content Relevance Language Resources Content Relevance 51.4 312.8 40.4 Revenue Revenue EBITDA 126.2 EBITDA 12.2 11.2 74.8 22.1 FY
Slide 6: High growth, long term customer relationships (A$M)
High growth, long term customer relationships (A$M) 364.3 For personal use only Ongoing customer growth and repeat revenue • New and existing customers growing with multiple projects • Consistent growth underscores importance of 166.6 data and quality of Appen’s delivery 110.9 • Growth driven by dat
Slide 7: Business initiative updates
Business initiative updates For personal use only Secure facilities Leapforce • Growing demand due to data privacy and • Integration nearing completion. commercial confidentiality • Increased automation and scalability for all • Manila facility ISO 27001 certified operational processes under Appen C
Slide 8: Growth trajectory continues (A$M)
Growth trajectory continues (A$M) For personal use only % change FY2018 FY2017 % change constant Revenue up 119% on 2017 currency Statutory Results Growth largely driven by current and new projects with existing customers and the addition of Leapforce Language Resources 51.4 40.4 27% 25% Contact Rel
Slide 9: Strong Balance Sheet (A$M)
Strong Balance Sheet (A$M) For personal use only Dec-18 Dec-17 Strong balance sheet Cash 40.0 24.0 Increase in receivables relates to increase in revenue volumes Receivables 60.5 31.6 Non-current assets include Goodwill of $81.1M and Other Current Assets 13.8 12.5 identifiable intangible assets of $
Slide 10: Strong cash conversion (A$M)
Strong cash conversion (A$M) For personal use only FY2018 FY2017 Cash balance increased by $16.0M Receipts 340.4 157.7 Cash flow from operations increased by 249% and Payments and other (275.0) (136.8) remains strong Cash flow from operations before 65.4 20.9 Cash used to repay debt, pay dividends,
Slide 11: Currency impact (A$M)
Currency impact (A$M) For personal use only Revenue 364.3 186.8 10.9 Almost all revenue derived offshore, most in USD 166.6 Low currency tailwind impact in 2018 Underlying business performing well FY2017 Currency Neutral Currency Impact FY2018 Growth Underlying EBITDA 3.5 71.3 39.7 28.1 FY2017 Curre
Slide 12: AI and the need for data is booming
AI and the need for data is booming For personal use only The AI market is Investment driven by new Data is up to 10% of booming and existing use cases the AI investment3 Total AI market by 2025: Data labelling market by 2025: $169B1 • Chatbots • Assistants • Search • Social media $17B • Natural lan
Slide 13: Data volume and refresh are critical
Data volume and refresh are critical For personal use only AI performance improves Applications require with data volume regular data refresh2 At least monthly refreshes At least At least monthly weekly Less frequent refreshes • Work by Andrew Ng1, co-founder • One third of AI applications of Google
Slide 14: Appen investing in technology to meet the demand for data
Appen investing in technology to meet the demand for data For personal use only Technology Investment Global crowd workforce • Hired Wilson Pang as CTO. Formerly Chief Data Officer Ctrip.com and Senior Director Engineering at eBay Client Annotation Crowd • Building out global software workspace tool
Slide 15: Additional growth initiatives
Additional growth initiatives For personal use only Customer-centric alignment China • LR and CR sales teams combined to unify • Largest AI market outside US customer engagement and support • Building out team, customer base and • Operations teams combined under global operations in Shanghai Client
Slide 16: Appen strongly positioned and delivering
Appen strongly positioned and delivering For personal use only Established Provider Global Presence Scalable Operations Founded in 1996 513 full time staff worldwide Delivered 500K hours of speech data Exeter High staff engagement, Seattle Detroit Beijing low turnover San Francisco Provided 3B+ rele
Slide 17: Outlook
Outlook For personal use only Appen is uniquely positioned and continues to execute strongly in a high growth market The company is investing in engineering to meet the demand for data. Investments of $6M (P&L impact) funded by efficiency savings in 2019 from Leapforce integration Future investments
Slide 18: Thank you
For personal use only Thank you Mark Brayan, CEO mbrayan@appen.com Kevin Levine, CFO klevine@appen.com appen.com