Slide 1: Half Year Results Presentation cover letter to ASX
Commercial in Confidence For personal use only 26 May 2015 Company Announcements Officer Australian Securities Exchange Limited Exchange Centre, 20 Bridge Street SYDNEY NSW 2000 BY ELECTRONIC LODGEMENT TECHNOLOGY ONE LIMITED – HALF YEAR RESULTS PRESENTATION Please find attached a copy of the Executi
Slide 2: 2015 Half Year Results
25-May-15 For personal use only 2015 Half Year Results Half year ending 31 March 2015 Adrian Di Marco, Executive Chairman 26 May 2015 Commercial in confidence Commercial in confidence Final Disclosure Statement Technology One Ltd Full Year Presentation - 26 May 2015 Technology One Ltd (ASX: TNE) tod
Slide 3: Agenda and Original Guidance
25-May-15 For personal use only Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook Appendix • Technology One Overview Original Guidance Half year results in line with guidance Guidance provided at the start of 2015 financial year…. “In the first half of 2014 we s
Slide 4: Results Summary
25-May-15 Results Summary For personal use only FY15 FY14 Variance % Revenue $90.0m $87.6m 3% As per guidance given at start of Initial Licence Fees $18.6m $20.9m (11%) financial year Total Consulting2 $29.7m $30.3m (2%) Annual Licence Fees $38.1m $33.8m 13% Cloud Service Fees $1.4m $0.6m 100%+ Expe
Slide 5: Results Highlights and Dividend
25-May-15 For personal use only Results Highlights Continuing strong performance Significant investments have continued as follows: - United Kingdom ($494k loss) - TechnologyOne Cloud ($1.6m loss) - Preconfigured solutions ($2.6m loss) - R&D, including Ci Anywhere ($19.2m) • Fully expensed as incurr
Slide 6: Total Expenses up 5%
25-May-15 Total Expenses up 5% For personal use only Variable Operating #039;m #039;m $69M, 12 80 UP 3% $9.6M, UP 23% 70 10 60 8 50 FY14 FY14 6 40 FY15 FY15 30 4 20 2 10 0 0 Variable costs¹ up 23% ($1.8m) Operating costs up 3% • TechOne Cloud costs up 100%+ ($841k), • As expected associated with cloud rev
Slide 7: Balance Sheet
25-May-15 Balance Sheet Mar-15 #039;000 Mar-14 #039;000 Var #039;000 % Cash & cash equivalents 51,703 53,997 (2,294) (4%) For personal use only Trade and other receivables 39,246 31,900 7,346 23% Earned and unbilled revenue 10,941 7,839 3,102 40% • Cash & Cash Equivalents1 $51.7m (vs. $54.0m, down $2.3m) Pre
Slide 8: Results Analysis
25-May-15 Results Analysis For personal use only FY15 FY14 Variance Half Year 2015 v Half Year 2014 #039;000 #039;000 #039;000 % Revenue excl interest 88,969 86,712 2,257 3% Expenses (excl R&D, interest, Depn & Amortisation) 57,538 53,986 3,552 7% EBITDAR 31,431 32,726 (1,295) (4%) R&D Expenditure 19,229 18,
Slide 9: Revenue Streams: Licence Fees
25-May-15 Revenue Streams For personal use only #039;m 25 Licence Fees DOWN 11%, Compound Growth 10% $2.3M 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Licence fees down 11%, as was expected • At the start of the 2015 year we identified that the sales pipeline was weighted strongly to
Slide 10: Revenue Streams: Annual Licence and Cloud Fees
25-May-15 Revenue Streams For personal use only #039;m Annual Support Fees UP 13%, 45 $4.4M 40 35 Compound Growth 17% 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Annual licence fees continue to grow strongly: up 13% • Compound growth over the last 10 years is 17% • Customer ret
Slide 11: Consulting Revenue inc Plus down 2%
25-May-15 Consulting Revenue inc Plus down 2% ($600k) For personal use only Product Consulting Plus #039;m Product Consulting #039;m UP 8%, Plus 30 12 $1.8M Compound Growth 13% 25 10 Compound Growth 0% DOWN 20 8 34%, $2.4M 15 6 10 4 5 2 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008
Slide 12: Licence Fee Contribution - Vertical Market
25-May-15 Licence Fee Contribution - Vertical Market For personal use only Licence Fee Contribution - Vertical Market Local Government, $3m, 16% Health & Community Services, $6.1m, 33% Financial Services, $1.3m, 7% Government, $1.1m, 6% Managed Services, $1.1m, 6% Education, $4.6m, 25% Utilities, $1
Slide 13: Ci Anywhere and TechnologyOne Cloud
25-May-15 For personal use only Agenda Results • Significant Achievements • Outlook for Full Year • Long Term Outlook Appendix • Technology One Overview Ci Anywhere Enterprise software Any device. Any where. Any time. Early adopters in progress, positive feedback Front Office mobile apps now c
Slide 14: Traditional Hosting vs TechnologyOne SaaS
25-May-15 Traditional Hosting Customised For personal use only Hand crafted to your specific needs – you only get what you pay for Economy of scale TechnologyOne SaaS - Massively scalable, Highly efficient , Cost effective Highly resilient & fault tolerant Mass Production Elastic - add capacit
Slide 15: TechnologyOne Cloud
25-May-15 For personal use only TechnologyOne Cloud Expect a smooth transition of our business to the Cloud over next 5+ years Significant benefits for us as we transition our business to the Cloud - Streamline our business, reduce costs - Reduce time to market - Increase innovation and creativi
Slide 16: Journey to the Cloud and Acquisition Strategy
25-May-15 TechnologyOne’s For personal use only Journey to The Cloud • Email done • Corporate Accounting done • R&D in the Cloud done • Documents & Files in the Cloud done • Demonstrations via the Cloud done • Consulting in the Cloud June 2015 Acquisition Strategy • TechnologyOne is not an acquisiti
Slide 17: Acquisitions: Icon Software and Digital Mapping
25-May-15 Acquisitions For personal use only Icon Software Solutions • Online Planning and Approval for Local Government and Government - Streamline the development approvals for Councils reducing cost, time and effort • Strengthens our overall enterprise solution, particularly in Local Government -
Slide 18: Other Initiatives: UK
25-May-15 Other Initiatives For personal use only UK • Relocated Operating Officer from Australia to the UK • 4 new customers, taking us to a total of 21 customers in the UK • Critical mass will require 40+ customers • Critical we bring our HRP1 offering into the UK market • HRP UK adaption in progr
Slide 19: Outlook for Full Year
25-May-15 Outlook for Full Year For personal use only • Substantial base of committed annual licence fees in the second half • Strong pipeline of opportunities in second half • We are now preferred supplier for a number of very large contracts, for which we are now in contract negotiations • We expe
Slide 20: Long Term Outlook: Profit Margin
25-May-15 For personal use only Agenda Results Significant Achievements Outlook for Full Year • Long Term Outlook Appendix • Technology One Overview Long Term Outlook Net Profit Margin Before Tax 35% Focus is to 31% 30% 29% 27% 25% 26% 24% 25% substantially improve 25% 21% 21% 21% 19% PBT marg
Slide 21: Controlled R&D Growth
25-May-15 Controlled R&D Growth For personal use only #039;m 2011 Model for R&D Expense Growth 70 Historical Compound 2014 growth was 6% Growth 16% $67m 2011 Model, shows 60 savings of $20m/year 2013 growth was 6% Model Compound in year 5 (2016) 50 Growth 8% $47m 2012 year growth was 5% • In year 5, R&
Slide 22: Long Term Outlook: Clear strategy for growth
25-May-15 Long Term Outlook For personal use only Clear strategy for continuing growth Resilient nature of the enterprise software market The breadth and depth of our product offerings Our enterprise vision Our focus on seven markets Our preconfigured solutions Our large customer base
Slide 23: TechnologyOne Overview
25-May-15 For personal use only Agenda Results Significant Achievements Outlook for Full Year Long Term Outlook Appendix • Technology One Overview TechnologyOne Overview Formed in Employees 300+ developers 1000+ Revenue 1987 900+ R&D in centre corporations, government and statutory authoriti
Slide 24: 1000+ high profile customers
25-May-15 1000+ high profile customers For personal use only TechnologyOne Overview Financially very strong¹ .... • Cash and Equivalents $80.2m • Return on Equity 30+% • Adjusted Return on Equity² 76+% • Debt/Equity 4% • Interest Cover 168 • Continually paid dividends since 1996 (19 years) • Continu
Slide 25: The Competitive Landscape
25-May-15 The Competitive Landscape For personal use only New expanding market coverage ORACLE SAP/R3 $1,000m Current market coverage TechnologyOne Microsoft Business Solutions $100m SAP/Business One NetSuite Infor (Sun Systems) $30m Xero Reckon CLIENT TURNOVER MYOB What makes us unique We are one o
Slide 26: What makes us unique: focus on seven markets
25-May-15 What makes us unique For personal use only We focus on seven key markets… Deep understanding and engagement in our markets Deeply integrated preconfigured solutions Proven practice Streamlined implementations Reduce time, cost and risk We sell to asset and service intensive organ
Slide 27: What makes us unique: the power of evolution
25-May-15 What makes us unique For personal use only The power of evolution • Substantial investment into R&D each year • Embrace new technologies, concepts and innovation Green screen Client server Web based Cloud computing and smart mobile devices 99% retention rate of customers who have continued
Slide 28: Robust Revenue Model
25-May-15 Robust Revenue Model For personal use only Robust Revenue Model ... • Initial Licence - based on usage (number of users ) - Matrix of licensable products & modules (approx 300 modules over 12 products) - Once off fee – invoiced on contract signing • Implementation Services - fee for servic
Slide 29: TechnologyOne Overview
25-May-15 TechnologyOne Overview For personal use only Diversity of revenue streams from multiple: • Products 12 • Vertical markets 7 • Geographies 12 - All states of Australia, New Zealand, South Pacific, Asia and UK Strong, very loyal blue chip customer base • We provide a mission critical solutio
Slide 30: Historical Performance
25-May-15 Historical Performance 120 For personal use only 100 Key metrics over last 15 years … 80 #039;m Revenue - 15% per annum compound 60 – Even through the Dot-Com and GFC Initial Licence Fees - 15% per annum compound 40 Annual Licence Fees - 22% per annum compound 20 Profit After Tax - 13