Slide 1: 2017 Half Year Results
For personal use only 2017 Half Year Results ending 31 March 2017 Adrian Di Marco Edward Chung Tony Ristevski Executive Chairman Chief Executive Officer Chief Financial Officer 23 May 2017 FINAL Commercial in confidence Disclosure Statement Technology One Ltd Half Year Presentation – 23 May 2017 Tec
Slide 2: Agenda and Original Guidance
For personal use only Agenda Results • Significant Achievements • Strategic Initiatives • Outlook for Full Year • Long Term Outlook Appendix • TechnologyOne Overview Original Guidance Half year results in line with guidance Guidance provided at the start of 2017 financial year1… “As in previous ye
Slide 3: Our cloud first, mobile first strategy is driving our strong results
For personal use only Our cloud first, mobile first strategy is driving our strong results 3
Slide 4: Results Summary
Results Summary FY17 FY16 Variance % Revenue $113.9m $101.0m 13% For personal use only Initial Licence Fees $24.1m $18.5m 30% Total Consulting1 $32.9m $33.0m (0%) Refer slides: Total Consulting Annual Licence Fees $47.9m $43.7m 10% Cloud Service Fees $8.2m $4.3m 90% Expenses $103.6m $91.5m 13% R&D E
Slide 5: Updated Guidance For The Full Year
Updated Guidance For For personal use only The Full Year Profit growth of 10% to 15% for the full year • Pipeline for second half is strong • Continuing growth in Licences Fees expected in full year • Full year guidance will be discussed in more detail Impact of Evolve User Conference Profit excludi
Slide 6: Dividend Up 10%
For personal use only Dividend Up 10% 3.00 Dividend UP 10% Compound Growth 10% Given strong profit growth for 2.50 Cents per share the full year, H1 dividend 2.00 increased 1.50 • 2.60 cps up 10% (declared, 75% franked1) 1.00 • Payout ratio of 101% 0.50 • Board will consider a special dividend at ye
Slide 7: Total Expenses Up 13% and R&D Expenses Up 9%
Total Expenses Up 13% ($12.1m) For personal use only 2%, UP 13%, 106 7%, $2.1M $103.6M 104 $6.1M 102 100 2%, 98 2%, $1.6M 96 $2.3M #039;m 94 $91.5m 92 90 88 86 84 2016 Marketing Cloud Payroll Underlying Total Expenses Expense (1) Expense (2) Expense (3) Expenses (4) Expenses Major contributors to expen
Slide 8: Cash Flow
Cash Flow Mar-17 Mar-16 Var % $ '000 $ '000 Operating Cash Flow $2.6m, has increased from negative For personal use only $3.3m in prior year (up $5.9m) EBIT 10,325 9,420 905 10% Depreciation & Amortisation 2,098 2,297 (199) (9%) • Up $5.9m, 177% from Mar 2016 Change in working Capital (Increase) / D
Slide 9: Managing the transition to the cloud carefully
We are managing the transition to the cloud carefully We are generating significant cash from the cloud For personal use only From the Balance Sheet on previous page… Mar 2017 Mar 2016 • Earned & Unbilled Revenue (non current) 3 ($6.505m) ($2.081m) Driven by cloud - Revenue recognized & to be billed
Slide 10: Results – Key Metrics and Profit By Segment
Results – Key Metrics For personal use only Half Year 2017 v Half Year 2016 2017 2016 Variance % Half Year 2017 v Half Year 2016 2017 2016 Variance % EPS (cents) 2.57 2.36 9% ROE Dividends (cents) Return on equity 7% 7% Standard 2.60 2.36 10% Adjusted return on equity1 11% 12% Balance Sheet ($‘000s)
Slide 11: Licence Fees continue to grow strongly, up 30%
Licence Fees continue to grow strongly, up 30% For personal use only 30 Licence Fees UP 30%, $24.1M 25 Compound Growth 8% 20 #039;m 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • This exceeded expectations as a number of deals closed earlier than would normally be expected • New customer
Slide 12: Annual Licence and Cloud Service Fees growth
Annual Licence continues to grow strongly, up 10% For personal use only Annual Licence Fees 60 UP 10%, $47.9M 50 Compound Growth 14% 40 #039;m 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Compound growth over the last 10 years is 14% • Customer retention is important • Investing in Co
Slide 13: New Cloud Customers For 2017 (41)
New Cloud Customers For 2017 (41) Adur & Worthing Borough Councils Illawarra Credit Union Tasracing Pty Ltd For personal use only CEnet - Archdiocese of Hobart Inner West Council Thames Coromandel District Council CEnet - Diocese of Townsville Irrigo Centre Limited The Roman Catholic Archbishop of P
Slide 14: Licence Fee Contribution - Vertical Market
Licence Fee Contribution - Vertical Market Government, $2.1M, 8% For personal use only Corporate, $876K, 4% Project Intensive, $844K, 3% Financial Services, $633K, 3% Local Government, $8.6M, 36% Asset Intensive, $848K, 3% Health & Community Services, $3.1M, 13% Education, $7.1M, 30% Licence Fees $2
Slide 15: TechnologyOne Cloud
For personal use only TechnologyOne Cloud Enterprise software as a service TechnologyOne Cloud 5.0+ introduced the start of our mass production Software as a Service offering Have now migrated majority of customers seamlessly from Cloud 1.0, 2.0, 3.0, 4.0, 5.0 to Cloud 6.0 Cloud 7.0 now releas
Slide 16: TechnologyOne Cloud Services Fee Growth To 2022
TechnologyOne Cloud Services Fee1 Growth To 2022 Additional $143m / year (recurring) in 2022 For personal use only new revenue stream and does not cannibalise existing revenue streams #039;m Annual Contract Value - Compound Growth 69% per annum 160 $143.0M Up 26% 140 $113.9M Up 15% 120 $99.0M Up 25% 10
Slide 17: Ci Anywhere
For personal use only Absolutely essential in a digital world Ci Anywhere Any device. Any where. Any time. Enterprise software, incredibly simple Ci Anywhere Enterprise software, incredibly simple Any device. Any where. Any time. 2016A & earlier releases progressively de-commissioned by mid 2017
Slide 18: Showcases and Consulting
Showcases For personal use only Insights, Inspiration, Innovation Following success of Evolve Create sales momentum for TechnologyOne Cloud and Ci Anywhere Solution showcases now planned for mid 2017 to early 2018 to continue momentum Australia, New Zealand and UK Capitalising on Evolve Ne
Slide 19: United Kingdom
United Kingdom For personal use only • United Kingdom $775k loss1 (vs 300k last pcp) • Licence Fees down 50% to $678k • A large University contract could not be finalized by March 30 th • Pipeline strong for the full year, and expect to grow licence fees by 33% to $4m • 4 new customers, all of which
Slide 20: UK Customers (44)
UK Customers (44) Local Government (12) Higher Education (14) For personal use only Adur & Worthing Borough Councils Carnegie College Aylesbury Vale District Council Ealing, Hammersmith and West London College Cambridge City Council Glasgow Clyde College Clackmannanshire Council Institute of Educati
Slide 21: Fast Track Subscription Licences
For personal use only Agenda Results Significant Achievements Strategic Initiatives • Outlook for Full Year • Long Term Outlook Appendix • TechnologyOne Overview Fast Track Subscription Licences Move away from perpetual licences • on Cloud or On Premise Push 5 year subscription licences wi
Slide 22: Edward Chung Appointed CEO; Brisbane City Council Status
Edward Chung Appointed CEO For personal use only • Long term carefully executed succession plan • Edward Chung was previously Chief Operating Officer - Long serving executive for 10+ years - Responsible for day to day operations of TNE globally • Adrian Di Marco continues in role of Executive Chairm
Slide 23: Outlook for 2017 Year
For personal use only Agenda Results Significant Achievements Strategic Initiatives Outlook for Full Year • Long Term Outlook Appendix • TechnologyOne Overview Outlook for 2017 Year Continuing strong growth • The enterprise software markets has been one of the most resilient sectors of the I
Slide 24: Outlook For Full Year
Outlook For Full Year For personal use only • Substantial base of committed Annual Licence fees heavily weighted to the second half • Strong pipeline of opportunities in second half • We expect profit growth of 10% to 15% for the full year Assumptions • The current pipeline remains strong for the se
Slide 25: Our focus this financial year
Our focus this financial year For personal use only Control costs: R&D, Cloud, Consulting etc.. Cloud to deliver $2.5m profit in 2017 United Kingdom to deliver $500k profit in 2017 Consulting improve profitability Transition our business: TechnologyOne Cloud & Ci Anywhere Focus on our ei
Slide 26: Long Term Outlook: Profit Margin and R&D
Temporary hiatus due to Cloud loss of $2.2m on revenues of $10.1m Excluding Cloud business, margin is 23%. Cloud becomes profitable 2017 financial year, margin improvement to resume Long Term Outlook For personal use only Net Profit Margin Before Tax Focus is to 35% 29% 30% 25% substantially improve
Slide 27: Cloud Services Growth To 2022 and UK Licence Fee Growth
TechnologyOne Cloud Services3 Growth To 2022 $143m / year (recurring) in 2022, recalibrated by financial year For personal use only new revenue stream and does not cannibalise existing revenue streams #039;m Annual Contract Value - Compound Growth 69% per annum 160 $143.0M, UP 25% 140 120 recalibrated
Slide 28: Product Maturity and long term growth strategy
Product Maturity Tipping point when Profit exceeds Licence fees For personal use only 20 #039;m Contribute $16+m of additional Profit per year in 5+ years time 15 10 5 0 (5) CPM Financials & Student Asset Management Enterprise Content HR/Payroll Property Stakeholder Spatial Supply Chain Management Mana
Slide 29: Positioned well for the future…
Positioned well For personal use only for the future… Agenda Results Significant Achievements Strategic Initiatives Outlook for Full Year Long Term Outlook Appendix • TechnologyOne Overview 29
Slide 30: Australia's largest enterprise software company
Australia’s largest enterprise software company Continually profitable $46m+ For personal use only Invest For over 25 years R&D Back into Profit Formed in $53m Largest 1987 R&D centre Revenue 1000+ in Australia $249m employees 300+ developers Cash $83m Market Capitalisation 1000+ Corporate, governme
Slide 31: Financially Very Strong
Financially Very Strong For personal use only • Cash and Equivalents $82.6m • Return on Equity 30+% • Adjusted Return on Equity1 61% • Debt/Equity 0.02% • Interest Cover 683 • Continually paid dividends since 1996 (21 years) • Continually profitable since 1992 (25 years) As at 30th Sept 2016 1Adjust
Slide 32: The Competitive Landscape
For personal use only Technology One .. Additional Information The Competitive Landscape ORACLE SAP New expanding market coverage Workday $1,000m Current market coverage TechnologyOne Microsoft Business Solutions $100m SAP/Business One NetSuite Infor (Sun Systems) $30m Xero Reckon CLIENT TURNOVER MY
Slide 33: What makes us unique: Our enterprise vision
For personal use only What makes us unique What makes us unique… Our enterprise vision We are one of only a few global enterprise vendors • Suite of 14 products • Deeply integrated • Best of Breed functionality • Common platform • Consistent user interface The power of a single, integrated, enterpri
Slide 34: What makes us unique: The power of one
For personal use only What makes us unique What makes us unique… The power of one We do not use implementation partners or resellers We take complete responsibility for building, marketing, selling, implementing, supporting and running our enterprise solution for each customer to guarantee long-term
Slide 35: We focus on eight key markets
What makes us unique… For personal use only We focus on eight 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 organisations.
Slide 36: What makes us unique: The power of evolution
For personal use only What makes us unique What makes us unique… The power of evolution Substantial investment into R&D each year • New releases encompass new technologies, concepts and innovations • Configuration and not customisation Green screen Client server Web based Cloud computing & smart mob
Slide 37: TechnologyOne Cloud
TechnologyOne Cloud For personal use only Enterprise software as a service • We run our own enterprise software through the cloud • We take responsibility to provide a simple, cost effective and highly elastic model of computing • Unique mass production model delivers economies of scale and strategi
Slide 38: Mass Production SaaS and Ci Anywhere
Economy of scale TechnologyOne SaaS - Massively scalable, Highly efficient , Cost effective Highly resilient & fault tolerant Mass Production Elastic - add capacity dynamically For personal use only Significant cost savings Future proof - We invest millions annually to make our production li
Slide 39: TechnologyOne Cloud Growth To 2022
Flow across many devices in the course of a day For personal use only We are delivering our entire enterprise suite on mobile devices Enterprise Software intelligently adapts to the devices TechnologyOne Cloud Growth To 2022 Additional $143m / year (recurring) in 2022 new revenue stream and does not
Slide 40: Cloud Services Fee Growth To 2022
TechnologyOne Cloud Services Fee3 Growth To 2022 $143m / year (recurring) in 2022, recalibrated by financial year For personal use only new revenue stream and does not cannibalise existing revenue streams #039;m Annual Contract Value 160 $143.0M, Compound Annual Growth 69% UP 25% 140 recalibrated reven
Slide 41: Other Facts
Other Facts For personal use only Diversity of revenue streams from multiple: • Products 14 • Vertical markets 8 • 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 solution – ‘sticky customer
Slide 42: Robust Revenue Model
Robust Revenue Model For personal use only Initial Buy Based on: No of Users, Initial Licence Implementation Service Annual Licence Annual Licence Annual Licence …. Products & Modules Buy Addn Users Initial Licence Annual Licence Annual Licence Annual Licence …. Additional Fee Buy Addn Modules Initi
Slide 43: Our Vision
Our Vision Clear and focused vision… Transforming business, For personal use only making life simple 43