Technology One Limited · ASX:TNE

Technology One — H1 FY2013 Earnings Presentation

26 slides from Technology One's earnings presentation, Jul 25, 2013

  1. Slide 1: 2013 Mid Year Presentation

    7/25/2013 For personal use only Technology One Ltd Mid Year Presentation - 23 July 2013 Technology One Ltd (ASX:TNE) today conducted presentations with Merrill Lynch Australia in Sydney. Attached is the presentation by the company’s Executive Chairman, Mr Adrian Di Marco. These slides have been lodg

  2. Slide 2: Agenda; TechnologyOne Overview

    7/25/2013 Agenda For personal use only  Company Overview  2013 Half Year Results Highlight  Company Update  Outlook for Full Year  Long Term Outlook Appendix  2013 Half Year Results Detail TechnologyOne Overview Formed in Employees 300+ developers 800+ Revenue 1987 800+ R&D in centre corporati

  3. Slide 3: 800+ high profile customers; financially very strong

    7/25/2013 800+ high profile customers For personal use only TechnologyOne Overview Financially very strong*…  Continually paid dividends since 1996 (16 years)  Cash and Equivalents $51.1m  Return on Equity 32%  Adjusted Return on Equity** 70+%  Debt/Equity 10%  Interest Cover 50 * as at 30th S

  4. Slide 4: The Competitive Landscape

    7/25/2013 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 Infor (Sun Systems) $30m Reckon CLIENT TURNOVER MYOB What Makes Us Different We are one of only a fe

  5. Slide 5: What Makes Us Different

    7/25/2013 What Makes Us Different For personal use only We focus on seven key markets ...  Deep understanding and engagement in our markets We sell to asset and  Deeply integrated pre configured solutions service intensive  Proven practice organisations.  Streamlined implementations We do not se

  6. Slide 6: Robust Revenue Model

    7/25/2013 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

  7. Slide 7: TechnologyOne Overview: revenue diversity and key metrics

    7/25/2013 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 s

  8. Slide 8: Results Summary

    7/25/2013 Agenda For personal use only  Company Overview  2013 Half Year Results Highlight  Company Update  Outlook for Full Year  Long Term Outlook Appendix  2013 Half Year Results Detail Results Summary FY13 FY12 Variance % Revenue $79.7m $77.3m 3% Initial Licence Fees $16.3m $18.4m (12%) Co

  9. Slide 9: Results Highlights

    7/25/2013 Results Highlights For personal use only  Good result given challenging and uncertain economic climate  Positions us to deliver continuing growth in both revenue and profit for the full year  Pipeline for new licences weighted to the second half this year  Continued significant investm

  10. Slide 10: Significant Achievements: R&D

    7/25/2013 Company Update For personal use only Significant Achievements  R&D  TechnologyOne Ci²  TechnologyOne Cloud  Other Initiatives R&D 2012 R&D was $33.5m, approx 20% of revenue  R&D fully expensed as incurred  R&D is an important driver for future growth The most ambitious R&D plan in th

  11. Slide 11: TechnologyOne Ci²

    7/25/2013 Company Update For personal use only Significant Achievements  R&D  TechnologyOne Ci²  TechnologyOne Cloud  Other Initiatives TechnologyOne Ci²  Ci² - next generation of our Ci product range  R&D into new technologies, innovations, ideas and concepts  Simple, easy way forward for ou

  12. Slide 12: Strategy for roll out of Ci²

    7/25/2013 TechnologyOne Ci² For personal use only Strategy being developed for roll out of Ci²  Minimise the risks associated with such a large and ambitious project  Maximise the revenue potential at the same time  Early adopters to be identified  Generally available mid/late 2014 Company Updat

  13. Slide 13: On Premise versus the Cloud

    7/25/2013 Today – On Premise For personal use only The old way - Run your own hardware & systems On Premise ..Your Problem Database Server N-tier Application Distributed Citrix Servers Servers Processors client A complex computing model Installation Servers What is cloud In the Cloud The new way ..N

  14. Slide 14: The TechnologyOne Cloud

    7/25/2013 The TechnologyOne Cloud For personal use only TechnologyOne Enterprise Suite in the cloud today, delivered in a browser. Power of One TechnologyOne takes We build, market, sell, Implement, support care of everything and now run it all for you  Running of hardware & software  Capital expe

  15. Slide 15: Cloud: years before a meaningful profit contribution

    7/25/2013 Cloud For personal use only TechOne Cloud - a number of years before a meaningful contribution to our profit Company Update Significant Achievements  R&D  TechnologyOne Ci²  TechnologyOne Cloud  Other Initiatives 15

  16. Slide 16: TechnologyOne's Journey to the Cloud

    7/25/2013 TechnologyOne’s Journey to The Cloud For personal use only TechnologyOne’s Journey to the Cloud ...  Email done  Corporate Accounting done  R&D in the Cloud done  Demonstrations in the Cloud Dec 2013  Documents & Files in the Cloud Dec 2013  Consulting in the Cloud Dec 2013 Significa

  17. Slide 17: Other Initiatives

    7/25/2013 Other Initiatives For personal use only  Transformation of Consulting Business – One Consulting  Transformation of R&D Business – One R&D  Pre Configured Solutions  TechnologyOne Leadership program  Compelling Customer Experience program  TechnologyOne College  United Kingdom • New

  18. Slide 18: Outlook for Full Year

    7/25/2013 Outlook for Full Year For personal use only  Economic environment remains challenging and uncertain  Strong committed annual licence fees in the second half  TechnologyOne enterprise business remains resilient  Good pipeline of opportunities in second half  We expect profit growth of

  19. Slide 19: Improved Margins

    7/25/2013 Agenda For personal use only  Company Overview  2013 Half Year Results Highlight  Company Update  Outlook for Full Year  Long Term Outlook Appendix  2013 Half Year Results Detail Improved Margins Net Profit Margin Before Tax Profit margin has contracted over the 35% last 10 years 30%

  20. Slide 20: Control R&D Costs

    7/25/2013 Control R&D Costs For personal use only Compound Growth 16% 2002 – 2011 Control R&D costs...  Leveraging our new Offshore R&D centre  Economies of scale  World Class R&D Practices  Maintaining an ambitious R&D agenda R&D Growth Projections Target for R&D growth of 8% per annum compound

  21. Slide 21: Platform for Continuing Growth

    7/25/2013 Platform for Continuing Growth For personal use only  Ci – large and loyal customer base • On average our customers have 3.5 out of 12 products • On average 10% to 20% penetration in each market  Ci² - next generation of our Ci product range • Enterprise software incredibly simple R&D •

  22. Slide 22: Results Summary

    7/25/2013 Results Summary For personal use only FY13 FY12 Variance % Revenue $79.7m $77.3m 3% Initial Licence Fees $16.3m $18.4m (12%) Consulting Services Fees $22.2m $21.3m 4% Annual Licence Fees $29.9m $25.4m 18% Expenses $68.9m $68.0m 1% R&D Expenses * $17.2m $16.6m 4% Expenses excl R&D $51.7m $5

  23. Slide 23: Balance Sheet

    7/25/2013 Balance Sheet For personal use only Strong balance sheet Mar-13 Mar-12 Var % $'000 $'000 $'000  Cash & Cash Equivalents $50.3m (vs. $33.4m) Cash & Available-for-sale financial assets 50,251 33,410 16,841 50%  Net Cash*: 14.00c/s (vs.7.55c/s) Trade and other receivables 22,060 21,629 431

  24. Slide 24: Dividend

    7/25/2013 Dividend For personal use only Dividends for this half year Dividend up 10% 2.00  Half 1 1.77 cps up 10%* (declared, 85% franked) 1.50 Compound Growth 19% Cents per share  Payout ratio of 63% 1.00 *Indicative of our confidence for the full year outlook 0.50 0.00 Notes 2009 2010 2011 2012

  25. Slide 25: Revenue Streams

    7/25/2013 Revenue Streams For personal use only Licence fees down 12% Annual licence fees continue to grow strongly: up 18%  Half year can not be extrapolated, as discussed at AGM  Compound growth over the last 10 years is 18%  Our pipeline this year is weighted towards the 2nd half year.  Custo

  26. Slide 26: Licence Fee Contribution - Vertical Market

    7/25/2013 Licence Fee Contribution - Vertical Market For personal use only Licence Fee Contribution ‐ Vertical Market Financial Services, $520k, 3% Utilities, $2.3m, 14% Government, $1.7m, 11% Health & Community Services, $2.3m, 14% Local Government, $3.5m, 21% Managed Services, $664k, 4% Education,

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