Slide 1: FY16 H1 Results Presentation
FY16 H1 Results Presentation For the six months ended 31 December 2015 19th February 2016 Sam Weiss – Chairman | Jonathan Kenny – Interim CEO
Slide 2: Our core purpose is to transform lives through a love of learning
“ Our core purpose is Agenda to transform lives through a love of learning. FY16 H1 Results Presentation 19 February 2016 2
Slide 3: Agenda
Agenda 1 Overview 2 FY16 H1 Financial Results 3 Product Update 4 FY16 Outlook 5 Q&A 6 Appendices FY16 H1 Results Presentation 19 February 2016 3
Slide 4: Section One: Overview
Section One Overview FY16 H1 Results Presentation 19 February 2016 4
Slide 5: FY16 H1 Results Highlights
FY16 H1 Results Highlights • Revenue growth 24% to $22.9m year-on-year (YoY) • Revenue growth in all regions ANZ +10%, EMEA +52%, Americas +58% • Licence growth 14% YoY to 5.56 million licences across all products and regions • EBITDA growth 16% YoY to $7.3m including first-time associate contributi
Slide 6: FY16 H1 Results versus prior year
FY16 H1 Results versus prior year Proforma $M FY16 H1 FY15 H1 Variation Variation % Key Points Revenue 22.9 18.4 4.5 24% ANZ 13.5 12.3 1.2 10% 24% revenue increase reflects EMEA 6.4 4.2 2.2 52% growth in all regions and all Americas 3.0 1.9 1.1 58% products Mathletics 18.7 15.4 3.3 21% 31% expen
Slide 7: Seasonality of Sales
Seasonality of Sales Peak buying season in the Southern hemisphere is in February/March and in the Northern hemisphere in May/June which skews revenue and cash flow to H2. Reading Eggs agency revenue is recorded in line with invoiced billings, predominantly in H2. Revenue seasonality (A$m) EBITDA se
Slide 8: Section Two: FY16 H1 Financial Results
Section Two FY16 H1 Financial Results FY16 H1 Results Presentation 19 February 2016 8
Slide 9: ANZ – Expanding EBITDA supporting investment in global growth
ANZ – Expanding EBITDA supporting investment in global growth ANZ Financials Key Points Proforma $M FY16 H1 FY15 H1 Variation Variation % 10% revenue growth driven by licences Revenue 13.5 12.3 1.2 10% and ARPU Costs (6.1) (5.9) (0.2) 3% EBITDA 7.4 6.4 1.0 16% 16% YoY licence growth supported by
Slide 10: EMEA – Investing while growing market share
EMEA – Investing while growing market share EMEA Financials Key Points Proforma $M FY16 H1 FY15 H1 Variation Variation % Strong revenue growth of 52% and 31% Revenue 6.4 4.2 2.2 52% on a constant currency basis as a result Costs (3.3) (2.1) (1.2) 57% of licence growth EBITDA 3.1 2.1 1.0 48% Lice
Slide 11: Americas – Building Scale
Americas – Building Scale Americas Financials Key Points Proforma $M FY16 H1 FY15 H1 Variation Variation % 58% growth in revenue, 35% on a Revenue 3.0 1.9 1.1 58% constant currency basis Costs (3.5) (1.9) (1.6) 85% EBITDA (0.5) 0.0 (0.5) NM Solid licence growth of 39K in a non- EBITDA margin (%)
Slide 12: Case study: New York City Department of Education
Case study: New York City Department of Education Overview 3P’s growing presence • 1880 schools (1400 K-8) • 144 K-8 client schools / 10% market share • 1.1 million students • Client schools in 28 of the 32 sub-districts • $21.8 billion operating budget • Almost 100,000 student licences and growing
Slide 13: Learnosity – Valuable strategic investment
Learnosity – Valuable strategic investment Market leading assessment tool that powers Synergy benefits for 3PL 3P products • Learnosity software integrated into 3P products to • Completely customisable by non-technical users provide market leading assessment capability and teachers • Integrated futu
Slide 14: FY16 H1 – Income Statement
FY16 H1 – Income Statement Proforma Key Points $M FY16 H1 FY15 H1 Variation Variation % Total Revenue 22.9 18.4 4.5 24% Expenses up 22% on constant currency basis Expenses (15.9) (12.1) (3.8) (31%) Employee (9.9) (8.6) (1.3) (15%) Higher employee expenses due to 21% Marketing (1.6) (0.9) (0.7) (
Slide 15: FY16 H1 – Cash flow
FY16 H1 – Cash flow * Proforma $M HY 2016 HY 2015 Var Key Points Underlying Group EBITDA 7.3 6.3 1.0 Non-cash expense (0.4) (0.3) (0.1) Negative working capital reflects Change in working capital (10.6) (7.7) (2.9) seasonality of cash billings where 75% occur in second half of year Operating free
Slide 16: FY16 H1 – Balance sheet
FY16 H1 – Balance sheet $ million 31-Dec-15 30-Jun-15 31-Dec-14 Key Points Cash and cash equivalents 3.1 30.9 15.8 Trade and other receivables Income tax receivable 8.2 1.0 8.7 - 5.8 - • Cash and cash equivalents reduced due to Other current assets 0.0 0.6 3.7 investment in Learnosity Total current
Slide 17: Section Three: Product Update
Section Three Product Update FY16 H1 Results Presentation 19 February 2016 17
Slide 18: Product update - Mathletics
Product update - Mathletics Mathletics Licence and Revenue trends Key Points FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % 21% revenue growth supported by licence Licences (000s) 2,158 2,797 2,930 3,486 3,791 3,604 3,930 9% growth and ARPU increases Revenue $m 20.2 23.2 24.9 28.5 32.9 15.4 18
Slide 19: Product update – Reading Eggs
Product update – Reading Eggs Reading Eggs Licence and Revenue trends Key Points FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % 110% revenue growth reflects strong ANZ Licences (000s) 0 367 651 849 986 921 1,052 14% licence growth and pricing increases Revenue $m 0.0 1.5 2.8 4.0 6.2 1.0 2.1 11
Slide 20: Product update – Spellodrome
Product update – Spellodrome Spellodrome and Revenue trends Key Points FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % 25% revenue growth supported by licence Licences (000s) 240 300 278 294 436 293 476 62% growth offset by lower ARPU on bundled sales and revenue recognition Revenue $m 1.3 1.5
Slide 21: Product update – Into Science
Product update – Into Science Into Science Licence and Revenue trends Key Points FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % 100% revenue growth reflects strong licence Licences (000s) 0 0 4 37 99 46 108 135% growth Revenue $m 0.0 0.0 0.0 0.1 0.5 0.2 0.4 100% New features delivered : Upcomi
Slide 22: Section Four: FY16 Outlook
Section Four FY16 Outlook FY16 H1 Results Presentation 19 February 2016 22
Slide 23: Massive and growing market opportunity
Massive and growing market opportunity External drivers of growth Ongoing migration to Launch of National Innovation and Science Agenda in Australia online resources “Through the National Innovation and Science Agenda, the Government will invest $1.1 billion to incentivise innovation and entrepreneu
Slide 24: FY16 Outlook – Investing to Grow
FY16 Outlook – Investing to Grow • The forward order book in ANZ is up 9% to a record high and along with price increases will underpin the region’s FY16 result • As we enter the peak selling season in FY16 H2, revenue and licence growth is anticipated to continue • However, EBITDA margin percentage
Slide 25: CEO Transition
CEO Transition • Recruitment process by international search firm Russell Reynolds • Shortlist of candidates obtained and interviews underway • Strong and experienced management team lead by Jonathan Kenny during interim period FY16 H1 Results Presentation 19 February 2016 25
Slide 26: Section Five: Q&A
Section Five Q&A FY16 H1 Results Presentation 19 February 2016 26
Slide 27: Section Six: Appendices
Section Six Appendices FY16 H1 Results Presentation 19 February 2016 27
Slide 28: Revenue by Geography and Product
Revenue by Geography and Product Revenue by Geography Revenue split by Geography A$million FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % FY15 H1 FY16 H1 ANZ 19.6 22.2 24.2 24.6 30.1 12.3 13.5 10% EMEA 3.1 4.5 5.5 8.6 10.3 4.2 6.4 52% Americas 1.1 1.7 2.3 3.3 4.4 1.9 3.0 58% Total 23.7 28.5 32
Slide 29: Licences by Geography and Product
Licences by Geography and Product Licences by Geography Licences split by Geography 000s FY11 FY12 FY13 FY14 FY15 FY15 H1 FY16 H1 Variation % ANZ 1,486 2,236 2,500 2,524 2,696 2,659 2,853 7% FY15 H1 FY16 H1 EMEA 666 912 1,005 1,480 1,685 1,541 1,742 13% Americas 247 316 358 662 931 664 970 46% Total
Slide 30: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is a summary of 3P Learning Limited’s (‘3P’) activities and results as at the time of preparation, 19 February 2016. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of informati