Slide 1: 2020 Half Year Results
2020 Half Year Results Ended 31 March 2020 19 May 2020 Commercial in confidence Disclosure Statement TechnologyOne Ltd Half Year Presentation – 19 May 2020 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2020 Half Year results. These slides have been lodged wit
Slide 2: Agenda
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook Record Half Year Net Profit Before Tax of $25.9m, up 6% 2
Slide 3: TechnologyOne Global SaaS ERP Solution
TechnologyOne Global SaaS ERP Solution Continuing strong demand transforms our customers’ business, and makes life simple for them Our Vision Any Device, Anytime, Anywhere set a number of years ago, has allowed us and our customers to navigate COVID-19, quickly and easily 3
Slide 4: TechnologyOne Global SaaS ERP customers
COVID-19 is highlighting the substantial difference between ‘cloud hosting’ and SaaS Everything is available on our Global SaaS ERP Any device, Anytime, Anywhere COVID-19 will accelerate the move to SaaS TechnologyOne Global SaaS ERP customers "So pleased that we implemented a true SaaS Finance and
Slide 5: Our SaaS business continues to grow strongly
Our SaaS business continues to grow strongly SaaS ARR $110m up 33% ARR (Annual Recurring Revenue) 475 enterprise customers on TechnologyOne SaaS Up 22% from 389 enterprise customers pcp Target 1000 enterprise customers by 2022 5
Slide 6: Total Annual Recurring Revenues will increase to $500+m in FY24
Total Annual Recurring Revenues will increase to $500+m in FY241 1Total ARR in FY19 was $202m SaaS continues to drive our business Outlook for FY20 is strong Discussed later in more detail 6
Slide 7: Interim dividend up 10%
Interim dividend up 10% We remain confident about the outlook for the full year Dividend up 10% H1 Dividend last five years Compound growth 10% 1 3.47 cps, up 10% (60% franked ) 3.47 Payout ratio of 58% 3.15 2.86 2.60 2.36 FY16 FY17 FY18 FY19 FY20 Notes: • 1 Dividends are not fully franked as a resu
Slide 8: H1 Results Summary
H1 Results Summary H1 FY20 H1 FY19 Var Var % $’000 $’000 $’000 Revenue 138,398 129,287 9,111 7% In line with expectations, not indicative of the Full Year results SaaS Fees Recognised 51,053 37,550 13,504 36% Our SaaS business continues to grow strongly On Premise 56,708 61,780 (5,072) (8%) Initial
Slide 9: Cash Flow Balance Sheet
Cash Flow H1 FY20 H1 FY19 Var Var #039;000 #039;000 #039;000 % Profit Before Tax 25,940 24,481 1,459 6% Cash Flow Generation $9.9m, up $16.2m Depreciation & Amortisation 1 8,390 2,718 5,672 209% Changes in working capital: • H1 is historically lower than H2, as anniversary dates are in H2, (Increase) / Decre
Slide 10: Results Analysis and Key Metrics, H1 FY20
Results Analysis and Key Metrics, H1 FY20 H1 FY20 H1 FY19 H1 FY20 H1 FY19 Var% Var% $000 $000 $000 $000 Revenue excl interest 138,163 128,847 7% EPS (cents) 5.98 5.65 6% Expenses (excl R&D, interest, D & A) 88,226 88,285 0% Dividend (cents per share) EBITDAR 49,937 40,563 23% Interim dividend 3.47 3
Slide 11: H1 FY20 Profit Contribution
H1 FY20 Profit Contribution APAC and UK $30.0m Company Profit APAC Profit Up 5% Up 6% $1.5m $1.3m $25.0m $20.0m $15.0m $10.0m UK Profit Up 18% $0.2m $5.0m Chart Title $24.5m $25.9m $25.4m $26.7m $0.0m ($0.8m) ($0.9m) ($0.9m) ($0.8m) ($5.0m) Company APAC UK UK FY19 FY20 FY19 FY20 UK on track to break
Slide 12: Substantial Growth in SaaS ARR going forward
Our SaaS business is growing strongly H1 SaaS ARR up 33% Compelling value proposition of TechnologyOne Enterprise SaaS ARR UP 33% $27.5m ✓ One global code line ✓ Massive economies of scale Organic growth ARR Up $110.2m $23.4m ✓ 8 active-active data centres ✓ Defence-in-depth security $82.7m ARR Up ✓
Slide 13: Significant investment for future growth
Significant investment for future growth R&D investment of $30.5m1, 22% of Revenue, up 10% R&D Expense growth will return to 8% going forward 1R&D expenditure before capitalisation R&D ✓ No impact from COVID-19 ✓ Delivered 2020A to the market, 340+ product enhancements ✓ Under development is 2020B f
Slide 14: R&D Reconciliation
R&D Reconciliation Highly Disciplined approach to R&D. We expense maintenance and research. We capitalise development based on actual timesheets for eligible projects. Capitalisation is independently audited with H1 FY20 financial statements. $30.5m $17.3m $2.2m H1 FY20 ($15.4m) $30.5m R&D investmen
Slide 15: Consulting Profit and Vertical Market Analysis
H1 FY20 Consulting Profit of $5.1m, up 49% Turnaround has Consulting is responsible for occurred in APAC Turnaround underway implementation of our software in the UK Turnaround driven by: ✓ New leadership $6.0m APAC Profit Up 35% $1.4m Total $5.0m Consulting ✓ Two focussed divisions Profit Up 49% UK
Slide 16: Customer Churn 10 Years
Customer Churn 10 Years 4.00% 3.00% 2.00% 1.31% 1.00% 0.84% 0.82% 0.57% 0.39% 0.45% 0.29% 0.13% 0.18% 0.13% 0.00% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 -1.00% * FY20 is for the half year ending Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 16
Slide 17: Outlook for 2020 Full Year
Outlook for 2020 Full Year Strong Profit growth to continue in 2020 ▪ The markets we serve are generally resilient ▪ TechnologyOne provides mission critical software with deep functionality for the markets we serve ▪ Our Global SaaS ERP solution enables ‘any device, anytime’ access from anywhere aro
Slide 18: H1 FY20 Summary
H1 FY20 Summary ✓ Record profit, revenue, SaaS Fees, SaaS ARR ✓ Profit of $25.9m, up 6% ✓ SaaS Fees Recognised of $51m, up 36% ✓ SaaS ARR of $110m up 33% ✓ Total ARR of $211.6m, up 15% ✓ Interim dividend up 10% ✓ Total Consulting profit $5.1m, up 49% ✓ Strong growth for FY20 with Profit Before Tax g
Slide 19: Profit margin to grow to 35+%
Positioned well for the future and to continue to double in size every 4 to 5 years ✓ SaaS continues to grow strongly ✓ Annual recurring revenues to grow to $500+m in FY24 ✓ Harvest substantial opportunities in our customer base ✓ Continuing growth in APAC ✓ Continuing growth in the UK ✓ Profit marg
Slide 20: Drivers for long term growth
Drivers for long term growth 14 Licensable products1 6 Vertical markets Diversified geographies2 Over 325 licensable modules Asset Intensive. 8% New Asset International, 4.4% Spatial. 4% Zealand, Managemen CPM. 17% Local Other. 6% 13.1% t. 12% Government. Diversified 29% SHM. 2% revenue streams ECM.
Slide 21: Total Annual Recurring Revenues will increase to $500+m in FY24
Total Annual Recurring Revenues will increase to $500+m in FY24 an additional $300m ARR1 1Total ARR in FY19 was $202m. Harvest substantial opportunities in Illustrative model only Not to be used as guidance our customer base In FY18 we achieved 5.38 Estimate $420m of new ARR by FY2027 products per c
Slide 22: Continuing growth in APAC
Continuing growth in APAC ✓ Local Government ✓ Health & Community Services ✓ Education ✓ Asset & Project Intensive Industries ✓ Government ✓ Financial Services & Corporates Our APAC market penetration does not exceed 15% Significant room to grow in future years Continuing growth in the UK The UK mar
Slide 23: technologyone
technologyone transforming business, making life simple 23