Slide 1: 2020 Full Year Results
2020 Full Year Results Ended 30 September 2020 24 November 2020 Commercial in confidence 1 Disclosure Statement TechnologyOne Ltd Full Year Presentation – 24 November 2020 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2020 Full Year results. These slides have
Slide 2: Agenda
Agenda • Results • Significant Achievements • Outlook for Next Year • Long Term Outlook 3 TechnologyOne is a successful SaaS company 4 2
Slide 3: TechnologyOne Global SaaS ERP Solution
TechnologyOne Global SaaS ERP Solution Continuing strong demand 5 Our SaaS business continues to grow strongly SaaS ARR $134.6m up 32% 6 3
Slide 4: Our global SaaS ERP solution
Our global SaaS ERP solution transforms our customers’ business, and makes life simple for them 7 Enabling a digital revolution Any device, Anywhere, Anytime 8 4
Slide 5: Underlying Net Profit Before Tax growth of 13%
539 enterprise customers on TechnologyOne SaaS 104 additional enterprise SaaS customers , Up 24% pcp 9 Underlying Net Profit Before Tax growth of 13% 10 5
Slide 6: Record Profit
Record Profit Net Profit Before Tax of $82.5m up 8% 11 consecutive years of Record Profit 11 Underlying Profit Growth of 13% Our business has continued to grow strongly 1After year end, Reported Results Post Reported balance Underlying were impacted by a once-off FY20 Results date Event Results incr
Slide 7: Revenue – SaaS & Continuing Business up 12%
Very Strong Result to achieve Underlying Profit growth of 13% Legacy Licences1 down 34% as planned $14m immediate P&L reduction in FY20 Legacy Licence also referred to as Initial Licence, Perpetual Licence or On premise Licence 13 Revenue – SaaS & Continuing Business up 12%1 1Total Revenue was up 4%
Slide 8: Revenue – SaaS & Continuing Business up 12%
Revenue – SaaS & Continuing Business up 12% FY20 FY19 Growth Growth $ % Total Revenue $299m $286m $13m 4% Less Legacy Licence Fees $27m $41m ($13m) (33%) Less Associated Annual Licence1 $1m $3m ($1m) (55%) Revenue – SaaS & Continuing Business $271m $243m $28m 12% 1 Annual licence fees recognised fro
Slide 9: SaaS continues to drive our growth
SaaS continues to drive our growth Outlook for FY21 is strong1 Discussed later in more detail 1 Growth will be based on the FY20 Underlying Profit Before Tax 17 Dividend up 8% Full year dividend increased Dividend last ten years Up 8% Up 8% Up 8% Dividends for the 2020 year: Up 8% Up 8% 2.00 Up 46%
Slide 10: We continue to double in size every 5 years
We continue to double in size every 5 years Underlying Net Profit After Tax up 13% $66.1m 10 YR $58.5m COMPOUND GROWTH $51.0m $44.5m 14% $41.3m UP 13% $35.8m $66.1m $31.0m $27.0m $23.6m $20.3m $17.8m FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 the last six years compound growth in NPAT ha
Slide 11: Balance Sheet
Balance Sheet Sep-20 Sep-19 Var Var #039;000 #039;000 #039;000 % Cash & cash equivalents1 125,244 105,046 20,198 19% Prepaid expenses 10,851 12,810 (1,959) (15%) Cash & Equivalents $125.2m, up $20m, 19% Trade and other receivables1 Contract assets2 37,396 49,032 (11,636) (24%) 22,051 24,607 (2,556) (10%) • N
Slide 12: Long history of strong cash flow generation
Long history of strong cash flow generation Cash Flow Generation will continue to align to NPAT $70.0m $60.0m $50.0m $40.0m $30.0m $20.0m Occasional large legacy licences invoiced at year end, collected early in new $10.0m year $0.0m 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2
Slide 13: FY20 Underlying Profit Contribution
FY20 Underlying Profit Contribution APAC and UK Up 13% $9.7m Up 10% $7.7m $100.0m $90.0m $80.0m $70.0m $60.0m $50.0m $40.0m $30.0m Up 103% $20.0m $1.9m $10.0m $76.4m $86.1m $78.3m $86.0m $0.1m $0.0m Company APAC ($1.9m) UK ($10.0m) FY19 FY20 UK break even 25 Results Analysis and Key Metrics 2020 Und
Slide 14: Our SaaS business is growing strongly
Agenda • Results • Significant Achievements • Outlook for Next Year • Long Term Outlook 27 Our SaaS business is growing strongly SaaS ARR is growing at 32% per annum Compelling value proposition of TechnologyOne Enterprise SaaS One global code line Massive economies of scale 8 active-active da
Slide 15: $200m ARR Runway moving On Prem to SaaS by FY26
$200m ARR Runway moving On Prem to SaaS by FY26 120% $290.0m SaaS customers vs On Premise 100% $240.0m 80% $200+m $190.0m SaaS ARR from $134.6m Up 32% Existing Customers 60% PCP $140.0m $110.2m $101.7m 40% $82.7m $70.4m $90.0m $59.3m $50.7m $35.4m 20% $24.5m $40.0m $14.3m $15.5m 0% ($10.0m) H2 FY15
Slide 16: Total Annual Recurring Revenues will increase to $500+m by FY26
Total Annual Recurring Revenues will increase to $500+m by FY26 1Total ARR in FY20 was $222m 2Date has been extended because of COVID-19 from FY24 31 Vertical Market Analysis 99% customer retention across all markets ARR of $221.9m Our APAC market $90.0m penetration in any Up 13% $81m single vertica
Slide 17: Customer Churn 10 Years
Customer Churn 10 Years Annual Licence Fee - Customer Churn 10 Years 4.00% 3.00% 2.00% 1.31% 0.84% 0.82% 1.00% 0.57% 0.57% 0.39% 0.29% 0.18% 0.13% 0.13% 0.00% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 -1.00% 33 Harvest substantial opportunities in Illustrative model only Not to be used as gu
Slide 18: Significant investment for future growth
Significant investment for future growth R&D investment of $68.1m1, 22% of Revenue, up 13% R&D Investment will return to benchmark growth of 8% or less going forward 1R&D expenditure before capitalisation 35 DXP • DXP is our Digital Experience Platform • Delivering specialised functionality for the
Slide 19: Most trusted SaaS
Most trusted SaaS Only global SaaS ERP provided to be IRAP Protected ISO/IEC ISO/IEC ISO/IEC SOC 1 27001 27017 27018 Audit Controls SOC 2 Australian Federal PCI DSS UK G-Cloud Compliance Government 3.2 SAQ-D Controls Security Standard 37 R&D Investment1 up 13% v 8% target Highly Disciplined approach
Slide 20: Consulting Profit of $13.7m, up 38%
Consulting Profit of $13.7m, up 38% Profit margin has improved to 22% in 2020, from 8% in 2017 Consulting is responsible for implementation of our software Total Consulting Company Profit Turnaround underway in the UK Profit Up 38%Up 38% $3.8m3.5m APAC Profit Up Turnaround driven by: $16.0m 19% $2.2
Slide 21: People and Culture
People and Culture Recognized as Employer of Choice Award winning programs O week Grad program Buddy program Townhalls Hack days Regional days MARVELS awards Continual eNPS surveys of all teams Strong culture of creativity and innovation 41 500,000 children and their families out of
Slide 22: FY20 Full Year Summary
FY20 Full Year Summary Record profit, record SaaS ARR, record revenue SaaS ARR of $134.6m, up 32% Underlying Profit Before Tax of $86.1m, up 13% Reported Profit of $85.2m, up 8% Revenue for our SaaS and continuing business of $269.8m, up 12% UK breakeven result, up $1.9m Consulting pro
Slide 23: Outlook for 2021 Year
Outlook for 2021 Year Continuing strong growth • The enterprise software market continues to be resilient • TechnologyOne key markets remain strong : Local government, higher education, government and government related businesses • SaaS is creating significant opportunities for us • The pipeline fo
Slide 24: Drivers for long term growth
Agenda • Results • Significant Achievements • Outlook for Next Year • Long Term Outlook 47 Drivers for long term growth 14 Licensable products1 6 Vertical markets Diversified geographies2 Over 325 licensable modules International, 6.4% Asset Intensive, 6.2% Asset Spatial, 4% New Zealand, Management,
Slide 25: Positioned well for the future
Positioned well for the future and to continue to double in size every 5 years SaaS continues to grow strongly Annual recurring revenues to increase to $500+m Harvest substantial opportunities in our customer base Continuing growth in APAC Continuing growth in the UK Profit margins to gr
Slide 26: Appendix Glossary
Appendix 51 Glossary EBITDAR Earnings before interest, taxes, depreciation, amortisation, and research and development EBITDA Earnings before interest, taxes, depreciation, and amortization EBIT Earnings before interest and taxes Churn Proportion of ARR for annual licence fees from lost customers Ca
Slide 27: 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 along with financial statements. $68.1m FY20 ($37.0m) ($37.1m) ($33.0m) $68.1m R&D investmen