Slide 1: ASX Announcement: Investor Presentation
Appen Limited Level 6, 9 Help Street Chatswood NSW 2067 Tel: 02 9468 6300 www.appen.com For personal use only ASX ANNOUNCEMENT 24 February 2021 INVESTOR PRESENTATION Further to the Company’s announcement to the market today on its results for the year ended 31 December 2020, please find attached the
Slide 2: 2020 Full Year Results Presentation
For personal use only Appen Limited 2020 Full Year Results Presentation 24 February 2021
Slide 3: Disclaimer
Disclaimer For personal use only The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they sp
Slide 4: Artificial intelligence... informed by Appen
For personal use only Artificial intelligence... Appen makes AI work in the real world by delivering high-quality training data at scale. Our clients include the world’s largest technology companies, global leaders in automotive, financial services, retail, healthcare, and government agencies. ...in
Slide 5: Making AI work in the real world
Making AI work in the real world For personal use only Search Drive Immerse 3.5bn+ 40 terabytes 1 in 5 online searches per day of data for every eight hours US consumers used virtual of autonomous driving reality (VR) in 2020 Chat Interact Shop 30% 128m 21%+ annual growth in the people in the US wil
Slide 6: Solid growth maintained in FY20
Solid growth maintained in FY20 For personal use only High growth and performance in 1H20 A$ FY2020 vs FY2019 Moderated in 2H20 due to strong Australian Group revenue $599.9M +12% dollar and COVID-19 impacts including: impact of lower digital ad revenue and Relevance $538.2M +15% uncertain outlook
Slide 7: New customer and project wins strengthen our position
New customer and project wins strengthen our position For personal use only Customer wins Project wins China revenue A$M 46 2.8 +60% 36 QoQ 1.9 30 24 +34% 1.3 in 2020 0.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 136 new customers in 2020 34% increase in projects with China revenue growth 60% existing major cus
Slide 8: Ongoing growth in committed revenue
Ongoing growth in committed revenue For personal use only Annual contract value (ACV) Revenue by type At end of period A$M US$M 124.4 103.0 98.7 100% 97% 93% 88% 69% Project Committed 25.0 31% 3% 7% 12% 2H 2019 1H 2020 2H 2020 1 Feb 2021 2H 2018 1H 2019 2H 2019 1H 2020 2H 2020 399% increase in ACV
Slide 9: Growth from new and long-standing customers
Growth from new and long-standing customers For personal use only Revenue1 Major programs are highly retentive A$M 599.4 535.5 Continued growth in major customers Adding new customers each year to diversify the customer base 364.2 166.6 110.9 82.6 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Spee
Slide 10: Relevance growth continues
Relevance growth continues For personal use only Relevance Relevance growth A$M A$M 538.2 538.2 467.8 467.8 312.9 126.2 104.2 112.7 73.2 50.7 Revenue EBITDA FY2019 FY2020 2015 2016 2017 2018 2019 2020 Revenue $538.2M, up 15% 60% CAGR FY15-FY20 EBITDA up 8% to $112.7M, including growth Core p
Slide 11: Speech & Image impacted by project timing
Speech & Image impacted by project timing For personal use only Speech & Image Speech & Image A$M A$M 67.7 67.7 61.2 61.2 51.4 37.7 40.3 31.9 21.4 12.4 Revenue EBITDA FY2019 FY2020 2015 2016 2017 2018 2019 2020 Revenue $61.2M, down 10% 14% CAGR FY15-20 Revenue cyclicality due to product life c
Slide 12: Maintaining investments for future growth
Maintaining investments for future growth For personal use only Underlying EBITDA growth of 13% ex. FX gains and incremental growth investments A$M +13% FY20 includes significant growth investments totalling $12.7M Sales and marketing - to add new customers to improve diversification China – t
Slide 13: Growth investments - China
Growth investments - China For personal use only China revenue A$M China revenue growth of 60% quarter on quarter 2.8 Customers include the major Chinese technology +60% QoQ players 1.9 Growing position in autonomous vehicles 1.3 Working in all major data modalities 0.7 Gross margins impro
Slide 14: Growth investments - Sales and marketing: New customers
Growth investments New customers – Sales and marketing For personal use only Payments tech Medical technology Financial/banking company company institute 136 new customers Labelling documents to train Classifying images of Natural language processing OCR models completed testing devices for custom
Slide 15: Growth investments - Technology
Growth investments - Technology For personal use only Crowd management Platform and tools Mobile app • Appen Connect platform for • Appen annotation platform and • New mobile app to improve crowd recruitment, onboarding, tools for at-scale data crowd utility and productivity management collection an
Slide 16: Growth investments - Government
Growth investments - Government For personal use only Government set up complete Prime contractor eligibility Experienced team in place Washington DC office open Air-gapped technology and operations 2020 progress Hampered by COVID-19 and U.S. presidential election Business development ongo
Slide 17: Revenue and EBITDA growth
Revenue and EBITDA growth For personal use only % Revenue up 12% change Growth largely driven by increase in existing and new Relevance % constant projects with existing customers A$M FY2020 FY2019 change currency Growth impacted by major customers’ response to COVID-19 and Relevance 538.2 467.8
Slide 18: FX - minimal full year impact, half-on-half swings
FX - minimal full year impact, half-on-half swings For personal use only Revenue Underlying EBITDA A$M A$M +$57.9M full year +$6.0M full year +$8.2M full year -$0.6M full year Almost all revenue and earnings are derived offshore, mainly in US$ The full year FX impact was not meaningful, however
Slide 19: Balance sheet continues to strengthen
Balance sheet continues to strengthen For personal use only Strong balance sheet, impacted by year end translation at high AUD rate A$M Dec 2020 Dec 2019 $78.4M in cash at 31 December 2020 Cash 78.4 75.3 Decrease in receivables relates to year end timing Receivables 65.7 116.3 related to billi
Slide 20: Cash flow generation and conversion was strong
Cash flow generation and conversion was strong For personal use only Cash balance increased by $3.1M, negatively impacted A$M FY2020 FY2019 by translation at high AUD rate Receipts 597.8 488.6 Positive impact from receipt timing (expected Dec 19 receipts received in Jan 20) Payments and other (4
Slide 21: Creating value for our stakeholders
Creating value for our stakeholders For personal use only Social and Global crowd Appen employees environment Our goal: Have a happy, Our goal: Make Appen a great Our goal: Manage our impacts engaged and diverse crowd place to work and make a positive contribution Crowd Code of Ethics Our values Res
Slide 22: Capturing the market opportunity
Capturing For personal use only the market opportunity The growth in AI-enabled products and services highlights the growing demand for quality training data. Source: Global spend on AI - IDC Worldwide Artificial Intelligence Spending Guide 2019 and 2020 21
Slide 23: Outlook
Outlook For personal use only Near-term challenges While providing guidance is challenging given near-term Strong Australian dollar uncertainty, we remain committed to transparency Impact on major customers’ priorities and resource Year-to-date revenue plus orders in hand of ~A$240M allocati
Slide 24: appen.com/investors
For personal use only appen.com/investors