Slide 1: Results 1H18 – Investor Briefing
Results 1H18 – Investor Briefing 21 February 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Visit www.wisetechglobal.com/investors FORWARD-LOOKING STATEMENTS PREPARATION OF INFORMATION This presentation may contain statements that are, or may are deemed to be, forward-looking All financial information has
Slide 3: A leading provider of software to the logistics industry globally
A leading provider of software to the logistics industry globally 130 countries(1) 7,000+ customers (2) 3+ million development hours over 15 years 44+ billion data transactions annually(3) >1,000 Employees(4) 1 integrated CargoWise One global system Countries with licensed users WiseTech office Head
Slide 4: CargoWise One: an integrated software solution for the logistics industry
CargoWise One: an integrated software solution for the logistics industry Allowing companies to better manage many aspects of the global supply chain A4 Paper Gu A4 Paper Gu 3
Slide 5: Agenda
Agenda Richard White Founder and CEO Welcome CEO overview & Financials Outlook Q&A performance 1H18 highlights 4
Slide 6: WiseTech Global financial highlights
WiseTech Global financial highlights Delivered strong, high quality growth while expanding technology lead and accelerating global footprint ACCELERATED HIGH recurring, LOW HIGH innovation LOW sales and PROFITABLE + revenue growth HIGH quality customer product development marketing cash generative r
Slide 7: Delivered on strategy
Delivered on strategy Prioritised pipelines for innovation through development, and global expansion through acquisitions Innovation and expansion of Greater usage by existing Increase new customers Stimulate Accelerate organic growth through our global platform customers on the platform network eff
Slide 8: Acquiring businesses for geographic expansion – solving buy or build?
Acquiring businesses for geographic expansion – solving buy or build? Small targeted acquisitions in key regions provide safer, faster, stronger entry to new markets We buy into market positions that would take years to build, integrate swiftly, and drive value across platform Why buy, not build? Ra
Slide 9: Adjacencies feed into our innovation pipeline to build ecosystems
Adjacencies feed into our innovation pipeline to build ecosystems Targeting key plug-ins to our global development or multi-regional adjacencies that can scale We are accelerating convergence of technologies by adding targeted acquisition of key adjacencies to our innovation pipeline to build valuab
Slide 10: Innovation pipeline – BorderWise
Innovation pipeline – BorderWise Global data set + machine learning = powerful border compliance engine, market leading WiseTech border compliance engine + Custom-built global data set + Adjacent acquisitions x 2 + WiseTech machine learning and natural language processing (NLP) Prototype testing to
Slide 11: Innovation pipeline – Global Tracking
Innovation pipeline – Global Tracking Global data set, powerful, unique global tracking engine Powerful global tracking for vessel and container + Custom-built global data set – ‘one source of truth’ + WTC proprietary advanced analytics and workflow automations + Embedded in CargoWise One and will i
Slide 12: Innovation investment
Innovation investment Significant pipeline of longer-term innovations across existing verticals and new adjacencies Work faster, harder, smarter 230 product upgrades and Major development focus on: PAVE GLOW Universal enhancements in 1H18 • Productivity • Productivity • ‘Build once’ Customs Engine A
Slide 13: Ongoing and upcoming regulatory changes
Ongoing and upcoming regulatory changes We invest our regulatory experts and development teams in ensuring CW1 fully compliant globally Germany World • Customs ATLAS Release • ASYCUDA World/UNCTAD – EU 8.8 and AES release 2.4 • Union Customs Code over 90 smaller countries UK – ongoing ongoing (UCC)
Slide 14: Revenue growth by cohort – all cohorts grew revenue in 1H18
Revenue growth by cohort – all cohorts grew revenue in 1H18 Our customers stay and grow their revenue over time… more users, modules and transactions • CW1 continues to grow CargoWise One application suite revenue by customer cohort during business $m, last 12 months transformation, licence conversi
Slide 15: Solid revenue growth while business in transition and expanding globally
Solid revenue growth while business in transition and expanding globally Revenue from core CargoWise One platform now 100% recurring Revenue 153.8 $m 1H18 revenue + 31% vs 1H17 102.8 + 92% vs 1H16 70.0 Solid foundation 56.7 for our FY18 43.0 93.4 growth forecast 71.1 48.6 32.3 FY13 FY14 FY15 FY16 FY
Slide 16: Agenda
Agenda Andrew Cartledge CFO Welcome CEO overview & Financials Outlook Q&A performance 1H18 highlights 15
Slide 17: Financial summary
Financial summary Strong growth in revenue continues, impact on EBITDA reflects execution on expansion strategy $m 1H16 2H16 1H17 (1) 2H17 (1) 1H18 (1) Change PF PF (vs 1H17) Total revenue 49.3 54.0 71.1 82.7 93.4 31% Gross profit 43.3 46.9 61.0 70.0 79.4 30% Gross profit margin 88% 87% 86% 85% 85%
Slide 18: Revenue and EBITDA
Revenue and EBITDA Growth in quality revenue continues, impact on EBITDA reflects execution on expansion strategy • 31% revenue growth v 1H17, reflecting 24% organic growth from existing and new customers plus 9% Revenue EBITDA excl-acquisitions(1) from targeted acquisitions offset by $m $m 46% 2% o
Slide 19: Revenue growth
Revenue growth Organic revenue growth continues across existing and new customers • Existing customer growth rose $5.0m in 1H18 as customers continue to grow transactions, modules, sites and take Revenue up new products $m 4.0 1.7 • Strength of underlying growth masked 5.0 by one-off $2.3m static st
Slide 20: Licensing model
Licensing model Transition to On-Demand licensing essentially complete for CargoWise One • Conversion essentially complete: 99% of our 1H18 CargoWise One revenues from On-Demand Revenue by licence type customers % of total revenue • On-Demand licensing = access on an as-needed basis, pay monthly bas
Slide 21: Financial performance summary
Financial performance summary Strong underlying metrics for CW1 impacted by acquisitions to accelerate long-term growth Income statement $m 1H17 2H17 1H18 Ch vs 1H17 Revenue On-Demand 58.6 68.7 76.2 30% OTL maintenance 7.6 7.5 11.3 49% OTL and support services 4.9 6.4 5.8 18% Total revenue 71.1 82.7
Slide 22: Operating expenses
Operating expenses Continued investment to scale, support and accelerate global growth • Operating expenses focused on strategic Operating expenses levers % of total revenue — Innovation and product development expanded and updated core platform. However, new acquisitions typically have higher level
Slide 23: Investment in innovation and product development
Investment in innovation and product development Relentless investment in R&D, every $ and every hour builds out our technology lead • Over $200m invested in R&D and innovation (FY14-FY18) driving our platform leadership Investment in innovation and product development • Increases in product design
Slide 24: Cash flow profile
Cash flow profile Strong operating cash flow impacted by multiple acquisitions in global expansion Cash flows • Continued high conversion of EBITDA into operating cash flow $m – Non-cash items in EBITDA mainly reflect share-based 1H17 2H17 1H18 payments EBITDA 24.0 29.9 31.8 – Negative working capit
Slide 25: Summary statement of financial position
Summary statement of financial position Solid capital position from which to drive further strategic growth initiatives $m 30 Jun 2017 31 Dec 2017 • Solid capital position with $60m in cash Current assets and equivalents, plus $55m in unused debt Cash and cash equivalents 101.6 60.2 facility availab
Slide 26: Agenda
Agenda Richard White Founder and CEO Welcome CEO overview & Financials Outlook Q&A performance 1H18 highlights 25
Slide 27: Logistics execution industry dynamics
Logistics execution industry dynamics Industry pain points drive an exponential shift to CargoWise One 3PL industry dynamics vs Impact of Our leading global logistics software and low propensity to switch out of dynamic for open-access, usage-driven business model proprietary systems CargoWise One r
Slide 28: Industry and competitive environment
Industry and competitive environment What’s ahead in 2018 and beyond 3PL industry in rapid evolution Governments E-commerce growth driver • Consolidation continues, for 3PL • Constant ongoing change • E-commerce volumes are and 2PL providers scale is key centred around single simultaneously pressuri
Slide 29: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules + Innovation and Increase Stimulate Accelerate Industry new network organic Geographies expansion consolidation customers effects growth of our global on the through platform Gre
Slide 30: High growth outlook for FY18
High growth outlook for FY18 Execution on strategy provides solid foundation for delivering high growth in FY18 • Momentum from 1H18 leading into FY18 FY18 Revenue(1) — Powerful progress on innovation and acquisition pipelines — Continuing revenue growth during business expansion and transformation
Slide 31: Agenda
Agenda Welcome CEO overview & Financials Outlook Q&A performance 1H18 highlights 30
Slide 32: Visit our investor centre for more information on WiseTech Global
Visit our investor centre for more information on WiseTech Global www.wisetechglobal.com/investors Videos Presentations Other materials 31
Slide 33: Appendix
WiseTech Appendix
Slide 34: FY18 guidance and assumptions
FY18 guidance and assumptions Strong growth in revenue and EBITDA What is included in the guidance: • Retention of existing customers with organic usage growth consistent with historical levels • New customer growth consistent with historical levels • Contracted increases in revenue from existing cu
Slide 35: Global revenues received in a mix of key currencies
Global revenues received in a mix of key currencies Revenues protected with effective natural hedge and external arrangements • 73% of 1H18 revenue in non-AUD, as expected, FX rates vs AUD FY18 2H18 slightly lower rate than guidance guidance FY17 (75%) GBP 0.60 0.58 • Natural hedges in some RMB 5.23
Slide 36: Key operating metrics – including and excluding acquisitions
Key operating metrics – including and excluding acquisitions 1H18 excl Key operating metrics 1H17 2H17 1H18 acquisitions(1) Recurring revenue 93% 92% 94% 100% On-Demand revenue 82% 83% 82% 99% Gross profit margin 86% 85% 85% 91% Total R&D - % of total revenue 34% 32% 37% 36% Product design and devel
Slide 37: Global 3PLs – 33 of the top 50 global 3PLs
Global 3PLs – 33 of the top 50 global 3PLs(1) The WiseTech Global group offers solutions domestically, multi-regionally and globally 1. Armstrong & Associates: Top 50 Global Third Party Logistics Providers List, ranked by 2016 logistics gross revenue/turnover. 36
Slide 38: Employees
Employees 30% increase in our diverse, talented workforce in 1H18 Growth in number of employees Employees by function Employees by region as at 31 Dec 2017 as at 31 Dec 2017 ~1,060(1) 175 General and administration Europe, 48 20% 17% South Australia & Product Africa, 9% 960 design and NZ, 43% Custom
Slide 39: Overview of revenue, licensing models, drivers and platforms
Overview of revenue, licensing models, drivers and platforms 1. Represents percentage of 1H18 total revenue. 2. Mainly comprises additional services such as e-services (connections to commercial information systems) and hosting fees provided to STL and MUL customers. Fees are typically based on the
Slide 40: Product commercialisation and monetisation processes and timeline
Product commercialisation and monetisation processes and timeline High innovation to commercialisation ratio – product designed for CW1 platform + global customer base Rich ideation Innovation cycle Rapid commercialisation Grow usage and revenue Industry expert teams solve Product leads and architec
Slide 41: Capitalised development and amortisation
Capitalised development and amortisation High innovation to commercialisation ratio – product designed for CW1 platform + customer base • Capitalised development comprises: - In development – labour and overhead costs relating to the development of new modules and products Net book value of capitali
Slide 42: Acquisition ─ integration process + value components
Acquisition ─ integration process + value components Stage 1 integration completed swiftly, we focus on long-term product capability and growing revenue Foothold 12-24 months 3-12 months Adjacencies 3+ years 0-36 months Integrate target Develop product Grow revenue “Acculturation” “Build out” Global
Slide 43: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY15 and FY16 FY17 FY18 Customs Customs Customs Customs Ocean Customs Customs Customs Land carrier tariffs transport China South Africa Germany Italy Global Brazil Australasi
Slide 44: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 Rates Rates Warehouse Customs Customs management management WMS FF/WMS Global Global Asia Pacific Pan-European Ireland North America Middle East ABM Data Brand Cargoguid
Slide 45: Key operating metrics
Key operating metrics Strong growth in revenue continues, impact on EBITDA reflects execution on expansion strategy 1H16 PF 2H16 PF 1H17 2H17 1H18 Revenue growth vs prior period 16% 10% 32% 16% 13% On-Demand revenue 79% 88% 82% 83% 82% Recurring revenue 98% 99% 93% 92% 94% Gross profit margin 88% 87
Slide 46: Income statement
Income statement $ million 1H16 PF 2H16 PF 1H17 2H17 1H18 Revenue On-Demand 38.9 47.3 58.6 68.7 76.2 OTL maintenance 9.4 6.0 7.6 7.5 11.3 OTL and support services 1.0 0.7 4.9 6.4 5.8 Total revenue 49.3 54.0 71.1 82.7 93.4 Cost of revenues (6.0) (7.1) (10.1) (12.6) (13.9) Gross profit 43.3 46.9 61.0
Slide 47: Reconciliation of statutory operating cash flow to statutory cash flow
Reconciliation of statutory operating cash flow to statutory cash flow • Payments for intangibles are 6 months to 31 December Full year $17.2m capitalised development $m 1H17 1H18 FY17 • Acquisition of businesses EBITDA 24.0 31.8 53.9 comprises: Non-cash items in EBITDA 1.6 4.1 5.4 Change in working
Slide 48: Reconciliation from statutory to pro forma income statement
Reconciliation from statutory to pro forma income statement $m Note 1H16 2H16 Statutory revenue 48.6 54.2 Net impact of acquisitions 1 0.7 (0.2) Summary of pro forma adjustments 1. Represents the pro forma impact of acquisitions as presented in Pro forma revenue 49.3 54.0 the Prospectus and adjustme
Slide 49: Logistics industry – moving goods and data
Logistics industry – moving goods and data A myriad of logistics suppliers is needed across the supply chain. Information moves ahead of, alongside and behind the physical goods as they move through the supply chain. Data speed, accuracy, timeliness and quality is essential. 48
Slide 50: WiseTech Global
WiseTech GLOBAL