Technology One Limited · ASX:TNE

Technology One — FY2004 Earnings Presentation

56 slides from Technology One's earnings presentation, August 2004

1. Slide 1: 2004 Results Presentation

   www.TechnologyOneCorp.Com 2004 Results Presentation Technology One Business Software Solutions Adrian_DiMarco@TechnologyOneCorp.com August 2004 Executive Chairman Private and Confidential

2. Slide 2: Agenda

   Agenda  2004 Full Year Results  Significant Achievements  Product Road Map and Direction  Outlook One Vision 2

3. Slide 3: 2004 Full Year Results - Summary

   2004 Full Year Results - Summary  Record Revenue of $50.6m, up 7%  Impacted by performance of a number of business units  Record Profit Before Tax of $13.11m, up 30%  Tight control over costs was a key factor in our results  Profit After Tax of $9.48m, up 35%  Over provisioning of tax in prior

4. Slide 4: 2004 Full Year Results - Summary

   2004 Full Year Results - Summary  Record R&D expenditure, up 3%  R&D of $9.5m, representing 19% of revenue  R&D fully expensed as incurred  Dividend of 2.85cs fully franked, up 14%  Yield of 4.6% ff, based on a share price of 62 cents  Payout ratio of 90% One Vision 4

5. Slide 5: Dividends (cps) for the Year

   2004 Full Year Results - Summary Dividends (cps) for the Year 3.00 2.50 2.00 Cents per Share 1.50 1.00 0.50 0.00 2001 2002 2003 2004 Year One Vision 5

6. Slide 6: 2004 Full Year Results - Summary

   2004 Full Year Results - Summary  Adjusted ROE of 52%  Unadjusted ROE of 28%  Strong Operating Cash flow of $12.3m compared to NPAT of $9.5m  Debt/Equity of 3% One Vision 6

7. Slide 7: Actual 2003 v Actual 2004 - Operating

   Actual Actual Actual 2003 v Actual 2004 - Operating 2003 2004 Variance Increase $ (000) $ (000) $ (000) % Revenue (excl interest) 47,443 50,554 3,111 7% Expenses (excl R&D, Depn, FOREX & Amort) 27,153 27,333 (180) (1%) EBITDAR 20,290 23,221 2,931 (14%) R&D 9,306 9,547 (241) (3%) EBITDA 10,984 13,674

8. Slide 8: 2004 Full Year Results - Analysis

   2004 Full Year Results - Analysis  Initial licence fee revenue up 30%  Licence fees to new customers up 22%  Licence fees to existing customers up 51%  Annual licence fee revenue up 16%  Consulting services revenue down 5%  Timing issue  Project Services revenue down 9% this year  Poor perfo

9. Slide 9: 2004 Full Year Results - Analysis

   2004 Full Year Results - Analysis  Finance One suite strongest performer  22% increase in revenue over the previous year  Involved in almost all deals  Have not yet tapped the full potential of our Supply Chain (Retail One) and Payroll/HR (People One)  Proclaim One revenue flat  Smaller averag

10. Slide 10: 2004 Full Year Results - Analysis

    2004 Full Year Results - Analysis  All regions performed strongly except Malaysia (revenue down 33%) and WA (revenue down 37%)  WA had an abnormally strong year in 2003, so reduced performance was expected in 2004  Impact reduced by significantly reducing expenses (MAL down 53%, WA down by 25%) 

11. Slide 11: Agenda

    Agenda  2004 Full Year Results  Significant Achievements  Product Road Map and Direction  Outlook One Vision 11

12. Slide 12: Significant Achievements

    Significant Achievements  Increased Sales  Organisational Changes - New executive team and improved organisational structure  Continued R&D program  Investigation into new overseas territories One Vision 12

13. Slide 13: Increased Sales

    Increased Sales  70 new contracts signed (vs 47 last year)  Key factors  Improving market conditions (patchy still)  “Act Locally, Think Globally” Restructure undertaken in late 2003 One Vision 13

14. Slide 14: New Contracts by Sector - Local Government

    New Contracts by Sector  Local Government  Adelaide City Council  Baw Baw Shire Council  Burdekin Shire Council  Campbelltown City Council  City of Sydney  Ku-ring-gai Council  Local Government Association of Qld  Warwick Shire Council  Launceston City Council  Hastings District Council (

15. Slide 15: New Contracts by Sector - Retail

    New Contracts by Sector  Retail  New business sold: – Timberland – Le Cornu  Purchasing/Supply Chain component of Retail One sold to over 45 Finance One customers One Vision 15

16. Slide 16: New Contracts by Sector - State and Federal Government

    New Contracts by Sector  State and Federal Government  ACT Revenue  Australian Broadcasting Authority  Australian Maritime Safety  Australian National Training Authority  Department of the Senate  Melbourne Water Corporation  National Native Title Tribunal  Qld Competition Authority  Qld R

17. Slide 17: New Contracts by Sector - General Commercial (Australia Only)

    New Contracts by Sector - General Commercial (Australia Only)  Catholic Education – Wagga Wagga  Little Company of Mary Healthcare Limited  Outdoor Education Group  Magellan Petroleum  Adelaide Convention Centre  Milura Pty Ltd  Advanced Data Integration Pty Ltd  OFM Investments  Catholic E

18. Slide 18: New Contracts by Sector - Payroll/HR

    New Contracts by Sector  Payroll/HR  20 new contracts signed  Sold as „add on‟ to Finance One, not as best of breed  Played an important part in winning Finance One deals such as Australian Maritime Safety Authority One Vision 18

19. Slide 19: New Contracts by Sector - Project Services

    New Contracts by Sector  Project Services  Australian National Training Authority  NSW Department of Lands  Qld Department of Public Works  Qld Department of Primary Industries  Qld Department of Tourism, Fair Trading and Wine Industry Development  Siemens Theiss Communications  Victoria Leg

20. Slide 20: New Contracts - International: New Zealand

    New Contracts - International  New Zealand  Aviation Security  Electricity Ashburton Limited  Hastings District Council  Hutt City Council  Institute of Chartered Accountants NZ  Jacques Martin  Marlborough Lines Limited  Scenic Circle Hotels Limited  South Taranaki District Council  The

21. Slide 21: New Contracts - International: Malaysia

    New Contracts - International  Malaysia  Align Distribution Sdn Bhd  KUB Telekomunikasi Sdn Bhd  Quanterm Logistics Sdn Bhd  WCT Construction Sdn Bhd One Vision 21

22. Slide 22: Outlook by Product

    Outlook by Product  Finance One will continue to perform strongly  Finance One CI positions us strongly for the future  Will need to manage the roll-out of the new Finance One CI series carefully not to impact existing sales – Limited trials starting in Oct/Dec 2004 – Expected company wide rollou

23. Slide 23: Outlook by Product

    Outlook by Product  Retail One  Addition of Fashion/Apparel functionality will increase market potential  More reference sites important as this is a very conservative market – Timberland and Le Cornu are important  UK could be a strong market for this product in the future  Proclaim One  The

24. Slide 24: Outlook by Product

    Outlook by Product  People One  Total of 53 clients using People One now  Addition of HR functionality will position this product well in the future  Becoming critical in the sale of Finance One  Student One  Limited opportunities in 2004  Focus on maximising revenue from exiting base  Poten

25. Slide 25: Outlook by Product

    Outlook by Product  Project Services  Queensland and Victoria well positioned  Focus on New South Wales to build the business  New Zealand good opportunities going forward  Malaysia  Costs dramatically reduced by using local staff only  Target smaller deals to get entry into large organisatio

26. Slide 26: Significant Achievements

    Significant Achievements  Increased Sales  Organisational Changes - New executive team and improved organisational structure  Continued R&D program  Investigation into new overseas territories One Vision 26

27. Slide 27: Organisational Changes

    Organisational Changes  Company divided into four major operating divisions to create a greater sales and delivery focus  North West Region – QLD, SA, WA, TAS  Central Region – NSW, VIC, ACT  International – NZ, MAL, etc..  Project Services  New Executive Team of four Operating Officers, respo

28. Slide 28: Organisational Changes

    Organisational Changes  Operating Officers will spend substantial time in each of their states/territories on a regular basis with  Increased focus on driving sales  Increased focus on customer satisfaction One Vision 28

29. Slide 29: Increased Focus on Sales

    Increased Focus on Sales  Regional based strategy to achieve revenue growth:  Account management to increase sales/services to existing customers  Partnerships to target new verticals  Increased focus on Verticals we are already strong in: – Local Government – State, Federal and Qangos – Health,

30. Slide 30: Increased Focus on Sales

    Increased Focus on Sales  Pipeline management is a key initiative going forward  Reliably measure our opportunity pipeline and measure it against stated KPIs  Company wide CRM is key to make this happen  Specific initiatives for a region  Telemarketing moved into the bigger states, to get close

31. Slide 31: Increased Focus on Customer Satisfaction

    Increased Focus on Customer Satisfaction  Executive team has direct influence on R&D through their assigned product responsibility  Establish regional based resources (as distinct to state based)  People One, Supply Chain, Proclaim One  Improved resource sharing across states in a region  Great

32. Slide 32: Organisational Changes

    Organisational Changes  This will underpin our next stage of growth and opportunities One Vision 32

33. Slide 33: Significant Achievements

    Significant Achievements  Increased Sales  Organisational Changes - New executive team and improved organisational structure  Continued R&D program  Investigation into new overseas territories One Vision 33

34. Slide 34: Continued R&D Program

    Continued R&D Program  R&D continued at 19% of revenue, fully expensed  New releases of all our products shipped as follows:  Finance One, Retail One and People One R10.3 & R11.0  Student One R2.4, R2.5 & R2.6  Proclaim One R9.3  Work also commenced on our newest product Work One  An advanced

35. Slide 35: Significant Achievements

    Significant Achievements  Increased Sales  Organisational Changes - New executive team and improved organisational structure  Continued R&D program  Investigation into new overseas territories One Vision 35

36. Slide 36: Investigation into New Overseas Territories

    Investigation into New Overseas Territories  Territories investigated:  South Africa  United Kingdom  China  South Africa  Local Government market as the initial entry point  Issue is „Black Empowerment Partner”  Strategy to find a high quality partner  Still under investigation One Vision

37. Slide 37: Investigation into New Overseas Territories

    Investigation into New Overseas Territories  United Kingdom  Finance One as the initial entry point  Strategy is to find a Country Manager, and use local Partners  Issue is multi-currency and availability of Finance One CI  Still under investigation, and looks very promising  China  Finance O

38. Slide 38: Agenda

    Agenda  2004 Full Year Results  Significant Achievements  Product Road Map and Direction  Outlook One Vision 38

39. Slide 39: Product Road Map

    Product Road Map Consulting & Customer Services (direct relationship with our customers) (business Intell & utilities) Project Services (custom applications) New Verticals (Sales & Distribution) Partnerships (under investigation) Proclaim One Student One (higher education) (local government) Retail

40. Slide 40: Product Direction

    Product Direction  Connected Intelligence  Deep Integration  Product Breadth  “Out of the Box, Ready to Go”  Information At Your Fingertips One Vision 40

41. Slide 41: Connected Intelligence – What Is It Really?

    Connected Intelligence – What Is It Really?  More than just .NET technology  Business application framework to build applications that engage employees, suppliers, customers etc.  Allow us to take our Intellectual Property (and that acquired from others) to build powerful new generation of applic

42. Slide 42: Connected Intelligence Series

    Connected Intelligence Series  Development of R1 of Finance One CI completed  Undergoing Alpha & Beta testing  Expected to be available for LD in early 2005  Development of other CI products progressively released over the next two years as follows:  People One CI – mid/late 2005  Retail One C

43. Slide 43: Connected Intelligence Series

    Connected Intelligence Series  We will need to manage CI rollout carefully  CI developed for the future not today….  As part of CI there are certain themes that are driving our product direction One Vision 43

44. Slide 44: Deep Integration

    Deep Integration  Integration is what the market is looking for going forward - Deep Integration! One Vision 44

45. Slide 45: One Solution Deeply Integrated

    One Solution Deeply Integrated Assets/Project Management Financials Supply Business Chain Intelligence Management HR/Payroll Each part of our solution is world class, and our totally integrated solution is greater than the sum of its parts. One Vision 45

46. Slide 46: One Solution One Vendor

    One Solution One Vendor Property Regulatory & Rating eCouncil Financials Customer HR/Payroll Service (CRM) Asset Maintenance Totally Integrated One Vision 46

47. Slide 47: Deep Integration

    Deep Integration  Our integrated workplaces will allow us to showcase this deep integration  Focus on increasing the depth of our integration as part of CI rollout for  Proclaim One  Student One One Vision 47

48. Slide 48: Product Breadth

    Product Breadth  Best of breed is dead!  People looking for broad tightly integrated solutions from one vendor  Approach is to build „Add Ons‟  Breadth not depth  Partner with companies where depth is required  Add Ons  Work One – asset/project management  Generic cash receipting/POS across

49. Slide 49: Out of the Box, Ready To Go

    Out of the Box, Ready To Go  Drive down implementation costs  Goal: less than $1 of services for every $1 of license fees  Everything works out of the box when installed  System data shipped  Preconfigured setups One Vision 49

50. Slide 50: Information At Your Fingertips

    Information At Your Fingertips  Powerful enquiries part of all our products  Drill downs to transactions and across system boundaries  Drag and Analyse technology across all our products  Business Intelligence „out of the box‟  Business One integration across our product suite  Business Intell

51. Slide 51: Agenda

    Agenda  2004 Full Year Results  Significant Achievements  Product Road Map and Direction  Outlook One Vision 51

52. Slide 52: Outlook 2005

    Outlook 2005  Market conditions are confusing  We believe market conditions should continue to improve in 2005  Challenges for 2005 & 2006 are as follows:  “Bed down” Finance One CI and establish it in the market  Progressively develop and release other CI products  “Bed in” the new Regional S

53. Slide 53: Outlook 2005

    Outlook 2005  Expect growth of 5% to 10% in 2005 assuming the following:  No impact caused by new accounting standards (IFRS)  No substantial costs incurred by our international expansion One Vision 53

54. Slide 54: Long Term Outlook

    Long Term Outlook  Growth from existing regions as follows  Improving market conditions  Capitalise on market consolidation  CI series to increase our win rate  Increased penetration of People One, Retail One, Proclaim One  New systems – Work One and others to follow  New partnerships (to be

55. Slide 55: Long Term Outlook

    Long Term Outlook  Growth from new international expansion One Vision 55

56. Slide 56: 2004 Results Presentation

    www.TechnologyOneCorp.Com 2004 Results Presentation Technology One Business Software Solutions Adrian_DiMarco@TechnologyOneCorp.com August 2004 Executive Chairman Private and Confidential

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