Logo Yazilim Sanayi Ve Ticaret A.s. · BIST:LOGO
Logo Yazilim Sanayi Ve Ticaret A.s — Investor Presentation (November 2017)
27 slides from Logo Yazilim Sanayi Ve Ticaret A.s's investor presentation, November 2017
Slide 1: Investor Presentation
[ogo Investor Presentation
Slide 2: Disclaimer
Disclaimer This presentation contains information and analysis on financial statements as well as forward-looking statements that reflect Logo management’s current views with respect to certain future events. Although it is believed that the information and analysis are correct and expectations refl
Slide 3: Logo at a Glance
Logo at a Glance Leading Software Company in Turkey … With an Extensive Product Suite • Founded in 1984, Logo is one of the largest Solutions Enterprise Application Software (“EAS”) companies in Turkey, serving as a one-stop shop ERP Solutions for SMEs HR Solutions CRM Solutions • One of the fastest
Slide 4: Logo Sales Cycle
Logo Sales Cycle Partner 1 . . Customers . Partner n • User increments Following Sales • Modules R&D, Product Initial Sales • 3rd party solutions Marketing Sales(1) Development (to Customers) Cross – Sales • CRM / BI / SCM / BPM Support Logo Coin • E-Services (e-invoices etc.) Membership • LEM INVOI
Slide 5: Key Investment Highlights
Key Investment Highlights 6 1 Strong Attractive Financial Software Market Performance in Turkey Rapid International Unparalleled 5 Expansion in Competitive 2 Emerging Advantages Markets Tailored Multiple Technological Avenues of Advancements Growth through R&D 4 3 4
Slide 6: Attractive Turkish Software Market Trends
1 Attractive Turkish Software Market Trends With a focus on Turkey SMEs, Logo is well positioned for robust growth driven by increasing spend expected in the Turkish software industry. Turkey’s ERP penetration(1) was roughly half of EU28’s penetration, implying significant growth potential. Share of
Slide 7: Logo to Capitalise on Software Trends in Turkey
1 Logo to Capitalise on Software Trends in Turkey Top 4 Software Market Growth Opportunities Already Addresses Key Trends Positioning • The real turnover of Turkish companies with 20-99 SMEs will lead software market employees grew by c. 12%(1), significantly faster than growth GDP growth of c. 5%
Slide 8: Competitive Advantages of Logo
2 Competitive Advantages of Logo 1 2 3 Robust Product Suite Extensive Distribution Network Strong Brand a a Large network of 800+ BPs and c. 5,000 a Best suited to local market legislations sales and implementation team Trusted brand with >30yrs of presence and business practices members b b b All B
Slide 9: Capturing Market Share From Global Incumbents
2 Capturing Market Share From Global Incumbents Logo has increased its share in the Turkish EAS market from c. 20% to over 24% between 2012 and 2016 +32% pa 20% 14% 24% 19% (1) 6% 2012 2015 9% Total market 8% Total Market $204mn $269mn 11% 7% 41% 41% +10% pa SAP Oracle Microsoft Others Source: IDC,
Slide 10: Logo's Product Portfolio From Micro to Large Corporates
2 Logo’s Product Portfolio From Micro to Large Corporates Logo is trusted partner of its clients providing a product portfolio from micro to large corporates. Employees # Firms Positioning Competitors Large Volumes Revenues 1.5k (500+) 1 Logo’s highest Medium revenue 12.3k 2 (100–499) contribution L
Slide 11: Logo's Technology Strategy Components
3 Logo’s Technology Strategy Components Lower Technological Debt and Extend the Useful Life Time of Aging Cash-cow Improve Products Customisability and Introduce Improve Usability Easy to Use Tools and User and Training Experience Services for the Ecosystem Lower Dependence on Provide Gateways Propr
Slide 12: Building Blocks of Logo's Growth
4 Building Blocks of Logo’s Growth Inorganic Growth Total Growth d c b a a Existing Customers New Customers Government Initiatives On-premise to Cloud Consolidation/M&A Revenue Growth 11
Slide 13: Increasing Revenue From New & Existing Clients
4a Increasing Revenue From New & Existing Clients In addition to sizable revenues from initial license sales, Logo typically generates revenues from user increments, module upgrades, and cross-sales as clients’ needs expand. Furthermore, Logo has consistently attracted new customers while upselling
Slide 14: Growth Drivers of LEM Revenues
4a Growth Drivers of LEM Revenues Renewals of Existing LEM Contracts LEM Rev. ($) Improvement in Customer Base >85K 8.5k Penetration Rates Initial Sales for Last Years’ New Customers ~6k New Customers Price Increase Effect Cross Sales (BI, CRM, SCM … ) Increase in Existing LEM Contract Sizes Module
Slide 15: Low Customer Churn
4a Low Customer Churn Churn rates across Logo’s key products are lower than the typical churn rate across the global software industry. Logo Global (1) 5.1% Churn >10% 30% 2.7% Churn <5% 52% 1.2% 18% 5%-10% Churn Source: KeyBanc Capital Markets. Note: (1) Includes natural churn of SMEs going out of
Slide 16: e-Government Initiatives Will Generate Exponential Growth
4b e-Government Initiatives Will Generate Exponential Growth Burning Rate of Existing Customers Box ~12k e-Invoice Customers Existing Coverage Logo Coin Companies >TL Rev. ($) Natural Expansion + Additional Pool 10mn Revenue Expansion Intention of Finance Ministry (New Companies will be Required to
Slide 17: Logo Continues to Pursue Inorganic Domestic Expansion
4c Logo Continues to Pursue Inorganic Domestic Expansion Acquisition of new capabilities via successful integration through bolt-on acquisitions. Proven M&A Track-Record Highly accretive transactions Talent acquisition Successful integration Ability to generate significant operational synerg
Slide 18: Logo's Journey to International Markets
5 Logo’s Journey to International Markets Leverage JV • Critical size reached partners globally • Proactive focus on international markets • Total Soft acquisition completed Extensive Distribution 7 International and Sales Channel Expansion Eastern Europe Ability to 6 Balkan Region MENA Export India
Slide 19: Logo's Recent Int'l Expansion: Acquisition of Total Soft
5 Logo’s Recent Int’l Expansion: Acquisition of Total Soft Overview and Strategic Rationale of Total Soft Acquisition Vertical Expansion in the Turkish Leasing and Healthcare Industries Leasing ERP market in Turkey • A leading EAS provider for medium and large companies in Europe (# of companies; CA
Slide 20: Logo's Recent International Expansion in India
5 Logo’s Recent International Expansion in India In October 2016 Logo signed a JV agreement with GSF Software Labs and the JV was established in India's state of Maharashtra in December 2016. Logo and GSF Software Labs hold respective stakes of 66.6% and 33.4% in the new entity, namely Logo Infosoft
Slide 21: International Expansion – Recent Developments
5 International Expansion – Recent Developments • Total Soft, Romania − The company was re-organized as two main business units: ERP Division for local SMEs and large enterprises and Financial Solution Division targeting the Leasing Sector internationally. − ERP Division’s goal will be to maximize p
Slide 22: Appendix
Appendix
Slide 23: Logo's R&D Spend is in Line with Peers
Logo’s R&D Spend is in Line with Peers Over the past 5 years, Logo has spent a total of TRY156mn on R&D(1). Logo’s relentless focus on technology development has resulted in an overall R&D spend(1) as a % of revenue reaching 31.3% in 2016, up from 26.1% in 2012. R&D(1) as a % of Sales (%, FY) (3) 31
Slide 24: Case Studies: Domestic Acquisitions
Case Studies: Domestic Acquisitions Strategic Rationale of Netsis Acquisition Strategic Rationale of e-Logo Acquisition Strategic Rationale of JV of Logo & FIT • Reinforced Logo’s position and accelerated • Completion of the e-Government product portfolio geographical expansion in Turkey Rating • Al
Slide 25: Logo's Technology Improvements: Past and Present
Logo’s Technology Improvements: Past and Present Managed Technical Debt Developed 3 Series Product Development of SaaS / PaaS Challenges in Products and Technologies Development of role based usage • Three aging code stacks • Logo acquired retail SaaS company • Incoming code stacks from M&A Coretech
Slide 26: Technology Strategy Going Forward
Technology Strategy Going Forward Product Transformation Technology Transformation Development of New Renewal of Product Private & Public Lay Technical Complementary / Development of New Ensuring Technical Technology Hosting Groundwork to Move Value-added Services Products (CRM, BPM Preparation of E
Slide 27: Thank you
Thank you ° Mobile Solutions — es e-Government Cloud Oo yk ERP © f°) CRM Business QQ Analytics Production Planning Retail Solutions A HR Solutions
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