Technology One Limited · ASX:TNE

Technology One — FY2007 Earnings Presentation

41 slides from Technology One's earnings presentation, September 2007

1. Slide 1: Full Year Results Presentation To June 2007

   Full Year Results Presentation To June 2007 Adrian Di Marco September 2007 Executive Chairman www.TechnologyOneCorp.com Private and Confidential

2. Slide 2: TechnologyOne Overview

   TechnologyOne Overview  TechnologyOne develops, markets, sells, implements and supports a broad range of enterprise applications & services:  TechnologyOne Financials  TechnologyOne Supply Chain  TechnologyOne HR & Payroll  TechnologyOne Works & Assets  TechnologyOne Business Intelligence  Te

3. Slide 3: Agenda

   Agenda  2007 Full Year Results  Summary  Analysis  Significant Achievements Last 12 Months  Outlook  Our Strategy for Growth 3 of 40

4. Slide 4: 2007 Full Year Results

   2007 Full Year Results  Record Revenue $78.4m, up 18% ($11.9m)  Record Profit Before Tax $19.8m, up 22% ($3.5m)  Profit After Tax $14.8m, up 20%* ($2.5m)  Expect continuing lower tax rate for 12 to 24 months (25.2%)  Expenses excluding R&D $44.8m, up 19% ($7.2m)  Company continued to invest in

5. Slide 5: 2007 Full Year Results: Cash Flow and Balance Sheet

   2007 Full Year Results  Operating Cash Flow of $17.7m (vs $14.8m NPAT)  Balance sheet strong  Cash & Equivalents*: $28.8m (vs $22.3m 30/06/07)  Debt/Equity: 4% (vs 3% last year)  Return on Equity 35%  Return on Equity (adjusted for non working capital) 66%  Transparency of results – all R&D f

6. Slide 6: 2007 Full Year Results

   2007 Full Year Results Revenue (pre 3rd party costs & excl interest) 77,054 65,242 11,812 18% Expenses (exclR&D,Depn,Forex & Amort) 43,277 36,364 6,913 19% EBITDAR 33,777 28,878 4,899 17% R&D Expenditure 13,837 12,675 1,162 9% EBITDA 19,940 16,203 3,737 23% Depreciation & Amortisation 1,375 1,114 26

7. Slide 7: Historical Annual Compound Growth

   2007 Full Year Results Historical 10 year annual compound growth is as follows*:  Revenue: 23% per annum compound  R&D: 22% per annum compound  Net Profit: 27% per annum compound * To June 30 2007 7 of 40

8. Slide 8: 2007 Full Year Results – Analysis

   2007 Full Year Results – Analysis  Total licence fees - $18.3m, up 18% ($2.7m)  Initial licence fees - New customers of $14.4m, up 12% ($1.6m)  Initial licence fees - Existing customers of $3.9m, up 42% ($1.1m)  Annual licence fees of $25.6m, up 21% ($4.5m)  Consulting services of $22.5m, up 25

9. Slide 9: 2007 Full Year Results – Analysis by Region

   2007 Full Year Results – Analysis  North West region continued strong performance, profit contribution up 28% (up $755k)  Central region turned around, profit contribution up 29% (up $683k)  3 new state managers appointed  UK loss of $1.3m as expected  An increase loss of $755k, up 151% to last

10. Slide 10: Strong result because

    2007 Full Year Results  Strong result because:  Continuing strong demand for our products (18% increase in Initial Licences - New & Existing)  Strong performance from North West region & Central region  Continued strong investment in R&D at 18% of Revenue fully expensed  Good pipeline of emergi

11. Slide 11: Strength and Diversity of Our Business

    2007 Full Year Results  Demonstrates the strength and diversity of our business  Geographical diversity – North West, Central, Asia Pacific, Asia and in future UK  Market diversity – Local Government, State and Federal Government, Financial Services, Higher Education, Health and Community Service

12. Slide 12: Agenda

    Agenda  2007 Full Year Results  Summary  Analysis  Significant Achievements Last 12 Months  Outlook  Our Strategy for Growth 12 of 40

13. Slide 13: Significant Achievements Last 12 Months

    Significant Achievements Last 12 Months  New ‘House of Products’ business transformation  Momentum of the Ci series  Executive Team expanded  United Kingdom  R&D  Developing Services Business  New Systems & Processes  Change of Financial Year 13 of 40

14. Slide 14: House of Products

    ‘House of Products’  Capitalise on our pipeline of products created over recent years:  Financials (well established)  Student Management (well established)  Property & Rating (well established)  Business Intelligence (developing)  Works & Assets (developing)  HR & Payroll (developing)  Supp

15. Slide 15: House of Products: Challenges

    ‘House of Products’  Challenges  Round out each product to make ‘best in class’  Become ‘customer centric’ by product  Move from intensive ‘R&D’ to marketing, sales and distribution  Increase substantially the profit contribution from each product  Capitalise on our extensive and growing custo

16. Slide 16: House of Products

    Customers TechnologyOne Brand Corporate Network of Offices Australia m New Zealand m Asia m UK Management Financials HR & Payroll Supply Chain Business Intelligence Property & Rat Works & Assets Project Services Student Management Customer Relation: Connected Intelligence Platform Corporate Shared S

17. Slide 17: House of Products

    ‘House of Products’  Creation of separate ‘product lines’ driven as individual business units  Dedicated to ‘market leadership’ in functionality and service for each product  Dedicated product/industry specialists by product  General Managers for each product line to drive them to be ‘best in cl

18. Slide 18: House of Products

    ‘House of Products’  Substantial restructure & re-alignment of the company  Significant Change Management issues  Over the last 6 months  Continuing for the next 12 months  Significant impact on all our systems & business processes  Senior management team expanded with appointment of General M

19. Slide 19: House of Products

    ‘House of Products’  Future focus will see General Managers appointed:  Works & Assets  Business Intelligence  Supply Chain  CRM  Provides us with a powerful ‘model’ to undertake strategic acquisitions that will deliver significant revenue growth  Performance Planning  Library Systems  Docu

20. Slide 20: Momentum of the Ci series

    Momentum of the Ci series  Connected Intelligence (Ci) is the new generation of our suite of products  Significant competitive advantage over our competitors  Migration of existing customer to Ci accelerating  600 customers in total  300 Customers now committed to Ci  280 live  Expect 98% of

21. Slide 21: Executive Team Expanded

    Executive Team Expanded  Executive Team expanded – Operating Officers (OO) as follows:  OO Sales/Marketing (existing)  OO Consulting (existing)  OO R&D (new appointment)  Operating Officer role:  Ensure consistency across products  Drive ‘best practice’ for their respective disciplines  Ensu

22. Slide 22: United Kingdom

    United Kingdom  Geographical expansion continued to gain momentum  Feedback continues to be very positive  First sites lives in the UK are now strong references:  Allco Management UK  Bravura Solutions UK  Hereford, Worcester Fire & Rescue  New strategic win : Institute of Education (IOE)  G

23. Slide 23: Research & Development

    Research & Development  R&D at 18% of revenue, fully expensed  Up 9% to $13.8m, and increase of $1.2m  Connected Intelligence remains main focus  Migration of remaining products to Ci platform to be completed by June 2009  Strategic initiatives on track  New Business Intelligence product now a

24. Slide 24: Research & Development

    Research & Development  Focus on developing ‘add on modules’ to all our existing products  Customers looking to expand their relationship with us • Programs/Promotions for existing customers • Increase our penetration into our customer base • Increase licence fees from existing customers 24 of 40

25. Slide 25: Developing Services Business

    Developing Services Business  Developing a services business based on:  Project Services business  Integrate One business  New general manager appointed 18 months ago  New strategy & focus  New name: TechnologyOne Plus  Sales team increased  Pipeline of opportunities emerging  Early days 25

26. Slide 26: New Systems & Processes

    New Systems & Processes  New systems & business processes to meet the challenge of:  Strong & continuing growth  International expansion  New ‘House of Products’ Business Model  Acquisitions – integration using our Corporate Shared Services  Objective: streamline, automate, control our busines

27. Slide 27: New Systems & Processes

    New Systems & Processes  Systems & business processes to be upgraded include:  Annual Support Renewals (90% complete)  Time Billing (90% complete)  ‘House of Products’ Management Reporting (80% complete)  Profit Forecasting (80% complete)  Utilisation Management (80% complete)  Customer Relat

28. Slide 28: Change of Financial Year

    Change of Financial Year  Current year end: June 30th  New year end: September 30th  Transition period: July 1 2007 to September 30th 2007  3 Months for transition purposes only  Not meaningful period to draw any conclusions  First full year: October 1 2007 to September 30th 2008  Expected co

29. Slide 29: Change of Financial Year: Reasons

    Change of Financial Year  Reasons for change  Government is a major part of our business  Tendencies for deals to close around December & June, which leads to significant licence fee revenues in Nov/Dec and May/June  New AIFRS requires contract signed by both parties before period end  New Fina

30. Slide 30: Agenda

    Agenda  2007 Full Year Results  Summary  Analysis  Significant Achievements Last 12 Months  Outlook  Our Strategy for Growth 30 of 40

31. Slide 31: Outlook – Market Conditions

    Outlook – Market Conditions  Higher Education/Student Management  Consolidation progressing quickly  TechnologyOne solution well regarded • Tier one universities selecting our solution  Strong pipeline of opportunities over the next 3+ years in Australia  Investigating overseas markets: UK & US

32. Slide 32: Outlook – Market Conditions

    Outlook – Market Conditions  Financials  Enterprise market confusion continues delaying replacement cycle  Opportunities continue to emerge in ‘tier one’ space  Good pipeline of opportunities going forward for new customers  Existing customers licences to increase • Migration to Ci platform is

33. Slide 33: Outlook – Market Conditions

    Outlook – Market Conditions  Works & Assets  Customers looking for an integrated solution ‘out of the box’  New product for TechnologyOne  Compelling business proposition for our existing customers  Strong demand in our existing customer base  Medium term – ‘best of class’ solution as a busine

34. Slide 34: Outlook – Market Conditions

    Outlook – Market Conditions  Australia & New Zealand  Conditions remain good  United Kingdom  United Kingdom 3+ times size of Australian market, with substantial opportunities  First product is Financials – same competitors as Australia  Gaining momentum  Asia  Challenge: our focus is Malays

35. Slide 35: Outlook 2007/2008

    Outlook 2007/2008  Continuing strong growth:  Continuing strong performance from Student Management  Growth from: • Financials • Property & Rating • Business Intelligence • Works & Assets • Existing customers – new licence fees & services as they migrate to the Ci platform  Continuing strong per

36. Slide 36: Outlook 2007/2008: Board Budget

    Outlook 2007/2008  Board Budget for 2007/2008 (after 3 month transition period):  Profit growth of 15% to 20%  Dividend increase of 10%  Manage costs in line with revenue growth  Staff costs  Continued expansion of senior management & executive team  New systems to handle scaling of our busin

37. Slide 37: Focus in 2007/2008

    Focus in 2007/2008  Complete the ‘House of Products’ business transformation  Continue the successful migration of all our customers to our new Ci platform  Complete the Ci redevelopment of all our products • Property & Rating • Student Management • Supply Chain  Continue to drive our Student Ma

38. Slide 38: Long Term Outlook

    Long Term Outlook  Financials  Mature market  Opportunities in Tier 1 space  Opportunities arising from consolidation of the market  Overseas expansion will drive sales growth from 2009  Student Management  Continue to dominate in the Australian market  Overseas expansion in 2009 – either UK

39. Slide 39: Long Term Outlook

    Long Term Outlook  Good pipeline of new products with strong earnings profile in Australia:  Business Intelligence – increasing from now  Works & Assets – increasing from now  CRM - in a few years  HR & Payroll - in a few years  United Kingdom – significant market opportunity for many of our p

40. Slide 40: After Word

    After Word These slides are now available from our web site: www.TechnologyOneCorp.com under the investor relations section. 40 of 40

41. Slide 41: Full Year Results Presentation To June 2007

    Full Year Results Presentation To June 2007 Adrian Di Marco September 2007 Executive Chairman www.TechnologyOneCorp.com Private and Confidential

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