Straker Ltd · ASX:STG
Straker — Straker Translations — H1 FY2019 Earnings Presentation
37 slides from Straker's earnings presentation, Nov 28, 2018
Slide 1: Straker Translations Investor Briefing
For personal use only Straker Translations Investor Briefing Half year results to 30 September 2018
Slide 2: Disclosure Statement
Disclosure Statement This presentation is given on behalf of Straker Translations Limited ASX:STG (Company number NZ: 1008867 / AU: ARBN 628 707 399) For personal use only Information in this presentation: • Is for general information purposes only, and is not an offer or invitation for Includes Non-
Slide 3: Agenda
Agenda Business Financial Outlook Q&A update update For personal use only Grant Straker Haydn Marks CEO CFO !3
Slide 4: Business Update
For personal use only Business Update Grant Straker CEO !4
Slide 5: Outstanding performance across all KPIs
YoY Revenue Growth Adjusted EBITDA +39% $110k For personal use only Outstanding performance NPBT ($243k) across all KPIs Pro forma Revenues Gross Margins $13.4m 55.3% $12m Reported Revenue Operating Expenses Repeat Revenue Growth 54% of revenue 42% !5
Slide 6: Key Business Points from the H1 Result
Key Business 1 PROFITABILITY Points from the We are seeing clear benefits from the operating leverage produced by our For personal use only technology as we continue to deliver on our profitability forecasts. H1 Result Major achievement of 2 IPO The IPO was a significant work stream for the team and th
Slide 7: Organic Growth
Success at growing existing customer accounts at an enterprise Organic Growth level For personal use only New opportunities with large global tech companies for automation of the translation process We have a laser focus on new business generation Customers requirements becoming more complex, aligni
Slide 8: Acquisitions: MSS Spain and Eule Germany
MSS Spain Eule Germany Straker European Offices ACQUISITIONS For personal use only During H1 2019 we completed two acquisitions and both have performed in line with 22 Staff 21 Staff expectations, and generated new Barcelona Kiel and Cologne organic growth NZ$3.25m Revenue* NZ$3.14m Revenue* opportuniti
Slide 9: Total revenue breakdown by geography
Total revenue breakdown by geography (Reported) Europe (largest global translation market) now our largest market as we penetrate deeper in region For personal use only 19% 17% 36% H1 Sep-17 H1 Sep-18 52% 29% 47% North America EMEA APAC North America EMEA APAC !9
Slide 10: Investment into our RAY platform
Investment into our RAY platform During H119 we made significant investments into our RAY translation platform For personal use only 1 Translation A.I driven quote engine upgraded 8 File analysis servers have been set up in a high-availability to 2 handle increased load and complexity Adobe AEM Conne
Slide 11: Our Business
Our Business For personal use only What we do and how we commercialise our innovation MAX German, French and English Freelance Translator St. Johann, Germany !11
Slide 12: The Market
Language services market size, global, 2015 to 2020 The Market For personal use only 60 We operate in the US CAGR 7.3% 58 $50bn and growing 54 50 global translation 45 industry 43 40 38 30 15 0 2015E 2016E 2017E 2018F 2019F 2020F !12 Source: 1. Frost & Sullivan, ‘Market Report on the Language Servic
Slide 13: Hybrid translation model on the RAY platform
13,000 Hybrid Content 90+ File formats supported crowd- We overlay source 554 Billion Translation Model sourced For personal use only language Automated content ingestion data points translators Over many years we have developed a hybrid translation platform that 1st Crowd Human big utilises advance
Slide 14: Commercialising our innovation
We leverage advances in We utilise our proprietary Commercialising 1 machine learning to 2 and unique platform to produce industry-high track and pay translators For personal use only our innovation gross margins by the hour, rather than by the word 3 Our technology helps to increase translator spee
Slide 15: Full Time Employees in Offices
122 Full Time Employees in 10 Offices For personal use only UK Ireland Germany USA Spain Japan Hong Kong Thailand Australia New Zealand Sales Sales and Production !15
Slide 16: Financial Results
For personal use only Financial Results Haydn Marks CFO
Slide 17: Financial KPIs and Highlights
Pro-forma revenues of $13.4m and on track to deliver prospectus forecast Financial For personal use only Pro-forma adjusted EBITDA loss of ($132k) KPIs and Revenue growth of 39% YoY Highlights H1-19 Reported YoY repeat revenue growth of 42%, driven by both strong organic growth and acquisition reven
Slide 18: Statutory Results
For personal use only Statutory Results
Slide 19: Revenue growth (Reported)
Revenue growth (Reported) For personal use only Revenue Growth New v Repeat Revenue 12 14 12 39% 2.3 9 10.5 71% 8.6 31% 9.9 1.8 NZDm NZDm 6 7 42% 6.9 5 3 3.5 0 0 0 0 0 H1 Sep-16 H1 Sep-17 H1 Sep-18 H1 Sep-17 H1 Sep-18 Repeat New Reported repeat revenue growth of 42% !19
Slide 20: Non-IFRS Operating Income H1-19 (Reported)
Non-IFRS Operating NZDm H1-19 H1-18 YoY Income H1-19 For personal use only Translation Revenue 12.00 8.61 39% (Reported) CoS (5.37) (3.96) Gross Margin 6.63 4.65 42% Revenue Growth of 39% YoY, to $12m Gross Margin % 55.3% 54% 130 bps Gross margin of 55.3% expands by 130 bps Operating expenses up 20%
Slide 21: Reconciliation to IFRS Income Statement H1-19
Reconciliation to IFRS NZDm H1-19 H1-18 YoY Income Statement Adjusted EBITDA 0.11 (0.79) 813% For personal use only Acquisition costs (0.41) (0.01) H1-19 (Reported) Non-operating costs (0.07) (0.07) Net loss before tax of ($0.24m), up on EBITDA (0.37) (0.87) 235% previous year of ($1.13m) Spent slig
Slide 22: Pro-forma Results
For personal use only Pro-forma Results
Slide 23: Revenue growth (Pro-forma)
Revenue growth (Pro-forma) YoY Pro-forma revenue growth of 14.4% For personal use only Repeat New Revenue Growth Pro-forma New v Repeat Revenue 14 14 13.4 2.3 31.3% 11.7 14.4% 1.8 10.5 10.5 11.1 11.5% 10 NZDm NZDm 7 7 3.5 3.5 0 0 0 0 H1 Sep-17 H1 Sep-18 H1 Sep-17 H1 Sep-18 !23
Slide 24: Non-IFRS Operating Income H1-19 (Pro-forma)
Non-IFRS Operating NZDm H1-19 PF FY-19 PF Prospectus For personal use only Income H1-19 (Pro- Translation Revenue 13.40 24.90 forma) CoS (6.03) (10.94) Gross Margin 7.37 13.96 On track to achieve full year prospectus forecast Gross Margin % 55% 56% Pro-forma revenues of $13.4m v $24.9m full year Pro
Slide 25: Cash Flow and Balance Sheet
For personal use only Cash Flow and Balance Sheet
Slide 26: Cashflow H1-19 (Reported)
NZDm H1-19 H1-18 YoY Cashflow H1-19 Receipts from 10.82 8.09 33% For personal use only Customers (Reported) Interest Received (0.03) Operating outflows Payments to (11.81) (9.16) Suppliers reduced by 10% Net Cashflows from (0.96) (1.06) 10% operating activities Operating outflow higher than expected due
Slide 27: Summary Balance Sheet
NZDm Sep-18 Mar-18 Summary Balance Sheet Cash 3.6 7.8 For personal use only Trade Receivables 4.9 2.0 Other current assets include Other Current Assets 2.2 1.2 deferred IPO costs Total Current Assets 10.7 11.0 Non Current Asset movement include Non current Assets 9.2 5.2 acquired intangibles of rece
Slide 28: Outlook
Outlook For personal use only ADELAIDA Spanish & Catalan Freelance Translator Palma, Spain Bachelor’s Degree in English Studies
Slide 29: Existing Customers
Traction for organic growth has come through winning new Existing projects with our technology offering into existing customers, and growing into other departments or areas of a customers Customers For personal use only business. Expansion and renewal of MSA agreements We have a strong focus on growi
Slide 30: New Customers
New New ‘technology solution’ focused website to be released in Q3 Customers For personal use only New lead generation partners are starting to get traction in North America We have a laser focus on new business generation Deployment of adwords strategy into Japan, Germany and Spain to generate onli
Slide 31: Acquisitions
Growing and significant pipeline of potential acquisition targets Acquisitions For personal use only Main targets are in Western Europe and North America Growth by acquisition remains a Deals are normally ~60% upfront and ~40% earn out over two key strategy and a key years. With cash and or cash/stoc
Slide 32: Pro-forma Revenue vs prospectus forecast
Pro-forma Revenue (NZm) Prospectus Actual For personal use only 27 24 22 We remain on target 19 to hit our prospectus 16 14 revenue forecast 11 8 5 3 0 April September March Financial Year: 1 April 2018 - 31 March 2019 !32
Slide 33: Straker Translations
For personal use only Straker Translations ASX:STG www.strakertranslations.com
Slide 34: Appendix
For personal use only Appendix !34
Slide 35: Company History
Company History 30 48 80 120 For personal use only Started to offer translation employees employees employees employees services directly to 10 customers via employees crowdsourcing NZ$11.8m NZ$17.0m NZ$1m NZ$5.5m NZ$10.0m revenue revenue revenue revenue revenue (FY12) (FY17) (FY18) (FY14) (FY16) 19
Slide 36: Board of Directors
Board of Directors For personal use only Phil Norman Grant Straker Tim Williams Katrina Johnson Steve Donovan Paul Wilson Independent Non-Executive Chairman Founder and Managing Director Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Non-Executive Direct
Slide 37: Executive Team
Executive Team For personal use only Grant Straker Founder and Managing Director David Sowerby Haydn Marks Indy Nagpal Merryn Straker Kim Andrews Chief Revenue Officer Chief Financial Officer Chief Technology Officer Chief Operating Officer Chief People Officer As per above ▶David was appointed Chief Revenue
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