Wisetech Global Ltd. · ASX:WTC
Wisetech Global — H1 2021 Earnings Presentation
39 slides from Wisetech Global's earnings presentation, Feb 24, 2021
Slide 1: WTC 1H21 Results investor presentation
ASX Announcement: 2021/11 24 February 2021 WTC 1H21 Results investor presentation Attached is the 1H21 results investor presentation for the half-year ended 31 December 2020. //ENDS Authorised for release to ASX by David Rippon, Corporate Governance Executive and Company Secretary. Contact informati
Slide 2: 1H21 Results
Enabling and empowering the world’s supply chains 1H21 Results © 2021 WiseTech Global
Slide 3: Agenda
Agenda 1 1H21 Highlights 2 1H21 Financial Review 3 Strategy & Outlook 4 Q&A 5 Appendices 2 © 2021 WiseTech Global
Slide 4: 1H21 Highlights
1H21 Highlights RICHARD WHITE, CEO & FOUNDER
Slide 5: 1H21 overview
1H21 overview Strong 1H21 financial and strategic performance Total Revenue EBITDA Underlying NPAT $238.7m ↑16% $89.2m ↑43% $43.6m ↑61% on 1H20 on 1H20 on 1H20 $150.0m CargoWise revenue (↑19%) EBITDA margin 37% (↑7pp) Statutory NPAT $44.4m1 $88.7m Acquisition revenue (↑12%) CargoWise EBITDA margin 5
Slide 6: COVID-19 market context
COVID-19 market context Evolving outcome of global pandemic on international trade Our industry Our customers Our business • Volatility and marked slowdown in movement • Customer activity levels started to improve mid 2020 • Increased demand for CargoWise services of goods across all modes of transp
Slide 7: 1H21 Financial Review
1H21 Financial Review ANDREW CARTLEDGE, CFO
Slide 8: 1H21 results
1H21 results Total revenue Total revenue of $238.7m, up 16% on 1H20 Strong financial performance • • $3.6m FX headwind in 1H21 (1H20: $4.6m FX benefit vs. 1H19) • Excluding FX headwind, total revenue grew 18% and CargoWise A$m 1H20 1H21 % change revenue grew 20% on 1H20 CargoWise revenue 126.5 150.0
Slide 9: 1H21 revenue growth
1H21 revenue growth A$m CargoWise revenue growth • $23.5m or 19% revenue growth in 1H21 on 1H20 • $17.5m of revenue growth from existing customers (1H20: $17.0m) • $6.0m growth from new customers (1H20: $7.3m) and strong pipeline especially with larger global freight forwarders (1.2) • Growth from e
Slide 10: 1H21 operating expenses
% of revenue 1H21 operating expenses1 Expenses (A$m) Cost reductions driving margin expansion Product Design & Development (A$m) Sales & Marketing (A$m) General & Administration (A$m) 20% 14% 14% 20% 13% 20% 19% 19% 19% 19% 19% 19% 18% 11% 10% 46.5 44.7 44.4 45.1 38.3 28.8 28.1 37.1 39.8 34.9 25.9 2
Slide 11: 1H21 research and development
1H21 research and development Innovation and product development continues to be a priority Investment in innovation and product development (A$m) Product investment 38% 36% 35% • 13% increase in innovation and product development in 1H21 vs. 1H20 focused R&D % 33% on product enhancements and furthe
Slide 12: 1H21 balance sheet
1H21 balance sheet Strong balance sheet and liquidity A$m 30 Jun 20 31 Dec 20 Strong liquidity Cash 223.7 251.4 • $251.4m in cash Receivables 59.6 63.2 • $190.0m undrawn debt facility with additional $200.0m accordion facility Derivative financial instruments 4.6 12.1 Other current assets 22.3 17.9
Slide 13: 1H21 operating cash performance
1H21 operating cash performance Strong operating cash flow, investing in long-term growth A$m 1H20 1H21 % change Strong operating cash flow • Operating cash flows were $92.1m (1H20: $69.7m), up 32% on 1H20, EBITDA 62.5 89.2 43% demonstrating strength of underlying operating model, highly cash genera
Slide 14: Strategy & Outlook
Strategy & Outlook RICHARD WHITE, CEO & FOUNDER
Slide 15: Long-term strategy: CargoWise global expansion
Long-term strategy: CargoWise global expansion We are doing what we said we would; COVID-19 further accelerates the opportunity we have built Our vision is to create the operating system for global logistics Foundation established Resources + global foothold Penetration + efficiency FY15–17 FY18–20
Slide 16: Product
Product Building the operating system for global logistics CargoWise product development strategy 456 product features and enhancements in 1H21 … 4,000+ since FY16 Global customs Global rates Ecommerce Logistics Enterprise Global native customs and Build out global rates International Landside logis
Slide 17: Product: CargoWise global native customs & cross border compliance
Product: CargoWise global native customs & cross border compliance Product development priority 1 Acquisitions accelerate multi-year development process to build the global customs platform Development pipeline1 Industry pain points Our solution Live CargoWise Planned FY21 Planned for FY22 Planned f
Slide 18: Product: CargoWise global rates engines and ecosystem
Product: CargoWise global rates engines and ecosystem Product development priority 2 Our global rates solution is designed to streamline the booking-to-payment process and improve customer profitability with an advanced multi-modal rates engine and live rate connectivity Industry pain points Our cur
Slide 19: Product: CargoWise International Ecommerce
Product: CargoWise International Ecommerce Product development priority 3 Our solution is a single platform for the entire international ecommerce Retail ecommerce sales worldwide, 2019-20241 US$ trillions fulfilment supply chain $6.4 $5.9 $5.4 Industry pain points Our current solution Development p
Slide 20: Product: CargoWise Neo
Product: CargoWise Neo Beta version of CargoWise Neo launched • Beta version deployed to a select group of Beneficial Cargo Owners (BCOs) via existing WiseTech logistic provider customers • Working with one of our largest customers to trial Neo and develop extensions with a large retailer who is als
Slide 21: Penetration
Penetration Global rollouts continue to increase across global freight forwarders and 3PLs enhancing value over time CargoWise has 341 large global freight forwarders2 with global rollouts in process or completed, 11 of these are in the Top 253 Of these 34 large global freight forwarders: Global rol
Slide 22: Profitability
Profitability On track to deliver $10 million in net cost reductions in FY21 and achieve $20-$30 million run-rate for FY22 → Organisation-wide efficiency program and acquisition synergy extraction • Efficiency initiatives implemented to date include gross reduction of 2691 employees and contractors
Slide 23: People
People Investing in our product & development talent WiseTech’s unique team of technology and industry experts has been built over many years through recruitment and strategic acquisitions WiseTech employees Other functions (G&A, S&M, COR) Acquired Cost reductions Product & development 234 (233) Hir
Slide 24: Strategic achievements to date
Strategic achievements to date Our strategic investment is driving long-term strategic growth and delivering shareholder value People – focused on building technology and industry expertise • 1,024 technology and industry experts at 1H21 (up from 225 at FY16) • 53% of WiseTech workforce focused on R
Slide 25: Management’s FY21 priorities
Management’s FY21 priorities Product Penetration Profitability Extend technology Expand market Drive operational lead penetration efficiency • Investment and focus on expanding • Sales team targeting Top 25 Global • Continued implementation of CargoWise product suite: Freight Forwarders and Top 200
Slide 26: FY21 revised guidance
FY21 revised guidance EBITDA guidance increased by $10m from $155m-$180m to $165m-$190m; Revenue guidance reaffirmed FY21 revenue FY21 guidance update 1. CargoWise: recurring revenue market share growth of 15%-30% $470m - $510m • In line with expectations 2. CargoWise: recurring revenue industrial p
Slide 27: Conclusion
Conclusion Solid CargoWise Strong EBITDA Acquisition revenue growth and Underlying synergies NPAT growth a key focus Testament to increasing Reflects revenue growth and Good progress on CargoWise market share disciplined cost management product development and delivering efficiencies Strategy delive
Slide 28: Q&A
Q&A
Slide 29: Appendices
Appendices Slides 29. FY21 guidance assumptions and FX 30. CargoWise container bookings and container departures 31. Overview of revenue licensing models 32. Drivers of CargoWise revenue growth 33. Income statement 34. Key operating metrics 35. Reconciliation of statutory expenses to non-statutory e
Slide 30: FY21 guidance assumptions and FX
FY21 guidance assumptions and FX What is included in the FY21 guidance: FX rates FY20 1H21 2H21 forward Foreign Exchange v AUD actual actual guidance • Retention of existing customers with CargoWise usage growth consistent with historical levels 1H21 USD 0.67 0.70 0.79 • New customer growth consiste
Slide 31: CargoWise container bookings and container departures
CargoWise container bookings and container departures Container bookings executed through CargoWise can act as a leading indicator to departure volumes representing our customers’ intent to move goods Container % Difference in 7-day Moving Average from the Index Baseline • bookings and container dep
Slide 32: Overview of revenue licensing models
Overview of revenue licensing models Other revenue Group revenue by licence type (A$m) Recurring revenue (91% of revenue)1 (9% of revenue)1 OTL 238.7 On-Demand Licensing OTL & support services Revenue maintenance 223.5 75%1 9%1 20.3 16%1 205.9 27.5 191.6 19.9 39.0 Seat + Transaction OTL Support Lice
Slide 33: Drivers of CargoWise revenue growth
Drivers of CargoWise revenue growth Acquired revenue transition Drivers of CargoWise revenue to CargoWise revenue 1. Existing customers For geographic expansion assets: 1 Transitionary pricing agreements • Add transactions, including by responding to global • the revenue will only become CargoWise w
Slide 34: Income statement
Income statement A$m 1H20 1H21 Revenue Recurring On-Demand licence 151.8 179.4 Recurring OTL maintenance 34.1 39.0 OTL and support services 19.9 20.3 Total revenue 205.9 238.7 Cost of revenues (36.4) (35.3) Gross profit 169.4 203.4 Operating expenses Product design and development (38.3) (44.7) Sale
Slide 35: Key operating metrics
Key operating metrics WiseTech Global including and excluding acquisitions 1H21 1H20 1H21 CargoWise1 Total revenue growth vs. prior year 31% 16% 19% Recurring revenue – % of total revenue 90% 91% 99% On-Demand licence revenue – % of total revenue 74% 75% 99% Gross profit margin 82% 85% 94% Product d
Slide 36: Reconciliation of statutory expenses to non-statutory expenses
Reconciliation of statutory expenses to non-statutory expenses A$m 1H20 2H20 FY20 1H21 Cost of Revenues Cost of revenue – statutory 39.3 44.2 83.5 38.9 Less: Depreciation & amortisation 2.9 3.9 6.8 3.6 Cost of revenues – non-statutory 36.4 40.3 76.7 35.3 Statutory to non-statutory reconciliation Pro
Slide 37: Explanatory notes
Explanatory notes NPAT A$m 1H20 1H21 NPAT 59.9 44.4 Fair value gain on contingent consideration (32.7) (0.8) 1 Underlying NPAT 27.1 43.6 NPAT 59.9 44.4 Fair value gain on contingent consideration (32.7) (0.8) Acquired amortisation (net of tax) 3.8 3.7 Contingent consideration interest unwind (net of
Slide 38: Important notice and disclaimer
Important notice and disclaimer Content of presentation for information purposes only Visit wisetechglobal.com/investors Preparation of information All financial information has been prepared and reviewed in accordance with Australian Accounting Standards. Certain financial data included in this pre
Slide 39: www.wisetechglobal.com/investors
www.wisetechglobal.com/investors