Xero Limited · ASX:XRO
Xero — Shareholder Meeting (August 2024)
38 slides from Xero's shareholder meeting presentation, Aug 22, 2024
Slide 1: Market Release: 2024 Annual Meeting Addresses and Presentation
MARKET RELEASE 024 Annual Meeting Chair, CEO and 2 People & Remuneration Committee Chair Addresses and Presentation ELLINGTON, 22 August 2024- Xero Limited (ASX: XRO)attaches the Chair, CEO and People & W Remuneration Committee Chair addresses and presentation for Xero’s 2024 Annual M
Slide 2: Address by the Chair, David Thodey
XERO LIMITED – 2024 ANNUAL MEETING Thursday 22 August 2024 Address by the Chair, David Thodey AO ia ora, good morning from Auckland, New Zealand and welcome to Xero’s 2024 Annual Meeting. I’m K David Thodey and I’m the Chair of Xero’s Board. Thank you for attending today’s meeting. We’re
Slide 3: Agenda and online platform; Chair address on FY24
I’ll now turn to the agenda and order of events for today. ● I’ll first say a few words ● We’ll then hear from our CEO Sukhinder ● Then we’ll turn to the formal business of the meeting as set out in the notice of meeting ● After that, there will be an opportunity for any general sha
Slide 4: Chair address: small business conditions
erforming. XSBI data shows lower sales than a year ago in the five markets we monitor — Australia, p the UK, the US, Canada and New Zealand. However, there are signs that the US and Canada may return to positive sales growth soon, along with improvements in job numbers, particularly in Austral
Slide 5: Chair address: trust, security and governance
uilding and maintaining trust is at the heart of our business and is the foundation of the many ways B we create long-term value for our stakeholders. I mportantly Xero processes a significant amount of personal and customer data and we take a rigorous approach to managing security, through
Slide 6: Chair address: conclusion and thanks
evolve. I ’d like to acknowledge and thank my fellow directors for their commitment, time and effort in the work of stewarding Xero as it grows into a global company with a clear vision and purpose that has digitally disrupted the accounting software industry. I n conclusion, we’re pleased
Slide 7: CEO address: subscribers, ARPU and EBITDA
Subscriber additions were 419,000 in the year. rice changes across both our Business Edition and Partner Edition products were a key driver of ARPU P increasing 14%, or 10% on a constant currency basis. Moving to the next slide, I’ll now spend a few minutes talking through our bottom line ou
Slide 8: CEO address: product developments
articularly how our engineering and product functions operate together as we continue to evolve our p capabilities and improve product delivery. he improvement in product velocity was a key theme at our recent Xerocons in London and Nashville. T We’re focused on continuing to enhance our pr
Slide 9: CEO address: aspiration and conclusion
Our aspiration is to be a world class global SaaS business, from our very strong position today. s we shared with you in February, we believe we have the opportunity to double the size of this A business AND deliver Rule of 40 or greater performance. nd we’ll focus on high quality growth, w
Slide 10: Remuneration Chair address: performance culture and peers
performance-focused culture. he application of these principles has also been an important factor in Xero being able to attract the T necessary global talent to deliver our strategy, and become an even higher performing global SaaS company. ecruiting and retaining leading global talent is
Slide 11: Remuneration reporting disclosures
e continue to improve and evolve our remuneration reporting each year, in part based on feedback W our shareholders provide. This year we have added new disclosures, including detail on our peers for benchmarking, and additional colour on performance against Short Term Incentive targets. hr
Slide 12: CEO pay structure
r eality. It’s pleasing to hear in our conversations with active, long term shareholders that they agree with us in this regard. e acknowledge the structure of our CEO’s pay does not completely align with what you would W typically see for an Australian or US based CEO. However, we believe o
Slide 13: Xero Limited Annual Meeting August 2024
For personal use only XERO LIMITED Annual Meeting 22 AUGUST 2024
Slide 14: Important Notice
IMPORTANT NOTICE For personal use only This presentation is given on 22 August 2024 on behalf of Xero Limited (Xero) (ASX:XRO) (Company number NZ 183 0488, ARBN 160 661 183) Information in this presentation: ● is for general information purposes only, and is not an ● includes statements relating to
Slide 15: Board of Directors
Board of Directors For personal use only David Thodey, AO Mark Cross Susan Peterson Anjali Joshi CHAIR INDEPENDENT NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR Audit and Risk Management Committee People and Remunerati
Slide 16: Agenda
AGENDA For personal use only 01 CHAIR 02 CEO 03 RESOLUTIONS 04 Q&A ADDRESS UPDATE DAVID THODEY SUKHINDER SINGH CASSIDY CHAIR CHIEF EXECUTIVE OFFICER
Slide 17: Using the online platform
Using the online platform For personal use only Voting Questions Get a Voting Card Get a Voting Card ? Get a Voting Card Ask a question Help number 1 800 990 363 Download the If you are calling from Online Guide at Australia xero.com/investors/ or under Downloads +61 1800 990 363 If you are calling
Slide 18: Agenda
AGENDA For personal use only 01 CHAIR 02 CEO 03 RESOLUTIONS 04 Q&A ADDRESS UPDATE DAVID THODEY SUKHINDER SINGH CASSIDY CHAIR CHIEF EXECUTIVE OFFICER
Slide 19: Agenda
AGENDA For personal use only 01 CHAIR 02 CEO 03 RESOLUTIONS 04 Q&A ADDRESS UPDATE DAVID THODEY SUKHINDER SINGH CASSIDY CHAIR CHIEF EXECUTIVE OFFICER
Slide 20: FY24 results demonstrated our ability to execute towards our aspirations
FY24 results demonstrated our ability to For personal use only execute towards our future aspirations Continued our track record of strong revenue growth Delivered profitability and above Rule of 40 outcome Operating Revenue Adjusted EBITDA Rule of 401 $ $ 1,714m 527m 41.0% +22% YOY +75% or $225m YO
Slide 21: Continued our track record of strong revenue growth
Continued our track record of strong revenue growth For personal use only +14% YOY Revenue ($b) Subscribers (#m) ARPU ($) (+10% CC) $39.29 +22% YOY +11% YOY (+21% CC) 4.16m +10% YOY $1.71b +14% YOY $34.61 +28% YOY 3.74m +7% YOY $1.40b +19% YOY $31.36 3.27m -2% YOY +29% YOY $29.30 $1.10b +20% YOY +18
Slide 22: Delivered a Rule of 40 outcome
Delivered a Rule of 40 outcome; in line with commitment to balance growth with profitability For personal use only Adjusted EBITDA ($m) Free cash flow ($m) & margin (%) Rule of 401 (%) Revenue growth CC (%) +75% YOY Free cash flow margin (%) $342m 41% $527m 20.0% 32% 30% +45% YOY 21% 25% $302m +10%
Slide 23: Winning on Purpose
WINNING ON PURPOSE For personal use only Purpose Vision WHY WE To make life better for people in small business, To be the most trusted and insightful EXIST their advisors and communities around the world small business platform To be a world class SaaS business ASPIRATION To double the size of our
Slide 24: Our areas of focus for FY25-27
Our areas of focus for FY25–27 For personal use only 80% 20% A Winning GTM Focused Bets to Win the 3x3 Unleash Xero(s) to Win Playbook Win the Future Complete the three critical Product, pricing and Evolve customer experience Deliver a purpose and jobs in the three largest packaging to increase thro
Slide 25: Progress on strategic priorities and capital allocation
We continue to progress our strategic priorities & purposefully allocate capital For personal use only Focused Bets to Win the Win the 3x3 A Winning GTM Playbook Unleash Xero(s) to Win Future ● Embed partnership with ● Launched simplified ● Restructured Canada ● Diya Jolly promoted to Deputy in Aust
Slide 26: Xerocon London Product Announcements
@ Xerocon London Product Announcements Partnership Tax in Xero r personal use only yg OS t Integrated Practice Management Payroll Manager
Slide 27: Xerocon Nashville Product Announcements
(& xerocon Nashville Product Announcements August 2024 ) Sales tax Embe reporting and (3) peypeonts dashboard
Slide 28: Global product updates
Global product updates = : : Tap to Pay in the Xero Accounting app >s e] Coming August ) me with the invoice number and the item you’d like to adjust. ‘ SE ihe
Slide 29: FY25 Outlook
FY25 Outlook For personal use only Total operating expenses as a percentage of revenue is expected to be around 73% in FY25, and compared to FY24, product design and development costs as a % of revenue is expected to be higher 17
Slide 30: Our aspiration
Our aspiration1 For personal use only We aspire to be a world class SaaS business We believe we have the opportunity to both double the size of our business2 and deliver Rule of 40 or greater performance3,4 As we grow, we will also seek to be more balanced between subscriber growth and ARPU expansio
Slide 31: Agenda
AGENDA For personal use only 01 CHAIR 02 CEO 03 RESOLUTIONS 04 Q&A ADDRESS UPDATE DAVID THODEY SUKHINDER SINGH CASSIDY CHAIR CHIEF EXECUTIVE OFFICER
Slide 32: Resolution: Auditor's fees and expenses
RESOLUTION 1 For For personal use only Auditorʼs fee 113,952,694 and expenses 99.75% That the board is authorised to fix the Against fees and expenses of Ernst & Young as auditor for the ensuing year 236,945 0.21% Discretionary* 47,528 *32,068 of which are held by the Chair of the Meeting who intend
Slide 33: Resolution: Re-election of Steven Aldrich
RESOLUTION 2 For For personal use only Re-election of 112,549,373 Steven Aldrich 98.52% That Steven Aldrich, retiring from Against office as a director of Xero at the close of the Meeting, and being eligible, be 1,640,350 re-elected as a director of Xero 1.44% Discretionary* 47,074 *31,614 of which a
Slide 34: Resolution: Re-election of Dale Murray CBE
RESOLUTION 3 For For personal use only Re-election of 112,187,285 Dale Murray CBE 98.21% That Dale Murray, retiring from office Against as a director of Xero at the close of the Meeting, and being eligible, be 2,001,717 re-elected as a director of Xero 1.75% Discretionary* 47,734 *32,274 of which are
Slide 35: Resolution: Adoption of the Remuneration Report
RESOLUTION 4 For For personal use only Adoption of the 81,566,493 Remuneration Report 77.49% That the Remuneration Report contained in the FY24 Against Annual Report be adopted 23,646,454 Note: Xero is putting this resolution to shareholders voluntarily as a matter of good governance. This is an 22.
Slide 36: Agenda
AGENDA For personal use only 01 CHAIR 02 CEO 03 RESOLUTIONS 04 Q&A ADDRESS UPDATE DAVID THODEY SUKHINDER SINGH CASSIDY CHAIR CHIEF EXECUTIVE OFFICER
Slide 37: Glossary
Glossary For personal use only Adjusted EBITDA Free cash flow Adjusted EBITDA (a non-GAAP financial measure) is Free cash flow is defined as cash flows from provided as Xero believes it provides useful operating activities less cash flows used for information for users to understand and analyse inve
Slide 38: Contact
For personal use only CONTACT Nicole Mehalski INVESTOR RELATIONS nicole.mehalski@xero.com +61 400 947 145 Kate McLaughlin COMMUNICATIONS kate.mclaughlin@xero.com +64 27 533 4529 26