Technology One Limited · ASX:TNE
Technology One — Conference Presentation (March 2016)
48 slides from Technology One's conference presentation, Mar 31, 2016
Slide 1: Technology One Ltd Presentation
____ __ ____Technology _____One ____ ______ Ltd Presentation _____ _____ 25____ _____ July 2012 - Technology One Ltd (ASX:TNE) today conducted a mid year presentation with Merrill Lynch Australia. _____ _____ The attached presentation was given by the company’s Executive Chairman, Mr ____ Adrian ___
Slide 2: 2012 Mid Year Presentation
2012 Mid Year Presentation Adrian Di Marco Adrian_Dimarco@TechnologyOneCorp.com Final Commercial in confidence July 2012
Slide 3: Agenda
Agenda Overview ____ __makes What ____ _____ ____ ______ Us Different _____ _____ Strategic Initiatives ____ Full_____ Year Guidance _____ _____ ____ _____ Appendix Half Year Results Long Term Outlook
Slide 4: TechnologyOne is an enterprise software vendor
____ __ ____ _____ ____ ______ _____ _____ ____ _____ TechnologyOne is an enterprise software vendor _____ _____ ____ _____
Slide 5: TechnologyOne Overview
TechnologyOne Overview Our enterprise solution consists of the following products: Financials ____ __ ____ Supply Chain _____ ____ ______ _____ _____ Asset Management ____ _____& Payroll Human Resource Corporate Performance Management _____ _____ • Business Intelligence ____ _____ • Budgeting
Slide 6: Overview
Overview TechnologyOne specifically targets seven vertical ____ __ ____ _____ ____ ______ markets: _____ • Local _____ Government • Government (State, Central & Federal) ____ _____ • Education _____ _____ • Financial Services ____ _____ • Health, Community Services and Not for Profit • Utilities • M
Slide 7: TechnologyOne Overview
TechnologyOne Overview One of Australia’s ____ __ ____largest_____ software ____ houses, ______ specialising in the research, development _____ and _____ of software – invest commercialisation ____in _____ $32+m R&D per year _____ _____ Connected Intelligence (Ci) is our current generation produ
Slide 8: TechnologyOne Overview
TechnologyOne Overview Offices in Australia, New Zealand, Asia and, more recently, the United ____ __ ____ _____ ____ ______ Kingdom _____ _____ Growing business in the United ____ _____ Kingdom _____ Major _____ supplier of enterprise ____ _____ applications in ANZ – 900+ major corporations,
Slide 9: Historical Performance
Historical Performance Strong financial track record … Doubling in size approx every 4 years for 15 years ____ __ ____ _____ ____ ______ Continually profitable since 1992 (20 years) _____ _____ Continually paid dividends since 1996 (16 years) Revenue ____ _____ Cash and Equivalents $45.4m
Slide 10: Historical Performance
Historical Performance Key metrics over last 15 years … ____ __ ____ _____ ____ ______ Revenue - 22% per annum compound Even through the Dot-Com and GFC _____ _____ Initial Licence Fees - 22% per annum compound ____ _____ Annual Licence Fees - 27% per annum compound _____ _____ Profit Befo
Slide 11: What Makes Us Different
Agenda Overview ____ __ makes What ____Us_____ Different ____ ______ _____ _____ Strategic Initiatives ____ _____ Full Year Guidance _____ _____ ____ _____ Appendix Half Year Results Long Term Outlook
Slide 12: What Makes Us Different
What Makes Us Different Enterprise Solution ____ __ ____ _____ ____ ______ One of a few companies globally with an enterprise solution _____ Own the_____ IP to our software, which allows us to control our ____ future_____ _____ _____ model - Power of One Unique business ____ _____ We build
Slide 13: What Makes Us Different
What Makes Us Different Our focus on seven key vertical markets ____ • Deep__ ____ of _____ understanding ____ our target seven ______ markets _____ _____ • Understand their value drivers • Know the universe of opportunities in each of our market ____ _____ 14 Preconfigured solutions for each of
Slide 14: Revenue Model
Revenue Model Robust Revenue Model ____ • Initial__ Licence____- based_____ ____of users on usage (number ______ ) – Matrix of licensable products & modules (approx 300 modules over 10 products) _____– Once_____ off ____ _____Services - fee for service • Implementation – $1.20 Services : $1 Initia
Slide 15: Revenue Model
Revenue Model Initial Implementation Annual Annual Annual Initial Licence Service Licence Licence Licence …. ____ __ ____ Purchase _____ ____ ______ _____ _____ -Specified: Products, Modules, No of Users ____ _____ Initial Annual Annual Annual Increase Licence Licence Licence Licence …. No _____ of
Slide 16: Revenue Model
Revenue Model ____ __ ____ _____ ____ ______ _____ _____ ____ _____ On average _____ _____our customers have 3 products (out of ____ a product range of 10) _____
Slide 17: Agenda
Agenda Overview ____ __ What____ makes Us _____ Different____ ______ _____ _____ Strategic Initiatives ____ _____ Full Year Guidance _____ _____ ____ _____ Appendix Half Year Results Long Term Outlook
Slide 18: Strategic Initiatives
Strategic Initiatives ____ __ ____ _____ ____ ______ R&D _____ _____ ____ United_____ Kingdom _____ _____Cloud TechnologyOne ____ _____ Improved Margins
Slide 19: R&D Expense Growth
R&D $33m, R&D Expense Growth 35 20% Revenue 30 Target for full year is R&D growth of only 4% pcp ____ __ ____ _____ ____ ______ 25 Compound Growth 15% vs15% over last 10 year _____ _____ 20 $'m 15 ____ _____ 10 _____ _____ 5 - ____ _____ 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 R&D will be
Slide 20: New Offshore R&D Centre
New Offshore R&D Centre New offshore R&D centre in Indonesia to handle ____ __ ____ _____ ____ ______ future growth _____ _____ To contain costs – operating leverage of offshore R&D staff ____ To tap into_____ a new pool of R&D talent outside of Australia _____ _____ To improve support levels
Slide 21: TechnologyOne Ci²
TechnologyOne Ci² Ci² is the next generation of our Ci enterprise suite... Embrace new technologies, innovations & concepts ____ __ ____ _____ Focus is Simplicity, Not Complexity ____ ______ _____ Browser_____ based – no more software installs & pervasive ____ _____ Apps and Enterprise App S
Slide 22: Strategic Initiatives
Strategic Initiatives ____ __ ____ _____ ____ ______ R&D _____ _____ ____ United_____ Kingdom _____ _____Cloud TechnologyOne ____ _____ Improved Margins
Slide 23: United Kingdom
United Kingdom United Kingdom ____ __market Emerging ____ for us_____ ____ ______ _____ Significant_____ impact caused by the GFC ____ _____ Substantially less business Highly competitive _____ _____ New strategy being implemented ____ _____ Fine tuning our products for the UK market M
Slide 24: Strategic Initiatives
Strategic Initiatives ____ __ ____ _____ ____ ______ R&D _____ _____ ____ United_____ Kingdom _____ _____Cloud TechnologyOne ____ _____ Improved Margins
Slide 25: Today – On Premise
Today – On Premise Database Server ____ __ ____ _____ ____ ______ _____ _____ Citrix Servers N-tier Application Servers Distributed Processors ____ _____ client _____ _____ ____ _____ Installation Servers A complex computing model
Slide 26: The Future – The Cloud Service
The Future – The Cloud Off Premise ____ __ ____ _____ ____Service ______Provider _____ _____ ____ _____ client Internet connection _____ _____ ____ _____ A simpler computing model
Slide 27: TechnologyOne Cloud
____ __ TechnologyOne Cloud ____ _____ ____ ______ _____ _____ ____ _____ _____ _____ TechnologyOne Enterprise Suite in the ____ _____ cloud today, delivered via the browser... TechnologyOne takes care of everything
Slide 28: TechnologyOne Cloud
TechnologyOne Cloud TechnologyOne takes care of everything for a Yearly Subscription Fee… ____ __ ____ _____ ____ ______ Hardware, Operating Software, Middleware etc.. _____ _____ Backup ____ Services _____ _____ _____ Replication Services & Disaster Recovery ____ _____ Upgrades IT staff A
Slide 29: Cloud
Cloud ____ __ ____ _____ ____ ______ _____ _____ ____ _____ _____ _____ ____ _____
Slide 30: Strategic Initiatives
Strategic Initiatives ____ __ ____ _____ ____ ______ R&D _____ _____ ____ United_____ Kingdom _____ _____Cloud TechnologyOne ____ _____ Improved Margins
Slide 31: Improved Margins
Improved Margins Profit margin has contracted over the last ____ 10 years__ ____ _____ ____ ______ _____ _____ Expanded our product range to become an enterprise ____ _____ vendor _____ R&D _____ expenditure increased by 16% per annum ____over last 10 years _____ Profit margin now stabilised
Slide 32: Control of R&D Costs
Control of R&D Costs R&D expense growth to decelerate in coming ____ __ ____ _____ ____ ______years… Compound Growth 16% _____ _____ ____ _____ _____ _____ ____ _____ R&D expense growth to decelerate in coming years because: • Initial build of the enterprise suite is complete • Critical mass in R&D
Slide 33: R&D Growth Projections
R&D Growth Projections Model R&D growth over the next 5 years at 8% per annum • R&D currently projected to be $67m in year 5 (compared to $33.5m now) ____ __ ____ _____ ____ ______ • In year 5 our R&D will be $47m vs $67m, saving $20m in one year _____ _____ • Saving $52m over 5 years ____ _____ R&D
Slide 34: Strategic Initiatives
Strategic Initiatives ____ __ ____ _____ ____ ______ R&D _____ _____ ____ United_____ Kingdom _____ _____Cloud TechnologyOne ____ _____ Improved Margins
Slide 35: Agenda
Agenda Overview What ____ __makes ____ Us Different _____ ____ ______ _____ _____ Strategic Initiatives ____ Full_____ Year Guidance _____ _____ ____Appendix _____ Half Year Results Long Term Outlook
Slide 36: Full Year Guidance
Full Year Guidance Economic environment remains challenging and uncertain ____ __ ____ _____ ____ ______ TechnologyOne enterprise business remains strong and resilient _____ _____ Continuing growth in Licence Fees in enterprise business ____ _____ • Good pipeline of opportunities in second hal
Slide 37: Full Year Guidance
Full Year Guidance Assumptions Economic climate does not deteriorate any further ____ __ ____ _____ ____ ______ Continuing contract momentum is maintained _____ _____ Total expense growth of 7% in 2012 year ____ _____ _____ _____ R&D expense growth to be 4% • TechnologyOne new generation Ci²
Slide 38: Agenda
Agenda Overview What ____ __makes ____ Us Different _____ ____ ______ _____ _____ Strategic Initiatives ____ Full_____ Year Guidance _____ _____ ____Appendix _____ Half Year Results Long Term Outlook
Slide 39: Results Highlights
Results Highlights FY12 FY11 Variance % Revenue $77.3m $71.6m 8% ____ __ ____ _____ ____ ______ Initial Licence Fees $18.4m $15.6m 18% Consulting Services Fees $21.3m $19.6m 9% _____ _____Annual Licence Fees $25.4m $21.8m 16% ____ _____ Expenses R&D Expenses * $68.0m $62.5m $16.6m $14.9m 9% 11% ____
Slide 40: Guidance
Guidance Guidance at Annual General Meeting ____ __ ____ _____ ____ ______ Half Year _____ _____ - challenging and not a good indicator of full year results Market consensus was profit to be down between 5% and 10% ____ Actual_____ profit up 2% Half 1 FY11 Abnormally high _____ _____ Full Ye
Slide 41: Dividend
Dividend H1 Dividend up 10% 1.80 Dividends for this year 1.60 22% per annum ____ __ ____ _____ ____ ______ 1.40 Half 1 1.61 cps up 10%* (declared) Cents per share 1.20 1.00 _____ Payout ratio _____ 0.80 of 67% 0.60 ____ _____ 0.40 0.20 0.00 _____ _____ *Indicative of the confidence for the full
Slide 42: Balance Sheet
Balance Sheet Mar-12 Mar-11 Var % Strong balance sheet $'000 $'000 $'000 Cash & Cash Equivalents $33.4m (vs $33.4m) Cash & Available-for-sale financial • Net Cash*: 8.51c/s (vs 8.23c/s) assets ____ __ ____ 13.27% _____ ____ ______ 33,410 33,396 14 0% Trade and other receivables 27,944 17,761 10,18
Slide 43: Cash Flow
Cash Flow Operating Cash Flow $4.4m, down 41% from $7.5m Mar11 Var % Mar-12 Mar-11 * Increase in Debtors ($5.2m) as a result of a number of large $ '000 $ '000 $'000 deals signed late H1 ____ __ ____ _____ ____ ______ EBIT 8,887 8,624 263 3% * Operating Cash Flow $4.4m (vs NPAT $7.4m) Depreciation &
Slide 44: 10 Year History – Half 1
10 Year History – Half 1 Average compound growth in Half 1 over the last 10 years 30 ____ __ ____ _____ ____ ______ Revenue 14% per annum 25 _____ _____ Licence Fees 16% per annum Consulting 13% per annum 20 ____ _____ Annual support 17% per annum _____ _____ $'m 15 NPAT 10% per annum ____
Slide 45: Agenda
Agenda Overview What ____ __makes ____ Us Different _____ ____ ______ _____ _____ Strategic Initiatives ____ Full_____ Year Guidance _____ _____ ____Appendix _____ Half Year Results Long Term Outlook
Slide 46: Long Term Outlook
Long Term Outlook Long Term Outlook is Strong ..... Enterprise Suite – one of a few companies globally with an enterprise solution ____ Power __– unique of One ____ _____ approach ____ to build, market,______ sell, implement and support our products _____ Vertical _____ markets focus – focus o
Slide 47: Long Term Outlook
Long Term Outlook Geographical expansion – United Kingdom has significant longer term growth ____ Our __Customer Compelling ____ Experience _____program ____– ______ retain our customers _____ New _____ offshore R&D centre – provide access to additional talent and operating leverage ____ _____
Slide 48: 2012 Mid Year Presentation
2012 Mid Year Presentation Adrian Di Marco Adrian_Dimarco@TechnologyOneCorp.com Final Commercial in confidence July 2012
Technology One — Conference Presentation (March 2016) on 6ix