Slide 1: WiseTech Global FY18 Results
WiseTech Global FY18 Results Investor briefing materials - 22 August 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Visit www.wisetechglobal.com/investors FORWARD-LOOKING STATEMENTS PREPARATION OF INFORMATION This presentation may contain statements that are, or may are deemed to be, forward-looking All financial information has
Slide 3: A leading provider of software to the logistics industry globally
A leading provider of software to the logistics industry globally 130 countries(1) ~8,000 customers (2) 3.5+ million development hours over 15 years 54+ billion data transactions annually(3) ~1,500 Employees(4) 1 integrated CargoWise One Countries with licensed users WiseTech office Headquarters Glo
Slide 4: CargoWise One…operating system for global logistics
CargoWise One…operating system for global logistics Strong foundation for future technology, seamless rollout, scalable capacity, global solutions scalable to any size of business global reach – 130 countries deeply integrated with real time visibility reduces risks, costs and data entry d
Slide 5: FY18 performance, delivery on strategy and financial results
FY18 performance, delivery on strategy and financial results
Slide 6: WiseTech Global financial highlights
WiseTech Global financial highlights Delivered strong, high quality growth while expanding technology lead and global footprint POWERFUL HIGH recurring LOW HIGH innovation LOW sales and PROFITABLE + revenue HIGH quality customer product development marketing attrition cash generative growth revenue
Slide 7: Delivered on strategy
Delivered on strategy Prioritised pipelines for innovation through development, and global expansion through acquisitions Innovation and expansion of Increase new customers Stimulate Accelerate organic growth through Greater usage by existing our global platform on the platform network effects acqui
Slide 8: Acquiring businesses for geographic expansion – securing assets swiftly
Acquiring businesses for geographic expansion – securing assets swiftly Small targeted acquisitions in key regions provide safer, faster, stronger entry to new markets We originate our own acquisition pipeline and Rapid expansion since January 2017. Acquired execute with our internally built M&A eng
Slide 9: Adjacencies feed into our innovation pipeline to build ecosystems
Adjacencies feed into our innovation pipeline to build ecosystems Targeting key plug-ins to our global development or multi-regional adjacencies that can scale We look for adjacencies to scale • FY18 acquisitions focus on expanding We are accelerating convergence of globally that either: TAM in ocea
Slide 10: Cargo chain – building an ecosystem
Cargo chain – building an ecosystem Rates WiseRates Schedules Cargoguide CargoSphere AIR SEA RAIL Needs of all logistics providers Booking Real time visibility Control over margins Netting & Faster multi-modal reconciliation movement Tracking & More efficient use of events resources EVENT BA
Slide 11: Trade and border compliance ecosystem – pain points abound
Trade and border compliance ecosystem – pain points abound AT BORDER IN COUNTRY Border clearance Accounting Customs entry Taxation Permits Languages Certificate of origin Localisations Needs of all logistics providers Control over margins Risk-free, cross-border execution Faster multi-modal mo
Slide 12: CargoWise One…operating system for global logistics
CargoWise One…operating system for global logistics Strong foundation for future technology, seamless rollout, scalable capacity, global solutions Integrated modules covering key logistics transactions… Freight Customs Warehousing Land Liner & Container E-commerce forwarding clearance transport agen
Slide 13: Increasing investment in relentless innovation
Increasing investment in relentless innovation Significant pipeline of longer-term innovations across existing verticals and new adjacencies Major development focus on: Work faster, harder, smarter 551 • Productivity product upgrades and • Global data sets PAVE GLOW Universal enhancements in FY18 •
Slide 14: Innovation pipeline – Global Tracking
Global data set, powerful, global tracking engine, events can trigger automated transactions Empty container returned to CY Full container delivered Container gated out from terminal Container discharged at final port Vessel arrived at final discharge port Vessel departed from t/s port Innovation pi
Slide 15: E-commerce volumes and speed demand 'light touch' execution
E-commerce volumes and speed demand ‘light touch’ execution Border management + compliance risks are the largest pain-point of international logistics and e-commerce What challenges do you face with your Retail e-commerce sales worldwide, 2016-2021 $6.0 30.0% Trillions and % of total retail sales cr
Slide 16: E-commerce 2nd generation, 'High Volume Low Value'
E-commerce 2nd generation, ‘High Volume Low Value’ Providing scalable, high volume integrated solution for 3PLs facing e-commerce juggernaut International e-commerce solution designed for higher volume levels Country agnostic – founded on the global customs strategy Designed for seamless rollout to
Slide 17: Widening our reach, building unassailable ecosystems
Widening our reach, building unassailable ecosystems We converge our innovation pipeline and acquisitions to rapidly build our multi-modal capabilities on a global scale Manufacturer/suppliers Logistics service provider End customers Integrated logistics solutions Manufacturer/ Road & rail Import/ex
Slide 18: CargoWise One will be the operating system for global logistics
CargoWise One will be the operating system for global logistics Expanding depth, reach and network effect – every innovation & acquisition adds to flywheel of growth Geographic expansion Customs/Freight Forwarding Adjacencies and convergent technologies 17
Slide 19: Ongoing and upcoming regulatory changes
Ongoing and upcoming regulatory changes We invest our regulatory experts and development teams in ensuring CW1 fully compliant globally UK • CDS platform to replace CHIEF ongoing Germany World • Customs ATLAS Release • BREXIT new border EU • ASYCUDA World/UNCTAD – 8.8 and AES release 2.4 requirement
Slide 20: Strong growth in revenue continues
Strong growth in revenue continues Powerful high quality revenue growth while focusing on innovation and global expansion Revenue 221.6 $m FY18 revenue +44% vs FY17 153.8 +41% CAGR FY14 – FY18 128.2 102.8 82.7 70.0 54.2 56.7 43.0 37.7 93.4 71.1 56.7 43.0 48.6 Full year revenue (FY13 and FY14), 2H re
Slide 21: Revenue growth by cohort – all cohorts grew revenue in FY18
Revenue growth by cohort – all cohorts grew revenue in FY18 Our customers stay and grow their revenue over time… more users, modules and transactions CargoWise One application suite revenue by customer cohort • CargoWise One continues $m, FY14 - FY18 significant organic growth during extensive busin
Slide 22: Significant revenue growth
Significant revenue growth Organic growth strong accelerated with strategic acquisitions Strong organic growth up 37%, delivering over two thirds of total revenue growth Revenue reflecting: $m • continued increased usage of the CargoWise One platform by existing Growth from customer organisations –
Slide 23: Strong growth in revenue and EBITDA
Strong growth in revenue and EBITDA Strong organic revenue growth, expanding CargoWise One EBITDA margins, while building out our platform • 44% revenue growth vs FY17, of which 66% is from organic growth (existing and new customers) excluding including FX Revenue EBITDA acquisitions(1) $m $m 48% •
Slide 24: Licensing model
Licensing model Focus on pay for usage, revenue benefits from transition of customers to On-Demand licensing • Excluding acquisitions, 99% Revenue by licence type of our FY18 CargoWise One % of total revenue revenues are from customers on On-Demand licensing • High volume of strategic asset acquisit
Slide 25: Licensing model
Licensing model With the shift to On-Demand complete, we are rapidly transitioning pre-existing MUL to STL • We have well-proven expertise in customer licence Revenue by licence type transition with <1% attrition % of total revenue • We introduced STL in 2014 for all new customers and have transitio
Slide 26: Financial summary
Financial summary Strong growth in revenue and earnings reflects strength of business and execution on strategy $m FY16 PF FY17(1) FY18(1) Change (vs FY17) Revenue above FY18 Total revenue 103.3 153.8 221.6 +44% guidance of $210m – $220m Gross profit 90.2 131.1 187.3 +43% Gross profit margin 87% 85%
Slide 27: Financial performance summary
Financial performance summary Robust delivery on strategy, business thriving, operating leverage as revenue grows Income statement $m FY16 PF FY17 FY18 Change vs FY18 Revenue On-Demand 86.2 127.3 171.0 34% OTL maintenance 15.4 15.1 27.7 83% OTL & support services 1.7 11.4 22.9 102% Total revenue 103
Slide 28: Operating expenses
Operating expenses Scaling to support relentless innovation, geographic expansion and business growth Operating expenses focused on strategic levers: Operating expenses % of total revenue — Innovation and product development expanded core 24% 21% 22% 22% General and platform 21% administration 20% 2
Slide 29: Investment in innovation and product development
Investment in innovation and product development Continued high investment in R&D, every $ and every hour builds out our technology • $222m invested in R&D and Investment in innovation and product development innovation (FY14-18) driving $m our platform leadership Total R&D % of total revenue • Over
Slide 30: Cash flow profile
Cash flow profile Healthy operating cash flow • Our strong operating performance delivered 32% increase in operating cash flow $m FY15 PF FY16 PF FY17 FY18 • Free cash flow rose to $43.5m EBITDA 21.9 31.5 53.9 78.0 with operating cash flow Non-cash items in EBITDA 3.5 2.6 5.4 9.4 conversion remainin
Slide 31: Summary statement of financial position
Summary statement of financial position Strong capital position from which to drive strategic growth $m 30 June 2017 30 June 2018 • Strong operating cash generation and Current assets $100.6m capital raising, funded our Cash and cash equivalents 101.6 121.8 investments in product development, growth
Slide 32: Strategy and FY19 outlook
WiseTech Strategy and FY19 outlook
Slide 33: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules + Increase new Stimulate Accelerate Innovation and customers on network organic Industry expansion of Geographies consolidation the platform effects growth our global Greater usa
Slide 34: Opportunity
Opportunity Logistics market size: across 1PL, 2PL, 3PL = ~A$14trillion Global 3PL E-commerce Government Ecosystems • Top 150 • 3PLs • Regulation Ecosystems, once • Logistics • Express • Digitisation built, drive long providers in couriers • Integration term value that is each vertical • E-commerce
Slide 35: High growth outlook for FY19
High growth outlook for FY19 Execution on strategy to deliver strong growth in FY19 Revenue 315-325 $m FY19 Revenue $315m - $325m 221.6 42% to 47% FY19 growth vs FY18 153.8 FY19 EBITDA 102.8 70.0 $100m - $105m 56.7 43.0 28% to 35% FY19 growth vs FY18 FY13 FY14 FY15 FY16 FY17 FY18 FY19 34
Slide 36: Visit our investor centre for more information on WiseTech Global
Visit our investor centre for more information on WiseTech Global www.wisetechglobal.com/investors Videos Presentations Other materials 35
Slide 37: Appendix
WiseTech Appendix
Slide 38: FY19 guidance and assumptions
FY19 guidance and assumptions Growth in revenue and EBITDA What is included in the guidance: • Retention of existing customers with organic usage growth consistent with historical levels • New customer growth consistent with historical levels • New product and feature launches • Contractual increase
Slide 39: Global revenues received in a mix of key currencies
Global revenues received in a mix of key currencies Revenues protected with effective natural hedge and external arrangements • 71% of FY18 revenue in FY18 FY19 FX rates v AUD non-AUD, as expected, Actual Guidance slightly lower rate than GBP 0.58 0.56 FY17 (75%) RMB 5.07 4.93 • Natural hedges in so
Slide 40: Employees
Employees Our diverse, talented workforce has doubled since beginning of FY18 Employees by function Growth in number of employees as at 30 Jun 2018 General and administration, 20% ~1,500(1) Product design and Customer development, support and 51% other, 20% Sales and marketing, 9% 1,225 Employees by
Slide 41: Product commercialisation and monetisation processes and timeline
Product commercialisation and monetisation processes and timeline Rich ideation Innovation cycle Rapid commercialisation Grow usage & revenue Industry expert teams solve Product leads + architects leverage global data, across sectors and Global platform availability of released product/functional en
Slide 42: Capitalised development and amortisation
Capitalised development and amortisation High innovation to commercialisation ratio – product designed for CargoWise One platform + customer base • Capitalised development comprises: - In development – labour and overhead costs relating to the development of new modules and products Net book value o
Slide 43: Overview of revenue licensing models, drivers and platform
Overview of revenue licensing models, drivers and platform Customers in transition to “On-Demand”, ultimately move to transaction-based licensing Nature of revenue: Recurring revenue Other revenue (1) (1) 90% 10% Revenue categories: On-Demand OTL maintenance OTL & support services 77%(1) 13%(1) 10%(
Slide 44: Acquisition ─ integration process + value components
Acquisition ─ integration process + value components Stage 1 integration completed swiftly, we focus on long-term product capability and growing revenue Foothold 12-24 months 3-12 months Adjacencies 3+ years 0-36 months Integrate target Develop product Grow revenue “Acculturation” “Build out” Global
Slide 45: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY15 and FY16 FY17 FY18 Customs Customs Customs Customs Ocean Customs Customs Customs Land carrier tariffs transport China South Africa Germany Italy Global Brazil Australasi
Slide 46: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 Rates Rates Warehouse Customs Customs Customs Customs Freight management management WMS Freight Freight WMS forwarding forwarding forwarding /WMS /WMS Global Global Asia
Slide 47: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 FY19 Freight Customs Parcel Customs LTL transport Customs Customs Intermodal Customs/Freight forwarding shipping TMS tariffs trucking TMS forwarding TMS Latin WMS Americ
Slide 48: Key operating metrics - WiseTech Global including acquisitions
Key operating metrics - WiseTech Global including acquisitions FY16 PF FY17 FY18 Total revenue growth vs prior period 30% 49% 44% Recurring revenue 98% 93% 90% On-Demand revenue 83% 83% 77% Gross profit margin 87% 85% 85% Product design and development - % of total revenue 20% 18% 19% Sales and mark
Slide 49: Key operating metrics – including and excluding acquisitions
Key operating metrics – WiseTech Global including and excluding acquisitions FY18 excluding FY16 PF FY17 FY18 acquisitions(1) Recurring revenue 98% 93% 90% 97% On-Demand revenue 83% 83% 77% 96% Gross profit margin 87% 85% 85% 91% Total R&D - % of total revenue 38% 33% 34% 33% Product design and deve
Slide 50: Income statement
Income statement $m FY16 PF FY17 FY18 Revenue On-Demand 86.2 127.3 171.0 OTL maintenance 15.4 15.1 27.7 OTL & support services 1.7 11.4 22.9 Total revenue 103.3 153.8 221.6 Cost of revenues (13.1) (22.7) (34.3) Gross profit 90.2 131.1 187.3 Operating expenses Product design and development (21.1) (2
Slide 51: Reconciliation of statutory operating cash flow to statutory cash flow
Reconciliation of statutory operating cash flow to statutory cash flow $m FY17 FY18 • Payments for intangible assets EBITDA 53.9 78.0 include $35.2m capitalised Non-cash items in EBITDA 5.4 9.4 development and $0.1m for Changes in working capital 4.1 (3.6) payments of patents Operating cash flow 63.
Slide 52: Reconciliation from statutory to pro forma income statement
Reconciliation from statutory to pro forma income statement $m Note(1) FY14 FY15 FY16 Statutory revenue 56.7 70.0 102.8 Net impact of acquisitions 1 9.3 9.6 0.5 Pro forma revenue 66.0 79.6 103.3 Statutory NPAT from continuing operations 10.1 10.1 2.2 Net impact of acquisitions 1 1.7 1.5 0.5 Acquisit
Slide 53: Notes to pro forma adjustments
Notes to pro forma adjustments Summary of pro forma adjustments 1. Represents the pro forma impact of acquisitions as presented in the Prospectus and adjustments for FY16 to remove the impact of CCN for May and June 2016. 2. Represents costs associated with acquisitions completed in the respective p
Slide 54: Global 3PLs – 34 of the top 50 global 3PLs
Global 3PLs – 34 of the top 50 global 3PLs(1) The WiseTech Global group offers solutions domestically, multi-regionally and globally 1. Armstrong & Associates: Top 50 Global Third Party Logistics Providers List ranked by 2017 logistics gross revenue/turnover. 53
Slide 55: Freight Forwarders – large, global customer base
Freight Forwarders – large, global customer base We provide solutions to a diverse group of logistics providers globally including 24 of the top 25(1) 1. Armstrong & Associates: Top 25 Global Freight Forwarders List ranked by 2017 logistics gross revenue/turnover.
Slide 56: Logistics execution industry dynamics
Logistics execution industry dynamics Industry pain points drive an exponential shift to CargoWise One 3PL industry dynamics vs Impact of Our leading global logistics software and low propensity to switch out of dynamic for open-access, usage-driven business model proprietary systems WiseTech remove
Slide 57: Logistics industry – moving goods and data
Logistics industry – moving goods and data Movement of goods requires timely movement of accurate information across the supply chain A myriad of logistics suppliers are needed across the supply chain. Information moves ahead of, alongside and behind the physical goods as they move through the suppl
Slide 58: WiseTech GLOBAL
WiseTech GLOBAL