Slide 1: Appen Limited 2019 First Half Results Presentation
For personal use only Appen Limited 2019 First Half Results Presentation
Slide 2: Forward looking statements
For personal use only The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as
Slide 3: Appen collects and labels data for AI systems
Appen collects and labels image, For personal use only text, speech, audio, and video data used to build and continuously improve the world’s most innovative artificial intelligence systems.
Slide 4: 1H 2019 highlights – Appen delivers again
1H 2019 highlights – Appen delivers again (A$M) For personal use only Speech & Revenue $245.1MRevenue + 60 % Image3 $39.9M Revenue + 85 % Underlying EBITDA1 $46.3M Revenue + 81 % Relevance4 $193.7MRevenue + 48 % Underlying EBITDA 18.9% Revenue From 16.8 % Dividend 4c Revenue Partially franked Margin
Slide 5: Strong core performance
Strong core performance (A$M) Speech and Image gathering speed1 Relevance growth and margin For personal use only expansion continues1 Speech & Image Relevance 39.9 193.7 131.2 21.5 Revenue Revenue 14.7 EBITDA EBITDA 7.6 46.7 24.4 H1 FY2018 H1 FY2019 H1 FY2018 H1 FY2019 (A$M) ($Am) (A$M) ($Am) • Hal
Slide 6: Figure Eight – High conviction
Figure Eight – High conviction (A$M) For personal use only Delivering on the thesis – accelerating tech, diversifying revenue, expanding markets Figure 8 P&L Figure Eight ARR • Diversifying customer base 11.2 40.0 35.0 35.0 • Joint wins in US and Europe 30.0 27.5 30.0 25.0 • Leading position in high
Slide 7: High growth, long term customer relationships
High growth, long term customer relationships (A$M) 364.2 For personal use only 2H Existing customers continue to provide reliable, repeat revenue 244.8 • Appen’s existing customers underpin revenue growth with repeat buying for existing and new projects 166.6 • Customer relationships remain strong
Slide 8: Technology update
Technology update For personal use only Delivering the vision Global crowd workforce • Investing in technology to improve speed, quality and productivity Crowd Client Annotation management workspace tools • Acquisitions accelerate and de-risk tech strategy • New feature releases increase competitive
Slide 9: Integration update
Integration update Leapforce Figure Eight For personal use only 1M+ 180+ 20Y+ 500K+ 13B+ Skilled Global Languages Enabling Audio Hours Human Workforce AI Projects Processed Judgments Scale Quality Security Speed • Integration complete • Figure Eight operating ‘as is’ in 2019 • Deep review and redesi
Slide 10: Emerging growth pillars - Government
Emerging growth pillars - Government Governments increasing investments in AI For personal use only • Growing government interest in AI • Multiple use cases and data types required • Large scale projects • High barriers to entry including cleared personnel and facilities • Well positioned by combini
Slide 11: Emerging growth pillars - China
Emerging growth pillars - China Appen China taking shape For personal use only China AI Market1 ($USBN) • China AI market growing at 55% annually. 16.0 14.3 1 Forecast to be $14.3BN in 2020 14.0 • Appen leadership in place 12.0 10.2 10.0 • Building sales, client services, HR/recruiting 8.0 and opera
Slide 12: High growth momentum continues
High growth momentum continues (A$M) For personal use only H1 FY2019 H1 FY2018 % change % change constant Revenue up 60% on 1H 2018 currency Statutory Results Relevance data from major customers continues to Speech & Image 39.9 21.5 85% 73% underpin revenue High Speech and Image revenue growth in 1H
Slide 13: Robust balance sheet
Robust balance sheet (A$M) For personal use only Jun-19 Dec-18 Robust balance sheet Cash 70.8 40.0 Increase in receivables relates to increase in revenue volumes and acquisition of Figure Eight Receivables 89.0 70.8 Other Current Assets 9.7 2.6 Non-current assets include Goodwill of $367.2M, identif
Slide 14: Solid cash conversion
Solid cash conversion (A$M) For personal use only H1 FY2019 H1 FY2018 Cash balance increased by $39.9M Receipts 233.3 142.6 Cash flow from operations increased by 98% and Payments and other (190.7) (121.1) remains strong Cash flow from operations 42.7 21.6 $293M (net of raising costs) raised to acqu
Slide 15: Currency tailwind
Currency tailwind (A$M) Revenue For personal use only 19.7 245.1 72.6 152.8 • Most revenue derived offshore in USD • Currency benefit in 1H 2019 • Currency neutral revenue growth H1 FY2018 Currency Currency H1 FY2019 Neutral Growth Impact 47% on 1H 2018 (A$M) • Currency neutral underlying EBITDA up
Slide 16: AI market and the need for data continues to expand
AI market and the need for data continues to expand For personal use only AI market still early, Multiple use cases and Appen uniquely and growing data types positioned to win AI Projects Per organisation1 Adoption plans for AI2 Global crowd workforce RPA Crowd Client Annotation management workspace
Slide 17: Appen strongly positioned and delivering
Appen strongly positioned and delivering For personal use only Established Provider Global Presence Scalable Operations Founded in 1996 with industry-leading work in 662 full-time staff speech solutions worldwide1 Added search relevance Exeter High staff engagement, Seattle Beijing expertise in 2007
Slide 18: Outlook
Outlook For personal use only Appen is strengthening its position in a high growth market through investments in technology, sales & marketing, government markets and China YTD revenue plus orders in hand including Figure Eight for delivery in 2019 of ~$380M at mid-August 2019. The Company’s full ye
Slide 19: Thank you
For personal use only Thank you Mark Brayan, CEO mbrayan@appen.com Kevin Levine, CFO klevine@appen.com appen.com