Slide 1: Appen Limited 2020 First Half Results Presentation
For personal use only Appen Limited 2020 First Half Results Presentation 27th August 2020
Slide 2: Disclaimer
Disclaimer 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 sp
Slide 3: Appen makes AI work in the real world
Appen makes AI work in the real world For personal use only High growth market Strong performance Positioned to win § Appen provides essential § Proven supplier of high-quality § Market leading position training data for AI speech, natural language, development and image, video and relevance § AI-en
Slide 4: Appen maintains high growth in 1H 2020
Appen maintains high growth in 1H 2020 For personal use only H1 2020 Highlights Change on PCP 4 of 5 major2 customers using Appen Group Revenue $306.2M +25% annotation platform (former Figure Eight platform) Relevance $273.9M +34% Enterprise-wide platform agreement with Speech & Image $31.9M -20% ex
Slide 5: Relevance high growth continues
Relevance high growth continues For personal use only Relevance Relevance Revenue Half on Half 273.9 300.0 273.9 262.9 250.0 204.9 204.9 200.0 181.7 AU $ M Revenue 150.0 131.2 EBITDA 52.2 100.0 44.1 72.9 53.3 50.0 35.0 38.2 22.7 28.0 H1 FY2019 H1 FY2020 (A$M) - 1H15 1H16 1H17 1H18 1H19 1H20 § Revenu
Slide 6: Speech & Image maintains positive long-term trend
Speech & Image maintains positive long-term trend For personal use only Speech & Image Speech & Image Revenue Half on Half 39.9 45.0 39.9 40.0 31.9 35.0 31.9 29.9 30.0 27.8 AU $ M 25.0 Revenue 20.7 19.6 21.5 14.7 20.0 18.8 18.4 19.3 EBITDA 15.0 13.1 4.7 10.0 5.0 H1 FY2019 H1 FY2020 (A$M) - 1H15 1H16
Slide 7: Continued demand from long-standing customers
Continued demand from long-standing customers For personal use only 535.5 2H § Ongoing demand for high quality training 364.2 data from major customers underpins consistent revenue growth 305.8 § New business development adds customers and diversifies revenue base 166.6 § Future revenue to benefit f
Slide 8: High value combination
+ initiatives High value combination For personal use only Growth 4 of 5 US$80M annual § Platform plus crowd provides full-suite major customers commitment solution using Appen annotation platform Enterprise-wide platform agreement (former Figure Eight platform) with existing major customer § Breadt
Slide 9: Substantial increase in committed revenue
Substantial increase in committed revenue For personal use only Annual Contracted Value (ACV) Revenue by Type at end of period 103.0 306.2 305.8 290.7 244.8 211.1 USD $ M AU $ M 25.0 20.4 12% 7% 3% H2 FY2018 H1 FY2019 H2 FY2019 H1 FY2020 H2 FY2018 H1 FY2019 H2 FY2019 H1 FY2020 Annual contract Projec
Slide 10: Ongoing investments in future growth
Ongoing investments in future growth For personal use only Strong EBITDA growth of 35% (excluding incremental growth investments) Impact of Growth Investments +35% § H1 2020 includes significant growth 70.0 investments totalling $13.4M 16.2 62.5 60.0 § Sales and Marketing - to add new customers to i
Slide 11: China
China For personal use only Growth initiatives China Monthly Revenue YTD 2020 High growth revenue. July 6x January Customers include Chinese technology giants 0.7 0.6 Strong position for international data 0.5 Growing volume of local data projects 0.4 AU $ M 0.3 Providing speech, text, image, video
Slide 12: Technology
Technology For personal use only Growth initiatives New features opening markets Build the platform Accelerate scalability Revenue growth and quality § 3D point cloud / LiDAR annotation for • Increased market share by autonomous vehicles, robotics, manufacturing Crowd 1. Product breadth supporting m
Slide 13: Sales and Marketing
For personal use only Growth initiatives Sales and Marketing Global FMCG Global aerospace Global fast-food Significant expansion in global go-to- company company chain market team Speech data for Speech data for Speech data for ASR for customer ASR for air traffic ASR for customer § US by sector § A
Slide 14: Government
Government For personal use only Growth initiatives Government setup complete § Prime contractor eligibility § Experienced team in place § Washington DC office open § Air-gapped technology and operations Business development ongoing § Growing pipeline of platform and service opportunities § Known go
Slide 15: Profit and loss
Profit and loss For personal use only Statutory Results % change Revenue up 25% H1 FY2020 H1 FY2019 % change constant AU $M • Continued strong growth in Relevance currency Relevance 273.9 204.9 34% 24% • Speech & Image revenue mainly impacted by cyclicality and pandemic Speech & Image 31.9 39.9 -20%
Slide 16: Balance sheet
Balance sheet For personal use only AU SM Jun-20 Dec-19 • Strong balance sheet Cash 126.0 75.3 • $126M in cash at 30 June 2020 Receivables 62.0 116.3 • Decrease in receivables relates to receipt Other Current Assets 34.6 11.0 timing (refer Cash Flow slide) Non-Current Assets 439.2 431.5 • Non-curren
Slide 17: Cashflow
Cashflow For personal use only AU SM H1 FY2020 H1 FY2019 • Cash balance increased by $55.2M Receipts 334.4 233.3 • Positive impact from receipt timing (Expected Dec 19 Payments and other (259.0) (190.6) receipts received in Jan 20 and some expected Jul 20 Cash flow from operations before receipts re
Slide 18: Currency
Currency For personal use only Revenue (A$M) Underlying EBITDA (A$M) Increase Decrease Total Increase Decrease Total 350.0 60.0 21.8 306.2 300.0 39.3 50.0 3.6 49.1 46.3 250.0 245.1 -0.8 40.0 200.0 30.0 150.0 20.0 100.0 50.0 10.0 - - Currency Neutral H1 FY2020 Currency Neutral H1 FY2020 H1 FY2019 Gro
Slide 19: Capital management guidelines
Capital management guidelines For personal use only Organic growth Debt § Appen will continue to invest in new and existing § Debt excluding M&A not to exceed 1x EBITDA. markets and capabilities in support of its growth § Debt to fund M&A plus non-M&A debt not to strategy. exceed 2x combined EBITDA
Slide 20: Delivering non-financial outcomes
Delivering non-financial outcomes For personal use only Environmental Social Governance § Low environmental § Member of Global Impact § Added US-based NED to footprint Sourcing Coalition increase independence and § Jobs for disadvantaged add market knowledge § Investment in carbon communities offset
Slide 21: Strong demand tailwinds
US e-commerce penetration, % Strong demand tailwinds For personal use only Growth initiatives 10 years’ growth in 3 months 35% Pandemic accelerating growth in advantaged sectors 30% § Technology § Logistics/delivery § Ecommerce § Entertainment streaming and gaming 25% § Pharmaceuticals § Contactless
Slide 22: Positioned to win
Positioned to win For personal use only Market leading position AI-enabled technology platform that opens markets and improves scalability and automation On-demand 1M+ crowd, covering 180 languages, 70K locations, 130 countries Highly skilled, resilient and experienced staff Proven, scalable and uni
Slide 23: Near term pandemic impact
Near term pandemic impact For personal use only Small business impact New business impact Global Online Ad Spending1 Annual Contracted Value (ACV) 600 50% at end of period Speech & Image Revenue Half on Half 526 45% 500 485 103.0 441 40% 45.0 39.9 389 35% 40.0 400 325 333 30% US $ BN Major 35.0 31.9
Slide 24: Outlook
Outlook For personal use only • Appen continues on its long-term growth trajectory • Positioned to win in a high growth market that will accelerate post-pandemic • No material change to growth investments. Taking a long-term focus • Pandemic to have a small impact on 2H revenue • Guidance maintained
Slide 25: Thank you
For personal use only Thank you