Slide 1: Business and Trading Update Presentation
Appen Limited Level 6, 9 Help Street Chatswood NSW 2067 Tel: 02 9468 6300 www.appen.com ASX ANNOUNCEMENT 19 May 2021 BUSINESS AND TRADING UPDATE PRESENTATION Appen Limited (Appen) (ASX:APX) will be holding an investor and analyst conference call and an audio webcast at 11.00am AEST on Wednesday 19 M
Slide 2: Business and trading update
Business and trading update May 2021
Slide 3: Disclaimer
Disclaimer 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 of the dat
Slide 4: Agenda
Agenda • Evolution from services to product • Enhanced segment reporting • Trading update 3
Slide 5: Appen continues to evolve
Appen continues to evolve From To Data type Language data AI data Delivery model Service led Product led Revenue Project based Committed Customer Concentration Diversification Org structure Functional alignment Customer alignment Reporting Data modality, AUD Strategy led, USD 4
Slide 6: Phase 1: Dominate the AI data annotation services market
Phase 1: Dominate the AI data annotation services market Leading provider of AI data annotation services ̵ Acquired Butler Hill 2010 ̵ Acquired Leapforce 2017 Global (Leading US Tech Companies) Enterprise 1. Appen Connect included in Leapforce acquisition. Built on existing capabilities to manage cr
Slide 7: Phase 2: Build leading data annotation products
Phase 2: Build leading data annotation products Leading provider of AI data annotation services ̵ Acquired Butler Hill 2010 ̵ Acquired Leapforce 2017 Acquired market leading technology platforms and tools Global ̵ Acquired Figure Eight 2019 ̵ Ongoing product investment ̵ New Enterprise customer base
Slide 8: Phase 3: Product led expansion
Phase 3: Product led expansion Leading provider of AI data annotation services ̵ Acquired Butler Hill 2010 ̵ Acquired Leapforce 2017 Acquired market leading Enterprise technology platforms and tools ̵ Acquired Figure Eight 2019 Govt ̵ Ongoing product investment ̵ New Enterprise customer base Global
Slide 9: Appen is accelerating its transformation into an AI powered provider
Appen is accelerating its transformation into an AI powered provider of AI data and solutions 8
Slide 10: Our areas of focus
Our areas of focus Our future is product led, enabling us to deliver high-quality Product training data, faster, at larger scale, with improved unit Led economics, and is a foundation for future capabilities Customer We are aligning our operations to better support the needs Centric of our target cu
Slide 11: Our product suite is a foundation of the business
Our product suite is a foundation of the business New products Appen Appen Data Appen Appen Appen Connect Annotation Platform Intelligence In-Platform Audit Mobile Match our global Collect and annotate Empower Appen products Organise and analyse Engages, enables and crowd workforce to training data
Slide 12: Value created from our products
Value created from our products New products Appen Appen Data Appen Appen Appen Connect Annotation Platform Intelligence In-Platform Audit Mobile AI-augmented AI-enabled crowd In-built crowd Native integration data collection Embedded management management with our large and labelling expertise deli
Slide 13: Customer-centric org structure
Customer-centric org structure • Four customer focused business units with end-to-end operational and P&L Enterprise accountability Govt • Respond quickly to changing customer needs and market trends Global • We are optimising resources to align with the new operating model and technology- China dri
Slide 14: We are aligning our segment reporting to our product-focused strategy
We are aligning our segment reporting to our product-focused strategy 13
Slide 15: New reporting segments: Global Services and New Markets
New reporting segments: Global Services and New Markets Customer tools Appen training data products Global (Leading US Tech Companies) Enterprise Govt China Global Services New Markets • Services provided to leading US • New Markets reflects progress against our Product Led strategy, tech companies
Slide 16: Reporting change to USD commencing with 2021 interim result
Reporting change to USD commencing with 2021 interim result Restated 2020 P&L in US dollars • Reflects business, >90% of revenue and assets are in US US$ FY2020 vs FY2019 dollars Group revenue $413.0M +11% • Removes volatility in translation of US$ into A$ Global Services $328.1M +6% • Enables easie
Slide 17: Segment revenue by service and product led offering
Segment revenue by service and product led offering Customer tools Appen training data products Global Enterprise Govt China Global Services New Markets Includes Global customer revenue through Appen products and Enterprise, Govt, and China 200 9%1 50 48 41%1 165 164 164 144 40 36 150 34 Revenue (US
Slide 18: New Markets revenue breakdown
New Markets revenue breakdown Customer tools Appen training data products Global Global Enterprise Govt China Global Product Enterprise, China, Govt 30 30 26 27 25 25 25%1 60%1 22 Revenue (US$M) Revenue (US$M) 19 20 20 17 16 15 13 15 10 7 10 5 5 0 0 H1 2019 H2 2019 H1 2020 H2 2020 H1 2019 H2 2019 H1
Slide 19: Segment EBITDA by service and product led offering
Segment EBITDA by service and product led offering Customer tools Appen training data products Global Enterprise Govt China Global Services New Markets 28% 1% 26% 2 50 46.0 0.4 42.3 0 40 H1 2020 H2 2020 EBITDA (US$M) EBITDA (US$M) -2 30 -4 20 -6 10 -8 -7.9 0 H1 2020 H2 2020 -10 -22% EBITDA Note: All
Slide 20: Revenue by customer-focused business units
Revenue by customer-focused business units Customer tools Appen training data products Global Enterprise Govt China Global Enterprise, Govt, China 14%1 200 183 190 30 172 27 25%1 157 25 160 22 Revenue (US$M) Revenue (US$M) 20 17 120 16 15 80 10 40 5 0 0 H1 2019 H2 2019 H1 2020 H2 2020 H1 2019 H2 201
Slide 21: 2021 outlook
2021 outlook 2021 revenue growth outlook Resource optimisation • Global Services skewed to H2; • Restructure and tech-enabled full-year mid to high single-digit productivity allow resource growth optimisation, mainly in delivery • New Markets expected growth resources circa 25%, in line with broader
Slide 22: Trading update
Trading update • Year-to-date revenue plus orders in hand of ~US$260M1 at end of April 2021, consistent with prior methodology2 • Heavy weighting to underlying EBITDA in 2H21 due to: • Key projects that were delayed in late 2020 are returning with a skew to delivery in 2H21 • 1H21 cost base reflects
Slide 23: Questions
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