Straker Ltd · ASX:STG
Straker — Investor Presentation (November 2019)
30 slides from Straker's investor presentation, Nov 22, 2019
Slide 1: H1 FY20 Results
Contact H1 FY20 Results 22nd November 2019 David Sowerby (Chief Revenue Officer) and Amaya Montoya (co-founder of On-Global) 1 on a visit to an industrial customer in the Basque region of Spain
Slide 2: Building the future of global communication using machines and humans together
Building the future of global communication using machines and humans together 2
Slide 3: Scaling our platform to $100m revenue
Scaling our platform to $100m revenue Data assets on the RAY Ai platform 1000 Enterprise customer growth and further acquisitions, will support STG’s pathway to $100m revenue within the next 3 years 750 Proprietary RAY Ai platform provides STG with a unique competitive advantage in Billions the $50b
Slide 4: H1 FY20 progress towards long term growth strategy
H1 FY20 progress towards long term growth strategy Acquired On-Global to further penetrate attractive Spanish and European translation markets Entered into partnership with AppTek to provide a unique solution at scale for Media sector localisation, the fastest growing segment of the global translati
Slide 5: Strong balance sheet supports Straker's growth
Strong balance sheet supports Straker’s growth Straker Media localisation team at MIPcon Cannes, France 5
Slide 6: Strategic growth plan underpins financial performance
Strategic growth plan underpins financial performance 13.3% $13.6m H1FY20 Revenue YoY Revenue Growth ($0.2m) 92% Revenue Adjusted from Repeat EBITDA customers 28% $14.0m Repeat Revenue Growth Cash at Bank 6
Slide 7: H1 FY20 revenue up 13.3% to $13.6m
H1 FY20 revenue up 13.3% to $13.6m ▪ Revenue growth in H1 FY20 reflects shift in focus to Enterprise customers to expedite long term growth ▪ Revenue was up 13.3% reflecting: • Growth in core repeat business and increase in Media revenues • Addition of acquired revenues from COM (Media) and On-Globa
Slide 8: Financial performance reflects growth profile
Financial performance reflects growth profile Stat Pre IFRS16 Stat Stat ^ H1-FY20 Performance H1-FY20 H1 FY19 v H1 FY19 Revenue 13.59 13.59 11.99 13.3% Gross Margin 7.39 7.39 6.63 11.5% ▪ Revenue grows to $13.6m Gross Margin % 54% 54% 55% -0.9% Operating Costs (7.66) (7.92) (6.54) 17.1% ▪ Gross marg
Slide 9: Jobs running on the RAY Ai Platform yield a higher margin
Jobs running on the RAY Ai Platform yield a higher margin Platform revenues make up 84% at a 55.5% margin and have grown by 19% half on half Platform Revenue H1 FY20 H1 FY19 NZD m Revenue Margin Margin % On Platform % On Platform Platform Translation 11.4 55.5% 84% 80% Non Platform 2.2 48.7% 16% 20%
Slide 10: Underlying Operating Cashflow Stable HoH
Underlying Operating Cashflow Stable HoH Stat Pre IFRS16 Stat Stat ^ H1-FY20 Cashflow Adjusted EBITDA H1-FY20 (0.24) (0.50) H1 FY19 0.11 v H1 FY19 -329.2% Non-operating expenses (0.30) (0.30) (0.06) ▪ Operating cash outflow ($1.0m) which includes Changes in working capital (0.46) (0.46) (1.00) restr
Slide 11: Strong balance sheet
Strong balance sheet ▪ Working capital improvements through tighter receivables management ▪ Days of Sales Outstanding improving to 67 days on the back of strong cash collections, which were 98% of revenues ▪ No external debt other than conditional earnout liabilities related to acquired business’ a
Slide 12: Financial Summary
Financial Summary Continued revenue growth with revenue from repeat customers up to 92% Gross margins stable, above industry norm Investing for growth to achieve future growth strategy Stable cash flows Improved working capital Strong balance sheet to execute growth strategy 12
Slide 13: Ready to rapidly scale
Ready to rapidly scale Straker’s European e-commerce localisation team presenting at a Magento conference in Germany 13
Slide 14: 5 strategic growth areas
5 strategic growth areas Enterprise Grow enterprise customer base to rapidly scale platform and geographic footprint Geographical Grow geographical footprint while focusing on key markets Media Grow in the fastest growing segment of the global translation industry Connected Platforms Grow by buildin
Slide 15: Enterprise Growth
Enterprise Growth As technology advances and large users of translation services need to find Enterprise -wide, easier, faster and more cost effective methods of translation leveraging A.I , our RAY Ai platform is highly appealing 2,359 14 6 3 2 1,605 Investment in marketing to raise Global programs t
Slide 16: Media localisation is the fastest growing segment of the industry
Media localisation is the fastest growing segment of the industry and most vendors have capacity constraints as content volumes expand. We have an aim to be the global leader in media localisation through our innovation initiatives Significant R&D investment We have partnered with appTek to Increased
Slide 17: Acquisitions
Acquisitions We continue to have multiple advanced conversations with sellers in our core target markets for acquisition. 3 4 1 1 Regions where we are at a Market dynamics make M&A Integration of acquired negotiation stage with attractive. Ageing owners entities going to plan, 65% of potential selle
Slide 18: Connected Platforms / API
Connected Platforms / API Connected revenue is sticky and there is significant growth opportunities as we embed ourselves inside platform communities. 19% Platform Revenue Growth Strong half on half growth in Our three main connected We have 4 new enterprise platform customers platforms are growing c
Slide 19: Key priorities for H2 FY20
Key priorities for H2 FY20 Tirs Abril, European IT Support based in Barcelona, supports a human tower (3rd from top on left hand tower) 19
Slide 20: Key priorities for H2 FY20
Key priorities for H2 FY20 Undertake at least 1 acquisition Increase Media segment annualised run-rate revenues Increase RAY implementations with Enterprise customers Increase number of platform connected customers R&D investment in media platform, appTek integration and platform connectors Sales en
Slide 21: Appendix
Appendix 21
Slide 22: Statutory Financials
Statutory Financials Reconciliation to IFRS Income Statement FY-19 ▪ EBITDA loss of ($1.0m) includes acquisition costs and restructuring costs ▪ EBIT loss of ($2.04m) down -158% on prior year due to above plus increased D&A costs ▪ Net loss before tax of ($0.26m) after gaining $1.3m on FX gains and
Slide 23: What is the opportunity with STG?
What is the opportunity with STG? 1 Huge Market Opportunity 2 Industry Leading Technology 3 Proven Growth Strategy 70 66B Market leading Global channels to technology developed market established 52.5 56B over 10 years 47B Offices in 10 countries 43B 40B Data-driven approach 35 Multiple growth enabl
Slide 24: Market Opportunity
Market Opportunity Localisation enables Media content segment trillions of dollars of growing exponentially global commerce Fragmented industry Data will drive success as with 20,000 vendors machines need data for ripe for consolidation context 10 year head start Limitless horizon for growth buildin
Slide 25: What makes us unique in a US $50bn Industry
What makes us unique in a US $50bn Industry We use data to drive substantial benefits for our customers in ways the traditional translation providers cannot We can do this as we have a unique platform built over 10 years that provides the competitive advantage of using professional humans and machine
Slide 26: The benefits to customers and Straker from our platform
The benefits to customers and Straker from our platform 1 2 3 Translators go Production We simplify a complex significantly faster Efficiencies process at scale takes less time project managers handle data service more revenue per person API costs less to provide the service less staff automation variab
Slide 27: Successfully acquiring and integrating strategic acquisitions
Successfully acquiring and integrating strategic acquisitions EULE MSS Enterprise customer $6.4m Enterprise customer access with larger access with larger footprint in Spanish footprint into Europes market largest market. $4.8m $4.6m Kiel Barcelona COM $2m Key entry into the fast- growing audio visu
Slide 28: Board of Directors and Executive Team
Board of Directors Phil Norman Grant Straker Tim Williams Katrina Johnson Steve Donovan Paul Wilson Independent Non-Executive Chairman Founder and Managing Director Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Non-Executive Director Executive Team Gran
Slide 29: Disclosure Statement
DISCLOSURE STATEMENT This presentation is given on behalf of Straker Translations Limited ASX:STG (Company number NZ: 1008867 / AU: ARBN 628 707 399) Information in this presentation: • Is for general information purposes only, and is not an offer or invitation for All information in this presentatio
Slide 30: Questions
Questions www.strakertranslations.com CEO: grant@strakergroup.com Chairman: phil.norman@strakergroup.com Investor Relations: ronn.bechler@marketeye.com.au 30