Slide 1: 2016 Mid Year Presentation
2/23/2016 For personal use only 2016 Mid Year Presentation 23 February 2016 Adrian Di Marco, Executive Chairman Feb 2016 Commercial in confidence Commercial in confidence FINAL (21/02/16 am) Disclosure Statement Technology One Ltd Mid Year Presentation – 23 February 2016 Technology One Ltd (ASX: TNE
Slide 2: 2015 Results Recap
2/23/2016 For personal use only Agenda • 2015 Full Year Results Recap • Outlook for Full Year • Long Term Outlook • AGM Appendix • 2015 Full Year Results Detail • TechnologyOne Overview Enterprise software as a service 2015 Results Recap FY15 FY14 Variance % Revenue $218.7m $195.1m 12% Initial Licen
Slide 3: Margin Analysis
2/23/2016 Margin Analysis For personal use only The TechnologyOne Cloud impacted our margins significantly Company FY15 Company Cloud Excl. Cloud Revenue $218.7m $4.1m $214.6m Profit $46.5m ($2.5m) $49.0m Margin % 21% (62%) 23% FY14 Company Cloud Excl. Cloud Revenue $195.1m $1.4m $193.7m Profit $40.
Slide 4: Results Highlights
2/23/2016 For personal use only Results Highlights Continuing strong performance Significant investments have continued as follows: - United Kingdom $400k loss (vs $745k loss in 2014) - TechnologyOne Cloud $2.5m loss (vs $2m loss in 2014 ) - R&D, including Ci Anywhere $41m ($38m in 2014) • Fully exp
Slide 5: Outlook for Full Year
2/23/2016 Outlook for Full Year For personal use only Outlook for the full year remains unchanged Outlook for 2016 Year Continuing strong profit growth • The enterprise software markets has been one of the most resilient sectors of the IT industry in recent years • In particular TechnologyOne market
Slide 6: Outlook for 2016 Year
2/23/2016 Outlook for 2016 Year For personal use only Expect strong profit growth again in 2016 full year Strong growth in licences, revenue and profit in the full year Sales pipeline is once again weighted to the second half We expect the first half of 2016 will once again be challenging and
Slide 7: Long Term Outlook
2/23/2016 For personal use only Agenda 2015 Full Year Results Recap Outlook for Full Year • Long Term Outlook • AGM Appendix • 2015 Full Year Results Detail • TechnologyOne Overview Enterprise software as a service Long Term Outlook Long Term Outlook remains unchanged 7
Slide 8: Long Term Outlook
2/23/2016 Temporary hiatus due to Cloud loss of $2.5m on Revenues of $4.1m. Excluding Cloud business, margin is 23%. For personal use only Long Term Outlook Net Profit Margin Before Tax Focus is to 35% 31% 29% 30% 27% 26% substantially improve 25% 25% 24% 25% 21% 21% 19% 21% 21% PBT margins through:
Slide 9: Product Maturity and TechnologyOne Cloud Growth to 2022
2/23/2016 Product Maturity For personal use only Tipping point when Profit exceeds Licence fees 16 Contribute $16+m of additional profit per year in 5+ years time #039;m 14 12 10 8 6 4 2 0 (2) (4) CPM Financials & Student Asset Management Enterprise Content HR/Payroll Property Stakeholder Supply Chain
Slide 10: Positioned well for the future
2/23/2016 Positioned well For personal use only for the future… Agenda 2015 Full Year Results Recap Outlook for Full Year Long Term Outlook • AGM Appendix • 2015 Full Year Results Detail • TechnologyOne Overview Enterprise software as a service 10
Slide 11: AGM Voting
2/23/2016 AGM Voting For personal use only Very Positive Annual General Meeting RESOLUTIONS FOR AGAINST Re-election of Mr Richard Anstey 243,048,626 (99.1%) 1,002,967 (0.4%) Adoption of remuneration report 149,033,260 (90.7%) 14,199,303 (8.6%) Increase in Director’s Fee Pool 140,139,301 (85.3%) 23,0
Slide 12: Remuneration Framework
2/23/2016 Remuneration Framework For personal use only Last year we had a substantial vote against the Remuneration Report of 24.3% Board has engaged Independent Advisors and implemented recommendations from these Advisors Aim to get better alignment with other ASX200 companies Board has made
Slide 13: Recommendations by Proxy Advisors
2/23/2016 Recommendations by Proxy Advisors For personal use only • Ownership Matters, CGI Glass Lewis & ASA in favour of all resolutions • ISS Proxy Advisory Services - Recommended against the Rem Report & increase of Directors Fee - Gave us the lowest possible score for Corporate Governance • We n
Slide 14: ISS Proxy Advisory Services
2/23/2016 ISS Proxy Advisory Services For personal use only • Issue of ‘Appearance over Substance’ - TNE strong record in Corp Governance and Rem in alignment with shareholder wealth creation • Issue of ‘One size fits all’ approach - Versus ASX approach of ‘if not, why not’ which is far superior • I
Slide 15: Corporate Governance
2/23/2016 Corporate Governance For personal use only • TechnologyOne has always preferred a small and accountable Board (5 members) • Some independent advisors did not accept Mr McLean as independent which caused our Board & Committees to be seen as not majority independent - Major shareholders Adri
Slide 16: Results Summary
2/23/2016 For personal use only Agenda 2015 Full Year Results Recap Outlook for Full Year Long Term Outlook AGM Appendix • 2015 Full Year Results Detail • TechnologyOne Overview Enterprise software as a service Results Summary FY15 FY14 Variance % Revenue $218.7m $195.1m 12% Initial Licence
Slide 17: Margin Analysis
2/23/2016 Margin Analysis For personal use only The TechnologyOne Cloud impacted our margins significantly Company FY15 Company Cloud Excl. Cloud Revenue $218.7m $4.1m $214.6m Profit $46.5m ($2.5m) $49.0m Margin % 21% (62%) 23% FY14 Company Cloud Excl. Cloud Revenue $195.1m $1.4m $193.7m Profit $40.
Slide 18: Top End of Full Year Guidance Achieved
2/23/2016 For personal use only Top End of Full Year Percentage Profit Growth by Year Guidance Achieved NPAT 2015 - $35.8m, up 16%, Compound growth 15% 18% Full Year Guidance 16% 15% 14% Continuing profit growth of 10% to 15% 12% Guidance 10% to 15% growth 10% 10% Profit Before Tax up 16% 8% Pro
Slide 19: Total Dividend Up 8%
2/23/2016 Total Dividend Up 8% For personal use only Dividend 10.00 UP 8% Dividends for the 2015 year: 9.00 Compound Growth 9% 8.00 Half 1 2.15 cps up 10% (paid) Cents per share 7.00 Half 2 4.63 cps up 10% (declared) Special Div 6.00 (cps) Total 6.78 cps up 10% 5.00 Special 2.00 cps (as per last yea
Slide 20: R&D Expenses up 8%, fully expensed
2/23/2016 R&D Expenses up 8%, fully expensed For personal use only R&D Excl. Acquisitions R&D Incl. Acquisitions UP 8%, UP 7%, $41M 45 $40.5M 45 Compound Growth 6% Compound Growth 7% 40 40 35 35 30 30 25 25 #039;m #039;m 20 20 15 15 10 10 5 5 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 R&D1 expe
Slide 21: Cash Flow
2/23/2016 Cash Flow Sep-15 $ '000 Sep-14 $ '000 Var % For personal use only EBIT 46,494 38,684 7,810 20% Depreciation & Amortisation 4,157 4,791 (635) (13%) Operating Cash Flow ($37.6m), has improved Change in working Capital substantially over the full year (Increase) / Decrease in Debtors (6,416)
Slide 22: Results – Key Metrics
2/23/2016 Results – Key Metrics For personal use only Full Year 2015 v Full Year 2014 FY15 FY14 Variance % Full Year 2015 v Full Year 2014 FY15 FY14 Variance % EPS (cents) 11.57 10.06 15% ROE Return on equity 30% 30% Dividends (cents) Adjusted return on equity1 63% 76+% Standard 6.78 6.16 10% Specia
Slide 23: New Customers for 2015 (58)
2/23/2016 New Customers for 2015 (58) For personal use only Anglican Church Diocese of Perth Freedom Aged Care Pty Ltd Port Arthur Historic Site Management Authority Annecto Inc Gladstone Area Water Board Qantas Credit Union AS Bryden Heathgate Resources Pty Ltd Royal Australian College of General P
Slide 24: Cloud Service Fees continue to grow strongly
2/23/2016 Cloud Service Fees continue to grow strongly: $8m, up 100% For personal use only $8.0M Target for Dec 2015 was: 9.0 UP 347%, ($6.2M) $8m Contract Value (vs $4.1m H1) 8.0 7.0 Strong momentum to continue in future years 6.0 $4.1M FY14 5.0 UP 200%, ($2.7M) Target for Dec 2016 is: #039;m 4.0 $16m
Slide 25: Consulting Revenue inc Plus up 3%
2/23/2016 Consulting Revenue inc Plus up 3% ($2.2m) For personal use only Product Consulting Plus UP 11%, $55.4M 60 25 Compound Growth 13% Compound Growth 1% 50 20 DOWN 26%, $10.2M 40 15 #039;m #039;m 30 10 20 5 10 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 20
Slide 26: Licence Fee Contribution - Vertical Market
2/23/2016 Licence Fee Contribution - Vertical Market For personal use only Project Intensive, $818K, 2% Corporate, $1.2M, 2% Financial Services, $2.4M, 5% Local Government, $15.3M, Government, $4.8M, 10% 31% Asset Intensive, $3.4M, 7% Health & Community Services, $9.5M, 19% Education, $11.9M, 24% Li
Slide 27: Australia's largest enterprise software company
2/23/2016 Australia’s largest enterprise software company For personal use only Continually profitable Invest$41m+ For over 24 years Back into R&D Profit Formed in $47m Largest 1987 R&D centre Revenue 1000+ in Australia $219m employees 300+ developers Cash $76m Market Capitalisation 1000+ Corporate,
Slide 28: Financially very strong / The Competitive Landscape
2/23/2016 Financially very strong For personal use only • Cash and Equivalents $75.5m • Return on Equity 30+% • Adjusted Return on Equity² 63% • Debt/Equity 2% • Interest Cover 309 • Continually paid dividends since 1996 (20 years) • Continually profitable since 1992 (24 years) As at 30th Sept 2015
Slide 29: What makes us unique: Our enterprise vision
2/23/2016 For personal use only What makes us unique What makes us unique… Our enterprise vision We are one of only a few global enterprise vendors • Suite of 14 products • Deeply integrated • Best of Breed functionality • Common platform • Consistent user interface The power of a single, integrated
Slide 30: What makes us unique: The power of one
2/23/2016 For personal use only What makes us unique What makes us unique… The power of one We do not use implementation partners or resellers We take complete responsibility for building, marketing, selling, implementing, supporting and running our enterprise solution for each customer to guarantee
Slide 31: Market focus and commitment
2/23/2016 Market focus and commitment For personal use only We focus on eight key markets… • Deep understanding and engagement in our markets • Deeply integrated preconfigured solutions • Proven practice • Streamlined implementations • Reduce time, cost and risk We sell to asset and service intensiv
Slide 32: What makes us unique: The power of evolution
2/23/2016 For personal use only What makes us unique What makes us unique… The power of evolution Substantial investment into R&D each year • New releases encompass new technologies, concepts and innovations • Configuration and not customisation Green screen Client server Web based Cloud computing &
Slide 33: TechnologyOne Cloud
2/23/2016 TechnologyOne Cloud For personal use only Enterprise software as a service • We run our own enterprise software through the cloud • We take responsibility to provide a simple, cost effective and highly elastic model of computing • Unique mass production model delivers economies of scale an
Slide 34: TechnologyOne SaaS Mass Production
2/23/2016 Economy of scale TechnologyOne SaaS - Massively scalable, Highly efficient , Cost effective Highly resilient & fault tolerant Mass Production For personal use only Elastic - add capacity dynamically Significant cost savings Future proof - We invest millions annually to make our pro
Slide 35: Ci Anywhere
2/23/2016 Ci Anywhere For personal use only Enterprise software, incredibly simple • Embraces smart mobile devices including iPad, iPhone and Android • Allows users to flow across any and all devices during the course of their day • Consumer concepts deliver powerful enterprise software that is incr
Slide 36: Other Facts / Robust Revenue Model
2/23/2016 Other Facts For personal use only Diversity of revenue streams from multiple: • Products 14 • Vertical markets 8 • Geographies 12 - All states of Australia, New Zealand, South Pacific, Asia and UK Strong, very loyal blue chip customer base • We provide a mission critical solution – ‘sticky
Slide 37: Robust Revenue Model
2/23/2016 Robust Revenue Model For personal use only Initial Buy Based on: No of Users, Initial Licence Implementation Service Annual Licence Annual Licence Annual Licence …. Products & Modules Buy Addn Users Initial Licence Annual Licence Annual Licence Annual Licence …. Additional Fee Buy Addn Mod
Slide 38: Our Vision
2/23/2016 Our Vision Clear & focused vision… For personal use only Transforming business, making life simple 38