Slide 1: Investor & Analyst Briefing
14 February 2020 Investor & Analyst Briefing Half year results to 31 December 2019 Rebekah O’Flaherty – CEO | Simon Yeandle - CFO
Slide 2: Our Agenda
Our Agenda Strategy Update Outlook H1-20 Financial Q&A Results FY20 H1 Investor & Analyst Briefing 14 February 2020
Slide 3: Strategy update
Strategy update FY20 H1 Investor & Analyst Briefing 14 February 2020
Slide 4: APAC
APAC At our FY19 full year results, we communicated that we had sales execution issues in APAC in H2-19 that resulted in licence loss and, consequently, this has negatively impacted our H1-20 result. To re-cap, the execution issues emerged when we moved to a team, rather than individual, commission
Slide 5: 2020-2022 Accelerate profitable growth
2020-2022 Accelerate profitable growth At the end of FY19 we completed a 3-year long organisational restructure, including tackling technical debt and investing in scalable sales and marketing systems. We now have a stable cost base positioning us well to enjoy operating leverage as we accelerate
Slide 6: H1 progress and outlook against our strategic plan
H1 progress and outlook against our strategic plan Leverage our stronger and Accelerate profitable growth in Improve customer retention expanded product portfolio and the Americas customer base H1 new business billings on Licence revenue up 30% in H1- First year retention has improved current
Slide 7: H1-20 Financial results
H1-20 Financial results FY20 H1 Investor & Analyst Briefing 14 February 2020
Slide 8: Revenue and EBITDA
Revenue and EBITDA We traditionally have a stronger H2 billings and revenue profile, however FY20 will skew more heavily to H2, due to four factors: The 12-month effect of APAC FY19 sales execution issues will impact H1-20 more than H2-20; Improved retention in APAC will buoy H2 performance; P
Slide 9: H1-20 Results summary
H1-20 Results summary AU$M H1-20 H1-19 $+/- %+/- Licence revenue was down 2% to $22.8M, with Revenue & other income 1 23.1 24.0 (0.9) (4%) Americas up 30%, offset by declines in APAC and EMEA as we exited FY19 with lower licences in those Licence revenue regions. APAC 12.5 13.6 (1.1) (8%) EMEA 5.5
Slide 10: APAC
APAC Licence revenue was down 8% due to previously advised FY19 churn issues. AU$M H1-20 H1-19 $+/- %+/- Corrective action is on track with new business billings on Licence revenue 12.5 13.6 (1.1) (8%) current products in H1-20 up 2% vs. H1-19, first year Revenue - Copyright fees, retention up 5
Slide 11: EMEA
EMEA Due to continued uncertainty around Brexit revenue was £M H1-20 H1-19 $+/- %+/- down 9% vs. H1-19, however new business billings on current products were up 2%. Licence revenue 3.0 3.3 (0.3) (9%) Total revenue 3.0 3.3 (0.3) (9%) First year retention improved 2%pts this half vs. H1-19 and Ex
Slide 12: Americas
Americas Licence revenue was up 30% in AUD and 22% in USD vs. H1-19. US$M H1-20 H1-19 $+/- %+/- New business billings on current products were up 59% vs. Licence revenue 3.3 2.7 0.6 22% H1-19 and ARR up 11% since 30 June 2019. Other revenue and income 0.1 0.3 (0.2) (67%) Total revenue 3.4 3.0 0.
Slide 13: H1-20 Income statement
H1-20 Income statement At the group level, expenses are level with H2-19 (as we have completed the majority of our organisational structuring) and are $M H1-20 H1-19 $+/- %+/- up $2.5M vs. H1-19. Total Revenue 1 23.1 24.0 (0.9) (4%) Employee expenses (14.1) (12.5) (1.6) 13% Sales-related employe
Slide 14: H1-20 Cash flow
H1-20 Cash flow $M H1-20 H1-19 $+/- The reduced change in working capital is due to the higher EBITDA 3.5 6.9 (3.4) than usual trade receivables balance at 30 June 2019 ($10.8M vs $6.6M at 30 June 2018). As these receivables were collected this half, there is an increase in cash FX and other non c
Slide 15: H1-20 Balance sheet
H1-20 Balance sheet AU$M 31-Dec-19 30-Jun-19 31-Dec-18 Cash and cash equivalents 12.5 25.8 10.1 Trade receivables down $1.0M to $12.0M, due to some state Trade and other receivables 12.0 10.8 13.0 education departments in Australia changing their Income tax receivable 0.2 - 0.3 procurement practic
Slide 16: Investment in products & technology assets
Investment in products & technology assets Investment split by asset type and accounting treatment We launched Readiwriter Spelling and enhanced Mathletics (Problem Solving & Reasoning and H1-20 CAPEX % OPEX % Total strengthened 7-10) and expect to launch Mathletics AU$M Spanish, and further Mathl
Slide 17: Outlook
Outlook FY20 H1 Investor & Analyst Briefing 14 February 2020
Slide 18: Outlook
Outlook Regional outlook for FY20: APAC: While APAC sales execution issues have moderated our growth in FY20, our corrective action is on track and we expect to see modest licence revenue and EBITDA growth in H2-20 vs. H2-19; EMEA: we have a well qualified pipeline of large opportunities in EM
Slide 19: Q&A
Q&A FY20 H1 Investor & Analyst Briefing 14 February 2020
Slide 20: For further information, analysts, investors and other interested parties should contact
For further information, analysts, investors and other interested parties should contact: Rebekah O’Flaherty Simon Yeandle Chief Executive Officer Chief Financial Officer rebekah.oflaherty@3plearning.com simon.yeandle@3plearning.com The release of this announcement has been authorised by the Board o
Slide 21: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is a summary of 3P Learning Limited’s (‘3P’) activities and results as at the time of preparation, 14 February 2020. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of informati