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2019 ASX Straker Translations (ASX.STG)Grant StrakerCEO
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Straker is revolutionising the localisation industry using RAY A.I, our data-driven platform to power the global growth of business
A HUGE INDUSTRY POORLY SERVED BY TRADITIONAL SUPPLIERS
3
0
17.5
35
52.5
70
2016 2017 2018 2021 2022
66B
56B
0B
47B43B
40B
Industry Size USD$
2018 - 2022 CAGR 7%*
*nimdzi 2018 Language services market analysis
The translation industry facilitates trillions of dollars of global trade annually
The industry is changing and this is aligning with our business model
Estimated TAM of around 35-40B
More need for an A.I driven hybrid translation process due to the advantages in speed and cost
Data becoming more valuable
Media the fastest growing segment
Legacy providers a long way behind in adapting to the fast change
20,000 providers in a fragmented industry
We believe with our advanced technology platform we can significantly extend out footprint into the industry
WHAT MAKES US DIFFERENT
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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 8 years that provides the competitive advantage
of using professional humans and machines
together in a highly efficient way
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WHAT ARE THE BENEFITS OF OUR PLATFORM
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takes less time costs less (we make higher margins or gain market share)
project managers handle more revenue per person less staff variable cost base with world leading crowd sourcing platform effective use of data
data service API automation connectors Enterprise localisation management
1 2 3Translators go faster Production Efficiencies We simplify a complex
process at scale
SOME OF OUR PROJECTS IN FY19
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We helped leading technology companies
streamline and scale the ability to communicate
across regions
We provided leading global manufacturers with the ability to easily push out
new products into multiple markets
We enabled major finance institutions
deliver quarterly market reports in multiple
languages
We worked with major e-commerce providers to
localise their product websites into multiple
languages
We enabled thousands of SME’s to cost-effectively
cross border trade without language as a
barrier
We enabled global media companies to provide
content in multiple languages across multiple
platforms
A TRUELY GLOBAL BUSINESS READY TO SCALE
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Straker Group Revenue by region
North America14 Staff
34% Revenue
UK/Europe86 Staff
52% Revenue
Asia 6 Staff
3% Revenue
Australasia42 Staff
11% Revenue
ACQUISITION STRATEGY
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Our acquisition strategy is part of an overall plan to gain scale, increase operating performance and gain access to larger customer networks ready for our next phase of growth:
Through acquisitions we have acquired scale (size is needed to win bigger projects)
We operate on one platform across all group entities so that operational efficiencies can be gained
We increase the acquired entities’ financial performance through our platform
We gain access to networks that are hard to gain organically
We have hundreds of potential targets
We have experienced M&A and Integration teams
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Strong financial performance in FY19 – exceeding Prospectus
forecast
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44% $25.8m
($0.48m)
$17.7m83%
YoY revenue growth
Repeat Revenue
Proforma revenues
Cash at bank
Proforma adjusted EBITDA
Exceeded Prospectus FY19 forecasts
52.4mWords Translated
All figures as at the end of FY19
DELIVERING STRONG GROWTH
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44% YOY Revenue Growth (NZ $m)
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18
21
23
26
FY-18 FY-19
44%
55%Gross Margins Up 0.4% on a constant currency basis
YoY revenue growth of 44%, driven both strong organically and by acquisition contributions
54%Repeat Revenue Growth
14%Operating Cashflow improves by 14% YoY
Note: Based on statutory results
Adjusted EBITDA margin of -0.6% with adjusted EBITDA loss improving by 89% on FY-18
23.524.6
17.0
ProspectusActual 44%
38%
All figures as at the end of FY19
Key operational achievements
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Acquired three strategic bolt-on businesses
Completed IPO, raising $20m (gross proceeds) for growth initiatives
Setup Hong Kong Office focused on lucrative Asian Legal market
Using our unique technology advantage to push into enterprise customers
Exceeded Prospectus FY19 forecasts
Delivering what we promised
Built new platform connectors including Magento where we now have the industry leading plugin
RAY translator workbench version 4 released
Key technology achievements
100 Billion new A.I. data points collected
New translator workbench using A.I. driven translator selection
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Well placed to continue growth trajectory
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HUGE POTENTIAL IN OUR EXISTING CUSTOMER BASEWe estimate that the total budget across five of our major customers for localisation to be around US$300-500m. We currently get only a portion of this and are focused on building out our networks and connections across multiple divisions in each of these companies.
Three of these customers have setup or acquired media streaming services
They need centralised continuous localisation processes
They have large A.I departments with requirements for data training and language learning
Huge opportunities with the customers of these organisations
Created a global growth sales team to work on extending our footprint into networks
Global Media Company
Global eCommerce Company
Global Tech Services Company
Global Tech Software company
Global Media/Hardware/Software
Company
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Successfully acquiring and integrating strategic acquisitions
MSSEULE
COM
Enterprise customer access with larger footprint in Spanish market
Enterprise customer access with larger footprint into Europes largest market.
Key entry into the fast-growing audio visual market for localisation.
2016 2017 2018 2019
Eurotext Elanex MSSEULE
BarcelonaKiel
Madrid
$6.4m
$4.8m
$2m
Total annual revenue of acquired
companies at the time of acquisition
$4.6m
COM On Global
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ACQUISITION STRATEGYThe focus of our acquisition strategy is on Asia Pacific (specifically Japan and Australasia), USA, Spain, DACH region, Benelux and the UK. In all these regions (outside of Benelux) we have well functioning business units.
Benelux20
AP21
USA120
UK55
Spain51
Germany26
We estimate the total revenue of all the acquisition targets we have identified and validated as being around $1.5bn
Revenue range of target companies between $3-15m
Majority of targets being below the $10m revenue range
Focus still on companies doing majority of translation
Potential in profitable audio-visual localisation related companies
At the advanced stages with several opportunities Acquisition opportunities by market
INVESTING IN GROWTH
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Admin14%
Production44%
Sales27%
Development16%
Admin15%
Production39%
Sales28%
Development19%
Allocation of people budget by department
Q4-FY19
Q2-FY20
A key to sustained growth will be ensuring we have a focus on using technology to gain efficiencies, but more importantly to gain continued competitive advantage in key markets and verticals.
Our goal is to have our investment in people split 28% Technology, 28% Sales and 28% Production with the rest of the spend being Admin staff.
WHAT SUCCESS HAS PROVEN
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In 2011 we were the first company to develop a data driven approach to translation.
We have redefined how the translation process works and aligned it to the business requirements of today
Industry High Gross Margins
Unique solutions for world leading
companies
Variable cost base and
efficient use of capital
solutions that give us tight relationships
with customers
83% of revenue is repeat
customers
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Outlook
On track to complete further acquisitions
Integration of existing acquisitions on track
Pursuing business partnerships in aligned markets
Global growth enterprise sales team active
Investing in R&D in aligned business growth areas
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Disclosure Statement
Information in this presentation:
• Is for general information purposes only, and is not an offer or invitation for purchase, or recommendation of securities in Straker Translations Limited (Straker)
• Should be read in conjunction with, and is subject to, Straker’s latest and prior interim and annual reports, including Straker’s Annual Report for FY19, and Straker’s market releases on the ASX
• Includes forward-looking statements about Straker and the environment in which Straker operates, which are subject to uncertainties and contingencies outside of Straker’s control - Straker’s actual results or performance may differ materially from these statements
• Includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance
• May contain information from third parties believed to be reliable; however, no representations or warranties are made as to the accuracy or completeness of such information, and
All information in this presentation is current at 3 September 2019, unless otherwise stated.
All currency amounts are in NZ dollars, unless otherwise stated.
This presentation is given on behalf of Straker Translations Limited ASX:STG (Company number NZ: 1008867 / AU: ARBN 628 707 399)
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Questions
www.strakertranslations.com
CEO: [email protected] Chairman: [email protected] Investor Relations: [email protected]
