Embed Size (px)
Citation preview
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Technology One Ltd Half Year Presentation
21 May 2012 - Technology One Ltd (ASX:TNE) today conducted investor presentations pertaining to its 2012 Half Year results.
The attached presentation was given at this meeting by the company’s Executive Chairman, Mr Adrian Di Marco.
These slides have been lodged with the ASX and are also available on the company’s web site: www.TechnologyOneCorp.com.
Adrian Di Marco
[email protected] Commercial in conf idence May 2012 Final
2012 Half Year Results Presentation Ending March 31st 2012
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Overview
TechnologyOne develops, markets, sells, implements
and supports a new generation enterprise solution
specifically targeted at seven vertical markets:
• Local Government
• Government (State, Central & Federal)
• Education
• Financial Services
• Health, Community Services and Not for Profit
• Utilities
• Managed Services – Media/Entertainment
– Property and Construction
– Mining and Exploration
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Overview
Our enterprise solution consists of the following products: TechnologyOne Financials
TechnologyOne Asset Management
TechnologyOne Supply Chain
TechnologyOne Human Resource & Payroll
TechnologyOne Corporate Performance Management
• TechnologyOne Business Intelligence
• TechnologyOne Budgeting & Forecasting
• TechnologyOne Performance Planning
TechnologyOne Enterprise Content Management (ECM)
TechnologyOne Customer Relationship Management (CRM)
TechnologyOne Student Management
TechnologyOne Property & Rating
TechnologyOne Mobile Solutions
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Overview
Offices in Australia, New Zealand, Asia and, more recently, the United Kingdom
Growing business in the United Kingdom
Major supplier of enterprise applications in ANZ – 800+ major corporations, government departments and statutory authorities
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Overview
Unique Business Model - ‘Power of One’ One Vision. One Vendor. One Experience.
Sell ‘best practice’ preconfigured solutions for our seven vertical markets to reduce time, cost & risk for our customers
Diversity of revenue streams from… Multiple geographies
10 products
seven vertical markets
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Overview
One of Australia’s largest software houses, specialising in the research, development and commercialisation of software – invest $32+m in R&D per year
Connected Intelligence (Ci) is our current generation product suite
Next generation of our enterprise suite Ci² is under development
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Historical Performance
Strong financial track record …
Doubling in size approx every 4 years for 15 years
Continually profitable since 1992 (20 years)
Continually paid dividends since 1996 (16 years)
Cash and Equivalents $45.4m
Return on Equity 30+%
Debt/Equity 14%
Interest Cover 50
Revenue
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Key metrics over last 15 years …
Revenue - 22% per annum compound
Even through the Dot-Com and GFC
Initial Licence Fees - 22% per annum compound
Annual Licence Fees - 27% per annum compound
Profit Before Tax - 20% per annum compound
Dividends - 23% per annum compound
Net Assets - 28% per annum compound
Historical Performance
Doubling in size every 4 years for last 15 years
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Agenda
Results
Significant Achievements
Outlook for Full Year
Long Term Outlook
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Results Highlights
Positions us for strong growth in Profit in the full year
FY12 FY11 Variance %
Revenue $77.3m $71.6m 8%
Initial Licence Fees $18.4m $15.6m 18%
Consulting Services Fees $21.3m $19.6m 9%
Annual Licence Fees $25.4m $21.8m 16%
Expenses $68.0m $62.5m 9%
R&D Expenses * $16.6m $14.9m 11%
Expenses excl R&D $51.4m $47.6m 8%
Profit Before Tax*** $9.3m $9.1m 2%
Other
Operating Cash Flow ** $4.4m $7.5m (41%)
Cash and Cash Equivalents $33.4m $33.4m inline
* 21% of revenue v 21% last year ** v NPAT of $7.4m
R&D is fully expensed as incurred
***Market consensus was profit to be down between 5% and 10%
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Guidance
Half Year - challenging and not a good indicator of full year results Market consensus was profit to be down between 5% and 10%
Actual profit up 2%
Full Year - continuing profit growth Discussed later
Guidance at Annual General Meeting
5.0m
6.9m
9.1m up 33%
9.3m up 2%
0.0
2.0
4.0
6.0
8.0
10.0
FY09 FY10 FY11 FY12
$'m
Half 1 Profit Compound Growth 23% Over 4 years
Half 1 FY11
Abnormally high
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Results Highlights
Strong result given economic climate and the abnormally high previous half year
Continued strong demand for our products:
18% increase in Initial Licence fees
16% increase in Annual Licence Fees
Continued significant investments in a number of key areas as follows:
New solutions group (loss of $1.35m)
United Kingdom (loss of $789k)
R&D into Ci² - Next generation of our Ci suite
R&D into TechnologyOne cloud
These investments will drive growth in future years – discussed later
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Balance Sheet
Strong balance sheet
Cash & Cash Equivalents $33.4m (vs $33.4m)
• Net Cash*: 8.51c/s (vs 8.23c/s)
• Debt/Equity: 13.27% (vs 13.13%)
• Net Assets: $62.4m (vs $57.8m)
• Interest Cover 28 times
-
5
10
15
20
25
30
35
40
Cash Cash equivalents Total
$'m
Other Financial Indicators
FY10
FY11
FY12
*after debt per share Intangibles consist of the acquisition of our ECM, Property products.
Mar-12 Mar-11 Var %
$'000 $'000 $'000
Cash & Available-for-sale f inancial
assets 33,410 33,396 14 0%
Trade and other receivables 27,944 17,761 10,183 57%
Other current assets 5,594 5,079 515 10%
Current assets 66,948 56,236 10,712 19%
Property, plant and equipment 17,587 19,791 (2,204) (11%)
Intangible assets 16,320 16,601 (281) (2%)
Other non-current assets 4,391 5,325 (934) (18%)
Non-current assets 38,298 41,716 (3,418) (8%)
Total Assets 105,246 97,952 7,294 7%
Trade and other payables 13,966 10,444 3,522 34%
Provisions 9,236 9,172 64 1%
Unearned revenue 6,726 7,263 (538) (7%)
Borrow ings 8,302 7,594 709 9%
Other liabilities 4,613 5,638 (1,026) (18%)
Total Liabilities 42,841 40,111 2,730 7%
Net Assets 62,403 57,841 4,562 8%
Issues Capital and Reserves 33,518 30,243 3,275 11%
Retained earnings 28,885 27,598 1,287 5%
Equity 62,403 57,841 4,562 8%
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Cash Flow
Operating Cash Flow $4.4m, down 41% from $7.5m Mar11
* Increase in Debtors ($5.2m) as a result of a number of large
deals signed late H1
* Operating Cash Flow $4.4m (vs NPAT $7.4m)
$7.3m $7.4m
$7.5m
$4.4m
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
2011 2012
$'m
$'m
NPAT versus Operating Cash Flows
Operating Cash Flows
Mar-12 Mar-11 Var %
$ '000 $ '000 $'000
EBIT 8,887 8,624 263 3%
Depreciation & Amortisation 2,875 2,599 276 11%
Change in w orking Capital
(Increase) / Decrease in Debtors (5,521) (266) (5,255) (1979%)
Increase / (Decrease) in Creditors 738 (629) 1,367 217%
Increase / (Decrease) in Staff Entitlements (511) (567) 57 10%
Net Interest Paid 402 478 (76) (16%)
Income Taxes paid (3,860) (4,019) 160 4%
Other 1,403 1,287 116 9%
Operating Cash Flow 4,413 7,507 (3,094) (41%)
Capital Expenditure (1,683) (3,282) 1,599 49%
Proceeds from Sale of PP&E and Investments 0 199 (199) (100%)
Free Cash Flow 2,730 4,424 (1,694) (38%)
Dividends Paid (14,209) (13,243) (966) (7%)
Debt movement (1,131) 4,828 (5,959) (123%)
Proceeds from Shares issued 517 933 (416) (45%)
Increase in Cash & Cash equivalents (12,093) (3,058) (9,035) (295%)
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Dividends for this year
Half 1 1.61 cps up 10%* (declared)
Payout ratio of 67%
Notes • We have continuously paid a dividend since we listed in 1999 (through Dot-Com
and GFC).
• Full year compound growth in dividends over last 10 years has been 28% per annum.
• The Board will once again consider Capital Management initiatives at full year such as a Special Dividend, if cash reserves remain high, growth continues as is expected and there is no compelling alternative use for the cash reserves.
Dividend
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2009 2010 2011 2012
Ce
nts
pe
r sh
are
H1 Dividend up 10%
22% per annum
*Indicative of the confidence for the full year outlook
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
2012 Half 1 Results
-
10
20
30
40
50
60
70
80
90
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Revenue
-
2
4
6
8
10
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Net Profit Before Tax
Half Year 2012 v Half Year 2011 2012 $'000
2011 $'000
Variance $'000
%
Revenue excl interest 76,863 71,093 5,770 8%
Expenses (excl R&D, Depn, Forex &
Amortisation) 48,520 45,008 3,513 8%
EBITDAR 28,343 26,085 2,258 9%
R&D Expenditure 16,581 14,911 1,670 11%
EBITDA 11,762 11,174 588 5%
Depreciation 2,735 2,458 277 11%
Amortisation of Intangibles 141 141 0 0%
Forex Expense 1 (47) 48 (101%)
EBIT 8,886 8,623 263 3%
Net Interest Income 402 478 (76) (16%)
Profit Before Tax 9,288 9,102 187 2%
Profit After Tax 7,426 7,356 70 1%
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
2012 Half 1 Results
0.00
0.50
1.00
1.50
2.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ce
nts
pe
r sh
are
Dividend (cps)
-
10
20
30
40
50
60
70
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Net Assets
Half Year 2012 v Half Year 2011 2012 $'000
2011 $'000
Variance $'000
%
EPS cents Reported 2.44 2.43 0.01 0%
DPS cents - standard 1.61 1.46 0.15 10%
Dividend Payout Ratio 67% 60%
EBITDAR Margin 37% 37%
EBITDA Margin 15% 16%
Net Profit Before Tax Margin 12% 13%
Net Profit After Tax Margin 10% 10%
R&D as Percentage of Total Revenue 21% 21%
Net Assets 62,403 57,841 4,562 8%
Cash & Cash Equivalents 33,408 33,396 12 0%
Net operating cash flows 4,406 7,507 (3,101) (41%)
Debt/Equity 13% 13%
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
10 Year History – Half 1
Average compound growth in Half 1 over the last 10 years
Revenue 14% per annum
Licence Fees 16% per annum
Consulting 13% per annum
Annual support 17% per annum
NPAT 10% per annum
NPBT 8% per annum
R&D expense 15% per annum
-
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
ASM Consulting Licence Fees R&D Expense
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Revenue Streams
Revenue $77.3m, up 8% (up $5.7m)
Initial licence fees $18.4m, up 18% (up $2.8m)
Annual licence fees $25.4m, up 16% (up $3.6m)
Consulting services fees $21.3m, up 9% (up $1.7m)
Plus* $8.5m, down 16% (down $1.6m)
Other revenue $3.7m, down 18% (down $780k)
This includes Product Modifications of $1.3m, down 48% (down $1.2m)
$18.4m Up 18%
$25.4m Up 16%
$21.3m Up 9%
$8.5m Down 16%,$1.6m
$3.7m Down 18%,$1.2m
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Initial licence fees Annual licence fees Consulting services fees Plus Other revenue
$'m
FY10 FY11FY12
*Plus – non enterprise product revenue
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Revenue Streams
Continuing strong demand for our products: 18% increase in licence fees
Increasing market share
Continuing success of our Ci product suite
New pre-configured solutions also driving growth in licence fees
Compound growth over the last 10 years has been 16%
Annual licence fees continue to grow strongly: up 16%
Compound growth over the last 10 years is 17%
Customer retention is important
Our investment in Compelling Customer Experience program and Ci²
-
2
4
6
8
10
12
14
16
18
20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Licence Fees
Compound Growth 16%
up 18%, $2.8m
-
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
ASM
Compound Growth 17%
up 16%, $3.6m
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Major New Customers
South Burnett Regional Council
QSuper
Indigenous Business Australia
Collection House
Civil Aviation Safety Authority
Country Health (SA)
Torres Strait Regional Council
South Australian Govt Financing Authority
City of Unley
St Andrews Hospital
Aoraki Polytechnic (NZ)
Police & Community Youth Club (NSW)
Royal New Zealand Plunket Society
Townsville City Council*
Catholic Education
National Bank of Vanuatu
Australian Power and Gas
Ability Options
SGE Credit Union
Holiday Coast Credit Union
Museum of New Zealand
Tuaropaki Trust (NZ)
Office of Parliamentary Council (ACT)
Marubeni Coal
Fisher & Paykel Finance
Transaction Solutions
Attorney General (SA)
Dickinson Dees (UK)
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Revenue Streams
Return to growth for our Product Consulting: up 9%
Consulting profit is down $404k
Appointed a new Operating Officer Consulting
Commenced a review of this business unit to ensure continuing strong growth
Compound growth over the last 10 years is 13%
Plus (non product consulting) revenue : down 16%
Plus profit is down $1m
Market conditions for non Ci product services is challenging
Challenging conditions will continue over the full year
Strategy to move this business to ‘value added’ services around our Ci products
-
5
10
15
20
25
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Consulting
Compound Growth 13%
up 9%, $1.7m
-
2
4
6
8
10
12
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
Plus
Compound Growth 9%
down 16%, $1.6m
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Licence Fee by Product
Financials & Supply Chain licence fees $5m, up 30% (up $1.2m)
CPM licence fees $4.7m, up 9% (up $390k)
Asset Management licence fees $1.8m, up 100%+ (up $1m)
HR/Payroll licence fees $1.1m, up 100%+ (up $713k)
CRM licence fees $320k, up 100%+ (up $225k)
Mobility licence fees $192k, up 100%+ (up $185k)
Student Management licence fees $4.3m, down 3% (down $134k)
Property licence fees $706k, down 16% (down $138k)
Enterprise Content Management licence fees $278k, down 58% (down $388k)
Licence fees $18.4m, up 18% (up $2.8m)
$5m
Up 30% $4.7m Up 9%
$1.8m Up 100%+
$1.1m Up 100%+
$320k Up 100%+
$192k
Up 100%+
$4.3m
Down 3%
$706k Down 16%
$278k
Down 58%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Financials &Supply Chain
CPM AssetManagement
HR/Payroll CRM Mobility StudentManagement
Property EnterpriseContent
Management
$'m
FY10
FY11
FY12
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Product - Licence Fee Analysis
Good pipeline of opportunities continue into the second half
ECM and Property will improve over the full year
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Licence Fee Contribution - Vertical Market
Education, $5.6m, 31%
Financial Services, $1.4m, 8%
Government, $2.8m, 15%
Health & Community Services, $2.1m, 12%
Local Government, $4.5m, 24%
Managed Services, $596k, 3%
Util ities, $1.4m, 7%
Licence Fee Contribution - Vertical Market
Education
Financial Services
Government
Health & CommunityServicesLocal Government
Managed Services
Utilities
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Segment Analysis
Net Profit Before Tax $9.3m, up 2% (up $186k)
Sales $2.1m, up 100%+ (up $1.7m)
Consulting $2.6m, down 13% (down $404k)
PLUS $1m, down 52% (down $1m)
R&D $1.9m, down 13% (down $291k)
Corporate $1.7m, up 14% (up $220k)
$2.1m, Up 100%+ Heads 132, Up 10%
$2.6m, Down 13%, $404k Heads 229, Up 9%
$1m, Down 52%, $1m Heads 82, Down 23%
$1.9m, Down 13%, $291k Heads 274, Up 2% $1.7m, Up 14%
Heads 102, Up 19%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Sales Consulting PLUS R&D Corporate
$'m
Profit Contribution
FY11
FY12
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
New Operating Officer for Consulting appointed
We expect all segments except Plus to perform well over the full year
Reviewing Plus structure given the current economic climate
Strategy to move Plus business to ‘value added’ services around our Ci products
Segment Analysis
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Agenda
Results
Significant Achievements
Outlook for Full Year
Long Term Outlook
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Significant Achievements
Significant Achievements
R&D
TechnologyOne Cloud
United Kingdom
Other Initiatives
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
R&D
R&D up 11% on prior period
R&D is 21% of revenue ($16.5m)
Compound growth in R&D over the last 10 years has been 15% per annum
Target for full year is R&D growth of only 4% pcp
R&D continued across all products
New Off Shore R&D centre
Significant investment into our new Ci² product suite
-
2
4
6
8
10
12
14
16
18
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$'m
R&D Expense Growth
Compound Growth 15%
up 11% 21% of Revenue
Target for full year is R&D growth of only 4% pcp
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
New Offshore R&D Centre
New offshore R&D centre in Indonesia to handle
future growth
To contain costs – operating leverage of offshore R&D staff
To tap into a new pool of R&D talent outside of Australia
To improve support levels to our customers
Allow R&D in Brisbane to focus on new projects
Trial and evaluation
Extended to Dec 2012
Trial in progress with 30+ people
Reduces the risk and proves the business case and benefits
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Ci²
Ci² is the next generation of our Ci enterprise suite...
Embrace new technologies, innovations & concepts
Focus is Simplicity, Not Complexity
Browser based – no more software installs & pervasive
Apps and Enterprise App Store
Native support for the Cloud
Simple, easy way forward for our Ci customers
These become just ‘appliances’ that simply plug into Ci² ……
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Significant Achievements
Significant Achievements
R&D
TechnologyOne Cloud
United Kingdom
Other Initiatives
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
client
Citrix Servers
Database Server
Installation Servers
Distributed
Processors N-tier Application
Servers
A complex computing model
Today – On Premise
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Off Premise
Service Provider
client
Internet connection
A simpler computing model
The Future – The Cloud
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne Cloud
TechnologyOne Enterprise Suite in the
cloud today, delivered via the browser...
TechnologyOne takes care of everything
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
TechnologyOne takes care of everything for a Yearly Subscription Fee…
Hardware, Operating Software, Middleware etc..
Backup Services
Replication Services & Disaster Recovery
Upgrades
IT staff
Capital expenditure
TechnologyOne Cloud
A simple and easy experience
A compelling solution
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Cloud
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Significant Achievements
Significant Achievements
R&D
TechnologyOne Cloud
United Kingdom
Other Initiatives
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
United Kingdom
United Kingdom licence fees $147k – substantial improvement pcp
UK loss of $789k ($86k improvement on pcp)
New customer (Dickinson Dees)
Significant impact caused by the GFC
Substantially less business
Highly competitive
Risk averse to a new entrant such as TechnologyOne
Significant improvement will require UK conditions to improve
New strategy being implemented
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Significant Achievements
Significant Achievements
R&D
TechnologyOne Cloud
United Kingdom
Other Initiatives
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Other Initiatives
Other Initiatives
TechnologyOne Solutions
• 14 pre-configured solutions now available
• Driving strong growth of our licence fees
Compelling Customer Experience
• CCE Stage 2 in progress
• Critical to continuing strong customer retention
TechnologyOne Leadership
• Development almost complete – rollout in next 6 months
TechnologyOne College
• Up and running – courses to be expanded
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Agenda
Results
Significant Achievements
Outlook for Full Year
Long Term Outlook
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Outlook for Full Year
Economic environment remains challenging and uncertain
TechnologyOne enterprise business remains strong and resilient
Continuing growth in Licence Fees in enterprise business
• Good pipeline of opportunities in second half
• Strong committed annual licence fees revenue in second half
TechnologyOne Plus business will continue to struggle over the full
year
We expect profit growth of 10% to 15% for the full year
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Outlook for Full Year
Assumptions
Economic climate does not deteriorate any further
Continuing contract momentum is maintained
Total expense growth of 7% in 2012 year
R&D expense growth to be 4%
• TechnologyOne new generation Ci² suite
• TechnologyOne Cloud
• New Offshore R&D centre
• Round off existing products – ECM, HR & Payroll, Asset Management
Plus revenue will be approx $17m, down 16% (down $3.1m pcp)
United Kingdom – market remains challenging
• UK full year loss contained to $1m (vs $1.5m loss last year)
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Agenda
Results
Significant Achievements
Outlook for Full Year
Long Term Outlook
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Improved Margins
Profit margin has contracted over the last
10 years
Expanded our product range investment
Profit margin now stabilised
Focus is to substantially improve margins
over next five years
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Financials & Supply Chain 44%
CPM 33%
Student Management 19%
Property 3%
Asset Management 1%
ECM, CRM, HR/Payroll, Mobile
<1%
Profit Contribution - Product - FY11
Financials & Supply Chain
CPM
Student Management
Property
Asset Management
ECM, CRM, HR/Payroll, Mobile
New Products Contribution to Profit
New Products Increase Profits
• Opportunity to substantially grow the
contribution to profit by these
products over the next five years:
• Property & Rating
• Asset Management
• ECM
• HR & Payroll
• CRM
• Mobile Solutions
96% Profit Contribution comes from Financials, CPM and Student Management
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
Control of R&D Costs
Control of R&D costs …
Compound Growth 16%
leveraging Offshore R&D to achieve substantial savings
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
-
10
20
30
40
50
60
70
$'m
R&D Expense Growth
Compound Growth 8%
$67m
$47m
R&D Growth Projections
Model R&D growth over the next 5 years at 8% per annum
• R&D currently projected to be $67m in year 5 (compared to $33.5m now)
• In year 5 our R&D will be $47m vs $67m, saving $20m in one year
• Saving $52m over 5 years
saving $20m per year
in year 5
Compound Growth 16%
In year 5, R&D will be
18.5% of revenue (vs 20% now)
Long term target for R&D is 15% of revenue
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
52
Long Term Outlook
Long Term Outlook is Strong .....
Enterprise Suite – one of a few companies globally with an enterprise solution
Power of One – unique approach to build, market, sell, implement and support our products
Vertical markets focus – focus on seven key markets and our deep industry knowledge
Preconfigured Solutions – reduce time, effort, risk and increase penetration in our markets
Our large customer base – opportunities to cross sell our expanding product range
Pipeline of products – at various stages of maturity, which we will continue to harvest in future
years, as immature products move from loss making to profitability
____ __ ____ _____ ____ ______
_____ _____
____ _____
_____ _____
____ _____
53
Long Term Outlook
Geographical expansion – United Kingdom has significant longer term growth
Our Compelling Customer Experience program – retain our customers
New offshore R&D centre – provide access to additional talent and operating leverage
Acquisitions – expand our product range and our customer base
TechnologyOne Cloud – position us as a continuing leader in innovation and technology
Improving Profit Margin
Adrian Di Marco
[email protected] Commercial in conf idence May 2012 Final
2012 Half Year Results Presentation Ending March 31st 2012
