Technology One Limited · ASX:TNE
Technology One — FY2006 Earnings Presentation
40 slides from Technology One's earnings presentation, September 2006
Slide 1: 2006 Results Presentation
2006 Results Presentation Adrian Di Marco September 2006 Executive Chairman www.TechnologyOneCorp.com [email protected] Private and Confidential
Slide 2: Agenda
Agenda TechnologyOne Overview 2006 Full Year Results Summary Analysis Significant Achievements Strategy for Growth Outlook and Challenges 2/41 Connected Intelligence
Slide 3: TechnologyOne Overview
TechnologyOne Overview TechnologyOne develops, markets, sells, implements and supports a range of enterprise applications: TechnologyOne Financials TechnologyOne Supply Chain TechnologyOne HR & Payroll TechnologyOne Works & Assets TechnologyOne Business Intelligence TechnologyOne Stude
Slide 4: Agenda
Agenda TechnologyOne Overview 2006 Full Year Results Summary Analysis Significant Achievements Strategy for Growth Outlook and Challenges 4/41 Connected Intelligence
Slide 5: 2006 Full Year Results - Summary
2006 Full Year Results - Summary Record Revenue, up 21% To $65.2m, increase of $11.3m Record Net Profit After Tax (NPAT), up 16% To $12.3m, increase of $1.7m Record Net Profit Before Tax (NPBT), up 13% To $16.3m, increase of $1.8m NPBT up 13% vs 16% NPAT Tax benefits associated with
Slide 6: 2006 Full Year Results - Summary
2006 Full Year Results - Summary Record R&D expenditure remained strong, up 24% To $12.7m, an increase of $2.5m Representing 19% of Revenue R&D fully expensed as incurred Expenses excluding R&D/Depreciation up 24% To $36.4m, increase of $7.0m Dividend of 3.41 cents fully franked, up 10
Slide 7: 2006 Full Year Results - Summary
2006 Full Year Results - Summary 7/41 Connected Intelligence
Slide 8: 2006 Full Year Results - Summary
2006 Full Year Results - Summary Return on Equity (ROE) of 32% (vs 26% last year) Among top publicly listed companies in Australia 24% ROE over 5 years, makes us #35 of all publicly listed companies* Adjusted ROE of 62% (adjusted for non working capital cash) Strong balance sheet Debt/Eq
Slide 9: 2006 Full Year Results - Summary
2006 Full Year Results - Summary 2006 v 2005 Full Year 2006 v 2005 2006 2005 Variance Increase $ (000) $ (000) $ (000) % Revenue 65,242 53,850 11,392 21% Expenses 36,411 29,332 7,079 24% EBITDAR 28,831 24,518 4,313 18% R&D 12,675 10,220 2,455 24% EBITDA 16,156 14,298 1,858 13% Depreciation and Amort
Slide 10: 2006 Full Year Results - Analysis
2006 Full Year Results - Analysis Licence fees up 47% (vs 17% last year) Annual licence and support revenue of $21.1m, up 23% (vs 19% last year) Implementation and consulting services revenue of $18.1m up 22% (vs 11% last year) 53% of our revenues now generated from existing clients 10/41 Co
Slide 11: 2006 Full Year Results - Analysis
2006 Full Year Results - Analysis TechnologyOne Financials licence fees up 44% (vs 7%) last year) Involved in almost all deals TechnologyOne Business Intelligence licence fees of $1.3m in first full year TechnologyOne Student Management licence fees up 151% 11/41 Connected Intelligence
Slide 12: 2006 Full Year Results - Analysis
2006 Full Year Results - Analysis North-West region (QLD, SA, WA, TAS & NZ) performed strongly Profit contribution up 114% to $5.5m, an increase of $2.9m Licence fees up 97% to $9.2m, an increase of $4.5m Consulting (Total) up 38% to $9.8m, an increase of $2.7m New Zealand and Queensland v
Slide 13: 2006 Full Year Results - Analysis
2006 Full Year Results - Analysis Strong results particularly taking into consideration: Project Services/Integration Services Revenue decrease of 6% to $7.2m a reduction of $437k TechnologyOne HR & Payroll had an R&D loss of $676k TechnologyOne Supply Chain had an R&D loss of $1.1m Techno
Slide 14: Agenda
Agenda TechnologyOne Overview 2006 Full Year Results Summary Analysis Significant Achievements Strategy for Growth Outlook and Challenges 14/41 Connected Intelligence
Slide 15: Significant Achievements
Significant Achievements Continued Strong New Business Continued Strong R&D program Continued Organisational Changes TechnologyOne United Kingdom 15/41 Connected Intelligence
Slide 16: Continued Strong New Business
Continued Strong New Business Licence fees to new customers up 58% Strong indicator of the increasing success of our new Connected Intelligence (Ci) product line General Commercial - 38 new customers Local Government - 12 new councils, giving us 103 councils in total State & Federal Govern
Slide 17: Significant Achievements
Significant Achievements Continued Strong New Business Continued Strong R&D program Continued Organisational Changes TechnologyOne United Kingdom 17/41 Connected Intelligence
Slide 18: Continued Strong R&D Program
Continued Strong R&D Program Record R&D expenditure remained strong, up 24% To $12.7m, an increase of $2.5m Representing 19% of revenue R&D fully expensed as incurred Goal: Integrated enterprise software suite with ‘out of the box’ deep functionality based on the very latest technology and
Slide 19: Continued Strong R&D Program
Continued Strong R&D Program TechnologyOne Financials Ci has been very successful to date: Involved in all new deals 150 sites committed; 120 sites now live Opened up opportunities in Tier One customer space R11.2 now available – critical for United Kingdom R&D accelerated to bring remai
Slide 20: Continued Strong R&D Program
Continued Strong R&D Program R&D accelerated to develop new modules/functionality in following areas: TechnologyOne Works & Assets TechnologyOne Business Intelligence R&D planned to develop new modules/functionality in following areas over 2006/07: TechnologyOne Student Management Techno
Slide 21: Continued Strong R&D Program
Continued Strong R&D Program TechnologyOne Business Intelligence (BI) – significant new direction BI “out of the box” across all our products Lower cost of ownership; TechnologyOne data aware; able to incorporate other non-TechnologyOne data sources Objective: Consolidate our approach to BI
Slide 22: Significant Achievements
Significant Achievements Continued Strong New Business Continued Strong R&D program Continued Organisational Changes TechnologyOne United Kingdom 22/41 Connected Intelligence
Slide 23: Continued Organisational Changes
Continued Organisational Changes Continue to evolve as our business grows rapidly New executive team ‘bedded down’ and responsibilities reassigned Awesome Software Initiative Smaller, empowered ‘domain teams’ to increase ownership, commitment and innovation Consolidated Financials, HR & Pa
Slide 24: Continued Organisational Changes
Continued Organisational Changes Exceptional Customer Service Initiative All consulting now under one Operating Officer Consistent business practices across all regions Exceptional Sales and Marketing Initiative All sales and marketing now under one Operating Officer Marketing now aligne
Slide 25: Continued Organisational Changes
Continued Organisational Changes Creation of AANZ – Australia, New Zealand and Asia Asia now reports into Australia Executive Team Appointment of new Asian Manager to revisit our approach to Asia Allows one senior executive to focus on developing our United Kingdom business 25/41 Connected I
Slide 26: Significant Achievements
Significant Achievements Continued Strong New Business Continued Strong R&D program Continued Organisational Changes TechnologyOne United Kingdom 26/41 Connected Intelligence
Slide 27: TechnologyOne United Kingdom
TechnologyOne United Kingdom First European office opened in Maidenhead United Kingdom Opportunities for substantial growth – market estimated to be 3+ times size of Australian market Country Manager appointed with extensive experience and contacts Key Australian staff relocated into United
Slide 28: Agenda
Agenda TechnologyOne Overview 2006 Full Year Results Summary Analysis Significant Achievements Strategy for Growth Outlook and Challenges 28/41 Connected Intelligence
Slide 29: Strategy for Growth
Strategy for Growth Focus on our seven key markets Goal to achieve a dominant market presence in each market Re-align sales, marketing, consulting, R&D and acquisitions/partnerships Connected Intelligence (Ci) increasing our ‘win rate’ in our financial business Accelerate R&D to move all p
Slide 30: Strategy for Growth
Strategy for Growth Higher Education – strong pipeline of opportunities now TechnologyOne now ‘last man standing’ Need to pro-actively manage opportunities and build infrastructure for growth Good candidate for United Kingdom to continue growth in this sector Extend product breadth to ‘add
Slide 31: Strategy for Growth
Strategy for Growth Focus now on HR & Payroll to become ‘best in class’ Work with existing customers to achieve this Significant revenue stream in medium term, as companies look for a totally integrated solution from one vendor Will make this a highly profitable product line ($676k loss in 2
Slide 32: Strategy for Growth
Strategy for Growth TechnologyOne Works & Assets New product, needs to be carefully managed Extend product breadth rapidly over next few years Potential new markets for TechnologyOne Need to re-look at our strategies for: TechnologyOne Supply Chain TechnologyOne Project Services 32/41
Slide 33: Strategy for Growth
Strategy for Growth New Zealand –continuing strong growth Continue to build our management team Geographical expansion provide significant growth opportunity in medium term Continue to invest in the UK • $1m loss for 2007 financial year • Medium term strong contributor to growth • Critical t
Slide 34: Strategy for Growth
Strategy for Growth Significant opportunities in our existing customer base Powerful proposition: ‘provide customers with complete integrated solution from one company’ Cross-sell existing TechnologyOne products Acquisition/partnerships of other third party products Moving existing custome
Slide 35: Agenda
Agenda TechnologyOne Overview 2006 Full Year Results Summary Analysis Significant Achievements Strategy for Growth Outlook and Focus 35/41 Connected Intelligence
Slide 36: Outlook 2007
Outlook 2007 Continuing strong growth Market conditions continue to improve generally Continuing strong growth in New Zealand and Australia Improvements in 2 largest states NSW and Victoria Increased win rate from our Connected Intelligence series Tier One opportunities Increased penet
Slide 37: Outlook – Long Term
Outlook – Long Term Opportunities for continuing strong growth Financials - further Tier One opportunities in ANZ due to acceptance of our Ci platform Financials – growth in United Kingdom market Higher Education continuing strong market in ANZ Higher Education opportunities in United King
Slide 38: Focus in 2007/2008
Focus in 2007/2008 Manage the migration of all our customers to our new Ci platform Progressively develop and release other Ci products • TechnologyOne Property Ci • TechnologyOne Student Management Ci Consolidate TechnologyOne HR & Payroll position in the market Manage rollout of Technology
Slide 39: After Word
After Word These slides are now available from our web site: www.TechnologyOneCorp.com under the investor relations section. 39/41 Connected Intelligence
Slide 40: 2006 Results Presentation
2006 Results Presentation Adrian Di Marco September 2006 Executive Chairman www.TechnologyOneCorp.com [email protected] Private and Confidential