Xero Limited · ASX:XRO
Xero — Shareholder Meeting (August 2020)
27 slides from Xero's shareholder meeting presentation, Aug 13, 2020
Slide 1: Annual Meeting
Xero Limited Annual Meeting 13 AUGUST 2020 From top: KLAS Business + Accounting | AU CV Ledger | US, Evansdale Cheese | NZ
Slide 2: Important notice
Important notice This presentation is given on 13 August 2020 on behalf of Xero Limited (Xero) (ASX:XRO) (Company number NZ 183 0488, AU ARBN 160 661 183) Information in this presentation: - is for general information purposes only, and is not an offer or - includes statements relating to past perfo
Slide 3: Board of Directors
Board of David Thodey, AO CHAIR OF THE BOARD Directors INDEPENDENT NON-EXECUTIVE DIRECTOR People and Remuneration Committee Nominations Committee (Chair) Mark Cross Rod Drury INDEPENDENT NON-EXECUTIVE DIRECTOR XERO FOUNDER Audit and Risk Management Committee NON-EXECUTIVE DIRECTOR Lee Hatton Dale Mu
Slide 4: Agenda
Agenda 01 Chair’s address 02 CEO update David Thodey Steve Vamos CHAIR OF THE BOARD CHIEF EXECUTIVE OFFICER 03 Financial overview 04 Resolutions 05 Q&A Kirsty Godfrey-Billy CHIEF FINANCIAL OFFICER 4
Slide 5: Using the online platform
Using the online platform Download the Online Portal Guide at xero.com/about/investors Virtual Meeting HELP NUMBER Ask a Question Get a Voting Card Questions (+61) 1800 990 363 POWERED BY LINK MARKET SERVICES Ask a Question ? Ask a Question Voting Get a Voting Card Get a Voting Card Help number 1 80
Slide 6: Chair's address
Chair’s address David Thodey CHAIR OF THE BOARD Kaye Harding, Ecosystem & Simon Lofts, Marketing 6
Slide 7: CEO update
CEO update Steve Vamos CHIEF EXECUTIVE OFFICER Iyanna Vaughn | US Partner 7
Slide 8: Working under COVID-19
Working Ok under COVID-19 Supporting our Continuing to help Prioritised people and customers and product maintaining partners development productivity - Adapting to new ways - Targeted support on - Responding to changes of working topics such as in leave entitlements, wage subsidies, tax and - Stayi
Slide 9: COVID-19 subscriber update
COVID-19 subscriber update Operating conditions remain uncertain and we continue to anticipate an impact from COVID-19 on Xero’s FY21 results 96,000 2.38 m net subscriber total subscribers additions in the first as at 31 July 2020 four months of FY21 Gross subscriber Net subscriber additions and add
Slide 10: Strategic trends
Strategic trends Adoption of cloud technologies Digitisation of tax and compliance Innovation in financial services Post COVID-19 small business economy 10
Slide 11: Areas of planned strategic investment
Areas of planned strategic investment STRATEGIC Grow small Build for global scale Drive cloud accounting PRIORITIES business platform and innovation Best-in-class cloud Small business needs Attract, inspire and accounting for small beyond accounting and retain world class business compliance talent
Slide 12: Social and environmental impact
Social and Fishermans Bay Conservation Project NEW ZEALAND environmental impact V I R O N MEN EN T T Y & I NC S I L R US DIVE ION BUSINESS OUR P EO P L E S ITIE UN SU P M PO M RT C O 12
Slide 13: Financial overview
Financial overview Kirsty Godfrey-Billy CHIEF FINANCIAL OFFICER Apparition Media | Australia 13
Slide 14: Continued global growth drives FY20 results
Continued global growth drives FY20 results Financial performance highlights for the year ended 31 March 2020 SUBSCRIBERS ARPU AMRR TOTAL LIFETIME VALUE 2.285m $29.93 $820.6m $5.5b + 467,000 YOY + 2% YOY (-1% in + 29% YOY (25% in + $1.2b YOY constant currency) constant currency) OPERATING REVENUE EB
Slide 15: Drive cloud accounting
Drive cloud accounting FY20 Australia New Zealand United Kingdom North America Rest of World Subscribers 914k +26% 392k +12% 613k +32% 241k +24% 125k +51% Net additions 188k +31% 41k -18% 150k -1% 46k +5%1 42k +68% Revenue $320m +23% $116m +19% $184m +54% $55m +25% $43m +43% >50% cloud adoption2 <20
Slide 16: Grow the small business platform
Grow the small business platform FY20 revenue FY20 revenue growth YOY composition 82% Group operating revenue $718.2m 30% Group 33% operating 28% revenue 19% Core accounting growth 89% Platform revenues1 WorkflowMax2 Core Platform Non- 7% accounting revenues1 WorkflowMax2 recurring3 Non-recurring 2%
Slide 17: Unit economics and track record of value creation
Unit economics Value of a Xero subscriber at 31 March 2020 and track record $2,500 $2,000 LTV/CAC of value creation $1,500 $1,000 5.8 LTV $2,422 $500 March 2020 Δ YOY CAC $0 $420 ARPU $29.93 $-500 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 MRR churn 1.13% Gross margin 85% >$1.1b added L
Slide 18: Total available liquid resources of $686 million
Total available Movement in net cash position liquid resources FY19 FY20 YOY of $686 million ($000s) ($000s) change ($000s) Cash and 121,527 108,027 (13,500) cash equivalents Positive free cash flow result in FY20 of $27.1m, equivalent to 3.8% of operating revenues Short-term deposits 336,819 428,05
Slide 19: Outlook
Outlook The continuing uncertainty surrounding the COVID-19 environment means it remains speculative to comment further on the potential impact on our expected performance for FY21. Xero’s ambition is to be a long-term oriented, high-growth business. We continue to operate with disciplined cost mana
Slide 20: Resolutions
Resolutions Alex Falcon | UK Partner 20
Slide 21: Fixing the remuneration of the auditor
RESOLUTION 1 Fixing the remuneration of the auditor That the Board is authorised to fix the fees and expenses of Ernst & Young as auditor for the ensuing year For Against Discretionary 101,582,181 1,293,393 82,964* 98.66% 1.26% 0.08% * 32,135 of which are held by the Chair of the Meeting who intends
Slide 22: Re-election of Lee Hatton as a director
RESOLUTION 2 Re-election of Lee Hatton as a director That Lee Hatton, retiring from office as a director of Xero at the Meeting, and being eligible, be re-elected as a director of Xero For Against Discretionary 102,328,883 549,599 82,606* 99.39% 0.53% 0.08% * 31,777 of which are held by the Chair of
Slide 23: Re-election of Rod Drury as a director
RESOLUTION 3 Re-election of Rod Drury as a director That Rod Drury, retiring from office as a director of Xero at the Meeting, and being eligible, be re-elected as a director of Xero For Against Discretionary 102,857,696 29,326 81,857* 99.89% 0.03% 0.08% * 31,028 of which are held by the Chair of th
Slide 24: Election of Mark Cross as a director
RESOLUTION 4 Election of Mark Cross as a director That Mark Cross, appointed by the Board as a director of Xero on 1 April 2020, and who will retire at the Meeting in accordance with clause 20.4 of Xero’s Constitution, and being eligible, be elected as a director of Xero For Against Discretionary 10
Slide 25: Q&A
Q&A Moovaz | Singapore 25
Slide 26: Glossary
Glossary Subscribers Constant currency Liquid resources Subscriber means each unique subscription to a Xero- Constant currency comparisons for revenue are based on Liquid resources comprises cash and cash equivalents, offered product that is purchased by an accounting average exchange rates for the
Slide 27: Beautiful business
Beautiful business xero.com/investors