Xero Limited · ASX:XRO
Xero — Investor Presentation (2011)
25 slides from Xero's investor presentation, 2011
Slide 1: Investor Presentation
Investor Presentation Rod Drury, CEO
Slide 2: Small Business market opportunity
Small Business market opportunity The internet unlocks a significant global opportunity Traditionally the small businesses market has been too fragmented to sell into: • Millions of small businesses = multi-billion dollar market • Untapped – of the global software companies (including IBM, Oracle, S
Slide 3: Macro trends
Macro trends Existing economic environment and technology trends are favourable Economic Climate • All businesses are likely to need a greater focus on cashflow • Greater focus on monthly management reports. Banks are increasingly asking for these and may insist on them as a pre-requisite for any fu
Slide 4: Xero snapshot
Xero snapshot • Listed on the NZ Stock Exchange in 2007 • Raised NZ$50m including Craig Winkler and Peter Thiel investments • Invested over NZ$30m • 100+ staff globally in NZ, AU, UK and USA • 8th fastest growing tech company in Asia Pacific 2010 (Deloitte Tech Fast 500 Asia Pacific) • Bank feeds to
Slide 5: Board of Directors
Board of Directors Phil Norman Sam Knowles Chairman Sam Morgan Rod Drury Chief Executive/Executive Director Graham Shaw Hamish Edwards Executive Director Craig Winkler
Slide 6: Strong senior management team
Strong senior management team Rod Drury Chief Executive/Executive Director Chris Ridd Managing Director, Australia Ex Director Dynamics Business Group - Microsoft, Australia Alastair Grigg Chief Operating Officer Ex CIO - AirNZ Gary Turner Managing Director, UK Ex Product Group Director - Paula Jack
Slide 7: Customers in 50+ countries
Customers in 50+ countries
Slide 8: Customer acquisition record
Customer acquisition record 30,000+ Paying business customers have grown quickly Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10
Slide 9: Half-year operating revenue
Half-year operating revenue $3.7m • Near tripling September half year operating revenues from NZ$1.3m in 2009 to NZ$3.7m in 2010 • This compares with 2010 full-year revenues of NZ$3.4m • As of 30 Sept 2010 annualised subscriptions were running at approximately NZ$9.0m 2007 2008 2009 2010
Slide 10: Break even
Break even New Zealand Direct sales operations are now United Kingdom at break even Australia Overall costs On target for break even this calendar year
Slide 11: Xero shares on issue
Xero shares on issue Latest shareholder listing at Feb 2011 Other shareholders 32% Directors & staff 68%
Slide 12: Xero operates globally
Xero operates globally Our Global hosting platform is best in class Scalable global online platform in place Used by paying customers in over 50 countries Active partnerships with: • Rackspace (NYSE:RAX) Tier 1 global data centre • Akamai (NASDAQ:AKAM) Global Content Distribution Network
Slide 13: Scaleable business platform
Scaleable business platform Most start-ups do not have resources to build this sophisticated platform Highly scalable accounting and back office platform can cater for hundreds of thousands of customers Significant investment so “servers can run the business”
Slide 14: Xero delivers quality software - fast
Xero delivers quality software - fast 50+ major releases February 2010 March April May Bank Rules Xero Personal Launch Paycycle Integration Improved MYOB Chart of Accounts & Accounts Payable – Set Planned Date FreshBooks Integration & Multi- Developer Site Update Bank Statements Import Batch Payment
Slide 15: Competitive landscape
Competitive landscape “Start-ups” “Nimble, funded, global” “Incumbents” Incumbents are Start-ups don’t have Expected struggling to deliver resources to be successful competitors have not online accounting and in this market emerged execute globally
Slide 16: Web 2.0 approach changes the landscape
Web 2.0 approach changes the landscape Low cost solutions expanding up to the mid market Partner Partner solution solution Product Costs Traditional Xero $1,000,000’s desktop feature set Large $100,000’s Medium $10,000’s Small $1,000’s $100’s $100’s Micro
Slide 17: Single ledger efficiency
Single ledger efficiency For the For the Accounting Business Practice Shared Invoicing General ledger Management accounts data Debtors Creditors Annual accounts GST Fixed assets Expense claims Contacts
Slide 18: Full product family
Full product family Small Medium Large Cashbook Ledgers Partner Edition Accounts Production
Slide 19: Cloud benefit to Accountants is compelling
Cloud benefit to Accountants is compelling The old way 2011 INSTALLED SOFTWARE BUSINESS SOFTWARE Server hardware Shoebox and Excel Networking infrastructure MYOB per user BankLink and Bank Server operating system, Connect virus scanner, firewalls, etc Other SME systems Server(s) support and updates
Slide 20: Modern practice
Modern practice Email, Office, Print, Document Management Practice Management & Tax Website, CRM, eMarketing Client Accounting, Final Accounts Production PracticePoint Template Migration and Support Partner
Slide 21: Themes for 2011
Themes for 2011 Everything goes mobile
Slide 22: Social Accounting
Social Accounting Connecting our customers customers PARTNERS CLIENTS GOVERNMENT BANKS
Slide 23: US strategy
US strategy • Process underway to relocate Chief Technology Officer to the US to drive product development • Xero beachhead being established in San Francisco • Xero Inc has been incorporated • Working on strategic partnerships • Leveraging the Peter Thiel investment • Full strategic update will be
Slide 24: Drivers of value
Drivers of value What to look for in SaaS companies • Growth and adoption of partners and ecosystem • Ability to execute marketing partnerships in offshore markets • Continued execution of product delivery • Customer growth • Revenue growth - contracted monthly revenue
Slide 25: Questions
Questions