Serko Ltd. · NZX:SKO
Serko — FY2017 Earnings Presentation
31 slides from Serko's earnings presentation, May 23, 2017
Slide 1: FY17 Results Presentation
FY17 Results Presentation YEAR ENDED 31 MARCH 2017 23 May 2017 – Serko’s 10 year anniversary
Slide 2: Important notice
Important notice This presentation is given on behalf of Serko Limited. Information in this presentation: • is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Serko Limited; • should be read in conjunction with,
Slide 3: FY17 Results Presentation Agenda
FY17 Results Presentation Agenda Darrin Grafton Susan Putt • FY17 Highlights CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER • Financial Update • FY18 Focus & Outlook • Q&A • Appendix • About Serko • Definitions 3
Slide 4: FY17 Highlights
FY 17 Highlights 10 Year Anniversary 2007 – Established by Founders Darrin Grafton & Bob Shaw 2013 – Acquired Serko Expense (formerly Incharge) 2014 – Serko IPO 2015 – Acquired Arnold Travel Technology 2016 - $8.1 million additional capital raise 2017 – Finalist Hi-Tech Company of the Year (5 years
Slide 5: FY17 Strategy
FY 17 Strategy Leading Grow Technology customer Innovations base Grow ARPB 5
Slide 6: Grow Customer Base and ARPB
Grow Customer Base and ARPB ATMR 37% increase in ATMR $15.3m FY17 ATMR vs $11.2m FY16 ATMR (Actual FY17 Recurring Revenue was $12.9m) Non GAAP Measures: ATMR = Annualised Transactional Monthly Revenue - Serko uses this as useful indicator of future recurring revenues from Serko products. Calculated
Slide 7: Grow Customer Base
Grow Customer Base >50% of corporate travel in Australasia booked through Serko1 18% increase in bookings • Established strategic relationship with Sabre • Signed new TMC2 agreements with Helloworld & Magellan 1200 serko.travel signups • New serko.travel to address $15 billion SME travel spend • Add
Slide 8: Grow ARPB through $ per Booking
Grow ARPB through $ per Booking 5% attachment and growing Additional Content Bookings as % 7% ARPB increase due to content of total bookings introduced in FY16 • Continuing to add content • HRS • Hotel Hub • Transportation options • Traveller services 8
Slide 9: Investment in Innovation
Investment in Innovation $5.8m R&D1 investment in FY17 vs $6.3m FY16 • Major technology releases including: • Predictive mobile booking experience • Expense submission via Mobile App with smart receipt reader • serko.travel • Virtual credit card payments through Conferma • Serko Zeno • New premium o
Slide 10: On Track to Generate Profit
On Track to Generate Profit 44% decrease in Net Losses Before Tax to $3.3m for FY17; 53% EBITDA1 loss decrease to $2.5m $4.5m Cash Reserves at end of year Target $3m-$4m Balanced growth investment for sustainability 9% increase in Revenue and 10% decrease in Operating Costs 1. EBITDA is a non-GAAP m
Slide 11: Revenue Growth and Cost Control
Revenue Growth and Cost Control Performance dashboard (FY17 vs FY16) ↑37% ↑18% ↑9% ↑9% ↑7% ↓7% ↓10% ↑44% DECREASE IMPROVEMENT INCREASE INCREASE INCREASE INCREASE INCREASE DECREASE NPBT ATMR 1 ONLINE TOTAL RECURRING TOTAL REVENUE R&D Operating LOSS BOOKINGS REVENUE USAGE 2 & OTHER COSTS 3 Costs 4 REV
Slide 12: Recurring Revenue Growth
Recurring Revenue Growth >90% Recurring Revenues compared to total Operating Revenue for FY16 & FY17 9% uplift through 18% rise in online booking transactions and 21% growth in expense management usage • Revenue growth masked by strong New Zealand dollar in FY17 and strong contribution in FY16 of cu
Slide 13: Decreasing EBITDA Losses
Decreasing EBITDA Losses • Serko is emerging into profitability as we benefit from the scalability of our platform, while controlling Operating Costs and R&D Notes to non-GAAP measures 1. EBITDA is a non-GAAP measure representing Earnings Before the deduction of costs relating to Interest, Taxation,
Slide 14: Achieving Half-on-half Improvement Targets
Achieving Half-on-half Improvement Targets Achieved FY17 – 2H FY17 – 1H FY16 – 2H FY16 – 1H Total Revenue $7.3m $7.0m $6.7m $6.4m a Operating Expenses $9.0m $9.7m $10.1m $10.6m a NPBT (Loss) ($1.3m) ($2.1m) ($2.6m) ($3.3m) a EBITDA1 (Loss) ($0.7m) ($1.8m) ($2.2m) ($3.1m) a Net cash outflows (excludi
Slide 15: Focus for FY18
Focus for FY18 • Serko Zeno - Premium travel online booking tool technology • Predictive booking tools • Supplier Hub with visual imagery consistent with retail branding of our key content providers • Expense integration • New ways of booking travel including Artificial Intelligence • Serko.travel -
Slide 16: Outlook
Outlook • Serko expects to achieve profit in FY18 • On track with April positive NPBT and EBITDA • Growing ATMR • Cash flow breakeven over year • Expect net outflows in 1H 2018 due to prepayments and FY17 remuneration payments however expect positive net cash outflow in 2H to outflow 1H 16
Slide 17: Shareholder Questions
Shareholder Questions
Slide 18: About Serko
Appendix ABOUT SERKO Background information on Serko 18
Slide 19: About Serko – Cloud-based travel and expense solution providers
About Serko – Cloud-based travel and expense solution providers WORLD SPEND ON BUSINESS TRAVEL IN 2015 = US$1.2TN AU + NZ Asia incl. Northern Hemisphere $21.8bn Enterprise India $298bn Enterprise $15bn SME $494bn Enterprise $240bn SME • Serko tracking to 50% of Enterprise $370bn SME • Open for Serko
Slide 20: Best of breed digital travel and expense technology platforms
Serko – Best of breed digital travel and expense technology platforms Enterprise Level – sold via TMC1 Partner SME2 – Self onboarding option sold direct 1. TMC -Travel Management Company Online Booking Tool 2. SME – Small and Medium Enterprises 20
Slide 21: Partners TMCs to deliver Enterprise level solutions to Blue Chip corporates
Serko – Partners TMCs to deliver Enterprise level solutions to Blue Chip corporates Corporate Travel Serko addresses Market leading 66% of the reseller base (TMCs) US$1.2tr global market $21.8bn of covering large market corporate spend share with current and provides a global Australasia technology
Slide 22: Cascading layers of revenue in the Enterprise market
Cascading layers of revenue in the Enterprise market Traveller pays, takes photo Corporate traveller makes Subscription paid to Serko of receipt using Serko Mobile a booking via Serko Online per year for use in Serko Expense Booking and other fees paid Traveller downloads and Monthly active user fee
Slide 23: Serko.travel – Supplier Based Commission Model
Serko.travel – Supplier Based Commission Model Corporate traveller makes Option to purchase and use Fee paid to TMC Serko Expense a booking via Serko serko.travel SME traveller uses TMC Free use Monthly active user fee paid by for booking or changes corporation to Serko SME user books a hotel Suppli
Slide 24: Enterprise Go-to-market Partnerships
Enterprise Go-to-market Partnerships • Serko sells Serko Online through Travel Management Companies (TMC)s • Reseller base gives Serko access to 90%* of corporate travel spend in Australia and New Zealand • TMCs refer their clients to Serko for Expense management • New Zealand and Australia reseller
Slide 25: Transforming Corporate Travel
Transforming Corporate Travel Serko Online • Used by travel arrangers/travellers • Door-to-door experience • Book and change flights, hotel, taxi • Preferred supplier promotion • Powerful policy management engine • Access to ‘leisure’ providers • Integrated approvals workflow • Unique Mass Booking c
Slide 26: Transforming Corporate Expense
Transforming Corporate Expense Serko Expense • Create, edit and submit expenses on desktop and mobile • Cloud-based receipt translation (OCR) • View corporate card transactions • Cloud-based matching of receipts • Grouping of expenses & review • Extensive reporting capability • Rapid data exporting
Slide 27: Making Business Travel Mobile
Making Business Travel Mobile Serko Mobile • Serko Mobile launched May 2015 • Unique integrated travel and expense • Ability to book & change • Full acquittal via mobile • Powerful Travel Concierge • Free to download with premium upsell • White labels* for Flight Centre Travel group and others *Whit
Slide 28: SME Go-to-market Partnerships
SME Go-to-market Partnerships • Serko sells serko.travel direct to SME customers • Serko partners companies with active SME relationships like Xero and 2degrees • Currently actively leveraging partnerships across Australia, New Zealand, Asia and India 28
Slide 29: serko.travel - A Revolution in Small Business Travel
serko.travel - A Revolution in Small Business Travel • Secure self-registration online • Access via desktop and mobile app • Choice of 3 TMCs • Ability to add rules for travel bookers • Free 1 to make & change online bookings • GDS Air & Car, API Hotels & Taxi • Premium offline services • Integratio
Slide 30: Definitions
Definitions • FY17 (Financial Year 2017) 1H (First half) 2H (Second Half) • Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. The non-GAAP financial information incl
Slide 31: Thank you
Thank you