Strong Business Fundamentals To
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Record Revenue and Profit Growth with Contributions from All Regions and Business Units ALTIUM HALF YEAR INVESTOR PRESENTATION Aram Mirkazemi CEO 19 – 23 February 2018 Joe Bedewi CFO Sydney & Melbourne Kim Besharati VP IR Disclaimer Future performance - Forward looking statements, opinions and estimates provided This presentation has been prepared by Altium Limited (ACN 009 568 772) and in this presentation are based on assumptions and contingencies which are subject is for information purposes only. It does not constitute financial product or investment advice or a recommendation to acquire Altium shares and has to change without notice, as are statements about market and industry trends, been prepared without taking into account the objectives, financial situation or which are based on interpretations of current market conditions. Forward looking needs of individuals. Before making an investment decision prospective statements including projections, guidance on future earnings and estimates are investors should consider the appropriateness of the information having provided as a general guide only and should not be relied upon as an indication or regard to their own objectives, financial situation and needs and seek legal guarantee of future performance. An investment in Altium shares is subject to and taxation advice appropriate to their jurisdiction. Altium is not licensed to investment and other known and unknown risks, some of which are beyond the provide financial product advice in respect of Altium shares. control of Altium Limited. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, Altium, Altium Designer, Altium Vault, Ciiva, Circuitmaker, Circuistudio, opinions and conclusions contained in this presentation. To the maximum extent Octopart, PCBWorks, Protel, Tasking and Upverter, and their respective logos, permitted by law, none of Altium employees, its directors, employees or agents, nor are trademarks or registered trademarks of Altium Limited, or its subsidiaries. any other person accepts any liability, including, without limitation, any liability All other registered or unregistered trademarks mentioned in this presentation arising out of fault or negligence, for any loss arising from the use of the information are the property of their respective owners, and no trademark rights to the same are claimed contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this Presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties Financial data and contingencies. Before making an investment decision, you should consider, with All dollar values are in US dollars (US$) unless as otherwise or without the assistance of a financial adviser, whether an investment is presented. appropriate in light of your particular investment needs, objectives and financial circumstances. 2 Agenda 1 Company Highlights & Significant Achievements 2 2018 Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview Altium's Half Year FY18 Financial Highlights $110M $110.9M $100M Record revenue growth of 30% $90M $93.6M Record EBITDA Margin of 30% $80M (33.1% underlying) $80.2M 30% $70M H1 Strong net profit growth of 51% $71.0M $60M 14% 4% increase in subscriber seats $61.9M H1 $63.2M 13% to 35,977 H1 $50M $55.1M 16% 11% H1 22% increase in Altium Designer $48.7M $40M 10% H1 seats with 2,650 new licenses sold 20% H1 $42.6M H1 $30M $37.6M $32.3M 30.0% $29.0M H1 Revenue $20M $26.4M 26.7% 25.0% 25.8% $48,342 Full Year Revenue 18.4% $10M H1 Revenue growth 9.6% H1 EBITDA Margin $0M -16.3% H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY 2012 2013 2014 2015 2016 2017 2018 Driving Performance from a Position of Financial Strength Altium’s H1 FY18 Financial Metrics $36M AU13c $60.3M Sales 11.48c Cash Dividend (Up 28%) EPS (Up by 18%) 35,977 (Up by 50%) Subscribers $63.2M Revenue (Up by 4%) A$1.95B 30% (Up by 30%) Market Cap EBITDA Margin (Up from 25.8%) Debt $14.9M Op Cash Flow 2,650 $19.0M $14.9M Altium Designer seats EBITDA NPAT Free (Up by 8%) (Up 51%) (Up 22%) (Up 51%) 5 Progress Update - First Half Significant Achievements Record 30% revenue growth – with all regions and business segments delivering double-digit revenue growth China continued its rise and significance – delivering 30% revenue growth and expanding further by opening a new sales office in Shenzhen Octopart continued to outperform - through increased traffic and improved search experience delivering 42% revenue growth TASKING is building momentum – through organizational strength and growing market opportunity Release of Altium Designer 18 - a major software release with high-speed engine, multi-board design capability & new user interface/user experience Launch of NEXUS high-end solution selling – released Altium’s high-end PCB design tool and established a separate internal sales channel focused on high-end solutions 6 A New Organizational Structure to Scale Aram Mirkazemi CEO Sergey Kostinsky Henry Potts CTO CSO Biz Dev Joe Bedwi CFO Ted Pawela Xpedyze COO High-end Channel Altimyze Mainstream Channel Octomyze R&D Marketing Sales Longtail Channel Brand & Program Management Corporate Services (Finance, HR, IT, Sales Ops) Altium Org 2.0 – a new organizational structure to scale and deliver multi-product, multi-channel strategy while maintaining strong operating leverage 7 Achieving Market Leadership by 2020 2020 Target Revenue Breakdown Octopart TASKING 7.5-10% BSD - Americas 7.5-10% 30-35% $200M *- Revenue 2025 7.5-10% NEXUS 35% --** 2020 EBITDA Margin 2017 15-20% 2015 20-25% BSD – Rest of World Strong Strategy, $100 + Million PCB Market Transforming Leading Technology Revenue & Leadership & Electronic Design BSD - EMEA & Revenue Expansion of Emerging Leader and its Momentum Market Opportunity in Systems Realization * The target revenue of $200M may include 5-10% from future acquisitions Design ** 35% reported EBITDA margin or better in fiscal year 2020 BSD – Board and Systems Division (accounts for all PCB products excluding NEXUS) 8 Agenda 1 Company Highlights & Significant Achievements 2 2018 Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview Revenue Sources – FY18 H1 US Millions $63.2 $0.9 $3.0 (100%) (1.4%) $3.4 (4.7%) $20.1 (5.4%) 60 (31.8%) Non-recurring Revenue 50 $27.4 $4.9 $0.6 (43.4%) 40 (7.8%) (0.9%) $2.3 $0.2 $1.5 $25.4 $0.9 (3.6%) (0.3%) (2.4%) 30 (40.2%) (1.4%) Recurring 20 Revenue $35.8 10 (56.6%) Services Subscription AltiumDesigner Term AltiumDesigner Maintenance TASKING Recurring Other Licenses Perpetual New AltiumDesigner Perpetual New TASKING Non Other Octopart Term TASKING Term NEXUS Total Revenue Total * Services includes revenue for TASKING, Altium Designer and - - - NEXUS based Licenses based based Licenses based based Licenses based * - recurring Licenses 10 Revenue – –BoardBoard and and Systems Systems [Martin] BSD - Americas H1 Revenue: 17% 5 Yr Revenue CAGR: 17% BSD – EMEA USD H1 Revenue: 38% 5 Yr Revenue CAGR: 15% 5 Yr Recurring CAGR: 16% 5 Yr Recurring CAGR: 17% $40m $25m $35m $20m $30m $25m $15m $20m $15m $10m $10m $5m $5m H1 FY H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Recurring H1 Revenue: 27% 5 Yr Revenue CAGR: 15% H1 Revenue: 32% 5 Yr Revenue CAGR: 11% BSD – Total BSD – Rest of World 5 Yr Recurring CAGR: 16% Revenue 5 Yr Recurring CAGR: 11% $100m $17m $15m $80m $13m $60m $11m $9m $40m $7m $5m $20m $3m H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 2013 2014 2015 2016 2018 2017 2013 2014 2015 2016 2017 2018 Revenue – TASKING and Octopart MES (TASKING) H1 Revenue: 21.3% 5 Yr Revenue CAGR: 15% Octopart H1 Revenue: 42% 5 Yr Revenue CAGR: 44% 5 Yr Recurring CAGR: 12% $12m $10m $8m $8m $6m $6m $4m $4m $2m $2m H1 FY H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Recurring Revenue 12 Board and Systems – Underlying Metrics Altium Designer New Seats Sold Subscription Pool 35,977 (+1,455) 5,520 6,000 (+339) 32,321 7,351 (+ 988) 5,181 35,000 (+1,187) (+863) 29,320 26,943 (+2,377) 30,000 5,000 4,318 (+2,122) 4,655 13,248 (+ 1,281) (-337) 24,821 25,000 4,000 2,650 20,000 (+473) 3,000 2,162 2,177 1,124 (+266) 15,378 (+ 1,387) (+406) (+15) 15,000 1,916 1,756 2,000 (-160) 10,000 755 (+83) 1,000 771 (+124) 5,000 - ч H1 FY H1 FY H1 FY H1 FY H1 Dec Jun Dec Jun Dec Jun Dec Jun Dec 2014 2015 2016 2017 2018 FY14 FY15 FY16 FY17 FY18 Americas EMEA Rest of World Americas EMEA Rest of World 13 Altium’s Subscription Pool +2,724 -5,605 +1,340 40,000 +6,269 +3,024 -2,909 35,977 34,522 35,000 31,134 30,000 New Lapsed Growth pool ~ Developed Countries Lapsed New 86% of subscription pool 25,000 87.7% renewal rate (FY17 - 86.6%) Rejoins Rejoins & Upgrades Rejoins Rejoins & Upgrades 20,000 Constant pool ~ Developing Countries 14% of subscription pool 15,000 30.1% renewal rate (FY17 - 35.8%) Subscription Pool Size 10,000 5,000 0 June 2016 June 2017 Dec 2017 14 Operating expenses What Drives Altium’s Unique 100% Operating Leverage? 25.8 % 30.0 % We support a Value-Based Market but, we 26.7 % 25.0 % 80% service this market with a commodity selling model 1.2 % EBITDA 60% 19.9 % R&D spend efficiency due to impact of 24.4 % 23.4 % 19.6 % Acquisitions restructured Tasking operations – R&D G&A spending is aligned with our new release 40% drumbeat Sales 32.8 % 36.4 % 33.1 % 32.3 % R&D Sales and Marketing spending aligned to growth projections FY2017.