2013 Annual Report

Transforming business, making life simple Technology One Limited Technology 2013 Annual Report Technology One Limited 2013 Annual Report cus & Fo t Po et men we rk it r a m of M m O o n C e n o i s i V e s i One One One r p r e t vision. vendor. experience. n E n n S io o i t t m lu C pl o o ici Ev m ty, of ple er xity Pow y t P i o x w e e l r p o , y f t m i E c o i v l C o p t l u m i o t S n i o n TechnologyOne is a leading supplier of powerful, integrated enterprise software solutions. We are also Australia’s largest publicly listed software company. Market focus Our core An enterprise vision and commitment Transforming business, beliefs The power of a single, Preconfi gured enterprise making life simple integrated enterprise solution software solutions reduce time, cost and risk Experience the power of a single, A deep understanding and integrated enterprise solution engagement with our seven key built on a single modern markets means we can deliver platform with a consistent to our customers integrated, look and feel. preconfi gured solutions that provide proven practice, streamline implementations and reduce time, cost and risk. 1 Technology One Limited 2013 Annual Report 2013 full year highlights $m Compound Growth 13% $m Compound Growth 20% 40 80 35 70 30 60 25 50 20 40 15 30 10 20 5 10 0 FY FY 0 04 05 06 07 08 09 10 11 12 13 04 05 06 07 08 09 10 11 12 13 0 FY 04 05 06 07 08 09 10 11 12 13 0 FY 04 05 06 07 08 09 10 11 12 13 5 Net Profi t Before Tax 10 Annual Licence Fees 10 up 16%, $35.1m 20 up 14%, $9.1m 15 30 Every day, more than 1,000 leading corporations, government departments and statutory authorities in Australia, New Zealand, Asia, the South Pacifi c and United Kingdom use our world class enterprise software solutions, which we develop, market, sell, implement, support and run. Our core The power of one The power of evolution Simplicity, not complexity Transforming business, beliefs One vision. One vendor. An enterprise solution that Enterprise software, making life simple One experience. adapts and evolves incredibly simple When you invest in a Substantial investment into R&D each Software that embraces consumer TechnologyOne solution you year means we provide our customers concepts and expectations to deliver benefi t from a direct relationship a strong, continuing competitive solutions that are incredibly easy to use with us every step of the way. advantage through an enterprise and remove complexity. We do not use implementation solution that adapts and evolves by partners or value-added resellers. embracing new technologies, concepts We take complete responsibility and innovation. for building, marketing, selling, implementing, supporting and running our enterprise solution for each customer to guarantee long-term success. $m Compound Growth 15% $m Compound Growth 15% 40 60 35 50 30 40 25 20 30 15 20 10 10 5 0 FY 04 05 06 07 08 09 10 11 12 13 FY 0 FY 04 05 06 07 08 09 10 11 12 13 0 FY 04 05 06 07 08 09 10 11 12 13 5 Initial Licence Fees 10 Consulting Services 10 up 5%, $1.6m up 5%, $2.2m 20 15 We build and deliver truly great products and great services that transform business and make life simple for our customers. Our core Transforming business, beliefs making life simple 3 What’s inside 4 TechnologyOne at a glance 31 Investing in the community 5 Financial highlights 33 Financial statements 6 Letter to shareholders 99 Shareholder information 13 Our strategy 100 Corporate directory 22 Our operations 101 Financial calendar 30 Employer of opportunity At a glance Our vision • Property & Rating Transforming business, making life simple • Corporate Performance Management Business Intelligence Our markets Enterprise Budgeting With a deep understanding of our seven key markets, TechnologyOne is the leading supplier of Performance Planning integrated software solutions for more than 1000 • Student Management enterprise-level organisations across: • Asset Management • Local government • Enterprise Content Management • Government • Customer Relationship Management • Education • Health and community services Our preconfi gured solutions • Utilities and infrastructure We currently offer a range of industry-leading preconfi gured enterprise solutions that provide • Financial services proven practice, streamline implementations and • Managed services, including property, reduce time, cost and risk. These include: construction, media, entertainment and • OneCouncil • OnePolytechnic mining services • OneGovernment • OneFRS Our reach • OneCommunity • OneWater TechnologyOne has 14 offi ces throughout • OneHealth • OneEnergy Australia, New Zealand, Asia, the South Pacifi c and the United Kingdom • OneHousing • OneCPM • OnePort • OneResearch Our products • OneBanking • OneAirport TechnologyOne’s comprehensive suite of enterprise software products include: • OneCare • OneWealth • Financials • OneUniversity • OneInsurance • Human Resource & Payroll • Supply Chain 4 Technology One Limited 2013 Annual Report Our fi nances R&D • TechnologyOne has been continually • 20% of revenue reinvested in R&D annually* profi table since 1992 ($35.6m) • 15 consecutive years of record revenue • Largest Australian-owned commercial R&D centre • Strong fi nancial track record over 15 years: • R&D facilities in Australia and Indonesia Profi t After Tax growth up 15% per annum • R&D continued into new and emerging Revenue growth up 17% per annum technologies, including cloud-based Dividend growth up 18% per annum technologies and new innovations *Fully expensed in the period it is incurred. Financial highlights Growth 15yr on last compound 2013 year growth 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Revenue 180,591 7% 17% 169,070 156,742 135,906 122,487 110,215 78,367 66,485 55,165 51,551 48,348 47,380 39,991 28,125 19,638 Licence Fees 37,073 5% 14% 35,447 30,729 26,766 24,333 22,588 18,354 17,150 12,210 11,996 8,075 11,534 10,119 5,843 5,945 Consulting 47,573 5% 12% 45,388 41,746 41,583 41,023 35,882 22,498 18,060 14,846 13,438 14,078 13,830 10,306 9,825 9,746 Annual Support 72,753 14% 24% 63,684 55,268 48,506 43,114 36,343 25,594 21,064 17,173 14,388 12,426 10,704 8,399 5,018 3,772 R&D Expense 35,595 6% 20% 33,524 31,796 26,963 24,908 21,154 13,837 12,675 10,220 9,547 9,306 8,135 7,840 4,690 2,638 Net Profit Before Tax 35,097 16% 14% 30,324 26,675 23,282 20,276 23,129 19,772 16,257 14,429 13,110 10,121 12,844 11,430 8,802 5,576 Net Profit After Tax 26,984 15% 15% 23,559 20,326 17,813 15,684 17,229 14,781 12,314 10,597 9,479 7,030 8,755 7,767 5,750 3,689 Earnings Per Share 8.78 14% - 7.73 6.71 5.93 5.24 5.77 4.97 4.12 3.54 3.17 2.30 2.76 2.49 1.90 - Dividend - Cents Per Share (excluding Special) 5.60 10% 18% 5.09 4.62 4.20 3.75 4.12 3.75 3.41 3.10 2.85 2.50 2.00 1.42 0.50 0.52 Dividend Payout Ratio 64% - - 66% 91% 96% 72% 71% 75% 82% 90% 90% 106% 73% 97% 26% 71% Return on Equity 31% - - 32% 30% 28% 27% 34% 33% 31% 27% 26% 20% 24% 22% 40% - Adjusted Return on Equity* 83% - - 72% 62% 48% 43% 47% 58% 46% 46% 41% 28% 37% 39% 57% - Cash and Cash Equivalents 65,397 28% 21% 51,133 45,357 36,573 30,538 23,684 28,809 22,279 25,623 23,853 20,187 23,244 25,343 14,271 4,679 Net Assets 87,736 19% 30% 73,997 68,370 63,415 57,143 50,514 44,312 39,256 38,500 36,956 35,646 36,644 35,348 14,299 2,267 *Adjusted for net cash above required working capital, which was assumed at $10m. 5 Our people Our difference • More than 800 employees • Our preconfi gured solutions reduce the time, cost and risk associated with implementing • Leadership program to develop enterprise software solutions our future leaders • The only vendor to develop, sell, implement and • Compelling Customer Experience program, support a fully integrated suite of enterprise which supports our people in delivering software solutions outstanding customer service • We run our enterprise software for our • TechnologyOne College delivers ongoing customers so they can focus on their business training to our people Letter to shareholders On behalf of Technology One Limited Analysis of full year results (TechnologyOne) I am pleased to announce our results for the year ending 30 September 2013, with our tenth consecutive year of record revenues Highlights of our results include: and record licence fees. • Net Profi t Before Tax up 16% TechnologyOne has also once again posted strong • Revenue up 7% profi t growth with Net Profi t Before Tax up 16%. • Total Expenses up 5% This is a strong result given the poor operating environment for IT companies over the last few • Expenses excluding R&D up 4% years. Our continuing success in such a challenging • R&D expenses up 6%, which is 20% of revenue environment is a direct result of the signifi cant investment we have made in R&D in recent years.

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