Cloud & Smart Mobile Devices Blue Ocean Equities Conference

Adrian Di Marco

Adrian [email protected] FINAL 4.0* Commercial in confidence March 2015

The Cloud

Redefining business and IT

What have we learned ?

Confusion in the Cloud

. IAAS . PAAS . SAAS . Private Cloud . Hybrid Cloud . Under the covers you find the same players . Amazon . Microsoft . Dimension Data Confusing and Complex Long Term – The Cloud Henry Ford Hosting - Customised For You

Hand crafted to your specific needs SaaS – Mass Production

Production line of servers running exactly the same software SaaS – Mass Production

 Economy of scale . Massively scalable, Highly efficient , Cost effective  Highly resilient & fault tolerant  Elastic - add capacity dynamically  Significant cost savings

Future proof - We invest millions annually to make our production line and software quicker, better, faster • Continuous improvement to our enterprise software - more functions, features and capabilities • Continuous improvement to the production line - scalability, elasticity, reliability, security, privacy etc..

Hosting - Customised

X Economy of scale X Highly resilient & fault tolerant X Elastic X Significant cost savings

X Future Proof – you only get what you pay for

Henry Ford Problem…

You can have any color as long as it's black.

Henry Ford SaaS – Mass Production

SaaS – Highly Configurable Experience

Marriage of infrastructure and software to create a business service

Guaranteed service level that encompasses infrastructure and software

Guaranteed performance of business processes Software as a Service Hosting Massive economy of scale No economy of scale

Only a small number of companies globally doing SaaS TechnologyOne Cloud

TechnologyOne Cloud 5.0

 Massively scalable, highly efficient and elastic  Highly resilient & fault tolerant  Highly Configurable – own configuration  Data is Secure – own database  Significant cost savings, No capex  Simple & easy - We do it all  Future proof - We invest millions of dollars annually

Enterprise Software as a Service Future of Enterprise Software, Today Status of TechnologyOne Cloud

 Launched Evolve Feb 2014  Early adopters program finished  11 customers now live, 26 in progress  TechnologyOne Cloud 5.0 mid 2015 . Start of our mass production architecture  Strategy to grow this business . New customers to the Cloud . Existing ‘on premise’ customers to Cloud . Target of 100 customers end 2015

Transition of TechnologyOne to the Cloud

 Expect a smooth transition of our business model to the Cloud over next 5+ years  Significant benefits for us as we transition our business to the Cloud . Streamline our business, reduce costs . Reduce time to market . Increase innovation and creativity . Improve our customers’ experience . More resilient business model . Strong competitive advantage ANZ Competitive Landscape

The Competitive Landscape

Oracle SAP New expanding market coverage $1,000m

Current market coverage TechnologyOne

Microsoft Businss Solution $100m NetSuite INFOR (Sun Systems) SAP/Business One $30m MYOB CLIENT TURNOVER

Legend: Hosted SaaS The Future is SaaS Mobile Devices Ci Anywhere

 Supports any and all mobile devices  Support various form factors/sizes  Adaptive behaviour  Deep integration to the mobile devices  Consumer software – simple to use  Beautiful software

Ci Anywhere Enterprise software Any device. Any where. Any time.

Incredibly Simple

Status of Ci Anywhere

Ci Anywhere

 Launched at Evolve Feb 2014  Early adopters in progress, positive feedback  Deliver all our enterprise functionality on this platform over next 2 years  Significant competitive advantage

Enterprise software Any device. Any where. Any time.

Positioned well for the future…

Cloud first, mobile first world

TechnologyOne Cloud Enterprise Software as a Service

Ci Anywhere Any device. Any where. Any time.

Historical Performance

Key metrics over last 15 years … 120

 Revenue - 15% per annum compound 100 . Even through the Dot-Com and GFC 80

 Initial Licence Fees - 15% per annum compound $'m 60  Annual Licence Fees - 22% per annum compound  Profit After Tax - 13% per annum compound 40

 Dividends - 22% per annum compound 20

 Net Assets - 15% per annum compound - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Profit After Tax Annual Licence Fees  Return on Equity – 30+% Net Assets Initial Licence Fees Dividends

Doubling in size every 5+ years for last 15 years Cloud & Smart Mobile Platform for our Continuing Growth

Consistent long term strategy

What makes us unique ...

The Power of One

We take complete responsibility for building, marketing, selling, implementing, supporting and running our enterprise solution for each customer to guarantee long term success.

We do not use implementation partners or resellers

Brief TechnologyOne Overview ... TechnologyOne Overview

Formed in Employees 300+developers 1000+ Revenue corporations, government 1987 1000+ in R&Dcentre and statutory authorities $195+m

One of ’s most successful software companies

Continually Doubles Invest 20% 14 international offices in profitable in size of revenue back into Australia | South Pacific | Asia for over 23 years Every 4+ years R&D 1000+ high profile customers TechnologyOne Overview

Financially very strong¹ .... . Cash and Equivalents $80.2m . Return on Equity 30+% . Adjusted Return on Equity² 76+% . Debt/Equity 4% . Interest Cover 168 . Continually paid dividends since 1996 (19 years) . Continually profitable since 1992 (23 years)

1 th 2 as at 30 Sept 2014 Adjusted for net cash above required working capital, assumed at two months of staff costs

What makes us unique ...

We are one of only a few Enterprise Vendors globally...

 Single supplier of a suite of 12 products  Best of Breed functionality We believe in the  Deeply integrated freedom of choice  Common platform our solution is  Consistent user interface modular by design  Embraces new & emerging technologies

The power of a single, integrated, enterprise system to streamline your business, reduce costs and embrace new technologies What makes us unique ...

We focus on seven key markets...

 Deep understanding and engagement in our markets We sell to asset and  Deeply integrated preconfigured solutions service intensive  Proven practice organisations.  Streamlined implementations We do not service  Reduce time, cost and risk retail, distribution or manufacturing industries. Market focus and commitment

What makes us unique ... The power of evolution Our enterprise solution adapts and evolves to new technologies

Green screen Client server Connected Intelligence Cloud Computing and Smart Mobile Devices

99% of customers have continued with us through this journey ... Our Vision

Clear & focused vision ...

Transforming business, making life simple Robust Revenue Model

Robust Revenue Model ... . Initial Licence - based on usage (number of users ) • Matrix of licensable products & modules (approx 300 modules over 12 products) • Once off fee – invoiced on contract signing . Implementation Services - fee for service • $1 Services : $1 Initial licence • Once off fee – invoiced as services rendered . Annual Licence Fee • 22.5% of Initial Licence • Re-occurring every year Robust Revenue Model

Initial Implementation Annual Annual Annual Licence Service Licence Licence Licence …. Initial Buy -Based on: No of Users, Products & Modules

Initial Annual Annual Annual Buy Addn Users Licence Licence Licence Licence …. - Additional Fee

Buy Addn Modules Initial Implementation Annual Annual Licence Licence …. - Additional Fee Licence Service

Initial Implementation Annual Annual Buy Addn Products** Licence Service Licence Licence …. - Additional Fee ** On average our customers have 3.5 products out of a product range of 12 products TechnologyOne Overview

Diversity of revenue streams from multiple: • Products (12) • Vertical markets (7) • Geographies (12) – All states of Australia, New Zealand, South Pacific, Asia and UK

Strong, very loyal blue chip customer base • We provide a mission critical solution – ‘sticky customer base’ • 60+% of our revenues generated from existing customers each year – Annual licences, increase usage, new modules, new products, ongoing services etc..

TechnologyOne Overview

. One of Australia’s largest software houses, specialising in the research, development and commercialisation of enterprise software – invest $37m+ in R&D per year . Connected Intelligence (Ci) is our current generation enterprise suite . Next generation of our enterprise suite, Ci Anywhere is now released . TechnologyOne Cloud is now available . Diversity of revenue streams from… . Multiple geographies, 12 products, seven vertical markets

Historical Performance

Key metrics over last 15 years … 120

 Revenue - 15% per annum compound 100 . Even through the Dot-Com and GFC 80

 Initial Licence Fees - 15% per annum compound $'m 60  Annual Licence Fees - 22% per annum compound  Profit After Tax - 13% per annum compound 40

 Dividends - 22% per annum compound 20

 Net Assets - 15% per annum compound - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Profit After Tax Annual Licence Fees Net Assets Initial Licence Fees Dividends

Doubling in size every 4+ years for last 15 years