Technology One Limited a N N U a L R E P O R T 2 0
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The TechnologyOne Difference is defined by our Power of One value proposition, in that we take total responsibility for the success of every customer’s investment in our world-class fully integrated enterprise business software solutions. From technology through to TechnologyOne Limited services and support, we partner directly with our customers to ensure their ongoing success. We pride ourselves on delivering innovative enterprise business software solutions that set the standard for others to follow. We work relentlessly to build awesome software that has a profound effect on the user experience by engaging, empowering and exciting users. TechnologyOne invests approximately 20% of its revenue each year into research and development, which allows us to respond with speed ANNUAL REPORT The TechnologyOne and agility to market changes and our customers’ changing business Technology One Limited Difference requirements. We lead the market in the delivery of new technology that ANNUAL REPORT 2 0 0 8 significantly enhances the way our customers do business. Our customers rely on us to deliver a best-in-class suite of products, but also on our significant experience and value-added services. We build best practice into our world-class software solutions by listening to their needs and learning from their experience. TechnologyOne employs a team of people who are innovative and 2 0 0 8 challenge conventional thinking. They stand out from the crowd because they are empowered to make a difference. We encourage leadership and the belief that together we can achieve anything. The TechnologyOne difference is that in partnership with our customers, anything is possible. TechnologyOne’s vision is to deliver comprehensive and deeply integrated enterprise software solutions that have a profound and positive effect on our customers’ experience. We achieve this by: • Providing exceptional customer service and taking total responsibility for each customer by developing, marketing, selling, implementing and supporting our solutions - the Power of One advantage • Targeting key vertical markets where we deliver fully integrated end-to-end enterprise software solutions • Delivering functionally rich solutions that work ‘out of the box’ with inbuilt flexibility, that do not require code Our Vision customisation • Evolving our solutions in real time with our customers, and providing them with long term security by delivering a seamless and straightforward upgrade path • Embracing new technologies as they become available, to significantly enhance the way our customers do business • Employing a team of people who are innovative and challenge conventional thinking, and who are empowered to make a difference TechnologyOne at a Glance 2 Financial Highlights 3 Letter to Shareholders 5 Evolving our Strategy 9 Our Business Model - The House of Products 11 Review of Operations - Operating Officers 12 Review of Operations - General Managers 21 Employer of Opportunity 27 Targeted Vertical Markets 29 Our Integrated Solution Suite 30 Contents Corporate Citizenship 31 Financial Statements 33 Shareholder Information 97 Corporate Directory 98 Financial Calendar 99 Notice of Annual General Meeting The Annual General Meetings of Technology One Limited for the transitional period of three months ending 30 September 2007, and for Financial Year 2008 will be held on Friday 6 February 2009 at 10.30am at the Stamford Plaza Brisbane, Corner Edward and Margaret Streets, Brisbane Qld 4000. The business to be presented is set out in the separate Notice of Meeting issued with a Proxy Form to shareholders with this report. Technology One Limited 2008 Annual Report n TechnologyOne at a Glance Our Main Activities Did You Know? TechnologyOne is a leading supplier of • TechnologyOne has doubled its powerful integrated enterprise software revenue, profits and employees solutions for the following markets: approximately every two and a half • Financial services years over the last 15 years. • Education • Large corporations, government departments, universities and statutory • Health, Community Services and authorities rely on TechnologyOne Not for Profit software to improve their business • Local Government performance. “TechnologyOne • Government • More than 15,000 people use • Utilities TechnologyOne Financials every day. Access, together • Managed Services, including • More than 50% of universities in Property, Construction, Media and Australia use TechnologyOne software with Webforms, Entertainment. solutions to meet their business needs. is helping us We develop, market, sell, implement and • More than 40% of Australian and New support our own world-class software Zealand rates notices are produced provide an solutions which are used by thousands using TechnologyOne software. of large organisations and corporations • We have the largest installed innovative, in Australia, New Zealand, Asia and the customer base of enterprise solutions United Kingdom. in Australian Federal Government technology- departments and agencies. Our Products • We are a major provider to the based service to TechnologyOne’s comprehensive suite of community services sector, asset our customers. business software products include: intensive industries and the health care • TechnologyOne Financials sector. ECM will be an • TechnologyOne Human Resource & • Our Connected Intelligence solution Payroll is a generation ahead of the functionality-centric ERP (Enterprise integral element • TechnologyOne Supply Chain Resource Planning) applications of our as we continue • TechnologyOne Business Intelligence competitors. • TechnologyOne Budgeting • TechnologyOne is the only enterprise to improve our • TechnologyOne Performance Planning software solution provider to customer service • TechnologyOne Property & Rating have successfully delivered a new generation enterprise platform to the • TechnologyOne Student Management levels and drive market and seamlessly migrated its • TechnologyOne Works & Assets customers across efficiencies • TechnologyOne Enterprise Content • More than 80% of customers have Management now successfully and easily migrated throughout the • TechnologyOne Customer Relationship across to our new Connected Management. Intelligence series of applications. organisation.” We also provide large scale custom software development services to build Pauline Webb bespoke systems. Customer Service Manager, Our Finances City of Canada Bay Council TechnologyOne has been continually profitable since 1992, returning compound annual growth of 31% per annum Net Profit Before Tax. Our Reach TechnologyOne operates throughout Australia, New Zealand, Asia, the Pacific region and the United Kingdom. Our People We employ more than 670 staff throughout our offices. 2 n 2008 Annual Report Technology One Limited Financial Highlights Revenue Full Year 2008 v 2007 2008 2007 Variance Increase RevenueRevenue $ (000) $ (000) $ (000) % $(000) 120,000 $(000) 120,000100,000 Revenue (Pre 3rd party costs)1 108,874 77,054 31,920 41% 100,00080,000 Expenses2 63,592 43,277 20,315 47% 80,00060,000 60,00040,000 EBITDAR3 45,282 33,777 11,505 34% 40,00020,000 20,0000 R&D4 21,154 13,837 7,317 53% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 EBITDA5 24,128 19,940 4,188 21% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 net profit after tax Net Profit After Tax Depreciation 1,861 1,375 486 35% net profit after tax $(000) 20,000 $(000) Amortisation of Intangibles 211 28 183 654% $(000) 20,000 15,000 FOREX 268 78 190 242% 15,000 10,000 6 EBIT 21,788 18,459 3,329 18% 10,000 5,000 Net Interest Income 1,341 1,313 28 2% 5,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Net Profit Before Tax 23,129 19,772 3,357 17% 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Net Profit After Tax 17,229 14,781 2,448 17% $(000) $(000) Research & Development 25,000 $(000) 25,000 Earnings Per Share cents reported 5.77 4.97 0.80 16% 20,000 20,000 Dividend Per Share cents 4.12 3.75 0.37 10% 15,000 15,000 R&D 10,000 R&D Return on Equity (ROE) 36% 35% R&D 10,000 5,000 Cash and Cash Equivalents 23,684 28,809 (5,125) (18%) 5,000 0 Net Operating Cash Flows 11,782 17,715 (5,933) (33%) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Debt/Equity 4% 4% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 dividend per share Cents dividend per share EBITDA Margin (Total Revenue) 22% 26% Cents dividendDividend per Per sharSharee 5 Cents 5 45 Net Profit Before Tax Margin (Total Revenue) 21% 25% 4 4 3 R&D as Percentage of Total Revenue 19% 18% 3 2 1. Excluding Interest 2 1 2. Excluding R&D, Depreciation, FOREX and Amortisation 1 0 3. Earnings Before Interest, Tax, Depreciation, Amortisation and R&D 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 4. Research and Development 2000 2001 2002 2003 2004 2005 2006 2007 2008 2000 2001 2002 2003 2004 2005 2006 2007 2008 5. Earnings Before Interest, Tax, Depreciation and Amortisation 6. Earnings Before Interest and Tax Technology One Limited 2008 Annual Report n While the Department of Prime Minister and Cabinet leads the nation, it relies on another leader for its financial management - TechnologyOne. We have the largest installed customer base of enterprise solutions in Australian Federal Government departments and agencies. n 2008 Annual Report Technology One Limited Letter to Shareholders On behalf of Technology One Limited We continue to grow both the sales and Acquisitions (TechnologyOne) I am pleased to consulting team in the United Kingdom, A significant event during the year announce our fifth consecutive year of and remain confident of this becoming a was the acquisition of the Avand record revenues and profit.