Pivoting to the Cloud with Growing Momentum for a Stronger Second Half
ALTIUM HALF YEAR FISCAL 2021 INVESTOR PRESENTATION
Aram Mirkazemi CEO 15 February– 18 February 2021 Martin Ive CFO VIRTUAL Kim Besharati Chief of Staff Disclaimer
This presentation has been prepared by Altium Limited (ACN 009 568 772) Future performance - Forward looking statements, opinions and estimates provided in and is for information purposes only. It does not constitute financial product this presentation are based on assumptions and contingencies which are subject to or investment advice or a recommendation to acquire Altium shares and has change without notice, as are statements about market and industry trends, which are been prepared without taking into account the objectives, financial situation based on interpretations of current market conditions. Forward looking statements or needs of individuals. Before making an investment decision prospective including projections, guidance on future earnings and estimates are provided as a investors should consider the appropriateness of the information having general guide only and should not be relied upon as an indication or guarantee of future regard to their own objectives, financial situation and needs and seek legal performance. An investment in Altium shares is subject to investment and other known and taxation advice appropriate to their jurisdiction. Altium is not licensed to and unknown risks, some of which are beyond the control of Altium Limited. No provide financial product advice in respect of Altium shares. representation or warranty, express or implied, is made as to the fairness, accuracy, With a unique range of technologies, Altium helps organizations and design completeness or correctness of the information, opinions and conclusions contained in communities to innovate, collaborate and create connected products while this presentation. To the maximum extent permitted by law, none of Altium employees, remaining on time and on budget. Products provided are ACTIVEBOM®, ActiveRoute®, Altium 365®, Altium Concord Pro™, Altium Designer®, Altium its directors, employees or agents, nor any other person accepts any liability, including, NEXUS®, Altium Vault®, Autotrax®, Camtastic®, Ciiva™, CIIVA without limitation, any liability arising out of fault or negligence, for any loss arising from SMARTPARTS®, CircuitMaker®, CircuitStudio®, Common Parts Library™, the use of the information contained in this presentation. In particular, no representation Draftsman®, DXP™, Easytrax®, EE Concierge®, NanoBoard®, NATIVE or warranty, express or implied is given as to the accuracy, completeness or correctness, 3D™,OCTOMYZE®, Octopart®, P-CAD®, PCBWORKS®, PDN Analyzer™, Protel®, Situs®, SmartParts™, Upverter®, X2®, XSignals®, PCB:NG®, and likelihood of achievement or reasonableness of any forecasts, prospects or returns Gumstix®. 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 and contingencies. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is Financial data appropriate in light of your particular investment needs, objectives and financial All dollar values are in US dollars (US$) unless as otherwise presented. circumstances.
2 Agenda
1 2021 Half Year Highlights and Significant Achievements
2 2021 Half Year Financial Performance and Metrics
3 Altium’s Strategy for Dominance and Transformation
4 Growth Engines and Flywheels for Dominance and Transformation
5 Appendix: Electronic Industry and Company Overview Half Year FY21 Financial Summary
$100M $9.7M $9.6M $90M TASKING Revenue decline of 4% Revenue COVID’s second wave and pivot to cloud $8.4M impacted first half performance $80M Continuing $83.1M Revenue EBITDA margin of 33.8% $80.0M Margin is impacted by decline in revenue and continued investment in cloud $70M $6.3M 19% -4% Revenue growth 12% increase in subscriber $69.7M $60M base to 52,157 Renewals remain resilient through COVID $5.2M and strengthened by pivot to cloud 22% $50M $5.4M $57.0M Altium Designer new seats 3,590 Return to full pricing before the second wave of $31.8m COVID impacted new perpetual license sales $40M 31% $43.5M 38.3% $26.1m $27.0m 33.8% Continuing $30M $37.2M 37.4% 17% EBITDA/ EBITDA Margin 10% $17.7m (prior years revised for comparative purposes to 31.1% $20M $13.1m exclude Tasking) $9.9m 30.2% 26.5% $10M
H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21 4 Pursuing Dominance and Transformation from a Position of Strength
Financial Altium Designer Altium 365 Performance Dominance Adoption
Altium is the fastest growing EDA company Altium Designer is the most widespread The world’s first digital platform for with 8 consecutive years of double-digit growth professional PCB design tool used by design and realization of electronics (prior to COVID) and expanding margin over 100,000 engineers worldwide hardware gaining strong early adoption
$88.3m $20.7m $27.0m 3,590 Altium Designer Twice Yearly Cash PBT EBITDA New Seats Sold Software Updates (Down 5%) (Down 23%) (Down 15%) (Down 15%) Over 9,300 Over 4,400 Active Users Active Accounts No R&D A$4B 33.8% EBITDA Margin Total (Up 83%) (Up 69%) Expense Market Dominance (Down from 38.3%) Capitalization Cap in China 52,157 Seats on Subscription 17% 5 Year Over 30 (Up 12%) $80.0m Revenue Years of Revenue CAGR (Down 4%) R&D Launched
AU19c Direct Altium Designer is Used Debt 65% Presence in 1 May 2020 Dividend by over 30,000 Free Recurring Revenue Most (Down 5%) Markets Companies
* The above represents continuing operations
5 Altium 365 Strong Early Adoption
Commercial Licensed Registered Accounts Seats Users Altium Commercial Accounts represent businesses Altium Licensed Seats represent predominantly Altium Registered Users represent commercial designers, and entities that have at least one commercial license Altium Designer and Altium Designer SE licenses, engineers and other professionals who have registered for of Altium software (Altium Designer 10 or later) but also include NEXUS and CircuitStudio clients access to Altium software and Altium 365 platform
Commercial / 34.2K 160.2K Professional 84.5K (Up 5.9%) (Up 8.1%) Active (Up 5.6%)
On Altium Designer 20.3K 52.6K 125.4K Subscription (Up 3.6%) (Up 2.7%) (Up 7.2%)
Altium 365 4.6K 15.6K 15.4K Exploratory (Up 67.3%) (Up 56%) (Up 104.3%)
Altium 365 1.5K 4.4K 8.6K Full Adoption (Up 90%) (Up 65%) (Up 127%)
4,462 9,389 Monthly Active Altium Monthly Active 365 Accounts Altium 365 Users (Up 69%) (Up 83%) All numbers are as of 13 February 2021 and compared to 6 corresponding numbers at the end of July 2020 Altium 365 Adoption Accelerates
7 Updated Flight Path to 2025
Rebuilding Performing Leading Dominating & Transforming...
$500M $100M $200M $500M * Revenue Revenue Revenue $450M 35,000 50,000 $345-423 100,000 Subscribers Subscribers 20-25% Subscribers Recurring $400M Electronic Design (BSD) Revenue
- Pivot to Cloud $287-338 $350M - TASKING Divestment 20-25% 60-80% 80% - COVID Impact
$300M $240-270 $500M * $500M * 18-22% Revenue Revenue
$250M $202-222 13-17% 100,000 100,000 Revenue $190-202 $189M 0-7% *** $134-186 Subscribers Subscribers Rev. Growth % 10% $200M $172M 39-44% 23% $140M $103-139 20-30% 20% 26% 36-41% $150M $111M 18% $81-105 $94M $73-87 34-39% $80M 17% $70-83 Non-recurring $76M 36-39% $71M 13% 37-41% Electronics Supply Chain $100M $62M $66.8M 40% Revenue 15% & Manufacturing (NEXAR) $55M 12% 38.9% 14% $48.2M 34.4% $36.4M $24.8M $30.3M 32.9% $50M $21.4M 31.0% 32.4% $9.2M 30.1% EBITDA * The target revenue of $500M may include 10-20% from future acquisitions. $3.3M 14.8% ** The target revenue ranges (2021-2025) exclude revenue from future acquisitions. 5.9% EBITDA Margin % *** Reduced from 6-12% down to 0-7% as the revenue from TASKING is not removed from FY2020 and prior periods. 2012 - 2014 2015 – 2017 2018 - 2020 2021 – 2025 ** 8 Half Year FY21 Significant Achievements
1st Quarter 2nd Quarter
Altium’s Altium 365 Hard Pivot Gains to Cloud Momentum
Q1 Q2
• Implemented organizational change to • Altium 365 adoption accelerates with over separate CAD software from Cloud business 9,300 active users and 4,400 active accounts and sales into high-volume (digital sales) and • Released Altium Designer 21 with a range of high-touch (value sales) new capabilities targeting next generation rigid flex boards, length tuning support for high- • CAD business to drive dominance and Cloud speed designs, SPICE simulation and deeper business to drive transformation integration with Altium 365
9 Four Flywheels for Dominance and Transformation
Design Tools Adoption Cloud Adoption
• Seats on Subscription • AD Seats on Altium 365 • Seats Sold Subscription (SaaS) • PCB Design Projects on Altium 365 • Component/Libraries on Altium 365 100K Seats on Subscription • Active Users • API Calls • Concord Pro Accounts • Partners • NEXUS Accounts • Web Traffic
Design Platform Adoption Ecosystem Adoption
10 Agenda
1 2021 Half Year Highlights and Significant Achievements
2 2021 Half Year Financial Performance and Metrics
3 Altium’s Strategy for Dominance and Transformation
4 Growth Engines and Flywheels for Dominance and Transformation
5 Appendix: Electronic Industry and Company Overview First Half 2021 Group Revenue by Type
$80.0M $25.3M $1.1M $1.4M (1.8%) (100%) (31.6%) (1.4%) $80m Other Non-recurring $70m $25.3 Perpetual Non-recurring $0.2M (31.6%) Licenses Revenue $60m $10.7M $27.8 (34.7%) (13.4%) (0.3%) Other Recurring $50m $28.6M $10.7 Search Revenue (35.8%) (13.4%) $40m
$30m Maintenance Recurring $28.6 Revenue (35.8%) Subscription $20m $5.7M $52.2 (65.3%) $4.6M $1.8M (7.1%) $0.6M (2.2%) $7.5 $10m (5.8%) Term Licenses (0.7%) (9.3%) $5.2 AD/365 SaaS
(6.5%) Subscription/TBL
Term Designer Altium Term Pro ConcordNexus,
Revenue Total
Term 365 Designer Altium SaaS 365 Designer Altium Subscriptions Designer Altium Revenue Search Octopart Recurring Other Licenses Perpetual Altium Services Non Other
-
recurring
- -
-
based Licenses based Licenses based
Based Licenses Based Subscription Subscription
Perpetual Licenses All revenue recognized upfront Search Revenue Octopart search revenue, pay-per-click revenue Maintenance Subscription Straight line revenue recognition Term Licenses A portion of the revenue is recognized upfront AD/365 SaaS Subscription Based on Altium 365 subscription, straight line revenue recognition AD/365 Term Licenses Based on Altium 365 software licenses 12 First Half Historical Group Revenue by Type
$90m $83.1M $80.0M $80m 3.8 2.5 $69.7M $70m 1.9 Non-recurring $25.3 29.6 $56.5M (31.6%) Revenue $60m $27.8 (34.7%) 2.5 26.1 $50m $43.5M $10.7 (13.4%) 20.9 10.1 $40m 1.8 10.0 16.4 Recurring $30m 5.0 $28.6 Revenue (35.8%) 3.8 31.3 $52.2 (65.3%) $20m 28.1 25.5 19.9 $10m $7.5 (9.3%) 8.3 $5.2 1.6 2.6 3.6 (6.5%)
H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21
Perpetual Licenses All revenue recognized upfront Search Revenue Octopart search revenue, pay-per-click revenue Maintenance Subscription Straight line revenue recognition Term Licenses A portion of the revenue is recognized upfront AD/365 SaaS Subscription Based on Altium 365 subscription, straight line revenue recognition AD/365 Term Licenses Based on Altium 365 software licenses 13 Board and Systems (BSD) Revenue by Region
$80m $72.4M Board and $68.2M Systems (BSD) CAGR 14% $60.8M △ 6% 5.8 △ 12% 6.5 $60m $52.0M △ 27% 12.5 Rest of world △ 4% 5.5 CAGR 12% ▽ -15% 10.7
△ 31% 5.3 $40.0M △ 49% 9.9 China $35.7M △ 30% 6.6 CAGR 22% △ 18% 24.2 $40m ▽ -2% 23.7 △ 12% 4.0 3.6 20.5 EMEA △ 28% 5.2 △ 17% 4.0 △ 43% 17.6 CAGR 17%
△ 14% 12.3 10.8 $20m Americas
△ 20% 29.9 ▽ -9% 27.3 CAGR 10% △ 11% 24.9 △ 22% 22.5 17.3 △ 7% 18.5
H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21
Americas EMEA China Rest of world 14 Board and Systems (BSD) Revenue by Product
$72.4M $68.2M 4.3 $60.8M ▽ -16% 3.6 2.8 $80m ▽ -11% 2.5 $52.0M 0.5 1.4 ▽ -64% 0.5 1.8 0.6 NEXUS 1.6 $40.0M 1.3 Concord Pro $60m 0.9 Other 0.6 $35.7M (CircuitStudio, 0.8 Solidworks, PDN Analyzer) 0.6 0.8 $40m 0.3 Altium Designer 63.9 ▽ -4% 61.6 56.9 49.2
$20m 37.8 34.8
H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21
15 NEXAR Revenue by Product
NEXAR Octopart Clicks
$12.5m $11.8M 8.000.000 $10.7M 1.0
7.000.000 $10.0m $8.9M 1.7
6.000.000
$7.5m 5.000.000
$4.9M 10.8 4.000.000 9.0 $5.0m 6.0m 5.9m $3.5M 8.9 3.000.000 5.4m 5.3m 5.3m 4.7m $2.1M 4.9 2.000.000 $2.5m 3.5m 3.5 2.1 1.000.000
H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21 H1 H2 H1 H2 H1 H2 H1 FY18 FY18 FY19 FY19 FY20 FY20 FY21
Octopart Smart Manufacturing 16 Board and Systems (BSD) – Underlying Metrics
Altium Designer New Seats Sold Subscription Pool All years include term-based licenses
52,157 5,046 55,000 46,693 51,006 (+6,457) (+7,308) (+5,464) 5,000 5,948 50,000 (+561) 4,471 4,205 40,236 43,698 4,500 (+661) (+3,455) (+4,872) 5,240 45,000 (+502) 3,590 36,781 38,826 4,000 3,544 (+3,732) (+3,539) 20,603 3,670 (-615) (+893) 40,000 33,049 35,287 (+2,744) 583 (+3,127) (+3,751) 3,500 3,343 (+81) 35,000 29,922 31,536 3,019 (+2,742) (+2,948) 2,651 1,265 3,000 (+473) 27,180 28,588 2,562 (-288) 30,000 2,162 2,178 2,500 (+406) (+16) 25,000
2,000 1,756 20,366 20,000 915 (+1,657) (-199) 1,500 15,000
1,000 10,000 827 (-209) 500 5,000
H1 FY H1 FY H1 FY ч H1 FY H1 FY H1 FY H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2015 2016 2017 2018 2019 2020 2021
Americas EMEA China Rest of World Americas EMEA China Rest of World 17 Growth in Subscription Pools
55,000 55,000
New Seats
Rejoins & & Rejoins Upgrades Lapsed Seats
50,000 50,000 +2,610 +862 -2,227 45,000 43,094 45,000 41,849
40,000 40,000
35,000 35,000
30,000 30,000
25,000 25,000
New Seats Upgrades Lapsed Seats 20,000 20,000 & Rejoins
15,000 15,000 +745 SubscriptionSize Pool SubscriptionSize Pool +1,872 -2,711 9,157 9,063 10,000 10,000
5,000 5,000
0 0 June Dec June Dec 2020 2020 2020 2020
Growth Pool (Developed Countries) Constant Pool (Developing Countries) 86.7% renewal rate (FY20 - 88.4%) 43.5% renewal rate (FY20 - 36.6%) 18 All numbers include term-based licenses Operating Expenses
Operating Expenses as a Percentage of Revenue Operating Expenses as a Breakdown of Revenue
83.1 (-2.0) 80.0 $80m -2.4% -3.1% (-2.5) 100% 69.7 $70m 33.8% 31.8 26.5% 30.2% 27.0 31.1% 37.4% 38.3% 80% $60m 57.0 26.1 3.3% 0.2% 3.4% 0.4% $50m 43.5 12.6 17.7 60% 21.4% 15.7% 0.3 15.0 17.9% 18.0% 37.2 25.8% 19.9% $40m 13.1 1.9 9.9 13.9 40% $30m 0.1 10.2 28.4 1.2 34.1% 33.5% 35.5% 11.2 26.0 31.9% 31.3% 29.4% $20m 7.9 20.5 20% 19.1 $10m 12.7 13.9 18.1% 14.5 14.8% 12.0% 14.1% 12.8% 14.7% 12.3 5.5 5.2 8.0 8.9
H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021
EBITDA One off Costs incl Acquisitions General & Administration Sales & Marketing Research & Development
19 Balance Sheet
Dec-20 Jun-20 Dec-19 Jun-19 $ '000 $ '000 $ '000 $ '000 Cash and cash equivalents Cash and cash equivalents 88,318 93,083 80,666 80,531 Trade and other receivables 46,823 59,655 45,520 45,833 Other current assets 11,007 7,455 7,514 5,108 Assets classified as held for sale 10,759 - - - $100m Total current assets 156,907 160,193 133,700 131,472 93.1 88.5* Trade and other receivables 3,878 3,343 2,742 2,285 Property, plant and equipment 19,609 21,113 19,683 7,762 80.5 Intangible assets 48,664 49,690 50,265 51,534 $80m Other non-current assets 57,103 61,723 83,041 84,873 Total non-current assets 129.254 135.869 155,731 146,454
Total assets 286,161 296,062 289,431 277,926
Trade and other payables 11,541 16,629 8,679 16,278 $60m Tax liabilities 758 6,587 6,096 5,705 52.5 Provisions 2,719 2,792 3,053 2,109 Lease liabilities 5,635 5,480 4,932 0 44.3 Customer contract liabilities 45,302 50,193 45,883 48,277 38.1 Liabilities classified as held for sale 7,560 - - - $40m Total current liabilities 73,515 81,681 68,643 72,369
Deferred tax 8,206 8,820 9,256 5,833 Provisions 298 2,755 3,525 6,407 Customer contract liabilities 9,355 10,013 7,523 6,875 $20m Lease liabilities 7,580 8,453 7,794 - Other liabilities 6 7 9 1,884 Total non-current liabilities 25,445 30,048 28,107 20,999
Total liabilities 98,960 111,729 96,750 93,368 $0 Net assets 187,201 184,333 192,681 184,558 FY16 FY17 FY18 FY19 FY20 H1 FY21 Contributed equity and reserves 149,212 147,702 146,265 145,137 Retained profits 37,989 36,631 46,416 39,421 Total equity 187,201 184,333 192,681 184,558 *Includes TASKING cash held for sale 20 Cash Flow
H1 FY21 H1 FY20 H1 FY19 H1 FY18 Dividends paid/declared $ '000 $ '000 $ '000 $ '000 Cash flows from operating activities Final Receipts from customers 91,132 95,325 81,601 64,501 Interim Payments to suppliers and employees (62,253) (71,440) (54,234) (48,965)
Payments for expenses relating to acquisitions - - - (347)
Net interest received 107 592 279 32 40AUD¢ 19 Interest and other finance costs paid (360) - - - Net income taxes paid (9,921) (3,686) (831) (348) 35AUD¢ 18 Operating cash flows 18,705 20,791 26,815 14,873
30AUD¢ Capital Expenditure 14 Payments for property, plant and equipment (1,327) (1,733) (2,481) (1,592) 25AUD¢ Payments for intangibles (588) (262) (13) (231) 12 Free Cash Flow 16,790 18,796 24,321 13,050 20AUD¢ 10 20 19 Cash flows from investing activities 16 15AUD¢ Payments on contingent and deferred considerations (50) (3) (5,471) (9,048) 13 11 Cash flows from financing activities 10AUD¢ 10 Dividends paid (18,351) (16,050) (13,327) (12,534) Repayment of borrowings (2,828) (2,720) (3) (6)
5AUD¢ (Decrease)/increase in cash and cash equivalents (4,439) 23 5,520 (8,538) Effects of exchange rate changes (149) 112 46 290 0 Total (decrease)/increase in cash and cash equivalents (4,588) 135 5,566 (8,248)
FY16 FY17 FY18 FY19 FY20 FY21
21 Cash Conversion
Cash conversion rate H1 FY20 H1 FY21 H1 FY21 H1 FY20 Reconciliation to EBITDA USD’000 USD’000
Operating EBITDA 30,649 34,631
Dividends 46% Non-Cash Items in EBITDA 60% Share-based payment 1,105 851 Changes in 28% Unrealised foreign exchange differences (297) (12) working capital 0% Interest (252) 591 Lease payments 8% 9% Earnout (2,500) (2,000)
Purchase of property, 6% Changes in working capital plant and equipment 6% Receivables 1,098 (144)
11% Inventories (118) (598) Tax payments 32% Deferred revenue 1,106 (1,746) 1% Non-cash items Other operating assets (434) 1,514 7% Payables and provisions (1,731) (8,610) Movement in cash 0% -14% Other items
Tax paid (9,921) (3,686)
Operating cashflow 18,705 20,791 -20% 0% 20% 40% 60%
22 Half Year FY21 Results Key Metrics *
H1 H1 +/- H1 H1 H1 H1 H1 H1 USD millions FY21 FY20 % FY19 FY18 FY21 FY20 FY19 FY18
EPS Revenue (excl. interest) 89.6 92.8 -3% 78.1 63.2 15.03 17.65 18.00 11.48
Reported expenses 58.9 56.0 5% 49.8 44.3 Dividends (AU cents) 19 20 16 13
EBITDA 30.7 36.8 -17% 28.3 19.0 Key Margin Analysis EBITDA margin 34.2% 39.7% 36.3% 30.0% EBITDA margin (Underlying) 32.7% 37.6% 36.7% 33.1% Depreciation and 6.2 5.4 15% 2.9 2.5 Net profit before tax margin 27.0% 34.2% 33.0% 26.1% amortization Net profit after tax margin 22.0% 24.9% 30.0% 23.5% Effective tax rate 18.7% 27.3% 9.0% 9.7% EBIT 24.5 31.5 -22% 25.5 16.4
Balance Sheet (USD millions) Net interest 0.3 -0.3 N/A -0.3 0.0 Cash and equivalents 88.5 80.7 58.0 36.0 Net assets 187.2 192.7 166.1 141.8 Profit before income tax 24.2 31.8 -24% 25.8 16.5
Operating cash flows 18.7 20.8 26.8 14.9 Income tax expense 4.5 8.7 -48% 2.3 1.6
Profit after income tax 19.7 23.1 -15% 23.4 14.9
* The above numbers include Tasking. Historical data is as reported and has not been revised for AASB16 Leases unless noted.
23 Agenda
1 2021 Half Year Highlights and Significant Achievements
2 2021 Half Year Financial Performance and Metrics
3 Altium’s Strategy for Dominance and Transformation
4 Growth Engines and Flywheels for Dominance and Transformation
5 Appendix: Electronic Industry and Company Overview The Rise of Smart Connected Devices and the Emergence of Digital Economy
Mega Trends Digital Disrupters
Web 1.0 Search & Discovery Information 1990’s Is Indexed
Web 2.0 Social Networking People are 2000’s Networked
Web 3.0 Electronics puts 2010’s Internet of Things Internet into Things
Web 4.0 Electronics 2020’s Artificial Intelligence Binds Infotech to Biotech
Internet of Things & Artificial Intelligence are driving the proliferation of Electronics & the Digital Economy
25 Electronics Industry is in Need of Transformation & Ripe for Disruption
Electronic Design Supply Chain & Manufacturing
Concept
Unification of Data Model and Digital Continuity Large Scale Management of Production Risk will is Required to Manage Design Complexity Result in Unimagined Productivity & Reward 26 The Electronics Industry Value Chain is Disconnected
Electronic Design Estimated size: $2 - $5Bn Electronic Manufacturing Estimated size: $1,000 - $1,500Bn PLM Electronic Parts Supply Chain Vendors IC Design Estimated size: $600 - $800Bn Electronic Manufacturing Tools Equipment Vendors Vendors
Simulation Semiconductor Vendors Manufacturers
Electronic CAD Vendors Electronic Testing Equipment Vendors PCB Assemblers
Electronic Parts PCB Fabricators Manufacturers
Electronic Manufacturing Electronic Parts Services (EMS) Distributors
Electronic Electronic Manufacturing Parts Search & Analytics Supply Content Aggregators Chain
$2 Trillion Altium 365 connects the Electronics Industry fragmented value chains to drive Estimated Industry Size productivity and manage production risk 27 Industry Transformation Through Market Dominance
Market Market Industry Leadership Dominance Transformation
1 2 3 LEAD UNIFY TRANSFORM
Altium must target 100,000 active subscribers by 2025 to compel key industry stakeholders to support its agenda to transform electronic design and its realization
28 Phases in Pursuit of Leadership, Dominance & Transformation
LEAD UNIFY TRANSFORM
1- Sharing Design Files on Altium 365 Light-weight Collaboration Industry Building Altium Transformation Cloud Platform 2- Hosting Design Data on Altium 365 Structured Collaboration Altium 365 (Cloud) 3- Manufacturing PCB on Altium 365 Industry-wide Collaboration
Market Extending Reach Building High Scaling Direct Digital Sales and Going Direct in Dominance Performing Direct Sales for Altium Online Store Key Markets Dominance Man-out-of-loop (Channel) Sales Force including China
Market Establishing Driving Innovation & Innovating as Building High Yearly Innovation Closing Capability Market Leader & Leadership Performing R&D Cycles Gaps with High-End Extending Lead (Product)
$100M $200M $500M Revenue Revenue Revenue 35,000 50,000 100,000 Subscribers Subscribers Subscribers 2012 - 2014 2015 – 2017 2018 - 2020 2021 - 2025 29 Altium 365 Providing Opportunities for Significant TAM Expansion
Realization Altium 365 Digital PLM for Electronics ($3Bn)
Platform ($2 Trillion) The total global PLM software market size is estimated to be over $20Bn with The total global electronic around $3Bn attributable to electronics manufacturing and supply chain is industry. estimated to be over $2 Trillion. (PLM – Product Life Cycle Management)
PCB Electronic Design Software Electronic Hardware Market Products $1Bn
CAE for Electronics ($1.4Bn) MCAD for Electronics ($1.6Bn) The total global CAE market size is The total global MCAD market size is estimated to be $7.3Bn. The estimated to be over $8.7Bn. Estimated electronics industry portion is $1.6Bn (18%) is applied to the electronics estimated at $1.4Bn. industry. (CAE –Computer Aided Engineering Design (MCAD – Mechanical Computer Aided Design) – Simulation & Analysis tools) 30 Agenda
1 2021 Half Year Highlights and Significant Achievements
2 2021 Half Year Financial Performance and Metrics
3 Altium’s Strategy for Dominance and Transformation
4 Growth Engines and Flywheels for Dominance and Transformation
5 Appendix: Electronic Industry and Company Overview Altium’s Hard Pivot to the Cloud
Go-To-Market
Professional Digital Channel Channel
Software Business Business Cloud Business Administration (Dominance Engine) (Transformation Engine)
Altium 365 CAD Cloud Software Platform
Product
32 Two Complementary Engines of Growth
Software Business Cloud Business (Dominance Engine) (Transformation Engine)
Altium’s strong software business is our dominance engine, and our new cloud platform Altium 365 is our transformation engine 33 Altium’s Move to the Cloud is Unlike Any Other
• Software Tools for • Collaboration Platform for Design of Electronics Realization of Electronics
• Traditional Software • Premium Services and Software Business Licensing Model Direct Monetization Cloud Business (Dominance Engine) (Transformation Engine)
On-premises Cloud Hybrid
Built-in Data Governance
Altium’s move to the cloud is from a position of strength and does not force its customers to change either their licensing model or the way they use Altium’s existing software
34 The Impact of the Move to Cloud on Altium’s Revenue
Indirect Monetization Direct Monetization
Indirect Monetization of Maintenance the Altium 365 Platform Subscription AD/365 “SaaS-like” 49.8% Subscription (6.5% as at end of Dec 2020) Software Business Cloud Business (Dominance Engine) Currently, there (Transformation Engine) Altium PCB is no direct Software Revenue monetization of 12.2% the Altium 365 Term-based Licenses platform
38.0%
Perpetual Software Licenses
Altium’s move to the Cloud will bring “SaaS-like” revenue Altium 365 provides future opportunities without changing its software licensing model for direct monetization 35 Financial data as at first half fiscal 2021 (NEXAR revenue is excluded) Altium 365 Direct Monetization
Cloud Business (Transformation Engine)
Transaction Fees on Premium Services Manufacturing (e.g. Amazon Prime) (e.g. Airbnb)
Altium 365 provides unique opportunities for direct monetization
36 Four Flywheels for Dominance and Transformation
Design Tools Adoption Cloud Adoption
• Seats on Subscription • AD Seats on Altium 365 • Seats Sold Subscription (SaaS) • PCB Design Projects on Altium 365 • Component/Libraries on Altium 365 100K Seats on Subscription • Active Users • API Calls • Concord Pro Accounts • Partners • NEXUS Accounts • Web Traffic
Design Platform Adoption Ecosystem Adoption
37 Guidance Update and Long-Term Outlook
• Fiscal year 2021 a “pre-vaccine” environment for Altium’s flight path to 2025
• Macro environment remains challenging but a stronger second half expected as sales organization changes gain traction
• Confident of achieving the updated flight path to 2025 target of US$500 million and 100,000 subscribers for dominance (ex-TASKING, with 10%-20% revenue from future acquisitions)
• Altium commits to the company’s updated guided range (ex-TASKING) for the full year fiscal 2021:
o Revenue of US$190 million to US$195 million
o EBITDA Margin 37% to 39%
38 Agenda
1 2021 Half Year Highlights and Significant Achievements
2 2021 Half Year Financial Performance and Metrics
3 Altium’s Strategy for Dominance and Transformation
4 Growth Engines and Flywheels for Dominance and Transformation
5 Appendix: Electronic Industry and Company Overview Electronics at the Heart of All Intelligent Systems
Printed Circuit Boards are central to the design & realization of electronics and smart connected products 40 IOT is Driving the Pace of Innovation
Electronics is critical to speeding up cycles of innovation
Existing tools do not adequately address the needs of high-tech products
Success depends on the ability to move quickly through innovation cycles
41 Current Engineering Tools Fall Short
MCAD - Mechanical Computer Aided Design ECAD - Electronic Computer Aided Design CAE - Computer Aided Engineering - Analysis and Simulation
CAM CAM - Computer Aided Manufacturing
PLM PLM - Product Lifecycle Management CAE
The current model for tool integration is old and has evolved around the notion of “tool-chains” 42 The Future of Engineering Tools is Multi-disciplinary…
Cloud System
Embedded Software
Electronic CAD
Mechanical CAD
Electrical CAD ECAD and MCAD tools must communicate natively and operate at the same level of abstraction 43 Altium Leading Products
Altium Designer – Altium 365 – Octopart – Most Widely Used PCB Altium’s Cloud Platform Extensive, Easy-to-Use Search Design Software for Electronic Design & Engine for Electronic Parts Realization
Altium NEXUS – Altium Concord Pro – Agile PCB Design Complete Solution for Library Software for Teams Management 44 Diversity of Application
Automotive Aerospace & Life Sciences Mobile Devices & Consumer – Defense Communications Electronics
Electronics & Research & Industrial Controls Computers Semiconductors High-Tech Education Automation 45 High Profile Customers
Automotive Aerospace & Defence Life Sciences Mobile Devices Consumer- Electronics
Electronics & High-Tech Research & Education Industrial Controls Computers Semiconductors
46 Global Reach
Main Operating Centers Sales and Support Centers Research & Development Centers San Diego, Munich, Shanghai San Diego, Boston, Karlsruhe, Munich, Shanghai, Sydney San Diego, Ukraine, Netherlands, Shanghai
Regional HQ Munich Global HQ Regional HQ San Diego Shanghai
Corporate & Registered Office Regional officers, with locations in over 17 countries ASX Listing Sydney Network of channel partners, with over 50 authorized Value-Added-Resellers 47 Altium’s High Velocity, Highly Profitable Direct Sales Force
Altium’s Touch
Go Direct Everywhere; Altium’s touch matters Always Improving
Sell what you have – more will be there tomorrow
Everyone Counts User Focus Every Customer, Every Focus on the USER and the Seat, Every $ Counts Customers will follow Great Product
Superior product that is easy to use and affordable
Altium connects to users at all levels within an organization providing a user experience that is unique within the industry
48 Altium Core Values
The Genius of AND
Product Sales
“Regular Product Releases” and “High Volume Selling” and “Delivering Next Generation “Sophisticated Value Proposition” Products”
Finance People
“Growing Revenue Strongly” and “Diversity in Thinking” and “Expanding Profit Margin” “Aligned in Action and Purpose” 1- Diversity
2- Transparency
The only way to make the “Genius of AND” work is through Ingenuity supported by Transparency, Agility, Adaptability and Perseverance
49 Guidance Update and Long-Term Outlook
• Fiscal year 2021 a “pre-vaccine” environment for Altium’s flight path to 2025
• Macro environment remains challenging but a stronger second half expected as sales organization changes gain traction
• Confident of achieving the updated flight path to 2025 target of US$500 million and 100,000 subscribers for dominance (ex-TASKING, with 10%-20% revenue from future acquisitions)
• Altium commits to the company’s updated guided range (ex-TASKING) for the full year fiscal 2021:
o Revenue of US$190 million to US$195 million
o EBITDA Margin 37% to 39%
50