rhipe Limited (ASX code RHP) FY16 Full Year Results Presentation & FY 2017 Outlook

Transcription

1 rhipe Limited (ASX code RHP) FY16 Full Year Results Presentation & FY 2017 Outlook Dominic O Hanlon, CEO & Managing Director Mike Hill, Executive Chairman 1

2 This presentation has been prepared by rhipe Limited ACN (RHP). Each Recipient of this presentation is deemed to have agreed to accept the qualifications, limitations and disclaimers set out below. None of RHP and or its subsidiaries or their respective directors, officers, employees, advisers or representatives (Beneficiaries) make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this presentation, including any forecast or prospective information. The forward looking statements included in this presentation involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, the Beneficiaries. Actual future events may vary materially from the forward looking statements and the assumptions on which those statements are based. Given these uncertainties, you are cautioned to not place undue reliance on such forward looking statements. This presentation is a general overview only and does not purport to contain all the information that may be required to evaluate an investment in RHP. The information in this presentation is provided personally to the Recipient as a matter of interest only. It does not amount to an express or implied recommendation with respect to any investment in RHP nor does it constitute financial product advice. The Recipient, intending investors and respective advisers, should: conduct their own independent review, investigations and analysis of RHP and of the information contained or referred to in this presentation; seek professional advice as to whether an investment in RHP is appropriate for them, having regard to their personal objectives, risk profile, financial situation and needs; and/or nothing in this presentation is or is to be taken to be an offer, invitation or other proposal to subscribe for shares in RHP. The Recipient specifically agrees, understands and acknowledges that some of the information contained herein has been provided by third parties (including all information regarding LiveTiles) and the Beneficiaries accept no responsibility for any inaccuracy, misstatement, misrepresentation or omission in relation to that information. Except insofar as liability under any law cannot be excluded, none of the Beneficiaries shall have any responsibility for the information contained in this presentation or in any other way for errors or omissions (including responsibility to any persons by reason of negligence). RHP FY16 RESULTS PRESENTATION 2

3 1. summary 2. FY16 Financial Results 3. Growth In new investments 4. Industry update 5. The rhipe value proposition 6. FY17 Outlook 7. Questions

4 summary

5 Cloud services are not sold or shipped in a traditional sense. They are consumed on a subscription basis. Cloud First Channel First rhipe drives this consumption with value-added enablement services: training, consulting, marketing, support, reporting and subscription billing services RHP FY16 RESULTS PRESENTATION 5

6 Cloud Licensing 96% of Group revenues via channel B2B Software sold and implemented by service providers. Users pay based on usage. Cloud Solutions 4% of Group revenues from direct end user B2B customers Professional services and support people to help Service Providers with technical needs. Cloud Operations Support, IT and IP to support Licensing and Solutions Cloud first, digital first marketing transformation to drive demand for channel partners. Billing, software-asset management & license optimization. Licensing Build and expand on cloud licensing programs. Multi-vendor and multi region. Support Services and support to position offerings for new licensing programs. Value Add value with systems & ease of trade for Cloud Service Providers. RHP FY16 RESULTS PRESENTATION 6

7 Group Revenue $143.0m (+32%) Licensing Sales $129.4m (+38%) 96% subscription revenues Group Gross Margin $25.8m (+28%) Group Gross Margin 18% Licensing GM $20.0m (+21%) Attractive GM % outside Top 10 customers Operating leverage emerging Management focus on sizing cost base relative to opportunity Underlying Licensing EBITDA up 40% to $7.1m (1) CSP ARR $8.4m+ (c.54k seats) (Aug-16) SEA Revenue growth (+87%) LSP profitable at 30 June 2016 LiveTiles partially monetised (profit of $2.4m) Note: ARR is Annual Run Rate 1. Total Group based on audited financial statements. Divisional segmentation is unaudited. RHP FY16 RESULTS PRESENTATION 7

8 Fy16 financial results

9 Revenue ($ 000) FY14 FY15 1H FY16 2H FY16 FY16 FY15/16 Change (%) Revenue 74, ,769 69,505 73, , % Gross Margin 11,991 20,083 12,967 12,800 25, % Gross Margin (%) 16.1% 18.5% 18.7% 17.4% 18.0% - EBITDA Reported 1,468 (1,353) (254) 1,721 1, % Profit/(loss) before tax 1,370 (1,535) (341) 1,509 1, % Total comprehensive income/(loss) after tax 833 (2,255) 1,577 (1,448) % Reported EBITDA up 208% to $1.5m underpinned by: Profit in Licensing division of +$2.4m (1) (up +72% pcp) and profit on sale of investment of +$2.4m However impacted by: Non cash costs of ($1.1m) and non recurring costs of ($0.3m) and loss in Solutions division of ($1.9m) (1) Solutions division costs reductions of $2m p.a. effective from Jun-16 Refer to page 11 for further information on detailed break down to reported EBITDA and underlying EBITDA 1. Total Group based on audited financial statements. Divisional segmentation is unaudited RHP FY16 RESULTS PRESENTATION 9

10 (2) +28% (2) (2) 1. Ex Top 10 is approximately 99% of total customers (or 1,840 of a total of approximately 1,850 customers) 2. Total Group based on audited financial statements. Divisional segmentation is unaudited RHP FY16 RESULTS PRESENTATION 10

11 Reported P&L ($'000) FY14 FY15 FY16 Licensing Revenue 74, , ,780 Solutions Revenue - 3,717 6,236 Total Revenue 74, , ,043 Licensing Gross Margin 11,991 16,452 19,950 Solutions Gross Margin - 3,631 5,817 Total Gross Margin 11,991 20,083 25,767 Licensing Gross Margin (%) 16.1% 15.7% 14.6% Solutions Gross Margin (%) % 93.3% Total Gross Margin (%) 16.1% 18.5% 18.0% Licensing expenses (10,159) (15,065) (17,570) Solutions expenses - (3,796) (7,718) Total expenses (1) (10,159) (18,861) (25,288) Other (364) (2,575) 987 Reported EBITDA 1,468 (1,353) 1,466 Profit/(Loss) before tax 1,370 (1,535) 1,168 Underlying Group EBITDA ($'000) FY14 FY15 FY16 Reported EBITDA 1,468 (1,353) 1,466 Add back/(less): Non cash share options expensed 310 1, Profit on Sale of Investment - - (2,384) Non recurring costs (2) Sub-total 364 2,575 (987) Underlying EBITDA (incl. Growth costs) (3) 1,832 1, Add back: Investment in SEA 1,500 2,459 3,031 Investment in new Programs - 1,215 1,650 Sub-total 1,500 3,674 4,681 Underlying EBITDA (ex. Growth costs) (4) 3,332 4,896 5,160 Underlying Licensing EBITDA (1) ($'000) FY14 FY15 FY16 Licensing Reported EBITDA 1,832 1,387 2,380 % growth (24.3%) 71.6% Underlying Licensing EBITDA (ex. Growth costs) 3,332 5,061 7,061 % growth 51.9% 39.5% 1. Total Group based on audited financial statements. Divisional segmentation is unaudited 2. FY16 non-recurring costs consists of $306k of cash costs and non-cash impairment on mine camp of $128k 3. Underlying EBITDA (including growth investment). EBITDA after adding back non cash expenses and profit on sale of investment. 4. Underlying EBITDA (excluding growth investment). EBITDA after adding back investment made in SEA and new programs net of GM contribution. RHP FY16 RESULTS PRESENTATION 11

12 Sales ($m) FY15 FY16 % Mix % Growth Top % 36.1% Rest (ex Top 10) % 38.9% Sub-total % 38.1% One-off & Other 4.2 NM Rebates & Incentives % Strong growth across all customers Ex Top 10 higher growth, higher margin, lower churn Margin $ in ex Top % of Licensing GM Vendor incentives focus on public cloud programs (e.g. CSP) Total % FY16 # Partners Margin ($m) % of Margin Margin (%) Top % 3.6% Rest (ex Top 10) c.1, % 19.7% Total c.1, % 14.6% ($M) Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun Excludes one-off back report of $2.1m not repeated in FY16 RHP FY16 RESULTS PRESENTATION 12

13 Expenses $m FY15 FY16 FY17 (1) ($M) $20 Expense Growth plateaued in FY16 Licensing Solutions (3) Total Expenses (2) $19 $18 $17 (4) Other Abnormal items 2.6 (1.0) n/a Total Cost $16 $15 $14 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Group FY17 expenses reflective of 2H FY16 run-rate which has been flat since Nov-15 Licensing expenses includes all investment in new regions and teams 1. Budgeted expenses based on no new regions and programs added in FY17 2. Cost reductions made of approximately $2.0m 3. Total Group based on audited financial statements. Divisional segmentation is unaudited 4. Abnormal items include non cash, non recurring expenses and profit on sale of investment per page 11 RHP FY16 RESULTS PRESENTATION 13

14 $m Jun-15 Jun-16 Change Cash on Hand Trade Receivables Other Current Assets Total Current Assets Investments - LVT (1.7) Goodwill (2.0) Other Total Assets Trade Payables Other Current Liabilities (3.8) Total Current Liabilities (2.4) $m FY16 Trading Licensing EBITDA 2.4 Solutions EBITDA (1.9) Non-recurring cash costs (0.3) Total cashflow from trading 0.2 Other cash items Tax paid (1.9) Capital expenditure (0.4) Proceeds on sale of investment 4.5 Subsidiary costs associated with investment (1.1) Total other cashflow 1.1 Other Non Current Liabilities Total Liabilities (2.2) Net increase in cash +1.3 Net Assets rhipe has $13.8m Cash on Hand and no debt Full year positive operational cashflow at EBITDA level Working capital improvements made in 2H FY16 Operational cashflow positive in 2H FY16 RHP FY16 RESULTS PRESENTATION 14

15 Growth in new investments

16 $M 700 Quarterly Cumulative partner agreements in SEA Total: $143.0m Thailand Apr 2013 Malaysia Feb 2014 Singapore since 2012 Indonesia Jul 2014 Philippines Sep FY11 FY12 FY13 FY14 FY15 FY Australia and New Zealand South East Asia (1) FY13 FY14 FY15 FY16 Singapore Thailand Malaysia Indonesia Philippines Long history of strong growth delivered via new customers, new programs and new regions c.600 partner agreements from c.400 partners now in South East Asia, growing strongly 1. SEA revenue inclusive of ANZ arbitrage customers (large customers in ANZ procuring software through SEA) RHP FY16 RESULTS PRESENTATION 16

17 +92% +46% +62% +148% +85% Singapore Philippines Thailand Malaysia Indonesia 0% 50% 100% 150% 200% 250% FY15 FY16 SEA opportunity remains attractive delivering circa 87% YOY sales growth in FY16 Vendor mix strong across all key categories as markets adopt cloud solutions RHP FY16 RESULTS PRESENTATION 17

18 000 s ,510 at 26-Nov-15 Average revenue: c.$13 per seat per month 23-Aug-16 54,215 38,289 at 3-Jun-16 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Asia Ranked #1 Global by Company #7 Global by Territory # partners onboarding to CSP 663 signed partners 442 signed and now transacting (Activation ratio 67%) 48% Net-new partners to rhipe 279 at 3-Jun at 3-Jun at 3-Jun-16 45% at 3-Jun-16 AU since 1 July 2015 SEA launched Oct 2015 Launched Q2 FY16 Launched Feb 16 rhipe s combined Cloud business continues to grow in all countries RHP FY16 RESULTS PRESENTATION 18

19 200 $m Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun FY15 Q1 Q2 Q3 Q4 FY LSP contracts YTD to 30 June 16 Cloud LSP launched in OCT 14 Strong financial year end close to 30 June Investment success with LSP division profitable and growing RHP FY16 RESULTS PRESENTATION 19

20 Industry update

21 USD195 Billion Global Public Cloud Market size by 2020 rhipe is well-positioned to capture this Cloud opportunity. We have the programs, people and systems today to deliver on the Public, Hybrid or Whole of Cloud future 1. Reference - IDC Worldwide Public Cloud Services Spending Guide August 2016 RHP FY16 RESULTS PRESENTATION 21

22 US$m 1,200 1,142 CAGR 34% 1, % % % % Singapore Thailand Malaysia Indonesia Philippines Overall = 35% Source: IDC #AP RHP FY16 RESULTS PRESENTATION 22

23 rhipe existing core revenue opportunity rhipe new revenue opportunity APEJ - ODHPC APEJ - DHPC 6,586 5,120 8,330 5,289 SaaS PaaS IaaS2 8,959 7,394 5,975 4,663 10,650 5,617 1, ,813 3,991 2,925 2,698 2,063 1,363 1,335 1,750 2,195 2,595 3,041 3,616 1, ,742 2,905 2, , ,909 2,288 2,713 3, , , APEJ hosted private cloud Services (On demand & dedicated), revenue usdm s CAGR = 38% IDC #259066, Sept 2015 APEJ PUBLIC CLOUD (BY SERVICE MODEL), revenue usdm s CAGR = 24% IDC #US , Dec 2015 RHP FY16 RESULTS PRESENTATION 23

24 The rhipe value proposition

25 Growth in Vendor adoption of subscription programs Growth as switch from traditional to cloud/hybrid Growth across industry and geographic boundaries within SMB and Enterprise Organisations Business model leverages the channel Data Centres Telcos SI/VAR s ISV s MSP s Enterprise SAAS Cloud Early Adopters Main stream others others Software Licensing Service Products RHP FY16 RESULTS PRESENTATION 25

26 rhipe s business model has been built and refined for over a decade to drive the consumption of subscription services From linear to sophisticated multidimensional relationships Professional Services (Deployment Acceleration) Partner to Partner Engagement Strategy & Competitive Insights Channel Representation & Awards License Optimisation & Compliance Marketing Services (e.g. MaaS) Next generation aggregator facilitates these interactions Billing & Collection Services Reporting & Management Portals Events, Know How (Business & Technical) Complimentary Vendor Programs Representing vendors with subscription services 16 APAC countries RHP FY16 RESULTS PRESENTATION 26

27 Search Refer Find Up-sell Engage Acquire Qualify rhipe s platform provides vendor usage reporting, provisioning and subscription billing services Support Manage Onboard Activate & Fulfill Order Try Significant value add to service providers but also to vendors in driving the consumption and billing of their services An extensive API set allowing partners to integrate rhipe s platform with their own systems: o Access to products and pricing o Provision new tenants o Manage existing tenants o Transition existing O365 customer from another program into Microsoft CSP o Purchase Add-ons for CSP customers RHP FY16 RESULTS PRESENTATION 27

28 Fy17 outlook

29 Revenue CAGR FY14 FY16 39%, target FY17 growth greater than +30% GM SEA Target Licensing gross margin 14 16%, gross margin $ growth expected to continue Growth continues into SEA region as cloud adoption grows in each country 9 smaller SEA countries added to CSP + SPLA Program in Q4 FY16 Microsoft CSP Continued strong growth expected into FY17 Expenses Licensing costs up marginally on run rate basis relative to revenue growth Focus Solutions towards providing channel services with lower cost base Total Group expenses $26m EBITDA Target Underlying EBITDA of +$8m Target Reported EBITDA of +$5m Dividend Board will implement dividend policy on after tax profits after taking into account growth opportunities RHP FY16 RESULTS PRESENTATION 29

30 Questions