ALTIUM HALF YEAR INVESTOR PRESENTATION

Transcription

1 Record Revenue and Profit Growth with Contributions from All Regions and Business Units ALTIUM HALF YEAR INVESTOR PRESENTATION Aram Mirkazemi CEO Joe Bedewi CFO Kim Besharati VP IR February 2018 Sydney & Melbourne

2 Disclaimer This presentation has been prepared by Altium Limited (ACN ) and is for information purposes only. It does not constitute financial product or investment advice or a recommendation to acquire Altium shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Altium is not licensed to provide financial product advice in respect of Altium shares. Altium, Altium Designer, Altium Vault, Ciiva, Circuitmaker, Circuistudio, Octopart, PCBWorks, Protel, Tasking and Upverter, and their respective logos, are trademarks or registered trademarks of Altium Limited, or its subsidiaries. All other registered or unregistered trademarks mentioned in this presentation are the property of their respective owners, and no trademark rights to the same are claimed Financial data All dollar values are in US dollars (US$) unless as otherwise presented. Future performance - Forward looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. An investment in Altium shares is subject to investment and other known and unknown risks, some of which are beyond the control of Altium Limited. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Altium employees, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns 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 appropriate in light of your particular investment needs, objectives and financial circumstances. 2

3 Agenda 1 Company Highlights & Significant Achievements Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview

4 Altium's Half Year FY18 Financial Highlights $110M $110.9M $100M $90M $80M $70M $60M $50M $40M $30M $20M $10M $0M 20% $55.1M $26.4M $48, % 10% $61.9M $29.0M 9.6% 11% $71.0M $32.3M 18.4% 16% $80.2M $37.6M 13% $93.6M $42.6M 14% $48.7M 26.7% 25.0% 25.8% 30% $63.2M 30.0% Record revenue growth of 30% Record EBITDA Margin of 30% (33.1% underlying) Strong net profit growth of 51% 4% increase in subscriber seats to 35,977 22% increase in Altium Designer seats with 2,650 new licenses sold Revenue Full Year Revenue Revenue growth EBITDA Margin FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

5 Driving Performance from a Position of Financial Strength Altium s FY18 Financial Metrics $36M Cash AU13c Dividend (Up by 18%) $63.2M Revenue (Up by 30%) 35,977 Subscribers (Up by 4%) $60.3M Sales (Up 28%) A$1.95B Market Cap 11.48c EPS (Up by 50%) 30% EBITDA Margin (Up from 25.8%) Debt Free $14.9M Op Cash Flow (Up by 8%) 2,650 Altium Designer seats (Up 22%) $19.0M EBITDA (Up 51%) $14.9M NPAT (Up 51%) 5

6 Progress Update - First Half Significant Achievements Record 30% revenue growth with all regions and business segments delivering double-digit revenue growth China continued its rise and significance delivering 30% revenue growth and expanding further by opening a new sales office in Shenzhen Octopart continued to outperform - through increased traffic and improved search experience delivering 42% revenue growth TASKING is building momentum through organizational strength and growing market opportunity Release of Altium Designer 18 - a major software release with high-speed engine, multi-board design capability & new user interface/user experience Launch of NEXUS high-end solution selling released Altium s high-end PCB design tool and established a separate internal sales channel focused on high-end solutions 6

7 A New Organizational Structure to Scale Aram Mirkazemi CEO Joe Bedwi CFO Sergey Kostinsky CTO Biz Dev Henry Potts CSO Ted Pawela COO Brand & Program Management R&D Marketing Sales Xpedyze High-end Channel Altimyze Mainstream Channel Octomyze Longtail Channel Corporate Services (Finance, HR, IT, Sales Ops) Altium Org 2.0 a new organizational structure to scale and deliver multi-product, multi-channel strategy while maintaining strong operating leverage 7

8 Achieving Market Leadership by 2020 Octopart 2020 Target Revenue Breakdown TASKING % BSD - Americas NEXUS % % $200M *- Revenue 35% -- ** EBITDA Margin 30-35% % 20-25% 2015 BSD Rest of World BSD - EMEA * The target revenue of $200M may include 5-10% from future acquisitions ** 35% reported EBITDA margin or better in fiscal year 2020 BSD Board and Systems Division (accounts for all PCB products excluding NEXUS) Strong Strategy, Leading Technology & Revenue Momentum $100 + Million Revenue & Expansion of Market Opportunity PCB Market Leadership & Emerging Leader in Systems Design Transforming Electronic Design and its Realization 8

9 Agenda 1 Company Highlights & Significant Achievements Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview

10 Revenue Sources FY US Millions $25.4 (40.2%) $0.9 (1.4%) $2.3 (3.6%) $0.2 (0.3%) $1.5 (2.4%) $4.9 (7.8%) $0.6 (0.9%) $20.1 (31.8%) $3.4 (5.4%) $3.0 (4.7%) $0.9 (1.4%) $63.2 (100%) Non-recurring Revenue $27.4 (43.4%) Recurring Revenue $35.8 (56.6%) Altium Designer Subscription Altium Designer Term-based Licenses TASKING Maintenance TASKING Term-based Licenses NEXUS Term-based Licenses Octopart Other Recurring Altium Designer New Perpetual Licenses TASKING New Perpetual Licenses Services * Other Non-recurring Total Revenue * Services includes revenue for TASKING, Altium Designer and NEXUS 10

11 Revenue Board and Systems [Martin] 5 Yr Revenue CAGR: 17% BSD - Americas Revenue: 17% 5 Yr Recurring CAGR: 16% BSD EMEA USD Revenue: 38% 5 Yr Revenue CAGR: 15% 5 Yr Recurring CAGR: 17% $40m $35m $30m $25m $20m $15m $10m $5m $25m $20m $15m $10m $5m FY FY FY FY FY Yr Revenue CAGR: 11% BSD Rest of World Revenue: 32% 5 Yr Recurring CAGR: 11% BSD Total FY 2013 FY FY FY Revenue: 27% FY 5 Yr Revenue CAGR: 15% 5 Yr Recurring CAGR: 16% Recurring Revenue $17m $15m $100m $80m $13m $11m $60m $9m $7m $5m $3m $40m $20m FY 2013 FY FY FY FY FY 2013 FY FY FY FY

12 Revenue TASKING and Octopart MES (TASKING) Revenue: 21.3% 5 Yr Revenue CAGR: 15% 5 Yr Recurring CAGR: 12% Octopart Revenue: 42% 5 Yr Revenue CAGR: 44% $12m $10m $8m $8m $6m $6m $4m $4m $2m $2m FY 2013 FY FY FY FY FY 2013 FY FY FY FY Recurring Revenue 12

13 Board and Systems Underlying Metrics Altium Designer New Seats Sold Subscription Pool 6,000 5,000 4,655 4,318 (-337) 5,181 (+863) 5,520 (+339) 35,000 30,000 24,821 26,943 (+2,122) 29,320 (+2,377) 32,321 (+1,187) 35,977 (+1,455) 7,351 (+ 988) 13,248 (+ 1,281) 4,000 25,000 3,000 2,000 1,916 1,756 (-160) 2,162 (+406) 2,177 (+15) 2,650 (+473) 1,124 (+266) 755 (+83) 20,000 15,000 10,000 15,378 (+ 1,387) 1, (+124) 5,000 FY FY FY FY Dec Jun ч Dec Jun Dec Jun Dec Jun Dec FY14 FY15 FY16 FY17 FY18 Americas EMEA Rest of World Americas EMEA Rest of World 13

14 Subscription Pool Size New Rejoins & Upgrades Lapsed New Rejoins & Upgrades Lapsed Altium s Subscription Pool +2,724-5,605 +1,340 40,000 +6,269 +3,024-2,909 35,977 34,522 35,000 31,134 30,000 25,000 Growth pool ~ Developed Countries 86% of subscription pool 87.7% renewal rate (FY %) 20,000 15,000 Constant pool ~ Developing Countries 14% of subscription pool 30.1% renewal rate (FY %) 10,000 5,000 0 June 2016 June 2017 Dec

15 Operating expenses 100% What Drives Altium s Unique Operating Leverage? 80% 60% 40% 26.7 % 19.6 % 25.0 % 24.4 % 25.8 % 23.4 % 30.0 % 1.2 % 19.9 % EBITDA Acquisitions G&A Sales We support a Value-Based Market but, we service this market with a commodity selling model R&D spend efficiency due to impact of restructured Tasking operations R&D spending is aligned with our new release drumbeat 20% 36.4 % 17.3 % 33.1 % 17.6 % 32.3 % 18.5 % 32.8 % 16.1 % R&D Sales and Marketing spending aligned to growth projections FY2017. Positioning reflected in FY2018 spends. We expect to experience positive impact moving forward

16 Balance Sheet $70m $60m $50m Cash and cash equivalents 61,906 44,273 Dec-17 Jun-17 Jun-16 Jun-15 $ '000 $ '000 $ '000 $ '000 Cash and cash equivalents 36,025 44,273 38,139 61,906 Trade and other receivables 32,770 32,672 30,406 20,704 Other current assets 3,117 2,861 1,548 1,955 Total current assets 71,912 79,806 70,093 84,565 Trade and other receivables 1,030 2,531 5,379 1,499 Property, plant and equipment 5,524 5,054 5,091 3,886 Intangible assets 45,799 40,459 33,508 0 Other non-current assets 82,165 82,946 82,301 81,622 Total non-current assets 134, , ,279 87,007 $40m $30m $20m $10m 22,049 38,139 36,025 Total assets 206, , , ,572 Trade and other payables 7,307 10,179 7,188 6,048 Tax liabilities 1,863 1,008 2,713 4,989 Provisions 3,702 7,600 3,568 1,908 Deferred revenue 37,378 38,436 32,234 28,773 Total current liabilities 50,250 57,223 45,703 41,718 Deferred tax liability 5,923 5,276 4,793 0 Provisions ,230 1,202 Deferred revenue 6,000 6,958 9,038 6,091 Other liabilities 2, , Total non-current liabilities 14,394 13,611 19,874 8,252 Total liabilities 64,644 70,834 65,577 49,970 $0 Net assets 141, , , ,602 FY14 FY15 FY16 FY17 FY18 FY18 Cash includes payments for Upverter Acquisition ($US2.8M), increased dividend ($US2.7M) and a contingent consideration payout of ($US6.2M) Contributed equity and reserves 136, , , ,767 Accumulated profits (losses) 4,850 2,510 (4,776) (10,165) Total equity 141, , , ,602 16

17 Cash Flow Dividends paid/declared Final Interim FY18 FY17 FY16 FY15 $ '000 $ '000 $ '000 $ '000 Cash flows from operating activities Receipts from customers 64,501 54,397 43,919 37,032 Payments to suppliers and employees (48,965) (39,268) (37,366) (29,499) Payments for expenses relating to acquisitions (347) (72) (839) - Net Interest received/(paid) 32 (21) Net income taxes paid (348) (1,320) (862) (408) Operating Cash Flow 14,873 13,716 4,890 7,353 25AUD 20AUD Capital Expenditure Payments for property, plant and equipment (1,592) (2,548) (1,779) (1,195) Payments for intangibles (231) Proceeds on sale of assets Free Cash Flow 13,050 11,168 3,111 6,158 15AUD 8 Cash flows from investing activities 10AUD Purchase of subsidiary and contingent considerations (9,048) (2,939) (10,767) - Cash flows from financing activities Proceeds from issue of shares ,966 Dividends paid (12,534) (9,830) (7,644) (7,941) 5AUD 4 Repayment of borrowings (6) (28) (30) (38) Net cash used (8,538) (1,629) (15,330) 38,145 0 Effects of exchange rate changes 290 (162) (223) (1,140) Decrease in cash and cash equivalents (8,248) (1,791) (15,553) 37,005 FY14 FY15 FY16 FY17 FY18 17

18 Half Year Results Key Metrics USD millions FY18 FY17 +/- % FY16 FY15 FY18 FY17 FY16 FY15 Revenue (excl. interest) % Reported expenses % EPS Dividends (AU cents) Business expenses % One-off expenses N/A EBITDA % Key Margin Analysis EBITDA Margin Underlying EBITDA Margin Net profit before tax margin Net profit after tax margin Effective tax rate 30.0% 33.1% 26% 24% 9.7% 25.8% 29.7% 22% 20% 8.6% 25.0% 27.5% 23% 21% 6.1% 26.7% 26.7% 26% 18% 30.6% Depreciation and amortization % EBIT % Net interest N/A Balance Sheet (USD millions) Cash and equivalents Net assets Operating cash flows Profit before income tax Income tax expense % N/A Profit after income tax %

19 Agenda 1 Company Highlights & Significant Achievements Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview

20 Rise of Smart Connected Devices Internet of Things is driving the proliferation of electronics 20

21 Electronics at the Heart of All Intelligent Systems Printed Circuit Boards are central to the design & realization of electronics 21

22 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 22

23 CAE CAM Current Engineering Tools Fall Short PLM MCAD - Mechanical Computer Aided Design ECAD - Electronic Computer Aided Design CAE - Computer Aided Engineering - Analysis and Simulation CAM - Computer Aided Manufacturing PLM - Product Lifecycle Management The current model for tool integration is old and has evolved around the notion of tool-chains 23

24 The Future of Engineering Tools is Multi-disciplinary Cloud System Embedded Software Electronic CAD Mechanical CAD ECAD and MCAD tools must communicate natively and operate at the same level of abstraction Electrical CAD 24

25 IOT is Driving Change in Engineering Tools Startups formed Early adopters found First generation products produced Unfulfilled promises Only a few successes Scores of failure TECHNOLOGY TRIGGER PEAK OF INFLATED EXPECTATIONS Benefits better understood New methodologies developed Best Practices identified TROUGH OF DISILLUSIONMENT SLOPE OF ENLIGHTENMENT Next generation products are produced Mainstream adoption PLATEAU OF PRODUCTIVITY Gartner's Hype Cycle for IOT Transformation of electronic design & its realization is critical to success 25

26 Transforming Electronic Design & its Realization Concept Requirements Electronic Design & Manufacturing Services Estimated size: $1,000 - $1,500Bn Realization Validation System Design Product Assembly Electronic Design Automation Tools Estimated size: $2 - $5Bn Board & Circuit Design Board Fabrication & Assembly Global Printed Circuit Board Market Estimated size: $80 - $100Bn Electronic Components $2 Trillion Estimated Industry Size Global Semiconductor and Electronic Parts Manufacturing & Distribution Estimated size: $600 - $800Bn 26

27 Two The Domains Two Circles of of Transformation Business Model Continuity Concept Requirements Realization Validation Digital Model Continuity System Design Product Assembly Board & Circuit Design Board Fabrication & Assembly Electronic Components Transformation must be pursued in two domains Business & Technology 27

28 Agenda 1 Company Highlights & Significant Achievements Half Year Financial Performance & Metrics 3 Leading and Transforming the Electronic Design Industry 4 Appendix: Company Overview

29 Altium's Journey --a Long History and and a a Promising Future Future Now 1- Altium surpasses $US100 million revenue target and delivers $US110 million for financial year Altium acquires Upverter, the developer of the world s first fully cloud, fully collaborative electronics design systems 3- Altium releases Altium Designer 18 and launches NEXUS The company was founded by creating the first version of Altium Designer, Protel PCB Altium Launches Protel for Windows - World's first Microsoft Windowsbased PCB design system Altium partners with Dassault Systemes SOLIDWORKS to deliver a specialized version of its PCB design software for SolidWorks users Altium acquires Octopart, the #1 electronic parts search engine in the world 2- Altium acquires Ciiva a cloud based electronic components management system Successful capital raising of $44M on ASX 2- Altium relocated its HQ to California USA Altium Successfully completes an IPO on Australian Stock Exchange Altium launches Altium Designer 6, the world s first Native 3D PCB design software Altium launches Altium Designer 13 introducing DXP 2.0, its next generation integration platform opening up Altium Designer to third-party developers 29

30 Printed Circuit Board Design and Printed Manufacturing Circuit Board Process Design and Manufacturing Process Circuit Diagram Layout Film Bare Board Assembled Board Design Capture Layout Fabrication Assembly 30

31 Altium the Has Easy Always to Been Company Easy to Do Business With Altium s DNA Uncomplicated Value Proposition Easy to Get Up and Running Direct Sales Force Easy to Learn, Easy to Use Free Technical Support Easy to Maintain with No Hidden Costs 31

32 A Unique PCB Solution For Every Usage Profile 32

33 Altium Products 33

34 Diversity of Application 34

35 High Profile Customers Automotive Aerospace & Defence Life Sciences Mobile Devices Consumer- Electronics Electronics & High-Tech Research & Education Industrial Controls Computers Semiconductors 35

36 Global Reach 36

37 Total Revenue (Billions) Global Engineering Software Market revenue, 2014 and 2022 Revenue Segments CAGR Electronic Design Automation (EDA) Computer Aided Design (CAD) % 13.9% CAD CAE CAM AEC EDA Architecture Engineering & Construction (AEC) 10.6% 8.3% Computer Aided Manufacturing (CAM) 13.0% Computer Aided Engineering (CAE) Source: Transparency Market Research 37

38 The Altium Advantage Transformational Leadership Established Global Business User-Centric DNA 38

39 Altium s Strategy for Success Maintaining Disciplined Execution and Remaining Single-Minded About PCB Market Leadership Disciplined Execution to Achieve Market Leadership Transforming Electronic Design & Its Realization Being True to Our Deep Conviction that Altium s Journey Will Bring About Transformation of the Electronics Industry Building Strong Strategic Partnership Building a Strong Partnership with Leading Engineering Software Companies to Connect ECAD with MCAD & PLM 39

40 Altium Values Diversity in Thoughts Transparency Product Sales Perseverance Regular Product Releases and Delivering Next Generation Products Finance Growing Revenue Strongly and Expanding Profit Margin 0 4 High Volume Selling and Sophisticated Value Proposition People Diversity in Thinking and Aligned in Action and Purpose Ingenuity the Genius of AND Adaptability Agility 40

41 Altium s Long-Term Outlook The proliferation of electronics through the rise of smart connected devices continues to drive growth for our business in the foreseeable future Altium will continue to drive top line growth and expand operating margin Altium remains confident in its business momentum and its ability to achieve its 2020 revenue target of US$200 million Altium will grow its reported EBITDA margin steadily and aim at achieving 35% or better by 2020 Altium will continue to pursue partnership and M&A opportunities to support its long-term vision of creating a product design and realization platform that is centered around electronics Altium s goal is to achieve $200 million in revenue by 2020