2012 Full Year Results Presentation Ending September 30th 2012 - PowerPoint PPT Presentation

2012 Full Year Results Presentation Ending September 30th 2012 Adrian Di Marco Adrian_Dimarco@TechnologyOneCorp.com *Final November 2012 Commercial in confidence

Technology One Ltd Full Year Presentation - 26 Nov 2012 Technology One Ltd (TNE) today conducted investor presentations pertaining to its 2012 Full Year results. The attached presentation was given by the company ’ s Executive Chairman, Mr Adrian Di Marco. These slides have been lodged with the ASX and are also available on the company ’ s web site: www.TechnologyOneCorp.com.

TechnologyOne Overview 300+ developers 800+ Formed in Employees Revenue 800+ in R&D centre $170m 1987 corporations, government and statutory authorities One of Australia’s most successful software companies Invest 20% 14 international offices in Doubles profitable Continually in size of revenue back into Australia | New Zealand R&D South Pacific | Asia Every 4 years since 1992 United Kingdom

TechnologyOne Overview We are one of only a few Enterprise Vendors globally ... Suite of 12 products ü ü Deeply integrated We believe in the freedom of choice ü Common platform our solution is ü Consistent user interface modular by design The power of a single, integrated, enterprise system

TechnologyOne Overview We focus on seven key markets ... ü Deep understanding and engagement in our markets We sell to asset and Deeply integrated pre configured solutions ü service intensive Proven practice ü organisations. Streamlined implementations ü We do not service retail, distribution or Reduce time, cost and risk ü manufacturing industries. Market focus & commitment

TechnologyOne Overview We do not use implementation partners or resellers We take complete responsibility for building, marketing, selling, implementing and supporting our enterprise solution for each customer to guarantee long term success. The Power of One

TechnologyOne Overview § One of Australia ’ s largest software houses, specialising in the research, development and commercialisation of software – invest $33+m in R&D per year § Connected Intelligence (Ci) is our current generation product suite § Next generation of our enterprise suite Ci ² is under development § Diversity of revenue streams from… Multiple geographies § 10 products § seven vertical markets §

TechnologyOne Overview Strong financial track record … § Doubling in size approx. every 4 yrs (last 15 yrs) § Continually profitable since 1992 (20 years) § Continually paid dividends since 1996 (16 years) § Cash and Equivalents $51.1m § Return on Equity 32% § Debt/Equity 10% § Interest Cover 50

Agenda Ø Results § Significant Achievements § Outlook for Full Year § Long Term Outlook

Results Summary ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ FY12 FY11 Variance % ¡ ¡ ¡ ¡   Revenue $169.1m $156.7m 8%   Initial Licence Fees $35.4m $30.7m 15%   Consulting Services Fees $45.4m $41.7m 9%   Annual Licence Fees $63.7m $55.3m 15%   Expenses $138.7m $130.0m 7%     R&D Expenses * $33.5m $31.8m 5%   Expenses excl R&D $105.2m $98.2m 7%   Profit Profit After Tax** $23.6m $20.3m 16% Profit Before Tax   $30.3m $26.7m 14% Other   ¡ ¡ ¡ ¡ ¡ ¡   Operating Cash Flow $28.0m $23.2m 21%   Cash and Cash Equivalents $51.1m $45.4m 13% Profit Before Tax Margin 18% 17%   * 20% of revenue v 20% last year ; fully expensed   ** R&D tax concession, positive impact on NPAT ¡ ¡  

Guidance Full Year Guidance* - continuing profit growth of 10% to 15% ü Profit After Tax up 16% ü Profit Before Tax up 14% * at Half Year Results Presentation

Results Highlights § Strong result given challenging and uncertain economic climate § Continued strong demand for our products: § 15% increase in Initial Licence fees § 15% increase in Annual Licence Fees § Continued significant investments in a number of key areas as follows: § Pre-Configured solutions § R&D into Ci ² - Next generation of our Ci suite § R&D into TechnologyOne cloud § United Kingdom § These investments will drive growth in future years – discussed later

Balance Sheet Strong balance sheet Sep-12 Sep-11 Var % $'000 $'000 $'000 § Cash & Cash Equivalents $51.1m (vs. $45.4m) Cash & Available ‑ for ‑ sale financial assets 51,133 45,357 5,777 13% Trade and other receivables 26,208 18,303 7,905 43% § Net Cash*: 13.7c/s (vs.11.2c/s) Other current assets 5,324 5,908 (584) (10%) Current assets 82,665 69,568 13,098 19% § Debt/Equity: 10% (vs. 14%) Property, plant and equipment 15,490 18,733 (3,243) (17%) § Net Assets: $74m (vs. $68m) Intangible assets 16,191 16,461 (270) (2%) Other non ‑ current assets 5,590 6,443 (853) (13%) § Interest Cover: 50 times Non ‑ current assets 37,271 41,637 (4,366) (10%) Total Assets 119,936 111,205 8,731 8% Cash ¡and ¡Equivalents ¡ ¡60 ¡ ¡ Trade and other payables 16,110 11,620 4,490 39% Up ¡13%, ¡$5.8m ¡ Provisions 9,995 9,852 143 1% Unearned revenue 6,525 6,549 (24) (0%) ¡50 ¡ ¡ Borrowings 7,344 9,611 (2,267) (24%) Compound ¡Growth ¡21% ¡ Other liabilities 5,965 5,203 762 15% ¡40 ¡ ¡ Total Liabilities $'m ¡ 45,939 42,835 3,104 7% ¡30 ¡ ¡ Net Assets 73,997 68,370 5,628 8% ¡20 ¡ ¡ Issues Capital and Reserves 39,610 41,931 (2,321) (6%) ¡10 ¡ ¡ Retained earnings 34,387 26,439 7,948 30% Equity 73,997 68,370 5,627 8% ¡-­‑ ¡ ¡ ¡ ¡ 2008 ¡ 2009 ¡ 2010 ¡ 2011 ¡ 2012 ¡ *after debt per share

Cash Flow Vary % Sep-12 Sep-11 Operating Cash Flow $28m, up 21% from $23.2m Sep11 $'000 $ '000 $ '000 Operating Cash Flow $28m (vs NPAT of $23.6m) § EBIT 29,453 25,686 3,767 15% Depreciation & Amortisation 5,643 5,156 488 9% Change in working Capital (Increase) / Decrease in Debtors** (7,287) (3,121) (4,166) 133% Increase / (Decrease) in Creditors 3,473 1,491 1,983 133% Increase / (Decrease) in Staff Entitlements 279 213 65 31% Net Interest Paid 872 989 (118) 12% NPAT ¡versus ¡OperaBng ¡Cash ¡Flows ¡ Income Taxes paid (4,706) (7,848) 3,142 40% Other 271 642 (372) 58% $28m ¡ 30 ¡ 30 ¡ Operating Cash Flow 27,997 23,208 4,789 21% $23m ¡ 25 ¡ 25 ¡ $'m ¡ $'m ¡ Capital Expenditure (1,868) (4,715) 2,847 60% 20 ¡ 20 ¡ Proceeds from Sale of PP&E and Investments 0 2,051 (2,051) (100%) 15 ¡ 15 ¡ Free Cash Flow 26,129 20,544 5,585 27% $20.3m ¡ 10 ¡ 10 ¡ Dividends Paid (19,118) (17,669) (1,449) (8%) $23.6m ¡ Repayment of finance lease (2,090) (1,990) (100) (5%) 5 ¡ 5 ¡ Proceeds from leasing of PPE 0 8,877 (8,877) 100% Proceeds from Shares issued 678 1,017 (339) 33% 0 ¡ 0 ¡ 2011 ¡ 2012 ¡ Increase in Cash & Cash equivalents 5,599 10,779 (5,181) 48% Opera>ng ¡Cash ¡Flows ¡ ** increase in debtors as a result of significant number of deals closed in Aug & Sept

2012 Full Year Results Dividends for this year Dividend ¡ 6.00 ¡ ¡ up ¡10% ¡ Compound ¡Growth ¡8% ¡ Half 1 1.61 cps up 10% (paid) § 5.00 ¡ ¡ Cents ¡per ¡share ¡ 4.00 ¡ ¡ Ø Half 2* 3.48 cps up 10% (85% franked) 3.00 ¡ ¡ 2.00 ¡ ¡ Sub Total 5.09 cps up 10% § 1.00 ¡ ¡ 0.00 ¡ ¡ Ø Special Dividend** nil 2003 ¡ 2004 ¡ 2005 ¡ 2006 ¡ 2007 ¡ 2008 ¡ 2009 ¡ 2010 ¡ 2011 ¡ 2012 ¡ Notes • We have continuously paid a dividend since 1996 (through Dot-Com and GFC) • * A recent independent review of our R&D tax claims has found a substantial additional tax concession. Though this is a positive outcome, this will now unexpectedly impact the availability of franking credits. As such, our normal H2 dividend will now be 85% franked. • We expect in future years to return to 100% franked dividends • ** As previously advised, the Board considers the payment of a Special Dividend each year. As a result of the independent review of our R&D tax claim, and the additional tax concessions we have now received, there are no remaining franking credits, and as such the Special Dividend will not be paid this year. • Board will consider Capital Management initiatives once again in 2013 financial year

2012 Full Year Results 2012 ¡ 2011 ¡ Variance ¡ ¡ ¡ Full ¡Year ¡2012 ¡v ¡Full ¡Year ¡2011 ¡ % ¡ ¡ ¡ $'000 ¡ $'000 ¡ $'000 ¡ Revenue excluding interest 167,624 155,252 12,372 8% Expenses (excluding R&D, Depn, Forex & amortisation) 98,969 92,522 6,447 7% EBITDAR 68,655 62,730 5,925 9% R&D Expenditure 33,524 31,796 1,728 5% EBITDA 35,131 30,934 4,197 14% Depreciation 5,373 4,874 499 10% Amortisation of Intangibles 270 281 (12) (4%) Forex Expense 24 82 (58) (71%) EBIT 29,464 25,697 3,767 15% Net Interest Income 861 978 (117) (12%) Profit Before Tax 30,325 26,675 3,650 14% Profit After Tax 23,559 20,326 3,233 16%