Altium Limited ASX Announcement

Transcription

1 ` Altium Limited ASX Announcement ALTIUM LIMITED ACN Minna Close Belrose NSW 2085 Australia t f Altium Limited - February 2015 Investor Presentation Sydney, Australia - 26 February The executive management of electronics design software company Altium Limited (ASX:ALU) will today hold investor presentations at the offices of Blue Ocean Equities and Bell Potter in Sydney providing an update of the company s business strategy and financial performance. The attached presentation will be given. A copy can also be found on the company s website: Investor Relations contact details: Kim Besharati - VP Investor Relations & Corporate Affairs (US-based) Ph: Mobile: Alison Raffin - Company Secretary (Australian-based) Ph: ENDS About Altium Altium Limited (ASX:ALU) is an Australian multinational software corporation that focuses on electronics design systems for 3D PCB design and embedded system development. Altium products are found everywhere from world leading electronic design teams to the grassroots electronic design community. With a unique range of technologies Altium helps organisations and design communities to innovate, collaborate and create connected products while remaining on-time and on-budget. Products provided are Altium Designer, Altium Vault, CircuitStudio, CircuitMaker, PCBWorks and the TASKING range of embedded software compilers. Founded in 1985, Altium has offices worldwide, with US locations in San Diego and Boston, European locations in Karlsruhe, Amersfoort, Kiev and Zug and Asia-Pacific locations in Shanghai, Tokyo and Sydney. For more information, visit You can also follow and engage with Altium via Facebook, Twitter and YouTube.

2 Delivering Strong Performance & Building Momentum for Further Growth Altium Mid-Year Investor Presentation 26 February 2015 Sydney & Melbourne Aram Mirkazemi CEO Richard Leon CFO

3 Introduction 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. 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. INVESTOR PRESENTATION 2

4 Agenda 1 Company Highlights & Key Focus Areas for the Remainder of FY Half Year 2015 Financial Performance & Metrics Market Opportunity & Growth Strategy Appendix: Company Overview & Long Term Outlook

5 Introduction Altium s H1 FY15 Financial Highlights REPORT CARD Maintain top line growth and expand margins. $40 $35 $30 Expanding Margins 26% EBIT $9.6M (up 84% pcp) $37.8M Revenue (up 17% pcp) First half 17% revenue growth and EBIT margin increased from 16% to 26%. Increase subscription renewals rates. Renewal rates in key regions improved from 81% to 84% (3% compared to FY14). $25 $20 $15 $10 16% 27,000 Subscribers (51% of H1 Revenue) 5.63 EPS (up from 3.11) AU 8c Dividend (up 50%) Acquire New Customers. Continued to aggressively acquire new accounts at the same level as FY14. $5 $0 H1FY13 H1FY14 H1FY15 $59.1M Net Cash $33.7M Sales (up 9% pcp) EXPENSES EBIT EBIT margin % INVESTOR PRESENTATION 4

6 Significant Achievements 5

7 Americas Sales Furthering Momentum Successfully transitioning to a leveraged sales model o High value sales through Altium direct o Volume sales through the channel delivering extended reach US sales is regaining full strength o o o Growing new licences Increasing subscriptions Launch of SolidWorks World in February generating strong interest from resellers 6

8 European Sales Delivering Solid Performance Confident we will achieve full year target Additional resources & management focus to ensure targets are achieved Created and filled a new leadership role: VP Sales, EMEA Indirect territories on track to achieve their quotas Underlying demand remains solid 7

9 Other Focus Areas for the Remainder of FY15 Aggressively drive new account acquisition Mobilise resources to further increase our subscription rates Accelerate the roll out of the expanded product range Close-out strategic partnership tracks to begin selling and drive revenue Accelerate the transition of China towards value sales We are confident to achieve our full year FY15 target of double digit growth 8

10 Agenda 1 Company Highlights & Key Focus Areas for the Remainder of FY Half Year 2015 Financial Performance & Metrics Market Opportunity & Growth Strategy Appendix: Company Overview & Long Term Outlook

11 Altium s Revenue Sources Subscriptions Attachment to New License Sales Lapsed Subscriptions Re-joining and upgrades Altium Subscription (Recurring Revenue) 51% (50% H1FY14) (47% H2FY14) Altium Software (New Licenses) Subscription Renewals Other (Services & Hardware) Tasking Software (New License & Maintenance) INVESTOR PRESENTATION 10

12 Altium s Subscription Pool 2,700 Lapsed Subscriptions Non-renewals +2,230 +1,330 New Subscriptions Attached to New License Sales Re-join Lapsed Subscribers Re-joining and Upgrades Developed pool = 85% of subscription pool H1 FY15 Renewal rate of 84.6% (up from 81.6% FY14) Subscription Pool ~ 27,000 at Dec 14 Under-developed pool = 15% of subscription pool (comprised mainly of China, Russia & Latin America) H1 FY15 Renewal rate of 30.1% (up from 23.4% FY14) 11

13 Seasonality Curves - Revenue: Sales: Deferred Revenue Sustain revenue growth (13% CAGR) notwithstanding quarterly seasonality Linear (Deferred Revenue) 12

14 Introduction Altium s H1 Revenue Contribution by Region $16 Americas $16 EMEA $14 $14 $12 $12 $10 $8 $6 $4 $2 $10 $8 $6 $4 $2 Historical CAGR 13% Across All Regions $0 FY10 FY11 FY12 FY13 FY14 FY15 $0 FY10 FY11 FY12 FY13 FY14 FY15 $16 China $16 APAC $14 $14 $12 $12 $10 $8 $6 $10 $8 $6 (Flat last three years) Other Tasking (Licenses & Maintenance) $4 $2 $0 FY10 FY11 FY12 FY13 FY14 FY15 $4 $2 $0 FY10 FY11 FY12 FY13 FY14 FY15 Altium Licenses Altium Subscription INVESTOR PRESENTATION 13

15 Altium s Operating Costs Workforce investment Investment focus and deployment to drivers of growth: - R&D - Sales & Marketing resources. Customer success: - Software maintenance - Technical support, - User education Operating leverage increase through growth of subscription revenue Functions Research & Development Sales & Marketing Customer Success FY14 FY15 projected General & Admin 14

16 Altium s Balance Sheet $60 $50 $40 $30 $20 Cash and Cash equivalents Capital Raising Dec-14 Jun-14 Var $ '000 $ '000 $ '000 % Cash and cash equivalents 59,054 22,049 37, % Trade and other receivables 15,535 22,429 (6,894) -31% Other current assets 1,557 1,582 (25) -2% Total current assets 76,146 46,060 30,086 65% Trade and other receivables 1,115 1,136 (21) -2% Property, plant and equipment 2,331 1, % Other non-current assets 3,881 4,898 (1,017) -21% Total non-current assets 7,327 7,942 (615) -8% Total assets 83,473 54,002 29,471 55% Trade and other payables 4,002 5,499 (1,497) -27% Borrowings (10) -17% Tax liabilities 1, , % Provisions 1,939 1, % Deferred revenue 25,390 29,727 (4,337) -15% Total current liabilities 32,919 37,397 (4,478) -12% $10 $0 FY11 FY12 FY13 FY14 Dec-14 - Successful capital raising - Operating Cash Flow up 16% to $7.4m - Minimal borrowings - Debt/Equity less than 1% Borrowings (21) -24% Provisions 2,024 2,829 (805) -28% Deferred revenue 4,844 5,981 (1,137) -19% Other liabilities % Total non-current liabilities 7,115 9,014 (1,899) -21% Total liabilities 40,034 46,411 (6,377) -14% Net assets 43,439 7,591 35, % Contributed equity and reserves 131,280 94,268 37,012 39% Accumulated losses (87,841) (86,677) (1,164) 1% Total equity 43,439 7,591 35, % 15

17 Altium s Cash Flow Dividends paid/declared H1FY15 H1FY14 Var $ '000 $ '000 $ '000 % Cash flows from operating activities Receipts from customers 37,032 35,867 1,165 3% Payments to suppliers and employees (29,499) (29,052) (447) 2% Net Interest paid % Net income taxes paid (408) (553) % Operating Cash Flow 7,353 6,316 1,037 16% Capital Expenditure Payments for property, plant and equipment (1,195) (407) (788) 194% Final Free Cash Flow 6,158 5, % Cash flows from financing activities Proceeds from exercise of options - 2,562 (2,562) Proceeds from issue of shares 39,966-39,966 Dividends paid (7,941) (8,594) 653 Repayment of borrowings (38) (105) FY12 FY13 FY14 FY15 Interim Subtotal 38,145 (228) 38,373 > 100% Effects of exchange rate changes (1,140) 17 (1,157) > 100% Increase in cash and cash equivalents 37,005 (211) 37,216 > 100% Steady increase in dividend payments to shareholders 16

18 Half Year Results Key Metrics USD millions H1FY15 H1FY14 Change % H1FY15 H1FY14 Change % Total Revenue (excl. Interest) % Reported Expenses % (excl. D&A & Interest) EBITDA % Depreciation Amortisation EBIT % Net Interest Income tax expense NPAT >100% EPS % Dividends (AU cents) % Key Margin Analysis EBIT Margin 26% 16% EBITDA Margin 27% 18% Net Profit Before Tax Margin 26% 16% Net Profit After Tax Margin 18% 10% Return on Equity 27% 3% Debt/Equity 0.3% 1.9% Balance Sheet (USD millions) Cash & Cash Equivalents >100% Net Assets >100% Operating cash flows % 17

19 Agenda 1 Company Highlights & Key Focus Areas for the Remainder of FY Half Year 2015 Financial Performance & Metrics Market Opportunity & Growth Strategy Appendix: Company Overview & Long Term Outlook

20 Rise of Smart Connected Devices Web s Search & Discovery Information is Indexed Web s Social Networking People are Networked Web s Internet of Things Electronics puts Internet into Things 19

21 Printed Circuit Boards Central to Electronics At the Heart of All Intelligent Systems Are Electronics and Printed Circuit Boards 20

22 Increasing Demand in Electronics is the Main Growth Driver 60% By % Electronic Value (Hines, 2012) Traditional Vehicle 75% Electronic Value (Hines, 2012) Hybrid/Electric 21

23 Use of Smart Electronics in Everyday Things The Nest thermostat learns the temps you like, turns itself down when you're away, and has remote control through Wi-Fi Complex Design with Multiple Printed Circuit Boards 22

24 Multidisciplinary Designing Smart Engineering Connected is Products Driving Market Convergence Cloud System Engineering Cloud application development and infrastructure management Cloud Computing Embedded System Engineering Development of Control Systems in Electromechanical devices Electronics Engineering Creation of high-performance electronic hardware with complex form factor Mechanical Engineering Designing complex objects with sophisticated electromechanical behaviour Electrical Engineering Development of wire harness and electrical systems in Electromechanical devices

25 Altium - the Next Generation PCB Design Software Company Altium is the only pure-play PCB design software company in the world With over 30 years of continuous design in PCB software Altium is best in class Our platform base provides agility to partner with other engineering design tools We support deep integration of our tools to other engineering disciplines (including mechanical CAD) We support and work with specialised goto-market plays 24

26 Altium s High Level Strategy Build Momentum by Focusing on Core Strengths Expand Market Reach through Partnership Acquisition Grow Capability Through Acquisition 25

27 ALTIUM (Transactional Model) TASKING (Enterprise Model) Brand Acquisition Farnell (Catalogue-based Model) MCAD (Transaction Model - Indirect) New Partners Growing Capability Through Acquisition & Partnership Technology Acquisition Altium will Grow by Acquiring/Partnering with Brands that are Associated with the Design of PCB and Smart Devices Acquisition Strategy Partnership Strategy 26

28 Altium s Core Strengths & Enduring Competitive Advantages Core Strengths Competitive Advantages Established Brand in Most Countries in the World Complex Software IP Consisting of Millions of Lines of Code Altium is the Only Pure-Play PCB Company in the World Altium has a Strong Operating Leverage Sustainable Business Transactional Sales Expanding Margin Customer Stickiness Value-based Sales with Strong Operating Leverage Altium Enjoys a High Level of Customer Loyalty 27

29 Agenda 1 Company Highlights & Key Focus Areas for the Remainder of FY Half Year 2015 Financial Performance & Metrics Market Opportunity & Growth Strategy Appendix: Company Overview & Long Term Outlook

30 30 Years of Continuous R&D in PCB Design Software The company was founded by creating the first version of Altium Designer, Protel PCB 1985 Altium launches PCBWorks introducing a specialized version of its PCB Design Software for SolidWorks Now Altium launches Altium Designer 6, the world s first Native 3D PCB design software Altium Launches Protel for Windows - World's first Microsoft Windows-based PCB design system Altium Successfully completes an IPO on Australian Stock Exchange Altium launches Altium Designer 13 introducing DXP 2.0, its next generation integration platform opening up Altium Designer to third-party developers 29

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

32 Altium Products Altium Vault Design Data Management & Collaboration Software 3D Printed Circuit Board Design Software Tasking Embedded Software Development Tools Concept Design Capture & Verification Embedded Software Development FPGA Prototype Electronic Design Printed Circuit Board Layout Manufacturing 31

33 Diversity of Applications Automotive Aerospace & Defence Life Sciences Mobile Devices & Communications Consumer- Electronics Electronics & High-Tech Research & Education Industrial Controls Automation Computers Semiconductors 32

34 High Profile Customers Automotive Aerospace & Defence Life Sciences Mobile Devices Consumer- Electronics Electronics & High-Tech Research & Education Industrial Controls Computers Semiconductors 33

35 Global Reach Sales and Support Centres San Diego, Boston, Karlsruhe, Shanghai, Sydney Research & Development Centres San Diego, Ukraine, Netherlands, Shanghai Main Operations Centres San Diego, Karlsruhe, Shanghai Global HQ San Diego Regional HQ Karlsruhe Regional HQ Shanghai Corporate & Registered Office ASX Listing Sydney Network of channel partners, with over 50 authorized Value-Added-Resellers 34

36 PCB Design Software Market Segmentation & Size Low-end 7% of market value. Simple designs carried out by multiskilled engineers High-end 57% of market Value Large engineering teams designing complex products High-end Low-end 20k+ Price Range Total Market size: $800M Currently Addressable: $500M Mainstream 36% of market value Moderate to high design complexity, carried out by small teams of specialist engineers Less than 2k Price Range 35

37 Low-end Mainstream High-end Industry Consolidation & Competitive Landscape 1960 s & 1970 s 1980 s 1990 s 2000 s 2010 s Cadnetix Daisy Mentor Graphics (Board Station) Veribest (Intergraph) Expedition Mentor Graphics Racal-Redac Zuken (CR-2000) ECAD (Cadence Allegro) Cooper & Chan PADs Altium (Protel) PCAD OrCAD CADStar Accel Technology (Tango) CR-5000/8000 Zuken Allegro Cadence Altium Designer Altium PADs (Mentor Graphics) OrCAD (Cadence) CADStar (Zuken) National Instruments (Electronic Workbench) CADSoft (Eagle) Eagle Electronic Workbench Pulsonix 36

38 PCB Design Software - Global Market Share Printed Circuit Board Estimated Market Share (by Revenue) Source: PCB Market Trends 2014 Gary Smith EDA 37

39 Long-Term Outlook The rise of smart connected devices is creating new opportunities for PCB Expect to see continuing growth in revenue (licences & subscription) Will maintain or improve operating leverage The impact of Altium s higherend product release in FY15 is anticipated to be felt during FY16 and beyond Altium s aspirational goal is to achieve $100 million in revenue by FY17 38