ASX Listing Presentation. July 2017

Transcription

1 ASX Listing Presentation July 2017

2 Important Notice This presentation has been prepared and authorised by GeoOp Limited (GEO) ARBN New Zealand company number: NZAX:GEO. GEO is a public company incorporated in New Zealand under the Companies Act 1993 (New Zealand) (Companies Act) and is registered in Australia as a foreign company under the Corporations Act 2001 (Cth) (Corporations Act). This presentation has been prepared in relation to the proposed offer by GEO of fully paid ordinary shares and free attaching options (on a 1:3 ratio) (Securities) pursuant to an Australian prospectus to be prepared under Part 6D.2 of the Corporations Act 2001 (Cth) (Offer). Taylor Collison Limited is the Lead Manager to the Offer ( Lead Manager ). Information in this presentation: is of a general nature only, and is for general information purposes only, and is not an offer or invitation for subscription, purchase, or sale of securities in GEO (whether under the Offer or otherwise); is not a recommendation or opinion that any person should buy or sell securities in GEO, is not financial or investment advice to any person, and has been prepared without taking into account the investment objectives, financial situation or particular needs (including financial and taxation issues) of any person. Any person who is considering an investment in GEO should undertake his or her own independent analysis and seek appropriate professional advice from his or her legal, financial, tax and/or business advisor(s); should be read in conjunction with, and is subject to, GEO s Annual Report, NZAX market releases, and information published on GEO s website is a summary only, and not a complete description of GEO and its business. This presentation does not contain all the information that a prospective investor may require in evaluating a possible investment in GEO; includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; includes forward-looking statements about GEO and the environment in which GEO operates, which are subject to uncertainties and contingencies outside of GEO s control GEO s actual results or performance may differ materially from these statements. To the extent any statements constitute forward looking statements or statements about future matters (including projections, guidance on future revenues, earnings and estimates), the information: o is provided as a general guide only and should not be relied upon as an indication or guarantee of future performance or events; o is 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, and involve known and unknown risks, uncertainties and other factors that may cause GEO s actual results, performance or achievements to differ materially from any actual or future results, performance or achievements expressed or implied by these forward-looking statements; o reflects GEO s intent, belief or expectations at the date of this presentation. Although management may indicate and believe the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect. There can be no assurance that the results contemplated in the forward-looking statements will be realised. None of GEO, the Lead Manager, their respective related bodies corporate, directors, officers employees, advisers, agents or any other person, gives any warranty, representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur, or as to the accuracy of any assumptions upon which forward looking statements are based; and may contain information from third parties believed to be reliable; however, no representations or warranties are made as to the accuracy or completeness of such information or any other information contained or referred to in this presentation. To the maximum extent permitted by law, GEO, the Lead Manager, their related bodies corporate and their respective directors, officers, employees, advisers and agents disclaim all liability and responsibility (including without limitation arising from fault or negligence on their part) for any direct or indirect loss or damage which may be suffered by any recipient through the use of or reliance on anything contained in or omitted from this presentation. No recommendation is made as to how investors should make any investment decision in relation to GEO. Any recipient of this presentation should independently satisfy themselves as to the accuracy of all information contained in this presentation. GEO, the Lead Manager, their related bodies corporate and their respective directors, officers, employees, advisers and agents do not assume an obligation to any person to update any information in this presentation over time. None of the Lead Manager, nor any of its respective advisers, nor the advisers of GEO, have caused the issue, submission, dispatch or provision of this presentation and none of them makes or purports to make any statement in this presentation and there is no statement in this presentation which is based on any statement by any of them. This presentation is not a prospectus, product disclosure statement, disclosure document or other offer document under Australian law or under any other law. This presentation is a summary and does not purport to be complete, nor has it been independently verified. While all reasonable care has been taken in compiling this presentation, GEO accepts no responsibility for any errors or omissions. All information in this presentation is current at the date of circulation, and all currency amounts are in either New Zealand or Australian dollars, as or unless otherwise stated. Investors should read and consider the final Prospectus in full and seek advice from their financial adviser or other professional adviser before deciding to invest in the Offer. Any decision by a person to apply for Securities should be made on the basis of information contained in the Prospectus and an independent assessment as to whether to invest, and not in reliance on any information contained in this presentation. A copy of the Prospectus will be available at following lodgement with ASIC. Applications for Securities under the Offer must be made using the application form accompanying the Prospectus. 2

3 Introduction to GEO Established SaaS company Developing productivity tools for mobile workforces 27,000+ licenced users in 26 countries FY17 projected revenues NZ$4.5m NZAX listed, market cap NZ$16.9m Transferring listing to ASX and corporate migration: Management team located in Australia 60% of revenues generated in Australia Major shareholders are Australian 3

4 Key people Roger Sharp Chair Anna Cicognani CEO and MD Matt Johnson CFO Jason Faulkner CTO 30 years of investing in, financing and running growth businesses. 20-year experience in digital media and technology. 20-year chartered accounting experience. 20-year experience in high availability tech builds. Founder of technology investment firm North Ridge Partners. Former Global Head of Technology for ABN AMRO Bank in London and CEO of ABN AMRO Asia in Hong Kong. Chair of Webjet. CEO and C-level roles in public and private companies such as APN, PMP, Telstra and Fairfax. PhD from Sydney University, Honorary Professor at UOW, Director of Basketball Australia. Senior roles in British Telecom, George Patts and Fairfax. Track record in supporting millions of monthly active users in both enterprise and venture funded start-ups across energy, logistics, entertainment and social industries. Former CFO at SaaS start-up Maestrano. New leadership team built since

5 Productivity tools for a mobile workforce For any business with workers providing services in the field Workforce job and costing management Create, schedule and assign jobs Record job details and attach photos, signatures and files in the field, real time Invoice jobs and collect on the spot payment Integrated with Xero, Quickbooks, MYOB and other SaaS platforms For businesses with a field sales channel e.g. telcos, energy and media businesses Sales managers allocate sales territory and track live campaign performance More efficient prospecting through consolidating sales territories, targets, geographic and demographic data More efficient sales through real-time closure and integration into client ERP systems 5

6 New product development Manages distributed healthcare and social workers for NDIS service providers Currently in pilot with an NDIS customer Real-time management of schedules, availability, rostering and service delivery Real-time communication between client, carer, care team and operations Potential Australian market of 460k participants needing NDIS services by 2020 Capital raising will fund roll out in FY18 after IPO 6

7 SaaS business model Subscription - annual or month-by-month (at a 20% premium) Annual licence fee paid upfront or billed monthly Self-service sign up for GeoService Training and implementation to facilitate change management with customers Marketing through: digital channels inbound and outbound sales trade shows 7

8 Market opportunity GROWTH IN THE SAAS MARKET Secular shift by business to SAAS applications, seeking cost reduction and improved productivity Global SaaS market growing at ~20% p.a projected global market size US$246.8bn GROWTH IN GEO S MARKET SEGMENTS GeoService: 78% of SMBs will increase SaaS usage by 2020 with most increasing from 3 to 7 applications GeoSales: the field sales channel is resurgent in the US, with 30%+ CAGR in field sales FTEs from as other sales channels have become less effective Sources:

9 Top Customers 9

10 Customer profiles GeoService Strong presence in the SME market 26,098 licences with ARPU NZ$91 Increasing focus on Enterprise level customers with higher ARPU 55% of group revenues GeoSales Strong presence in subscription-based Enterprise sales market (e.g. energy, telecoms, media) 1,584 licences with ARPU of NZ$1,063 45% of group revenues 10

11 Group licence growth 11

12 GeoService - consistent growth Consistent long-run growth in this foundation product MRR grew by 27.3% in FY17 Delivered by a combination of additional users and increases in pricing alongside product upgrades Major initiatives completed and expensed in FY17 to drive future growth: Shift to default annual plans in Q2 New Enterprise-grade platform launched in Q3 which customers are being migrated to Migration to AWS in Q3 Long-run opportunity to build share in a highly fragmented market that is going digital with no clear leader 12

13 GeoSales expanding the opportunity Acquired June 2016 Consistent long run growth track record Lost a major customer at the time of acquisition as client moved its technology solution in house 12.4% MRR growth in FY17 while being integrated into GEO Multiple long-term benefits to GEO: Higher ARPU Enterprise application Extends GEO s workforce productivity suite into field sales Established presence in the US market, now built out further Immediate scale in revenues and unit economics Completion of integration process in FY17 provides backdrop for increased growth rates 13

14 Customer Retention Lifetime Value FY17 GeoService Churn 1.2% - 1.8% / month FY17 GeoSales Churn ~1% per month GeoService churn is improving, with further gains expected in FY18 due to: annual subscription is now the default plan, improving retention materially continuing focus on Enterprise customers (>20 licences), with annual retention rates 92-96% product improvements and improved onboarding experience are improving post-trial retention GeoSales experiences low churn in customer numbers due to its Enterprise segment licenced user numbers typically fluctuate seasonally typically decreasing in Winter and increasing at other times GEO does not define this as churn 14

15 Customer Retention Lifetime Value Generally accepted methodology of valuing incremental customer value created for SaaS companies: FY17 LTV created Current 80% annual retention rate implies average customer life of five years NZ$3.1m Multiply increase in gross margin by average customer life to derive LTV created Retention strategies above will positively impact LTV: eg. 88% retention increases LTV by 37% LTV / CAC ratio 2.6x Accepted methodology for assessing effectiveness of sales function in creating LTV and potential long term profit margins at scale: Calculated by dividing LTV created in a period by the sales and marketing spend FY17 LTV / CAC ratio of 2.6x 15

16 Trend to cash breakeven Operating Costs Break-even scenario Revenue New cash: A$2.5m-$3.5m With revenue growth: 30-40% Cash Flow delivers Breakeven run-rate: months Revenue, operating costs and cash burn have all shown a consistent improving trend across FY17 Monthly average operating cash burn reduced from ~NZ$320k to ~$230k IPO funds will enable acceleration of marketing spend to drive growth rates GEO expects cost management and revenue growth to continue to drive the trend to breakeven 16

17 Financial Results AU$ 000 Operating Revenue Other Income Total revenue FY15 FY14 15 months FY16 FY17 (1) 321 1,125 1,768 3, ,371 2,102 4,178 FY17 forecast shows inclusion of GeoSales revenues and costs since acquisition in June 2016 FY17 revenues driven by organic growth in GeoService and full year post-acquisition contribution of GeoSales Other Income is primarily Training and Implementation revenues General Administration costs held flat despite acquiring GeoSales Significant cost savings achieved during integration FY17 costs include $400k in one-off expenses: Expenses Research & Development (661) (2,185) (1,510) (2,837) Sales & Marketing (948) (2,121) (1,338) (1,784) (2,720) (2.424) (2,330) (2,442) Total Expenses (4,329) (6,730) (5,178) (7,063) EBITDA (4,006) (5,359) (3,076) (2,885) General Administration Forecast FY17 EBITDA before transaction related expenses (1) acquiring and integrating GeoSales, reducing from 53 (Jun-16) to 42 (Jun-17) FTEs preparing for IPO and tax and legal migration to Australia (2,485) Unaudited forecast FY17 ends with materially improved cash flow, a scalable platform with 100% uptime and a base for growth once additional capital is raised for investment in sales and marketing 17

18 The Offer Listing on ASX with simultaneous delisting from NZAX Corporate migration to Australia intended during FY18 Prospectus issue to raise A$3m with over allocations Priority offer to existing shareholders Funds raised will be used for working capital and to accelerate sales and marketing spend 30 & 60 day VWAP are A$18.8 cents, spot price is A$20.6 cents (GEO is suspended for offer pricing) Offer to be conducted at A$ cents Includes a free one-for-three option issue with a three year term and A$30 cents strike price Offer to open early August

19 Valuation Signals FY17 MRR grew 20.6% on constrained marketing while establishing a growth platform: digesting a major acquisition infrastructure migration major product launches GeoService MRR grew by 27.3% and GeoSales by 12.4% during its integration into GEO FY18 CEO option vesting contains a 30% pa revenue growth trigger and positive EPS in FY19 Convertible note holders (issued as part-settlement for acquisition) intend converting 75% of remaining notes into the offer (leaving NZ$367k for conversion or redemption by 30 June 2018) Historical growth rates if achieved in FY18 would price GEO at ~2.5x FY18 revenues 19

20 Summary Proven business with 27,000+ users in 26 countries New leadership and strategy from 2015 Secular shift to SaaS is driving high industry growth rates Significant headroom to build market share Focussed on profitable growth through organic growth, new product launches and M&A Fundamental improvement in financial metrics in FY17 Clear path to profitability Seeking to raise A$3m with over allocations Proceeds to be used for working capital and increased sales and marketing 20

21 End Productivity tools for a mobile workforce 21