altium limited asx announcement · 2015-02-26 · altium limited asx announcement . altium limited...
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Altium Limited ASX Announcement
Altium Limited - February 2015 Investor Presentation Sydney, Australia - 26 February 2015 - 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: www.altium.com.
Investor Relations contact details: Kim Besharati - VP Investor Relations & Corporate Affairs (US-based) Ph: +1 858 864 1513 Mobile: +1 760 828 3567 Alison Raffin - Company Secretary (Australian-based) Ph: +61 2 9410 1005
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 www.altium.com. You can also follow and engage with Altium via Facebook, Twitter and YouTube.
A L T I U M L I M I T E D
ACN 009 568 772
3 Minna Close Belrose NSW 2085 Australia
t +61 2 9410 1005 f +61 2 9410 0509
www.altium.com
Altium Mid-Year Investor Presentation 26 February 2015
Sydney & Melbourne
Delivering Strong Performance &
Building Momentum for Further Growth
Aram Mirkazemi CEO
Richard Leon CFO
INVESTOR PRESENTATION 2
Disclaimer
This presentation has been prepared by Altium Limited (ACN 009 568 772) 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.
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.
Financial data
All dollar values are in US dollars (US$) unless as otherwise presented.
Introduction Introduction
Agenda
Half Year 2015 Financial Performance & Metrics 2
1
Market Opportunity & Growth Strategy
Appendix: Company Overview & Long –Term Outlook
Company Highlights & Key Focus Areas for the Remainder of FY15
4
3
INVESTOR PRESENTATION 4
Introduction Altium’s H1 FY15 Financial Highlights
REPORT CARD
Acquire New Customers. Continued to aggressively
acquire new accounts at the
same level as FY14.
Increase subscription renewals rates. Renewal rates in key regions
improved from 81% to 84% (3%
compared to FY14).
Maintain top line growth and expand margins. First half 17% revenue growth
and EBIT margin increased
from 16% to 26%.
$40
$35
$30
$25
$20
$15
$10
$5
$0 H1FY14 H1FY15
EXPENSES EBIT EBIT margin %
Expanding Margins 26%
16%
$37.8M Revenue (up 17% pcp)
AU 8c Dividend
(up 50%)
$59.1M Net
Cash
EBIT $9.6M
(up 84% pcp)
27,000 Subscribers
(51% of H1 Revenue)
$33.7M Sales (up 9% pcp)
5.63 EPS (up from
3.11)
H1FY13
5
Significant Achievements
6
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 Growing new licences
o Increasing subscriptions
o Launch of PCBWorks @ SolidWorks
World in February generating strong
interest from resellers
7
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
8
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
Agenda
Half Year 2015 Financial Performance & Metrics 2
1
Market Opportunity & Growth Strategy
Appendix: Company Overview & Long –Term Outlook
Company Highlights & Key Focus Areas for the Remainder of FY15
4
3
INVESTOR PRESENTATION 10
Altium’s Revenue Sources
51% (50% H1FY14)
(47% H2FY14)
Subscriptions Attachment
to New License Sales
Lapsed Subscriptions Re-joining
and upgrades
Altium Subscription
(Recurring Revenue)
Subscription
Renewals
Altium Software (New Licenses)
Tasking Software (New License & Maintenance)
Other (Services & Hardware)
11
Altium’s Subscription Pool
Lapsed
Subscriptions Non-renewals
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)
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) Subscription Pool
~ 27,000 at Dec 14
+2,230 +1,330
2,700
12
Seasonality Curves - Revenue: Sales: Deferred Revenue
Sustain revenue growth (13% CAGR)
notwithstanding quarterly seasonality
Linear (Deferred Revenue)
INVESTOR PRESENTATION 13
Introduction Altium’s H1 Revenue Contribution by Region
Americas
$0
$2
$4
$6
$8
$10
$12
$14
$16
EMEA
China APAC
FY15
Historical CAGR 13%
Across All Regions
FY14 FY13 FY12 FY11 FY10 $0
$2
$4
$6
$8
$10
$12
$14
FY15 FY14 FY13 FY12 FY11 FY10
$16
$0
$2
$4
$6
$8
$10
$12
$14
FY15 FY14 FY13 FY12 FY11 FY10
$16
$0
$2
$4
$6
$8
$10
$12
$14
FY15 FY14 FY13 FY12 FY11 FY10
$16
Other
Tasking (Licenses & Maintenance)
Altium Licenses
Altium Subscription
(Flat last three years)
14
Altium’s Operating Costs
Research & Development
Sales & Marketing
General & Admin
Customer Success
Functions
Customer success:
- Software maintenance
- Technical support,
- User education
Operating leverage increase
through growth of subscription
revenue
Investment focus and deployment to
drivers of growth:
- R&D
- Sales & Marketing resources.
Workforce investment
FY15 projected FY14
15
Altium’s Balance Sheet
$60
$50
$40
$30
$20
$10
$0 FY11 FY12 FY13 FY14 Dec-14
Cash and Cash equivalents
Dec-14 Jun-14 Var
$ '000 $ '000 $ '000 %
Cash and cash equivalents 59,054 22,049 37,005 168%
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 1,908 423 22%
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 50 60 (10) -17%
Tax liabilities 1,538 338 1,200 355%
Provisions 1,939 1,773 166 9%
Deferred revenue 25,390 29,727 (4,337) -15%
Total current liabilities 32,919 37,397 (4,478) -12%
Borrowings 67 88 (21) -24%
Provisions 2,024 2,829 (805) -28%
Deferred revenue 4,844 5,981 (1,137) -19%
Other liabilities 180 116 64 55%
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 35,848 472%
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 35,848 472%
- Successful capital raising
- Operating Cash Flow up 16% to $7.4m
- Minimal borrowings - Debt/Equity less than 1%
Capital
Raising
16
Altium’s Cash Flow
0.00
FY12
Dividends paid/declared
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY13 FY14 FY15
Interim
Final
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 228 54 174 322%
Net income taxes paid (408) (553) 145 -26%
Operating Cash Flow 7,353 6,316 1,037 16%
Capital Expenditure
Payments for property, plant and
equipment (1,195) (407) (788) 194%
Free Cash Flow 6,158 5,909 249 4%
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) 67
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
16.00
17
Half Year Results Key Metrics
Total Revenue (excl. Interest) 37.6 32.2 17%
Reported Expenses 27.5 26.3 5% (excl. D&A & Interest)
EBITDA 10.1 5.9 69%
Depreciation 0.4 0.5
Amortisation - 0.3
EBIT 9.6 5.2 84%
Income tax expense 3.0 1.9
Net Interest 0.2 0.02
NPAT 6.8 3.4 >100%
USD millions H1FY15 Change % H1FY14
EPS 5.63 3.11 81%
Dividends (AU cents) 8.00 4.00 100%
Key Margin Analysis
EBIT Margin 26% 16% EBITDA Margin 27% 18%
Balance Sheet (USD millions)
Net Assets 43.5 7.6 >100%
Cash & Cash Equivalents 59.1 22.0 >100%
Operating cash flows 7.4 6.3 16%
H1FY15 Change % H1FY14
Net Profit Before Tax Margin 26% 16% Net Profit After Tax Margin 18% 10%
Debt/Equity 0.3% 1.9%
Return on Equity 27% 3%
Agenda
Half Year 2015 Financial Performance & Metrics 2
3
1
Market Opportunity & Growth Strategy
Appendix: Company Overview & Long –Term Outlook
Company Highlights & Key Focus Areas for the Remainder of FY15
4
19
Rise of Smart Connected Devices
Information
is Indexed Search & Discovery
1990’s Web 1.0
Social Networking
2000’s Web 2.0 People are Networked
Electronics puts
Internet into Things Internet of Things
2010’s Web 3.0
20
Printed Circuit Boards Central to Electronics
At the Heart of All Intelligent Systems Are Electronics and Printed Circuit Boards
21
Increasing Demand in Electronics is the Main Growth Driver
75% Electronic Value (Hines, 2012)
Hybrid/Electric
40% Electronic Value (Hines, 2012)
Traditional Vehicle
60%
By 2017
22
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
Designing Smart Connected Products
Designing Smart Connected Products
Cloud System Engineering
Cloud application development and infrastructure
management
Development of Control Systems in
Electromechanical devices
Embedded System Engineering
Creation of high-performance electronic
hardware with complex form factor
Electronics Engineering
Mechanical Engineering Designing complex objects with sophisticated
electromechanical behaviour
Electrical Engineering Development of wire harness and electrical systems
in Electromechanical devices
Cloud
Computing
Multidisciplinary Engineering is Driving Market Convergence
24
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 go-to-market plays
25
Altium’s High Level Strategy
Build Momentum by
Focusing on Core
Strengths
Expand Market Reach
through Partnership
Grow Capability Through Acquisition
Acquisition
26
Growing Capability Through Acquisition & Partnership
ALTI
UM
(T
ransactional M
odel)
TASK
ING
(E
nte
rprise M
odel)
Acquisition Strategy
Technology Acquisition
Bra
nd A
cquis
itio
n
Altium will Grow by Acquiring/Partnering with Brands that are
Associated with the Design of PCB and Smart Devices
MC
AD
(Tra
nsaction M
odel
- In
direct)
Farn
ell
(Cata
logue
-based
Model)
New
Part
ners
Partnership Strategy
27
Altium’s Core Strengths & Enduring Competitive Advantages
Established
Brand in Most
Countries in the
World
Complex Software
IP Consisting of
Millions of Lines of
Code
Value-based Sales with Strong
Operating Leverage
Transactional Sales
Altium is the Only
“Pure-Play” PCB
Company in the
World
Altium has a
Strong
Operating
Leverage
Altium Enjoys a High Level of
Customer Loyalty
Customer Stickiness
Core Strengths Competitive Advantages
Expanding Margin
Sustainable Business
Agenda
Half Year 2015 Financial Performance & Metrics 2
4
1
Market Opportunity & Growth Strategy
Appendix: Company Overview & Long –Term Outlook
Company Highlights & Key Focus Areas for the Remainder of FY15
3
29
30 Years of Continuous R&D in PCB Design Software
2010
1985
1991
1999
The company was founded by
creating the first version of Altium
Designer, Protel PCB
Altium Launches Protel for
Windows - World's first Microsoft Windows-based PCB design system
Altium Successfully
completes an IPO on Australian Stock Exchange
2006
Now
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
Altium launches PCBWorks
introducing a specialized version
of its PCB Design Software for
SolidWorks
30
Printed Circuit Board Design and Manufacturing Process
Bare Board Layout Film Assembled Board Circuit Diagram
Fabrication Layout Assembly Design Capture
31
Altium Products
Electronic
Design Concept
Design Capture & Verification
Embedded Software
Development
FPGA Prototype
Printed Circuit Board Layout
Manufacturing
Altium Vault Design Data Management &
Collaboration Software
Tasking Embedded Software
Development Tools
3D Printed Circuit Board Design Software
32
Diversity of Applications
Automotive
Electronics &
High-Tech
Life Sciences Aerospace &
Defence
Consumer-
Electronics
Semiconductors Industrial Controls
Automation
Research &
Education
Mobile Devices &
Communications
Computers
33
High Profile Customers
Automotive
Electronics & High-Tech
Life Sciences Aerospace & Defence Consumer- Electronics
Semiconductors Industrial Controls Research & Education
Mobile Devices
Computers
34
Global Reach
Main Operations Centres San Diego, Karlsruhe, Shanghai
Research & Development Centres San Diego, Ukraine, Netherlands, Shanghai
Sales and Support Centres San Diego, Boston, Karlsruhe, Shanghai, Sydney
Network of channel partners, with over 50 authorized
Value-Added-Resellers
Global HQ San Diego
Corporate & Registered Office ASX Listing Sydney
Regional HQ Shanghai
Regional HQ Karlsruhe
35
PCB Design Software Market Segmentation & Size
High-end
Low-end
Total Market size: $800M Currently Addressable: $500M High-end
57% of market Value
Large engineering teams
designing complex products
Low-end 7% of market
value. Simple
designs carried
out by multi-
skilled engineers
Mainstream 36% of market value
Moderate to high design
complexity, carried out by
small teams of specialist
engineers
Less than 2k
Price Range
20k+ Price Range
36
Industry Consolidation & Competitive Landscape
PADs
Allegro Cadence
ECAD (Cadence Allegro)
Cooper & Chan
OrCAD
CADStar
Daisy
Cadnetix
Veribest (Intergraph)
Expedition Mentor Graphics Mentor Graphics (Board Station)
Altium Designer Altium PCAD
Altium (Protel)
Accel Technology (Tango)
PADs (Mentor Graphics)
OrCAD (Cadence)
CADStar (Zuken)
Main
str
eam
Low
-end
CADSoft (Eagle) Eagle
CR-5000/8000 Zuken
Racal-Redac
Zuken (CR-2000)
National Instruments
(Electronic Workbench) Electronic Workbench
Pulsonix
Hig
h-e
nd
1960’s & 1970’s 1980’s 1990’s 2000’s 2010’s
37
PCB Design Software - Global Market Share
Printed Circuit Board Estimated Market Share
(by Revenue)
Source: PCB Market Trends 2014 – Gary Smith EDA
38
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 higher-end 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