Delivering Sustainable Return While Positioning for Future Growth Altium Investor Presentation 27 August 2014 Aram Mirkazemi - CEO Sydney Richard Leon - CFO
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. 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. Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. fksbpql R =m R bpbkq^qflk= O=
Altium’s Financial Snapshot $80M Altium’s FY14 Financial Metrics 10% Sales 13% $70M Revenue 15% $11.2M EBIT $22.0M 21% Net Cash NPAT $17.1M 26,000 $60M 11% (up 49%) (up 717%) (up 354%) 12% Subscribers 9% $50M $71.1M $18.3M ( 47% of Revenue ) 7% EBITDA Revenue (up 15%) $40M Subscription Revenue $18.5M $290M $30M 12% 403 Market Underlying Op Cash Flow CAGR Employees Profit CAP (up 50%) $20M EBIT 10.3 $76.1M Sales $10M Debt 12.0 Div EPS Operating Free (up 9%) (up 10%) (up from 1.3) Cash Flow $0M 2010 2011 2012 2013 2014 fksbpql R =m R bpbkq^qflk= P=
Agenda Company & Industry Overview 1 FY14 Results & Altium’s Fundamentals 2 Mega Trends & Market Opportunity 3 Growth Strategy & Successful Execution 4 Outlook – FY15 and Beyond 5
Altium History Nick Martin founds the company Altium Launches Altium Acquires Tasking Altium Launches AD14 Altium Acquires Morfik by creating the first version of Protel 98 Complete a leading provider of embedded Introducing Advanced to bolster its drive towards Altium Designer, Protel PCB 32-bit design suite system compiler technology Design and 3D Capabilities building a platform for IoT 2010 1998 2014 1985 2002 Over 25 Years of Continuous R&D in Printed Circuit Board Design Software 1988 1991 1999 2006 2011 Altium Launches AD10 Introducing Altium Launches Protel for Altium Successfully Altium Launches Altium Launches AutoTrax its Next Generation Design Tools Window s - World's first completes an IPO on World’s first 3D PCB Offering autorouting and with Vault Technology Microsoft Windows-based Australian Stock Exchange photo plotting PCB design system R=
What is a Printed Circuit Board? Circuit Diagram Layout Film Bare Board Assembled Board Design Capture Layout Fabrication Assembly fksbpql R =m R bpbkq^qflk= S=
Altium Products Altium Designer 3D Printed Circuit Board Altium Vault Tasking Design Software Design Data Management & Embedded Software Collaboration Software Development Tools Electronic Design Embedded Design FPGA Printed Circuit Concept Capture & Software Manufacturing Prototype Board Layout Verification Development fksbpql R =m R bpbkq^qflk= T=
Diversity of Applications Automotive Aerospace & Life Sciences Mobile Devices & Consumer- Defence Communications Electronics Electronics & Research & Industrial Controls Computers Semiconductors High-Tech Education Automation fksbpql R =m R bpbkq^qflk= U=
High Profile Customers Automotive Aerospace & Defence Life Sciences Mobile Devices Consumer- Electronics Semiconductors Electronics & High-Tech Research & Education Industrial Controls Computers fksbpql R =m R bpbkq^qflk= V=
Global Reach Sales and Support Centres Research & Development Centres San Diego, Boston, Karlsruhe, Shanghai, Sydney San Diego, Ukraine, Netherlands, Shanghai Regional HQ Karlsruhe Global HQ Regional HQ San Diego Shanghai Corporate & Registered Office ASX Listing Sydney Network of channel partners, with over Main Operations Centres 50 authorized Value-Added-Resellers San Diego, Karlsruhe, Shanghai fksbpql R =m R bpbkq^qflk= NM=
PCB Design Software Market Segmentation & Size Total Market size: $800M High-end Currently Addressable: $500M 57% of market Value Large engineering teams CAGR: 5-6% designing complex products 20k+ Price Range High-end Mainstream 36% of market value Moderate to high design complexity, carried out by Low-end small teams of specialist engineers 7% of market value. Simple designs carried out by multi- Low-end skilled engineers Less than 2k Price Range fksbpql R =m R bpbkq^qflk= NN= Source: PCB Market Trends 2013 – Gary Smith EDA
Industry Consolidation & Competitive Landscape 1960’s & 1970’s 1980’s 1990’s 2000’s 2010’s Cadnetix Daisy Veribest (Intergraph) Expedition High-end Mentor Graphics ( Board Station ) Mentor Graphics Racal-Redac CR-5000/8000 Zuken ( CR-2000 ) Zuken Allegro ECAD (Cadence Allegro ) Cadence Cooper & Chan Altium Designer Mainstream PCAD Altium PADs PADs ( Mentor Graphics ) OrCAD ( Cadence ) OrCAD CADStar ( Zuken ) CADStar Altium (Protel) Accel Technology ( Tango ) Low-end Eagle CADSoft (Eagle) National Instruments Electronic Workbench (Electronic Workbench) NO= Pulsonix
PCB Design Software - Global Market Share Printed Circuit Board Estimated Market Share (by Revenue) Cadence Mentor Graphics 28% 35% 5% Other 10% 22% Altium Zuken fksbpql R =m R bpbkq^qflk= NP= Source: PCB Market Trends 2013 – Gary Smith EDA
Altium’s Enduring Competitive Advantage Established Brand in Most Sophisticated Software with Countries in the World Millions of lines of code Developed over 25 years, Active user community in virtually virtually impossible to rewrite, every country in the world reproduce or copy Transactional Sales Value-based Sales with Strong Operating Leverage The only ‘Pure Play’ PCB company in the World fksbpql R =m R bpbkq^qflk= NQ=
Agenda Company & Industry Overview 1 FY14 Results & Altium’s Fundamentals 2 Mega Trends & Market Opportunity 3 Growth Strategy & Successful Execution 4 Outlook – FY15 and Beyond 5
Altium’s Key Financial Metrics $80M Sales 10% Revenue 13% Cash Flow $70M Revenue Growth 15% ( Sales 10% ) 15% Underlying Profit 21% Revenue $71.1M ( Sales $76.1M ) EBIT $60M 11% 12% 9% $50M 7% EBIT $17.1M ( Margin 23% ) $40M Underlying Profit $22.9M $30M $20M Operating Cash Flow $18.5M Net Cash $22.0M ( 49% Growth ) Dividend $10M 12.0 AU CPS Full Year $0M 2010 2011 2012 2013 2014 fksbpql R =m R bpbkq^qflk= NS=
Altium’s Revenue Sources Subscriptions Attachment to New License Sales Lapsed Subscriptions Re-joining 10% Altium Software ($7M) 3% (New Licenses) ($2.1M) 36% 47% ($25.3M) Tasking Software (New License & 34% Altium Maintenance) ($24.4M) Subscription 10% (Recurring Revenue) ($7M) Other 7% ($5.3M) Subscription (Services & Hardware) Renewals The percentage breakdown for sales sources relate to FY14 fksbpql R =m R bpbkq^qflk= NT=
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