Changes, Implications & Insights The Role of Engineering Tools in the Rise of Smart Connected Products Blue Ocean Equities Technology Conference 2016 5 April, Sydney
Disclaimer This presentation has been prepared by Altium Limited (ACN 009 568 772) Fut utur ure pe performance nce - Forward looking statements, opinions and estimates and is for information purposes only. It does not constitute financial product provided in this presentation are based on assumptions and contingencies or investment advice or a recommendation to acquire Altium shares and which are subject to change without notice, as are statements about market has been prepared without taking into account the objectives, financial and industry trends, which are based on interpretations of current market situation or needs of individuals. Before making an investment decision conditions. Forward looking statements including projections, guidance on prospective investors should consider the appropriateness of the future earnings and estimates are provided as a general guide only and information having regard to their own objectives, financial situation and should not be relied upon as an indication or guarantee of future needs and seek legal and taxation advice appropriate to their jurisdiction. performance. An investment in Altium shares is subject to investment and Altium is not licensed to provide financial product advice in respect of Altium other known and unknown risks, some of which are beyond the control of shares. Altium Limited. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, Altium, Altium Designer, Altium Vault, Ciiva, Circuitmaker, Circuistudio, opinions and conclusions contained in this presentation. To the maximum Octopart, PCBWorks, Protel and Tasking, and their respective logos, are extent permitted by law, none of Altium employees, its directors, employees trademarks or registered trademarks of Altium Limited, or its subsidiaries. or agents, nor any other person accepts any liability, including, without All other registered or unregistered trademarks mentioned in this limitation, any liability arising out of fault or negligence, for any loss arising presentation are the property of their respective owners, and no trademark from the use of the information contained in this presentation. In particular, rights to the same are claimed 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 Fina nanc ncia ial l data contingencies. Before making an investment decision, you should consider, All dollar values are in US dollars (US$) unless as otherwise with or without the assistance of a financial adviser, whether an investment is presented. appropriate in light of your particular investment needs, objectives and financial circumstances. 2
Agenda Introduction to Altium 1 Internet of Things (IOT) & Engineering Tools 2 The Future of the Electronic Design Automation (EDA) Industry 3 Altium is Well Positioned to Emerge as a Leader 4
Sustained Growth & Profitability - Altium’s Financial Metrics Altium’s H1 FY16 Financial Metrics $100M $100M $9.1M $46.4M NPAT 29,300 50M Cash (up 35% pcp) Reven enue Subscribers > 30% 30% Sale les EBITDA $42.6M Revenue ( 42% of Revenue ) 40M (up 13% pcp) 7.12 AU10c EBIT Margin 30M 13% Expense 23% (down Dividend EPS CAGR from 26%) * (up 25% pcp) (up 26%) 20M $10.7M $41.1M Sales Debt EBITDA Free (up 22% pcp) H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 (up 6% pcp) 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 * Includes revenue and costs from acquisitions 4
Altium's Journey - a Long History and a Promising Future The company was founded by creating the first version of Altium Designer, Protel PCB 1985 1985 Altium Launches Protel for Windows - World's first Micros osoft Window ows-based 1991 PCB design system Altium launches Altium Designer 6, the world’s first Native ve 3D P PCB design software 1999 1999 Altium partners with Dassault Systemes SOLIDWORKS to Deliver a specialized version of its PCB Design Software for SolidWorks users 2006 006 2010 2010 Altium Successfully Now Now completes an IPO o on Australian Stock Exchange Altium launches Altium m Designer 13 introducing DXP 2.0, its next generation Successful Capital integration platform opening up Raising of 44M on ASX Altium Designer to third-party 5 developers
Printed Circuit Board Design and Manufacturing Process Circuit it Design ign PCB Design gn PCB Fabri bricati tion PCB Assemb embly ly Design Capture Physical Layout Fabrication Assembly 6
Altium Products Vault ult Design Data Management & Embedded Software Collaboration Software Development Tools Electronic 3D Printed Circuit Board Design Software Solution Design 7
Diversity of Applications Automotive Aerospace & Life Sciences Mobile Devices & Consumer- Defence Communications Electronics Electronics & Research & Industrial Controls Computers Semiconductors High-Tech Education Automation 8
Market Segmentation & Altium’s Product Offering ATINA High-End nd Tools ls - large engineering teams designing complex products X2 X2 Mains instream am Tools s - moderate to 16 high design complexity, carried out by small teams of specialist engineers Low-End nd Tools s - simple designs carried out by multi-skilled engineers 9
Altium’s Strategy for Market Leadership Leveraged Sales and a Multi-Product, Multi-Channel Strategy 1 Web-based Collaboration & Maintaining Leadership in 7 2 Smart Workflow Large-scale Transactional Sales Closing Advanced Capability Monetization Through 6 3 Smart Delivery of Content Gaps in High-end PCB Design 4 5 Delivering the Next Generation Well Executed M&A Enterprise Solution with Agility Strategy and Partnership 10
The Altium Advantage Enterprising Spirit Altium’s Secret Sauce Core Competitive Strengths Advantages Customer Centricity Aligned Leadership 11
Agenda Introduction to Altium 1 Internet of Things (IOT) & Engineering Tools 2 The Future of the Electronic Design Automation (EDA) Industry 3 Altium is Well Positioned to Emerge as a Leader 4
Mega Trends 1990’s Search & Discovery Information is Indexed Web 1.0 2000’s Social Networking People are Networked Web 2.0 Web 2.0 2010’s Things are Connected Internet of Things and Intelligent Web 3.0 13
At the Heart of All Intelligent Systems is Electronics Printed Circuit Boards Central to Electronics 14
Designing Smart Connected Products The Future is Multidisciplinary… Desig signing g Smart rt Connected nnected Produ oducts cts Cloud System Engineering Cloud application development and Infrastructure management Embedded System Engineering Development of Control Systems in Electromechanical devices Elec ectro troni nics Engin inee eeri ring Creation of high-performance electronic hardware with complex form factor Mechanica nical Engin inee eerin ring Designing complex objects with sophisticated electromechanical behaviour Electrical Engineering Development of wire harness and electrical systems in Electromechanical devices
Current Generation of Engineering Tools Fall Short CAM PLM CAE The current model for tool integration is old and has evolved around the notion of “tool -chains ” MCAD - Mechanical Computer Aided Design ECAD - Electronic Computer Aided Design CAE - Computer Aided Engineering - Analysis and Simulation CAM - Computer Aided Manufacturing PLM - Product Lifecycle Management 16
Gartner’s New Technology Adoption Curve for IOT • Unfulfilled PEAK OF promises INFLA LATE TED D • Only a few EXPE XPECTA TATIONS IONS successes Interne rnet t of Things gs • Scores of • Next generation failure products are produced • Mainstream adoption • Benefits better understood • New methodologies developed PLATEA TEAU U OF • Best Practices PRODU DUCT CTIV IVITY ITY identified SLOPE PE OF ENLIG LIGHTE HTENMEN MENT TECHN HNOLOGY OLOGY TRIGG GGER TROUG UGH H OF DISILL ILLUS USIONM IONMENT • Startups formed • Early adopters found Next Genera eratio ion • First generation Engin ineer erin ing g Tools products produced Gartner's 2015 Hype Cycle for IOT (5-10 years) 17
Intelligent Tools are Needed to Build Intelligent Products Future engineering tools will: learn from experience • search for knowledge • Syste stem Eng nginee eering ring is intelligently at the heart of building enable collaboration • intelligent products operate at a higher level of • abstraction be context-aware • minimize chances of errors • 18
Agenda Introduction to Altium 1 Internet of Things (IOT) & Engineering Tools 2 The Future of the Electronic Design Automation (EDA) Industry 3 Altium is Well Positioned to Emerge as a Leader 4
EDA Industry is at a Crossroad Chip System EDA Design Design 20
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