investor roadshow 2014 dec final
DESCRIPTION
NearMap PresentationTRANSCRIPT
InvestorRoadshow
December 2014
Current.Clear.Change.
6mo3mo 9mo 1yr
Images delivered within days of capture.
Traditional (45 days – 6 months)
Nearmap (3-5 days)
Facebook Campus – September 2014
Current.Clear.Change.
Google Campus – September 2014
High resolution imagery enables effective decision making.
4
Apple Campus Development
Current.Clear.Change.
August September
Track change over time.
5
Group Highlights
RevenueActivation of
multiple revenue lines inside the
business – digital, telesales, direct
sales, renewals & inside sales
Transition
‘De whitelisting’ of legacy customers and transition to individual user names and
personal profiles
CustomersStrong growth in
our customer subscriber base
with 22,000 named users as at the end
of 2014
Focus
Increased focus on R&D within the business culminating in the creation of HyperCamera
PricingSuccessful introduction of
‘Advantage’ pricing – a data consumption based approach
whereby customers pay based on the amount of data consumed.
Profit
Achieved maiden profit
Balance
Strong balance sheet with no
debt
SubscriptionsVery high retention of existing customers and subscription
renewal
Transition
Transition from ‘free’ to user pay
model
6
Results Scorecard
FY14 FY13 INCREASE
Total Income 1 20.1m 12.8m 57%
Revenue 17.8m 11.0m 62%
Net Profit After Tax 2 7.1m (1.0)m 794%
Adjusted NPAT 3 1.3m (1.7)m 176%
Adjusted EBITDA 4 5.8m (0.2)m 3000%
EBITDA Margin 5 33% (2)% --
Earnings Per Shares 2.2c (0.3)c 833%
Adjusted EPS 6 0.4c (0.6)c 167%
1. Includes government refund for eligible R&D activities (FY14 $1.7m, FY13 $1.5m)
2. Includes income tax benefit recognised for the first time (FY14 $3.6m)
3. Adjusted NPAT Reconciliation available on pg. 18
4. Adjusted EBITDA Reconciliation available on pg. 18
5. Adjusted EBITDA / Revenue
6. Adjusted EPS Reconciliation available on pg. 18
Operational Highlights
• Launch of new products:
• Rail (February 2014)
• Solar (April 2014)
• Property (May 2014)
• Insurance (July 2014)
• Construction (October 2014)
• Appointment of Chief Financial Officer
• Receipt of new patents for aerial mapping system
• Receipt of $1.7m R&D tax credit in H2
• Execution of license agreement with Google Maps
• Seamless platform integration with Google Earth
• Commencement of US capture program
7
Competitive Strengths & Barriers to Entry
• Patented intellectual property
• Frequent and responsive capture program
• High quality imagery (5-8cm resolution)
• Uniquely short delivery time (3-5 days vs 45+ competitor days)
• Time-series data (166TB of historical imagery since 2009)
• Disciplined focus on specific verticals
• Visual analytical tools and enriched data layers
• Mobile enhanced map browser
• Scalable e-commerce platform
• Expert and agile development capability
• Highly engaged and proven management team
• Capital light business model and strong free cash flows
8
Business Strategy & Revenue Model
9
Increase Yield & Returns
Implement Data
Usage Model
Embed nearmap into user workflows
Build Subscriber
Base
Offer Free Personal
Use
Initiate Data
Collection
IP Protection
3 Stage Approach to Growth and Monetisation
• Establishment: proven intellectual property and business model
• Introduce marketing: win market share and build subscriber base
• Progress towards market dominance: increase yield and returns
AustralianBusiness
• Growth company firmly in the growth phase of the business lifecycle
• Sophisticated operation derived from growth and monetisation of subscriber base
• Continued investment to facilitate growth:
• Industrialising systems
• Increasing the sales and marketing capability
• Broadening management bandwidth
• Planned investments to support long term expansion
• Observed change in sales mix resulting from implementation of the data usage model and preliminary retail offering
• Sales aimed at increasing users per enterprise customer
• Providing future upsell opportunities based on usage
• Retail offering aimed a leveraging fixed cost base
• Adding to incremental gross profit
10
Revenue
Customers
Named Users
UnitedStatesExpansion
• The nearmap business model is a natural fit for the US, with it’s high level of
urbanisation, high per-capita GDP and similar business mix to Australia.
• The US strategy will be focused on establishing a sales and marketing
organisation that will initially target government and enterprise customers
to generate immediate subscription revenue.
• Small business and personal users will be given a period of free access to
drive adoption.
• Capture and commercialisation will be fully funded from existing cash flows.
• The nationwide US urban capture program is designed to capture 33% of the
US population during FY15 (100m people), scaling to 50% of the US population
during FY16 (150m people), captured multiple times a year.
• The easy-to-use map browser has already been localised for the US, including
Google street maps and address search, demographic data overlays, and
features for key verticals such as solar and insurance.
• US imagery is stored via Amazon Web Services.
• First-year combined capital and capture costs are expected to be around $8m.
• Sales and marketing costs will be incurred as incremental to this capital
investment.
• Ongoing capture costs, including expanding the capture program to 50% of the
US population, are expected to be around $8m per year.
• The aspirational sales goal in the US is $30-$50m per year by December 2017.
11
FY15 Outlook
• FY15 has started strongly with continued growth in named users
• Complimented by the launch of new retail products
• December 2015 revenue target remains on track
• Revenue targets are milestones used to measure performance, not indicators of total market size and maturity
• Scope for move Advantage pricing model to increase ARPU
• Supported by extremely low churn
• Expansion into the US tracking ahead of expectations
• 110m people in the US already captured
• Disciplined investments to drive future growth
• Industrialise systems and processes
• Modest increases in marketing and management resources
• Preliminary reporting on a segment and corporate level
• Renewed confidence in ability to grow based on assessment of the market opportunities, current value proposition, experience in building a profitable and sustainable business, relentless focus on detail and disciplined execution, and most of all the calibre and quality of the people
12
13
Appendices1. Financial Performance
2. User Case
3. Corporate File
Financial Performance
1
4
15
Income Statement
2H14 1H14 2H13 1H13
Total Income 11.9m 8.2m 8.7m 4.1m
Revenue 9.9m 7.9m 7.0m 4.0m
Net Profit After Tax 6.3m 0.8m 1.6m (2.6)m
Adjusted NPAT 1 0.7m 0.6m 0.1m (1.8)m
Adjusted EBITDA 2 3.3m 2.5m 1.4m (1.6)m
EBITDA Margin 3 33% 32% 20% -40%
Earnings Per Share 1.9c 0.3c 0.5c (0.8)c
Adjusted EPS 4 0.2c 0.2c 0.0c (0.6)c
1. Adjusted NPAT reconciliation available on pg. 18
2. Adjusted EBITDA reconciliation available on pg. 18
3. Adjusted EBITDA / Revenue
4. Adjusted EPS reconciliation available on pg. 18
Balance Sheet
FY14 FY13 INCREASE
Cash 23.3m 13.4m 74%
Other Current Assets 3.3m 3.0m 11%
Total Assets 37.1m 22.7m 63%
Unearned Income 1 13.4m 10.1m 33%
Other Current Liabilities 3.1m 1.6m 92%
Total Liabilities 2 16.6m 11.7m 41%
Equity 20.5m 11.0m 87%
1. Represents sales to be recognised as accounting revenue over time
2. No debt
-40%
20%
32% 33%
1H13 2H13 1H14 2H14
EBITDA Margin: Adjusted EBITDA / Revenue
Growing Annuity Revenues
16
17.3
0.5
Recurring Non-Recurring
2.63
4
6.5
7.8
9.5
0.1
0.4
1H12 2H12 1H13 2H13 1H14 2H14
* $0.5m from IP licencing recognised in 2H13 ^ $0.5m relating to “on-request” flights recognised in FY14
Continuing Operations
0.5
FY14
ScalableOperationsEBITDA Margin
New capture program aimed at driving cost efficiencies
Increased headcount to support growth initiatives
Operating cost base remained largely fixed
High return and capital light business model
17
Cash Flows
2H14 1H14 2H13 1H13
Receipts from Customers 13.6m 9.7m 12.5m 6.1m
Operating Cashflows 1 6.8m 4.2m 7.7m 0.4m
Investing Cashflows (1.1)m (0.5)m 0.0m 0.0m
Financing Cashflows 0.1m 0.4m 0.0m 0.0m
Net Increase in Cash 5.8m 4.1m 7.7m 0.4m
Cash at End of Half Year 23.3m 17.5m 13.4m 5.7m
1. Includes government refund for eligible R&D activities (2H14 $1.7m, 2H13 $1.5m)
5.7
13.4
17.5
23.3
1H13 2H13 1H14 2H14
Strong Financial
Position & Cash
Controls
18
Adjusted NPAT Reconciliation
2H14 1H14 2H13 1H13
Net Profit After Tax 6.3m 0.8m 1.6m (2.6)m
Income Tax Benefit (3.6)m -- -- --
R&D Tax Rebate (1.7)m -- (1.5)m --
Adjusted NPBT 1.0m 0.8m 0.1m (2.6)m
Effective Income Tax 1 (0.3)m (0.2)m -- 0.8m
Adjusted NPAT 0.7m 0.6m 0.1m (1.8)m
1. Applied statutory income tax rate of 30%
Adjusted EBITDAReconciliation
Adjusted EPSReconciliation
2H14 1H14 2H13 1H13
Net Profit After Tax 6.3m 0.8m 1.6m (2.6)m
Interest Expense -- -- -- --
Income Tax Benefit (3.6)m -- -- --
R&D Tax Rebate (1.7)m -- (1.5)m --
Depreciation & Amortisation 1.1m 1.0m 1.0m 1.3m
Impairment Reversal -- -- -- (0.3)m
Share Based Payments 1.2m 0.7m 0.3m --
Adjusted EBITDA 3.3m 2.5m 1.4m (1.6)m
2H14 1H14 2H13 1H13
Adjusted NPAT 0.7m 0.6m 0.1m (1.8)m
Shares on Issue 1 326.6m 324.6m 323.1m 323.1m
Adjusted EPS 0.2c 0.2c 0.0c (0.6)c
1. Weighted average number of shares on issue
User Case
1
9
20
Monitor progress remotely
Inspect sitesfrom thedesktop
Review & track assets
Facebook Campus- August 2014
21
Use the measurement tool to make informed decisions
Measure lengths & areas accurately
Identify unapproved developments & verify planning compliance
Measure the area
of a property
Monitor progress
remotely
1 World Trade Center – September 2014
Safety compliance
Building code
compliance
22
Use the solar tool to generate quotes
Use solar tool to generate immediate
location aware
quotes
Identify roof layouts and
features
Identify seasonal
shadowing using the
timeline
23
Inspect damage after environmental events
Understand if properties are at risk from environmental changes
Include high resolution images in reports & presentations
Napa Earthquake – September 2014
24
Search an address to quickly and clearly identify features
Use the measurement tool to survey land and save site visits
Use the timeline to track change over time
Property features
Overhanging trees
Abandoned
vehicles and
unauthorized
parking
Condition of roads
and paths
Unauthorized
constructions and
extensions
Condition of parks
and reserves
Boston MA – September 2014
Corporate File
2
5
Company ProfileBuilt around proprietary PhotoMaps™ aerial imagery technology, nearmap is a visual analytics company with a focus on empowering businesses with timely and reliable information on which to make decisions quickly and with confidence. Our breakthrough technology enables imagery to be updated much more frequently than other providers. With 85% of Australia’s population covered regularly, nearmap is changing the way governments, companies and communities see their world.
Key Milestones and Financials• Announcement of US expansion plan (13 October 2014)
• Launch of nearmap Insurance (31 July 2014)
• Launch of new FAA-approved aerial camera system (17 July 2014)
• Seamless integration with Google Earth (10 June 2014)
• Launch of property intelligence tools (29 May 2014)
• Commencement of US test flights (6 May 2014)
• Launch of nearmap Solar (10 April 2014)
• Receipt of new patent for aerial camera system (19 May 2014)
• Generation of maiden profit (24 February 2014)
• Launch of nearmap Rail (12 February 2014)
• Execution of licence agreement for Google Maps (19 December 2013)
Value Metric 2014 2013 2012
Revenue 17.8m 11.0m 5.7m
Adjusted EBITDA 5.8m (0.2)m (5.6)m
Adjusted NPAT 1.3m (1.7)m (10.4)m
Earnings Per Share 2.2c (0.3)c (3.2)c
Cash Balance 23.3m 13.4m 5.4m
Debt --- --- ---
10 Largest Shareholders (As at December 2014)
Name No. Shares % Shares
Longfellow Nominees Pty Ltd <The Aeolus A/C> 38,155,167 10.98
National Nominees Limited 26,941,122 7.75
JP Morgan Nominees Australia Limited 26,077,205 7.50
Longfellow Nominees Pty Ltd <Norgard Super Fund> 20,381,128 5.86
HSBC Custody Nominees (Australia) Limited 11,978,902 3.45
Citicorp Nominees Pty Limited 11,933,499 3.43
MR Simon Benedict Crowther & Ms Fiona Kyla Crowther <Wisebuddha A/C> 10,000,000 2.88
RBC Investor Services Australia Nominees Pty Limited <BKCUST A/C> 7,690,958 2.21
HSBC Custody Nominees (Australia) Limited <NT-COMNWLTH Super Corp A/C> 6,696,488 1.93
Mr Paul Arthur Peterson 4,141,341 1.19
Management & Board Ownership
Name Shares Options
Ross Norgard 58,576,295 0
Cliff Rosenberg 2,775,000 0
Rob Newman 4,000,000 0
Simon Crowther 10,000,000 7,000,000
Gerhard Beukes 1,775,000 7,500,000
Paul Lapstun 2,500,000 6,000,000
Paul Peterson 4,141,341 3,500,000
Established: 7 December 2000
Shares on Issue: 347,646,101
Options: 30,450,000
Employees: 84
ASX: NEA
ManagementSimon Crowther, Managing Director & CEO
Simon has extensive knowledge and experience managing diverse content and data related businesses, including Managing Director of Canada’s largest Communications Agency and Director of Copyright Promotions Group (CPG), Europe’s largest entertainment and sports IP/ rights management agency. Simon was part of the management team that floated CPG on the FTSE in the mid 90’s. Previously, he was Head of Global Sales & Licensing for Granada Media (now ITV), the largest commercial broadcaster in the UK and one of Europe’s largest content producers.
Gerhard Beukes, Chief Financial Officer
Gerhard has held finance and group controller positions in various divisions such as banking, auditing, financial advisory, risk, tax services and specialist consulting. He served most of his career at Deloitte in South Africa, the US and Australia. Gerhard is a registered Chartered Accountant, a member of the executive team of the South African Institute of Chartered Accountants of Australia in New South Wales, and a member of the Financial Executives Institute of Australia.
Paul Lapstun, Chief Technology Officer
Paul has over 25 years’ experience in conceiving, developing and commercialising consumer electronics and software products in Australia, the US and UK. He holds more than 1200 granted US patents, making him the 3rd most prolific inventor worldwide. Before joining nearmap, Paul was CTO of Netpage at Silverbook Research, where he co-invented and led the research and development of digital pen and paper technologies. Prior to that he developed video and animation products for Canon, Rank Cintel and Integrated Arts.
Paul Peterson, Senior VP of Product & Engineering
Paul has held various senior executive positions with a primary focus on the development of software products. He joins nearmap from Hawaiian Telcom where he was Director of Enterprise Software. Previously, he was Vice President of Engineering for Myriad Australia focusing on social networking platforms for a wide range of mobile devices. Paul has successfully delivered highly profitable global software products, platforms and services for over 25 years across a wide range of industries.
Ross Norgard, Non-Executive Chairman
Ross is a Fellow of the Institute of Chartered Accountants and former managing partner of Aurthur Andersen DMP Hungerfords and its successor firms in Perth, Western Australia. He has held numerous positions on industry committees including past chairman of the West Australian Professional Standards Committee of the Institute of Chartered Accountants, current member of the National Disciplinary Committee, Chairman of the Duke of Edinburgh’s Award Scheme and a former member of the University of WA Graduate School of Management (MBA Programme).
Cliff Rosenberg, Non-Executive Director
Cliff is the Managing Director for LinkedIn South East Asia, Australia and New Zealand. He was formerly the Managing Director of Yahoo! Australia and New Zealand where he was responsible for all aspects of the local operation for mare than three years. Previously, Cliff was head of corporate strategy for Vodafone Australasia and also served as an international management consultant with Gemini Consulting and Bain Consulting.
Dr Rob Newman, Non-Executive Director
Rob has established a unique track record as a successful high technology entrepreneur in both Australia and the Silicon Valley. He has twice founded and built businesses based on Australian technology, both times successfully entering overseas markets. One of those companies, Atmosphere Networks, was established by Rob with US Venture Capital backing of USD34m and he ran it until it was acquired for USD123m.
27
Board
28
DisclaimerSome of the information contained in this presentation contains “forward-looking statements”
which may not directly or exclusively relate to historical facts. These forward-looking statements
reflect nearmap ltd’s current intentions, plans, expectations, assumptions and beliefs about
future events and are subject to risks, uncertainties and other factors, many of which are
outside the control of nearmap ltd.
Important factors that could cause actual results to differ materially from the expectations
expressed or implied in the forward-looking statements include known and unknown risks.
Because actual results could differ materially from nearmap ltd’s current intentions, plans,
expectations, assumptions and beliefs about the future, you are urged to view all forward-
looking statements contained herein with caution.
Contact DetailsLevel 6
6-8 Underwood Street
Sydney, NSW 2000
Australia
Telephone: +61 (0) 2 8076 0700
Facsimile: +61 (0) 2 8076 0701
Email: [email protected]
Website: www.nearmap.com
Universal Studios, CA – July 2014
Oakland Athletics, CA - September 2014