Annual Meeting of Shareholders Presentations

Gentrack Group Ltd (GTK)
Annual Meeting 2020
26 February 2020

DISCLAIMER
This presentation may contain forward-looking statements. Forward-looking statements often include words
such as ‘anticipate’, ‘expect’, ‘plan’ or similar words in connection with discussions of future operating or
financial performance.
The forward-looking statements are based on management’s and directors’ current expectations and
assumptions regarding Gentrack’s business and performance, the economy and other future conditions,
circumstances and results. As with any projection or forecast, forward-looking statements are inherently
susceptible to uncertainty and changes in circumstances. Gentrack’s actual results may vary materially from
those expressed or implied in its forward-looking statements.
This presentation includes audited financial information for the full year ended 30 September 2019.
All figures are shown in NZ$.
2

John Clifford
Chairman (2007)
Directors
Andy Coupe
Non-executive Director (2014)
Leigh Warren *
Non-executive Director (2008)
Fiona Oliver
Non-executive Director (2019)
DarcRasmussen **
Non-executive Director (2019)
Nick Luckock
Non-executive Director (2018)
INTRODUCTIONS
* Resolution for re-election
** Resolution for election
Jan Behrens
CTO
Executives
Phil Eustace
Interim CFO
Jon Kershaw
Company Secretary & GM
Commercial and Legal
Tony McGlennon
VP
NZ/Asia Pacific
Paul Muscat
Regional VP and GM
Europe
Mark Humphreys
Country Manager
Australia
James Williamson
CEO - Veovo
3

CEOAND CFOCHANGES
•Announced this week that Ian Black has resigned as CEO
•John Clifford taking over as executive chairman
•A global search has commenced for a new CEO
•An interim CFO is in place - Phil Eustace
4

FY19 SUMMARY
5
•Utilities Revenue
NZ$88.2m (up 3.6% on FY18)
•Veovo Revenue
N
Z$23.5m (up 22% on FY18)
•Group Recurring Revenue
NZ
$78.2m (up 22% year on year)
•Annualised Committed Revenue
NZ
$59.7m (up 12% year on year based on
month 12 run rate)
•Customer wins
7
new utilities and 3 new airports
1
EBITDA: Earnings before net finance expense, tax, depreciation and amortisationand other non-operating expenses. Non-operating expenses are costs relating to acquisition.
2
Adjusted NPAT – Underlying NPAT before non cash charges related to impairment
3
Full year FY19 including final dividend 3.0cps
1
2
3

UTILITIES – FY19 SUMMARY
UTILITIES REVENUE (NZ$’m)
7
3
New utilities
Evolve Assurance upsells
$88.2m
$20.0m
FY19 Revenue
Up 3.6% on FY18
FY19 EBITDA
Down 23% on FY18
6
1
1
EBITDA: Earnings before net finance expense, tax, depreciation and amortisationand other non-operating expenses. Non-operating expenses are costs relating to acquisition.

AIRPORTS REVENUE (NZ$’m)
3
20
New airports
$23.5m
$4.8m
FY19 Revenue
Up 22% on FY18
FY19 EBITDA
Down 4% on FY18
VEOVO – FY19 SUMMARY
of Top 100 busiest
airports as customers
7
1
1
EBITDA: Earnings before net finance expense, tax, depreciation and amortisationand other non-operating expenses. Non-operating expenses are costs relating to acquisition.

UTILITIES – SHIFT TOWARDS RECURRING REVENUE
Utilities CRR
is up 51%
on FY18
Non-recurring
revenue is
down 35%
on FY18
Licence
revenue
down 57%
on FY18
•SaaS first
All new business is based on a SaaS recurring revenue model
•Reduced implementation effort
SaaSproductised solutions are reducing implementation
e
ffort – providing a competitive advantage but reducing NRR
•Recurring SaaS revenues are more predictable
•Transitioning customer base to SaaS
New functionality is being delivered in the cloud on a
subscription basis as opportunity arises
►Changing our revenue mix
►Increasing annual recurring revenues
11.3
17.5
31.1
47.0
13.0
19.5
23.0
20.9
17.0
20.7
20.5
15.3
3.1
5.8
9.7
4.2
FY16FY17FY18FY19
Utilities revenues $m
Committed Recurring RevenueNon-contracted Recurring Revenue
Non-recurring RevenueLicences
Other
8

COST REDUCTION AND OPERATIONAL REORGANISATION
9
•We have reduced our costs by
c NZ$8m run rate, c NZ$4m in FY20,
principally head count reduction,
without reducing key product
investment
•We have restructured our customer
delivery and support functions to
achieve higher productivity, improved
product quality and customer
responsiveness

PRESSURE ON ENERGY RETAILERS IN THE UK AND AUSTRALIA
5
Rapid ongoing change in
the UK regulatory environment
Financial pressure increasing
for energy retailers
Energy Price Caps in the UK and
Australia impacting energy retailer profits
Failure and M&A
of UK energy retailers
Emerging competitors in
the UK and Australia
Regulatory changes in Australia
UNCERTAINTY WILL CONTINUE
•Further government intervention – lowering price caps and
encouraging easier switching
•Further energy retailer failures likely in the UK
•No sign yet of up turn in energy retailer confidence
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STRONG FUNDAMENTALS
•A market leader in energy and water utilities billing and customer management in
the UK, Australia and New Zealand
•A large sticky customer base
•Extensive IP:
•Meter-to-cash solutions for utilities
•Revenue and operations solutions for airports
•Significant barriers to market entry for competition
•but new competitors have emerged in Australia and the UK
•Gentrack remains a profitable, cash generative business with a strong balance sheet
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OUR PATHWAY BACK TO GROWTH
1.Continued investment in SaaS products to maintain competitive
a
dvantage
•100+ people in product development
2.Focus on migrating existing customers to our new SaaS capabilities
•accelerating the uptake of our Gentrack Cloud product offering
3.Focus on our existing markets – UK, Australia and NZ
•UK and Australia are long term growth markets despite current regulatory uncertainty, with
opportunities to follow our customers into Europe
4.Develop the SE Asia opportunity from a starting point
•Building on Singa
pore success and local expertise
5.Synergistic acquisitions
•We target synergist
ic products with cross sell opportunities
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OUTLOOK
•Guidance unchanged for FY20 EBITDA
1
expected to be between NZ$8m – $12m
•1H FY20 EBITDA
1
expected to be between NZ$2m – $3m (1H FY19 $12.8m)
•Cost reductions benefit 2H
•UK and Australia energy market conditions remain unpredictable
•Expect 5%growth in Contractually Recurring Revenue from existing customers:
•We will continue to invest in our products to meet market requirements
•Resultsdepend on timing of projects and contracts
•We will update the outlook with the half year results
13
1
EBITDA: Earnings before net finance expense, tax, depreciation and amortisationand other non-operating expenses. Non-operating expenses are costs relating to acquisition. References to FY20 EBITDA do not reflect
changes resulting from the implementation of IFRS16 that became effective for FY20 reporting.

Period NZ$’000
12 Months
30-Sep-19
12 Months
30-Sep-18
Reported net profit/(loss) for the period (GAAP)
(3,315)13,870
Add back: net finance expense/(income)
7631,820
Add back: income tax expense
3,7586,863
Add back: depreciationand amortisation
9,4406,987
Add back: acquisition costs
--1,268
Less: revaluation of acquisition related financial liability
(384)(3,835)
Add back: Impairment of goodwill
14,551
3,984
EBITDA
24,81330,957
APPENDIX - GAAP TO NON-GAAP PROFIT RECONCILIATION
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APPENDIX - ADJUSTED N PATRECONCILIATION
Period NZ$’000
12 Months
30-Sep-19
NPAT reported
(3,315)
Add back: CA+ Intangibles Impairment
14,551
Add back: Associated Deferred Tax Adjustment
(1,210)
Add back: Blip Systems Option Revaluation
(384)
Adjusted NPAT
9,642
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