Investor Update June 2018 - AWS
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Investor Update June 2018
Disclaimer
This information pack (“Pack”) is provided on behalf of GeoOp Limited (“GEO”) and is for general information purposes only. It is not investment
advice and does not constitute an offer or recommendation of securities in GEO.
The Pack is a summary and does not purport to be complete, nor independently verified. While all reasonable care has been taken in compiling
it, GEO accepts no responsibility for any errors or omissions.
The Pack should be read in conjunction with GEO’s Annual report and market releases. In addition to historical information, the Pack may
contain forward-looking statements. Any such forward-looking statements are based upon current expectations and involve both known and
unknown risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of
important factors and risks.
Although management may indicate and believe the assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could prove inaccurate or incorrect. There can be no assurance that the results contemplated in the forward-looking statements
will be realised.
All information herein is current at the date of circulation, and all currency amounts are in New Zealand dollars, unless otherwise stated.
2
Recap
3
Introduction
• Software tools to make mobile workforces productive
• ~28,000 licenses generating $4.4m in annual revenues ( 31 December 2017)
• Five key initiatives launched in H2 FY18 to accelerate revenue growth and
timeline to profitability
1. New GeoService application
2. ARPU increases to market rate over legacy pricing
3. Enhanced digital marketing instigated
4. GeoPay payments trials
5. Ingram Micro Cloud channel agreement signed
• Proof points are being obtained from trials
• Low or zero incremental cost from 4/5 growth initiatives above
Targeting 30%+ FY19 revenue growth and positive EBITDA by mid-2019 with $1.5m indicative cash consumption
4Productivity Tools for Mobile Workforces
GEO’s software makes businesses whose mobile workers
sell, deliver, perform services or collect payments in the field
more efficient and profitable
5GEO’s Products
Target Market Target Market
• Companies with workers providing field-based services • Services best sold face-to-face e.g. telcos, energy and media
• Key customer groups include trades, security, health, councils • Key customer groups include energy, solar, media, broadband
Key Product Features Key Product Features
• Workforce job and costing management • Allocate sales territory and track live campaigns from the
• Create, schedule and assign jobs office
• Create real-time job files in the field with photos and signatures • Enhanced prospecting through consolidating territories,
targets, geographic and demographic data
• Invoice and collect payment on the spot
• Real-time closure and integration into client ERP systems
• Integrated with Xero, Quickbooks, MYOB and other platforms
Geographies Geographies
• Australia (63%), NZ (19%), UK (9%), US (5%), Other (4%) • Australia (79%), US (19%), NZ (2%)
6Product Metrics
Revenue Model Revenue Model
• Monthly or annual subscription based on license • Monthly subscription invoiced based on license numbers
numbers • Training and Implementation
• Billed monthly via credit card
Average Revenue per User (ARPU) Average Revenue per User (ARPU)
• $92 per annum (Dec-2017) • $1,043 per annum (Dec-2017)
No. of licenses No. of licenses
• 26,482 (Dec-2017) • 1,141 (Dec-2017)
% of Total Revenues % of Total Revenues
• FY18 Projected: 62% • FY18 Projected: 38%
Primary Marketing Channels Primary Marketing Channels
• Digital marketing • Direct Enterprise Sales
• Partner channels
• Referral
7Management & Board
Executive Team Non-Executive Directors
Roger Sharp - Chair
(Queenstown)
30 years of investing in, financing, running and selling growth
businesses. Founder of technology investment firm North Ridge
Partners. Former Global Head of Technology for ABN AMRO Bank in
London and CEO of ABN AMRO Asia Securities based in Hong Kong.
Currently Chair of Webjet (ASX: WEB) and Asia Pacific Digital (ASX:
Kylie O’Reilly Jason Faulkner Brad Dunn Rochelle Lewis DIG).
CEO CTO Head of Product CFO
(Sydney) (Sydney) (Melbourne) (Sydney) Tim Ebbeck - Non-Executive Director
(Sydney)
20+ years of leadership, 20-year experience in high Former CEO of Nazori, an 18 years in finance and Experienced as a Chairman, Non-Executive Director, Board Advisor,
guiding technology and availability tech builds. Australian B Corp with accounting roles. CEO and CFO across the technology, media, sport, consulting and
media companies through start-ups in 12 countries. finance industries. Formerly CEO for Australia and New Zealand of
rapid/continuous growth. Track record in supporting Joined GEO from another SAP and Oracle, and Chief Commercial Officer of NBN Co. Currently
millions of monthly active Has taught product technology company. Executive Chair of IXUP (ASX: IXU), a data management platform.
Previously CEO of Director users in both enterprise management at General Previously at Ellerston
of AAP’s Agency and venture funded start- Assembly and been a start- Capital, Credit Suisse and
Enterprise businesses for
Mark Rushworth - Non- Executive Director
ups across energy, up mentor for countless PricewaterhouseCoopers.
11 years, National Sales logistics, entertainment programmes.
(Auckland)
Manager at Fairfax Digital. Longstanding technology and marketing professional. Currently
and social industries. Chartered Accountant with
chair of fintech start-up Genoapay and a Non-Executive Director of
Bachelors of Commerce.
NZX-listed Freightways. Previously CEO of Paymark, Pacific Fibre
and iHug. Prior to that was Chief Marketing Officer for Vodafone
New Zealand.
8Consistent Reduction in Cash Burn Run Rate
Average: Average: Average: Run rate:
six months to 30 six months to Q2 FY17 H1 FY18 report
Sep 2014 31 Dec 2015
Current monthly burn around NZ$135kGeoService Growth Initiatives
10Drivers of Growth
5 initiatives are intended to accelerate revenue growth for GeoService from FY19(1)
Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 FY20
1. New GeoService application
2. ARPU increases over legacy pricing
3. Enhanced digital marketing
4. GeoPay payments trials / rollout
5. New channels to market
(1) GeoSales to be upgraded in FY19 for relaunch in FY20; GeoCare is now a vertical within GeoService Preparatory work / trial phase Targeted revenue impact
11Initiative 1: Upgraded GeoService Application • Soft launched 30 May 2018 • Market-leading design after extensive user testing • Beta enthusiastically received by customers • Rollout will contribute to revenue growth through: • improved user experience • improved digital marketing conversions • increased ARPUs • higher retention
Initiative 2: Increased GeoService ARPUs
• Early customers joined with limited features / low ARPUs Current Pricing
• ARPU at 31 December 2017 was $7.70 per month versus
current pricing of $14.99 - $34.50 (volume dependant) $69/mo $139/mo $319/mo $999/mo $1499/mo
Billed annually or Billed annually or Billed annually or Billed annually or Billed annually or
• GEO is updating all customers to current pricing (less $82.80 monthly $82.80 monthly $82.80 monthly $82.80 monthly $82.80 monthly
loyalty discounts) as their contracts expire
• New pricing is at or slightly below competitor market rates 2 5 15 50 100
licenses licenses licenses licenses licenses
• From February to May 2018, 10% of GeoService customers
renewed their contracts generating a $25k increase in MRR Account
Manager
Account
Manager
Account
Manager
Email Support Email Support 1 hour setup 2 hour setup 3 hour setup
• These customers will be migrated to the new application webinar webinar webinar
Email Support Email Support Email Support
over time
• 90% customer retention thus far Monthly Monthly Monthly Monthly Monthly
ARPU ARPU ARPU ARPU ARPU
• Proof points obtained - high financial impact in CY18
$34.50 $27.80 $21.27 $19.98 $14.99
Pricing updates are driving revenue uplift at zero incremental cost to GEO on a slightly smaller customer base
13Initiative 3: Enhanced Payments Module
• GeoService customers generate hundreds of $m pa in
invoices through the GEO platform
• Few are paid via the GeoPay payments module
• GeoPay has been enhanced so customers can pay direct
from the platform and instantly improve their collections
• Trials commenced 23 May 2018 with ~300 NSW and VIC
customers who generate ~$40m in monthly invoices
• GEO receives 50 bp on each $1 paid
• Trial phase: each 1% of the invoices currently generated on
the GEO platform would generate ~$25k of annual revenues
for GEO if paid via GeoPay
• Proof points will be clear in H1 FY19 - minimal financial
impact in CY18
If widely taken up, GeoPay would create a new income stream at zero incremental cost
14Initiative 4: Enhanced Digital Marketing
• Digital transformation company APD appointed to streamline GEO’s
brand architecture, modernise its ecosystem and implement best
practise marketing
• Objectives are to improve customer acquisition velocity and lower
acquisition cost
• Initial proof points show minimal financial impact during CY18 set-up
phase
• Progressive improvement from H2 FY19 as paid search kicks in
• Organic search to drive FY20 as investment from SEO in FY19 takes
effect
Improved digital ecosystem expected to drive improvement in customer acquisition from H2 FY19
15Initiative 5: New Channel
• New distribution agreement entered with Ingram Micro Cloud (IMC), a
global cloud channel partner
• IMC’s nearly ~200,000 solution providers in 170 countries will be
prompted to resell GeoService
• Launch in Australia expected at end of September 2018 then to be
extended to other countries
• Minimal financial impact in CY18
If successful, IMC rollout will increase the rate of customer acquisition at low incremental cost
16GeoSales Update
17GeoSales FY19 Focus
• Enterprise solutions sales business with higher ARPUs and
longer client acquisition timelines than GeoService
• Clients include large utilities, telcos, media and alternative
energy companies. The industry leader in Australia.
• License numbers and revenues declined (9%) in FY18 post
integration with GEO
• To be rectified through reprioritising and refreshing the
GeoSales application in FY19 when the GeoService refresh
completes
• ~10% revenue growth projected in FY19, with a resumption
in growth assumed once the product is refreshed
18Balance Sheet
• GEO’s balance sheet holds $8.0m in intangible assets from the
purchase of InterfaceIT in June 16
• The valuation of these intangibles is directly linked to the FY18
performance of GeoSales
• Carrying value will be reviewed on or before 30 June 2018 as
required by the International Accounting Standards
• Possibility of deduction in carrying value
Any downward adjustment in intangibles would not affect cash flows or trading operations
19Capital Initiatives
20Impact of Growth Initiatives
Shorter Term: FY19 growth will primarily be driven by:
• New GeoService product launch
• ARPU increases
• Improved platform and paid digital marketing GEO believes its 5 growth
initiatives will generate 30%+
Medium Term: FY20 and beyond will be driven by: FY19 revenue growth, leading
• Organic search to positive EBITDA by mid-
• New partner channels
• Refocus on GeoSales, especially US expansion strategy 2019 with indicative NZ$1.5m
cash consumption
Blue Sky:
• GeoPay trial user patterns will be established in H1 FY19
• Promising opportunity for new revenue stream if successful
21Capital Raising Overview
$2.0m placement completed:
• $0.6m settled on 18 May 2018 (1st tranche)
• $1.4m will settle subject to shareholder approval on 21 June 2018 (2nd tranche)
$1.6m rights issue opens 15 June 2018:
• Existing shareholders can invest on the same terms as the placement
• Record date 14 June
• 2nd tranche of placement settles after record date and will not participate
• Rights issue structure and timeline summarised on the following slides
• For more information refer to the Offer Document once available
All convertible notes/debt intended to be converted / redeemed at rights issue close
Capital programme will leave GEO debt-free with cash to pursue growth initiatives
22Rights Issue Structure
COMPONENT DESCRIPTION
Offer Amount Approximately $1,633,628
Ratio 1-for-4
Number of New Shares Up to 10,890,853 new shares
Issue Price $0.15 per new share
Discount 21.1% to the last traded price of GEO shares before the Rights Issue was
announced (being $0.19 on 5 June 2018)
Eligibility Offer open to shareholders on GEO’s share register as at 5:00pm on 14 June
2018 with a registered address in New Zealand or Australia
Ranking New shares issued under the Offer will be of the same class as, and will rank
equally with, existing shares of GEO
Rights Trading Rights not taken up may be traded on the NZX Main Board
Underwriting The Offer is not underwritten
Refer to the Offer Document, once available, for further details
23Rights Issue Timeline
KEY EVENT DATE
Announcement of the Offer 6 June 2018
Rights trading commences on NZX Main Board 13 June 2018
Record Date 5:00pm on 14 June 2018
Offer opens 15 June 2018
Offer document and acceptance forms sent to eligible shareholders 15 June 2018
Rights trading closes on NZX Main Board 27 June 2018
Closing date for the Offer 5:00pm on 3 July 2018
Allotment of new shares and expected date for quotation on NZX Main Board 9 July 2018
Mailing of holding statements 16 July 2018
Dates are indicative and subject to change. Refer to the Offer Document, once available, for further details.
24Summary
25Summary
• Capital initiatives intended to raise up to NZ$3.6m and eliminate debt
• Five GeoService initiatives underway to accelerate timeline to profitability:
1. New application launched
2. ARPU increases underway with clear proof points
3. Enhanced digital marketing being rolled out
4. GeoPay being trialled
5. Ingram Micro Cloud agreement signed
• Low growth rate assumed for GeoSales while it is being refreshed (carrying
value of intangibles to be reviewed)
• Low or zero incremental cost from 4/5 growth initiatives
Targeting 30%+ FY19 revenue growth and positive EBITDA by mid-2019 with $1.5m indicative cash consumption
26Appendix – Statutory Financial Summary
27Financial Results
• GeoSales acquired in June 2016 FY15 H1
AU$ 000 FY14 15 months FY16 FY17 FY18
• FY17 driven by organic growth in GeoService
Operating Revenue 321 1,125 1,768 4,105 2,029
and full year contribution from GeoSales
• Other Income comprises Training and Other Income 2 246 334 416 171
Implementation revenues and Grants
Total revenue 323 1,371 2,102 4,521 2,200
• FY17 and H1FY18 include material one-off
expenses: Expenses
• FY17: integration of GeoSales, reducing Research & Development (661) (2,185) (1,510) (2,682) (1,297)
from 53 (Jun-16) to 43 (Jun-17) FTEs
Sales & Marketing (948) (2,121) (1,338) (1,795) (933)
• H1FY18: preparing for ASX IPO (which did
not proceed) General Administration (2,720) (2.424) (2,330) (3,394) (2,174)
Total Expenses (4,329) (6,730) (5,178) (7,871) (4,404)
EBITDA (4,006) (5,359) (3,076) (3,350) (2,204)
EBITDA before ASX-related expenses (4,006) (5,359) (3,076) (3,166) (1,549)You can also read
