Agenda

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(No Transcript)
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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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Our Strategy

• Technology Ones focus is the design,
  development, implementation support of
  integrated powerful enterprise wide industry
  solutions using internet, eBusiness and
  client/server technologies.

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Our Strategy
Consulting Services
Student One
Retail One
People One
Sales One
Proclaim One
Third Party Products
Custom Software Development
Finance One
Application Development Framework
Common Methodologies Systems
Highly Integrated Strategy
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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Extensive Intellectual Property (IP)

• We have today one of the most significant
  software IP portfolios ever developed in
  Australia, covering a broad range of industries

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Our Portfolio of Products

• Finance One - Financial management and
  accounting
• Retail One - Retail
• Sales One - Wholesale and distribution
• People One - Human Resources and Payroll
• Proclaim One - Local Government
• Student One - Student Administration for
  Universities

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Extensive Intellectual Property (IP)

• We own the IP, and only we are able to sell it
• Differentiates us from 80 of the IT industry
  which is primarily service based and can only
  really differentiate based on price
• World Class RD Center in Brisbane
• ISO 9000 accredited
• Culture, Systems and Processes for RD, and the
  commercialisation of RD into successful products
• Capability to develop other products to fuel
  ongoing growth
• Low cost production center
• Employer of choice in Queensland attract talent

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Unique Business Model

• We are the only Enterprise vendor that both
  develops, and then markets, sells, implements and
  supports their own suite of applications
• Offices throughout Australia, New Zealand and
  Asia, and we will continue to expand
  geographically

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Unique Business Model

• Benefits
• Not reliant on distributors/ third parties
• They own the customer relationship
• They are primarily responsible for the success of
  the customer
• Short term focus, on immediate revenues/profits
• They are not reliable or committed long term
• In their interest to blame the product
• Direct relationship with our customers
• We own the customer relationship
• Sole responsibility for the success of our
  customers
• Long term focus we want customers forever and
  can afford to invest short term
• Happier customers negligible attrition of
  customers
• Secure large recurring revenue stream
• Opportunities to sell more products and services
  to these customers

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Mid Market Focus

• Software and Services market
• Historically fastest growing market in IT
  industry
• Mid Sized organisations
• Organisations of 100 to 300 million turnover
• We do service 30 to 1,000 million turnover
• Fastest growing sector in the Software and
  Services market
• No one dominates this market globally!

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Finance One Competitive Landscape
Sap
Peoplesoft
1,000m
LARGECORPORATE
Qsp
Oracle
Computron
300m
FINANCE ONE
MID MARKET
100m
Navision
Sunsystems
Great Plains
Epicor
30m
SMALL BUSINESS
Accpac
CLIENT TURNOVER
Myob

• Australia is one of the worlds most competitive
  countries
• - competitors from USA, UK, Europe, South Africa

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Mid Market Focus

• Key Issues
• Better than Low End Players (MYOB, Accpac, Great
  Plains ..)
• Rich functionality to manage complex businesses
• Better than High End Players (SAP, Peoplesoft,
  Oracle..)
• Ease of use
• Simple and intuitive to use
• Quick implementations ( 3 to 6 months)
• Whole of Life Costs - quick return on investment
• High Expectations
• What is sold, must be delivered they do not
  have deep pockets

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Vertical Market Focus Next Step on From ERP

• Use Finance One as the platform to create
  powerful new solutions for specific vertical
  markets
• One of the few companies globally that owns a
  proven world class financial management and
  accounting engine
• Total solutions for each vertical market, from
  one vendor, who develops, markets, sells,
  implements and supports
• Powerful core financials and payroll/HR
• Vertical market specific functionality
• Totally integrated
• Out of The Box, Ready to Go
• In many vertical markets the competition is less
  sophisticated in terms of RD, Marketing, Sales
  and Support

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Vertical Market Focus Next Step on From ERP

• Current vertical markets
• Local Government (Proclaim One)
• University/ Student Administration (Student One)
• Retail (Retail One)
• Wholesale/ Sales Distribution (Sales One)
• Custom Application Development
• Investigating new vertical markets
• Professional Services
• Asset Intensive Industries

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Enterprise Applications

• Our software runs enterprises
• Mission critical
• High barrier to entry
• Special relationship with our customers
• Reluctant to change lock in annuity stream
• Prepared to continue to invest ongoing
• Opportunities to sell more products and services
  upside

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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Large Recurring Revenue Base

• Powerful revenue model
• Initial Licence Fee Initial Services
• Annual Licence Fee Annual Services
• Additional Licence Fees from Upgrades new
  Modules/Systems
• Additional Licence Fees from Third Party products

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Large Recurring Revenue Base
TECHNOLOGY ONE REVENUE MODEL
Initial Purchase
Every Year
Every Year
Product Extensions
Ongoing Services
Implementation Services
Upgrade Licence
Extra fee Annual licence fee
Fee for service
Extra fee Annual licence fee
Annual licence fee
Annual licence fee
Up front licence fee Annual licence fee
Fee for service
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Comparison
Existing Customer Revenue
New Annual Licence Fees
New Services
New Licence Fees
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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Diversity of Revenue Stream

• Generally
• Government and Corporates
• Vertical markets
• Local Government
• State Government
• Federal Government
• Education Universities, Tafes etc..
• General Corporate
• Retail
• Wholesalers
• Geographies
• Australia, New Zealand, Asia

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Sample Customer Base

• Strong, diverse, loyal blue chip client base

Education - Curtin University - James Cook
University - Macquarie University - University of
SA - University of Newcastle - Catholic Education
Office - Bond University
Corporates - Aussie Home Loans - Channel 7
Network - Goodman Fielder NZ - Gordon Gotch -
Mitre 10 - Independent Newspapers - Ray White -
Sky Channel - eCorp - Salvation Army -
Tattersalls - Westco
Federal Government - ACCC - Dept of Prime
Minister - Federal Court - Legal Aid - Australian
Institute of Health and Welfare - DAS Fleet -
Dept of Industry,Science Resources
Finance One
State Government - Melbourne Port - NSW
Forestry - Port of Brisbane - Workcover - Qld
Treasury
Utilities - Australian National Rail
Corporation - Great Southern Railways - Great
Southern Energy-
Local Government - City of Perth - Marrickville
Council - Woollahra Municipal Council - Newcastle
City Council - Waverley Council
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The Technology One Difference

• Extensive Intellectual Property (IP)
• Unique Business Model
• Mid Market Focus
• Vertical Market Focus next step on from ERP
• Enterprise Applications
• Large Recurring Revenue Base
• Diversity of Revenue Stream
• Intelligent Engineering

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Intelligent Engineering
Consulting Services
Student One
Retail One
People One
Sales One
Proclaim One
Third Party Products
Custom Software Development
Finance One
Application Development Framework
Common Methodologies Systems
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Intelligent Engineering

• Amortise RD over a wide range of applications
• Use industry standard technology
• SAP, Peoplesoft, Navision, Great Plains etc..
  have a proprietary approach
• One source code baseline
• All customers run exactly the same code

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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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2002 Financial Summary

• 7Th consecutive year of record revenues
• 10th consecutive year of record profits
• Difficult trading conditions continue in the IT
  sector

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2002 Financial Highlight

• EBITDA of 13.4 million, up 20 percent
• Revenue of 46.37 million, up 20 percent
• RD Expenditure (fully expensed) of 8.14
  million, representing 17 of Revenue
• Net Profit After Tax of 8.76 million, up 13
  percent
• Earnings Per Share of 2.76 cents, up 11 percent
• Dividend Per Share of 2.00 cents, up 41 percent
• Adjusted Return on Equity of 55
• Cash on Hand of 23 million
• Debt/Equity of 5 - no net debt

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2002 Financial Highlight

• Significant RD program continued at 17 of
  Revenues
• Almost equal to the size of our NPAT
• All RD continued to be fully expensed

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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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Significant Achievements

• New Clients Licence Fees up 22
• Exceptional result in a very difficult and
  competitive market
• Addition of 42 new clients
• Finance One Suite continues to perform well
  (revenue up 40)
• Largest Finance One contract signed with WA Tafe
• Retail One Emergence The Good Guys, Rabbit
  Photo, Godfreys
• People One continues to grow12 new sites in
  2002. 23 sites in total.

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Significant Achievements

• Proclaim One Revenue up 7
• Six new clients
• Leading supplier in local government in Australia
• First New Zealand council (Wanganui District
  Council)
• Student One - limited opportunities in Australia
• Focused on securing new licence fees 2003

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Significant Achievements

• Continued Investment in
• Australia
• New Zealand
• Malaysia
• Account Management
• Initiative implemented last year
• Improved customer satisfaction based on User
  Survey
• Additional revenues generated from User base
• Model still being refined for effectiveness and
  focus

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Significant Achievements

• Opening of new Canberra office(now have direct
  representation in all States)
• Increased sales / presales infrastructure

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New Clients

• Retail
• The Good Guys
• Godfreys
• Rabbit Photo
• International
• Northern Utility Resources (Malaysia)
• Universal Trustee Bhd (Malaysia)
• Metro Water Limited (New Zealand)
• Wakefield Hospital (New Zealand)
• Wanganui District Council (New Zealand)
• Wanganui Gas Limited (New Zealand)
• Dorchester Pacific Limited (New Zealand)

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New Clients

• Local Government
• City of Charles Sturt
• City of Cockburn
• City of Greater Bendigo
• Great Lakes Council
• Local Government Association of Qld
• Mackay City Council
• Moyne Shire Council
• Sutherland Shire Council
• Wagga Wagga City Council

• Corporate
• Baptist Community Services
• Budget Rent a Car Australia
• Data Action
• Dermody Petroleum
• Freemasons Hospital
• The Gribbles Group
• Lumley Technology
• Madec Australia
• Peter W Beck
• Piedimonte Stanley Hall
• University of New England
• Villa World
• Willmott Forests
• WorkPac

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New Clients

• State / Federal Government
• Australian Radiation Protection Nuclear Safety
  Authority (ARPANSA)
• Building Services Authority
• Indigenous Land Corporation
• Lower Murray Region Water Authority
• Queensland Performing Arts Trust
• Royal District Nursing Service SA
• Tasmanian Department of Justice and Industrial
  Relations
• Tasmanian Electronic Commerce Centre
• WA Department of Training and Employment and WA
  TAFE

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Project ServicesNew Business

• Project Services performing strongly (revenue up
  10)
• Project Services, major contracts awarded
  include
• PBL (Strategic relationship with PBL)
• Access Queensland
• NSW Police (Informants), Missing Persons System
  and Child Protection Register
• Stage 2 Victorian Land Titles
• Archives One for the State Records of SA

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Significant Achievements

• Continued RD into
• Finance One (R10.1 shipped)
• Retail One and Sales One (R10.1 shipped)
• People One (R10.1 shipped)
• Proclaim One (R9.0 to ship Q3 2002 )
• Student One (R2.2 and R2.3 shipped)
• ADF (R5.3 shipped)
• Continued RD into new technologies
• Microsoft .NET (MDF)
• J2EE (JDF)
• RD into new generation of Smart Internet
  Applications

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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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Outlook

• Significant Challenge IT Environment

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10 Year Business Replacement Cycle for Enterprise
Applications

• 40 business done in two years to Y2K
• Expect some improvement in 2003/2004 year
• Expect 2005 to return to normal levels

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Outlook

• Very low level of business
• Continuing fierce competition
• Reluctance by customers to sign contracts
• Onerous contractual conditions payment terms

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Outlook

• Significant challenge to provide continuing
  growth this year, on the back of 10 years of
  consecutive record revenue
• Streamlining the company
• New organisational structure
• Impact will not be felt this financial year
• Significant operating leverage TNE has, once
  environment improves

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Agenda

• Our Strategy
• The Technology One Difference
• 2002 Financial Highlights
• Significant Achievements
• Outlook 2003
• Initiatives for 2003

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Initiatives for 2003

• Organisational Restructure
• .NET Initiative with Microsoft
• Partnerships Acquisitions
• Consolidate our presence in all regions
  verticals

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Current Structure

• Executive Team

• Corporate

• Software
• Engineering

• Service
• Delivery

• Macro structure is unchanged
• Software Engineering software centric
• Service Delivery customer centric

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Organisational RestructureService Delivery

• Act Locally Think Globally
• Move from Departmental to Regional reporting
  lines
• Remove head-office General Managers
• Appoint Regional Managers (at the coal face)
  with PL responsibility and decision making
• Create a direct link between Regions and the
  Executive team
• Act locally and quickly
• Implementation in progress now

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Organisational RestructureService Delivery

• COO
• Service Delivery

• COO
• Service Delivery

• General Mgr
• Sales

• General Mgr
• Consulting

• Support
• Center

• QLD
• State Mgr

• NSW
• State Mgr

• VIC
• State Mgr

• Sales

Sales QLD
Cons. QLD
Sales NSW
Cons. NSW
Consulting
Sales VIC
Cons. VIC
Etc..
Etc..
Current Structure
New Structure

• Regional Focus
• Regional PLs
• Direct link to regions

• Departmental focus
• Departmental PLs

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Organisational Restructure Software Engineering

• Research and Development
• Differentiate between hard core Research and
  Product Development
• Product Development
• Existing products only evolutionary approach
• Specialised methodology and structure and skills
  sets
• Focused ongoing development of an existing
  product
• Based on customers direct input
• Led by Business Consultants
• Small teams, empowered that combine Help Desk,
  Consultants, Developers
• Hard Core Research
• New products only quantum leap approach
• Specialised methodology and structure and skills
  sets
• Focus on hard core research
• Based on market research and lateral thinking
• Small teams, empowered that combine Market
  Research, Domain Specialists, Developers

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Organisational Restructure Software Engineering

• COO
• Software Engineering

• COO
• Software Engineering

• Finance
• One Suite

• Student
• One

• Proclaim
• One

• Project
• Services

• Finance
• One Suite

• Student
• One

• Proclaim
• One

• Project
• Services

• Research

• Team 1

• On Going
• Development

• Team 2

• Etc..

• Support
• Center

Current Structure
New Structure
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Organisational Restructure Software Engineering

• Benefits Summary
• Act Locally Think Globally
• Faster and decentralised decision making
• Better supports our geographical expansion
• Greater focus on customer satisfaction
• Improved RD
• Smaller teams
• Separation of hard core Research from Development

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.NET Initiative

• Working closely with Microsoft
• New generation of smart internet applications
• Revolutionize Enterprise Application space
• All TNEs products will be migrated to this new
  architecture
• Large growth opportunity in 2004/2005

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Partnerships Acquisitions

• To extend our product reach
• Partnership with
• Chameleon for Advanced Budgeting
• EMS Solution for Asset Intensive Industries
• First step to getting a deep understanding of new
  industries/sectors

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Consolidate Presence in all regions verticals

• National network of offices now established
• New ACT office established early 2002
• Continue to invest in
• New Zealand
• Malaysia
• Increase our penetration in
• Local government in Australia New Zealand
• Retail
• Payroll/HR
• Student Administration
• Project Services in NSW

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After Word
These slides are available from the companys web
site, under the Investor Relations section
www.TechnologyOneCorp.com
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(No Transcript)