26 Nov

AGM CEO Presentation

Damstra Technology FY21 AGM CEO Presentation 26 November 2021 Financial data is provided on a pro forma basis except where explicitly stated otherwise Presenter: Christian Damstra (Chief Executive Officer) This presentation includes general information about the activities of Damstra Holdings Limited ACN 610 571 607 (Damstra) and it s affiliates and related bodies corporate (as defined in the Corporations Act 2001 (Cth) (Corporations Act) (together, the Damstra Group). This presentation is current as at 26 November 2021 (unless otherwise stated herein). The information con tai ned in this presentation is for general information purposes only. The information contained in this presentation does not constitute investment or financial product advice (nor taxation or le gal advice) and is not intended to be used as the basis for making an investment decision. It does not take into account the investment objectives, financial situation, taxation position or needs of any particular investor, which should be considered wh en deciding if an investment is appropriate. You must consider your own investment objectives, financial situation and needs. You should conduct and solely rely upon your own independent investigations and enquiries, including obtaining taxatio n, legal, financial or other professional advice in relation to the information contained in this presentation as appropriate to your jurisdiction. This presentation should be read in conjunction with any reports, financial statements, appendices or other documents or info rma tion that accompanies this presentation or which is otherwise announced or released by Damstra on or about the same time as this presentation. This presentation should also be read in conjunction with Damstra’s other periodic and continuous dis closure announcements. While care has been taken in preparing the information in this presentation, to the maximum extent permitted by law, no repre sen tation or warranty, express or implied, is made nor any duty undertaken in favour of any person as to the currency, accuracy, reliability, completeness or fairness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, no member of the Damstra Group nor any of their respective directors, officers, employees, affiliates, partners, consultants, agents, representatives or advisers (each a Damstra Party and together, the Dam str a Parties) guarantees or makes any representations or warranties, express or implied, as to or takes responsibility for, the currency, accuracy, reliability, completeness or fairness of this presentation nor the information, opinions and conclusi ons contained in this presentation. The Damstra Parties do not represent or warrant that this presentation is necessarily complete or that it contains all material information about the Damstra Group which a current or prospective investor may req uir e in evaluating a current or possible investment in Damstra. To the maximum extent permitted by law, each Damstra Party expressly disclaims any and all liability (whether direct, indirect, consequential or contingent), including, without l imi tation, any liability arising out of fault or negligence on the part of any person, for any loss, expenses, damages or costs ari sing from the use of information contained in this presentation or for omissions from this presentation including, without limitat ion , any financial information, any estimates or projections and any other financial information derived therefrom. Whilst the Damstra Group has prepared this presentation in good faith, the information appearing in this presentation has not been indep end ently verified or audited and may be subject to change, including via further market updates. Anyone proposing to use such information should independently verify and check the accuracy, completeness, reliability and suitability of the informa tio n and should obtain their own independent and specific advice from appropriate professionals or experts. None of the Damstra Parties act for, or are responsible as a fiduciary to, you or any other person. Any fiduciary relationshi p i s expressly disclaimed. This presentation contains certain forward - looking statements. Forward - looking statements can generally be identified by the use of forward - looking words such as "anticipate", "believe", "expect", "project", "forecast", "estimate", "outlook", "upside", "likely", "intend", "should", "could", "may", "target", "plan" and other similar expressions. Forward - looking statements include statements about Damstra’s expectations regarding the performance of the Damstra Group’s business and its plans, strategies, prospects and outlook. Indications of, and guidance on, future earnings and financial position and performance ar e a lso forward - looking statements, as may be any other statements that are not based on historical or current facts. Forward - looking statements are often based on: (1) assumptions regarding the Damstra Group’s financial position, business strate gies, plans and objectives of management for future operations and development and the environment in which the Damstra Group will operate; and (2) current views, expectations and beliefs as at the date they are expressed, and which are sub ject to various risks and uncertainties. None of Damstra, or any other Damstra Party, makes any representation or warranty as to the accuracy of any forward looking s tat ements contained in this presentation. Such statements speak only as of the date hereof. Except to the extent required by law, none of the Damstra Parties has any obligation to update or revise any such statements to reflect any change in events, conditions or circumstances on which any such statement is based. Such forward - looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyo nd the control of the Damstra Parties, which may cause actual results to differ materially from those expressed or implied in such statements. For example, the factors that are likely to affect the results of the Damstra Group include (but are not limited to) general economic conditions in Australia and globally, exchange rates, competition in the markets in which the Damstra Group does and will operate; weather and climate conditions; and the inherent regulatory risks in the businesses of the Damstra Group. There can be no assurance that actual outcomes will not differ materially from the forward - looking statements. As such, readers are cautioned not to place undue reliance on these statements. Any statements as to past performance do not represent, and are not an indication of, future performance and no representation or warranty is made by any person as to the li kelihood of achievement or reasonableness of any forward looking statements, forecast financial information or other forecast. Nothing contained in this presentation is, or shall be relied upon as, a promise, representation, warranty or guara nte e, whether as to the past, present or future. In addition, the Damstra Parties have not independently verified, and cannot give any assurance as to, the accuracy and completeness of any market and industry data or other information contained in thi s p resentation that has been extracted or derived from third party sources. Accordingly, the accuracy and completeness of such information is not guaranteed and it is merely included in this presentation for what it is worth and without endorse men t by the Damstra Parties. This presentation is not, and does not constitute, an offer to sell, or the solicitation of an offer to buy, invitation or re com mendation to purchase any securities or other investment products in any jurisdiction, and neither this presentation nor any of the information contained herein, shall form the basis of any contract or commitment. All financial amounts contained in this presentation are expressed in Australian dollars (unless otherwise stated). Any discr epa ncies between totals and sums of components in tables, figures and body content contained in this presentation are due to rounding. Tables, figures and body content contained in this presentation have not been amended by Damstra to correct immater ial summation differences that may arise from this rounding convention. Damstra’s results are reported under IFRS. This presentation may nevertheless include non - IFRS information and other measures su ch as ratios. These other measures are used internally by management to assess the performance of the business. Non - IFRS and other measures should not be considered as an indication of, or as an alternative to, an IFRS measure and according ly you are cautioned not to place undue emphasis on any such information or measures. This presentation may contain trade marks and trade names of third parties, which are the property of their respective owners . T hird party trademarks and trade names used in this presentation belong to the relevant owners and use is not intended to represent sponsorship, approval or association by or with any of the Damstra Parties. This presentation is made available to you on the condition that by receiving, viewing, downloading or otherwise accessing or ut ilising this presentation, you confirm that you understand and agree to the contents of this important notice and that you are a person to whom this presentation may lawfully be made available in accordance with laws applicable to you, including th ose of the jurisdiction in which you are located. Disclaimer 2 FY21 RESULTS OVERVIEW 1 $6.6m Pro forma EBITDA 3 vs. $6.8m in FY20 24% Pro forma EBITDA margin 4 vs. 35% in FY20 724 Clients vs. 279 at Jun - 20 79% Gross margin vs. 69% in FY20 2 34% Increase in total 5 R&D spend $11.0m vs. $8.2m in FY20 $27.4m Revenue 1 40% growth vs. FY20 $31.7m Cash receipts vs. $20.8m in FY20 737k Users vs. 423k at Jun - 20 1. Includes $0.3m revenue share related to SkillPASS joint venture with Energy Skills Queensland 2. On an underlying basis, excluding one - off other income 3. Earnings before IPO costs, share based payments, income tax, finance expenses and acquisition costs 4. Impacted by the pre - synergy orientation of the acquired Vault business 5. Cost of sales plus operating expense plus capitalised costs Strong performance delivering record revenue, cash receipts, client and user numbers Key financial and operating metrics in FY21 4 FY21 saw a continuation of growth across key metrics 422.7 419.2 603.8 689.0 737.0 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Accelerating growth in users (thousands) Flat due to COVID - 19 lockdowns Vault acquisition Growth re - acceleration 20.8 23.5 26.3 26.3 31.7 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Increasing cash receipts (LTM $m) +52% 5 FY21 – a year of significant achievements Growth Products & Technology Corporate Strategic New customer wins • Ended the year with 724 clients, an annual increase of 157 1 clients • Global user numbers stood at 737k, an annual of increase of 74% • 87% recurring revenue • Products used in over 20 countries • Exceeded 90,000 users in the construction industry Enterprise Protection Platform (EPP) • Strategic pivot to our EPP - reflecting the breadth, depth and integrated nature of our expanded product offering Product momentum • Increased R&D expenditure - 34% increase in total 2 R&D spend compared to FY20 • Paperless form users now exceed 15,000, reflecting rapid growth New products launched • Numerous new products launched in the year; Damstra Safety, Satellite, integrated paperless forms and Solo on an increased range of wearable devices Board • Appointment of Sara La Mela as a Non - Executive Director (NED) - she has previously held technology roles at Twitter and Google and is presently a NED of Whispir • North American Advisory Board established, the participants bring a strong background in technology, mining and energy Debt refinanced • Secured a new A$20m debt facility with Partners For Growth (PFG) Increasing North American presence • Continuing to invest in our North American resources, regional FTE is planned to exceed 30 in FY22 Financial • Record Q4 cash receipts of $10m and $32m for the financial year • Gross Margin of 79% • EBITDA Margin of 24% Vault acquisition • Acquisition completed in Oct - 20, its technology is now fully integrated • $6.2m annual synergies implemented, versus $4m target Partners • Global partners are increasing our external recognition. This includes AWS Partner status, Verdantix recognition and US Security Executive Council accreditation 1. Excludes clients acquired in the Vault acquisition 2. Cost of sales plus operating expense plus capitalised costs 6 BUSINESS UPDATE 2 1. Fiscal Year - To - Date ending 31 October 2021. All dollar amounts on this slide are provided on an unaudited basis. 2. Includes $0.1m related to October pre - acquisition TIKS revenue and share related to SkillPASS joint venture with Energy Skills Q ueensland 3. Based on a review of revenue sources that recur annually 4. Annual Recurring Revenue. Recurring portion of exit month revenue on an annualised basis 5. As of Q1 FY22 Key financial and operating metrics in YTD 1 FY22 $2.5m Oct - 21 Revenue 2 $8.7m YTD 1,2 Revenue 90.4% Recurring revenue 3 $27.5m ARR 2,4 77% Gross margin 5 $2.7m Oct - 21 Cash receipts $10.4m YTD 1 Cash receipts 870k Users 8 Damstra Group is a global provider of enterprise protection solutions 808 clients ~20 countries 1 870k licences 2 13 offices ~220 employees ~100 R&D staff Group office locations Damstra headquarters Continents in which Group operates Denver London Auckland Christchurch Melbourne Perth Clark (global operations centre) Newcastle Brisbane Hong Kong Singapore Sydney x2 1. Countries where Damstra products are used 2. Estimated as at 31 October 2021 9 The Damstra story so far 2006 2014 2002 2015 2016 2017 2018 2019 2020 2021 Acquired by Core functionality added: • Biometrics terminal • Drug & alcohol testing • Online bookings GPS tracking Handheld mobile terminals biometrics App - enabled access control Damstra buyout from Skilled Group New offices opened: • New Zealand • Philippines • United States 2002 – Platform development begins 2003 – First login Relocated to AWS Acquired SGS Stax (clients) Acquired WMS (product) Entered the UK • Facial recognition (pilot) • Asset Management Acquired (product) Acquired (clients) ASX Listed 16 October 2019 Acquired (clients) Acquired (product) Acquired (product) Acquired (product) Acquired (clients) North America advisory board established • EPP • Fever detection & facial recognition • Mobile attendance • Digital forms & workflows • RFID tracking • TechOne partnership • US partnerships ASX Added to the All - Technology Index New partnerships: • AWS • Oracle innovation Hub • Procore Key Activities : • Corporate event • Product development • Partnerships • M&A $19.6m $8.2m $10.6m $15.3m Revenue (as of 30 June): $27.4m 10 YTD 1 FY22 achievements 6 Growth Major Clients Technology Strategic Business Activity • Exceeded 95,000 users in the construction industry • Construction vertical, which includes three core clients, generated ~$1m of revenue 2 in Q1 - 74% growth on a PCP basis • Trial with a new global mining client is complete, contractual discussions have started. Scope with module services to be deployed in 9 countries, with potential for 40,000 users 3 • Rolling out our HSE solution with Amazon across all 25 logistics locations in Australia • CBRE are rolling out our Permit - To - Work solution across their managed facilities in ANZ and the UK, with other global locations to defined Major Clients • Top 10 clients - no contractual renewals occurring in FY22 • John Holland Group – have signed a new 5 - year contract • NBN – new contract is in operation and is performing well ahead of plan • Teck Resources – large Canadian miner is operational at 6 sites and is expanding to additional locations • Major construction clients to deploy forms/workflow solutions across all their projects • Newmont - reduced scope, presently remaining at 2 operational locations in the United States, which are not material • StateCover is the mutual insurer for NSW councils, it has currently rolled out the Damstra Safety solution across ~70 councils Enterprise Protection Platform (EPP) • Strategic pivot to our EPP – product lexicon continues to simplify and evolve Product momentum • Paperless form users now exceed 15,000, reflecting rapid growth of 50% on a PCP basis New products • COVID record management • Satellite now in pilot • Numerous new products are in UAT with key clients that can be commercialised: • Return to work • Skills matrix • Data lake TIKS acquisition • ~70 clients • FY21 revenue $4.1m • CEO and Founder Sam Marciano becomes Chief Commercial Officer of Damstra • Majority of Sam Marciano's consideration in Damstra stock at a deemed issue price of $1 per ordinary share • Increases our R&D bench strength Partners 4 • Procore partnership now in operation, targeting the construction industry in ANZ • Oracle integration and participation in the new Oracle innovation hub in Sydney confirmed for a February launch • Technology One partnership now has 16 active clients 1. Fiscal Year - To - Date ending 31 October 2021 2. Provided on an unaudited basis 3. Subject to contractual negotiations with the client. There is no guarantee that any agreement as to these matters will be rea che d 4. Procore and Oracle opportunities are early - stage. All three opportunities are not considered to be material at this stage 11 Growth strategy Core strategy is unchanged, has evolved following the acquisition of TIKS Solutions Geography Vertical & Channel Product North America Key growth pillar, continue to scale up the North American business UK Build out the UK business Users Continue to build user numbers, via product cross sell and increased client penetration New verticals Facilities Management and Rail Smaller clients Increase product uptake P artners Deepen and expand partnerships Workflows Increase roll - out of paperless forms/workflows across major clients Data analytics New frontier with our clients EPP Continue to build out our EPP proposition. Integrate TIKS and add new functionality 12 Revenue growth being driven by organic sales and accretive M&A $10.6m $15.3m $19.6m $27.4m FY18 FY19 FY20 FY21 Base Acquired Base Organic 3 2 1. Compound Annual Growth Rate 2. Prior Year Total Revenue, assumes net zero churn 3. Includes incremental - to - base revenue generated from post - acquisition control 37% 3YR CAGR 1 13 Revenue contribution by product module, multiple growth levers Relative Maturity Growth Focus Core platform, backbone for other modules Integrated or standalone, high growth potential Value - add, less mature Value - add, more mature Workforce Management Access Control Digital Forms Safety Solo eLearning Asset Management 14 Client growth is coming from a diverse range of industries Opens up new sources of revenue growth and reduces sector - specific macroeconomic risk 1. Select, approximation, as at 30 June 2020, 30 June 2021 and 31 October 2021 2. Last Twelve Months ending 31 October 2021 0 50 100 150 Construction Supermarkets & Hospitality Transport Utilities Agriculture Manufacturing Government Mining Education Number of clients by industry 1 FY20 FY21 Oct-21 LTM 2 15 M&A remains a core growth strategy We have a demonstrated track record of successfully integrating acquisitions that have accelerated our Enterprise Protection Platform strategy Damstra has acquired seven companies in the last four years, from small private businesses to listed entities on the ASX What do we look for in an acquisition target? Our ideal M&A target profile We have three core principles to identify a suitable target 1. Product – enhances or accelerates our EPP proposition 2. People – emphasis on cultural and integration fit 3. Traction – products must be commercialised to some degree Our secondary filters i. Provides entry into new markets , be it geography or new verticals ii. Establishes new client and cross - selling opportunities à increased network effect iii. Accelerates the convergence of technologies that can scale internationally iv. Acquires organisational capability 1. Adjacent and complementary technology - Enhances Damstra’s module suite and the EPP - Accelerates delivery of our innovation pipeline - Brings products that can scale internationally 2. Organisational capability – Increases organisational capability, particularly in R&D – Helps to build out an international organisation – Synergies can be extracted 3. Client lists – Market consolidation – Accelerate international growth – Cross sell target modules to Damstra client base 16 Reflecting on our M&A strategy We have a demonstrated track record of successfully integrating acquisitions and delivering value. Our M&A strategy continues to evolve, and is much more than simple revenue acquisition Reflection has reinforced the benefits of the strategy What has gone well Reflections • Acquiring products/modules is faster than developing them ourselves . • Each product acquisition has accelerated and helped to create the EPP proposition • Acquired products have fulfilled the expected client needs • Several Damstra senior leaders have come from acquired companies • Significant majority of acquired clients have been retained • Cash synergies have generally been higher than expected • Integration has generally gone well • Implemented a centralised infrastructure and global approach • Technical integration can be done, but for some products it is a long process when there is multi - year technical debt • Optimal results are achieved when acquired products strongly relate to core offerings we already have • Talent acquired has been positive overall, and organisational changes are generally required • It is optimal when senior management possess a strong technical background • Buy or build - we estimate it would have cost more to build the acquired products from the ground up 17 Detailed overview of our recent key acquisitions 6 Velpic (rebranded as eLearning) Scenario (rebranded as part of Workforce Management) APE (rebranded as Digital Forms) Smart Asset (Rebranded as Asset Management) Vault (Rebranded as Solo and Safety) TIKS Completion date May - 19 Dec - 19 Feb - 20 Jun - 20 Oct - 20 Oct - 21 Base Revenue 1 $0.7m $1.3m $1.3m $0.4m $4.6m $4.1m Strategic rationale • Accelerate the development of an integrated learning platform into workforce management • Consolidate a small Queensland competitor • Accelerate the addition of a forms module, which is the backbone of our workflows strategy • Create an assets module integrated into workforce management • Acquire a mobility product • Accelerate Safety proposition to the market • New verticals and partnership capability • Talent, founder and technical team Key success measures • FY21 Revenue related to this product is more than double its Base Revenue, and is on track for a further increase in FY22 • Key component of expanding into Queensland with a major client • Significant increases in licenses, current roll out to key clients will increase revenue • FY21 Revenue related to this product increased by 50% compared to its Base Revenue • $6.7m revenue contribution in FY21 accounts • Significant increase in users • TBC Positives • Implemented as a core offering as part of workforce management solutions • Key clients retained • Foundation module for our workflow management strategy • Uptake across key clients • Product is in the process of being deeply integrated • Product functionality is high • Enterprise platform merged with Damstra product and relaunched as Damstra Safety • Strategically, there is high client interest in Safety, Forms and Learning as a bundle of solutions • New module, permit to work • Strongly placed in the global partnership space • High quality development team Reflections • Time needed to retire the brand • No product addition benefit, which was expected • No executive talent acquired • Nil • Intrinsic growth has not been as strong as hoped • SurePlan dispute 2 • Nil 1. Standalone Revenue of the acquired company in the fiscal year immediately prior to the fiscal year in which it was acquired 2. Please refer to the FY21 Financial Results announcement released on 26 August 2021 for further information 18 PRODUCT OVERVIEW 3 Our product lexicon continues to evolve Simplifying our product names to increase client understanding and engagement Name Current name Also known as Description Enterprise Protection Platform Enterprise Protection Platform EPP Designed to automate security, health and safety, training, and contractor management across all operations, while retaining and optimizing user’s existing software investments Workforce Management Damstra Workforce Management TWMS Contractor portal, worker & supplier registration, documentation verification, time & attendance, inductions eLearning Damstra Learning Learning Management 360 virtual reality, training needs analysis, course development, inductions Solo Damstra Solo Connected Worker, Lone Worker, Solo Drive, Solo Satellite Wearables, crisis management, biometrics, fall detection, check - ins, alerts, duress & panic alarms, Solo mobile, beacons and geofencing Solo Drive Solo Drive Collision detection, driver behaviour monitoring – sold separately from Solo Access Control Damstra Access Control Terminals, thermal cameras, alcohol & drug testing, badge reader & printing, turnstiles, gates & doors, visitor management, evacuation & muster Digital Forms Damstra Forms HSE Management Safety audits, incident & hazard management, SWMS & RAMS, pre - starts and toolbox talks Safety Damstra Safety Governance, risk, compliance, claims, mobility Predictive Safety Analytics Damstra Predictive Analytics Artificial intelligence solution that uses data analytics to drive the identification and visualisation of risks associated with people, workplaces, assets and information Insights Damstra Insights (white labelled) In - vehicle connectivity, reporting, BI Asset Management Damstra Asset Management Track assets, plant service/maintenance and equipment calibration schedules Intelligent Workflows Damstra Intelligent Workflows Digital forms, training according to title, creates workflows, part of EPP Prepared People Safe Workplaces Connected Assets Accessible Information Investment Protection: 20 EPP has been enabled by our acquisition and development strategy Solo eLearning Safety 21 Product overview: our core contractor management portal Online induction management Allows the client to create and deliver online induction training courses and site inductions for its employees and contractors. Time and attendance onsite Damstra issues site access cards (or links to the client’s) allowing only compliant workers to access the site Online supplier registration Contracting companies register online and upload all the information and documentation the client requires, allowing Damstra to verify and approve a supplier Online worker registration Workers and contractors are able to upload all the information and documentation the client requires to verify and approve a worker Independent verification Damstra independently verifies all documents and certifications provided by contracting companies, suppliers and workers to verify the skills and competencies of the contractor. 22 Product overview: examples of our platform in action Time and attendance onsite Compliant workers are permitted to enter the site via access control hardware terminals. Entry is recorded via swipe card or biometric passthrough. Enables a real - time view of site attendance. Track and protect individual workers onsite Their location is tracked through geo - fenced zones via Solo mobile or wearable devices. Worker safety is monitored and protected via fall detection, distress beacons and instant notifications. 23 Product overview: examples of our platform in action (continued) Digital Forms Damstra captures and manages an organisation’s data in real - time, enabling everyone in the field and in the office to know what is going on, make better decisions and get more done. Mobile site management Workers benefit from consistent information, greater collaboration and progress monitoring, reduced cost of rework and improved safety and compliance on - site. 24 FY22 OUTLOOK 4 FY22 guidance Previous Guidance Updated Guidance Revenue • $35.9m – 38.9m • 31% – 42% YOY 1 Growth EBITDA Margin 2 • 22.5% – 25% Revenue • $30m – 34m • 10% – 24% YOY Growth • 21% – 37% YOY Growth excluding Newmont EBITDA Margin 2 • 15% – 20% Assumptions: • Nil revenue contribution from Newmont for the remainder of FY22 • Nil revenue contribution from the UK business in FY22 • Lower end of guidance assumes minimal new business • TIKS acquisition performs at FY21 levels • Nil revenue from the New Zealand contractual dispute 26 Updated revenue guidance of $30m - $34m 1. Year - over - year 2. Excludes non - cash share - based payments THANK YOU
Information on this Website is provided for general information purposes only and is not a substitute for professional advice. ASX Information (including company announcements and prices) is delayed by at least 20 minutes. JSE Information (including company announcements and prices) is delayed by at least 15 minutes. Reliance on the information you access on or from this Website is solely at your own risk. We make no representation or warranty in relation to the future performance of the companies that appear on this Website. Investment in securities involves risk and you should obtain independent professional legal, financial, investment or company advice before acting on any of the information you access on this Website. Using, browsing or otherwise accessing this Website is subject to our Terms and Conditions and our Privacy Policy.

© 2021 Listcorp. ABN 60 166 140 307

Never miss news from Damstra Holdings Limited (ASX:DTC) when you join Listcorp.