Transcript Kinexions 2006 - S&OP and Supply Chain Solution Provider

TSX : KXS
RICHARD MONKMAN, CFO
JOHN SICARD, CPO
April 2015
Forward Looking Statements
Forward-Looking Information
This document contains forward-looking statements within the meaning of applicable Canadian securities legislation. In some cases, these forward-looking statements can be identified by words or phrases
such as “may”, “will”, “expect”, “anticipate”, “aim”, “estimate”, “intend”, “plan”, “seek”, “believe”, “potential”, “continue”, “is/are likely to” or the negative of these terms, or other similar expressions intended to
identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and financial needs.
These forward-looking statements include, among other things, statements relating to: our expectations regarding our revenue, expenses and operations; our plans for and timing of expansion of our solutions
and services; our future growth plans; the acceptance by our customers and the marketplace of new technologies and solutions; our ability to attract new customers and develop and maintain existing
customers; our expectations with respect to advancement in our technologies; our competitive position and our expectations regarding competition; and anticipated trends and challenges in our business and
the markets in which we operate.
Forward-looking statements are based on certain assumptions and analysis made by us in light of our experience and perception of historical trends, current conditions and expected future developments and
other factors we believe are appropriate, and are subject to risks and uncertainties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect. There
can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Given these risks, uncertainties and
assumptions, you should not place undue reliance on these forward-looking statements. These statements are provided to assist external stakeholders in understanding Kinaxis’ expectations as of the date of
this document and may not be appropriate for other purposes.
Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors,
including those identified on page 3 of our Management’s Discussion and Analysis for the third quarter ended September 30, 2014, and in our other public disclosure documents, which are available under our
profile on SEDAR (www.sedar.com). Although the forward-looking statements contained in this document are based upon what our management believes are reasonable assumptions, these risks,
uncertainties, assumptions and other factors could cause our actual results, performance, achievements and experience to differ materially from our expectations, future results, performances or achievements
expressed or implied by the forward-looking statements. The forward-looking statements made in this document relate only to events or information as of the date of this document is made and are expressly
qualified in their entirety by this cautionary statement. Except as required by law, we do not assume any obligation to update or revise any forward-looking statements, whether as a result of new information,
future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Non-IFRS Measures
This document makes reference to certain non-IFRS measures, specifically Adjusted EBITDA. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning
prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement the IFRS
measures by providing further understanding of our results of operations from management’s perspective. Accordingly, they should not be considered in isolation or as a substitute for analysis of our financial
information reported under IFRS. We use Adjusted EBITDA to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise
be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our
management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital
expenditure and working capital requirements.
Adjusted EBITDA is not a recognized, defined or standardized measure under IFRS. Our definition of Adjusted EBITDA will likely differ from that used by other companies (including our peers) and therefore
comparability may be limited. Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial
statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
For a reconciliation of Adjusted EBITDA to the most comparable IFRS financial measure please see page 7 of our Management’s Discussion and Analysis for the fourth quarter ended December 31, 2014:
•
Under our profile on SEDAR (www.sedar.com)
All amounts are in United States dollars, unless otherwise indicated.
2
Today’s supply chain networks
are EXTENDED and COMPLEX
Short product and
delivery lead time
Global, outsourced,
multi-tier operations
Highly volatile
demand and supply
3
RapidResponse
A single product that provides customers
end-to-end visibility and planning, change
simulation and response co-ordination across
their supply chain networks
In today’s world, the ability to
respond to change is more
important than the plan
4
Rapidly growing market
for SaaS-based SCM solutions
2017
$3.9B
20.8%
CAGR
2012
2017
10.3%
CAGR
2012
$1.5B
$8.3B
Cloud Application
Market in SCM
Enterprise Application
Software Market in SCM
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Investment Highlights
1.
>20% Annual Growth in the SaaS segment
of $8.3B SCM Software Market
2.
Recognized Visionary Product
3.
>80% FTM of Subscription Revenue Visibility
4.
24% Annual Subscription Revenue CAGR(1)
& Strong Multi-Year Adjusted EBITDA(2)
5.
Strong Management Team;
CEO, CFO & CPO Team Together for Nearly a Decade
(1) 4-year CAGR (2011-2014)
(2) Adjusted EBITDA is a non-IFRS measure, for reconciliation of Adjusted EBITDA to profit before income taxes, please
see “Management’s Discussion & Analysis”
6
What we do
GLOBAL SUPPLY
CHAIN VISIBILITY
Access a complete and always
current view of the business
MULTI-SCENARIO
WHAT-IF ANALYSIS
Simulate anything anytime
with high speed
Integrates
ANALYTICS
with human
JUDGMENT
CROSS-ORGANIZATIONAL
COLLABORATION
Act as a group in the pursuit
of collective goals
TRANSFORMS HOW COMPANIES MANAGE THEIR SUPPLY CHAIN NETWORK
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RapidResponse: Our competitive differentiator
RapidResponse
MULTI-SOURCE DATA
Single multi-version in memory DB
Sources
SAP
CUSTOMER ACCESS
Rich Desktop
Mobile/Portal
ORACLE
Salesforce.com
SQL Server
Others
1.
One database integrates disparate data
2.
Speed of analytics and scale of application
enable superior agility
3.
Cohesive collection of applications
unites people and process
GENERATES LOYAL CUSTOMERS THAT SEE CONTINUOUS VALUE
8
Well established base of customers
including blue-chip enterprises
APPROACHING
100
LARGE ENTERPRISE CUSTOMERS
HIGH TECH AND
ELECTRONICS
AEROSPACE
AND DEFENSE
INDUSTRIAL
LIFE SCIENCES AND
PHARMACEUTICALS
AUTOMOTIVE
Avaya Inc.
Aviat Networks, Inc.
Blackberry Limited
Celestica Inc.
Cisco Systems, Inc.
Flextronics International Ltd.
Jabil Circuit, Inc.
NCR Corporation
Nikon Corporation
Nimble Storage Inc.
Qualcomm Incorporated
Teradyne, Inc.
TriQuint Semiconductor, Inc.
Honeywell International Inc.
First Solar
Genzyme Corporation
Ford Motor Company
Lockheed Martin Corporation
Schneider Electric
Masimo Corporation
Volvo Trucks NA
Raytheon Company
Toshiba Europe GmbH
Nihon Kohden Corporation
TE Connectivity
(EMERGING)
Sikorsky Aircraft Corporation
PROVEN ACROSS MULTIPLE MARKET VERTICALS
9
Actual Customer Results
IMPROVED ON-TIME DELIVERY
LOWER INVENTORY COSTS
6 weeks
to 4 weeks
33%
Days to Minutes
Planning cycle(1)
Assessment of demand plan(2)
50%
20% less in 3 months
Finished goods inventory(2)
80%
34%
Finished goods inventory(3)
budget
20% below
Overall product lead times(2)
(1)
(2)
TechFact, TVID:CD2-40A-D90
Kinaxis internal Study
Customer order changes(2)
(3)
(4)
Inventory productivity(2)
Abnormal scrap(4)
TechFact, TVID:589-4FF-2F6
TechFact, TVID:1A2-249-46E
10
Plan
Respond
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Strong track record of revenue and adjusted EBITDA
US Dollars (Millions)
70.1
23%
28%
CAGR
60.8
24%
YoY
51.1
CAGR
40.0
27%
QoQ
46.7
16.1
33.1
38.0
13.3
26.6
12.4
12.6
9.1
9.9 10.1
10.9
15.0
13.9
11.3
9.6
25%
23%
33%
21%
REVENUE
SUBSCRIPTION REVENUE
2014
Q4 2014
2011 2012 2013
Q42013
Q4 2014
Q3 2014
Q2 2014
Q1 2014
2013 2014
Q4 2013
2012
Q3 2013
2011
Q2 2013
2013 2014
3.8
Q1 2013
2012
Q4 2014
2011
Q4 2013
16.3
4.4
18.8
ADJUSTED EBITDA(1)
HIGH LEVEL OF REVENUE VISIBILITY
(1) Adjusted EBITDA is a non-IFRS measure, for reconciliation of Adjusted EBITDA to profit before income taxes, please
see “Management’s Discussion & Analysis”
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Business model provides visibility, stability & growth
STABILITY
VISIBILITY
>80
>100
%
FORWARD TWELVE-MONTH REVENUE
SUSTAINABILITY
2-5
YEAR CONTRACTS
%
NET REVENUE DOLLAR RETENTION
GROWTH
~
40
Multiple levers in revenue model:
 Discretionary pricing model
%
OF SUBSCRIPTION
REVENUE GROWTH FROM
EXISTING CUSTOMERS
 Number of applications
 Number of users
 Number of sites
 Renewal price escalator
13
2014 Financial Results
(unless otherwise noted)
Growth between
FY14 and FY 13
Total Revenue
$70.1
15%
Subscription Revenue
$51.1
28%
Professional Services Revenue
$17.8
(7%)
Gross Profit
$49.3
15%
Adjusted EBITDA(1)
$16.1
7%
$ in USD millions
Adjusted EBITDA Margin
23%
Cash & Cash Equivalents
$56.7
(1) Adjusted EBITDA is a non-IFRS measures, for reconciliation of Adjusted EBITDA to profit before income taxes, please
see “Management’s Discussion & Analysis”
14
Clear growth elements
1.
2.
3.
4.
5.
6.
LAND & EXPAND
Increase number of applications deployed within existing customers
NEW APPLICATIONS
Develop new applications and uses
NEW VERTICAL MARKETS
Won first automotive brand owner client in 2014
EXPAND CHANNEL PARTNERS
Add and expand relationships with managed service providers and resellers
EXPAND DIRECT SALES
Expanded sales team by one third in past 24 months
ACQUISITIONS
Opportunistic and selective
MULTIPLE OPPORTUNITIES TO INCREASE MARKET PENETRATION
15
Strong Leadership Team
MANAGEMENT TEAM
BOARD OF DIRECTORS
Doug Colbeth
Doug Colbeth (Chair)
Chief Executive Officer
•
•
•
•
CEO since 2003, led Kinaxis 2005 transition to SaaS
Previously CEO of Spyglass
Richard Monkman
Chief Financial Officer
•
CFO since 2005; high-tech finance experience
(public and private)
Ian Giffen (Independent Lead Director)
•
•
•
•
Key contributor to the architecture and development
of Kinaxis since 1994
•
•
•
Joined Kinaxis in May 2012
High-tech sales experience
Proven global experience with IBM, Agile, SAP
and others
Has helped public and private firms build scale and drive
successful outcomes in senior operating roles
Rob Wadsworth
•
•
Jeff Johnson
EVP Global Operations
Serves as an advisor and/or director to technology companies
and investment funds
Currently a director at Absolute Software and a number of private companies
Howard Gwin
John Sicard
Chief Products Officer
CEO of Kinaxis
Led Kinaxis in its transition to SaaS
Managing Director at HarbourVest Partners
Director of Camstar, Earth Networks
and several other privately-held companies
Marc Balevi
•
•
President of TechnoCap Inc.
Acted as director and/or chairman of various companies advising
them in financing and strategic alliances
Ronald A. Matricaria
•
•
Former CEO of a prominent health care organization
Has over 35 years of medical device and pharmaceutical experience
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TSX : KXS
RICHARD MONKMAN, CFO
JOHN SICARD, CPO
April 2015