APPEN LIMITED — Earnings Release 2016

Feb 28, 2016

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Level 6, 9 Help Street Chatswood, NSW 2067 Tel + 61 2 9468 6300 Fax + 61 2 9468 6311 www.appen.com.au https://www.linkedin.com/company/appen

**ASX

ANNOUNCEMENT**

**29[th] February

2016**

**APPEN

ANNOUNCES
FULL
YEAR
2015
RESULTS**

Appen
Limited (“Appen”)
(ASX:APX)
today
announced
its
Full
Year
results
for
the
year ended
31[st] December
2015.
Appen
is
a
leading
global
provider
of
high
quality
language data
and
services
to
major
technology
companies
and
government
agencies.

				% change constant currency
A$m	FY2015	FY2014	% change
Statutory Results
Language Resources	31.9	22.5	42%
Content Relevance	50.7	28.4	78%
Total Revenue	82.7	51.0	62%	35%
EBITDA	13.8	4.8	189%	85%
EBITDA Margin	17%	9%
NPAT	8.3	1.6	414%	144%
Pro Forma Results
EBITDA	14.0	6.7	110%	48%
NPAT	8.5	3.6	136%	38%

The
Company’s
revenue
grew
62%
on
FY2014
to
$82.7m,
EBITDA
was
up
189%
to $13.8m
and
net
profit
after
tax
(NPAT)
grew
414%
to
$8.3m.
Pro
forma
EBITDA
of $14.0m
was
up
110%
on
the
prior
year,
while
the
pro
forma
NPAT
of
$8.5m
exceeded the
prior
year
by
136%.

The
result
exceeds
the
commitments
in
the
Company’s prospectus.
Revenue
and
EBITDA
exceeded
the
statutory
prospectus
forecast
by
54% and
109%
respectively.

Growth
in
the
Company’s
revenue
came
from
search,
social
and
ecommerce
customers as
successful
pilots
in
FY2014
came
to
fruition
in
FY2015,
as
well
as
repeat
business from
many
of
the
Company’s
longstanding
customers.
Revenue
from
new
customers

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has
further
diversified
the
Company’s
customer
base.
Appen’s
customers
include
nine of
the
top
ten
global
technology
companies.

The
Company’s
earnings
result
benefited
from
an
increase
in
high
margin
revenue delivered
by
the
Language
Resources
Division.
The
Content
Relevance
Division
also
grew its
profit
contribution
with
productivity
improvements
and
globalisation
of
operations offsetting
volume
discounts,
competitive
pressure
and
investments
in
ramping
up multiple
client
engagements
in
parallel.

Appen
derives
most
of
its
revenue
in
USD.
The
relative
depreciation
of
the
AUD
through the
year
provided
a
boost
to
revenue
and
earnings.
Excluding
the
impact
of
foreign currency,
revenue
growth
was
up
35%,
statutory
EBITDA
up
85%
and
statutory
NPAT
up 144%
on
the
prior
year.

Appen’s
Chairman,
Chris
Vonwiller,
said
“This
is
an
outstanding
result
for
our
Company. We
have
exceeded
the
commitments
in
our
prospectus
and
achieved
our
strategic
goals of
growing
the
social
media
sector
and
further
improving
our
customer
diversification.”

The
Company’s
CEO,
Mark
Brayan,
added
“The
result
is
extremely
pleasing
and
we’re especially
proud
of
our
talented
and
dedicated
team.
There
is
clearly
strong
demand
for our
high
quality
language
data
and
services
and
we
have
demonstrated
our
ability
to scale
our
operations
to
translate
revenue
volume
increases
into
efficient
bottom
line performance.”

Appen
is
targeting
low
double-­‐digit
revenue
and
earnings
growth
in
FY2016.
Revenue will
come
from
existing
customers,
the
Company
has
over
$60m
in
orders
in
hand
at
the time
of
writing,
supported
by
the
ongoing
acquisition
of
new
customers
through
the healthy
pipeline
of
pilots.
However,
we
would
not
expect
to
repeat
the
same
growth rates
as
FY2015.
We
expect
margin
pressure
and
product
mix
changes
but
the
scalability of
operations,
supported
by
offshoring
and
technology,
will
help
operating
profits
to continue
to
grow.

Trends
within
the
technology
industry
of
the
increasing
application
of
speech recognition
technologies
in
multiple
sectors,
greater
use
of
machine
learning
and natural
language
processing
in
search
and
the
growing
use
of
crowdsourcing
to
solve enterprise
challenges
all
combine
to
make
us
optimistic
about
the
opportunities
and growth
ahead
of
us.

Appen
has
a
strong
balance
sheet
with
ample
cash
reserves
and
no
debt.
The
Company is
well
placed
to
seize
opportunities
for
growth
that
are
consistent
with
our
long-­‐term strategy
to
be
the
leading
language
service
provider
to
major
technology
and government
organisations.

The
Board
have
declared
a
dividend
of
3.0c
per
share,
fully
franked.
This
follows
the
1.2c half-­‐year
dividend
in
September
2015.

The
dividend
will
be
paid
on
24[th] March
2015 with
a
record
date
of
7[th] March
2015.

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**Please

contact
for
more
information:**

Mark
Brayan
(CEO) mbrayan@appen.com +61
9468
6392 Kevin
Levine
(CFO)
klevine@appen.com +612
9468
6322

**Conference

Call**

Mark
Brayan
(CEO)
and
Kevin
Levine
(CFO)
will
host
an
investor
briefing
call
today
at 11:00am
AEDT.

Analysts,
investors
and
media
who
wish
to
join
the
briefing
call
should
dial
1800
123
296 or
+61
2
8038
5221
and
when
prompted
input
Conference
ID
5368
9109.

_**About

Appen**_

Appen
is
a
language
technology
and
data
solutions
provider
that
has
a
services
capability
in
more
than 140
languages
and
dialects
for
global
technology
companies
and
government
agencies.

Appen
offers
large
scale
training
data,
linguistic
models
and
consulting
services
to
assist
leading technology
companies
and
government
agencies
in
the
development
of
internet
and
mobile
connected products
including

• -­‐
  Content
  Relevance
  (e.g.
  search
  relevance
  optimisation);

• -­‐
  Language
  Resources
  (e.g.
  speech
  recognition
  or
  speech
  synthesis,
  security
  and
  intelligence)

Components
of
language
technology
can
increasingly
be
found
in
modern
society
including
smartphones, social
media
content
analytics
software,
e-­‐commerce
platforms,
automobiles
and
government
security and
intelligence.
Demand
for
language
technology
is
growing
with
the
development
of
mobile communications
(phones,
tablets,
laptops),
consumer
electronics
(game
and
TV
consoles),
cloud
services, search
technology
and
social
media
that
enable
communication
and
intelligent
information
retrieval across
platforms
and
languages

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