GENTRACK GROUP LIMITED — AGM Information 2019

Feb 25, 2019

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26 February 2019

Annual Meeting of Shareholders Presentations

Please find attached a copy of the presentations that will be delivered at Gentrack Group Limited’s (NZX/ASX: GTK) annual meeting of shareholders today at 4pm NZT in Auckland.

ENDS

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Contact:

Jon Kershaw; Company Secretary

+64 9 966 6090

About Gentrack

Gentrack provides essential software for essential services, pairing powerful platforms with deep market knowledge to help utilities and airports lower service costs, foster innovation and confidently navigate market reform. It employs over 530 people in offices across New Zealand, Australia, the UK, Singapore, USA and Europe and services over 220 utility and airport sites in 30+ countries with its leading solutions.

Gentrack Cloud is a subscription-based billing, customer information, market interaction and portfolio analytics solution for energy and water utilities in markets where flexibility, uniqueness and compliance are essential. Its meter-to-cash capabilities and managed services offering are designed to enable utilities to differentiate their businesses in competitive markets, to deliver great customer service experiences, achieve lower service costs, launch innovative products and stay compliant with market regulations.

More information: www.gentrack.com

Veovo is Gentrack’s world-class solution for airports, enabling them to unlock operational, revenue, concession and passenger insights across the airport ecosystem. Over 115 airports globally are using Veovo to operate more efficiently, uncover new growth opportunities and deliver outstanding guest experiences.

More information: www.veovo.com

Gentrack Group Ltd | www.gentrack.com | info@gentrack.com | ARBN 169 195 751

GTK ANNUAL MEETING 2019 26 February 2019

www.gentrack.com

Introductions

Directors

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John Clifford Chairman (2007)

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Andy Coupe Non-executive Director (2014) Graham Shaw Non-executive Director (2014)

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Nick Luckock Non-executive Director (2018)

Leigh Warren Non-executive Director (2008) James Docking Non-executive Director (2016)

Key Executives

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Ian Black
CEO (2016)
Tim Bluett
CFO (2018)
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Jon Kershaw Company Secretary (2014)

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Agenda

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• CEO’s Report on FY18

• Strategy and Outlook

• Formal Business

• Questions/General Business

• Refreshments and Networking

3

Shareholder breakdown

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Shares - % held by region

4,045 16.4% NUMBER OF HOLDING DIRECTORS SHAREHOLDERS - ALL AND OFFICERS Up 13.8%

116

NUMBER OF SHAREHOLDERS - STAFF AND DIRECTORS

68.8% 4 HOLDING OF TOP SHAREHOLDERS 20 SHAREHOLDERS WITH 5%+ 1.04

• All figures as at 13 February 2019

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Enterprise software for utilities and airports Gentrack delivers software solutions which are deeply embedded and mission critical. We enable over 220 utilities and airports in 30 countries to lower service costs and drive innovation delivering enhanced customer service.

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EXPERTISE AND PASSION

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FY18 Financial Highlights

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REVENUE
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Up 37% Excluding acquisitions*

FREE CASHFLOW

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85%
Pre-tax as a %
of EBITDA
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EBITDA

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$31.0m
Up 30%
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Up 26% Excluding acquisitions*

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DIVIDEND
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13.7cps
Full year
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NPAT

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$13.9m
Up 17%
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TOTAL

SHAREHOLDER RETURNS

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137%
since 2014
IPO
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• Evolve Analytics acquired in June 2018

• ** Final dividend 8.7cps

*** Based on the closing share price on 14 February 2019 of NZ$5.15

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FY18 Highlights

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Growth since IPO (2014)

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FY18 Revenue by Region ($NZm)

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CAGR EBITDA
c.24%
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FY17 comparison:

• UK: up 107%

• Rest of World: up 105%

• Australia: down 4%

• New Zealand: down 9%

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Growing recurring revenues

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Utilities
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Total: $63.5m $85.1m
Annual
Recurring
Revenue
(ARR)
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Licence Revenue Annual Fees Annual Recurring Revenue up 67% up 86% up 49% on FY17 on FY17 on FY17

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Airports

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Total: $11.7m $19.4m
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Annual
Recurring
Revenue
(ARR)
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Licence Revenue Annual Fees Annual Recurring Revenue up 80% up 64% Up 50% on FY17 on FY17 on FY17

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• Total includes Other revenues

UK – growth opportunity

• Current market share

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• 47% of all energy suppliers

• 11% of the household energy market by meters

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• 40% of non-household water market by meters

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• Growing business with 4 of ‘Big 6’ energy suppliers

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• Expansion of Evolve solution across customer base

• Introduction of a Gentrack Market Connector solution, a

• £20m+ p.a. UK market opportunity

• Growth into core customer base of ‘Big 6’ – industry disruption

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Evolve Analytics acquisition – tracking ahead of expectations

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• Acquired in June 2018 for £23.0m (NZ$44.9m)

• SaaS solution provider to the UK energy sector

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• Specialises in the identification and correction of meter data errors, and reconciliation of energy and network settlement

• SaaS based solution and services improve revenue collection and cost control, which is complementary to our core billing and customer engagement solutions

• Clear opportunity to cross sell into all our existing UK customers and to bring the solution and service to Australia and New Zealand

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Airports

• Launched Veovo branding and an integrated solution across Airport 20/20, Blip and CA+

• Established US team to pursue large market opportunity

• New wins – Belfast, Jersey and Orlando Airports

• Launched BlipTrack Vision – a smart camera enabled passenger tracking solution

• CA+ expanded into Middle East with key projects

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• The CA+ earn out due in February 2020 will not be triggered as profits have fallen short of the vendor’s forecasts. We have written down the goodwill associated with the earn out (NZ$3.98m), and written back the earn out liability (NZ$3.84m)

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Asian opportunity

• Established operations in Singapore and deployed software to 3 energy suppliers as Singapore introduced competition

• Monitoring energy market deregulation and retail competition in other Asian markets

• Major markets are already liberalising - China and Japan

• Other countries are planning deregulation - Korea, Malaysia, Philippines

• Significant changes expected over the next 3-10 years as energy retail competition opens up these markets for Gentrack

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Shift of business model to SaaS recurring revenues

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• Productised solutions for each market to accelerate delivery and ROI

• Offer includes compliance, regular enhancements, rapid value delivery and is highly differentiated relative to competition

• Cloud-native solutions which enable utilities to bolt on new features quickly and at low cost

Traditional On Premise vs SaaS Revenue Model (Indexed)

On Prem $(PV) SaaS $(PV) Prem Acc. Revenue SaaS Acc. Revenue

• Signing new customers on a SaaS basis provisioned in the Cloud

• Increasing total lifetime value of customers

• Growing contracted recurring revenues and margins

• Sacrificing short term up front license revenues

• Revenue mix changing with the progressive migration of customers to SaaS

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Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
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• Customer lifetime value at Gentrack is measured over 15 years and the corresponding revenue multiple over this period is 2 times the traditional licensing model

SaaS revenue is 1.5 times the traditional licensing revenue after 7 years and 2 times after 15 years

• Delivering revenue growth notwithstanding the move to SaaS which has lower up front revenue, due to larger sales

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Global market opportunity

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Renewable and Distributed Energy Resources driving energy market restructuring

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Rise of Demand Response, Battery storage, Virtual Power Plants, Electric Vehicles

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Market pressures and price regulation forcing energy suppliers to reduce costs

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Energy markets getting competitive across Europe

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Asian markets deregulating and introducing energy competition

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Settlement and reconciliation of energy, Smart Metering roll outs, tariff reforms

Our customers are at the forefront of new utility business models, which are consumer centric

Legacy and in-house systems are more expensive to run and to keep compliant than new entrant solutions

We can follow our UK customers into Europe

Regulated/vertically integrated utilities cannot adopt Renewables and Distributed energy efficiently.

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Gentrack Strategy

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1. Continue to productise our software

• Better for customers, faster to deliver with fewer people and lower risk

• Move to SaaS revenue – new and legacy customers over time

• Improves margin and quality of earnings

3. Focus on our existing markets – UK, Australia and NZ

• UK and Australia are long term growth markets despite current regulatory uncertainty, with opportunity to follow our customers into Europe

• Develop the Asia Pacific opportunity from a strong starting point

• Building on Singapore success and local expertise

• Synergistic acquisitions, NZ$50m+ debt facilities

• We target synergistic products with cross sell opportunity

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Outlook

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• EBITDA for first half expected at c.$12.5m, compared to $15.9m 1H18 and $15m 2H18

• This is down on 1H18 due to increased staff investment of c.$5m compared to 1H18. We had expected this cost to be covered by substantial projects which have been put on hold

• Notwithstanding the first half result, we expect the full year FY19 EBITDA to be up on FY18 EBITDA of $31m. We will comment further on this with the first half results released in May

• Recurring software revenue (ARR) will be up in first half, in line with continued underlying growth

• FY19 will see continued capitalised product investment, and is expected to reduce in FY20 when the margin benefits of the shift to ARR are expected to show

• Regulatory and investment uncertainty in the UK and Australia continues for utilities, however we are winning business with a growing sales pipeline

• We remain confident in our 15% long-term organic EBITDA growth target

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FORMAL BUSINESS

www.gentrack.com

RESOLUTION 1:

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APPOINTMENT OF AUDITORS AND FIXING OF AUDITORS’ REMUNERATION

• That KPMG is re-elected as the auditor of Gentrack Group Ltd and that the Board is authorised to fix the auditors’ remuneration.

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	Votes For	Votes Against
Number of Shares	49,999,038	857,068
Number of Shareholders	114	4

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RESOLUTION 2:

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ELECTION OF FIONA OLIVER

• That Fiona Oliver be elected to the Board

as a non-executive director of Gentrack Group Limited.

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Votes For Votes Against Number of Shares 50,766,061 66,661 Number of Shareholders 103 6

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RESOLUTION 3:

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RE-ELECTION OF JOHN CLIFFORD

• That John Clifford be re-elected

as a non-executive director of Gentrack Group Limited.

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Votes For Votes Against Number of Shares 50,001,085 852,374 Number of Shareholders 113 2

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QUESTIONS AND GENERAL BUSINESS

www.gentrack.com

CLOSE

www.gentrack.com