GENTRACK GROUP LIMITED — Annual Report 2021

Nov 24, 2021

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Gentrack Group FY21 Full Year Update 25 November 2021

© Gentrack 2021. All rights reserved.

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Disclaimer

This presentation may contain forward-looking statements. Forward-looking statements often include words such as ‘anticipate’, ‘expect’, ‘plan’ or similar words in connection with discussions of future operating or financial performance.

The forward-looking statements are based on management’s and directors’ current expectations and assumptions regarding Gentrack’s business and performance, the economy and other future conditions, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Gentrack’s actual results may vary materially from those expressed or implied in its forward-looking statements. All figures are shown in NZ$M.

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CEO Commentary Gary Miles Chief Executive Officer

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© Gentrack 2021. All rights reserved.

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FY21 Financial Headlines

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up up up
89.0
5.2% 105.7 0.7% 8.8%
81.9
100.5 81.3 81.8
FY20 FY21 FY20 FY21 FY20 FY21
• EBITDA of $12.7m, up 5.0% from $12.1m in FY20.
• Net cash up $9.2m to $26.0m at 30th Sept 2021.
• Utilities Revenue up 8.8%:
• Strong NRR growth (up 68% to $18.3m) on
successful project deliveries, providing future up up
• ARR growth 5.0% 12.7 54.8% 26.0
Utilities ARR down 0.3% after absorbing ~$4m
customer revenue losses from prior periods
• Veovo (Airport Business) remains profitable
despite industry downturn:
• ARR is up by 7.7% 12.1 16.8
• Operating costs up 5.2% FY21 vs FY20 with
investment in people
• Nil capitalisation of R&D costs. FY20 FY21 FY20 FY21
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Strategic Growth Pillar 1 Strong Base

Delivery quality, efficiency and throughput will continue to improve further

Very good delivery execution - will continue to improve further projects on time and on budget Strong DSO and unbilled revenue management 3% 7% increased revenue per Customer strategic alignment for Revenue per Cost per customer innovation and upsell delivery FTE delivery FTE is up is down

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Customers in Green high Canstar 5 Star ranked performance status 11 years in a row 72% customer satisfaction rating

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Strategic Growth Pillars 2 and 3

Managed Service

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New Logos Managed Service
Strategic and profitable customer relationships
Growth through continuous delivery of new
innovations Generally flat FY20 to
New customers
FY21 revenue position
7 $5.6m
new B2B billing retailer
3
New engagements
1 new B2C billing retailer 5CHART secured
1 new water billing retailer New engagements and
pipeline will enable FY22
new profit & risk customers
2 growth $
(managed services) à
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Strengthened B2B leadership by winning and integrating E.ON and Npower, now the largest UK C&I supplier - one of the most significant transformation programmes globally

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Progress on cloud, clean technology delivering innovation and profitability for a sustainable era

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Gentrack Cloud for Utilities
Customers turning to Renewable Faster
Gentrack to partner in order generation switching
to drive cloud native, products
cleantech innovations.
Time based
Customer
“….together with pricing & billing volume risk
Gentrack, we can
management
deliver complex
business change at
pace. and now we have the ery of new innovations
foundation in place for the next
phase of our retail journey.“
Smart meter data
Billing, revenue &
Matt van Deventer, GM of management Upgrades to Cloud Point of Sale debt management
Bill anything, multiplay,
technology and delivery solution forecasting
green(e.g. EV’s)
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Veovo

Signs of aviation industry recovery starting to show with passenger numbers up 220% vs 2020 and back to only 50% down on 2019.

9 Major Projects delivered

17 Customers on SaaS Cloud ü All major Passenger Flow customers migrated to cloud SaaS

4 New customers

• ü Perth ü New York ü London Luton ü Asia Pacific ü Cincinnati ü Mexico

• ü London Gatwick

• ü 3 North American customers

• ü Extended support in Europe and APAC

• ü First customer adoption of new CI/CD

• Increasing investment in technology in FY22 as we believe in the segment

• Proven our technology in all airport tiers – sales focus will be on major aviation hubs going forward

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“Veovo helps us manage performance with data-driven certainty…”

• Eric van´t Veer, Project Manager at Schiphol Group

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The UK Market

Customer insolvencies Customer insolvencies since beginning of From beginning of 6 FY21 FY17 to end of FY20

• since beginning of From beginning of

• 9 6 FY21 FY17 to end of FY20

• B2C supplier failures in the UK has accelerated due to the global energy crisis and Government enforced price cap.

•

• This week, Bulb went into a special form of administration for larger supplier failures which has not been tested before.

• We will continue to support the business as required by the administrator as options for the business are assessed over the coming months.

• We anticipate there may be some further supplier failures in the coming winter months after which our expectation is that the market will stabilise.

• We have made allowances for a reasonable scenario for these additional potential failures.

• Gentrack revenue is diversified across airports and utilities, with our energy and water customers active in 6 countries, covering both B2B and B2C.

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Future opportunity remains strong

“By 2025, at least 25% of CIS contracts will be awarded to new entrants that will disrupt incumbent vendors offerings” Gartner

1.5b+ meters incumbent market today

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Great technology
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Delivery excellence
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Financial Results For the Full Year ending 30 September 2021 James Spence Chief Financial Officer

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Group Profit and Loss

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Utilities Veovo Group
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Revenue up 5.2% vs FY20 : growth in Utilities business driven by new customers and increases from existing customers offsetting revenue reductions in Veovo due to market conditionsTopCustomer Reporting.xlsx Costs up 5.2% vs FY20: driven by increased investment in personnel, with continued savings in non-personnel costs

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EBITDA up 5.0% vs FY20.

Net Finance (expense)/income: one-time, mainly due to simplification of internal funding structure Nil R&D capitalisation in FY21

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1 Underlying EBITDA being earnings before depreciation, amortisation, impairments and non-operating expenses related to acquisitions. EBITDA is a non-GAAP measure

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Utilities Revenue Analysis

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Utilities Revenue FY20 v FY21 •
NRR up 68% to $18.3m driven by project
deliveries in UK and Australia. Customers
$89.0m converting to recurring revenues in
$81.8m FY21/FY22
Total Revenue
Up 8.8% on FY20 • ARR growth negatively impacted by ~$4m
of previous years' customer losses.
Annual
Recurring • Growth from new and existing Utilities
Revenue
customers (Australia/UK) offset revenue
$70.7m loss
Down 0.3% on FY20
- 79.4% of total • TRR growth rate in FY21 negatively
utilities revenue impacted by incremental regulatory work
in FY20
Committed Monthly Non-contracted
Non-recurring
Recurring Revenues Recurring Revenues
Revenues (NRR)
(CMRR) (TRR)
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Utilities - Breakdown of customers

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Geographical FY21 Revenue
UK Market Segment FY21 Revenue
Client Concentration Top 10
($54.6m)
by Revenue ($89.0m)
• Bulb, in special administration in
UK, is a top 5 customer
• No other top 5 customers in SOLR
or on exit path
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Veovo Revenue Analysis

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Veovo Revenue FY20 VS FY21 Veovo Revenue by Geography FY21 VS FY20 [1]
$18.7m
$16.7m Europe
Total Revenue
Down –10.7% on FY20
Annual
Americas
Recurring
Revenue
$11.2m
APAC
Up 7.7% on FY20 -
67.1% of total
Veovo revenue
Rest of
Committed Monthly Non-contracted the world
Non-recurring
Recurring Revenues Recurring Revenues
Revenues (NRR)
(CMRR) (TRR)
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• ARR up 7.7% Driven by new customers moving into operation.

• Veovo geographies aligned with operating countries and continents and therefore not aligned with Financial Statement.

• NRR reduction due to Covid impact on the aviation industry.

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Expenditure Analysis

• Personnel costs have increased due to growth in headcount as we invest in

• Group Costs FY20 v FY21 (NZ$m) growth across the Utilities business

• NZ$m

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• Incentive payments including short term cash incentives and longer-term share schemes also a driver of increased personnel costs.

• Driving a performance-based organisation, using both a fixed and variable reward structure forms a basis of Gentrack’s remuneration strategy.

• The change in other costs is driven by reduction in bad debt and other expenses

• • No R&D capitalisation in FY'21 – conservative approach. Included in group expenditure of $12.7m.

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Cashflow/Balance Sheet

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EBITDA to Net Cashflow FY21 ($m)
01 30
October September
2020 2021
Cash $19.3m $26.0m
Debt $2.5m Nil
Net Cash $16.8m $26.0m
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• Cash generation of $9.2m further strengthening balance sheet

• Further improvements in working capital performance

• Nil utilisation of $20m debt facility, refinancing in advanced stages

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External Metrics – from Investor Day

NZ$M FY21 16 June FY21 Actuals FY24 Target*		• FY21 Actuals in line with or above guidance provided at 16 June 2021. R&D spend accelerating in FY22. • FY24 targets remain as at 16 June 2021: upsides in some areas of medium-term revenue forecasts + uncertainties in other areas, further update at ASM
ARR (=CRR+TRR) ~$80m $81.9m >10% CAGR vs FY21
Total Revenue >$100.5m $105.7m +~30% vs FY21
Strategic R & D Spend ~10% $12.7m ~15% x Total Revenue**
Cash EBITDA ~10% 12.0% 15-20% x Total Revenue

• FY24 target should be compared to FY21 guidance provided on 16 June 2021

• ** Total R & D spend of $12.7m in FY21

Notes/definitions:

1. CMRR – covers all contracted revenue both fixed (e.g. subscription, annual support) and variable (e.g. BMP variable revenue, Managed Service)

2. TRR – covers BAU service revenues which are contracted on an account by account basis on a collective degree of regularity.

3. ARR = CMRR+TRR

4. Strategic R&D definition (non-GAAP measure) – development of new strategic technology + enhancement of existing core

5. Cash EBITDA – EBITDA incl non-cash share scheme costs, incl all R&D spend, excl lease costs of property (corresponds to FY21 EBITDA of $12.7m)

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Outlook update

On 30 September 2021 Gentrack Group Limited (NZX/ASX: GTK) (“Gentrack”) advised that it anticipated an increase in FY22 group revenues vs FY21.

Over the intervening 8 weeks we have seen further turbulence in the UK energy market including the recent special administration of Bulb, a top 5 Gentrack customer.

In this context, Gentrack is pleased to reconfirm that FY22 group revenues are expected to be ahead of the FY21 revenues of $105.7m announced today.

Gentrack is not providing earnings guidance for FY22.

Gentrack has confirmed no changes to the FY24 targets provided on 16th June 2021.

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Q & A

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	GAAP to Non-GAAP Profit Reconciliation	GAAP to Non-GAAP Profit Reconciliation	GAAP to Non-GAAP Profit Reconciliation	GAAP to Non-GAAP Profit Reconciliation	GAAP to Non-GAAP Profit Reconciliation
	NZ$m	Full Year 30 Sept 20 Audited		Full Year 30 Sept 21 Audited
	Reported net (loss)/profit for the period (GAAP)	(31.7)			3.2
	Add: Net finance Expense	0.4			(3.7)
	Add: Income Tax expense	(2.6)			2.4
	Add: Depreciation and amortisation	12.4			10.8
	Add: Revaluation of acquisition related financial liabilities	(0.9)			0.0
	Add: Impairment of goodwill and intangible assets		34.5		0.0
	EBITDA		12.1		12.7

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FY 21 on a Constant Currency Basis

NZ$m FY'20	FY'21	FY'21 Constant Currency	Difference vs FY'20	%
Revenue 100.5	105.7	107.6	7.1	7.1%
Operating Costs 88.4	93.0	95.0	6.6	7.5%
EBITDA 12.1	12.7	12.6	0.5	4.1%
Statutory NPAT (31.7)	3.2	2.8	34.5	N/A

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