imimobile plc · 9/30/2019 · interim results presentation fy20, 30 september 2019 7 the cpaas...
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Jay Patel, Chief Executive Officer
Mike Jefferies, Chief Financial Officer
November 2019
IMImobile PLCInterim Results OverviewSix Months Ended 30 September 2019
Interim Results Presentation FY20, 30 September 2019
A global communications software and solutions provider
2
Who we are What we do Who we do it for
We provide cloud communications software that
enables enterprises to automate digital customer
interactions to improve customer experience and
reduce costs.
Our differentiation is that our platform &
applications work together and integrate with third-
party suppliers to provide end-to-end automation
of customer journeys.
Business split Key financials
▪ Organic recurring revenue growth for 17 years
▪ Management shareholding: 14%
5-year
revenue CAGR 5-year gross
profit CAGR 5-year adjusted
EBITDA CAGR
31% 21% 21%
Regional split Business model Approx. Sector split
2000 Founded with mobile-first vision
2014 Listed on London Stock Exchange’s AIM market
1100 Global employees
21 Offices - London HQ, Boca Raton, Joburg, Dubai
8 Successful acquisitions since IPO
1 Market leader in UK, Canada and South Africa
2019 Acquisition of 3C, global leader in RCS
MRR – Monthly recurring revenue; NRR – Non recurring revenue
Interim Results Presentation FY20, 30 September 2019
H1 Group highlights – growth in all regions
3
Financial highlights Operational highlights
▪ Organic growth in all regions and business units
▪ Milestone acquisition of 3Cinteractive integrated, strengthening position in
North America and establishing global RCS leadership position
▪ Strong period of new client wins and renewal of all major contracts in the
period
▪ New launches using richer messaging channels – Apple Business Chat,
RCS & WhatsApp Business
▪ Revenue up 24% to £83.0m (2018: £67.2m) (18% organic)
▪ Gross profit up 21% to £35.2m (2018: £29.2m) (12% organic)
▪ Adjusted EBITDA up 27% to £9.8m (2018: £7.7m)
▪ Adjusted profit after tax up 12% to £5.2m (2018: £4.7m)
▪ Adjusted diluted EPS up 5% to 6.9p (2018: 6.6p)
▪ Adjusted cash generated from operating activities of £12.5m; cash
conversion of 127% (2018: 80%)
27.8
36.0
53.1
67.2
83.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
FY16 FY17 FY18 FY19 FY20
16.6
20.2
24.7
29.2
35.2
0
5
10
15
20
25
30
35
40
FY16 FY17 FY18 FY19 FY20
4.55.3
5.7
7.7
9.8
0
2
4
6
8
10
12
FY16 FY17 FY18 FY19 FY20
H1 Revenue (£m) H1 Gross Profit (£m) H1 EBITDA (£m)
Interim Results Presentation FY20, 30 September 2019
Investment case
4
Structural growth
opportunity Track record of
growthOwn IP and
R&D investmentMarket leader Experienced
management
>85% senior management team
with over 10 years sector
experience(SVP level and above)
"The enhanced
functionalities of RCS will
lead to a nearly sixfold
increase over the next five
years for messages that
businesses send to
consumers”1
17 years of organic recurring
revenue growth
No. 1 UK, South Africa, Canada
Top 5 Providers in the US
1 https://www.businessinsider.com/verizon-sprint-tmobile-att-unite-on-new-messaging-standard-2019-10?r=US&IR=T
Market & Products
We believe that technology has and will continue to
fundamentally change how businesses engage with their
customers.
New communications channels and the possibilities of
intelligent automation will allow businesses to improve
customer experience and reduce costs.
We help our clients do this.
Interim Results Presentation FY20, 30 September 2019 7
The CPaaS market is
forecast to grow from $2bn
in 2017 to $10.9bn in 2022.
$10.9bn by 2022 IDC positions IMImobile as a Major Player in the
2019 IDC MarketScape for Worldwide Cloud
Communications Platform-as-a-Service
Spending on CPaaS will
grow at CAGR of 49.6% to
reach $4.63bn by 2021
49.6% CAGR
Developer focus
Enterprisefocus
The Communications Platform as a Service ‘CPaaS’ market opportunity
Interim Results Presentation FY20, 30 September 2019 8
The ‘Future of Messaging’ market opportunity
Additional differentiators
▪ 10+ channels including: email, SMS, voice, push, MMS etc.
▪ Direct relationships with mobile operators.
▪ Multiple new channel deployments.
Disclaimer: diagram based on publicly available information at the time of announcement
1 of 3 technology providers approved by Apple, Facebook and Google
Interim Results Presentation FY20, 30 September 2019 9
Recent deployments show momentum for new communications channels
Apple Business
Chat for Vauxhall
WhatsApp for
npowerRCS for
Vodafone RCS for EE
Interim Results Presentation FY20, 30 September 2019
Our CX automation product suite
10
CORE BUSINESS SYSTEMS
3 rd PARTY SERVICES
TRANSACTION PROCESSING
FRAUD MANAGEMENT
CASE MANAGEMENT
COMMERCE PLATFORM
BILLING PLATFORM
APPOINTMENT MANAGEMENT
DELIVERY / FULFILMENT
NAME / ADDRESS VERIFICATION
CREDIT CHECK
PAYMENTS
CRM PLATFORM
APP
2
Platform Layer
Integration set-
up
& management
Business logic
& flow
orchestration
NLP & AI
powered
conversational
automation
Communication
channel
management
Intelligent enterprise control
Service assurance & infrastructure
management
Applications Layer
Possible application alternatives/integrations
Interim Results Presentation FY20, 30 September 2019 11
Our products work across three core business areas
Customer Service &
Support
Customer Operations
Marketing Automation
My boiler has stopped
working – I need an
engineer
I have a suspect
transaction on my credit
card
Reminder that your
appointment with Dr.
Smith is at 2pm today
Your parcel will be
delivered between
11:00-13:00 today
Would you like to
upgrade your data
plan?
The iPhone 11 is out
now – click here to
reserve…
Saving £2 million for the
NHS in postal costs by
taking a digital-first
approach to patient
letters.
Achieving an overall
CSAT score of over 90%
after deployment for
British Gas.
Generating £250 million
revenue for O2 per year
through marketing
comms.
Interim Results Presentation FY20, 30 September 2019 12
How our products work together provides competitive differentiation
Customer receives message through
IMIcampaign – this could be over any channel
Customer clicks link and UI switches to Apple
Business Chat using IMIconnect
Customer is transferred to IMIchat for agent
support – this could be a third party contact
centre system
Bill shock prevention
using Apple Business Chat
Interim Results Presentation FY20, 30 September 2019
Financial Highlights
Interim Results Presentation FY20, 30 September 2019
Strong growth in all financial metrics
14
Year endedSep-19
£m
Sep-18
£m
Growth
%
Revenue 83.0 67.2 +24%
Gross profit 35.2 29.2 +21%
Administrative expenses
(excluding D&A)(25.4) (21.5) +18%
Adjusted EBITDA 9.8 7.7 +27%
EBITDA margin* 28.0% 26.4%
Adjusted profit after tax 5.2 4.7 +12%
Adjusted diluted EPS 6.9p 6.6p +5%
Cash & cash equivalents 16.4 13.2 24%
*EBITDA margin = EBITDA/Gross Profit
5-year
RevenueCAGR
5-year
Gross Profit CAGR
5-year
EBITDA CAGR
+21%
+21%
+31%
Interim Results Presentation FY20, 30 September 2019
Quality of earnings
15
Volume of e-mail, SMS, MMS,
push notification, sessions etc.
Licences
& one-off
prof.
services
Contracted
revenues
Fixed fees Usage based Transactional Non recurring
90%
Monthly Recurring Revenue(MRR)
Fees based
on
revenue
transactions
Impact of capitalisation and amortisation
Well diversified
Approximate gross profit split
Longstanding customer relationships
FY20
Gross profit split
(by region)
FY19
25% 50% 15% 10%
Average customer tenure
Top 10
customers
Top 20
customers
Percentage of gross profit
9.8 years
8.0 years
33%
48%
H1 20 excludes the impact of IFRS16
4.1 4.0
3.3
4.1 4.0
2.7
5.95.6
4.3
6.56.1
5.1
PBT as reported 7 yr amortisation PBT assuming 5 yr amortisation EBITDA less capex
H1 17 H1 18 H1 19 H1 20
Interim Results Presentation FY20, 30 September 2019
Trade payables and accruals increase also
attributable to 3C
Strong balance sheet
16
AssetsSep-19
£m
Mar-19
£m
Cash
Trade receivables
Pass through revenues
Other current assets
16.4
39.1
2.9
8.0
13.2
41.2
3.3
6.2
Current assets 66.4 63.9
Goodwill
Acquired intangibles
Other intangible assets
PPE
Other non-current assets
69.6
39.3
14.4
7.6
1.9
43.6
16.8
12.8
4.3
0.6
Non-current assets 132.8 78.1
Total assets 199.2 142.0
Net assets 78.9 60.1
LiabilitiesSep-19
£m
Mar-19
£m
Trade payables and accruals
Pass through revenues
Other current liabilities
40.3
4.7
24.1
34.1
5.1
18.6
Current liabilities 69.1 57.8
Non-current liabilities 51.2 24.1
Total liabilities 120.3 81.9
Goodwill and acquired intangible growth from 3C acquisition
Interim Results Presentation FY20, 30 September 2019
High levels of cash conversion
17
Period endedSep-19
£m
Sep-18
£m
Adjusted cash generated from
operations12.5 6.1
Net cash from operations 10.4 5.0
Investing activities (44.0) (20.1)
Financing activities 36.4 11.3
Cash and cash equivalents at
beginning of period13.2 15.7
Foreign exchange on opening
balances0.4 0.1
Cash and cash equivalents at end
of period16.4 12.0
Period endedSep-19
£m
Mar-19
£m
Cash 16.4 13.2
Borrowings (38.2) (20.7)
Net (debt)/cash (21.8) (7.5)
Net cash
£42m debt facility from SVB mix of GBP and
USD debt
Amortising over 5 years
Margin payable of ~2.5% + LIBOR
Interim Results Presentation FY20, 30 September 2019
Regional overview – Europe
18
The AA The AA The AA The AA The AA
▪ Revenue £57.2m (2018: £46.6m)
▪ Gross profit £19.1m (2018: £17.3m);
▪ 10% organic gross profit growth
▪ Gross margin 33.4% (2018: 37.2%)
FinancialsOperational highlights
▪ MRR growth in each of our key business units.
▪ Launched RCS for customer bases of three major UK operators.
▪ Multiple contract wins within the enterprise sector.
▪ UK Healthcare division continues to perform well with communications
volumes up over 20%.
▪ Our product in the SMB segment, Textlocal, continued to grow strongly
with record trading months.
▪ Momentum gained through established partnerships.
▪ Post-period end acquisition of Rostrvm, UK based, contact-centre provider
for additional voice channel and contact centre capabilities. 0
5
10
15
20
25
FY16 FY17 FY18 FY19 FY20
MRR NRR
H1 Gross Profit (£m)
9.4
6.
10.0
13.2
17.3
19.1
Interim Results Presentation FY20, 30 September 2019
Regional overview – Americas
19
The AA
▪ Revenue £8.3m (2018: £4.4m)
▪ Gross profit £5.8m (2018: £3.0m)
▪ 4% organic gross profit growth
▪ Gross margin 70.0% (2018: 62.1%)
FinancialsOperational highlights
▪ Following round of successful equity fundraising of £20 million and
increased debt facilities, completed acquisition of 3Cinteractive in August
2019 which:
▪ Strengthened operational capabilities in region
▪ Established Group as global leader for RCS Business Messaging
▪ Strengthened regional management team
▪ Existing Americas business continued to perform well, driven by increasing
messaging volume in the Canadian market from both existing and new
customers.
▪ Confident we have the necessary experience, scale and strength of
offering to drive significant growth in the largest addressable market for our
product set.0
1
2
3
4
5
6
7
FY16 FY17 FY18 FY19 FY20
MRR NRR
H1 Gross Profit (£m)
0.5 0.6 0.6
3.0
5.8
Interim Results Presentation FY20, 30 September 2019
0
1
2
3
4
5
6
7
8
FY16 FY17 FY18 FY19 FY20
MRR NRR
4.5
6.7
5.6
4.6
Regional overview – MEA and APAC
20
Middle East & Africa Asia PacificGross Profit £5.0m (2018: £4.6m) Gross Profit £5.3m (2018: £4.3m)
▪ Good organic gross profit growth of 10%.
▪ After period of headwinds, the operator segment has
now stabilised.
▪ Success developing new business in the UAE.
H1 Gross Profit (£m) H1 Gross Profit (£m)
5.0
0
1
2
3
4
5
6
FY16 FY17 FY18 FY19 FY20
MRR NRR
2.2
2.9
5.3
4.3
5.3
▪ Strong organic gross profit growth of 22%.
▪ New enterprise customers such as Hyundai, Britannia &
Skoda using WhatsApp Business.
▪ Textlocal India experienced significant year on year
growth, onboarding 6,000 new customers.
Interim Results Presentation FY20, 30 September 2019
Growth Strategy
Interim Results Presentation FY20, 30 September 2019 2222
Growth strategy
1 2 3 4
Accelerate market
penetration through
partnerships
Grow our share of
interactions for existing
customers
Introducing new
innovative customer
engagement technologies
Leverage acquisitions for
market distribution
+ +
52 customers over £500k p.a.
revenue, up from 43 last year.
376 customers over £25k p.a.
revenue, up from 316 last
year.
Interim Results Presentation FY20, 30 September 2019
Introducing new innovative customer engagement technologies
23
Interim Results Presentation FY20, 30 September 2019 24
Our latest acquisition: 3Cinteractive Corp
The RCS opportunity Progress & outlook
Acquisition rationale
81 global operators have currently launched
RCS, with an additional 27 operator launches
forecast by Q1 2020.
Consumers will engage with at least one brand,
once a day by 2023 using RCS.
▪ Leading RCS solutions provider in US
▪ Over 300 clients
▪ Direct connectivity to all major US mobile operators
▪ Delivering >1billion transactions per month
▪ >90% recurring & repeating revenues
▪ North American operations
merged under one
organisational structure.
▪ Initial training workshops on
Group product set
completed.
▪ Good existing client
workshops held and
significant cross-sell
opportunities identified and
progressing.
Interim Results Presentation FY20, 30 September 2019 25
Results of RCS
▪ Initial customer engagement rates for RCS
significantly higher than SMS.
▪ For a Vodafone promotional campaign; 80%
of customers read the message, and 25%
responded to the offer. SMS and MMS
scored a response rate of around 1%.
▪ Customers prefer the RCS experience to
SMS too.
Interim Results Presentation FY20, 30 September 2019 26
Post period acquisition: Rostrvm
▪ UK based, contact centre provider for a
consideration of up to £3.5 million
▪ Providing Group with additional voice
channel & contact centre capabilities
▪ Strong public sector customer synergies
▪ Complementary strategic reseller
partnerships with mobile operators
Interim Results Presentation FY20, 30 September 2019
Outlook
27
▪ Board encouraged by strong first half of the year, delivering growth in all regions
▪ Structural growth opportunity in customer communications
▪ Group well positioned to continue to deliver on its strategic priorities
▪ FY20 trading in line with management expectations
Interim Results Presentation FY20, 30 September 2019
London
IMImobile Europe Ltd.
5 St John’s Lane
London
EC1M 4BH
United Kingdom
Hyderabad
IMI Mobile Pvt. Ltd
Plot No. 770
Road No. 44
Jubilee Hills
Hyderabad – 500 033
Dubai
IMImobile VAS Ltd. FZE
P.O. Box 293593
Office # 624, Building 5EA
Dubai Airport Free Zone,
Dubai, U.A.E
Boca Raton
IMImobile North America
750 Park of Commerce
Blvd #400
Boca Raton, Florida
33487
USA
Johannesburg
IMImobile South Africa
Clearwater Office Park,
Building no. 3, First Floor.
Corner Christiaan De Wet and
Millennium Boulevard,
Strubensvalley,
Roodepoort, Gauteng,
South Africa
Theale
IMImobile Europe Ltd.
Abbey House
1650 Arlington Business
Park, Theale
RG7 4SA
United Kingdom
High Wycombe
IMImobile Europe Ltd.
Swan House
White Hart Street
High Wycombe
HP11 2HL
United Kingdom
Toronto
IMImobile Canada
4 King Street West
Suite 1700
Toronto, Ontario
M5H 1B6
Canada
Thank you
Interim Results Presentation FY20, 30 September 2019
Appendices
Interim Results Presentation FY20, 30 September 2019 30
Global client list FY20
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Significant clients with billing of >£100k revenue
Interim Results Presentation FY20, 30 September 2019
An experienced management team
31
Jay PatelGroup CEO
18 years with IMImobile
25+ years of Technology, Media
& Telecom experience with
BSkyB, UBS Warburg, Spark
Ventures
Chartered Accountant with
KPMG and MBA from INSEAD
Mike JefferiesGroup CFO
9 years at IMImobile
Executive position at WIN PLC
and formerly with the Whirlpool
Corporation
Chartered Management
Accountant
Vishwanath AlluriFounder & Non-Executive
Director
Extensive experience in
creating technology
companies
Chartered Accountant &
Company Secretary
Shyam BhatFounder & Group CTO
Engineer from highly prestigious
Indian Institute of Technology,
Bombay
30+ years in engineering & new
product developments
John AllwoodNon-Executive Chairman
Ex Chief Executive of Orange UK
Ex Chief Executive of Mirror
Group plc of
Non-Executive Director of
TalkTalk
Simon Blagden CBENon-Executive Director
25+ years experience in
telecoms & IT industry
Non-Executive Chairman
Fujitsu UK
Chairman Duke of York’s
Community Initiative charity
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