Edited Transcript of SKF.AX earnings conference call or presentation 29-Jul-19 12:30am GMT

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Update time : 2020-03-02 15:53:12

Q4 2019 Skyfii Ltd earnings Call

Aug 1, 2019 (Thomson StreetEvents) -- Edited Transcript of Skyfii Ltd earnings assembly shout or presentation Monday, July 29, 2019 at 12:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* John Rankin

Skyfii Limited - COO & MD of ANZ

* Wayne Arthur

Skyfii Limited - Co-Founder, CEO, MD & Executive Director

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Conference shout Participants

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* Owen Humphries

Canaccord Genuity Corp., investigation piece - Senior Industrials Analyst

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Presentation

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Operator [1]

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Thank you though standing by, and greet ought the Skyfii results call. (Operator Instructions) I used to now similar ought hand the assembly at ought Mr. Wayne Arthur, CEO. entertain proceed ahead.

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [2]

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Thank you. Good morning. Thank you sum though making the time ought mind us today. greet ought the econmic Year 2019 Fourth area Results Presentation though Skyfii. I'm joined today by Skyfii's Chairman, Andrew Johnson; Skyfii's head Operating Officer, John Rankin; and our Investor Relations consultant, Craig Sainsbury.

We're indeed excited ought receive you over what has been another fantastic quarter's action though the company. We simply summary ought grow from might ought strength. We consume either successfully closed out above the econmic year 2019 having delivered against sum of our key stated objectives.

Before we dive into the detail at Q4 at particular, I'd similar ought shout out some key highlights delivered during the econmic year 2019.

Firstly, the company continues ought grow at its climax queue and, most importantly, its recurring revenues at a identical healthy way, delivering a 52% growth at both climax queue and recurrings at FY '19 versus FY '18. And we added a important quantity of new clients ought the already extensive Skyfii enterprise guest base. And with the acquisition of Beonic, we can now embrace new names, such though AMP, QIC, ISPT, lend apply and David Jones ought mention a few.

We summary ought grow revenues and alter new contracts within our U.K., EMEA and Brazil markets. We consume begun ought successfully pierce the U.S. market, and at particular, the retail quality vertical, having secured contracts with Cafaro quality Group, brand quality masses and, just this bear quarter, (inaudible) Centers, a chief energetic mall quality masses at North America.

Per our stated strategy, we summary ought invest into our operating copy ought summary our revenue growth whilst however delivering a sure EBITDA and healthy cash locality though the year end.

And finally, mail the purpose of the econmic year, the company successfully negotiated, concluded and began ought integrate a new complementary acquisition at Beonics Technologies.

Moving ought glide #2. By lane of agenda, I'll depart by talking over a detailed magazine of the company, including high even [the concept of] the type of omnidata intelligence. I'll either address at more detail over key operating highlights delivered during the quarter, and I'll end with a advice above the identical healthy hope though Skyfii at FY '20. John Rankin will talk direct ought the key econmic highlights delivered during both the area and at though the entire year.

Moving ought glide 4. The company saw no issue alter at its quoted [choose] an prominent pool during the fourth area of FY '19. We concluded the area with cash at coast of $1.33 million, which was up from $1.2 million at the purpose of the foregoing quarter.

Moving ought glide 5. though we summary the econmic year, I wanted ought receive the opportunity ought recolect shareholders of the identical dedicated team after Skyfii. Our executive team, many of whom consume worked together during the company's inception, is a tight adjust though goal masses of executives and each alongside their executive responsibilities, carries a important global responsibility.

Our Board either adjust the purpose, consume been extremely engaged and the company has benefited primarily from the engagement of firstly, Andrew Johnson at the new role of Chairman and our 2 newly appointed nonexecutive directors at econmic at [our team], Jon Adgemis and Sue O'Malley.

Moving ought glide #6. during the quarterly presentation though Q3, we first introduced a type called omnidata intelligence, which is a type that Skyfii's operating and is chief globally. This type best defines our biggest offering, directly ought exist first of the exercise of collecting, analyzing and actioning data from a multitude of data sets currently and typically inherent within physical and digital spaces today.

We trust that though any of our modern and prospective customers, the way deliver ought a successful data tactic beg the blend of 3 key elements: firstly, the precise data; secondly, bright technology; and thirdly, experienced people.

And above Slides 9 over 20, I'm going ought explain how this plant at exercise and the [primitive] lane that Skyfii's issue plays at helping physical venues deliver evaluate though their data.

Moving ought glide 9. though our shareholders used to understand well now, Skyfii is the sole company within its [period], which has the technique and a chase record capable of ingesting data though more than just WiFi data. This has been a critical point of differentiation though Skyfii though we had successfully diversified our data diversity ought depart though perfect insight, more precise locationing and wider species of datical targets and ought exist capable ought proceed much, much deeper with our customers' interchangeable issue outcomes.

It has either provided us with a defendable locality within our impartial during we are no singularly reliant above just 1 data source only. The offer acquisition of Beonic Technologies supports this omnidata intellect strategy, which will depart us ought grow our attain above physical venues and verticals and add more revenue generating opportunities ought our existing guest base. There is a fate of data out there and the genius though customers ought resolution what is the precise data can exist a identical tricky resolution though most enterprise companies. at fact, according ought Gartner, up ought sole 5% of large data initiatives fail. This is exactly why Skyfii exists, ought aid these customers harness the precise data and deliver against a successful data strategy.

Moving ought glide 11, bright Technology. data is usually meaningless unless it can exist captured, analyzed and visualized at a rgeister that delivers insight or code though a business. This is why Skyfii's IO platform is such a critical device though our customers, most of whom are no technique companies and, therefore, discharge no traditionally get an in-house competence ought collect, analyze, digitalize and usually code their data.

Skyfii's apartment of Software though a Service products: Connect, which refers ought our data collection [and interiorization] product; Insights, which is our BI dashboard and automating reported product; Engage, which is our multichannel marketing manufacture apartment and our recently launched IO Labs product, which is our investigation and innovation environment. each contributes ought a various stage of the guest data tour and usually buy-in life cycle.

So we encounter ought glide #14. The fact that Skyfii's platform is either modular allows us ought essentially tailor our offering ought each guest based specifically above which divide of their data tour they're currently on. at the majority of cases, our customers will begin with our visitor WiFi products though a method ought collecting data, and typically they will encounter up the evaluate tie into our other products at time.

Starting with our most inherent manufacture allows us the opportunity ought win ought understand the customer's data ecosystem, their objectives so we can carefully deliver evaluate at a sustainable lane and though the expect term.

Our quite new effort at the realm of People counting at the launch of our new IO Labs manufacture consume been both identical well received by the impartial and we wish ought look good growth at both modern and prospective customers over these 2 manufacture lines, specially at econmic year '20.

Moving ought glide 14. farther ought my exposition of the various stages of the customer's buying cycle. Businesses typically apply Skyfii's IO platform at 3 phases: aspect 1, first and most importantly, we aid our customers ought construct a baseline above their modern customer metrics using the technique infrastructure they already have, and typically we begin with sole WiFi data though the baseline. This is above glide 15. This allows though 3 things. quantity one, you don't need ought win caught up at any hardware and physical infrastructure changes, which speeds up the sales cycle; quantity two, we aid them ought effect evaluate from an existing technique investment; and three, we aid them ought construct a hard baseline above how nation are using and interacting with their venue, which allows them ought depart ought understand and benchmark their overall and daily performance.

On glide 16. aspect 2, we add context ought the baseline over the addition of other data sources, such though people counter data, mobile data, climate data or point-of-sale transaction data. This extra context allows us ought map behavior against things similar weather, manufacture sales, marketing initiatives and even layout, staffing or retail mingle changes at direction ought perfect foretell future guest behavior.

And finally, aspect 3 above glide 17. Once we consume integrated the different contextual data sources into the only advice though the guest and we consume begun ought improve above key customer metrics and behavior, the bear step is ought depart ought apply the baseline data ought perfect apply with customers and depart ought drive action. Many of our customers look step 3 or aspect 3 though the desired purpose impartial during it allows them ought depart a meaningful conversation with their customers. Most also are engaged ought it over delivering surveys usually ought perfect understand things similar guest sentiment. Others apply it ought standard the shock of marketing initiatives or simply ought understand the shock of change.

Moving ought glide 18. The bear bit ought solving the large data bewilder is ought assure you consume the precise nation with the tough undergo ought exist capable ought decipher the data, understand patterns and capably deliver insights ought your issue over the data.

On glide 19, Skyfii's services team, which consists of highly experienced data scientists, digital strategists and PhDs was formed though we realized that many of our customers did no consume the precise undergo within the organization ought harness the evaluate at the data they were gathering. so our team plant alongside many of our customers ought aid them at delivering tangible outcomes over things similar customized research, assisting them ought ripen the precise data tactic overall or sometimes over data engineering, ought aid customers contest their modern data stack ought their stated objectives.

Moving ought glide 21. Key operating highlights. during the fourth quarter, we delivered above 3 key new milestones. First, we extended our already predominant locality at the retail quality vertical ought embrace Fortius Asset Management's retail quality portfolio at a 3-year condense though both our IO connect and IO Insight manufacture modules.

Secondly, we welcomed the globally iconic Sydney Cricket base ought our list of enterprise customers, securing a 5-year initial condense though IO connect and IO Insight and farther establishing Skyfii though a key actor at the gymnasium vertical.

And finally, mail the purpose of the quarter, we concluded the acquisition and, again, the integration of Beonic Technologies, which I'll draft at more detail above glide 22.

On the 9th of July, we announced the completion of the acquisition of Beonic, the guest insight solution provider, specializing at complex camera and People counting technology. And last, we consume sole been at locality though a pure owner issue though a short ripen of time. We're identical pleased ought talk we consume been identical impressed with the caliber of the Beonic team, specially at the domain of engineering, and either identical impressed by the feature of the Beonic, now Skyfii, guest base. The transaction was completed above a identical favorable multiple of a small at 1x recurring revenues and is an extension of our existing platform competence of ingesting and delivering insights also though providing managed services about camera and People counting technology.

The Beonic revenue copy mirrors that of Skyfii, generating recurring revenues above a 1- ought 3-year subscriptions, providing managed services and either the deployment of complex leading technique of our leading projects.

Their guest base includes many household Australian and international brand names, such though Westfield, David Jones, AMP, QIC, Dexus, New Balance, L'Oreal, Melbourne city assembly and rent Hall ought appoint a few, sum of whom are highly relevant targets ought Skyfii's complementary products and services and at some cases, our existing customers. The plan at the coming 12 ought 18 months is ought emigrate the Beonic guest base over ought the IO platform with migration having already commenced at a quantity of key clients.

In parallel, we will exist progressively introducing Beonic's customers ought the breadth and depth of the Skyfii products and service offering, targeting revenues from increased sell-through at products and services. We trust difficult synergies will exist realized at the first 12 months of operation, and we consume already guided investors ought wish a pro forma 27% uplift at our modern recurring revenues above econmic year '20 though the existing Beonic contracts alone.

On a bear note, the acquisition has established a healthy base ought amplify the camera and People counting manufacture and services lines into our international markets, which is one of our criterion objectives though econmic year '20.

Slide 23. Our global guest enterprise portfolio has again continued ought grow this quarter, farther broadening our vertical attain and either farther entrenching our market-leading locality within few key verticals globally. The new guest contracts and the acquisition of Beonic will add few new brands ought our enterprise guest base, and we're extremely excited about the growth at new and existing verticals over our omnidata intellect mode at econmic year '20.

I'll now hand you at ought John Rankin, Skyfii's head Operating Officer, ought address ought the key econmic highlights delivered during the area and though the entire year.

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John Rankin, Skyfii Limited - COO & MD of ANZ [3]

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Thanks, Wayne. so moving ought the econmic highlights. We encounter ought glide 25.

Firstly, a quick refresh above how Skyfii generates revenues. We explain revenues -- revenue lines at 3 ways: firstly, recurring revenues, which are generated from ongoing subscription fees though access ought Skyfii's platform. Recurring revenues are charged though a fixed salary per venue per month typically contracted above 3- ought 5-year terms.

Secondly, services revenues, which are generated from the payment of projects undertaken by both Skyfii's data consulting services and marketing services divisions. And thirdly, nonrecurring revenues, which are made up of one-off fees generated from the deployment of hardware and infrastructure, which underpins our recurring revenue, sum and subscriptions ought our platform. These embrace the equipment of WiFi infrastructure, 2D and 3D camera, and People counting technology.

Moving ought glide -- ought the next slide, entire year econmic '19 highlights. ago we start, I expect ought approve that no revenues from the Beonic acquisition are included at FY '19 results. The profession was completed post-end June, and therefore, will exist evident at our numbers from Q1 onwards.

To begin, Skyfii has delivered another prominent entire year arise with complete operating revenues of $9.4 million, up 52% year-on-year. Our recurring revenues either grew at a though rate, up 50% year-on-year at $5.2 million, which is a large arise and testament ought the momentum the company is delivering over sum operating regions.

At the EBITDA line, the company delivered a sure operating EBITDA of $0.6 million though the entire year, and whilst the company did undergo soft dip at our operating EBITDA at the second half, that arise can chiefly exist attributed ought an increase at corporate costs related ought the Beonic acquisition and increase at chief conceive costs specifically relating ought engineering and international expansion.

As Wayne stated at his introduction, maintaining a sure EBITDA though the entire year FY '19 was a key milestone put and announced by the issue 12 months ago. We are identical pleased that this milestone has been met and to furnish our investors with credit though we summary ought invest though growth.

Cash locality and salary management. at the purpose of the quarter, the company held a cash locality of $1.33 million, up from $1.2 million from the foregoing area ending 31 March.

And at May, the company announced it had secured a $2 million lend facility, which was a response at increasing need though working leading though a arise of the acquisition of Beonic and ought farther uphold a high growth rate. The company surplus focused above managing our salary base relative ought our revenue growth with the drawdown facility providing access ought leading though and when required.

Moving ought the next slide, Q4 results. complete operating revenues at Q4 of $2.45 million represented a 9% increase above the foregoing area and represents our fastest-growing quarter-to-date. Revenues generated from services of $700,000 represented a 10% increase above the foregoing quarter, a arise that can exist attributed ought the efforts ought internationalize our data science and professional services offering.

Revenues generated from subscriptions ought the IO platform were up 14%, having delivered $1.52 million at recurring revenues. That provides the company with a net monthly exit river evaluate of $0.5 million, a healthy base though FY '20.

So at summary, healthy entire year results with both the complete operating revenues and recurring revenues up 50%, healthy Q4 results with recurring revenues up 14% quarter-on-quarter, and the issue maintained a sure operating EBITDA compatible with our guidance over the entire year FY '19.

Looking ahead ought the modern quarter, the issue is confident at delivering healthy organic growth and inorganic growth at queue with the offer acquisition of Beonic. Thanks, Wayne.

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [4]

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Thank you identical much, John. And firstly, congratulations ought yourself, Koreen and the recess of your teams ought another identical healthy econmic and operating action though the area and an extremely healthy year overall. We certainly put ourselves up though Skyfii's best year however at econmic year '20 with $6 million at recurring revenues already booked and a healthy pipeline of prospects already progressed though the year.

In closing, I used to similar ought agreement an hope statement though the remains of econmic year '20 above glide 29. The company has concluded econmic year '19, having delivered, though John mentioned, a 52% climax queue revenue and recurring revenue uplift when compared ought econmic year '18.

Let me begin with [Slide 22] , $6 million recurring revenues booked and a identical high even of credit and an extra $1.5 million at recurrings from the Beonic acquisition. It is our hope that the company will summary ought grow its organic revenues at a though if no accelerated evaluate ought FY '19 with the Beonic revenues and Beonic growth ought bring at and layer above the climax of that. The company has firmly established its presence now at the U.S. market, having delivered small and meaningful wins at FY '19, and it expects ought look a healthy contribution from North America and the EMEA regions at FY '20 alongside continued growth from ANZ, New Zealand and South Africa.

Our concrete areas of concentrate though the FY '20 year will embrace conversion of key contracts within our international markets, delivering healthy climax queue and recurring revenues over sum regions, maintaining the concentrate above cash management and maintaining a sure EBITDA position. We intend ought fully integrate the Beonic People counting business, and we'll amplify the offering into the U.K., the U.S. and Brazil markets. We plan ought increase and summary ought grow the quantity of datasets represented at the IO platform ought summary ought diversify ourselves from our peers and ought compose the opportunity though new IO manufacture lines at the coming year. And we will farther build out our partnership ecosystem specifically with key global partnerships with managed service providers.

And with that, I thank you though your time today. I understand we're a small division longer than usual, and I used to now similar ought hand backward ought the moderator ought facilitate our Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first puzzle comes from Owen Humphries with Canaccord Genuity.

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Owen Humphries, Canaccord Genuity Corp., investigation piece - Senior Industrials Analyst [2]

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Wayne and John, congratulations above a cracking quarter, specially that fourth area looks it's -- the EBIT though that -- you had a fourth area that looks similar growth accelerating. can I just influence above just above the IRR uplift. I conceive most of that upgrowth that you're delivering is sum volume growth, i.e., guest contracts. There's no plus growth that you're putting over your platform. Is that right?

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [3]

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That's correct, yes.

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Owen Humphries, Canaccord Genuity Corp., investigation piece - Senior Industrials Analyst [4]

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Okay. And just -- maybe just proceed at a division more detail. when you're signing up the customers, what proportion is really taking up the friendly of new data sources or the People counting or other data layers inside your platform at WiFi? Is it a identical high conversion evaluate above the prolific data sources?

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [5]

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Sure, now. It's a good question, Owen. so look, instead of saying that the colossal majority, 95% of our customers are starting though I mentioned with the connected insight products initially. That somewhere between 15% or 20% of our modern customers now are subscribing ought the engaged module, and somewhere about 5%, maybe though high though 7% or 8% are starting ought bring over at condition of People counting. so certainly people counters, IO Labs and apply are however the up-sell opportunity though us over BOOM contracts. And most of our contracts will begin with connect and Insight. besides what I will talk is that during we started ought -- obviously we're identical new at condition of the acquisition and integration of Beonic, besides we've had a fate of international and local inbound inquiries about that People counting bit predominantly though it's now something that these customers can integrate over their WiFi and used to surpass the correlation of the 2. It seems ought exist what the purpose is.

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Owen Humphries, Canaccord Genuity Corp., investigation piece - Senior Industrials Analyst [6]

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