Background To Todays AGM

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Background To Todays AGM

• 2 Annual General Meetings today
• In 2007 TechnologyOne changed its year end from
  June 30th to Sept 30th
• The process to achieve this was as follows
• One Off 3 month transition reporting period for
  the period July 1st 2007 to Sept 30th 2007
• Normal 12 month reporting period for the period
  Oct 1st 2007 to Sept 30th 2008
• 2 AGMs are therefore required as follows
• One off transition reporting period Jul 1st
  2007 - Sept 30th 2007 (Meeting 2)
• Normal 12 month reporting period Oct 1st 2007 -
  Sept 30th 2008 (Meeting 1)

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Agenda

• Quick Overview
• 2008 Full Year Results
• Significant Achievements Last 12 Months
• Outlook

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TechnologyOne Overview

• TechnologyOne develops, markets, sells,
  implements and supports a new generation
  enterprise solution specifically targeted at
  seven vertical markets
• Local Government
• Government (State, Central Federal)
• Education
• Financial Services
• Health, Community Services and Not for Profit
• Utilities
• Managed Services

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TechnologyOne Overview

• Our enterprise solution consists of the following
  products
• TechnologyOne Financials
• TechnologyOne Supply Chain
• TechnologyOne Human Resource Payroll
• TechnologyOne Works Assets
• TechnologyOne Business Intelligence
• TechnologyOne Performance Planning
• TechnologyOne Enterprise Content Management (ECM)
• TechnologyOne Budgeting
• TechnologyOne Customer Relationship Management
  (CRM)
• TechnologyOne Student Management
• TechnologyOne Property Rating
• TechnologyOne Plus
• Offices in Australia, New Zealand, Asia and more
  recently United Kingdom

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TechnologyOne Overview

• Major supplier of enterprise applications in ANZ
  800 major corporations, government departments
  statutory authorities
• Growing business in the United Kingdom
• Top 300 ASX publicly listed company
• One of Australias largest software houses

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Over 800 High Profile Clients Use Our Enterprise
Solutions
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What Makes Us Different

• Power of One business model
• We build, market, sell, implement support our
  range of products
• We own the customer relationship
• Our Vertical Market focus
• We deliver total end to end solutions for our
  target vertical markets
• Significant benefits to our customers versus
  best of breed
• Our Connected Intelligence series of business
  applications
• First new generation enterprise suite delivered
  in the last 10 years

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What Makes Us Different

• Diversity of revenue streams
• Geographies
• All states of Australia, New Zealand, Asia and
  more recently UK
• Products
• Financials, HR/Payroll, SupplyChain, Property,
  Students, Business Intelligence etc..
• Vertical markets
• Local Government, State/Federal Government,
  Higher Education, Financial Services, Health
  Community Services, Utilities, Managed Services
• Strong, very loyal blue chip customer base
• We provide a mission critical solution

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Agenda

• Quick Overview
• 2008 Full Year Results
• Significant Achievements Last 12 Months
• Outlook

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2008 Full Year Results

• Financial Year 2008 another strong year
• Full Year Revenue 110m, up 41
• Net Profit Before Tax 23.1m, up 17
• Net Profit After Tax 17.2m, up 17
• Expenses (excluding RD) 65.9m, up 47
• RD 21.2m, up 53 - represents 19 of Revenue
• Balance sheet remains strong
• Cash Equivalents 23.7m (vs 25.6m 30/9/07)
• Debt/Equity 4 (vs 3 30/9/07)
• Return on Equity of 36
• Dividend (full year) increased to 4.12 cents up
  10
• Transparency of results all RD fully expensed

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Historical Performance

• Historical 16 year annual compound growth is as
  follows
• Revenue 28 per annum compound
• RD 25 per annum compound
• Net Profit 29 per annum compound

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2008 Full Year Results

• Key indicators
• Total licence fees of 22.6m, up 23
• Annual licence fees of 36.3m, up 42
• Consulting services of 35.8m, up 59

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2008 Full Year Results

• Continuing strong demand for our products 23
  increase in licence fees
• Resilience of our business model
• Student Management licence fees were down 6m
  compared to last year
• Continued investments as follows
• To build our United Kingdom business (1.3m)
• Human Resource Payroll (1.7m)
• CRM and New Technologies (750k)
• RD increased to 19 of revenue vs more typical
  18 of revenue impact of 1m approx in the full
  year
• Extended executive senior management team

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Agenda

• Quick Overview
• 2008 Full Year Results
• Significant Achievements Last 12 Months
• Outlook

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Significant Achievements Last 12 Months

• Acquisitions
• Avand
• Outcome Manager
• House of Products Business Transformation
  Completed
• Corporate Shared Services Completed
• Continuing Momentum of Connected Intelligence
  series
• Research Development
• Momentum in United Kingdom
• Restructure of New Zealand

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Acquisition of Avand

• Avand Enterprise Content Management business
• Avand company acquired for 7.0m
• Avand as a standalone business contributed a
  profit of 499k
• Turnaround from 700k loss in the half year
• After consideration for notional cost of capital
  results are break even, as expected
• Business fully integrated into TechnologyOne
• Common systems implemented, re-aligned business
  to our House of Products business model,
  re-branding to TechnologyOne ECM (Enterprise
  Content Management)
• New General Manager Consulting Manager
  appointed to drive this business forward
• Finalised a 5 year strategy
• Expect substantial growth over the next few years

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Acquisition of Outcome Manager

• Outcome Manager Performance Planning
  technology
• Outcome Manager acquired for 1m
• Significant applicability for Local, State
  Federal Government
• Complement our Business Intelligence / Enterprise
  Budgeting product
• Challenge over the next 12 months while we
  integrate the business and finalise a 5 year
  strategy

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House of Products Business Transformation

• Now complete
• Simplifies the management of TechnologyOne
  business
• Platform for managing our future growth
• Organisational restructure and change management
  now completed
• General Managers appointed to drive each product
• 5 year strategies KPIs now finalised
• New KPIs management reporting rolled out
• Profitability by product and by region/state
• Improved visibility of what is driving/not
  driving the business

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Corporate Shared Services Completed

• Corporate Shared Services group created
• Finance, HR, Payroll, Internal Systems, Legal,
  Administration
• Provide world class services to our business
  units
• Facilitate fast integration of acquired
  businesses
• Avand integration completed in 6 months
• New Operating Officer (OO) Corporate Services
  appointed
• Drive our significant investment in new systems
  process over the next 3 years
• New systems rolled out over the last 18 months
• Timesheet billing, Project Management, Profit
  Forecasting/Pipeline Management, CRM, Enterprise
  Budgeting, Business Intelligence, House of
  Products Financial Reporting etc.

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Continuing Momentum of CI series

• Connected Intelligence (Ci) is the new generation
  of our suite of products
• Significant competitive advantage over our
  competitors
• Strong demand for our products due to our new Ci
  series
• Only enterprise vendor to release and
  successfully migrate customers to a new
  generation product
• 800 customers in total
• 80 customers now live/in progress on Ci
• Expect 98 of customers to migrate to Ci
• Allow us to offer our customers more products
  services over the next few years
• Continuing strong increase in revenue from
  existing customers

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Research Development

• RD running at 21.2m, representing 19 of
  revenue
• Target is 18 of revenue, approximately 1m over
  target
• Detailed Product Roadmaps developed for next 5
  years
• Migration of our products to our new generation
  Connected Intelligence (CI) platform
• Major new initiatives
• Pipeline of licensable add ons for each of our
  products over the coming years to drive further
  growth in existing customer base
• TechnologyOne ECM and TechnologyOne Performance
  Planning to be moved to the Ci platform
• Round out Ci migration for Student Management
• Customer Relationship Management (CRM) exciting
  new product
• New Mobile computing platform solutions for
  field workers
• Next Gen platform for our next generation product

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Momentum in United Kingdom

• 3 significant new high profile contracts signed
• Royal Liverpool Childrens NHS Trust
• Institute of Education, a college of University
  of London
• Strathclyde Partnership for Transport (SPT)
• Total of 7 customers in the UK
• Built a strong team in the United Kingdom
• Country manager, sales pre-sales (3),
  consulting manager, consultants (7)
• Good pipeline of opportunities, focus on winning
  more business
• UK reporting line changed to be same as ANZ
• Under Operating Officer Sales/Marketing

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Restructure of New Zealand

• New Zealand has under performed over the last few
  years
• New Zealand now broken into 2 regions Auckland
  Wellington
• 2 Regional Managers appointed - focus and
  accountability on each region
• Will see a substantial improvement in
  profitability in 12/18 months

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Agenda

• Quick Overview
• 2008 Full Year Results
• Significant Achievements Last 12 Months
• Outlook

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Outlook Full Year

• Guidance of 10 to 15 profit growth for 2009,
  was provided in Nov 2008
• Economic conditions have deteriorated
  significantly since then
• Quarter 1 (Oct 2008 to Dec 2008) has shown
  continuing growth
• Central, North/West and Asia/Pacific licence fees
  up strongly
• Economic climate remains challenging, but the
  sales pipeline remains good
• As such no change to our guidance of 10 to 15
  profit growth for 2009

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Commentary For Full Year Outlook

• Full year targets are as follows
• Revenue growth of 15 to 18 - Our sales
  pipeline supports this
• Expense growth of 15 to 18 - This is the
  increase over the 12 months
• Profit growth of 10 to 15 - Our
  guidance given Nov 2008
• Last year TechnologyOne performed well with
  strong profit growth of 17
• Revenue up 41, Licence Fees up 23, Expenses up
  47
• The significant increase in expenses in the prior
  year (up 47 last year) is now having a full
  impact in the first half of this year
• Because of this we expect a 27 increase in
  expenses in the first half of 2009 (the flow
  through from last year). This will impact our
  half year results only discussed later.
• Over the full year of 2009, expenses will reduce
  to 15 to 18 increase which will be as per our
  targets above
• Therefore this will not impact our full year
  guidance of 10 to 15 profit growth for 2009

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Outlook For The Half Year

• As discussed in the previous slide the first half
  of this year expenses are expected to be up 27.
• In the previous year the strong profit growth (up
  17) was accompanied with a significant increase
  in expenses (up 47), with the full impact now
  coming through in the first half of this year.
• The 27 increase in expenses in the first half,
  is above the 15 to 18 we are targeting over the
  full year.
• This could negatively impact our first half
  profit by up to 4.0 million (approximate) as
  follows
• First half revenue growth of 15 to18 (our
  target)
• Less First half expense growth of 27 (flow
  through from last year etc.)
• Over the full year we expect expenses to increase
  only 15 to 18, which will be as per our target
  and therefore will not impact our full year
  profit guidance

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Outlook Full Year

• Full year guidance of 10 to 15 growth remains
  unchanged, because
• Our pipeline supports 15 to 18 revenue growth
• Our full year expenses are expected to be 15 to
  18 increase over the prior year
• Regions expected to continue to perform strongly
• Continued momentum in Central North West
  regions
• Significant improvement in the United Kingdom
• Significant improvement in New Zealand
• All products expected to grow licence fees
• Continuing licence fee growth expected from
  existing customers
• Main challenge as follows
• Student Management complete the CI migration
• ECM new product, continue to turn around this
  business
• Performance Planning newly acquired business,
  which is loss making
• HR Payroll need to continue to increase
  traction
• United Kingdom new market, continue to get
  traction
• Plus (Project Services) more susceptible to the
  economic climate
• RD to be 18 of Revenue

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AfterWord

• Clearly a challenging environment for the next
  few years
• Organisations continue to look at streamlining
  their operations to reduce costs improve
  efficiencies
• We have invested significantly in the past 5
  years, which positions us well in these difficult
  times
• Built an enterprise suite of products
• Delivered our Connected Intelligence series (new
  generation products)
• Substantial organisational change (House of
  Products)
• Implemented new systems
• Geographical diversification
• Vertical market diversification

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AfterWord

• TechnologyOne can not afford to be complacent
• Over the next few years
• We will continue to change and adapt
• We will continue to refine our strategy
• We will continue to streamline our business
• The difficult economic climate is an opportunity
  to make us a better and stronger company

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