WiseTech Global Ltd (ASX:WTC) announced accelerated growth, with FY17 revenue up 49%, EBITDA up 71%, NPAT up 127%.
Key results (FY16 statutory vs FY17 statutory)
- FY17 revenue of $153.8m, up 50%
- Net profit attributable to equity holders of $31.9m, up 1371%
- Fully franked final dividend of 1.2 cents per share
Key results (FY16 pro forma vs FY17 statutory)
- Revenue $153.8m up 49%
- Revenue (excluding F/X) $156.9m up 52%
- EBITDA $53.9m, up 71%
- Recurring revenue 99% (excluding recent acquisitions)
- Net profit attributable to equity holders of $31.9m up 124%
- Annual attrition rate of <1% by CargoWise One customer, as it has been for 5 years
- Over 680 product enhancements added to our global CargoWise One platform
- 7 targeted acquisitions announced across Germany, Italy, Taiwan, Australasia and Brazil
Strong, high quality growth in revenues while expanding global platform and operations
CEO, Richard White, said "Our global business continues to deliver high-quality growth with revenues up 49% to $153.8m and EBITDA up 71% to $53.9m while we continued to focus on executing significant strategic actions to drive future revenue growth and global expansion."
"Our high-quality earnings growth and 127% increase in net profit has been fuelled by significant growth in revenue from existing customers across transactions, modules and geographies and new sales worldwide, further accelerated by our targeted acquisitions."
"We have achieved FY17 revenue up 49% year-on-year, with 31% CAGR over 5 years, and EBITDA up 71% year-on-year, with 57% CAGR over 5 years - all delivered while enlarging our global platform and geographic footprint to further build our leadership position."
"Our 7,000+ customer base across 125 countries continues to grow transactions and users, expand into new modules and regions and use our platform as a tool of consolidation."
Highlights from execution of strategic growth initiatives
- In FY17, we invested over $50.4m, representing 33% of our revenue and over 50% of our people in product development, significantly expanding our platform. Over the last 5 years, we have invested $167m in R&D.
- Continued, powerful organic revenue growth with existing customer revenue up $27.2m
- Existing customers provided 78% of the FY17 organic growth, with global penetration still in the early stage.
- 32 of the top 50 global 3PLs are now customers.
- New customer wins across small-mid market plus large 3PLs eg Morrison, CLASQUIN, Allport Cargo Services.
- We now have over 200 external WisePartner organisations across the world, actively referring, promoting or implementing our platform.
- We have progressed product development and commenced early adopter sales for our integrated acquisitions in China and South Africa and, since January 2017, we have announced 7 further acquisitions in Italy, Germany, Brazil, Australia and Taiwan.
Innovation and expansion of our global platform
We invest heavily in product development and have achieved strong and profitable growth during our history. Through innovation and acquisition, we are expanding CargoWise One's integrated global platform.
- In FY17, our continued relentless investment in R&D further expanded our pipeline of commercialisable innovations, delivering over 680 product upgrades and enhancements seamlessly across the CargoWise One global platform.
- These hundreds of upgrades include initiatives such as global container tracking, automations in supply chain security for air cargo screening to reduce risks at the border and in the air, WiseRates rating and pricing automation engine, integrations in shipping port and cartage, carrier connectivity electronic booking and global address validation and master deduplication to ensure compliance and prevent futile trips, risks and fines.
- Larger pipeline components include our architecture engine, GLOW, which we utilise internally to deliver more rapid development capability for our teams and which is accelerating our new product pipeline commercialisation, and the Universal Customs Engine which is designed to deliver complex, multi-year customs localisation projects in a fraction of the time and which is accelerating the pace of integration of the customs solutions businesses we are acquiring in key regions.
- PAVE, our Productivity Acceleration and Visualisation Engine, is nearing completion and is in the process of commercialising, having delivered significant productivity improvements in development partner tests. We expect this to be rolled out across the global platform later in FY18.
- We have added to our considerable pipeline of development initiatives by investing research and development resources into machine learning, natural language processing, robotic process automation and guided decision support, driven by vast volumes of transactional and border agency data sets to enable enhanced compliance, due diligence, risk assessment and risk mitigation.
Greater usage by existing customers
- Strong existing customer revenue growth of $27.2m, delivering 78% of the FY17 organic revenue growth.
- In FY17 revenue growth was achieved across all customer cohorts for CargoWise One.
- We continued our global rollout programmes with the world's largest global forwarding groups, including DSV, Geodis/OHL, Yusen, Mainfreight, DHL GF and JAS which are in various stages of global rollout for the freight forwarding module.
- 32 of the top 50 global 3PLs are customers and, during the year, we experienced significant growth in revenue from larger customers, yet our top 10 customers contribute only 27% of revenue (FY16: 21%).
- Continued transition of customer licensing with 92% of revenues (excluding recent acquisitions) generated from On-Demand licensing, an access-as-needed, monthly payment based on usage licence.
Increasing new customers on the platform
We continued to enjoy strong new customer growth as our On-Demand commercial model encourages customers of all sizes to migrate from outdated platforms. New customer wins in FY17 progressed in the mid-market as did sign-ons with larger 3PL customers, including Morrison, CLASQUIN, and Allport Cargo Services who commenced on-boarding and will roll-out over the coming years.
Stimulated network effects
We harness important natural network effects that exist because of the necessarily collaborative nature of supply chain execution and the inherent effect of our deeply integrated global platform. We further stimulate these effects with targeted partner programs across high-GDP trade routes and target regions. We now have over 200 external WisePartner organisations across the world, actively referring, promoting or implementing our platform.
In addition, each new geography and adjacency we acquire adds a valuable point on our strategic map, accelerates the network effects and makes CargoWise One even more compelling to local and global logistics providers and their customers.
Accelerating organic growth through acquisitions
In addition to strong organic growth from our existing technology platform, we have progressed product development and commenced early adopter sales for our integrated acquisitions in China and South Africa and we announced further acquisitions in Italy, Germany, Brazil, Australasia and Taiwan. These acquisitions are at various stages of completion and integration and, once fully integrated, they will expand the functionality, scope and value of our industry-leading technology and provide a strong base for further accelerating our organic growth.
Throughout FY17 and to August 2017 we announced 7 acquisitions across 5 countries:
- We acquired and commenced integration of German customs software vendor, znet group GmbH, and Italian customs software vendor ACO Informatica S.r.l. These acquisitions will provide valuable footholds in key European geographies and will enhance the value of our technology platform by providing customers with increased functionality and efficiency opportunities in key European trading geographies. The initial product interface for both are integrated to our platform and we have commenced building out the embedded customs component for each.
- We gained control of, and further increased our ownership share in Softship AG (Softship) to 77%. Softship is a leading provider of logistics software solutions to the global ocean-carrier industry. On 18 August, we announced our intention to move to full ownership and a Frankfurt Stock Exchange on-market offer to acquire any and all remaining outstanding shares.
- In July and August 2017, we announced the acquisition of Bysoft Solucoes em Sistemas Para Comercio Exterior Ltda (the largest provider of customs and logistics compliance solutions in Brazil), the Digerati business (a leading provider of tariff research and compliance tools utilised by the Australasian customs broking community which we will utilise to enhance our pipeline on cross-border compliance), the Prolink business (a leading provider of customs and forwarding solutions across Taiwan and China which gives us additional regional strength to accelerate our growth throughout Asia) and CMS Transport Systems Pty Ltd (a leading Australasian provider of road transport and logistics management systems).
We have also invested in developing our potential acquisition pipeline of near, mid and long-term opportunities and in building out our internal M&A capabilities and integration processes to execute and embed acquisitions.
We declared a final dividend of 1.2 cents per share in-line with our dividend policy - a payout ratio of up to 20% of annual statutory NPAT. The dividend will be fully franked and the record date is 11 September 2017.
CEO, Richard White, said "Heading into FY18, our advances in product development, expanded global footprint, increased financial strength and ever more efficient business model ensure that we are exceptionally well-placed to meet the needs of our customers, leverage macroeconomic conditions and drive the competitive dynamics of the logistics execution globally."
"For our customers, industry dynamics such as increasing regulatory burdens, business complexity, savage competition, exponential growth in transaction volumes, capital constraints and razor-thin margins, increasingly drive logistics providers out of legacy systems to our flagship integrated execution platform, CargoWise One."
"Our leading global logistics software and open-access, usage-driven business model work to remove revenue growth constraints. Our relentless focus on product development, positions us at the forefront of technology in managing international logistics and cross-border compliance challenges, changes in trade patterns and evolving logistics regulation."
"We have a long term, high growth plan for FY18 and well-beyond, supported by continued improvements in our core business, a strong balance sheet and significant pipeline of new innovations and acquisition opportunities." "We will continue to drive our '5 levers of growth' across the business: relentless innovation and product development, growing revenue from existing customers, acquiring new customers, stimulating network effects and accelerating organic growth through targeted acquisitions in new geographies and logistics adjacencies."
Guidance for FY18 earnings outlook
CEO, Richard White, said "The strong momentum of the Group's performance during FY17 combined with 99% recurring revenue (excluding acquisitions), annual customer attrition rate of less than 1% and continued expansion across our global business gives us confidence to expect, subject to currency movements,
- FY18 revenue of $200m - $210m, revenue growth of 30% - 37%,
- EBITDA of $71m - $75m and EBITDA growth of 32% - 39%."
Investor Presentation Please refer to the WTC FY17 Results Investor Presentation released today for detailed financial data and analysis.
Analyst Briefing The results presentation webcast to discuss WiseTech Global's FY17 financial results will be held at 10.30am (Sydney time) today. The webcast and briefing audio will be available at http://webcast.openbriefing.com/3770/
 Recent acquisitions are those executed in FY17: Softship AG, znet group GmbH, ACO Informatica S.r.l.
 Our revenue is invoiced in a range of currencies, reflecting the global nature of our customer base and as a result is impacted by movements in foreign exchange rates. Our FY18 guidance is based on rates provided within the Investor Briefing Materials released to the ASX on 23 August 2017.
To view the Results FY17 Investor Presentation, please visit:
Investor Relations Gail Williamson T: +61-2-8001-2200 E: email@example.com Media Peter Brookes T: +61-2-8234-0100 E: firstname.lastname@example.org Matthew Gregorowski T: +61-2-8234-0100 E: email@example.com
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