Post on 23-May-2020
MACQUARIE AUSTRALIA CONFERENCE 2019Darren Stanley, CEO
• Formed in 2007, delivering specialist advisory training and technology services to federal government departments
• Expanded into the private sector and into state and local governments and has continued to grow organically and diversify solution and software offerings
• Successfully undertaken several acquisitions since listing
• Now a pure play software and technology company successfully pivoting under Citadel 2.0 strategy to SaaS
• Industry leading margins and strong growth across national security, defence, e-health and all levels of government. Moving into financial services
• Leader in secure, scalable enterprise information management solutions with a global focus
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A trusted brand that manages information in complex environments
Corporate history
Armistice Day 2009 in Afghanistan
Running the country remotely – April 2014
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With genuine differentiators and a clear purpose: ‘To keep people and information safe’
Leading software and technology company
• Secure IT pedigree provides opportunities to scale globally
• Focussed Citadel 2.0 strategy underpins growth
• Strong SaaS product suite targeting key verticals
• Investment in R&D enhancing software capabilities
• Significant SaaS contract growth
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Positioned to scale following pivot to Citadel 2.0
Investment proposition
• Citadel’s origins were in providing specialist advisory, training and technology services to
federal government departments where it built a foundation of trust and execution
excellence
• Citadel is now a leader in secure, enterprise information management solutions with a
global focus, successfully pivoting to SaaS
• Our track record of success, institutional knowledge and product solutions in
defence/national security, government, e-health and tertiary education positions us well to
increase SaaS market share both in Australia and globally
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Trusted, proven and preferred….and now scalable
Global scale through secure IT pedigree
1. Adoption of a bi-modal business strategy to Maintain and Grow with a key focus on
building an enduring business
• Cross-selling to drive growth from developed and acquired products to our existing clients
• Citadel channel and reseller partners will help us scale our sales and support
2. Development focused on SaaS solutions that can scale in our areas of expertise
• SaaS annuity style revenue model will allow us to grow and scale through shorter sales cycles,
reduced client concentration and larger numbers of new clients
3. Moving into adjacencies where our pedigree and expertise can be efficiently leveraged
• Focus on market and product relationships that align with our expertise where we have a
competitive advantage
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Prioritising market and product relationships that align with our expertise
Citadel 2.0 strategy underpins growth
Strategic rationale
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Citadel-IX
• A modular SaaS platform designed to provide both domestic and international customers with secure, flexible options to manage their
enterprise information
vResponder
• Citizen-centric digital platform designed to keep people safe and assist responders to deal with workplace incidents and national security
threats
Kapish Productivity Suite
• Series of software modules linked to HPE TRIM and Content Manager that enhances productivity, workflow automation and systems
integration
Evolution
• Enterprise class Laboratory Information Management System (LIMS) that seamlessly integrates with instruments and other systems and
provides unrivalled flexibility to customise data fields, reference lists, user privileges, workflows and reports
CHARM
• The leading Australian oncology e-health solutions software that provides oncology electronic medical record and chemotherapy
prescribing, compounding and administration
Anaesthetic Private Practice (APP)
• Cloud-based Software-as-a-Service (SaaS) practice management and billing solution for the anaesthetist market
Gruden
• Austender eProcurement Platform and Grants Management system
SaaS product suite targets key verticals
Strategic rationale
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Citadel-IX
SaaS product suite targets key verticals
Managed Expertise
Citadel-IX brings together application and cloud
infrastructure expertise to provide a superior
service, availability, redundancy, and application
support.
IdentityLeveraging federated identity services (ADFS,
AzureAD), Citadel-IX users are provided with a
secure and seamless logon experience.
CollaborationMicrosoft SharePoint® empowers teamwork with
dynamic and productive team sites for every
project team, department, and division. Share
files, data, news, and resources.
ProductivityOur Kapish® productivity suite, K2 Five® process
automation and Microsoft Office 365® bring the
power of process automation, the best tools for
the way people work today, and efficiency add-
ons to allow users to work the way they want to.
MobilityOur goTrim mobility solution and Citadel-IX
Microsoft Azure® hosting provides access to
your enterprise content from anywhere – on any
device.
Compliance
Micro Focus® Content Manager is a
governance based enterprise content
management system designed to meet the
global needs of regulated organisations.
Powered by
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Citadel has invested in our Citadel-IX and other SaaS solutions at the right time in a large and growing market
Strong SaaS product suite targets key verticals
• Total addressable Cloud Service market expected to be US$278bn by 2021
• The Government cloud market size is expected to grow from US$15.4bn in 2017 to
US$28.9bn by 2022
• Financial services cloud spending was US$16.7bn in 2018, forecast to grow at 23% CAGR,
making this a US$33bn market by 2022
• The Global Healthcare Cloud Computing Market is expected to exceed more than US$11bn
by 2022
• Citadel-IX covers all of the SaaS segments, and is applicable to public and private sectors
where we have deep expertise
• Back to base video calling connecting individuals with responders delivering instant incident response and assistance
• Collect real time streaming video from bystanders
• Receive caller’s GPS location for target incident response
• Receive incident reports and media uploads from anonymous sources
• Send targeted alerts to individuals to keep them safe and out of harms way
• Web-based command centre coordinating security or service incident response
• Share rich multi-media content such as first aid or user “how to” videos
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vResponder: The smartest way to create safe communities
Strong SaaS product suite targets key verticals
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The vResponder platform is a modular application with broad functionality across a number of key industries that are applicable both domestically and internationally
Strong SaaS product suite targets key verticals
National Emergency Services – Complete digitisation of emergency services and incident response. Nationwide enablement of citizen centric intelligence and emergency response facilitation. Transform archaic voice protocols into the digital era; a new security platform to counter assymetric threats.
State and Local Government – Superior engagement with members of the public. Meet duty of care by keeping people safe. Rapidly enabled public upload and reporting. Critical site and incident management and facilitation. Protect everything from tourist sites to significant events like Anzac Day marches.
Healthcare – Highly trafficked sites with open public access. Increasing rates of violent assault against staff and patients. People at their most vulnerable and staff already stretched to their limits caring for them; situation requires a smarter solution. Over 1000 public and private hospitals in Australia alone.
Education – Increasing prevalence of sexual assault and other violent incidents. Frequent mass gatherings with open public access; regular sites of political protest. Domestically, 20+ major campuses with hundreds of smaller tertiary and secondary sites.
Insurance – Prevention is better than cure; increase user engagement and protect clients and their assets through smart notifications. Advanced data capture and analytics for streamlined case management. Reduced premiums and payouts through superior incident prevention and management. Integrate with existing application infrastructure
Mass Transit – Regular congregations of people in predictable choke-points vulnerable to mass casualty events. Correlation between public transport and mass gatherings and high profile tourist attractions; high payoff targets for terrorist attack. GPS location and notifications to direct users to safe routes and away from incidents.
Stadiums and Arenas – Major sports stadiums and arenas regularly hosting tens to hundreds of thousands of people in vulnerable open spaces. Proven targets for terrorist incident. Advanced information gathering and security incident management through video upload and analysis and push notifcations. Over 20 venues routinely hosting more than 15,000 people in Australia alone.
Private Security – Leverage existing security arrangements to provide smarter, real-time intelligence upon which to make decisions. Enhance the security of the worlds most secure sites by getting the right information to the right people at the right time (and on the right device).
Workplace Health and Safety – Provide a mobile solution to report and manage workplace hazards and incidents in high-risk environments including Defence, Mining, Workshops and Heavy Industry.
ADDRESSABLE MARKET
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R&D investments enhance software capabilities
• Investments made to develop secure cloud-based software solutions have led to a direct increase in SaaS revenue from new client wins and cross-selling opportunities
• Citadel is transforming to a highly scalable business with increasing recurring revenues
• Selection of key investments made to scale growth:
• CHARM platform redeveloped to a fully hosted solution to enable rapid expansion of customer base. CHARM Standard released in H1 FY19
• Significant investment in improved security of the Citadel-IX platform, achieving ISO27001 certification in H1 FY19
• Multiple Kapish products released to market and in development
• Multiple vResponder product enhancements to meet current and future client requirements
• Acquisitions of APP and Gruden expand customer and product base
• Investments continue to be made in business critical software, big data/knowledge management and digital solutions across the product suite
1.8
4.5
5.5
2.2
FY16 FY17 FY18 FY19
R&D Investment (Opex and Capex) ($m)
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Significant SaaS contract growth
Significant contracts include:
• Contracts and relationships that have a significant total
lifetime value (TLV)
• Enterprise clients with the opportunity to utilise 2 or more
Citadel products/offerings
• Average tenure of contracts remains > 4 years
• H1 FY19 growth driven by subscription based models
with more expected in H2 FY19
• Total weighted pipeline* was in excess of $132m at 31
December 2018 (30 June 2018: $109m) with
approximately 70% in SaaS opportunities to new and
existing clients
• Targeting 200,000 Citadel-IX seats by end FY20
9 1014
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Business Significant Contracts
1HY16 1HY17 1HY18 1HY19
*Weighted pipeline represents the estimated Total Contract Value (TCV) of active sales opportunities, weighted
by the estimated probability of winning the contract as at 31 December 2018 compared to 30 June 2018
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Strong growth in SaaS and new product revenue
• Revenue growth reflects roll-out of existing contracts,
new SaaS contracts and growth in product sales
• Software/SaaS revenue growth of 39.1% compared to PCP
• Software/SaaS revenue includes upfront perpetual licence
fees, monthly SaaS revenue, annual maintenance or
managed service revenue
• Proportion of revenue from SaaS increased from 16.3%
in H1 FY16 to 34.2% in H1 FY19, and is expected to
continue increasing
• Strong revenue growth from SaaS business following
investments made to develop and enhance software and
platform capabilities
6.8 13.0 12.1
16.8
34.6 31.1 34.5
32.3
1HY16 1HY17 1HY18 1HY19
Revenue from Continuing Operations ($m)
Software/Saas Other
• Recurring revenues from SaaS products to continue to grow
• Strong balance sheet supports business investment and growth initiatives
• Increased investment in SaaS platform development to drive long-term sustainable growth
• Sales focus transitioned towards scalable solutions that provide annuity revenue streams
• Citadel-IX opportunities are building strongly (with circa 100,000 seats now being actively discussed
with our clients)… including an emerging significant pipeline with major financial services institutions
following Hayne Royal Commission recommendations
• Focused on vResponder (and derivatives of the solution) given substantial global market opportunity
• Provide a strong annuity based revenue stream rather than project based opportunities
• Strongest ever pipeline of opportunities for SaaS solutions will enable achievement of a 60-70%
subscription-based business within 2 to 3 years
• Ongoing and active M&A program in both domestic and international markets
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…underpinned by SaaS strategy
Positive outlook for continued growth
APPENDICES
Financial Results as at 31 December 2018
Increased Software/SaaS* and product revenue underpinned sustainable growth
Previous corresponding period (PCP): Half year ended 31 December 2017. PCP restated as a result of adoption of AASB15 Revenue from Contracts with Customers
*SaaS is defined to include both ‘Software as a Service’ and ‘Platform as a Service’ solutions
**Weighted pipeline represents the estimated Total Contract Value (TCV) of active sales opportunities, weighted by the estimated probability of winning the contract as at 31 December 2018 compared to 30
June 2018.
Financial Metricsfrom Continuing Operations
Product Metrics
$6.7mNET PROFIT AFTER TAX
$132mWEIGHTED PIPELINE**
26k+CITADEL-IX USERS
10.4cEARNINGS PER SHARE
$16.8mSOFTWARE/SAAS
REVENUE
$5.1mNET PROFIT AFTER TAX
ATTRIBUTABLE TO MEMBERS
4.8cINTERIM DIVIDEND
DECLARED PER SHARE FULLY FRANKED
21%
5.4%
39.1%
10.3%
$49.1mTOTAL REVENUE
5.5%
$13.2mEBITDA
3.2%
$8.8mPROFIT BEFORE INCOME
TAX
1.9%
8.3%
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Protected dataEnd-to-end ISO 27001 certified solution means the people, process, and
technical components are rigorous and of a superior standard.
Citadel-IX is the only end to end ISO27001 certified cloud-hosted Content
Manager solution in Australia.
Access anywhereCitadel-IX allows users to access information wherever they are. With our goTrim
mobility solution, users have a dedicated app for accessing, editing, annotating, and
actioning workflow items from the palm of their hand, providing the flexibility workforces
want.
Value for moneyThe Citadel-IX standard design allows us to deliver the solution with an average of 40%
more cost effectiveness, providing a fully supported and maintained solution at an
affordable cost. This reduces the need for continual hardware and skills investment and
reduces the total cost of ownership for an organization.
Solution expertiseCitadel has a strong pedigree of end-to-end management of mission critical and highly
protected and secure information. We have expertise across all aspects of the solution
to ensure optimal system performance, security standards, and application level support.
Citadel-IX is a proven information management solution for organisations that care about
compliance and resilience, delivered in a highly secure and cost effective way
The value of secure information management
• Significant opportunities are emerging within financial services institutions following the Hayne Royal Commission recommendations.
• The driver is being able to record, store and retrieve information to comply with new requirements coming out of the Hayne Royal Commission and to improve workflow efficiencies across the company.
• Citadel has built a simple and intuitive interface to drive broad adoption of improved document identification, retrieval, sharing and retention across the institution.
• Citadel has also built an Artificial Intelligence (AI) content enrichment engine to ensure documents are correctly classified to aid retention and retrieval.
• AI engine can identify documents that have Personally Identifiable Information (PII) and ensure these documents are secured in Citadel-IX and put on the appropriate retention schedule.
• AI engine can review content and provide additional information in the document metadata to aid retrieval. For example, if a document has an ABN number, the AI engine will find the corresponding company name and add this to the metadata improving the ability to find this document when company name is searched.
• Citadel-IX will assist financial institutions to comply with the new requirements, will greatly reduce the likelihood of PII breaches and drive meaningful employee efficiency savings.
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Citadel-IX application to Financial Services
Reporting Crime Information – Use Case
vResponder creates the ability for the public to report crime info anywhere, anytime, to keep their community safe
$132mWEIGHTED PIPELINE**
26k+CITADEL-IX USERS
$49.1mTOTAL REVENUE
$13.2mEBITDA
3.2%
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vResponder– Features
vResponder enables decision makers to virtually triage incidents in real-time using high quality video, vastly improving incident response times and citizen safety
$13.2mEBITDA
3.2%
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Important Notice and Disclosure
The information contained in this presentation prepared by The Citadel Group Limited (ASX:CGL) is not investment or
financial product advice and is not intended to be used as the basis for making an investment decision. This presentation
has been prepared without taking into account the investment objectives, financial situation or specific needs of any
particular person. Potential investors must make their own independent assessment and investigation of the information
contained in this presentation and should not rely on any statement or the adequacy or accuracy of the information
provided.
To the maximum extent permitted by law, none of the CGL Group of Companies, its directors, employees or agents
accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the
use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is
given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts,
prospects, statement or returns contained in this presentation. Such forecasts, prospects, statement or returns are by their
nature subject to significant uncertainties and contingencies. Actual future events may vary from those included in this
presentation.
The statements and information in this presentation are made only as at the date of this presentation unless otherwise
stated and remain subject to change without notice.
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CONTACTSDarren Stanley, CEOPhone: +61 2 6124 0800Mobile: +61 412 557 993Email: darren.stanley@citadelgroup.com.au
Ronn Bechler, MD Market EyePhone: +61 3 9591 8901 Mobile: +61 400 009 774 Email: ronn.bechler@marketeye.com.au