Thank you for joining us today for our first half financial year 2022 results presentation. My name is Jason Cooper, and I am the CEO of Envirosuite. I'm joined today by our newly appointed Chief Financial Officer, Justin Owen, as well as our Head of Strategy, Michael Hamilton, who was interim CFO during the first half. I will start by going through the business update, pass to Justin for the financials, and then back to me for the outlook. We'll then take questions at the end. Please write your questions in the box, and we will endeavor to respond. Envirosuite is a purpose-driven company that I'm incredibly proud to lead. We believe that environmental intelligence is the key to improving the well-being of people and the planet by creating innovative technology, software, and instrumentation that helps industries to monitor, predict, and manage emissions to reduce their impact. We enable airports, mining, industrial waste, wastewater, and water organizations to harness the power of environmental intelligence so industries grow sustainably and communities thrive. We're driven to create world-leading science-based technology to help our customers act faster, perform better, and realize their full potential with environmental intelligence. Let me take a moment to provide a high-level business snapshot. We are structured in 3 software product suites: EVS Aviation, EVS Omnis, and EVS Water. Our go-to-market strategy is based on having 3 focused regions: Americas, EMEA, and Asia Pacific, with Americas now the largest region, again, showing exceptional growth over the last year. Moving to our key metrics, I would like to share with you the great results that Envirosuite has achieved in the last 12 months. We've continued to drive focus and discipline in the company aligned to our core strategy that has resulted in significant growth for the company and a continual improvement in all of our key financial results. Our ARR has now grown to AUD 49 million, and we've grown our customer size by 16% to 391. With a strong focus from all regions on driving improvements in new customer onboarding, we have grown our revenue to AUD 26.8 million. The investment into AWS, ticketing, streamlined processes, the tech stack, and focus on improving regional performances has again improved the gross margin to a record of 48.4%. We're well-positioned to improve this in the next 12 months. Momentum continues to build in the business, particularly in our EVS Omnis product suite, which resulted in an ARR growth of 33.5%. This growth is only the starting point of this world-leading environmental intelligence platform. Central to our strategy of rapidly expanding in the Americas, we achieved a 36.8% growth in ARR. Our core aviation business has continued to grow in spite of significant headwinds in the aviation industry, achieving a 6.5% growth, which shows strength and trust that we have as the market leader. Winning awards for Optimizer as a global digital twin technology for water and a successful consortium win for NASA cements our product leadership. Furthermore, we have again secured long-term contracts with two of our important customers, Airservices Australia and Madrid City Council. In December, we completed a successful capital raise to accelerate development and sales for our core EVS Water products, Optimizer and SeweX. As you may have seen from our recent announcements, we've built out a world-class global leadership team, recently appointing Aaron Lapsley as the Chief Operating Officer in Austin, Texas, as well as Justin Owen coming in as our CFO with his strong SaaS and listed experience. In November, we added Sabina Todd as VP and Regional General Manager in APAC. For the calendar year 2022, we're focusing on execution and scale. We have the foundations in place, a world-class leadership team, proven product market fit, and continued product innovation, driving value for our customers around the world. The global opportunity is significant for scale and to take considerable market share. Our four strategic pillars have continued to drive our focus and discipline and ensure we remain accountable and on task. The results that we have presented today are aligned to our strategic focus areas. In the last 12 months, we have done what we said we were going to do. For each and every initiative on this page, we are driving an outcome that will drive a benefit for our customers, our staff, and importantly for our shareholders. We will continue to drive the strategic priorities and diligently focus on execution. Our ARR growth has been achieved in all products and regions. As I have already stated, this has been led by the significant expansion in the Americas, leveraging the market tailwinds of the increased focus on ESG, the Biden administration's investment into infrastructure, and the compelling value proposition that EVS Omnis represents. Achieving 33.5% PCP for Omnis provides the confidence that we will continue to improve this in the coming years. It is important to note that a significant portion of that growth has come through the mining sector. Considering the impacts to the aviation industry globally, we are delighted with the result of 6.5% growth within our EVS Aviation portfolio, and we are confident we are well-positioned to support our customers as flight traffic starts to return to pre-pandemic levels. Not only have we increased the number of sites, we have also been able to increase the ARPS on some of our customer sites, providing clear evidence that we have a compelling value proposition and momentum in these segments. We are a product-led sales-focused organization ensuring that our customers are engaged and derive value out of each of the products that we offer. We operate in air, land, and in water. I will take you through the key highlights from each of the product suites. EVS Aviation continues its market leadership position, securing long-term renewals with key customers, adding new sites and expanding into existing ones around the world. We have worked diligently with our customers to ensure they are well positioned to support an increase in flight traffic as the world starts to return to normal. The aviation business is now at AUD 32 million ARR, and we've seen an increase in one-time projects providing confidence that the aviation sector will continue to increase investment around the world. Importantly, we've been able to drive the customer acquisition as well as secure long-term contracts and renewals, providing a strong revenue increase of 14.4% with 88.5% recurring revenue. With an increase in one-time projects in the first half, we're confident that the aviation sector is starting to show positive signs. Dublin Airport has been a customer since the late 1990s. Recently, they had to significantly reduce their workforce by 1,000, which equated to one-third of the workforce. With a heightened concern around noise complaints increasing by a factor of 10 and a new runway due to open in 2022, that left the airport with a large environmental management problem. Envirosuite worked with Dublin Airport to increase our technology adoption and services to help the airport navigate through the noise and regulatory challenges. The close collaboration and knowledge sharing is set to increase our involvement further, ensuring the airport can make the most of its investment in infrastructure while meeting its environmental obligations as demand for air travel returns. Moving to EVS Omnis, the world's most advanced environmental intelligence platform. This year was a significant milestone for Omnis as it increased its market share around the world within the current AUD 1.2 billion serviceable addressable market. From a technology perspective, we've continued to invest in the product and its capabilities, and we have a strong, clear roadmap which will enable it to maintain its market leadership position. Achieving AUD 16.5 million in ARR, which represents a growth of 33% on prior corresponding periods and a growth of 25% of sites, taking this to 219 global customer sites. Core to our focus, the primary growth came from the Americas and within the resource sector. Our land expand and scale strategy has proven highly successful within the EVS Omnis product suite, where we now have examples of this working all around the world. Furthermore, we are now experiencing a network effect, particularly in the Americas, with towns and cities starting to pay attention to how we are able to help industries and communities coexist across our product suites. An example of this has recently occurred in the state of Michigan with a wastewater treatment facility in the city of Kalamazoo. What started out as understanding the impact of H2S from a wastewater facility in the community quickly expanded to a paper manufacturing company to provide additional insights into H2S, providing situational awareness and independent validation from two independent organizations. This is now continuing to expand to other industrial applications and expanding outside of Kalamazoo. In this example, Envirosuite sits at the center of the experience for industries and the community. Encouragingly, we are now seeing this trend being repeated in multiple locations across the U.S. Our newest product suite, EVS Water, experienced a positive introduction into the marketplace, where we have secured five sites in the first half and are well-positioned for more sites to be added for the remainder of this financial year. While the number itself is largely immaterial to the overall contribution, we're delighted with the market traction, the value creation, and the quality of discussions we have had in all regions around the world. We have also signed two strategic partnership agreements with GHD, a global consulting group within the water industry, to help scale implementation as well as refer prospective clients. We have invested into the water team based here in Brisbane, Australia, with some of the leading scientific subject matter experts and developers to now support the growth ambitions of the water segment. We are building the team from the ground up, and we have more PhDs in this group than any other, making sure we stay aligned on our scientific differentiation. Our most exciting product within the EVS Water suite is SeweX. SeweX identifies sewer corrosion issues before costly and disruptive incidents occur. Dynamic modeling of corrosion risk is translated to provide rapid analysis of the likely cause of corrosion risk that has occurred or is emerging. Alternative operating and control scenarios can then be simulated to identify the best approach for short-term response and long-term asset management. Our Optimizer product helps reduce operating costs and achieve regulatory targets with a high degree of accuracy without capital expenditure. Our focus and discipline around customer acquisition has paid dividends. To improve customer qualification using the MEDDIC framework, a rapidly growing reference customer base and significant value creation in a multitude of different environmental conditions, we are now able to confidently present our offering to ideal customer profiles, improving the deal velocity. We've been able to apply the land, expand, and scale approach to multiple segments and in all regions. While we've often spoken about the success of TEC, we are now able to talk about many other customer success stories, including Water Corp, where we're now in the final stages of validation of the three sites and working closely within Water Corp to help them meet their current and future objectives. I would now like to introduce and hand over to Justin Owen, Envirosuite's new CFO. We are delighted to have Justin on board, and as outlined earlier, Justin is a key member of our global leadership team. Thanks, Jason. I'm delighted to be part of Envirosuite and to participate in what will be an exciting future. We have presented today our income statement on an EBITDA basis. The reconciliation to IFRS results is outlined within the appendix. 13.8% growth in total revenue represents a strong result in a market where we have experienced some COVID headwinds. However, the resilience of the EVS Aviation segment has been excellent, and we've demonstrated growth both in sites and ARR on a PCP basis. Additionally, the growth in non-recurring or project revenue of AUD 1.7 million or 50% on a PCP basis represents a strong lead indicator as customers transition their projects to operations, resulting in recurring revenue growth for EVS. Improved gross profit margin of 48.4% represents a combined impact of the growth in our high-margin product, EVS Omnis, and focus on our cost-out initiatives. We are excited by the size of our serviceable addressable market, with Slide 22 providing an assessment of this market and our penetration. Demonstrable strong growth in sites and sustainable ARR per site provides ongoing support for investment in our key segments. Slide 23 reconciles our annualized statutory recurring revenue to ARR. Our customer success managers play a pivotal role in driving our renewal process, along with providing insight to our customers on future product updates and releases. Our new sites pipeline represents our implementation pipeline, which has grown following our sales success in Q2. We continue to focus on shortening our implementation time frames. However, supply chain issues over recent times has meant a higher focus on inventory levels is required. Put simply, COVID has impacted a number of global supply chains, and while EVS is not immune, we have taken action to address this global market dynamic. Our operating leverage or costs as a percentage of revenue has shown significant improvement over the PCP for sales and marketing in general and administration, an opening of the jaws between revenue and operating expenses. For sales and marketing, we anticipate that this metric will increase over coming quarters as we scale up the investment in EVS Water following the successful capital raise. Likewise, our cash spend in R&D as a percentage of revenue will be maintained as we continue the investment in our products, most notably EVS Water. Attention to G&A costs will continue to ensure our infrastructure supporting business growth is commensurate with our global business requirements. Our focus and management on costs and infrastructure are well demonstrated on slide 25, adjusted operating cash flow. Continual improvement over the recent half-year periods is a combination of the leverage referred to above and revenue growth. Our investment in product development expense, sales and marketing, and geographical expansion is expected to see this metric flatten out over coming quarters. Turning to slide 26, our balance sheet has EVS positioned for growth, enabling the ongoing investment in our product development and continuing the expansion in our key geographic regions. I'd now like to hand back to Jason. Thank you, Justin, for going through the financials in detail. As we look to the second half of this financial year, we believe we're well-positioned to build on these great results presented today. Our strategic focus continues to be focused on four key drivers: growth, product, customer, and scale. We are actively leveraging the ESG tailwinds, pursuing strategic partnerships and continuing to build on the Americas momentum. We will continue to drive a culture of innovation and scientific excellence to deliver environmental intelligence software solutions, delivering more value to our customers over the lifetime. By focusing on the customer, we will deliver high-value differentiation through customer success for both retention and growth. We will continue to build for global scale and innovation across all parts of the business, while optimizing for gross profit improvement to continue the upward trajectory of that gross profit result. In the last twelve months, we've told the market what we're going to do, and then we have delivered. For this calendar year and beyond, we are now focused on execution and scale, and we know that we are well-positioned for success. In January, we ran a highly successful in-person workshop in Brisbane with the water group that really drove a clear strategic direction. This engaged the group and provided a North Star for the water team. This week, I returned from my first trip abroad in two years, where we spent one week with our global EVS Omnis leadership team in California. I've never been more confident in the company's ability to execute on this opportunity. Many parts of the company have never met face to face due to the restrictions of travel around the world. I saw firsthand the power and importance of human interaction. We walked away aligned on the focus and the strategic objectives from the product, the customer, and the value creation, a North Star for the Omnis team. There will be continued focus on securing new customer sites and the expansion of global accounts that will drive our growth. We have a strong product roadmap, a highly differentiated product offering, and world-class sales team focused on execution of our strategy. Momentum is continuing to build for our business, and with a significant market opportunity, the right team, the right strategy, we know that the next 12 months are going to build on this momentum we have today. This brings an end to the presentation today, and we will now take questions from the participants. Anne, do we have any questions? We have a few questions today. The first one is: When is one platform likely to go live? Thanks, Anne. I'll take that question. This is Jason. At the moment, what we see is the products serve different market segments and solve different problems. Our go-to-market strategy from a product perspective will suit the customer needs. We are, however, investing into tighter integration between the platforms so that we would be able to provide all three solutions into the same customer base if that occurred, that likely being the airports group. We want to be able to serve the markets and the customer requirements in a value creation model. The second question for today is: What is the likely timeframe for completion of SeweX's proof of concept for Water Corporation? Okay, I'll take that again. We are in the final stages of proving out the data validation with Water Corp, and we would be hoping to close the proof of concept, the initial proof of concepts out within the next month or two. The next question is: When is EVS likely to break even on current trajectory? Great. Thanks, Anne. Justin here. In relation to break even and previous correspondence and information that we provided to the market, prior to our cap raise, late last year, we'd already outlined that there was an EBITDA break even position, in the back end of FY 2022. However, with the move in the investment in EVS Water and capital raise, obviously the investment in sales people, development people, we anticipate that our EBITDA break even will push out around 12 months. Thanks, Justin. Next question is: On slide 23, you indicate that ARR includes discounts. How material are these discounts? If possible, please quantify. And are they permanent or will they roll off? If the latter, broadly speaking, when would this be? Thanks, Anne. I'll grab that one again. In relation to how we go to market and the confidential arrangements that we have with customers, we always look at what are the strategies for winning with any particular customer. While discounts aren't necessarily a core part of the business, there are times where we look at opportunities with the customer, whether they be extension of contract lengths or improvement in services that we can offer to see whether there could be advantages by providing that through the negotiation process. Current market conditions have led us to use that as a possible negotiation piece, but it's not something that's core or fundamental to how we manage our customer relationships. Thanks, Justin. Our next question is: Can you talk to any impact of wage inflation on the current team and prospective hires? Maybe you can talk to the key areas of the business you are seeking to tie into. Yeah. We, like most tech companies, are facing a challenge in development. I think with borders opening in the coming months, we will start to see a better balance in that, but this is also a global phenomenon. We, however, are incredibly fortunate being a purpose-driven company because what we do find is a lot of software developers would prefer to come and work for a company that is truly trying to save the planet and make a positive contribution rather than joining a gambling company or a banking company. Certainly from an employee value proposition, we know that we are attracting fantastic talent that want to come and work for us. We are not immune to the global shortage of technical staff. Okay. Next question: How do you generate leads for EVS Water? Can you briefly walk us through that and how it differs to potentially Omnis and Aviation? Yeah. That's a really good question because there is a party which is certainly a network effect, and when we signed Water Corporation, a lot of the other Australian utilities took notice about what was that problem statement. If we now look at rolling this out globally, what you will need in each of the regions is a reference customer. We're working with world-leading facilities and customers to provide that reference. The other part though we're now applying to actually is in your area, Anne, which is in account-based marketing, where we're doing very focused messaging on that. I don't know if you wanna add anything on that. Yeah. Account-based marketing, if you're not aware of what that is, it's a very personalized, customized approach to targeting key accounts that we want to win. It's, you know, outlining the top accounts that we want to approach. It is putting together a personalized type of content stream and multi-touch programs in order to get in front of them and then to build intention and also awareness of what we can do for them, and also provide an understanding of how we can help them solve their problems. Okay, next question. How are you seeing the reopening of borders impacting the business? I think the only statement is positive, right? Positive from more, and potential employees coming into Australia. I think with flight traffic starting to open up will help our airport customers around the world. You know, I can truly say the experience I had in California of getting the team together, I see that we will move faster as a team. We will become more aligned, and then that means certainly going to customer sites more frequently, and really driving that. We have spoken about strategic partnerships, and some of those are harder to do virtually. We've already seen an increase in the last two weeks since I've been on a plane about being able to drive that forward. Only positive. Really looking forward to not actually sitting on a plane for hours, but certainly to getting out in front of customers and staff. Another question around recruiting. Could you outline any increase in staffing in the Omnis and Water businesses since the first quarter result? Thanks, Anne. Look, there's no doubt we went to the market in back end of calendar 2021 to raise money to invest in our EVS Water business. Clearly the first part of that is, there's a combination of looking to employ people who are able, you know, do the sales marketing, do the product development, and then coinciding with that is putting in an appropriate sales team. We're working through a detailed strategy on that one, ensuring that we bring the people on at the right time and invest accordingly. As we've outlined here, certainly the success that we've seen in the U.S. market is a result of our intentional investment in that geographic segment as well. Another question for you, Justin, this one on growth margin. The first half 2022 result was 48%, and it was mentioned that it could go higher. Will the margin expansion continue at a similar rate or be faster or slower? Thanks, Anne. Great question. Gross margin, very close to my heart. I outlined when I joined that this was a key priority for me and was an existing priority for the business. Certainly the experience of gross margin growth over recent reporting periods, we've shown a steady and substantial increase. The initiatives that we're looking at are currently in place to drive that include various cost out initiatives along with the success of our higher margin product, EVS Omnis. But we're also excited about the margin that's gonna come through in EVS Water once we get that to a sustainable and ongoing critical mass, if you like. We certainly see, and I'm certainly charged with responsibility for improving the gross margin, but we certainly see it going past the 50% mark and onwards from there. The next question is: Is an additional capital raise likely? I'll take that. No, we are well-funded. We're well-positioned to execute on our current strategy. We have a very clear path, and we're using our funds diligently. But we do not need to do another cap raise. Final question for today. Churn rate in Omnis seems quite high. Would you be able to run through what is driving this? Where are the customers going when they leave? Yeah, thanks. It's a little bit tricky to answer this. There's two parts to it. One is there's some legacy contracts that we've had in place that may not have been the right type of contract for us or potentially low margin that we did not want to maintain. The second part is there was a focus previously with the company within construction, and those construction projects have now come to an end, so we count that into churn. What we are seeing, though, is a strong retention in our core four focus areas, which is very, very good. As you'll see within Aviation, it's an incredibly low churn rate. We've got one final question that's come through. Can you broadly discuss how customers are receiving the push for cloud-based offerings? Yeah. I mean, absolutely. The cloud-based offerings are now absolutely accepted in the marketplace. I think if you went back four or five years, people were worried about the cloud. There is no doubt that it is easier to deploy, it is more secure, it is more scalable, there is better support. From a customer perspective, it ticks every single box. Even from oil and gas customers around the world now using it to banking institutions, I think people are largely comfortable with cloud-based offerings. Certainly from us, it gives us, you know, a more efficient way of running the business. That's all the questions for today. Thank you very much. We look forward to future updates as we go forward. Justin? Yeah. Look, excited to be part of the EVS journey and what's been achieved to date. We look forward in conjunction with Jason providing further updates, as they come to mind. Thank you for your time today. Terrific. Thank you.
Loading workspace