Knosys (ASX:KNO) Presentation, FNN Online Investor Event, April 2021

Company Presentations

Knosys Limited (ASX:KNO) Managing Director John Thompson talks about the compan'ys software-as-a-service (SaaS) solutions designed to boost productivity, collaboration and connectivity in the digital workplace, the recent acquisition of GreenOrbit, the market opportunity, financials and outlook.

Good afternoon everyone and thanks for taking the time to join this event and obviously the opportunity for myself to talk about Knosys. So I'll try and get through quite a lot in this 15 minutes, and it's particularly directed towards those of you who may not know a lot about the business and to try and get you up to speed as to where we are as a company.

Next slide, please. So who we are is a common question. Basically, our mission statement is very simple, it's to empower organisations to make smart connections with their information. Thereby, turning business information from what is commonly as a complex source of multiple data systems, how to see information into some kind of clear business advantage for that organisation. And we do this by creating innovative software solutions in the areas of knowledge management and employee experience. In particular, we focus upon delivering information that is easy to access, is controlled, secure, but most importantly is relevant and is clear, and based on personalising it for the intended user.

So our SaaS cloud-based solutions have a very much a common theme to them, which you'll see throughout the presentation, which is to simplify and intelligently centralise everything that's important to an organisation and their employee and, or the customer.

Next slide, please. So I'd like to start off with just giving a bit of a snapshot of the evolution of the business that is Knosys. Knosys is really focused on bringing to market SaaS solutions that enhance employee experience and customer engagement. We do this providing software tools that brings productivity, collaboration, and connectivity within the business workplace or remotely.

Now, this slide just really shows the evolution of the business from a single customer, a single software product offering back in 2013. The organisation listed on the ASX in 2015 to raise funds for expansion capital, and what I'd like to present to you today is where we are in 2021. We've changed quite considerably over the journey. We now have multiple software product lines, we've migrated majority of our solutions into the cloud, and we have hundreds of customers across the globe and now operate within five countries. So as you can see back from our very modest origins, we've now grown and expanded to be quite a powerful and quite a global company in our operations.

Next slide, please. So I want to start with our two primary SaaS solutions that we offer to the market. The first one is our GreenOrbit solution. And basically, as the tagline shows, it's designed to provide everything that an employee needs when they rock up through their office building the one solution. So fundamentally, GreenOrbit is an employee experience platform. It allows users to create and customise employee engagement via an intranet or a portal for sharing content and company knowledge throughout the organisation.

Fundamentally, it provides the tools for them to create, build, and deploy very much a personalised business intranet or staff portal. And thereby helping the company to engage with its employees, improve their productivity, simplify communications, and centralise business critical documentation under a controlled scenario. So GreenOrbit is an out-of-the-box solution, that's one of its unique propositions. It can be deployed within four to six weeks of signing up to the service. And it includes over 40 apps that enable the business to turn them on or off. And they include things such as workflow and automated processes, online form creation, analytics, staff directory, anything from chat, both group and individual to files sharing, calendars and things of that nature. So basically, it's designed to be the one-stop application that an employee turns on when they rock up to the job in the morning, as such.

Next slide, please. The second product or SaaS solution that we offer to the market is our KnowledgeIQ platform. So KnowledgeIQ is very much an intuitive AI based platform designed to support call centres, teams, and customers. So fundamentally, when we talk about KnowledgeIQ we talk about a series of tools generally used within a contact centre by agents when they're servicing, when they're engaging with the companies and customers.

So it's an important tool to help with efficiency within the contact centre environment. Productivity, obviously, it helps agents service queries quicker, provides consistency of information being presented to the customers, and it's really designed to be a productivity tool. In a contact centre environment, they're very metric driven, the KPIs are reducing call handling time, reducing escalation, they want agents to solve as many problems as they can and they want the customer to have a really good experience. And KnowledgeIQ fundamentally empowers the agent to be able to service that customer in the best way possible.

And as such, we've deployed this to a number of enterprises, so it's very much an enterprise orientated solution as opposed to our GreenOrbit solution, which is generally targeted more towards the SME and mid-market from that perspective. One of the unique offerings as part of the KnowledgeIQ platform, as I mentioned is, it does have elements of machine learning built into it. So it actually looks at what material is being used more frequently, most commonly used to solve problems, and it actually presents this to agents and promotes it so that agents don't have to go looking for the right material. They can actually go and it's presented to them just as part of their normal portal that they use on a day-to-day basis.

Now, what we've seen in the explosion particularly during COVID is the use of the knowledge management platform to drive the self service channels within organisations, be it their website, be it their chat bots, be it their kiosk. So basically, a lot of organisations have decided on what we call a single source of truth, whereby anything that's engaging with a customer through any channel comes from one location. Which makes it easy to maintain, ensures the security, integrity of that information, and just guarantees a consistent interaction with those end customers.

Next slide, please. So to give you an idea of where the solutions sit within the global market, in terms of product positioning, our employee experience platform is very much targeted at mid-market organisations with 200 to 1,000 employees. We've generally found good traction within the banking, health and retail industries as such. And the main driver for people wanting to purchase our solution or others is really around employee engagement. Do employees feel that they're part of the company, part of the culture? And particularly in COVID, that's a really a big requirement for a lot of businesses still struggling under the counter remote working conditions.

So remote working, the flexibility to have people working in office or external is a big part of having a platform that they can access from anywhere at any time. And obviously, centralizing the information is key to make sure that it's available wherever they are. Knowledge management is very much slightly different. It's very much focused on customer engagement, as I said before, it is designed to improve agent efficiency and it is really sort of grown as contact centres and service desk have increased particularly during COVID.

Next slide, please. In terms of the attractive news of the markets that we work within, as you can see the knowledge management solution operates between a $1.9 billion market segment, and that's growing around 22% at the moment. In terms of the employee experience, well, that's even much larger market segment as you can see $25 billion. And that's because it's a much more generalised solution and will be used by a larger group of mid-size and small size companies.

Next slide, please. When I look at the business, I always like to look at what their customer base looks like. And as you can see from ours, we have a very good mix of enterprise customers who have been with us for many years, as well as a large number of mid-tier customers. Overall, we have 270 clients around the globe and we have over 340,000 licensed users using our platforms as I sit here today. In terms of diversification, we're very lucky that we have customers within sort of six key sectors, and we also have geographic diversification. 25% of our revenues are derived from US, Canada and over 65% in Asia-Pac and 10% the rest of the world. So we're a well-developed well established company from a global sense.

Next slide, please. In terms of giving you an overview of financial summary, if we look at fundamentally the bottom row, this really is a summary of our performance as of the half year. We currently have at that time $5.9 million in the bank, we had an NPAT of $248,000 for the first half year of trading. And we had a total income at that stage of $2.4 million, as I sit here today, in April, we now have a projected annualised recurring revenue for the next 12 months, increased up to $5.8 million as such. We also that derived from predominantly our 270 customers. And if you look at the value of our customer base, you can see that the enterprise, including enterprise experience is very much on that $8,000 to 10,000 per annum. Whereas our knowledge management solution, which is more enterprise based is in that $30,000 to $150,000. So we have a good mix between the two platforms and we've had good results for the first half of the year.

The next slide, really just gives a summary of our financial metrics. You can see over the years, we look at the first graph, it shows what's happening with our annualised recurring revenue. And that's the key metric that we focus upon. As you can see, we have a tree of continual growth and expect over the next 12 months to have a significant uplift. In terms of our operational performance over the last six months, as you can see there, we have a consistent revenue growth in terms of total income, and we have been improving on our NPAT position over the last couple of years.

Next slide, please. So the question is where are we going as a SaaS technology company? The board and the company is very much focused on executing a growth strategy that we put in place a number of years ago, and it's focused on a four point growth strategy. Firstly, we're focusing on new customers acquisitions, particularly, in the knowledge management and employee experience in US and Canada. And obviously, in new parts of Asia-Pac, we're also focused on our success teams, on more upsell, more revenue being derived from our existing customer base. And also, the opportunity to cross sell to existing customers the other service that we've got. So we've got two revenue growth streams that we're focused on as a company. The third tier of our strategy really is about looking at offering, really expanding the solution so that they have capabilities and features that are more attractive to customers or to a wider audience of potential customers. So we're investing in the innovation in both technology platforms to make them better, to make them faster, to make them easier to use. And the fourth pillar of our strategy is obviously further acquisitions. We are obviously looking for aligned SaaS technology platforms that fit within our overarching information management, and we continue to pursue opportunities in that area.

Next slide, please. So just sort of rounding off, as you can see, here's a snapshot of our capital structure. As you can see, as of the 16th of April, we had a share price of 12.5% and the market cap of $26 million. You'll also note that we have a reasonably low number of shares on each issue and that's due to prudent capital management by the board over the preceding years, but you'll also notice that executive and employees have a significant percentage of the business. And we think that's important to align both executives and employees with our investors, and that's a trend we would like to continue as a business going forward. And as I mentioned previously, we have a solid cash position that we're sitting on and we're always looking to increase that through improved cash flow.

Next slide, please. So in terms of really closing out, why do I personally see Knosys as a great investment opportunity? Firstly, we're in, I think a terrific market, which is timely, which is relevant, particularly in this COVID environment. People are looking for solutions to help with remote working. People are looking for solutions to keep their business together. And this is a trend that started before COVID and we believe will continue post COVID. We have achieved a good blend of organic growth and opportunity as well as combined it with a good solid acquisition, increasing revenue. We've also managed to evolve our solutions so that they have AI as part of them, not from the terms to use the term the hype of AI, but practical machine learning elements that make the product stand out and differentiate them and give real benefit to the end customer. So overall, I think we're a quite an interesting proposition with looking forward to a very much better FY22. And we looked forward to people learning more about our business. So feel free to contact myself.

Next slide, please. Or Katie, more than happy to discuss the business with you further separately from this. And thank you very much, Clive for the opportunity.


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