Peter George Edwin Ayliffe – Chairman
Alastair Lukies – Chief Executive Officer
Lee Cameron – Deputy CEO & Chief Commercial Officer
Elizabeth Buse – Co-Chief Executive Officer
Bob H. Liao – Canaccord Genuity Ltd.
Gautam Pillai – Goldman Sachs (India) Securities Pvt Ltd.
Monitise Plc (OTCPK:MONIF) Board’s Appointment Conference Call June 4, 2014 4:00 AM ET
Ladies and gentlemen good morning and welcome to the Monitise call. There will be opportunities for question following the introductory remarks; the call is expected to last 30 minutes including questions (Operator Instructions).
Before we would like to remind you that certain statements made on this conference call contain Forward-Looking Statements. Whilst these forward-looking statements are made in good faith, they are based upon the information available to Monitise on the date of this call and upon current expectations, projections, market conditions and assumptions about future events. These forward-looking statements are subject to risks, uncertainties and assumptions by the Group and should be treated with an appropriate degree of caution.
I will now hand over the call to your first speaker Monitise’s Chairman, Peter Ayliffe.
Peter George Edwin Ayliffe
Good morning everyone I’m Peter Ayliffe, Chairman of the Board of Monitise and I would like to welcome you to this conference call where I’m joined by Alastair Lukies, CEO of Monitise, Lee Cameron, Deputy CEO and Elizabeth Buse who are delighted to welcome to Monitise today.
It was only a couple of months ago that we announced the new growth phase for the business, moving more to a product company and largely a subscription based business model, critical to the delivery of that growth phase is ensuring that we have the right capabilities within the business. We now have a very sizable existing business, which we need to continue to develop and operate.
Whilst of course we need to continue to do what I think we've so incredibly well to-date and that is mainly keep signing new customers and new relationships. We talked about the real importance of the need to get eyeballs as quickly as possible to deliver our 2018 objectives, which was to achieve 200 million customers an average revenue per customer of £2.50 and an EBITDA margin of over 30%.
So the Board and as both the executive directors and the non-execs were unanimous that want we needed to do is ensure that Al was free to focus on what he has done so magnificently for this business since founding it and that is the business development side, the investor, partner and industry relationships and the acquisition. And this very much plays to Alastair’s strengths and what he enjoys most from what I have seen working with him over the last few years.
So he remains CEO of Monitise PLC, however Al and the Board are also adamant that we should find someone with complementary skills who is a respected leader in the industry to help really develop this fantastic business of ours. We are really fortunate to be able to announce that one of the most respected individuals in payments is joining the group today, Elizabeth Buse to become CEO of Monitise Group. In my view, we now have two exceptionally talented individuals at the heart of the Monitise Group.
Alastair I believe is the leading expert in mobile banking payments in commerce and Elizabeth now a leading expert in global payments product propositions and marketing. Elizabeth was one of the most senior individuals in Visa Inc. I think importantly she really understands and knows big business businesses, the importance of 24/7 bank grade technology, the importance of process and the importance of customer relationships. At Visa Inc she was most recently Executive Vice President of Solutions and prior to that President of Asia Pacific, Central Europe, Middle East and Africa based in Singapore.
In addition, I’m delighted that Lee Cameron remains Deputy CEO and Chief Commercial Officer and will continue to focus on business development, acquisition and strategic relationships. We've all seen how effective the partnership of Al and Lee has been to this business and that we know will continue, but now it’s strengthened with the complimentary skills of Elizabeth.
The dual CEO role is not uncommon in software industries and works well where there are complimentary skills and clear lines of responsibility. Having seen Alastair, Elizabeth and Lee, who are carrying these roles and responsibilities, the respect they have for each other and the common shared vision for the business was outstanding, and I think this will work well for Monitise going forward.
The fact I’m convinced this is absolutely the right time for Monitise to make this move and it shows that we have the capabilities to deliver on what is quite an aggressive, but very exciting plan to create a market leading global business, but it doesn’t stop there. In addition, we are strengthening and diversifying the Board, we needed more global and retailing experience given our global and mCommerce ambitions.
I’m also therefore delighted to announce of Amanda and Paulette to the Board. Amanda Burton has been Global Chief Operating Officer at Clifford Chance, since 2010. She is also an experienced Independent Non-Executive Director, having been on the board of Galliford Try PLC, that’s FTSE 250 house building and construction and company since 2005, where she also held the posts of Senior independent Director and Chaired the Remco.
Paulette Garafalo has been the President of Brooks Brothers international, wholesale and manufacturing, since 2010, where she has been responsible for developing of global and retail business. Her experience in building a successful retail business will be invaluable to help us deliver our global mCommerce ambition. Based in New York, Paulette also has experience in other retail brands such Bally at Switzerland, Hickey Freeman and Salvatore Ferragamo.
So I really couldn’t be more delighted than to welcome Elizabeth, Amanda and Paulette to the Board of Monitise. I think we managed to acquire the services and some amazing globally experienced talented individuals. And we should leave no one any doubt about the ambitions that we have for this business.
So what I would like do now is hand over to the people I’m sure you would love to hear from and that is Alastair, Elizabeth and Lee. So we’ll start with you. Alastair.
Hi, thanks Peter very much and thanks for that great introduction. Thank you everybody that’s taken time of their day to be on the call, seeing the list of people that are on the call, many of you have been good enough to show an interest in Monitise for a long, long time and are consistently in touch with us on the journey, which means a huge amount to us a team, as you know as we continue to try and do something that we think is pretty groundbreaking and game changing globally in the space.
If I think back to 2007 when we went public, we demerged from Morse and [indiscernible], we were a company of about 70 people, we had revenues around a £0.5 million mark and our first consumers just starting to try some text message to see if getting a balance in the morning was a good thing before smartphone had even arrived and have you come forward to. Today we've grown the business 100 folds, we did $73 million of revenue loss here, 28 million consumers now habitually use our technology to stay better in touch with their finances and that’s just the beginning, we are just scratching the surface.
So we've come a long way, but as you will often hear me say we are at the foothills of the pyramids of the opportunity, we really are if you think about a clock face about one minute past midnight and that’s why we are just so incredibly excited and invigorated about the opportunity that lies ahead. Earlier this year as Peter referenced in his introduction, we raised some capital $100 million to accelerate what has been a long forecast, that we talked for a long time about Monitise being the Mobile Money leader in the space, could-based subscription in a annuity revenue stream business and we are accelerating as fast as we can towards that model.
We set the goals, Peter talked about them 200 million users, £2.50 by 2018 and we feel very, very good about that ambition. The big thing for me is that we are in a global space, the world gets small all the time and we have set ourselves up to really have the best opportunity of being the leading interoperable, [indiscernible] white-labeled platform in the space. And that is a very big ambition for any company for a U.K. Tech Company particularly and in a space that is incredibly complex, payment is not a simple space.
And as I have driven the business since founding it a decade are so ago, I have worked with a number of people around the world, I have worked with obviously people in banks and payments companies and I’m yet to have met anybody to comes close to Elizabeth, in terms of her understanding of the space, in terms of her universal respects an universe – universal is a very important word as is interoperability in the space that we found ourselves in, payment is all about 10% of the big numbers a lot quite of on a 100% of nothing.
And that takes particular mindset, it takes an element of humility, you need to make your customers and partners feel like heroes and there is genuinely in my mind no one better at doing than Elizabeth so, its one of the greatest honors I can remember that Elizabeth Buse agreed to join the company, me and the rest of the team in the entire task force of Monitise, entire workforce could not be more excited about this and I think Peter referred future complementary skills.
Those of you that have followed us for a few years know my background, we’re all about team sports, we’re a team of people that genuinely we get up every morning quite often we don’t have to get up, because we've not slept and stands shoulder-to-shoulder and ready take on the size of the opportunity and Elizabeth adds to that beautifully.
So I’ll hand over to her, thanks again for everyone taking your time out of your day.
Thank you, Al and Peter for your kind words. Those of you on the phone know that Monitise occupies a unique position in the Mobile Money ecosystem, it is one of handful a proven providers of bank grade mobile systems globally. My previous affiliation with Monitise as a Board member and as a client left me with tremendous respect for Monitise’s Technology, for its products, for it services, but above all for the people here. I have worked in developed markets, in emerging markets in front-tier markets and I have seen no company better placed than Monitise to capitalize on what’s happening in Mobile Money. And that’s why I am absolutely delighted to be joining the team today, to be joining this company and helping it realize its aspiration and the promises that it’s made to the investment community.
So I look forward to meeting you over the coming months and with that I would like to hand it over to Lee Cameron for some closing remarks.
Thank you, Elizabeth, we very much look forward to working with you. We have a month left of the current fiscal year to go and we reiterate our guidance of approximately 40% revenue growth in the period. The year to June 2015 will be pivotal year to Monitise, as we transition to the new technical and financial business model. And I look forward to communicating new milestones as the business accelerates and consumer adoption by our direct sales to banks and indirect sales for our strategic and channel partners including system integrators and financial processes around the world.
Operator, we would now like to open the lines for any questions.
Thank you. (Operator Instructions) The first question is from Bob Liao. Please go ahead.
Bob H. Liao – Canaccord Genuity Ltd.
Hi, Bob here of Canaccord Genuity. Just wanted to first of all provide a question I guess most directly to you Elizabeth and it’s about the recent strategy change at Monitise. So I wanted to get your initial thoughts on that and the second question was just in terms of the Co-CEO structure, just wanted to see how you might accommodate that well in terms of not many companies having that sort of structure and whether there is any way, you might be able to sort of speed-up decision making or whatnot despite having sort of several heads.
Sure, and I think – and thank you Bob for your question, and I think that those questions are quite related, the strategy change I think is absolutely spot on and I mentioned in my remarks that Monitise occupies a unique space with the products and services and technology and people. I think that they are possibly the only company that can pursue the strategy that the management team has laid out and the goals that they’ve laid out for 2018, but I think, recognizing that that is an ambitious strategy that are the change to the existing business model, they also recognized as Peter said including the Board that it requires some additional management talent and as you may know the places where dual CEOs have worked well are those places where responsibilities are very clear.
Although, all of us in the Board jointly own the strategy, which is critical, the execution of that strategy is divided pretty clearly, my background has been in operations, it has been in product, it has been in running [indiscernible] and that’s something that we have to do at a very significant scale. At the same time, we have to accelerate the rate at which we are adding new partners in new categories, we have to add the rated at which we are adding new capabilities, which have been laid out in the strategy and we have to engage even more fully globally with the investor community, those later things are what Al is going to be focused on and I of course need to be focused on the operation and execution of the business.
Bob H. Liao – Canaccord Genuity Ltd.
Great, thank you.
(Operator Instructions) The next question comes from the line of Gautam Pillai. Please ask your question.
Gautam Pillai – Goldman Sachs (India) Securities Pvt Ltd.
Hi, Gautam Pillai from Goldman Sachs. Thanks for taking my question. Congratulations Elizabeth on the new role. My question is basically on Monitise’s go-to-market strategy, so do you foresee any changes of organization in the U.K. or internationally in the near-term given the leadership and also some color on the business model transition would be great. Thank you.
Maybe I will start that and then I hand it over to Al to comment, so I think it’s premature at this time since I’ve been in this role for a couple of hour to comments on what any changes might be, but I think its really important to note something that you all know well and that is, this has been an enormously successful company. So, any changes we make we are going to make very carefully, and very thoughtfully, because we don’t want to do anything that sidetrack of success, I mean if anything we want to accelerate it. So, we will be looking at structures, but there isn’t anything that we anticipate in the immediate term.
Thanks Elizabeth. Hi, Gautam its Al, thanks for the question and thanks for taking the time out. I think as Elizabeth says obviously we set out a path, one of the things that I guess I’m sort of – the few things we are proud of as you know where always very aware of how far we've got to go, we remain a debt free technology company seven years into our public listing with the market cap over £1 billion, we consistently as I said a few minutes ago, keep in mind in people right at the beginning of the journey,
So, that in itself is unique in our space every other mobile banking vendor out there has either been consolidated or just ran out of gas. So, we’ve got ourselves in a strong position, but I think probably more importantly to your question, we’ve been completely consistent about our strategy and our message, which is the Mobile Money is three things, it’s Mobile Banking, it’s Mobile Payments and it’s Mobile Commerce.
Nowadays, and we talked about the seven years ago, and it’s become absolutely true, just like Google adopted your home screen on the internet, Google became the place you started your day, because that’s where the easiest way you would navigate the internet and therefore they become the conjurate between pervasive goods and buyers of goods and that’s advertised in normal language.
Monitise has the same opportunity from the perspective that we run and build and deploy for the world’s leading banks, applications that become from screen apps, on your mobile phone you’re only going to have a small number of apps, and your banking app is going to be one of them that gives banks and the partners of our in the payments industry an amazing opportunity to get consumers access to the goods and products that they want when they want them, which makes it an amazing channel to mCommerce to really comes a life.
And so, we’ve never changed our view on that you all know the pyramid, you have seen it lots of times on the slides we produced, you start with mobile banking and then adding mobile payment, we have partnership with Visa and MasterCard and many other payment companies and then you bring in mobile commerce on top of it. I don’t think our strategy is going to change, all we are talking about here today is accelerating that strategy even faster and continuing to look for partners, other companies, other relationships to help us get there and I don’t think you’re going to see that change at all, while Elizabeth and I are working together.
Gautam Pillai – Goldman Sachs (India) Securities Pvt Ltd.
Thanks Elizabeth, congratulations again.
Thanks very much. Good, okay I think that’s the question obviously we’ll see many of you over the next two weeks or months. Thanks again for your support and you know where we are if you need ask any more questions, we’ll close call there. Thank you very much.
This that does concludes today’s conference call. Thank you all for participating. You may now disconnect.
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