Corel Corporation

Information about Corel Corporation

Published on June 16, 2007

Author: Tarzen

Source: authorstream.com

Content

Corel Corporation:  Corel Corporation Debola Badejo Bill Taylor Company Overview:  Company Overview Leading global packaged software company Estimated installed base of 40 million users in over 75 countries Provide affordable productivity and graphics and digital imaging software Software products are targeted at value-conscious consumers and small businesses Company History:  Company History Founded in 1985; IPO in 1989 Acquired WordPerfect in 1996 Privatized by Vector Capital in 2003 Acquired WinZip in 2006 Second IPO in 2006 Acquired InterVideo and Ulead in 2006 Company Products:  Company Products Productivity WordPerfect Office Suite WinZip iGrafx FlowCharter iGrafx Process Graphics CorelDRAW Graphics Suite Corel DESIGNER Suite Corel Painter Digital Imaging Corel Paint Shop Pro Corel Photo Album Corel Snapfire Plus Best Sellers:  Best Sellers These products account for about 80% of Corel’s revenue Financials:  Financials Share Price: $12.95 Market Cap: 319.36M P/E Ratio: 32.37 MSFT: 23.64; ADBE: 46.15; Industry: 43.33 EBITDA: $54.53M Profit Margin: 5.22% MSFT: 25.86%; ADBE: 21.20% Investment Fundamental:  Investment Fundamental Profit Margin A ratio of profitability: Profit margin allows investors to determine the percentage of revenues that result in a profits Net Income provides an absolute number and does not tell much about management’s efficiency However, profit margin provides a relative measure that can be compared among companies in similar industries A high profit margin indicates a more profitable company with better control over its expenses Investment Thesis:  Investment Thesis Competition: Microsoft, Adobe andamp; Google No organic growth; Acquisition-based growth Declining sales in the Packaged Software Industry Insecure relationships with OEMs Declining brand name exposure Competition: Microsoft:  Competition: Microsoft Microsoft Office is the standard in the productivity software industry Microsoft Office controls 97% of the productivity software market in North America Microsoft developed Microsoft Works to become its free alternative to MS Office MS Office 2007 will reduce the cost of earlier MS Office versions Vista introduces more media capabilities that reduce the need for some of Corel’s products Competition: Adobe:  Competition: Adobe Adobe controls 50% of the global packaged and digital imaging software market Photoshop is the clear industry standard for professional image editing Adobe caters to the high-end consumer market, while Corel identifies with small businesses and the low-end consumer market However, Adobe has begun releasing its low cost versions such as Adobe Photoshop Elements 5.0 And the low-end market is vulnerable to free alternatives Competition: Google:  Competition: Google Last year, Google launched Google Apps Package contains: Writely Word Processor, Google Spreadsheets, E-mail, Calendar, IM and Website Creation Software all for free Google will market product to small and midsized companies Online collaboration and storage will be the future of productivity software Google also launched Picasa, a digital photos manager Product is in direct competition with Corel SnapFire plus Will allow users to save their photos online Competition: Internet Software Companies:  Competition: Internet Software Companies Barriers to entry for software companies now deteriorating Regulators are enforcing the adoption of standards and software code sharing Microsoft is slowly but surely providing software information and adapting to open standards Consumers are increasingly purchasing and downloading software products online eliminating the need for physical distribution channels These developments are eroding the Corel advantage Internet software companies now able to market and sell products at reduced cost Software products are compatible with Adobe and Microsoft Major Internet Competitors:  Major Internet Competitors These companies are positioning themselves to become the low cost alternatives to Microsoft and Adobe. They represent a threat to Corel’s territory Acquisition-based growth:  Acquisition-based growth Corel maintained an average of 3% organic growth Management is not concerned with development of new product lines Current business strategy focuses on acquiring smaller companies Recent revenue increase based on WinZip and Jasc revenues Future company performance based on InterVideo revenues Corel will expand operations into Asia through InterVideo acquisition InterVideo, WinZip and Jasc:  InterVideo, WinZip and Jasc InterVideo Windows Vista includes all InterVideo’s product capabilities Windows DVD Maker, Media Center WinZip Industry standard, but revenue comes from one-time license purchases Jasc Paint Shop Pro does not offer the features that Photoshop does Adobe Elements offers similar features at the same price Adobe ready to release its new CS3 this year It will be difficult for Jasc to quickly integrate products to adapt to new CS3 formats Relationship with Vector Capital:  Relationship with Vector Capital Vector Capital acquired Corel in 2003 Restructuring process piled Corel’s debt from next to nothing to $140 million before IPO Vector seeks to use Corel as an acquisition engine By cutting cost, Corel secured more loans to payoff Vector’s $130 million issued dividend before IPO Vector Fund owns 72% stake in Corel Debt:  Debt Tech investors traditionally are growth-focused and debt-averse Vector Capital applying a standard private equity strategy to an industry that avoids it Declining Sales in Packaged Software Industry:  Declining Sales in Packaged Software Industry General trend away from packaged software spending and towards online distribution for consumers Businesses moving towards custom-made software Custom plug-ins and add-ons to graphics designers and publishers Packaged software sales growth: 80s to early 90s: ~25% annual 90s to present: ~13% annual Insecure Relationship with OEMs:  Insecure Relationship with OEMs Simplified versions of products are sold through OEMs Corel generates revenue from consumer upgrades Revenue is shared between OEM and Corel Dell accounted for about 12% of OEM sales Dell recently discontinued its packaging of WordPerfect InterVideo also lost its relationship with Dell and HP to Cyberlink Dell still continues to package Corel Paint Shop Pro, Snapfire Plus Maintaining relationships with OEMs presents numerous difficulties Revenue sharing agreement will also decrease overall recorded sales Any future setbacks from OEMs will adversely affect Corel Declining Brand Name Exposure :  Declining Brand Name Exposure In the late 1980s and early 90s, WordPerfect dominated the word-processing market CorelDRAW was the first professional-grade vector drawing program for the PC Microsoft released Windows and packaged Office WordPerfect sales fell drastically WP did not release a Windows version for 2 years Adobe’s image editing and desktop publishing branches are industry standards Adobe name makes Illustrator a serious alternative to CorelDRAW VAR:  VAR Susan Glinert CreativePro.com/CNET.com/ZDNet.com Sue Chastain, About Graphics Software Shelley, Utah.gov Legislative Webmaster Patrick, Best Buy Computer Sales Associate Matt, Digital Camcorder and Camera Sales Associate Risks:  Risks CorelDRAW is still a serious alternative in the vector drawing software market Customers loyal to the name Pace of expansion in emerging markets could offset decline in North American sales InterVideo and Ulead performance may offset WordPerfect sales decline Short Strategy:  Short Strategy Short the stock after its scheduled Q107 earnings release on April 12 First quarter earnings should reflect the hype of its new product releases and December 2006 acquisitions CREL will meet analyst expectations After the release, thesis points will begin to materialize in company performance Questions:  Questions Do not ask hard questions or I will eat your face!

Related presentations


Other presentations created by Tarzen

FastFood
24. 02. 2008
0 views

FastFood

Money Banking
14. 04. 2008
0 views

Money Banking

Nature nurture
04. 09. 2007
0 views

Nature nurture

tolkein presentation
04. 09. 2007
0 views

tolkein presentation

chapter08
16. 06. 2007
0 views

chapter08

Data Storage 1
16. 06. 2007
0 views

Data Storage 1

Best Practices
17. 04. 2008
0 views

Best Practices

Community Workshop Seminar
17. 04. 2008
0 views

Community Workshop Seminar

mohamed ariff and greg lopez
13. 04. 2008
0 views

mohamed ariff and greg lopez

20011105e1
10. 04. 2008
0 views

20011105e1

s2 dewulf
09. 04. 2008
0 views

s2 dewulf

AAAS
07. 04. 2008
0 views

AAAS

D200510 06 GermanETRforJapan
30. 03. 2008
0 views

D200510 06 GermanETRforJapan

sez10
28. 03. 2008
0 views

sez10

SouthAfrica
21. 09. 2007
0 views

SouthAfrica

Scanning Tunneling Microscope
21. 09. 2007
0 views

Scanning Tunneling Microscope

chem lab bonding 05
12. 10. 2007
0 views

chem lab bonding 05

ClassifyAnimals
12. 10. 2007
0 views

ClassifyAnimals

desc fashion en
18. 10. 2007
0 views

desc fashion en

36 Isaiah and the Mountains
04. 09. 2007
0 views

36 Isaiah and the Mountains

Lecture 6
05. 10. 2007
0 views

Lecture 6

Berlin Conference
26. 10. 2007
0 views

Berlin Conference

Vietnam
07. 12. 2007
0 views

Vietnam

mobisys tutorial hardware
29. 10. 2007
0 views

mobisys tutorial hardware

ne tutorial
01. 11. 2007
0 views

ne tutorial

Koranteng MFRD
04. 09. 2007
0 views

Koranteng MFRD

korea
07. 11. 2007
0 views

korea

Salma Hayek
12. 11. 2007
0 views

Salma Hayek

global stanton
22. 10. 2007
0 views

global stanton

Success risk factor
16. 11. 2007
0 views

Success risk factor

0738001
19. 11. 2007
0 views

0738001

Funny Not So
18. 08. 2007
0 views

Funny Not So

earthhistory
03. 10. 2007
0 views

earthhistory

Justice and Equality
14. 12. 2007
0 views

Justice and Equality

peda2
22. 10. 2007
0 views

peda2

Gavin cholera risk prediction
04. 09. 2007
0 views

Gavin cholera risk prediction

2006 09 13DeepakAgarwal
23. 10. 2007
0 views

2006 09 13DeepakAgarwal

Oak Hill2
04. 01. 2008
0 views

Oak Hill2

informedegestion2005
22. 10. 2007
0 views

informedegestion2005

ClosingSession2005
07. 01. 2008
0 views

ClosingSession2005

vogel games
07. 11. 2007
0 views

vogel games

Obesity and Risk Factor
07. 08. 2007
0 views

Obesity and Risk Factor

Linda Simoni Wastila
07. 08. 2007
0 views

Linda Simoni Wastila

mbti students intro only team
07. 08. 2007
0 views

mbti students intro only team

Module14
07. 08. 2007
0 views

Module14

mmo 42
07. 08. 2007
0 views

mmo 42

Localization Week 2
27. 11. 2007
0 views

Localization Week 2

Clinica
28. 12. 2007
0 views

Clinica

GMV DP Wizard
21. 09. 2007
0 views

GMV DP Wizard

Milner China IndiaGEP
16. 10. 2007
0 views

Milner China IndiaGEP

Lecture 31 Power Point
28. 12. 2007
0 views

Lecture 31 Power Point

sessionr 9 12 13 1107
24. 02. 2008
0 views

sessionr 9 12 13 1107

Making Your Home Safer
26. 02. 2008
0 views

Making Your Home Safer

contextualized learning
28. 02. 2008
0 views

contextualized learning

disarmament
04. 03. 2008
0 views

disarmament

ogot
07. 08. 2007
0 views

ogot

installing globus
19. 06. 2007
0 views

installing globus

JPW Talk AHM2005 MAIN
19. 06. 2007
0 views

JPW Talk AHM2005 MAIN

jensen rockwell seesymp02
19. 06. 2007
0 views

jensen rockwell seesymp02

ipv6 workshop plzak 28oct02
19. 06. 2007
0 views

ipv6 workshop plzak 28oct02

ipfrr kvalbein
19. 06. 2007
0 views

ipfrr kvalbein

Clast Mind L M 2210
19. 06. 2007
0 views

Clast Mind L M 2210

brochure 2
19. 06. 2007
0 views

brochure 2

Brandmeldeanlage
19. 06. 2007
0 views

Brandmeldeanlage

birnecker cms
19. 06. 2007
0 views

birnecker cms

belleville ppthistory
19. 06. 2007
0 views

belleville ppthistory

belleville ppt2K
19. 06. 2007
0 views

belleville ppt2K

launchevent final fnr
15. 11. 2007
0 views

launchevent final fnr

IETF 68 P2PSIP Agenda
19. 06. 2007
0 views

IETF 68 P2PSIP Agenda

MSM Slides2005
07. 08. 2007
0 views

MSM Slides2005

lacnic V APNIC Report
19. 06. 2007
0 views

lacnic V APNIC Report

learning style roles 2007 05 15
07. 08. 2007
0 views

learning style roles 2007 05 15

icse
19. 06. 2007
0 views

icse

Global Johnny Appleseed Project
02. 11. 2007
0 views

Global Johnny Appleseed Project

belleville flash
19. 06. 2007
0 views

belleville flash

NaTang Inverse
07. 08. 2007
0 views

NaTang Inverse

Ramos Lab Tour
04. 10. 2007
0 views

Ramos Lab Tour

interims 2003b
19. 06. 2007
0 views

interims 2003b

kao tai BASS 2004
07. 08. 2007
0 views

kao tai BASS 2004

Rhew02
03. 01. 2008
0 views

Rhew02

Dale Tongue
16. 06. 2007
0 views

Dale Tongue

CS598STK Terra
16. 06. 2007
0 views

CS598STK Terra

Computer Essentials
16. 06. 2007
0 views

Computer Essentials

Coming SL 7 Overview
16. 06. 2007
0 views

Coming SL 7 Overview

CLI220 Mark Minasi
16. 06. 2007
0 views

CLI220 Mark Minasi

bpm keynote
16. 06. 2007
0 views

bpm keynote

beyond soa
16. 06. 2007
0 views

beyond soa

Intro OO Neuf
19. 06. 2007
0 views

Intro OO Neuf

PBOCFrance051219alsd1
23. 11. 2007
0 views

PBOCFrance051219alsd1

MOS384 Sel 07 test
07. 08. 2007
0 views

MOS384 Sel 07 test

NT 512B 2
07. 08. 2007
0 views

NT 512B 2

CP1 Commo
16. 06. 2007
0 views

CP1 Commo

Mark Carpenter
07. 08. 2007
0 views

Mark Carpenter

ma chap8
07. 08. 2007
0 views

ma chap8

Basic2
03. 10. 2007
0 views

Basic2

IPAM concluding workshop
19. 06. 2007
0 views

IPAM concluding workshop

michael cantor
07. 08. 2007
0 views

michael cantor

ietf 63 enum validation v01
19. 06. 2007
0 views

ietf 63 enum validation v01

KSU Speech1
07. 08. 2007
0 views

KSU Speech1

Mumulus Presentation
07. 08. 2007
0 views

Mumulus Presentation

bethel
19. 06. 2007
0 views

bethel

Mgt 201 Personality Differences
07. 08. 2007
0 views

Mgt 201 Personality Differences

ISSUES presentation
19. 06. 2007
0 views

ISSUES presentation

internet sec
19. 06. 2007
0 views

internet sec

Sathaye
24. 11. 2007
0 views

Sathaye

kline
07. 08. 2007
0 views

kline

wg2 t6
23. 10. 2007
0 views

wg2 t6

KNIT
20. 11. 2007
0 views

KNIT

Multicam2
07. 01. 2008
0 views

Multicam2

bilingual poll march2004
19. 06. 2007
0 views

bilingual poll march2004

NASC1 Lucken
07. 08. 2007
0 views

NASC1 Lucken