Good morning, everyone. Thank you for joining our conference call and webcast for our 2020 full-year results. We appreciate you joining us today. Earlier this morning, we lodged with the ASX our audited financial accounts and investor materials, which are available from our investor center at wisetechglobal.com. With me today is our CEO and Founder, Richard White, and our Chief Financial Officer, Andrew Cartledge.
Today, we'll cover the highlights of the year, along with a detailed discussion of our FY20 financial performance, and provide you with an update on our strategy and outlook, after which we will all be available to answer your questions. Note too that we are planning a digital investor day later this year, where we will provide further detail and insights on our strategy, product development pipeline, and acquisition integration progress. I'll now hand the call over to Richard. Thank you.
Good morning, everyone, and thank you for joining us today for our FY20 results presentation. The early stage of the COVID-19 pandemic resulted in significant challenges not just for WiseTech, but for almost all of our customers, large and small, and the many communities we serve around the world. You'll recall that when we announced our first-half results in February, our real-time data sets allowed us to be among the first companies to call out the dramatic impact of COVID-19 on industrial production and global trade, and the likely impact on many businesses, including our own. As a result, we provided revised guidance for FY20 at that early time. In April, again supported by our data sets, we provided a further update to the market and reaffirmed our FY20 guidance.
We noted on that occasion that in addition to the immediate short-term challenges posed by the pandemic in terms of disruption to supply chains and the initial sharp reduction in transaction volumes, we had observed, as predicted, a recovery in transaction volumes and had begun to see the mounting pressure within the global logistics sector for structural change. This pressure has continued to increase with growing demand for globally capable, highly productive, integrated logistics technology, a demand that is perfectly matched to CargoWise. Given the challenging COVID-19 environment, I am pleased to report that WiseTech delivered total revenue growth in FY20 of 23% and EBITDA growth of 17%, both in line with our guidance. Ahead of Andrew talking you through the financials, there are a few highlights that I would like to call out.
I am pleased to report that despite disruption to global trade resulting in reduced transaction volumes, our organic growth was strong, up 20% on the prior year, reflecting increased usage by existing customers and growth in new customers. Complementing our organic revenue growth is our strategic acquisition program, which has delivered 25% revenue growth in FY 2020. Despite the global trade disruptions caused by the pandemic, our EBITDA margins were above the top end of our guidance range of 30%, with CargoWise EBITDA margins at 48%, a testament to the strength of our core offering. This resulted in our NPATA, a good indicator of our performance given our significantly increased R&D investment, increasing 3% to AUD 64.6 million, an excellent result in the current environment. Our business is built on strong financial foundations. We have a healthy balance sheet, robust cash flows, and ample liquidity.
As at June 30, 2020, cash was AUD 224 million, and we had no outstanding debt, with a AUD 190 million undrawn debt facility in place, plus a further AUD 200 million accordion available to us. This provides us with the financial firepower to fund our future growth and to leverage opportunities that arise as we transition into a post-COVID world. Our operating cash flow, the best indicator of earnings quality, was up 16% on FY19. Our operating cash flow conversion rate at 116% demonstrates the strength of our high-cash generative operating model. In recognition of the continued strength of the WiseTech business, the board has declared a fully franked ordinary dividend of AUD 0.016 per share.
The final dividend, coupled with the interim dividend of AUD 0.017 per share, equates to a total FY20 dividend of AUD 0.033 per share. Let's look now at the impact of COVID-19 on the broader logistics sector and our response. As mentioned earlier, while there has been some short-term pain in the form of disruption to supply chains, the pandemic has also accelerated the long-term trend away from legacy systems littered with bolt-together micro-point systems and inherent cybersecurity risks, creating significant near and long-term global opportunities for WiseTech. Initially, the unexpected outbreak of COVID-19 and the ensuing lockdown restrictions had a distinct negative flow -on effect on industrial production and related supply chains, resulting in a temporary slowing of economic activity globally.
We saw volatility in global logistics markets and a marked slowdown in the movement of goods across all modes of transport. Lower transaction volumes were recorded in late January and February due to the impact of COVID-19 in China, and in March through May due to the impact of the rest of Asia, Europe, the Middle East, Africa, and the Americas. By June, however, a moderate recovery was evident, with transactions continuing to increase. Pleasingly, by the end of July, we have seen CargoWise user numbers return to close to pre-COVID levels. It is also notable that container bookings at the port of origin are now higher than pre-COVID levels, due in part to the recovery in industrial production and in part by the continued growth of a large cohort of CargoWise Global customers.
Note, there is a strong correlation between these increased export volumes and transaction revenues within CargoWise, albeit delayed by about six to eight weeks. Governments globally responded to the pandemic with restrictions designed to contain the spread of infection, resulting in increased complexity and risk for logistics service providers. At the same time, demand pressure intensified to get goods through. The effect of these dual pressures has provided a catalyst for many logistics providers to pivot their business models. Once the impact of COVID-19 was dealt with, it became even more critical for logistics providers to remove legacy systems, which rely on many small, poorly integrated, aging third-party systems with dangerous cybersecurity risks and flaws. CargoWise is well positioned to provide a highly integrated, fully digital system for logistics providers, designed with global visibility, increased productivity, and risk reduction.
Further, CargoWise easily enables remote working, a critical issue in the current environment. This is the new normal, and facilitating these many improvements is CargoWise's greatest strength. We saw the effect of these improvements firsthand with a number of our large logistics customers, such as DHL Global Forwarding and DSV Panalpina, both of whom have expanded their global rollouts on the CargoWise platform. We have also seen increased demand among our larger CargoWise customers for the accelerated development of customer co-funded CargoWise product enhancements alongside our own R&D investments, to better and more rapidly enable them to navigate the challenges posed during the pandemic.
We have been agile in our response, increasing our development team's productivity by more than 10% since moving to remote working, launching over 1,100 product enhancements at FY20, and increasing the scalability and security of our platforms. Because of our digital platform, WiseTech's global offices and teams move rapidly and successfully to work from home, and due to the productivity gains and the success of the new model, we have committed to a hybrid home-office working model in FY21. The power and completeness of CargoWise has also enabled many of our customers to move swiftly and successfully to a work-from-home environment. Last but not least, throughout this period, we were focused on preserving cash, strengthening our balance sheet, and reducing costs, all whilst continuing to invest in our growth and build on our competitive position.
So what does all this mean? WiseTech's opportunity for growth is vast. Our focus has been on leveraging the prevailing conditions and the increased demand amongst logistics providers for efficient, real-time digital solutions. Market penetration of globally integrated automated logistics solutions is still in the very early stages. Our immediate goal is to leverage the pressure on global logistics providers to lift the adoption of CargoWise. I am pleased to report that throughout FY20, we continue to grow our market penetration by signing up five new customers with global contracts in the last six months. The new freight forwarding and customs global rollouts are with Seafrigo Group, 12 countries, Aramex, 35 countries, a. hartrodt, 42 countries, and Top 25 Global Forwarders, Hellmann Worldwide Logistics, 42 countries, and CEVA Logistics, 59 countries.
In addition, our existing large customers increased usage of the CargoWise platform by adding transactions and seats, adopting additional modules and functions, and increasing the demand for accelerated development and delivery of customer co-funded product enhancements. Overall, 42 of the top 50 global third-party logistics providers are now WiseTech customers, as are all of the top 25 global freight forwarders, with 23 of those using the CargoWise platform. We have continued our strong investment in product innovation, with 51% of our people and 37% of our revenue invested in our R&D program FY20. This delivered over 1,100 product upgrades and enhancements to CargoWise, as well as technology developments across geographic footholds and global adjacencies in areas of global customs, rates management, border compliance, transport management, and landside logistics.
I will pause here to note that due to the difficulty resulting from COVID-related disruptions to supply chains, we decided to delay certain new product launches scheduled for the second half of 2020 that would have been difficult to commercialize while customer staff worked from home. Andrew will talk about the short-term impact this had on our FY20 revenue growth, noting that we will leverage the opportunity in FY21 to reschedule these launches. Complementing and enhancing our organic growth of CargoWise has been our acquisition strategy. In FY20, we completed five strategic acquisitions across North America, South Korea, Poland, and Switzerland, which have delivered significant development resources to optimize our technology pipeline and expand our geographic footprint.
These acquisitions have delivered additional skills in the forms of specialist technology teams and access to intellectual property that we can converge with our own technology and faster entry into markets and relevant customer bases. In addition to the five acquisitions completed in FY20, we were also able to prudently renegotiate and partially or fully close out earn-out obligations associated with 22 of our acquisitions to allow more flexible management of the new situation. This involved restructuring these earn-outs to replace nearly all of the cash payments with equity, enabling us to better align these acquisitions to our CargoWise technology pipeline, to the interest of our shareholders, and to improve our overall liquidity. Importantly, through FY20, we have also delivered on disciplined financial management.
Actions taken include preserving cash and fortifying our balance sheet, executing cost savings, strengthening our leadership team, and significantly increasing our R&D investment. We grew to over 17,000 customers across the group by the end of FY20, and CargoWise has expanded to 160 countries, a significant footprint to build upon. I'll now hand over to Andrew to talk through the financial results.
Thank you, Richard, and good morning, everybody. Starting with an overview of our income statement, as Richard mentioned, total revenue grew by 23% in FY20 to AUD 429.4 million, in line with our guidance. Our core CargoWise offering continued to achieve strong year-on-year growth, delivering FY20 revenue of AUD 263 million, up 20% on FY19, despite the challenges posed by the pandemic, which I will cover in more detail in the next slide. This growth reflects solid gains in new customers and deeper existing customer penetration. Our strategic acquisitions also contributed, with revenue attributable to acquisitions, up 29% in FY20 at AUD 166.4 million. Gross profit for the year was up 23% on FY19, driven mainly by organic revenue growth and the full period impact of FY19 acquisitions.
A strong performance in light of the impact of COVID-19 on the global logistics and supply chain sectors in the second half of 2020. Of note was our CargoWise gross profit margin, which increased one percentage point to 92% despite the challenging COVID conditions. Our lower margin acquisitions businesses held the overall gross profit margin flat on the prior corresponding period at 82%. It should be noted that our acquired businesses generally have higher product and service support costs and lower leverage due to their smaller size and commercial license model, which means they typically have a lower gross profit margin than CargoWise. For each business we acquire, we expect the dilutive impact of the existing gross profit margin to reduce over time as they integrate with or convert onto the CargoWise platform.
This transition occurs over a number of years. EBITDA was up 17% and in line with our guidance at AUD 126.7 million, a solid performance given the macroeconomic conditions since late January 2020. This includes a AUD 2 million FX benefit versus guidance and a one-time EBITDA benefit of AUD 6.4 million versus FY19 from the implementation of AASB 16 leases, which was offset by an increase in depreciation and finance costs. EBITDA margin of 30% was above the top end of the guidance range, reflecting 2H20 cost savings to offset the pandemic headwinds. It was particularly pleasing to see our CargoWise EBITDA margin remain in line with FY19 at 48%, despite the disruptions to global trade in 2H20, demonstrating the strength of our CargoWise offering.
Moving down the table, you can see that our depreciation and amortization charges increased by 66% in FY20 due to increased R&D investment, significant multi-year R&D project completion, including Glow, amortization of intangibles relating to our acquisitions, and our AASB 16 lease accounting transition. It's worth pausing here to discuss the fair value gain recorded in the year that had a significant impact on net profit after tax. As Richard mentioned, COVID provided the impetus for us to renegotiate and fully or partially close out the earn-out obligations associated with 22 of our acquisitions. The renegotiation of these earn-out obligations, along with adjustments in 1H20, delivered a fair value gain of AUD 111 million that is non-cash and not taxed.
This resulted in statutory net profit after tax increasing by 197% from AUD 54.1 million in FY19 to AUD 160.8 million in FY20. Excluding this fair value gain and the associated finance costs of AUD 2.9 million net of tax, underlying NPAT was AUD 52.6 million in FY20, which was flat on FY19, reflecting increased investment in R&D during the year and the amortization of acquisitions, resulting in a 66% increase in depreciation and amortization. A better indicator of our performance is NPATA, which shows our operating performance excluding amortization and interest expenses associated with our long-term investment in the acquisitions and the fair value gain. NPATA of AUD 64.6 million was achieved in FY20, up 3% on FY19, a solid performance given the prevailing COVID-19 environment.
Earnings per share based on NPATA were AUD 0.202 per share, down slightly on FY19, reflecting the issue of new shares in 2H19 and FY20. EPS based on underlying NPAT was AUD 0.164 per share, down 4% on FY19, reflecting the increased number of shares on issue. Let's take a closer look now at the financial impact that COVID-19 had on our business. As Richard explained, the unexpected outbreak of coronavirus at the start of 2020 and the effective global shutdown adversely impacted industrial production, supply chains, and economic trade across the world.
We saw delayed execution of logistics activities, resulting in reduced transaction volumes, and as a result, we decided to delay the launch of new products planned for 2H 20. This meant that we forfeited an estimated AUD 10-15 million of revenue growth in FY 2020 that was expected to be generated from these new products. In terms of our recurring revenue, you can see that the growth rate slowed from 10% in 1H 20 to 5% in 2H 20. This equates to approximately AUD 10-20 million of forfeited recurring revenue, reflecting the temporary reduction in supply chain volumes and transactions as industrial production stalled due to the COVID impact in the first half of calendar 2020.
Pleasingly, we've seen a moderate recovery in June, with momentum improving and continuing in July, with recent sea freight container booking volumes processed at origin via CargoWise now above our volumes from the 2019 peak shipping period of October and November. Interestingly, COVID's impact on non-recurring revenue in 2H20 was more favorable. You can see that in 1H20, our non-recurring revenue declined 13% on 1H19, reflecting a decline in one-time licenses in our acquired businesses. It should be noted that our acquisitions tend to have higher levels of one-time licenses and support services revenue. We anticipate that these sources of revenue will flatten and reduce over time as we transition these acquisitions across to our CargoWise platform.
In 2H20, you can see 38% growth in our non-recurring revenue driven by growing demand from CargoWise customers for the acceleration of development and delivery of customer-funded product enhancements ordered in calendar 2019. This basically relates to larger customers paying for technology developments in our pipeline to ensure early delivery to better enable them to navigate the logistical challenges posed during the pandemic. What's important to appreciate about these enhancements is that they are deployed across the global CargoWise platform and eventually made available to all customers, thereby driving future recurring revenue growth. This growth in our non-recurring revenue in 2H 20 had the effect of decreasing the proportion of recurring revenue in 2H 20, albeit in the context of a higher total revenue base.
To address the lower revenue growth rates due to COVID, we focused on delivering cost savings in 2H 20, which included lower travel and facility spend, reduced new resource onboarding, and adjusting incentives for senior management. Looking ahead to address the increase in demand we've seen among our large customers during the pandemic for digitized solutions, we've allocated additional R&D resources in FY21 to accelerate CargoWise product enhancements for these customers and to drive future growth in transactional revenue. Moving on now to a more detailed look at the composition of our revenue growth during the year, CargoWise generated AUD 43.4 million of revenue growth in FY20. This includes AUD 11.4 million foreign exchange benefit, which is broadly in line with the AUD 9.2 million FX benefit reported in FY19.
Revenue growth was achieved across all customer cohorts and represents 20% growth over FY19 of AUD 219.6 million. Of this, AUD 31 million was revenue growth attributable to existing CargoWise customers, reflecting increased demand for accelerated development and delivery of co-funded product enhancements. Increased customer usage of the CargoWise platform as customers continue to roll out and grow, and adoption of new products and features that we launched in FY20, including over 1,100 new product enhancements, a 32% increase versus FY19, reflecting our increased investment in R&D and large lift in productivity. AUD 12.4 million of organic revenue growth was attributable to new customers, an increase of 61% on the AUD 7.7 million of new customer growth delivered in FY19. This growth demonstrates the strong opportunity pipeline for CargoWise, in particular with larger freight forwarders.
All new CargoWise customers use the transaction-based seat plus transaction licensing revenue model, and I'm pleased to report that in FY20, we significantly progressed the conversion of CargoWise customers on the prior module user license to STL. Revenue from acquisitions grew by AUD 37.8 million, reflecting the AUD 27.6 million full period impact of the 14 acquisitions completed in FY19. The five acquisitions completed in FY20 delivered AUD 10.3 million of revenue growth, and the acquisitions completed in FY18 and prior delivered a modest net reduction in revenue. Turning now to our operating expenses, you can see on the slide three graphs charting our operating expenses year-on-year since FY16 across three areas: product design and development, sales and marketing, and general administration.
Overall, our operating expenses were up, reflecting the inclusion of expenses relating to the consolidation of our FY19 and FY20 acquisitions and increased R&D investment. Our sales and marketing expenses were up from AUD 44 million in FY19 to AUD 57 million in FY20, equating to 13% of revenue in each respective year. The FY20 sales and marketing expenses included AUD 6.5 million, reflecting the full period impact of FY19 and FY20 acquisitions and the rebrand of WiseTech and CargoWise for around AUD 500,000. The remainder of the spend relates to investments to support CargoWise's geographic expansion, multilingual capabilities, and growth into new technologies.
Our general and administration costs increased from AUD 68.3 million to AUD 84.1 million in FY20, representing 20% of revenue, which was in line with FY19. The FY20 G&A costs reflected the full period impact of FY19 acquisitions and costs from newly acquired businesses, which had their own G&A costs, costs of key management teams for strategic acquisitions, headcount additions in finance, people administration, and IT to support our global expansion, and increased compliance and regulatory costs such as higher D&O insurance premiums. Excluding M&A costs, our G&A expenses were 18% of revenue in FY20. In terms of product design and development expenses, you can see our continued commitment year-on-year to increasing our investment in R&D to drive development of product features and enhancements.
Our product design and development expenses increased by 28% in FY20 to AUD 84.9 million, reflecting our significant ongoing and accelerated investment in the development and maintenance of CargoWise, greater investment in expanding and retaining our skilled development workforce, and an increase related to acquired businesses, which typically have higher levels of maintenance and support costs. Let's take a closer look at our R&D investment. You can see from this graph the year-on-year increase in our investment in R&D on product development and enhancements. In FY20, we increased our R&D investment by 41% from AUD 130 million in FY19 to AUD 159.1 million in FY20. This represents 37% of our revenue for the year.
Our FY20 R&D investment delivered over 1,100 product upgrades, up 32% from FY19, for our CargoWise platform and utilized our 40 development centers worldwide to build out our technology assets and ensure an expanded core platform with enhanced scalability, functionality, productivity, and performance. You will note that our capitalized development investment rose significantly in FY20, up 58% to AUD 74.2 million from AUD 46.9 million in FY19, reflecting increased commercialization of our technology assets, such as product developments focused on extending CargoWise functionality, acquisition product integrations, international logistics, international e-commerce, and building out our global customs capability, including native customs builds in Asia, Europe, and Latin America. Turning now to our balance sheet strength.
You can see on this slide our strong liquidity position with AUD 223.7 million in cash and AUD 190 million undrawn debt facility in place, as well as an additional AUD 200 million accordion, providing ample financial flexibility and headroom. Our receivables were slightly up on FY 2019, in line with revenue growth. To date, we've not seen significant COVID-related delinquencies. However, in the interest of caution, we've taken a minor increase in our bad debt provision to protect against potential future losses. I would like to now take a moment to talk about Goodwill and the renegotiation of our acquisition earn-outs.
As I mentioned earlier, COVID provided the impetus for us to renegotiate and fully or partially close out the earn-out obligations associated with 22 of our acquisitions, and we were able to restructure these to replace nearly all cash payments with equity, thereby improving our overall liquidity. This had the effect of reducing our contingent consideration liability and, along with adjustments in 1H 20, delivering a fair value gain of AUD 111 million and AUD 2.9 million in associated finance costs net of tax. It did not, however, affect Goodwill.
As required under AASB 136, Goodwill is tested for impairment annually or when an impairment indicator arises. There has been no significant change to the forecast cumulative cash flow generation of these assets, and therefore no impairment has occurred. In the appendices to this presentation, you'll find a page that sets out the different time points and metrics adopted under AASB 9 and AASB 136 that explains in further detail the rationale for why the renegotiation of earnings resulted in a reduction in contingent consideration liability but had no impact on Goodwill. Before I wrap up today, I'd like to talk briefly about our strong operating cash flows. Over the past five years, the business has delivered AUD 454 million of operating cash flow, as well as AUD 398 million of EBITDA.
O ur FY20 operating cash flows were up 16% on FY19 at AUD 146.3 million, a testament to the quality of our earnings and the strength of our underlying operating model. A significant portion of this, over AUD 140 million, was reinvested in long-term growth initiatives, such as AUD 70.4 million invested in R&D and the development and expansion of our commercializable technology, AUD 20.1 million invested in our global footprint, including data centers and IT infrastructure, to enhance scalability and reliability of the CargoWise platform, increasing capacity for future growth, and AUD 57 million invested in new acquisitions and contingent payments for prior year acquisitions.
FY20 net cash flows from operating activities were AUD 129.9 million, up from AUD 112.5 million in FY19. Our free cash flow was down 27% on FY19 due to the increased investment in capitalized product development costs that I spoke about earlier. This brings us to our closing cash balance at 30 June of AUD 223.7 million, which, along with our undrawn AUD 190 million debt facility and AUD 200 million accordion, provides us with significant liquidity and the ability to fund our strategic growth opportunities. On this note, I'll hand it back to Richard, who will provide you with an update on our strategic focus and the outlook for the business.
Thank you, Andrew. As mentioned, the COVID-19 challenges faced by global logistics providers are accelerating the longer-term trend away from legacy systems littered with bolt-together micro-point systems and inherent cybersecurity risks towards industry consolidation. Within this environment, we are seeing increased demand among large global logistics providers for technology solutions that drive cost efficiencies, improve staff productivity, and mitigate risk. CargoWise has these attributes deeply embedded in its DNA and also facilitates management's ability to plan, visualize, and control global operations. As a result, we're ideally placed to address this growing demand with our logistics execution platform and 40 development centers continuously focused on integrated global capabilities that improve productivity, functional depth, and rich data-driven automation.
CargoWise enables manageability, regulatory compliance, and risk mitigation. You can see on this slide that the foundation was established with the launch of CargoWise One in 2014. This was followed by our ASX listing, raising AUD 125 million to fund our expansion strategy. During the IPO period, we continued to add new enhancements to the platform. We expanded our global workforce, signed the world's largest logistics providers in DHL Global Forwarding, and doubled our revenue. Since 2018, we have almost tripled our global workforce to 2,100 staff and established 40 development centers as well as completing 34 strategic acquisitions.
We have invested over AUD 348 million in R&D, expanded further into new markets, and established domain leadership in global logistics execution technology, all of which has helped drive further global contract wins for the rollouts of CargoWise. Looking ahead over the next three years, we will remain focused on winning further global CargoWise rollouts, targeting the top 25 freight forwarders and the top 200 logistics service providers. This year, we will commence a multi-year effort to extract efficiencies from our 40-plus acquired operations, remove duplication across functions and platforms, and bring all our acquired platforms into our data centers. More than 30 customs builds are scheduled to be completed as CargoWise native, along with new engines and modules and thousands more features to the platform to further drive the evolution of the CargoWise platform.
During this next phase, we will continue to launch customs clearance processes natively within CargoWise into a substantial set of geographic footholds and commence staggered conversions of acquired customers. We will also add significant capabilities to our Neo platform that is planned for early release later this year. We have a strong track record of delivering on our strategic commitments and are focused on continuing this. I'd like to spend some time now on the opportunity that is available to us. With the penetration of fully digital and highly automated global logistics solutions still in the early stages, the opportunity for growth is vast. You can see on the left-hand side graph the progress we have made over the past 10 years plus in signing up global rollouts for freight forwarders and the significant ramp-up that has occurred.
It took us more than a decade to sign up the first seven globals, but momentum has been gaining pace. We have now secured five new customers committed to CargoWise global rollouts in the past six months alone. The graph on the right-hand side demonstrates the customer journey. You can see that new large customers take multiple years to rollout CargoWise across the global business. As the rollout progresses, usage and transaction revenues continue to grow with customers progressively adding new countries, adopting new modules, and implementing our productivity tools. This is evident with our large logistics customers, DHL Global Forwarding and DSV Panalpina, both expanding their global rollouts on CargoWise in FY20.
As of today, we have more than 20 large global freight forwarders, 11 of which are in the top 25, who have either completed their rollouts or are currently in the process of a global rollout on the CargoWise platform. There is a significant runway available in both the top 25 freight forwarders, the top 200 logistics providers, and other international and domestic logistics segments. So we are still in early penetration stage, and the opportunity for growth remains significant. We have a strong pipeline for further global rollouts across the top 25 global freight forwarders and the top 200 logistics providers, which we are actively pursuing, having established a significant channel partner footprint across 46 countries focused on referring, promoting, or implementing our platform and supporting our global rollouts and expansion activities.
In the past, when we talked about global rollouts, it was largely driven by our powerful freight forwarding product capability. Now, however, CargoWise also includes global native customs and transit warehouse and contract warehouse modules. Our highly refined and productive R&D and product development capability is fundamental to our business. It is the key to our competitiveness and customer attraction and retention. This is why we are so focused on R&D and product development. We are continuing to expand a truly global solution that is capable of operating across borders, regulatory boundaries, and freight modes.
We have product-focused development teams around the world concentrating on deepening our already market-leading international freight forwarding capability, building additional key countries and localizations for customs and border compliance, extending CargoWise functionality into new adjacent modules, functions, and enterprise capabilities, building out the ecosystem of whole-of-cargo chain data-enriched automation, straight-through process integration and whole-of-system visibility, and developing the next-generation global engines for schedules, rates, bookings, tracking, invoicing, and reconciliation. I am pleased to report that we are progressing well with our international e-commerce offering, currently achieving shipment volumes of approximately two million consignments per month, and we expect this to continue to grow strongly. In FY 2020, we commenced expansion of the e-commerce offering outside Australia, launching in New Zealand with customers live and in production, and in the US, which is showing a strong sales pipeline.
We are also focused on landside logistics optimization and transport management systems with CargoWise Land Transport product development. In our longer-term pipeline, we are building out our global integrated platform for consumers of logistics services, CargoWise Neo. The development of Neo is significant and will progress over a number of years. At this stage, early release to select beneficial cargo owners via our existing customers is planned for the end of this year. We will continue to focus actively and invest in machine learning, natural language processing, process automation, and guided decision-making. Our vast volumes of transactional and global data and trade data sets provide us with industry insights that can be leveraged to enable enhanced compliance, due diligence, risk assessment, and risk mitigation. As I mentioned earlier, since 2018, we have completed 34 acquisitions, making a total of 38 since the IPO.
Because of this, we now have significant development product and market capabilities that allow us to build out and optimize our technology pipeline and leverage our expanded geographic footprint. Accordingly, our key development focus is on the integration of these acquisitions onto our CargoWise offering, with the pace of future acquisitions slowing substantially and becoming more opportunistic. Integration is a multi-stage, multi-year process. With the operational integration of many of our acquisition assets well progressed or completed and most earn-outs closed out, we are now focused on leveraging the acquired technology and skill sets to expand the CargoWise platform with native components built tightly on the CargoWise platform. We are also focused on delivering further operational and cost efficiencies, including elimination of duplications and inefficiencies across all functions, growing revenues and enhancing margins within all business units.
Our acquisition strategy is delivering tangible benefits. 24 of our acquisitions have enabled us to build customs and border compliance capabilities in many countries, covering up to 90% of manufactured trade flows. We have successfully acquired deep product capabilities in key adjacencies that will enable us to further build out CargoWise, covering global shipping, land transport, carrier rates and contracts, contract warehouse, landside logistics, container management, compliance, and machine learning. Given our market position, product strength, and industry pressures from COVID-19, in FY21, we will focus on the three Ps: product, penetration, and profitability. In order to drive product, we will lift development focus and move additional resources to the CargoWise product suite, CargoWise One, Neo, and other family products.
We'll accelerate key native customs projects further and focus delivery on the largest markets and major customer pain points first, draw all adjacencies into native module builds inside the CargoWise architecture, accelerate data agreements, and build deeper integrations over time with major sea, air, rail, and road carriers, including data sets and connectivity for schedules, transit times, rates of contracts, bookings, events, invoices, and reconciliation. We will create, develop, or acquire further valuable logistics data sources and data sets. We will integrate data sets and drive automations and visibility within the CargoWise stack, and we will launch Neo and other CargoWise family products, including products and functionalities held back by the COVID-19 event.
In order to drive penetration, we will focus and refine our major sales teams, tools, and techniques, and target the top 25 freight forwarders and top 200 global logistics providers. We will enhance the Delta Team. Delta Team has shown great results since lifting the focus in February, and we are expanding this team with further talent. Deprioritize local deals that do not have a direct and quick path to global deals. Further refine the Delta Team processes and high-performance staff developed and supported across management and product teams. All major marketing activity will be aligned with the Delta Team, and major sales, most marketing efforts will be moved to the CargoWise family and will be in Sydney. We will expand digital sales tools and techniques for smaller customers and smaller markets.
In order to drive profitability, we will remove duplication across the business and subsidiaries, centralizing or regionalizing where possible. Automate our manual customer-facing and internal functions that are high volume and automable via our self-service portal. Many manual processes are accumulated by the acquisitions or were built quickly for low volume and are now at scale that can be automated, giving better, faster customer service results. Establish a regional center in Hamburg, post-Brexit EU headquarters, and bring all administration, product marketing, and other general functions into Hamburg, Chicago, or Sydney, with a preference for Sydney HQ where possible. We'll build a NOC and development center in Bangalore, which is already underway, and increase focus on development centers, and we'll align product teams with key development resources that scale in Sydney.
I have mentioned the COVID-19 challenges faced by the global logistics and supply chain sectors, coupled with already intense pressures such as increasing regulation, capital constraints, margin pressures, high labor costs, geopolitical tensions, and demand for fast throughput. All of these pressures will continue to accelerate the longer-term trend away from legacy systems and bolt together micro-point systems towards business consolidation and technology-driven business improvements. Despite this challenging environment, we are seeing a surge in transactions and increased demand amongst large global logistics providers for technology like CargoWise that drives efficiencies, enhances capabilities, and reduces risk. WiseTech is ideally placed to leverage this structural change and capitalize on this growing demand both in the short term and long term while continuing to deliver ongoing growth for shareholders.
Turning now to the outlook for the year ahead, we have provided FY21 guidance today on the basis that market conditions do not materially change. In the presentation, you will see a set of underlying assumptions upon which we have based our FY20 guidance. Assuming there are no material changes to these assumptions and that there are no unforeseen events that arise over the next 12 months, we expect our FY21 revenue to grow between 9%-19%, representing revenue of AUD 470 million-AUD 510 million, and our EBITDA to grow by 22%-42%, representing AUD 155 million-AUD 180 million. To wrap up today, I'd like to reiterate that we were one of the first companies to understand and respond to the impacts of COVID-19, both for ourselves and for our customers, and to adjust FY20 guidance accordingly.
We were also the first to recognize the rebound on logistics and leverage the new world normal. Our ability to deliver revenue and EBITDA growth in line with our guidance in FY20, despite the havoc unleashed by the pandemic on supply chains and the logistics sector globally, is a testament to the strength of our product offering, business model, and valuable data sets and unique customer value proposition. We are ideally positioned for continued growth and market penetration. We have a well-considered and comprehensive plan to deliver on our strategic objectives and our healthy balance sheet, robust cash flows, and ample liquidity, meaning we have significant financial firepower to fund our future growth.
Importantly, we have a product pipeline and R&D program that will ensure we have a competitive edge and plenty of upside opportunities to continue to improve margins and profitability through the centralization of key functions and continued focus on resources into the CargoWise One product suite as we embark on the next phase of our acquisition integration process. We have an exciting future ahead of us, and I look forward to sharing with you some of the fantastic work we're doing in terms of product innovation and R&D at our Digital Investor Day later this year. Now, let's open for questions.
Thank you. If you wish to ask a question, please press star one on your phone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are using a speakerphone, please pick up the handset to ask your question. The first question today comes from Lucy Huang from Bank of America. Please go ahead.
Wonderful. Thanks. Good morning, Richard and Andrew and Gail. Thanks for taking questions. I just have a couple. So firstly, from my understanding, the DHL contract, the temporary provisioning pricing arrangements, should be coming up for renewal around the end of this year. Just wondering if you have a sense on when the contract does roll off, whether we could see an uplift in pricing over time. Secondly, you guys mentioned that this year benefited from paid product enhancements from customers who wanted to accelerate their global rollout. Just wondering if you can provide us an indication as to how much this contributed to revenues in this year, and how do you think about this type of, I guess, product moving forward?
Do we expect to see contribution from these enhancements to continue over time? And then just in terms of CargoWise Neo, which you've mentioned, you'll provide an early release of the version this year to customers. Can you explain to us what the monetization model of that could look like? And then just one last one from me. In terms of non-freight forwarding revenues in CargoWise, so you mentioned there's some native customs, also transit and warehouse modules. Was that a material contributor to revenues this year? And I guess, how do you expect the take-up of these extra functionalities to evolve over time? Thanks.
Look, I might just thank you for that, Lucy, but I might turn to Andrew on the more detailed financial questions, and I'll give you the strategic piece of that at the end. Andrew?
Yeah. So Lucy, maybe we'll start off with DHL. You're correct there that the contract comes off its temporary transitional pricing at the end of calendar 2020. We've included a minor step-up in revenue from that contract in our guidance at this stage. So we'll update you further if there's anything more significant.
The next one was about what we call co-funded development. So we've always done what we call paid feature requests, and these are community-driven requirements that customers want to bring forward in the development pipeline. So we co-fund them, and the customer contributes something to them, and we contribute the long-term development management documentation, training, and other components to it. But they're our IP. They sit on our platform.
They're available to all customers. There was a step-up in that because the company's larger and because the impact of a number of these effects that were happening from COVID-19 and other things made it more imperative for people to have improved efficiencies earlier. And a number of our customers stepped up and leaned in and gave us a bit more in that area, and we equally decided that we would push more in that area. And that will be a continuing evolution of the business model. I might just let Andrew comment on the quantum of that, Andrew.
Yeah. So in the CargoWise non-recurring revenue in the second half, Lucy, we saw a step-up there with the paid product enhancements that Richard indicated. So about AUD 8 million in the second half.
I think the third question was Neo, wasn't it?
Yes, Neo.
So you've got to think of Neo as I can't tell you about the monetization of Neo. I think we're a bit early to discuss that with the market, but Neo is effectively an extension to CargoWise One that sits in front of the beneficial cargo owner, the importers, exporters, shippers, and the like, to enable them to connect to the CargoWise platform on the other side and fully digitally connect. So that means that they can have a through process, data to data, rather than paper to paper to paper to data.
And we know that there is an enormous push to do this, and we already do quite a lot of the heavy lifting inside CargoWise One, but CargoWise Neo is to sit on the other side of that transaction and sit coupled to the customer of our customers' systems and drive value. Our initial rollout will be quite focused on getting the digital transaction going and not monetizing transactions. Yeah. So you also mentioned about freight forwarding customs warehousing. So the native customs components are well entrenched. We've got a number of them.
Can we just go to that slide that has the customs on it? I think that will call that slide out just so that Lucy and others can see what we're seeing. 32. 32? Yes. In fact, you can see here on slide 32 in the appendix, we have Australia, New Zealand, US, Canada, UK, South Africa, Singapore, China, and Taiwan live. These are able to produce entries electronically to government. We are working and well advanced on France, Germany, Spain, Italy, and Ireland, and a lot of those are the big countries in Europe.
Ireland is not that large, but it's going through a customs change, and so that has to be delivered for that change to occur. And then we've got a plan for 2022. You can see that we've got a number of the other European countries, some of one in South America. And again, we're driving into the European part of the business heavily there. And then later on, we're sort of covering off the Latin America. And I don't think the products that are planned for the future, of course, don't contribute revenue. And WMS and transit, I think they're. Do you want to make a comment? No. The transit warehouse is quite new and therefore doesn't contribute much to revenue yet.
And same thing with e-commerce. It's quite new and doesn't contribute that much to e-commerce yet, to our revenues yet. But these are clearly driving into the larger logistics piece and going to be part of that larger expanded TAM as we push forward. This is driven by CargoWise Forwarder and the CargoWise Customs clearance, but it grows into these landside components that drive the greater addressable market.
Wonderful. Thanks. I just have a follow-up question on that. So I can see Australia, U.S., Canada, etc., are now live on the customs piece, and also with the transit warehouse, it's quite new as well. Just wondering what the take-up has been like so far from some of your customers and what the feedback you're hearing on it as well.
Well, you mentioned customs in those countries. That take-up is very strong. It does take time for people to change systems because there are retraining issues, and they have to move out of old contracts and train staff and so forth. But in terms of those native customs systems that are in, all of our big customers are very excited because it changes completely their cost base and their risk profile in those entries.
This is a sealed data environment where the data flows from forwarding to customs into the accounting system, into the master data systems, into the things like security filings and other things. So this is much safer, much less fragmented than these older structures. And so there are very, very strong take-ups in those areas, particularly with our big customers who have to manage these huge risk portfolios. And then with the other products, the take-up is very strong, but these are very early days for those products.
Wonderful. Thanks, guys.
Thank you. The next question comes from Quinn Pierson from Credit Suisse. Please go ahead.
Hi. Good morning. I guess just firstly, would you be able to talk us through a little bit more on how to be thinking about your FY21 growth guidance at the sales and earnings levels, kind of split into the 1H and 2H? So presumably 1H is still a bit more impacted by macro COVID-related sluggishness. 2H presumably gets some benefit from cycling some of the weak 2H20 impact. Could you just, I guess, talk us through how to be thinking about the growth splits between the 1H and the 2H, please?
Yeah, Quinn, that's a good question. So really, the dynamics between first half and second half that I think we want to be aware of is we've got a bigger increase in industrial production rebounding in the first half of 2021.
As we said in the material here, industrial production was down 5.2%, half on half, in the second half of last year, and we're starting to see that recover in the first half. That, we expect, to return to more normal levels in the second half of the year, which typically industrial production will grow somewhere just around about 1%-1.5% annually, and the second thing that we should keep in mind when we do the first half, second half comparison is that the year-over-year impacts of the FY20 acquisitions will come into the first half, and obviously, we've acquired most of those in the second half this year. So the prior period comparison's already in there for the second half '20.
That's helpful.
Maybe I don't want people to place too much importance on any one factor. Industrial production is a very important guideline, as is container volumes and many other things, but we are actually gaining market share here as well as these recoveries are occurring. So the growth is not just from recovery. The growth is from market share. And you've seen that on the slide 17, where there's a significant increase. On that slide, it shows four new customers in six months.
That's a significant growth over the last couple of years, and you can see that's kind of a trend line that's establishing very strongly. The other thing to think about here is that all these drivers combine together, and there are various pricing models and things with periods of time where the revenue is flat. So there's no direct correlations that connect one factor to another to a revenue stream. It's a complex mix.
That's helpful color. I mean, with the growth rates and your assumptions between the 1H and the 2H, would they be within a couple percentage points? Is that kind of close enough growth, or would the growth differences be larger than a couple percentage points?
Yeah, Quinn, we've provided the guidance here on an annual basis. We've said that that market share growth is going to be in that 15%-30% range. We haven't really broken that down between first half and second half at this stage, but you've got to take into account some of the things that Richard's just described there that they will happen in different halves of the year. New customers will be coming on board either in the first half or the second half of the year and such like. So the guidance is the annual guidance right now.
Okay. Understood. I think I heard you mention that I guess you're seeing higher demand for third-party software solutions in the industry, kind of brought on by COVID. I guess, how are you seeing that demand coming through the market? Are you seeing kind of formal tenders in the market increasing, which you're participating to, or is it more just kind of inbound inquiry at the moment? Just kind of a little bit of color on that would be helpful, please.
Right after the half report, I stepped into the sales process and started working with the Delta Team, which is a team of very high-end salespeople. We refocused our efforts. We retooled and redoubled our efforts into the very large, the top 25 forwarders and top 200 logistics providers, and we de-emphasized the smaller sales. We think that the larger customers are doing very well in COVID, and smaller business units have much more difficulty in these tough times. So we've really doubled down on that, and you can see that impact on that slide 17.
And I think that there is a good understanding here that we're going to get most of our growth through organic means and through pushing into opportunities. We have seen definitely a very big step-up in conversations with potential customers talking about what they want to do and the opportunity. And CargoWise, really, stands alone in this international forwarding and logistics space. It's such a strong brand. It has so many customers in the top 25 and more than 20 in total that are what we call globals. And I think that we are all about now leveraging that. We talked about the three P's: product, penetration, and profit.
This penetration one is very, very much a focus that I'm going to put a lot of effort into. Gene Gander, who's my Global Head of Sales, and I are very aligned on what we're going to do, and I think we're going to continue to generate very strong positive sales results. So some of the growth will come from that. Andrew?
Yeah. Quinn, I think we saw that in the new customer growth in CargoWise in FY20. It was AUD 12.4 million, which was up about 61% versus the new customer growth in FY19.
Helpful. Thanks. Just lastly for me, so your split of capitalized R&D was towards the higher end of the range you provide. Does that higher end of the range continue into FY21, or does it revert a bit more towards the FY, I guess, '19 levels?
Thanks, Quinn. Look, I can speak to that in some detail, so ultimately, when you're expensing, you're fixing things, you're repairing old and restructuring old architectures, and it doesn't create any value for the company. It's effectively waste, and so Brett Shearer, my CTO, and I, who've worked together for decades, have put a particular focus on defect rates and on quality of software development, and we've been very successful. Gradually, since 2012, we've been building an increasingly powerful, high-quality software development structure that has lower and lower defect rates, and so what's actually happening is we're spending much less time fixing bugs and much more time building new software that is very powerful. We need that because we've got this huge roadmap in front of us of all these countries for customs and these new modules.
So we need everybody manning the pumps, as it were, building new software, which has got long-term revenue attached to it. And we don't want people fixing stuff that shouldn't have been broken in the first place. Now, as you do that consistently over five or six, seven, eight years, you wash out all of the technical debt. The actual platform itself gets faster and better and less defects, and the cost base for that to manage that goes down substantially. So this is a very good story about a high-quality process that's turning into capitalized R&D because we're building new things rather than fixing old things.
That's a very helpful background. And so I guess the outcome then is we probably should expect it towards the higher end of that 47% range.
Yeah, Quinn, I think that's right. So 47% was the CapEx rate in FY20. Clearly, that helped to deliver over 1,100 new product upgrades, which was up 32% versus FY19, and we'd expect to see that roughly in line with the captive rate in FY21.
Just to be clear, we've moved to this new work-from-home hybrid office arrangement, and we have been astounded by the productivity gains that we've had, particularly in the development teams. Very powerfully, in the last quarter, we really pushed and got a lot of product out the door much more quickly than I thought was possible, and we continued to benefit from the increased productivity that work-from-home has created. We do want to make sure that we've got team development and collegiate behavior working, so we do want to return to the office around the world on an irregular basis, perhaps one or two days in five for the teams.
But we are firmly of the view that we can reduce our office costs across the world, and we can increase our productivity even further by developing better toolkits in our productivity solution, which is called PAVE, Productivity Acceleration Visualization Engine. So this is a very powerful idea that we can actually do better working from home part of the time and working with the productivity tools. And it's been a wonderful experience, to be fair.
Great. Thank you very much.
Thank you. Once again, to ask a question, please press star one on your phone. The next question comes from Siraj Ahmed from Citi. Please go ahead.
Thank you. And I must say, much better disclosure, by the way. That's really helpful on the individual drivers. Just if I could start off with the guidance for FY21, could you just help break out? I mean, you've given some color on the organic and transactional. Can you give us some more color on that? Because you do have this AUD 10 million-AUD 15 million that's from the new product that's coming into FY21, and Richard, you spoke about new customer wins accelerating, so just trying to understand why it's not more towards the top end. Is it just weak macro or something like that? Just further color on the two breakdowns, please.
I'll follow Andrew for the more detailed financial question, but customer wins don't suddenly produce new revenue. They typically have a gestation period where they're developing their implementation plan, and then there is usually a couple of pilot sites, and these are somewhat tentative because people are starting to develop an understanding of the system. Within about a year, they're starting to move quite quickly.
As we've seen with some of their very large customers during COVID, they've actually accelerated at the end of their cycle because they become highly confident. They start seeing the productivity gains and the risk reductions that fall from the platform, and they really double down on that, pushing forward at the sort of end part of their implementation phase. I'll just turn to Andrew for the financial part of that.
Yeah. Siraj, so as Richard said, we've included in our guidance what we see in terms of the pipeline for new customer wins and new customer rollouts. We're obviously aware of the current customers that we have and how they're rolling out and what their plan is, and we've built that into the guidance. Of course, we typically do win new customer contracts during the year, and we've got a normal level of new customer wins also built into that growth range.
Sure. And just, Andrew, just on that question. So you're saying flat growth. Is that the way to read that you'll get AUD 12 million of annualization, but the underlying acquired growth declines because you're transitioning into CargoWise? Is that the way to think about it?
So the way to think about the acquisition strategy, so it's a good clarification. So we'll see the year-over-year impact of the increase, the full consolidation for the FY20 acquisitions. That'll be a step-up of about AUD 12 million. The underlying growth in the whole set of acquisitions, we expect to be about flat, which indicates that potentially we'll have some conversions potentially to CargoWise One, but also changes in the license types for some of those CargoWise for some of those acquisition customers. As we know in the revenue models there, we've got quite a lot of non-recurring revenue, which is installation and product support. We've indicated that that revenue would flatten or decline over time as we integrate those businesses.
Got it. The acquired book, the underlying book is not going backwards. It's just flat, and the annualization benefit comes through. Okay. Right. Richard, just on the cost reduction, I mean, you are a growth business, and as you just said, you're seeing demand accelerate. Can you just touch on why doing the cost out now? I completely understand there's been efficiency measures that you can do, but if you just talk about why do the cost out now?
Yeah. The integrations of the acquisitions are a multi-step process. Really, we've got to go back to why we've acquired these acquisitions. It's to get access to the valuable technology and experts that we have within those businesses. We've been focused on the integration of that technology onto the CargoWise platform. We're just getting to a point right now, particularly with the renegotiation of the earn-outs last year, where we're starting to see those cost reduction opportunities. Siraj, we built AUD 10 million of net cost reduction into the plan for FY21, and we expect to be at a run rate by FY22 between AUD 20 million and AUD 30 million.
Yep. Okay. Just last one from me. That customer-paid code development that you mentioned, where do you put that in the bucket? Is that on-demand or OTL? Where do you actually recognize it?
Yeah. So the c ustomer-paid goes in the non-recurring bucket.
Okay. All right. Sounds good. It's not on-demand.
So the volume of that is dependent upon our large customers driving demand for those services, which we've seen a big increase for in the second half of 2020. But the expectation is that that gets built into CargoWise One and could be on-demand revenue for other customers, like typically on-demand. Yeah. So the way that those products work is that they become part of the core platform, and then all our other CargoWise customers can use those, and then that generates a growth in the recurring revenue stream as those other customers use those on a transactional basis.
All right. Really helpful. Great resource, guys. Thanks.
Thank you. The next question comes from Jules Cooper from Ord Minnett. Please go ahead.
Morning, folks. If I could just clarify two points. One, you called out a minor benefit from DHL included in your guidance. I just wondered if you could just give us some sense for what a threshold for minor is, maybe in terms of percentage of revenue, just so we sort of understand that. And then just on the total R&D spend, we saw that it grew about 41% in FY20. Could you maybe just help us out to understand what the R&D spend looks like in FY21 from a growth perspective or a dollar value or some way we can just have a think about what that total spend on product might be for next year?
Yep. So let's focus on the DHL question first there, Jules. Thanks for that. So yeah, a minor benefit included in the guidance. We're not disclosing individual customer revenues, but the top 10 and the top 20 customers as a percentage of revenue, we don't expect to change too much as we go forward. On the total R&D spend, you're right. As we indicated at the beginning of the year, we were going to increase our investment and our focus on R&D, which we did, and we saw that come through in the total spend. We'd expect to see that as a percentage of revenue continue at roughly that same level in FY21. So as a percentage of revenue, total R&D spend was about 37%, which was up five points from 32% in FY19. So we'd expect to see it continue at the FY20 level.
I'd just like to make a strategic comment about that R&D spend. So as Andrew said, we indicated at the beginning of the financial year that we were going to step into that increased spend in R&D. And what this has allowed us to do is to go faster to market and pull away from any remnants of competitors in this global space. I'm very convinced that the customers are coming to us because we have the technology platform, the depth, and the strength, and that they can see the roadmap. I've had specific conversations with customers asking us to bring forward this country or that country into the customs piece because they've got pain in those places, and they're receiving fines, or they're having difficulty processing.
So we know that we're solving a very deep pain point, and we know that they want us to solve that for them, and they want us to move that forward. I mentioned in the talk that we are listening to those customers, and we're bringing forward certain countries due to those pain points and due to the opportunity for that customer to take a position and to get an advantage from that. And that's actually helping us in the sales model as well.
Thank you. That's very helpful.
Thank you. The next question comes from Paul Mason from E&P. Please go ahead.
Hey, guys. This is Paul from Rayne. Apologies if some of the answers have already been given. I've been managing two calls simultaneously. So just first on the cost out, I just wonder if you could talk through so that measure. I presume there's some sort of growth in the total cost base still given R&D as a percentage of revenue is going to be relatively stable.
I'm just looking at the bottom end of your guidance range, the gap between the revenue and EBITDA. The bottom is AUD 315 million, and this year was about AUD 305 million. And so the cost out of that's not actually calling out a reduction in absolute cost, but it's more just an initiative to clear costs out that are no longer required, but growth is going in other parts of the cost base, or should we think about it actually as an absolute reduction in your total OpEx and CapEx?
Yeah. So Paul, included in the guidance is a normal cost increase run rate that we would normally experience when we've got growth of revenue in the business in the indicated range of between 9% and 19%, and obviously a significant portion of that coming from the CargoWise One business in that sort of 15%-30% range. What we've indicated is, in addition to that normal cost run rate increase, we'll have some cost reduction initiatives, which will target to take AUD 10 million of cost out of FY21 on a run rate basis, moving into FY22. That looks like 20-30.
What that's helping us to do is increase that EBITDA margin. So the margin is actually increasing on the FY21 guidance, and the range there is between 33% and 35%. So it's a 3- to 5-point increase over FY20. I just want to add a technical strategic part of that. When you're buying acquisitions and running very quickly, which we have been in recent years, you pick up quite a lot of manual processes that these smaller entities singularly can't or don't automate or can't afford to automate.
And also, when you're growing as a company, you start with manual processes to define a process, and then later on you realize that at scale, these things are highly automatable. And so at least some of the cost reductions are to take things that are done in a mechanical way by low-level administration people and turning them into customer-guided portals and self-service arrangements. There's more to it than that because there's also duplication of function across many of the companies that we've bought. But this is a really well-thought-out and deep process that is going to take a number of years to get to the bottom of the full cost out. We're only talking about the first phase in 2021.
Okay. Great.
And just a follow-on one, which maybe this has been answered before because I think it's probably a key topic, is just about the other global rollouts that you've got going on, like the major ones, Bolloré Logistics and then the DSV Panalpina merger-related rollout. Have you seen any disruptions to the timing of those, or are they broadly on track? I think both customers have been flagging sort of expectations of sort of the end of fiscal 2021, that their first phase of employees would be fully done. I don't know if you can make any comments on that.
Well, not only were there not disruptions, there were accelerations. So both companies have done extremely well in COVID-19 times. I think DHL, you'd have to look at DHL's own announcements to get to details, but I believe they've had an extremely good quarter, and they were substantially above their guidance. They've been able to benefit from scale. They've been able to benefit from efficiency. They've been able to benefit by pushing forward with the rollout. DHL is an excellent, excellent customer, as is DSV. We're very proud to have DSV, and we've had them for a very long time, and we have a great relationship with management.
They're very, very, very smart people, and DSV particularly pushed further and faster into Panalpina's conversion rather than slowing down and worrying about the COVID-19 problem. They actually went faster. Both companies have commented that because of our digital education platform and the digital integration of our system, we've got a very strong content-led implementation process, which is online, electronic.
They can train their staff online. They can do their examinations online to verify their staff are fully qualified, and they can implement online and in remote circumstances. And they're actually making the point one of the two was making the point to me that they were actually delighted by the speed at which their staff went to change. Now that they're working from home, it was actually easier than when it was in the office.
All right. I'll leave it there. Thanks a lot.
Thank you. The next question is a follow-up from Siraj Ahmed from Citi. Please go ahead.
Richard, just a question on global rollouts. I guess one key thing of CargoWise One, which DSV has said publicly, is that using CargoWise One makes acquisitions easier for them, and you have benefited from the larger players in acquiring others. Now, there's discussions about DSV potentially buying Toll. Now, both are global customers of yours. So could this actually be a bit of a negative at the margin because DSV could get better pricing?
Well, first of all, I don't know anything about DSV's strategy, and obviously, that's something that's for them. I have seen market commentary, but I think I've seen market commentary for them buying several other companies, not just Toll. I think there was a comment about Expeditors, and there's a few others, and these are just press making stories about things that I don't think there's any underlying basis for that. I suspect, and I don't know this, but I suspect that anybody that consumes a business as large as Panalpina is going to take a short pause after they finish the initial consumption and tighten up their business, and I would expect that of most companies.
However, there are two questions I do want to answer that are implied or said in what you said. The first is that companies that convert to CargoWise One and have a pure platform stack like CargoWise One have the ability to acquire companies and rapidly roll them on, and they get a substantial lift in capability, in profitability, and in it's a hell of a good way to grow, and I think the market knows that that is, in fact, a fundamentally powerful way to grow their businesses when organic growth is very hard, and then we've had, probably in the last 15 years, we've had sort of 15 or so companies that have bought other companies that are on CargoWise One, and it may not give us a huge lift in revenue.
It might be slight, but we certainly don't lose revenue by merging two CargoWise businesses together. It just creates a more competitive business. I think we probably have to have okay?
Yeah. That's helpful.
I think that's it for us. We need to move on to our other appointment. We'd like to thank you all for attending today. We really appreciate your time, particularly an extended session, and look forward to seeing many of you in the coming days. Thank you.