Slide 1: Results Presentation Half Year Ended June 2010
For personal use only Results Presentation Half Year Ended June 2010 Presenters: Clive Rabie – Group CEO Chris Hagglund – Group CFO Gavin Dixon – Business Division CEO Brian Armstrong – Professional Division CEO
Slide 2: Group structure
For personal use only Group p structure The group comprises 3 main divisions: • Business Division – Business software suitable for SME’s through g to larger g enterprises, p p personal financial software, content provider & practice software for smaller accounting firms • Division CEO – Gavin Dixon
Slide 3: For personal use only
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Slide 4: Performance Highlights
For personal use only Performance Highlights – 6 months to June 2010 Reckon Group Operating revenue up 7% to $46.5m EBITDA up 30% to $15.3m* NPAT up 44% to $ 8.8m Business Division Professional Division nQueue BillBack Division Operating revenue +12% to $28.8m Operating revenue -5% to $13.8m Operati
Slide 5: Reckon Group (underlying growth)
For personal use only Reckon Group – 6 months to June 2010 (underlying growth) Growth 2010 2009 Operating revenue reported +7% $46 5m $46.5m $43 3m $43.3m Acquisition $1.1m FX impact ($1.2m) Underlying operating revenue +8% $46.5m $43.2m EBITDA reported +30% $15.3m $11.8m Acquisition $0.1m FX impact
Slide 6: Business Division
For personal use only Business Division – 6 months to June 2010 Growth 2010 2009 Operating revenue +12% $28 8m $28.8m $25 7m $25.7m EBITDA reported +39% $10 2m $10.2m $7 3m $7.3m Prior year restructure costs $0.2m Underlying y g EBITDA +35% $10.2m $7.5m EBITDA margin 36% 29% 6
Slide 7: Professional Division
For personal use only Professional Division – 6 months to June 2010 Growth 2010 2009 Operating revenue reported -5% 5% $13 8m $13.8m $14 4m $14.4m FX impact ($0.5m) Underlying y g operating p g revenue -1% $13.8m $13.9m EBITDA reported +6% $5 6m $5.6m $5 4m $5.4m FX impact ($0.3m) Prior y year restr
Slide 8: nQueue BillBack Division
For personal use only nQueue BillBack Division – 6 months to June 2010 Growth 2010 2009 Operating p g revenue reported p +25% 25% $3.9m $3 9 $3.2m $3 Acquisition $1.1m FX impact ($0.7m) Underlying operating revenue +9% $3.9m $3.6m EBITDA reported t d +124% 124% $1 6 $1.6m $0 7 $0.7m Acquisition $0.1
Slide 9: Margin trends – months to June
For personal use only Margin g trends – 6 months to June 2006 2007 2008 2009* 2010 EBITDA 6 7m 6.7m 8 2m 8.2m 9 4m 9.4m 12 9m 12.9m 15 3m 15.3m Margin 29% 29% 30% 30% 33% * 2009 EBITDA excludes the impact of the acquisition restructure costs 9
Slide 10: Other Highlights
For personal use only Other Highlights – 6 months to June 2010 • Operating cash flow, after allowing for expenditure on capitalised development p costs $11.9m ((+82%)) • Cash balance $5.5m • Interim dividend of 3.5 cents per share (3.0 cents in 2009) • Dividend franked to 90% • EPS growth up 37% to
Slide 11: Cash Flow Highlights
For personal use only Cash Flow Highlights g g – 6 months to June 2010 2010 2009 Cash at June 2010 / Dec 2009 $5.5m - Operating cash flow $15.8m $9.8m Development Cost Expenditure1 $3 9 $3.9m $3 2 $3.2m Amortisation of development costs & IP $3.1m $2.7m Operating cash flow after capitalised developm
Slide 12: Revenue Breakdown
For personal use only Revenue Breakdown – 6 months to June 2010 Prior year recurring 46% 65% 61% 54% revenue 12
Slide 13: Business Division
For personal use only Business Division • Product range • SME business p products – mainly y traditional QuickBooks range g • Medium to large business products – QuickBooks Enterprise • Online business products • Wealth management products – Quicken • Elite practice management software for smaller a
Slide 14: Business Division
For personal use only Business Division – 6 months to June 2010 Reckon Total revenue increase 12% QuickBooks Enterprise (incl online) +28% Direct revenue growth (excl Enterprise) +10% Corporate services +8% Retail revenue +34% 14
Slide 15: Business Division - 2010 Highlights
For personal use only Business Division - 2010 Highlights • Release of QuickBooks 2010 QBi Series • Numerous enhancements well received by the market • Smooth tax update in June • QuickBooks Enterprise continues to shine • Revenue growth is strong • O li products Online d t gaining i i ttraction ti
Slide 16: Business Division Key Strategies
For personal use only Business Division Key y Strategies g • Expand Online service • Improvements to connected services • New service offerings • Further leverage scalability of QuickBooks Enterprise Edition • Expand Elite customer acquisition through broader addressable market • Continue to grow Re
Slide 17: Professional Division
For personal use only Professional Division • Product range y integrated • Fully g p practice management g and compliance p suite for accounting gppractices • Expense management/cost recovery and other practice software modules for the legal profession • Market – Australia & NZ & UK • 165 employees
Slide 18: Professional Division Performance
For personal use only Professional Division Performance – 6 months to June 2010 Software/hardware revenue • Reflects impact of continued new business growth • Reflects ssuccess ccess of product prod ct e extension tension strategy strateg • Adversely affected by difficult UK trading conditions and f
Slide 19: Professional Division - 2010 Highlights
For personal use only Professional Division - 2010 Highlights • High demand for new products from existing clients • Supplier of choice to leading accounting and legal firms • Continued g growth of client base • Client retention strategy in legal starting to take effect • Successful completion of ma
Slide 20: Professional Division - Opportunities
For personal use only Professional Division - Opportunities • Continued rollout of integrated compliance and practice management suite • Leverage expanded Legal product suite • Leverage quality client base – new products and services • Service demand for online and mobility solutions • New Products
Slide 21: nQueueBillback Division
For personal use only nQueueBillback Division • 67% shareholding • Market – USA legal profession • Strategically placed in the top 200 law firms • Product range g • Cost Recovery Software & Hardware • Print Management • Expense Management • Embedded Solutions • Desktop Solutions • Hardware Solutions
Slide 22: nQueue BillBack Division
For personal use only nQueue BillBack Division – 6 months to June 2010 2010 2009 Underlying revenue Maintenance Revenue $2.4m $2.1m N New R Revenue $1 5 $1.5m $1 5 $1.5m 22
Slide 23: nQueue Billback Division - 2010 Highlights
For personal use only nQueue Billback Division - 2010 Highlights • Successfully integrated the operations of nQueue & Billback USA • Right sized the business • Positive client feedback on combined business • Added 30 new clients • Good progress on the “best of breed” product suite 23
Slide 24: nQueue Billback Division – Opportunities
For personal use only nQueue Billback Division – Opportunities • Accelerated sales efforts • Expand geographies • Target mid sized legal market • Extend channel/reseller relationships • Further consolidation of the “best of breed” product range • Continued product suite enhancements • Seek out oppor
Slide 25: Trends over last years
For personal use only Trends over last 5 years 11.8 8.2 9.4 6. 7 Cumm Growth 103% Cumm Growth 128% 25
Slide 26: Trends over last years
For personal use only Trends over last 5 years 7.5 9.4 4.6 5.8 6.7 3.8 4.2 3.3 26
Slide 27: The strategic direction for the Reckon Group remains unchanged
For personal use only The strategic direction for the Reckon Group remains unchanged • Continued organic growth – Grow business product suite to ensure Micro markets to Enterprise markets are catered for – Expand product suite into the Accounting Profession Mid market – Develop product for the SaaS
Slide 28: Questions
For personal use only Questions Thank you 28