Iress Limited · ASX:IRE
Iress — Investor Presentation (August 2019)
33 slides from Iress's investor presentation, Aug 23, 2019
Slide 1: Half Year Results Presentation 2019
Half Year Results Presentation 2019 For the six months ended 30 June 2019
Slide 2: Agenda
Agenda Who we are 2 2019 half year results 11 Segment overview 16 Financial information 22 Andrew Walsh John Harris Managing Director & CEO Chief Financial Officer 2019 financial outlook 27 Appendices 28 2
Slide 3: Who we are
Who we are We are a technology company providing software to the financial services industry Award-winning 500,000 9,000 financial software users globally clients 1,950 people 17 locations 7 countries 3
Slide 4: To be essential and desirable to our clients and users
Our mission Our purpose To be essential We believe technology and desirable to our should help people clients and users perform better every day 4
Slide 5: What we do
What we do Manage investments Navigate financial markets Deliver high quality financial advice We help our clients find better ways to: Simplify mortgage applications Find and compare insurance Administer super funds and service members Deliver better results 5
Slide 6: Key drivers of growth
Key drivers of growth Increasing Increasing business Demand for Demand for Increasing regulatory complexity and broader integrated software that demand for requirements. industry change. solutions to enable increases advice. client business efficiency and strategies. reduces the cost to do business. S
Slide 7: Business highlights
Business highlights 7
Slide 8: Business highlights
Business highlights Successful Continued QuantHouse Increasing Scale deliveries demand acquisition usability & efficiency Deliveries to large Increased sales and Acquisition of Significant Cloud and clients across private full pipeline of client international market improvements in continuous delivery
Slide 9: Acquisition of QuantHouse supports our data strategy
Acquisition of QuantHouse supports our data strategy Data is used to drive all Iress systems. Providing accurate, Benefits of acquisition About QuantHouse timely and cost-effective market Supports evolving market data needs of Iress clients globally, Leading provider of market data data is an importa
Slide 10: Improving client and user experience
Improving client and user experience Easier integrations for clients Co-designing with users Iress Open builds on our history of integrations. Iress Labs builds on prior success with co-design such as our ViewPoint online trading software. Allows clients to give permission to a third-party applicati
Slide 11: 2019 half year results
2019 half year results 11
Slide 12: Changes to reporting segments
Changes to reporting segments Previous segment name New segment name Comment APAC FM revenue separately reported as APAC FM APAC “Trading & Market Data” ANZ WM revenue separately reported as ANZ WM APAC “Financial Advice & Superannuation” UK UK & Europe Includes QuantHouse’s European operations Ires
Slide 13: 2019 half year financial highlights
2019 half year financial highlights Group Revenue growth: +5% v pcp (constant currency: +5%) Growth in key businesses in Australia, the UK and South Africa, positive contribution from QuantHouse Segment Profit growth: +10% v pcp (constant currency: +10%) Revenue growth, disciplined approach to costs a
Slide 14: Revenue +5%, Segment Profit +10% v pcp
Revenue +5%, Segment Profit +10% v pcp $AUDm - Reported 1H18 2H18 1H19 1H19/1H18 1H19/ H18 Revenue driven by Operating Revenue 229.7 235.0 241.8 +5% +3% growth in core markets Segment Profit 67.5 70.2 74.1 +10% +5% and the acquisition of QuantHouse Segment Profit Margin 29% 30% 31% +4% +2% Segment Profi
Slide 15: Key segments drive growth
Key segments drive growth Segment ($AUDm) 1H18 2H18 1H19 1H19/1H18 1H19/ 1H18 Reported Constant Organic revenue growth Revenue Currency Change Currency Change driven by UK & Europe, APAC 123.9 128.1 128.2 +3% +3% APAC Financial Advice UK & Europe 57.7 61.2 65.1 +13% +10% and South Africa. Mortgages
Slide 16: Segment overview
Segment overview 16
Slide 17: APAC
APAC Demand for financial advice software drives growth AUD (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 ● Financial Advice revenue +9% v pcp, driven by new Xplan implementations, growth in Operating Revenue independent licensees, and increased software uptake in response to compliance and data Trading &
Slide 18: Diversity and strength in Australia
Diversity and strength in Australia Distribution of Australian revenue - 1H19 (1) ● Iress’ client base in Australia is well diversified across a range of financial services businesses. ● We are strategically well positioned for the significant reshaping of financial advice underway where there is a re-w
Slide 19: UK & Europe
UK & Europe Delivery to existing and new private wealth clients. GBP (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 ● Revenue growth of +10% v pcp Operating Revenue 32.4 34.3 35.5 +10% +3% ○ Deployment of Private Wealth software to new tier one client underway Direct Contribution 20.7 23.2 23.6 +14% +1% ○
Slide 20: Mortgages
Mortgages Significant client deliveries and strong pipeline GBP (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 ● Revenue down 5% v pcp, reflects timing of client projects in 2019 Operating Revenue 8.4 7.6 8.0 (5%) +4% ● Yorkshire Building Society recently went live Direct Contribution 6.2 5.3 5.3 (22%) - wit
Slide 21: South Africa
South Africa JSE trading platform live. Private wealth delivery continues ZAR (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 ● Return to growth, revenue +6% v pcp Operating Revenue 228.4 228.3 242.4 +6% +6% ● Deployment of Private Wealth software to tier 1 financial services firm is well progressed, Direct C
Slide 22: North America
North America QuantHouse adds market data capability and expands client opportunities CAD (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 ● Canada revenue (ex QuantHouse) fell 10% reflecting lower non-recurring project revenue. Operating Revenue 8.8 9.1 9.0 +3% (1%) Underlying Canadian recurring revenue stab
Slide 23: Ongoing cost discipline across functional segments
Ongoing cost discipline across functional segments Product and Technology (P&T) AUD (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 Ongoing focus on capability, efficiency, quality and speed. Excluding the impact of adopting AASB 16 and the acquisition of QuantHouse, P&T costs increased ~1.0% v pcp Direct con
Slide 24: Financial information
Financial information 24
Slide 25: Excluding AASB16 and acquisition activity NPAT +2% v pcp
Excluding AASB16 and acquisition activity NPAT +2% v pcp(1) AUD (m) 1H18 2H18 1H19 1H19/1H18 1H19/ 2H18 Substantial decline in non-operating costs v prior periods. 1H19 Non Operating items included: Operating Revenue 229.7 235.0 241.8 +5% +3% Acquisition and post deal integration costs Operating Cos
Slide 26: Strong cash conversion, conservative balance sheet
Strong cash conversion, conservative balance sheet AUD (m) June 18 Dec 18 June 19 Cash conversion Total current assets 87.4 91.8 100.0 Total non-current assets 602.5 604.6 724.9 Total Assets 689.9 696.5 824.9 Total current liabilities 58.8 58.1 91.7 Total non-current liabilities 227.6 218.9 326.0 To
Slide 27: 2019 financial outlook
2019 financial outlook Iress continues to expect reported Segment Profit Reflecting anticipated company tax payments in growth in 2019 of between 6% and 11% ($146m - Australia, normalised franking levels are expected to $153m), on a constant 2018 currency basis(1), be ~30-40% including the impact of ad
Slide 28: Appendices
Appendices 28
Slide 29: Depreciation and amortisation
Depreciation and amortisation D&A - Operational 1H18 2H18 1H19 Depreciation Plant & Equipment 4.2 5.0 5.6 Amortisation Software (3rd Party Purchased) 2.3 2.9 0.9 Leases - - 5.4 Total 6.5 7.9 11.9 D&A - Acquisition Related 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 Computer Software Avelo 0.6 0.6 0.3 0.
Slide 30: Impact of FX, AASB16 and QH acquisition
Impact of FX, AASB16 and QH acquisition Reported Reported Underlying AASB 16 Adjusted $AUDm H1 18 H1 19 Acquisition of QH Currency 1H19 Adjustments Underlying 1H19 Operating Revenue 229.7 241.8 3.1 2.9 235.8 - 235.8 Segment Profit 67.5 74.1 (0.4) 0.9 73.6 2.6 71.0 Segment Profit Margin 29% 31% 31% 30%
Slide 31: Impact of AASB16 adoption and acquisition of QH
Impact of AASB16 adoption and acquisition of QH QuantHouse AUD (m) 1H18 2H18 1H19 AASB 16 1H19 Adjusted Acquisition (1) Operating Revenue 229.7 235.0 241.8 - (3.1) 238.7 Operating Costs (162.2) (164.7) (167.7) (2.6) 3.5 (166.8) Segment Profit 67.5 70.2 74.1 (2.6) 0.4 71.9 Share Based Payments (4.6)
Slide 32: Disclaimer
Disclaimer The material in this presentation is intended to be general background information on Iress Limited and its activities, current at the date of the presentation. The information is provided in summary form and does not purport to be complete. It is not intended to be relied upon as advice
Slide 33: Contact
Contact Andrew Walsh, CEO John Harris CFO +61 3 9018 5800 iress.com