Iress Limited · ASX:IRE
Iress — IRESS Market Technology — FY2008 Earnings Presentation
43 slides from Iress's earnings presentation, Feb 23, 2009
Slide 1: Cover letter: 2008 Full Year Results – Investor Presentation
23 February 2009 For personal use only The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam 2008 Full Year Results – Investor Presentation Please find attached a copy of an investor presentation on the Co
Slide 2: Full Year Results, Year Ended 31 December 2008
Full Year Results | Year Ended 2008 For personal use only Full Year Results Year Ended 31 December 2008 February 2009
Slide 3: IRESS 2008 Results
Full Year Results | Year Ended 2008 IRESS 2008 Results For personal use only • Adjusted Group profit $48.5 million (2007: $39.0m), up 24.4% • Wealth Management consolidation, growth & acquisition • Canadian revenue growth of 60% over 2007 & EBITDA C$4.131 up from 2007 C$(0.692) • Reported Group prof
Slide 4: Segment Performance Against Prior Half
Full Year Results | Year Ended 2008 Segment Performance Against Prior Half For personal use only Financial markets Wealth Management Aust & NZ Aust & NZ * • Op Rev up 3.0% (up 11.3% on PY) • Op Rev up 10.6% (up 36.5% on • EBITDA up 3.5% (up 12.3% on PY) PY) • PAT up 8.2% (up 12.8% on PY) • EBITDA up
Slide 5: Group Performance Against Prior Year
Full Year Results | Year Ended 2008 Group Performance Against Prior Year For personal use only • Adjusted Group Profit $48.540 m Up $9.522 million, 24.4% on PY • Segment Contribution against prior year $A % • Financial markets Aust/NZ 4.146 44 • Financial markets Canada 3.687 39 • Wealth Management
Slide 6: Strategic Charges and Non-Recurring Expenses
Full Year Results | Year Ended 2008 For personal use only Strategic Charges Non-Recurring Expenses • $14.802 m for full year • Non-Recurring Expenses of $0.054m Continued with amortisation of purchased intangibles such as Computer Software. The main changes from 2007 charges Tax Expense are: • Part
Slide 7: Review of Group Recurring Subscription Revenue
Full Year Results | Year Ended 2008 Review of Group Recurring Subscription Revenue For personal use only 6
Slide 8: Review of Group EBITDA
Full Year Results | Year Ended 2008 Review of Group EBITDA* For personal use only 7
Slide 9: Relative Impact H2'08
Full Year Results | Year Ended 2008 Relative Impact H2’08 For personal use only 8
Slide 10: Operating Cashflow per share
Full Year Results | Year Ended 2008 Operating Cashflow per share* For personal use only Cash generation from the business continues to be very strong * Calculated as Net Cash from Operations ÷ No shares on issue at end of year 9
Slide 11: IRESS 2009 Group Outlook
Full Year Results | Year Ended 2008 IRESS 2009 Group Outlook For personal use only • Growth weakened in all businesses towards end of 2008 • Difficult trading to date in 2009, significant downsizing in financial markets • Modest revenue growth from existing and new clients • No shortage of product i
Slide 12: Daily Trades on the ASX
Full Year Results | Year Ended 2008 Daily Trades on the ASX For personal use only 11
Slide 13: Australia Financial Markets
Full Year Results | Year Ended 2008 Australia Financial Markets For personal use only • Revenue growth of 3% in the second half: • IRESS desktop – downsizing mainly reflected as per user • webIRESS and Internet Products – continues overweight contribution • Portfolio – strong growth in all forms (Ad
Slide 14: Australia Financial Markets – Goals '09
Full Year Results | Year Ended 2008 Australia Financial Markets – Goals ‘09 For personal use only • IOS+ rolled out to additional key institutional clients • Further penetrate trading terminal market with OTW / IOS+ • IPS IMA / SMA Solution rolled out to more clients and leveraging fund manager comm
Slide 15: IRESS Portfolio System (IPS / FTS+)
Full Year Results | Year Ended 2008 IRESS Portfolio System (IPS / FTS+) For personal use only • Portfolio systems bringing retail and institutional together • Unique offering of integrated asset management, tax, reporting, modelling, OMS, compliance • Multi-asset. Multi-currency. • Growing presence
Slide 16: Australia Financial Markets - Outlook
Full Year Results | Year Ended 2008 Australia Financial Markets - Outlook For personal use only • Revenue conditions in early 2009 continue to show: • Increased and sustained levels of cancellations as clients rationalise • Limited but important growth from existing and new clients • Assuming no fur
Slide 17: Australia Financial Markets – Monthly Subscription Revenue
Full Year Results | Year Ended 2008 Australia Financial Markets – Monthly Subscription For personal use only Revenue 16
Slide 18: IRESS Desktop Monthly $ Gross Cancellations
Full Year Results | Year Ended 2008 IRESS Desktop Mthly $ Gross Cancellations For personal use only 17
Slide 19: Change in Australia Financial Markets Revenue
Full Year Results | Year Ended 2008 Change in Australia Financial Markets Revenue For personal use only Still positive growth but at a lesser rate than prior periods 18
Slide 20: Australia Financial Markets – Margin Analysis
Full Year Results | Year Ended 2008 Australia Financial Markets – Margin Analysis For personal use only 19
Slide 21: Canada - Overview
Full Year Results | Year Ended 2008 Canada - Overview For personal use only • Dramatic change from an EBITDA loss of over half a million (CAD) in 2007, to a very material contribution in 2008 of over $4.1m (CAD) • Focus remains on client service and satisfaction subsequent to the CX and KTA conversi
Slide 22: Canada – Business Highlights
Full Year Results | Year Ended 2008 Canada – Business Highlights For personal use only • IRESS and KTA+ continue to be enhanced to meet customer needs • National Bank Financial converted their KTA licensed service to KTA+ which further lowered costs and simplified support • 40 out of top 50 Canadian
Slide 23: Canada – Product Strategy
Full Year Results | Year Ended 2008 Canada – Product Strategy For personal use only • Current strategy includes: • Trading terminals for Canadian equities and options • Retail order flow management (including US FX tools) • Institutional order management and compliance • Buy Side services • FIX conn
Slide 24: Canada - Outlook
Full Year Results | Year Ended 2008 Canada - Outlook For personal use only • Early 2009 trading sees a modest net revenue increase – with small price rise and new revenue offsetting underlying cancellations • On balance we expect client rationalisation to continue in the coming months which, in the
Slide 25: Canada – Monthly Subscription Revenue
Full Year Results | Year Ended 2008 Canada – Monthly Subscription Revenue* For personal use only Pre-IRESS full production level offering *Assumes 100% ownership 24
Slide 26: Canada Financial Markets – Margin Analysis
Full Year Results | Year Ended 2008 Canada Financial Markets – Margin Analysis For personal use only * CAD - Assumes 100% ownership 25
Slide 27: Wealth Management - Financials
Full Year Results | Year Ended 2008 Wealth Management - Financials For personal use only • Aus/NZ revenue run rate over $40m pa • H2 2008 revenue up 10.6% on prior half (EBITDA +8.9%) • H2 2008 –small acquisitions + continued organic growth • Evidence of peripheral cost-cutting late in half • Medium
Slide 28: Wealth Management – Aust & NZ Monthly Subscription Revenue
Full Year Results | Year Ended 2008 Wealth Management – Aust & NZ Mthly Subscription Rev For personal use only Acquisition of TransActive business in May 08 Acquisition of Acquisition of VisiPlan DMS business in business in Aug’08 Apl’07 Acquisition of PlanTech business in Sep’06 27
Slide 29: Wealth Mgt – Aust & NZ Margin Analysis
Full Year Results | Year Ended 2008 Wealth Mgt – Aust & NZ Margin Analysis For personal use only 28
Slide 30: Wealth Management - Overview
Full Year Results | Year Ended 2008 Wealth Management - Overview For personal use only • Demand for integrated solutions, single-vendor, with scale to support client goals • Independence, commitment and scale well-regarded • Clear industry leader in Australia, New Zealand & South Africa • Australia
Slide 31: Wealth Management - Product
Full Year Results | Year Ended 2008 Wealth Management - Product For personal use only • Mortgage qualification & analytics (TransActive) now fully integrated. Specialist team for mortgage product data and tools • eApplication technology fully integrated and extended to support LIXI standard for elec
Slide 32: Wealth Management - South Africa
Full Year Results | Year Ended 2008 Wealth Management - South Africa For personal use only • IRESS Wealth Management (Spotlight) is the leading provider in South Africa with a large installed user base (16,000) and strong established client relationships • RSA team provides client support and develo
Slide 33: Review of Group Opex
Full Year Results | Year Ended 2008 Review of Group Opex For personal use only 32
Slide 34: Breakdown of Opex H2'08
Full Year Results | Year Ended 2008 Breakdown of Opex H2’08 For personal use only 33
Slide 35: Market Technology
MARKET TECHNOLOGY TT (ON i] | _ ) & | : | ml By | : 34
Slide 36: Supplementary Information
Full Year Results | Year Ended 2008 Supplementary Information: For personal use only • Headcount • Strategic charges • Non-Recurring items /Capex • Share Plans / SBP expense 35
Slide 37: Headcount & Direct Staff Costs
Full Year Results | Year Ended 2008 Headcount & Direct Staff Costs* For personal use only Acquisition of Spotlight business in Jul’07 Acquisition of VisiPlan business in Acquisition of Apl’07 Plantech business in Sep’06 * Excluding Share Based Payments 36
Slide 38: Strategic Charges - Amortising
Full Year Results | Year Ended 2008 Strategic Charges - Amortising For personal use only Amortising Intangibles arising through the acquisition of a business or company 37
Slide 39: Goodwill arising on Acquisitions
Full Year Results | Year Ended 2008 Goodwill arising on Acquisitions For personal use only 38
Slide 40: Anticipated Future Strategic Charges
Full Year Results | Year Ended 2008 Anticipated Future Strategic Charges For personal use only Assumes no goodwill impairment is identified in future periods 39
Slide 41: Non-Recurring items / Capex
Full Year Results | Year Ended 2008 Non-Recurring items / Capex For personal use only • Non-Recurring expenses • $0.054m for the period – modest business acquisition expenses and small unrealised Forex loss on intra-group loans. • CAPEX • $2.9m - No major CAPEX for the period. (2007: $12.6m was abno
Slide 42: Share Based Payments
Full Year Results | Year Ended 2008 Share Based Payments For personal use only • Share plans are a component of remuneration mix. Structure of instruments conserves cash & strongly encourages retention. Now also more tax efficient. • Expense increase reflects growth of group’s operations / headcount
Slide 43: Share Based Payments - Committed Expense
Full Year Results | Year Ended 2008 Share Based Payments - Committed Expense For personal use only (a) Cancellations reflect adjustments for cancellations as at 31 December 2008 42
IRESS Market Technology — FY2008 Earnings Presentation on 6ix