Praemium Ltd · ASX:PPS
Praemium — Merger or Acquisition (September 2012)
24 slides from Praemium's merger presentation, Sep 18, 2012
Slide 1: Præmium Limited Investor Presentation
For personal use only Præmium Limited Investor Presentation Michael Ohanessian 18 September 2012 1
Slide 2: Disclaimer
Disclaimer For personal use only The material contained in this document is a presentation of general information about the Præmium Group’s activities current as at the date of this presentation (18 September 2012). It is provided in summary and does not purport to be complete. You should not rely u
Slide 3: Executive Summary
Executive Summary For personal use only Praemium has delivered a significantly improved financial result, especially in the second half of FY2012 Praemium is: A market leader in non-custodial portfolio administration in Australia. A major player in the Separately Managed Account (SMA) space in A
Slide 4: Contents
Contents For personal use only Product Overview FY2012 Financial Overview Strategic Acquisitions 4
Slide 5: Revenue profile
Revenue profile For personal use only Products Product Segment Revenue - FY2012 Other V-Wrap — Non-custodial portfolio administration 6% UK SMA 15% CPS — SMA operated by BlackRock Aus CPS 4% UK SMA — Discretionary Portfolio Service (dps) and SMARTfunds 75% Other — Includes Powerwrap and E*Trade Aus
Slide 6: What we do now
What we do now For personal use only International Australia UK (Jersey) Core processing engine & dynamic re-balancer SMA Platform SMA Platform dps dps SMARTfunds Software V-Wrap SMA Powerwrap 6
Slide 7: Post the transactions
Post the transactions For personal use only International Australia UK (Jersey) Core processing engine & dynamic re-balancer SMA Platform SMA Platform SMA Platform CPS dps dps SMARTfunds Software Software Software V-Wrap WealthCraft CRM WealthCraft CRM Powerwrap WealthCraft CRM 7
Slide 8: Contents
Contents For personal use only Product Overview FY2012 Financial Overview Strategic Acquisitions 8
Slide 9: Key FY12 Highlights
Key FY12 Highlights For personal use only Group • Significantly reduced prior year’s cash burn • Breakeven EBITDA for second half of FY2012 ($32k profit) • Annualised cost savings of $3m+ (20% of FY11 cost base) Australia • Consistent underlying revenue growth • Enhanced sales & marketing focus • R&
Slide 10: Financial Summary
Financial Summary For personal use only Præmium Group FY2012 FY2011 Change $000 $000 % Revenue 13,045 13,037 0% Expenses 15,041 18,623 (19%) EBIT* (1,996) (5,586) 64% Net Loss after Tax (3,945) (5,536) 29% Cash at Reporting Date 4,713 4,644 1% Net Assets 6,592 5,494 20% Operating Cashflow* (3,082) (
Slide 11: Significant improvement in EBIT
Significant improvement in EBIT For personal use only Group EBIT ($000’s) - (1,000) (2,000) (3,000) (4,000) H1 FY11 H2 FY11 H1 FY12 H2 FY12 Note: Excludes organisational restructure costs. 11
Slide 12: Operating cash flow: positive last quarter
Operating cash flow: positive last quarter For personal use only Quarterly Operating Cashflow ($000’s) 500 (500) (1,500) (2,500) Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 $4.3 million cash with no debt as at August 2012 12
Slide 13: Growth in underlying revenue
Growth in underlying revenue For personal use only 14,000 FY12 Revenue Bridge ($000’s) 13,037 13,045 Flat equity markets Impacting FUM in both AUS & UK 12,000 Non cash revenue Recurring revenue Final release of Strong growth in prepaid license fees core products 10,000 FY11 Revenue E*Trade Powerwrap
Slide 14: Divisional Breakdown
Divisional Breakdown For personal use only AUS UK Corporate Group Præmium Group FY12 FY12 FY12 FY12 $m $m $m $m External Revenue 11.1 1.9 13.0 Employee Expenses (5.1) (4.6) (0.1) (9.8) Operating Expenses (2.5) (1.7) (0.6) (4.8) Total Expenses (7.6) (6.3) (0.7) (14.6) EBITDA 3.5 (4.4) (0.7) (1.6) EBI
Slide 15: AUS – strong underlying earnings
AUS – strong underlying earnings For personal use only 40% Profit Margin* (%) 30% 20% 10% 0% H1 FY11 H2 FY11 H1 FY12 H2 FY12 Continued focus on profitable growth *EBITDA to revenue % 15
Slide 16: UK Growing
UK Growing For personal use only • FUM up 45% in the past year Funds on Platform (£m) • 90% increase in client base 450 400 • Driven by Praemium’s uniquely 350 scalable and transparent solution 300 250 • Stable cost base, with targeted 200 investment in sales & operations 150 100 • Focus on incremen
Slide 17: Contents
Contents For personal use only Product Overview FY2012 Financial Overview Strategic Acquisitions 17
Slide 18: Praemium to execute two acquisitions
Praemium to execute two acquisitions For personal use only Acquisitions* • Take over from BlackRock as Operator of the SMA in Australia. • Acquire WealthCraft Systems Limited in Hong Kong. Financial impact • Total cash expenses (including consideration and transaction-related costs) of approximately
Slide 19: Acquisition 1: BlackRock/Praemium SMA
Acquisition 1: BlackRock/Praemium SMA Launched in late 2005 as a revenue share partnership with Praemium receiving 20%. For personal use only Following a strategic review, BlackRock determined that a company that focusses on portfolio administration would be better placed to develop the product.
Slide 20: Well placed as the leading SMA brand
Well placed as the leading SMA brand For personal use only SMA Unaided Brand Awareness (% of Planners) BlackRock Praemium 0 5 10 15 20 25 30 Source: Investment Trends – March 2012 Planner Direct Equities & SMA Report Note: Top 11 out of 30 shown 20
Slide 21: SMA has many inherent benefits
SMA has many inherent benefits For personal use only Benefits of investing in an SMA SMA Managed Direct Shares Funds Tax efficient ✔ X ✔ Transparent ✔ X ✔ Lower brokerage costs ✔ N/A X Customisable/flexible ✔ X ✔ Access to professional managers ✔ ✔ X Beneficial ownership ✔ X ✔ After 40 years the US
Slide 22: Acquisition 2: WealthCraft
Acquisition 2: WealthCraft Praemium acquires 100% of the shares in WealthCraft Systems Limited from For personal use only WealthCraft System Inc. WealthCraft was founded in 2003 and is based in Hong Kong. Consideration of $625,000 in cash plus 2 million Praemium Limited shares: Target completion d
Slide 23: Expected benefits
Expected benefits For personal use only 1. Acquire a rapidly growing CRM+planning software business addressing the English-speaking ex-pat market in Asia. 2. Provide a sales and distribution capability for Praemium’s International investment platform targeting the same client base. 3. Bolt onto the
Slide 24: Summary
Summary For personal use only Praemium to become a global SMA platform operator 1. Will be vertically integrated as the leading SMA Operator in Australia. 2. An emerging leader in the UK platform market with a scalable SMA-based solution. 3. WealthCraft provides an Asian footprint to drive our inter