Slide 1: Results Presentation Year Ended December 2010
For personal use only Results Presentation Year Ended December 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 structure The group comprises 3 main divisions: • Business Division – Business software suitable for SME’s through to larger enterprises, personal financial software, content provider & practice software for smaller accounting firms • Division CEO – Gavin Dixon • Australi
Slide 3: Reckon Limited product suite
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Slide 4: Performance Highlights
For personal use only Performance Highlights – December 2010 Operating revenue up 6% to $90.1m EBITDA up 20% to $30.2m NPAT up 27% to $17.2m 4
Slide 5: Reckon Group
For personal use only Reckon Group – December 2010 1st half 2nd half Full year Operating revenue $46.5m $43.6m $90.1m % growth (underlying) 8% 7% 7% % split 51% 49% EBITDA $15.3m $14.9m $30.2m % growth (underlying) 23% 11% 17% % split 51% 49% EBITDA margin 33% 34% 33% 5
Slide 6: Margin trends
For personal use only Margin trends 2006 2007 2008 2009 2010 EBITDA 13.0m 16.5m 19.0m 25.1m 30.2m Margin 29% 29% 31% 29% 33% 6
Slide 7: Divisional results (excl FX impacts)
For personal use only Divisional results (excl FX impacts) – December 2010 Growth 2010 2009 Business Division operating revenue +13% $56.0m $49.8m Business Division EBITDA +32% $20.7m $15.7m EBITDA margin 37% 31% Professional Division operating revenue -2% $26.8m $27.3m Professional Division EBITDA
Slide 8: Divisional results (reported)
For personal use only Divisional results (reported) – December 2010 Growth 2010 2009 Business Division operating revenue +12% $56.0m $49.9m Business Division EBITDA +33% $20.7m $15.6m Professional Division operating revenue -5% $26.8m $28.1m Professional Division EBITDA -2% $10.8m $11.0m nQueue Bill
Slide 9: Other Highlights
For personal use only Other Highlights – December 2010 • Operating cash flow of $28.2m, up 49% • Cash balance $8.1m • Final dividend of 4.5 cents per share (4.0 cents in 2009) • Dividend franked to 90% • Dividend payout ratio 65% • EPS growth 25% to 12.4 cents per share 9
Slide 10: Cash Flow Highlights
For personal use only Cash Flow Highlights – December 2010 2010 2009 Net cash/debt at year end $8.1m - Operating cash flow $28.2m $18.9m +49% Development Cost Expenditure1 $7.6m $6.5m Amortisation of development costs & IP $6.4m $5.6m Operating cash flow after capitalised development costs $20.6m $1
Slide 11: Growing Recurring Revenue
For personal use only Growing Recurring Revenue – December 2010 100% 90% 80% 52% 70% 59% 66% 71% 60% Recurring Revenue 50% Full Product 40% 30% 39% 29% Service Revenue 11% 22% 20% 10% 18% 9% 12% 12% 0% Business Professional nQBB Group Prior year recurring 49% 66% 58% 56% revenue 11
Slide 12: Business Division
For personal use only Business Division • Product range • SME business products – mainly traditional QuickBooks range • Medium to large business products – QuickBooks Enterprise • Online business products • Wealth management products – Quicken • Elite practice management software for smaller account
Slide 13: Business Division
For personal use only Business Division – December 2010 Reckon Total revenue increase 12% Direct QuickBooks growth 14% Enterprise revenue growth (incl online) 28% Retail revenue growth 32% Corporate services revenue growth 7% 13
Slide 14: 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 • Retail market share according to retailers now 40% • QuickBooks Enterprise continues to shine • Online products gaining
Slide 15: Business Division Key Strategies
For personal use only Business Division Key Strategies • Expand Online service • Improvements to connected services • New service offerings – new Cashbook product launches in 2011 • Further leverage scalability of QuickBooks Enterprise Edition • Expand Elite customer acquisition through broader addr
Slide 16: Professional Division
For personal use only Professional Division • Product range • Fully integrated practice management and compliance suite for accounting practices • Expense management/cost recovery and other practice software modules for the legal profession in Australia • Market – Australia & NZ & UK • 135 employees
Slide 17: Professional Division Revenue Movements (excl FX)
For personal use only Professional Division Revenue Movements (excl FX) – December 2010 Total revenue Maintenance Professional Division -2% +5% Australia -1% +5% New Zealand +1% -% United Kingdom -7% +8% 17
Slide 18: Professional Division Performance
For personal use only Professional Division Performance – December 2010 $10,000,000 Software/hardware revenue • 66 new firms added in 2010, despite difficult market $9,000,000 • Adversely affected by difficult UK trading conditions • Change of strategy to a software focus in legal, impacted $8,000,0
Slide 19: Professional Division - 2010 Highlights
For personal use only Professional Division - 2010 Highlights • New products released to market, to complete the integrated suite • Strengthened position of supplier of choice to leading firms • Continued growth of client base • Successful completion of major consulting projects • Demand for new pro
Slide 20: Professional Division - Opportunities
For personal use only Professional Division - Opportunities • New business growth picked up in Q4 in Australia (revenue impact in 2011) +51% over 2009 Q4 sign-ups. • Closing pipeline in 2010 stronger than 2009 • Service demand for online and mobility solutions • New Products available in 2011 (minim
Slide 21: nQueue Billback Division
For personal use only nQueue Billback Division • 67% shareholding at 31 Dec 2010 • Market – USA legal profession • Strategically placed in the top 200 law firms • Product range • Cost Recovery Software & Hardware • Print Management • Expense Management • Embedded Solutions • Workflow for Managed Pri
Slide 22: nQueue BillBack Division
For personal use only nQueue BillBack Division – December 2010 2010 2009 Revenue (excl FX impact) Maintenance Revenue $4.8m $3.7m New Revenue $2.5m $2.6m Gross profit margin 93% 86% Focus on software solution rather than hardware 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 • Focus on business cost structure in 2010 • Positive client feedback on combined business • Sales focus in 2nd half of 2010 culminating in st
Slide 24: nQueue Billback Division – UK operation
For personal use only nQueue Billback Division – UK operation • Accounting and Legal businesses in the UK de-merged in Jan 2011 • Exchanged 25% of the UK operation for an additional 7% of the USA operation • Ownership post exchange: • USA 74% • UK 75% • Rationale: • Harnesses the US Legal domain exp
Slide 25: nQueue Billback Division – Opportunities
For personal use only nQueue Billback Division – Opportunities • Accelerated sales efforts: • Expand geographies, now including Europe & Asia • Target mid sized legal market through reseller relationships such as Canon • Extend channel/reseller relationships • Q4 sales were the strongest in the comp
Slide 26: Group trends over last years
For personal use only Group trends over last 5 years Operating revenue EBITDA 100 35 90 80 30 70 43.6 25 60 42.0 14.9 20 $m 50 13.3 $m 27.4 28.8 40 15 9.6 30 22.1 8.3 10 6.3 20 ` 43.3 46.5 11.8 15.3 31.2 6. 7 8.2 9.4 10 22.9 28.0 5 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Half year Full
Slide 27: Group trends over last years
For personal use only Group trends over last 5 years NPBT EPS 25 14 12 20 10 11.0 6.1 15 9.6 8 cents 5.3 $m 7.6 6 4.3 10 6.6 3.7 5.2 2.9 4 5 9.4 11.4 4.6 6.3 7.5 2 3.8 4.2 5.8 6.7 3.3 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Half year Full year Half year Full year 27
Slide 28: Strategic direction 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 29: Questions
For personal use only Questions Thank you 29