Slide 1: Investor Presentation
Investor Presentation August 2021 To be read in conjunction with Appendix 4D and Accounts
Slide 2: Overview
Overview Reckon Limited (ASX: RKN) is a software-as-a-service company providing cloud-based technology solutions to a range of customers including SMEs, accounting firms and law firms Investment highlights Three clearly defined operating divisions targeting small businesses, accounting and bookkeepi
Slide 3: Corporate overview
Corporate overview Capital Structure Board of directors ASX code: RKN Shares on issue: 113.3m Greg Wilkinson Market capitalisation: FOUNDER & NON-EXECUTIVE CHAIRMAN $113m (as at $1 per share) 52 week high – low: $0.625 - $1.045 Net debt: $13m Phil Hayman NON-EXECUTIVE DIRECTOR Major shareholders at
Slide 4: Serving three defined and large sectors
Serving three defined and large sectors SMALL BUSINESS ACCOUNTANTS LEGAL Accounting and Practice Management and Practice Management Payroll solutions for Compliance software for and Workflow for SMEs accounting firms law firms Growing customer base and Enterprise grade software Cost recovery, scanni
Slide 5: Financial Results - Half Year 2021
Financial Results - Half Year 2021 REVENUE EBITDA NPAT $ 38 $ 17 $ 5 million million million +2.4% over PcP* +7.1% over PcP* +18.6% over PcP* 88% subscription revenue NET DEBT NET DEBT FULLY FRANKED DEVELOPMENT REDUCTION REDUCED TO INTERIM DIVIDEND INVESTMENT $ 17 $ 13 3 cents $ 10 million million m
Slide 6: Investment in cloud based products
Investment in cloud based products $10M development investment for HY 2021 New cloud products scheduled for H2 2021 release Small Business Cloud User Growth SMALL BUSINESS USERS 110K 106K 100k 90k Reckon Invoicing Reckon Reckon Payroll inc. Mobile App Insights STP 2.0 80k 70k ACCOUNTANTS 60k 50k 40k
Slide 7: Ongoing cloud user growth
ACCOUNTING AND PAYROLL SOLUTIONS FOR SMES Ongoing cloud user growth Revenue growth of 5% and EBITDA Growth of 8% Cloud based products represent 53% of divisions available revenue 106,000 cloud users (22% annualised growth) Continued growth in payroll apps and employees being paid via Reckon payroll
Slide 8: Cloud development will drive future growth
PRACTICE MANAGEMENT AND COMPLIANCE SOFTWARE FOR ACCOUNTING FIRMS Cloud development will drive future growth Reckon APS seat growth 83k 85k 83k 80k 82k 81k 71k Division returned to growth with revenue up 1% 64k Cloud adoption via APS customers accelerating with 6% of APS users using cloud products AP
Slide 9: Provides access to the large US legal market
PRACTICE MANAGEMENT AND WORKFLOW FOR LAW FIRMS Provides access to the large US legal market Recent merger between nQueue and Zebraworks (now nQzebraworks), adds a skilled management team and complimentary cloud products to a well established, US focused legal business Unlocks growth potential throug
Slide 10: Continued focus on employee engagement
Continued focus on employee engagement Great Place To Work Certified™ We’ve created a unique working environment because we believe in inclusivity, diversity, and trust. Living and breathing these values is fundamental to our open- door policy, allowing people to thrive personally and professionally
Slide 11: Financial Highlights
Financial Highlights RECKON INVESTOR PRESENTATION AUGUST 2021 11
Slide 12: Group financial performance and cash flow
Group financial performance and cash flow HY21 HY20 GROWTH HY21 HY20 $M $M % $M $M Revenue - normalised 37.5 36.6 +2.4% Operating Cashflow Continuing operations 16.4 16.3 Discontinued operations 0.3 1.4 EBITDA - normalised 16.7 15.6 +7.1% Development Spend Continuing operations (9.7) (9.3) Discontin
Slide 13: Business Group Financials
ACCOUNTING AND PAYROLL SOLUTIONS FOR SMES Business Group Financials A subscription business with consistently strong online growth Financial performance Revenue HY21 HY20 $M $M GROWTH Revenue • Consistently strong cloud revenue growth CLOUD SUBSCRIPTION 10.4 9.6 8% • Annualised cloud unit growth: 22
Slide 14: Accountant Group Financials
PRACTICE MANAGEMENT AND COMPLIANCE SOFTWARE FOR ACCOUNTING FIRMS Accountant Group Financials Stable subscription revenue and an impressive customer base Financial highlights Revenue HY21 HY20 $M $M GROWTH Revenue SUBSCRIPTION 11.2 11.1 +1% • Division returns to growth UPFRONT AND SERVICE 0.2 0.1 +37
Slide 15: Legal Group Financials
PRACTICE MANAGEMENT AND WORKFLOW FOR LAW FIRMS Legal Group Financials Stable subscription revenue and a top tier customer base Financial highlights Revenue HY21 HY20 $M $M GROWTH Revenue SUBSCRIPTION 4.0 4.1 -3% • New sales impacted by COVID in Q1 but strong Q2 UPFRONT AND SERVICE 0.9 1.0 -12% • Rev
Slide 16: Outlook
Outlook RECKON INVESTOR PRESENTATION AUGUST 2021 16
Slide 17: Near term growth drivers
Near term growth drivers SMALL BUSINESS ACOUNTANTS LEGAL Accounting and Practice Management and Practice Management Payroll solutions for Compliance software for and Workflow for SMEs accounting firms law firms Continued cloud growth with APS Workspaces - cloud Solid pipeline of new sales Reckon One
Slide 18: Board
APPENDIX ONE Board Greg Wilkinson has over 30 years experience in the software industry. He entered the industry in the early 1980s in London where he managed Caxton Software, which became one of the UK’s leading software publishers. Greg co-founded Reckon in 1987 and was CEO until February 2006. He
Slide 19: Clive Rabie Managing Director
Clive was Chief Operating Officer of Reckon from 2001 until February 2006 and in that time played a pivotal role in its turn-around. In February 2006 Clive was appointed to the position of Group Chief Executive Officer and in July 2018 was appointed Managing Director. He has extensive management and
Slide 20: Myron Zlotnick Company Secretary
Myron has over 20 years experience as a legal practitioner, general and corporate counsel, and as a director of companies. He has extensive expertise in the technology, media and telecommunications industries. Myron Zlotnick Company Secretary RECKON INVESTOR PRESENTATION AUGUST 2021 20
Slide 21: Executive Management
APPENDIX TWO Executive Management Chris is a Chartered Accountant and has 30+ years’ experience in accounting roles and leading the financial function of large public and private companies. Chris began his career working for various accounting firms, including one of the Big 4, in South Africa and A
Slide 22: David Francis, General Manager Sales
David joined Reckon in 2013, as General Manager – Sales. Prior to this, David held executive roles in professional services firms in the UK, New Zealand and, most recently, Australia. Now based in Sydney, David has a highly client-facing role and works strategically with clients David Francis to ‘Am
Slide 23: Jessica Morris General Manager People & Culture
Jess joined the People and Culture team at Reckon in January 2016. She has diverse experience in delivering and designing progressive people and culture strategies across the tech, financial services, and banking industry. Jess has a Bachelor in Business majoring in Human Resources and Business Law
Slide 24: Additional Information
APPENDIX THREE Additional Information HY21 HY20 GROWTH $M $M % Revenue Revenue from continuing operations at constant currency (Non-IFRs) 37.5 36.6 2.4% Discontinued operations 0.8 2.3 Currency impact - 0.9 Reported revenue 38.3 39.8 EBITDA EBITDA from continuing operations at constant currency (Non
Slide 25: Resources
Resources Website reckon.com About us reckon.com/au/about-us Investors reckon.com/au/investors Media reckon.com/au/media RECKON INVESTOR PRESENTATION AUGUST 2021 25