Slide 1: 2024 Half Year results
2024 Half Year results Investor presentation 19 August 2024 1
Slide 2: Group Highlights & Business Unit Performance
Group Highlights & Business Unit Performance Marcus Price | CEO 2
Slide 3: Group Highlights: Transformation delivering strong results
Group Highlights: Transformation delivering strong results Adjusted EBITDA Adjusted EBITDA Operating leverage Margin Strong growth driving significant in earnings $67m margin expansion 21.7% ⬆ 52%1 ⬆ 760bps1 Leverage ratio FY24 Adjusted EBITDA Balance Sheet FY24 Guidance ⬆Up 9%2 deleveraged ⬇1.2x upg
Slide 4: Transformation delivering operating leverage: Pro forma results
Transformation delivering operating leverage: Pro forma results demonstrating strength of businesses which contributed to full period Pro forma Revenue Pro forma Costs Pro forma Returns Margin 4% 246.2 -4% 620bps 21.7% 20.0% 15.5% 237.3 236.9 Pro forma Revenue $AUDm Pro forma Costs $AUDm Adjusted Pr
Slide 5: APAC Wealth: Revenue resilient with strong growth in earnings
APAC Wealth: Revenue resilient with strong growth in earnings Revenue Adjusted EBITDA Adjusted EBITDA Margin • New pricing frameworks being implemented $66.6m $25.2m • 11% opex reduction - enhanced delivery model & ⬆3% ⬆36% greater operational rigour • Reinvestment back into core products. 37.3% 37.
Slide 6: Trading & Global Market Data: Revenue resilient despite softer trading environment
Trading & Global Market Data: Revenue resilient despite softer trading environment; improved operating margins on lower cost base Revenue Adjusted EBITDA Adjusted EBITDA Margin • Upgraded sales capability driving new business wins & $101.5m $22.2m sustainable price increases, offset by industry ⬆1%
Slide 7: Superannuation: Performance below expectations, strategic options under review
Superannuation: Performance below expectations, strategic options under review Revenue Adjusted EBITDA $26.5m ($3.6)m • Current performance is below acceptable level • Actions have been taken on cost and revenue; improved second half ⬇7% n/m expected. • New CEO Sam Wall appointed in August • Strateg
Slide 8: UK: Significant turnaround under strengthened leadership
UK: Significant turnaround under strengthened leadership Revenue Adjusted EBITDA Adjusted EBITDA Margin • UK business turnaround executed through $70.7m $13.1m strengthened leadership team led by Harry Mitchell ⬆11% ⬆90% • Strong margin enhancement • Three notable Wealth 18.5% contracts re-signed - £
Slide 9: South Africa and Canada: Focused on empowering local management
South Africa and Canada: Focused on empowering local management Revenue Adjusted EBITDA Adjusted EBITDA Margin • Solid growth in revenue and $34.8m $8.4m continued improvement on earnings. ⬆5% ⬆55% • Focused on empowering local management to drive 24.1% results. 22.7% Adjusted EBITDA margin Revenue
Slide 10: Financials
Financials Julia Wong | Deputy CFO 10
Slide 11: 1H24 - Key metrics: Results demonstrate benefits of transformation program
1H24 - Key metrics: Results demonstrate benefits of transformation program Adjusted EBITDA Underlying PAT (UPAT) NPAT Leverage $67.0m $33.0m $17.3m ⬇1.2x ⬆52% vs pcp ⬆$18.2m vs pcp up from $(139.8)m in pcp (post sale of UK Mortgages1) NPATA Underlying EPS Free Cash Flow Dividend $17.2m $18.2cps $26.4
Slide 12: Group P&L: Adjusted EBITDA up 52%, costs down 10%
Group P&L: Adjusted EBITDA up 52%, costs down 10% $AUDm 1H23 1H24 % vs PCP P&L Highlights Total Revenue 311.6 309.0 (1%) • Broadly flat revenue reflects sale of businesses; pro forma revenue up 4% to $302.4m Staff costs (173.2) (153.4) (11%) • Opex 10% lower; disciplined approach to cost Cost of sales
Slide 13: Group P&L continued: Adjusted EBITDA reconciliation to NPAT
Group P&L continued: Adjusted EBITDA reconciliation to NPAT $AUDm 1H23 1H24 % vs PCP Strong growth in NPATA driving improved cashflow Adjusted EBITDA 44.0 67.0 52% Excluded items (14.5) (20.2) 39% • NPATA of $17.2m, up $12.7m driving improved free M&A related items cashflow (0.9) (7.4) - Transformatio
Slide 14: Revenue: Solid pro forma revenue growth
Revenue: Solid pro forma revenue growth Pro forma revenue +4% * Pro forma: revenue from business that continued for full 1H23 and 1H24 periods, excludes Platforms, MFA and Pulse. 14 Note: 1H24 revenue includes +$5.7m favourable FX translation
Slide 15: Costs: Lower opex driven by cost discipline across Group
Costs: Lower opex driven by cost discipline across Group Pro forma expenses -4% Note: Pro forma is costs from business that continued for full 1H23 and 1H24 periods, excludes Platforms, MFA and Pulse. 1H24 costs includes -$4.5m unfavourable FX translation 15
Slide 16: Adjusted EBITDA: Material growth in key business segments
Adjusted EBITDA: Material growth in key business segments Pro forma Adjusted EBITDA +45% 16 Note: Pro forma Adjusted EBITDA from business that continued for full 1H23 and 1H24 periods, excludes Platforms, MFA and Pulse. 1H24 Adjusted EBITDA includes +$1.2m favourable FX translation
Slide 17: Balance sheet: Significantly stronger
Balance sheet: Significantly stronger Free cash flow improving Net debt reduced Leverage ratio within target range A$m (pre-cap mgmt) A$m - 22% Net debt reduced by $240.6m - 54% 135.2 (post (post Mortgages Mortgages sale) sale) • Free cash flow improvement of 28% to $26.4m (1H23: $20.7m) • Leverage rat
Slide 18: Significant uplift to 2024 Guidance
Significant uplift to 2024 Guidance Guidance1 Prior guidance2 Upgraded guidance Upgraded guidance pre asset sales post asset sales FY24 Adjusted EBITDA $122m - $132m $135m -$141m $126m -$132m Up 9% 1 % change in guidance applied at the midpoint. FY24 Adjusted EBITDA pre-asset sales assumes 12 month c
Slide 19: Summary and Outlook
Summary and Outlook Marcus Price | CEO 19
Slide 20: Focus of 2H24: Complete transformation program; identify future growth opportunities
Focus of 2H24: Complete transformation program; identify future growth opportunities Transformation at ‘three Growth vectors explored Embed operational discipline quarter time’ Business focused on Transformation disciplines to Benefits realised ahead of assessing future growth continue beyond 2H. sch
Slide 21: Contact
Contact Marcus Price Managing Director & CEO Julia Wong Deputy Chief Financial Officer +61 3 9018 5800 iress.com © Iress 2024 21
Slide 22: Appendices
Appendices 22
Slide 23: APAC Wealth Management (constant currency)
APAC Wealth Management (constant currency) A$m 1H23 2H23CC FY23 1H24CC Recurring revenue 64.2 64.8 129.0 65.3 Non-recurring revenue 0.7 0.7 1.4 1.2 Total Revenue 64.9 65.5 130.4 66.5 Staff costs (25.8) (21.3) (47.1) (21.8) Cost of sales (4.2) (3.6) (7.8) (3.9) Other direct expenses (2.4) (1.9) (4.3)
Slide 24: Trading & Global Market Data (constant currency)
Trading & Global Market Data (constant currency) A$m 1H23 2H23CC FY23 1H24CC Recurring revenue 99.1 99.1 198.2 98.1 Non-recurring revenue 1.8 2.3 4.1 2.1 Total Revenue 100.9 101.4 202.3 100.2 Staff costs (30.2) (27.0) (57.2) (26.7) Cost of sales (35.1) (32.3) (67.4) (32.3) Other direct expenses (5.5
Slide 25: Superannuation (constant currency)
Superannuation (constant currency) A$m 1H23 2H23CC FY23 1H24CC Recurring revenue 24.1 19.3 43.4 18.7 Non-recurring revenue 4.3 6.5 10.8 7.8 Total Revenue 28.4 25.8 54.2 26.5 Staff costs (21.7) (21.3) (43.0) (22.0) Cost of sales (0.5) (0.2) (0.7) (1.4) Other direct expenses (2.1) (3.8) (5.9) (3.0) In
Slide 26: UK pro forma (constant currency) and UK 1H24 reconciliation
UK pro forma (constant currency) UK (Pro forma) UK 1H24 reconciliation A$m 1H23 2H23CC FY23 1H24CC A$m Continuing MSO Proforma Pulse Total UK Recurring revenue 54.2 55.3 109.5 57.2 Recurring revenue 44.5 12.7 57.2 2.9 60.1 Non-recurring revenue 9.6 8.3 17.9 9.5 Non-recurring revenue 3.8 5.7 9.5 0.1
Slide 27: UK continuing vs divested (constant currency)
UK continuing vs divested (constant currency) UK - Continuing UK Divested (Mortgages & Pulse) A$m 1H23 2H23 FY23 1H24 A$m 1H23 2H23CC FY23 1H24CC Recurring revenue 42.8 43.3 86.1 44.5 Recurring revenue 15.8 16.2 32.0 15.6 Non-recurring revenue 3.3 3.4 6.7 3.8 Non-recurring revenue 6.3 7.1 13.4 5.8 T
Slide 28: Managed Other (constant currency)
Managed Other (constant currency) Managed other - South Africa & Canada Managed other - Divested A$m 1H23 2H23CC FY23 1H24CC A$m 1H23 2H23CC FY23 1H24CC Recurring revenue 31.9 31.7 63.6 33.0 Recurring revenue 11.0 8.1 19.1 2.3 Non-recurring revenue 1.3 2.0 3.3 1.5 Non-recurring revenue 5.0 3.4 8.4 3
Slide 29: 1H24 Underlying NPAT
1H24 Underlying NPAT $AUDm 1H23 1H24 Reported NPAT (139.8) 17.3 Adjustments: Add: M&A related activity 0.9 7.4 Transformation related costs 13.6 12.8 Intangibles impairment / derecognition 142.9 - Amortisation of acquired intangibles 6.3 7.8 Deduct: (Gains)/Loss on disposal of subsidiary - (1.3) Net
Slide 30: Glossary
Glossary Constant Currency Results are converted at the average foreign exchange rates used for 1H23 Constant Currency Growth Growth based on constant currency results Free Cash Flow Cash generated from operating activities less taxes, net interest, capital expenditure and lease payments Leverage Ne
Slide 31: Disclaimer
Disclaimer The material in this presentation is intended to be general background information on Iress Limited and its activities, current at the These risks and uncertainties could cause actual results, performance or events to differ materially from those expressed or date of the presentation. The