Slide 1: Analyst Briefing
Integrated Research Analyst Briefing February 2004 Presented By Steve Killelea integrated research
Slide 2: Summary of H1 2004 Results
Summary of H1 2004 Results Half Year: PAT $2.1M Vs $1.8M -H1i 2003 H2 2003 PAT <0.7M> Maintained R&D spending at $3.2M for half Cash $7.1M - No Debt Dividend 0.75 cents per share, unfranked IP Telephony new sales up 17% 43 new name customers PROGNOSIS Regional Sales: - US up 14% - Europe up 52% - As
Slide 3: The Prognosis Family
The Prognosis Family PROGNOSIS for Infrastructure Management - Performance management —. Availability and SLM — Root Cause Analysis alanine anes - Automation Historic data cate, cepky on dared —. Event management manzgemeat Fi Vis. alleaticn of cornili: « Windows So seiennons « UNIX «Heterogeneous e
Slide 4: Problems Prognosis solves for our customers
ae problems Prognosis solves for our customers Keeps core systems available ~- Improves reliability and predictability e -Warns.of: impending problems that may impact their business ~. Preemptive problem identification - Improves mean time between failures ~ Identifies issues before customers become
Slide 5: Core strengths
Core strengths e Managing High Availability applications and systems e Functional ~. Preemptive problem management e Real time analysis of key system metrics e Root ‘cause analysis — problem diagnosis. e Depth and breadth of metrics ~ Performance management -— e real time, historical, capacity plann
Slide 6: Blue-chip Customer Base
Blue-chip Customer Base PROGNOSIS manages: AOL -.Manages % billion dollars hardware Dell - Manages.E-procurement infrastructure Charles Schwab .- Standardized on PROGNOSIS to manage their. UNIX environment Royal Bank of Canada - Standardized on PROGNOSIS to manage their cross-platform environment Wo
Slide 7: Offices & Distribution
Offices & Distribution e Sales and support offices ~- Denver ~. London -. Sydney e Worldwide distribution -..60+ countries e -Customers situated ~ 45+ countries integrated research
Slide 8: Sales Distribution
Sales Distribution i ° Direct and indirect sales model world-wide © Branch office ° Distributor/reseller integrated research
Slide 9: Revenue Model
Revenue Model e Upfront Licence Fee - Annual maintenance 15-20% -.10-yearicence e Annual Rental ~ 4-year break even to licence fee e System based pricing or device based pricing integrated research
Slide 10: Results
Results $000 2003/04 | 2002/03 % Incr Revenue from license fees 6,821 7,549 -10% Revenue from maintenance fees 7,123 6,957 2% Revenue from other operating activities 320 543 ~41% Total revenue from ordinary activities 14,264 | © 15,049 -5% Research & development expenses 2,943 2,571 14% Sales & mark
Slide 11: Major Sales
Major Sales e Home Depot e Borica Bank e Accenture e Northrop Grumman e Delux Data e State Street Bank e OPTUS Communications ¢ Pulse EFT e Vodacom Mozambique e Link Interchange e Banc One integrated research
Slide 12: Review of the Last Months
Review of the Last 6 Months e Global markets improving e Successful restructure of international sales & marketing IP Telephony products improving Maintaining company R&D and sales strategy integrated research
Slide 13: Review of the Last Months - Cont
Review of the Last 6 Months - Cont e Turnaround in Europe e Recovery of Tandem sales worldwide e Improved management team WINNER of ASOCIO Awards for exporting integrated research
Slide 14: Core Product Strategy
Core Product Strategy e Maintain Tandem revenue stream or slightly increase e Isolate new product areas for high growth e Leverage current architecture integrated research
Slide 15: Growth
Growth 0% = = =-20% +20% FYOS FY06 FYO7 integrated research
Slide 16: IP Telephony
IP Telephony IP Telephony e Strong research analyst backing - Gartner - Yankee - IDC e Better connection with channel - Higher % of sales from channel e Market growth accelerating e Focus on continuing product R&D integrated research
Slide 17: Finance Overview
integrated research tegrated Research Limited ABN: 76 003 588 449 FINANCE OVERVIEW February 2004 David Leighton Chief Financial Officer-and Company. Secretary
Slide 18: 1st Half FY2004 Revenue Analysis
st Half FY2004 Revenue Analysis © Revenue type: Revenue from licence fees ($6.8 million) was 48% of total revenue. Revenue from maintenance fees of $7.1 million was 50% of revenue (up from 46% for the first half last year). e Source: $7.4 million (52%) of revenue was from recurring maintenance and a
Slide 19: 1st Half FY2004 Expense Analysis
t Half FY2004 Expense Analysis fh. e Expense type: Salaries and salary.on-costs.made up $7.9 Of million, or-70%.of total spending in the 100% first half..19% ($2.2 million) of spending is 90% 4 directly.related to other employee costs, ; ~-such as occupancy, travel and office 80%} expenses. The rema
Slide 20: AUD/USD Exchange Rates
AUD/USD Exchange Rates 1997-2004 0.80 0.75 fl my / 0.76 4 0.65 yf \ ly fh / Wl 7 waa 0.60 % i, V %, J 4 0.85 4 A W oy aso \-As 0.45 0.40 integrated research
Slide 21: AUD/USD Actual & Hedged Rates
UD/USD Actual & Hedged Rates 1997-2004 0.80 07s }— fl \ J 0.70 4 065 d \ Pianeta . xt — ¢ ‘tam arf 0.60 \ w ' \ oe eo % ' ¢ i, ’ J, 4 ' 0.55 \ Af \ <i 0.50 0.45 0.40 integrated research
Slide 22: FY2004 Outlook
FY2004 Outlook Directors. anticipate the global Result by Half (AS Millions) IT market will continue ‘to recover.in.the second half of 90 2003/04, providing an 30 opportunity for. the company to ; maintain its improving 70 | performance. over the next six 6.0 months. Hedged exchange 50 - New Li rate
Slide 23: Sales & Marketing Strategy
Sales & Marketing Strategy February 2004 Ross Ballard Sales & Marketing Director integrated research
Slide 24: Sales and Marketing Strategy
Sales and Marketing Strategy e Focus on our areas of greatest competence e Safeguard our revenue stream e Build our position for the future integrated research
Slide 25: Sales and Marketing Strategy
Sales and Marketing Strategy e Target industries which demand high-availability solutions e Increase sales into multi-platform environments e Leverage off our prestigious customer base integrated research
Slide 26: Sales and Marketing Strategy
Sales and Marketing Strategy e Provide high-value solutions through key partnerships e Work with complementary and competitive products e Build on. our strategic alliances e. Grow our direct and indirect channels integrated research
Slide 27: Sales and Marketing Strategy
Sales and Marketing Strategy e Target marketing campaigns to key industry segments e Increase product information and success stories e Build relationships with industry experts e Use innovative techniques to -capture market attention integrated research
Slide 28: Prognosis fits well with our plans to deliver 'extreme' customer service
“Prognosis fits well with our plans to deliver ‘extreme’ customer service” FNB South Africa y, integrated A research
Slide 29: Integrated Research
Research _ Presented By integrated 4 research