Slide 1: ASX release cover letter
For personal use only ASX Market Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 22 February 2018 IRESS LIMITED - INFORMATION FOR RELEASE TO THE MARKET As required by the Listing Rules, IRESS encloses for release to the market a presentation to be provided to investors today at 09.
Slide 2: IRESS Full Year Results 2017
IRESS Full Year Results For personal use only 2017 22 February 2018 For the twelve months ended 31 December 2017 iress.com 1
Slide 3: Contents
Presentation overview CONTENTS For personal use only Contents FY17 overview 03 Segment overview 09 Financial information 17 Strategy overview 23 Andrew Walsh John Harris Managing Director & CEO Chief Financial Officer iress.com 2
Slide 4: Ongoing revenue and earnings growth
Ongoing revenue and earnings growth FY17 OVERVIEW Operating Revenue Segment Profit (1) NPAT For personal use only $430.0M $125.4M $59.8M UP 10% ON FY16 UP 2% ON FY16 UP 1% ON FY16 UP 13% ON FY16 ON A CONSTANT UP 3% ON FY16 ON A CONSTANT CURRENCY BASIS(2) CURRENCY BASIS (2) Operating Cash Flow Earnin
Slide 5: Sustainable long term growth
Sustainable long term growth FY17 OVERVIEW Operating Revenue Segment Profit (1) NPAT For personal use only 70 500 140 450 60 120 400 50 350 100 AUD (m) AUD (m) 300 AUD (m) 80 40 250 60 30 200 150 20 40 100 20 10 50 - - - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013
Slide 6: Key strategic highlights in 2017
Key strategic highlights in 2017 FY17 OVERVIEW Client delivery Product & Technology For personal use only • XPLAN deployment to CBA • MiFIID II compliance on time • Key milestones to CBAM, TBI, Intrinsic in the UK • Prime - changing the way advice is delivered • Delivered MSO V2 to production for TS
Slide 7: IRESS Labs
IRESS Labs FY17 OVERVIEW For personal use only Unlocking the rich functionality of our products by making them more efficient, intuitive and delightful – initial XPLAN focus in 2018. Efficient Intuitive Delightful • Less time for users to do • More logical process and • Increased user enjoyment comm
Slide 8: Growth across geographies and segments
Growth across geographies and segments FY17 OVERVIEW • Revenue and earnings growth reflects contribution from acquisitions, successful client deliveries and For personal use only continuing strong product demand. Results at higher end of November 2017 guidance. • Growth strengthened in second half:
Slide 9: Segment highlights
Segment highlights FY17 OVERVIEW APAC FM APAC WM United Kingdom For personal use only • Revenue growth despite ongoing • Continuing strong underlying product • Revenue +3% reflecting stronger market pressure. demand and revenue growth (+7%) growth in H2 from client deliveries and increased uptake •
Slide 10: Segment overview
For personal use only Segment overview iress.com 9
Slide 11: APAC Financial Markets
APAC Financial Markets SEGMENT OVERVIEW Continuing revenue resilience and AUD (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only buy-side demand. Maybank delivery Operating Revenue 56.0 57.4 113.5 57.5 57.5 115.1 1% creating opportunities in Asia. Direct Contribution 41.8 42.3 84.1 42.0 41.7
Slide 12: ANZ Wealth Management
ANZ Wealth Management SEGMENT OVERVIEW Continuing strong revenue and AUD (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only earnings growth. Key project Operating Revenue 43.5 50.3 93.8 61.6 63.5 125.1 33% delivery a feature of 2017. Direct Contribution 35.9 39.9 75.7 46.0 48.0 93.9 24% Reven
Slide 13: United Kingdom
United Kingdom SEGMENT OVERVIEW Results reflect delivery focus, GBP (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only stronger second half. Operating Revenue 29.2 31.2 60.4 30.7 31.7 62.3 3% Revenue growth driven by successful Direct Contribution 18.9 21.0 40.0 19.5 20.2 39.7 - client delive
Slide 14: Lending
Lending SEGMENT OVERVIEW Strong operational momentum - GBP (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only TSB delivered, MSO V2 Operating Revenue 8.1 5.9 14.0 6.4 7.6 14.0 - productisation, strong UK Direct Contribution 6.8 4.5 11.3 4.9 6.1 11.0 (3%) pipeline, first client outside UK. Mar
Slide 15: South Africa
South Africa SEGMENT OVERVIEW Continuing underlying ZAR (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only demand across product breadth. Operating Revenue 143.6 168.2 311.8 219.3 218.5 437.8 40% INET expands capability and Direct Contribution 110.9 132.1 243.0 167.7 168.3 336.0 38% market po
Slide 16: Canada
Canada SEGMENT OVERVIEW Wealth footprint increasing CAD (m) H1 H2 2016 H1 H2 2017 2017/2016 For personal use only following successful client Operating Revenue 8.5 8.2 16.7 8.5 9.1 17.6 6% deliveries, momentum building. Direct Contribution 4.0 3.7 7.7 4.1 4.9 8.9 16% Revenue +6% and direct contribut
Slide 17: Functional segments
Functional segments SEGMENT OVERVIEW AUD (m) (1) H1 H2 2016 H1 H2 2017 2017/2016 Product and Technology For personal use only Direct Contribution 48.7 49.7 98.4 55.6 56.2 111.8 14% Costs are largely people related reflecting IRESS’ ongoing investment in existing and new technology. % Revenue 25% 25%
Slide 18: Financial information
For personal use only Financial information iress.com 17
Slide 19: Sustainable revenue and earnings growth
Sustainable revenue and earnings growth FINANCIAL INFORMATION Revenue For personal use only 11.5 1.0 ( 8.8 ) 31.3 3.6 0.1 1.6 430.0 389.7 2016 APAC FM ANZ WM UK Lending South Africa Canada FX 2017 Segment Profit 8.5 1.2 ( 12.8 ) 18.2 ( 0.4 ) ( 0.6 ) ( 5.0 ) ( 5.5 ) ( 0.3 ) ( 1.3 ) 123.5 125.4 2016 A
Slide 20: Financial results reflect targeted investment
Financial results reflect targeted investment FINANCIAL INFORMATION Bonus expense reduced substantially in 2017 (~$4.6m) as a result of AUD (m) 2016 2017 For personal use only lower than expected revenue and earnings growth. Operating Revenue 389.7 430.0 p10% Share based payments declined as result
Slide 21: Strong cash conversion, conservative balance sheet
Strong cash conversion, conservative balance sheet FINANCIAL INFORMATION For personal use only AUD (m) Dec 2016 Dec 2017 AUD (m) Dec 2016 Dec 2017 Total current assets 73.1 84.8 Cash 23.0 28.6 Total non-current assets 589.2 586.8 Borrowings(1) (178.9) (194.4) Total Assets 662.2 671.6 Net debt 155.9
Slide 22: Segment summary - reported
Segment summary - reported FINANCIAL INFORMATION AUD (m) Revenue Direct Contribution Contribution Margin % For personal use only Reported currency 2016 2017 2016 2017 2016 2017 APAC FM 113.5 115.1 84.1 83.8 74% 73% ANZ WM 93.8 125.1 75.7 93.9 81% 75% UK 110.8 105.5 73.2 67.3 66% 64% Lending 26.0 23.
Slide 23: Depreciation and amortisation
Depreciation and amortisation FINANCIAL INFORMATION D&A - Operational 2016 2017 For personal use only Depreciation Plant & Equipment 6.4 8.0 Amortisation Software (3rd Party Purchased) 4.3 4.8 Total 10.7 12.8 D&A - Acquisition Related 1H17 2H17 1H18 2H18 1H19 2H19 Avelo 0.7 0.8 0.7 0.6 0.2 0.2 Proqu
Slide 24: Strategy overview
For personal use only Strategy overview iress.com 23
Slide 25: Our business model and competitive advantages
Our business model and competitive advantages STRATEGY OVERVIEW For personal use only Key elements of our Our competitive advantages business model Our market Our ability Our long • ~90% of our revenue is monthly leading solutions to continually term trusted recurring subscription fees re-invest in
Slide 26: Key growth drivers and strategy
Key growth drivers and strategy STRATEGY OVERVIEW For personal use only Key drivers of growth Demanding Market consolidation Demand for broader Demand for Increasing regulators with increasing business integrated solutions software that demand for increasing complexity to enable client increases adv
Slide 27: Business focus in 2018
Business focus in 2018 STRATEGY OVERVIEW For personal use only APAC: Continued migration to IOS+ and ViewPoint, and scaled response to advice demand. Delivery and growth of scaled advice (Prime). Delivery of technology answer to Canada: Delivery of wealth UK: Continued momentum in delivery, client s
Slide 28: Outlook
Outlook STRATEGY OVERVIEW For personal use only • Period on period revenue and cost remains subject to the timing of client implementations and significant industry change. • Expect growth weighted to the second half and a decline in Segment Profit in 1H18 (from 2H17), impacted by lower bonus provis
Slide 29: Disclaimer
Disclaimer For personal use only The material in this presentation is intended to be general background information on IRESS Limited and its activities, current at the date of the presentation. The information is provided in summary form and does not purport to be complete. It is not intended to be
Slide 30: Contacts
Delivering outcomes today developing For personal use only for tomorrow designing for the future CONTACTS Andrew Walsh, CEO John Harris, CFO +61 3 9018 5800 iress.com 29