Slide 1: Results Presentation: twelve months ended 31 December 2016
For personal use only Results Presentation For the twelve months ended 31 December 2016 To be read in conjunction with Appendix 4E and Accounts LAWYER PLUMBER ACCOUNTANT BUTCHER BUILDER
Slide 2: The Reckon Story
The Reckon Story Our mission is to bring millions of businesses and For personal use only professionals closer together with our software to create a brave new, connected economy... It’s been quite a ride already: 800,000+ registered businesses around the 2. Document Management world have used Recko
Slide 3: The Agenda
For personal use only The Agenda 1. CEO update 2. Financial update 3. Outlook 4. Q & A 3
Slide 4: 1. CEO update
1. CEO update For personal use only Clive Rabie RECKON CEO 4
Slide 5: Delivered on guidance
Delivered on guidance For personal use only Revenue EBITDA Development Spend $97.8 million $35.3 million $22.8 million With $3.3m exchange impact With $0.6m exchange impact $0.6m impact from business sold $0.1m impact from business sold $101.7 million $36.0 million FY16 $101 - $105m guidance* FY16 $
Slide 6: EBITDA performance improves as revenue grows
EBITDA performance improves as revenue grows For personal use only Revenue and EBITDA growth at constant currency: H1 FY16 H2 FY16 7% 10% revenue growth revenue growth -8% 5% EBITDA growth EBITDA growth Group revenue of $98m, up 7% (8% at Strong new customer growth across constant currency) from $91
Slide 7: Our momentum continues
Our momentum continues All areas across the business are performing well, and looking strong into the future. For personal use only Practice and Document Management • Strong organic growth across both divisions. H1 FY16 H2 FY16 FY16 • Ramped up geographic expansion for Document Management. REVENUE $
Slide 8: Three core areas of our business
Three core areas of our business We have a strongly diversified business across three key markets, with exciting synergies between them. For personal use only Business Document Management Practice Management We provide accounting software to SME’s Our document management software is used Market leade
Slide 9: Business highlights
Business highlights For personal use only Over 39k online users (+18% annualised growth). Online user growth 23% online revenue growth over FY15. USERS 40k 35% of available revenue is now cloud. 35k Launched payroll for Reckon One into AU market in 30k April 2016. 25k Delivered 54 major feature rele
Slide 10: Document Management highlights
Document Management highlights For personal use only 7k new paying customers added in FY16, an Increase in paying customers annualised underlying growth rate of 15%. SEATS 55k Virtual Cabinet and SmartVault online portals are currently used by 617k+ users to share 50k documents. 45k Cross selling in
Slide 11: Practice Management highlights
Practice Management highlights For personal use only 6k seats added across the APS suite (8% growth). Reckon APS seat growth Highest number of new large clients in many years. Entered 2017 with strong backlog and pipeline. Expansion of an already impressive customer list. 86k 92k 74k Online timeshee
Slide 12: 2. Financial update
2. Financial update For personal use only Chris Hagglund RECKON CFO 12
Slide 13: Financial performance
Financial performance Results For personal use only FY16 FY15 GROWTH • Strong subscription revenue growth. REVENUE 97.8m 91.4m 7% • Underlying business showed solid profit growth. OPERATING EXPENSES (62.5m) (54.8m) 14% • Investment in sales and marketing primarily in the EBITDA 35.3m 36.6m -4% Recko
Slide 14: Financial performance: revenue by business and type
Financial performance Revenue by business Revenue type For personal use only CONSTANT CURRENCY: FY16 FY15 GROWTH 100% 100% 8% 9% Content revenue PRACTICE MANAGEMENT 46.8m 45.0m 4% 20% 22% Other revenue DOCUMENT MANAGEMENT 14.8m 8.7m 70% Subscription revenue BUSINESS 35.5m 35.4m - TOTAL AT CONSTANT 9
Slide 15: Business financials
Business financials Subscription business with strong online growth. For personal use only Revenue Financial performance FY16 FY15 GROWTH • Revenue of $35.5m up marginally on FY15. • Transition to subscription substantially completed (mainly in SUBSCRIPTION 25.4m 22.5m 13% Q1). PERPETUAL/SERVICE/ OT
Slide 16: Document Management financials
Document Management financials Customer growth continues to accelerate. Global market opportunity. For personal use only Revenue Financial performance • Revenue of $14.8m, up 52% from $9.8m in FY15. FY16 FY15 GROWTH SUBSCRIPTION 11.8m 6.4m 85% • 60% revenue growth in H2 FY16 (45% in H1 FY16). UPFRON
Slide 17: Practice Management financials
Practice Management financials Highest number of new large clients added in many years, to an already impressive customer base. For personal use only Revenue Financial highlights • Revenue of $47.4m, up 2% from $46.2m in FY15. FY16 FY15 GROWTH SUBSCRIPTION 32.7m 32.2m 1% • Continued growth in softwa
Slide 18: Practice Management reporting disclosure
Practice Management reporting disclosure A move towards a more meaningful reporting framework. For personal use only New revenue disclosure • As advised we have simplified the reporting in our Content FY16 FY15 business by removing the pass through ASIC fees from the GROSS REVENUE 59.8m 59.9m revenu
Slide 19: Cashflow highlights
Cashflow highlights Development spend 25 25% For personal use only 22.8 FY16 FY15 20 19.6 20% OPERATING CASHFLOW 29.7m 33.5m 18.3 16.8 14.9 DEVELOPMENT SPEND (22.8m) (19.6m) 15 15% % of revenue 12.4 12.1 A$m SMARTVAULT ACQUISITION (5.8m) - 10.7 10 10% DESKTOP SUPER SALE 1.3m - VIRTUAL CABINET FINAL 5
Slide 20: 3. Outlook
For personal use only 3. Outlook 20
Slide 21: Reckon One growth opportunity
Reckon One growth opportunity Strong, rapidly growing customer feedback. For personal use only Customer feedback “The product is fantastic, very “Easy to use, and only get charged “The system is a great price and easy to use. The pricing is very for what you use, at a reasonable is becoming more and
Slide 22: Reckon One growth opportunity: we're only getting started
Reckon One growth opportunity For personal use only We’re only getting started Only 10% in the cloud of 5 million Self-Employed and SME’s United Kingdom Only 20% in the cloud of 3 million Self-Employed and SME’s Australia Only 40% in the cloud of 500,000 Self-Employed and SME’s New Zealand And inter
Slide 23: Document Management growth
Document Management growth Velocity of our customer and user base acquisition continues to rapidly increase. Our recent SmartVault acquisition is already providing positive synergies. For personal use only Users sharing documents in the portal 650k 600k 550k 500k 450k 400k 350k 300k 250k 200k 150k 1
Slide 24: Practice Management strength
Practice Management strength We continue to add to our already impressive customer base at the fastest pace in years. For personal use only Leading accounting and legal firms across the world are using Reckon products. 24
Slide 25: Building a sustainable growing company
Building a sustainable growing company by investing in product development, sales and marketing initiatives. For personal use only Growing Proving Global We’re momentum success opportunities ready Revenue and customer We’re executing on our A leading product range, We’ve made and are making volumes
Slide 26: 4. Q & A
For personal use only 4. Q & A 26
Slide 27: Resources
Resources For personal use only Website About us Investors Media reckon.com reckon.com/au/about-us reckon.com/au/investors reckon.com/au/media Watch our new Reckon One video here: reckon.com/au/one 27