Slide 1: Results Presentation
Results Presentation For the six months ended 30 June 2018 To be read in conjunction with Appendix 4D and Accounts LAWYER PLUMBER ACCOUNTANT BUTCHER BUILDER
Slide 2: The Reckon Story
The Reckon Story Our mission is to bring millions of businesses and 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. Practice Management - Accountants world have used Reckon softwa
Slide 3: The agenda
The agenda 1. CEO update 2. Business & Practice Management Accountant Groups update 3. Practice Management Legal Group update 4. Financial update 5. Outlook 6. Q & A 3
Slide 4: 1. CEO update
1. CEO update Sam Allert RECKON CEO 4
Slide 5: Core areas of the business
Core areas of the business Business Practice Management Practice Management Group - Accountant Group - Legal Group We provide accounting software to Market leaders in practice management Used by some of the worlds leading SME’s around the world. Over 800,000+ software for professionals. 7 of the top
Slide 6: 2018 Focus
2018 Focus Set ourselves up for growth Take existing client bases Released Create on a journey to the cloud new products new markets • Cloud subscription revenue in Reckon GovConnect Medical / Health Business Group is now 42% of Reckon Cloud Point Of Sale Franchises available revenue Reckon BankData
Slide 7: Results summary
Results summary Revenue EBITDA NPAT Development Spend (Excluding transaction costs) (Excluding transaction costs) $39.9 million $17.3 million $5.9 million $7.2 million -5% underlying reduction* 3% underlying growth* 9% underlying growth* 7% underlying cashflow improvement *Note: at constant currency
Slide 8: Results summary
Results summary H1 FY18 H1 FY17 Revenue $M $M GROWTH SUBSCRIPTION REVENUE 31.1 30.9 +0.6% OTHER REVENUE 8.8 11.3 -21.7% 39.9 42.2 -5% CURRENCY - 0.1 TOTAL REVENUE - CONTINUING BUSINESS 39.9 42.3 OVERHEADS - CONTINUING BUSINESS 22.6 25.5 -11% EBITDA 17.3 16.3 +3% 8
Slide 9: 2. Business & Practice Management Accountant Groups Update
2. Business & Practice Management Accountant Groups Update Sam Allert RECKON CEO 9
Slide 10: Business Group highlights
Business Group highlights Over 51k cloud users (20% annualised user growth). Online user growth 8% cloud revenue growth over HY17. USERS 55k 42% of available revenue is now cloud. 51K 50k Released new products for growth. 45k 40k Countries operational: 35k 30k 25k 20k AU NZ UK 15k 10k 5k 0 2011 2012
Slide 11: Practice Management Accountant Group highlights
Practice Management Accountant Group highlights Subscription growth of 2% in Accountants Group. Reckon APS seat growth* 82k 82k Good performance despite disruption to business. 80k Impressive customer list. Reckon Docs market moving to subscription. 71k Countries operational: 64k AU NZ UK 2014 2015
Slide 12: New products and markets for growth
New products and markets for growth Single touch payroll New cloud-based point of sale Bank feed processing tool for solution for small businesses accountants and bookkeepers Over 750,000 SME’s with 19 or less employees will require STP compliant Most affordable cloud POS in Advisor functionality fo
Slide 13: New products and markets for growth
New products and markets for growth Launch of cloud-based practice First of its kind industry partnership Major release of Practice management software for health, with launch of Books + a white Management providing medical, and fitness professionals labelled version of Reckon One cloudification Foc
Slide 14: 3. Practice Management Legal Group Update
3. Practice Management Legal Group Update Chris Hagglund RECKON CFO 14
Slide 15: Practice Management - Legal
Practice Management - Legal Repositioned the division from Cost Recovery Expanding scan opportunity to new markets such provider to detailed WorkFlows expert in three key as: HealthCare and Accounting. areas: • Cost Recovery Next generation product to be launched this • Print Management financial ye
Slide 16: 4. Financial Update
4. Financial Update Chris Hagglund RECKON CFO 16
Slide 17: Financial performance
Financial performance Revenue H1 FY18 H1 FY17 GROWTH at constant currency: $M $M % CONTINUING BUSINESS 39.9 42.2 -5% DISCONTINUED - 7.8 CURRENCY - 0.1 39.9 50.1 EBITDA at constant currency: CONTINUING BUSINESS 17.3 16.8 3% DISCONTINUED - 1.5 TRANSACTION COSTS (0.9) CURRENCY - 0.1 16.4 18.4 NPAT at c
Slide 18: Business Group Financials
Business Group Financials Subscription business with strong online growth. Revenue H1 FY18 H1 FY17 Financial performance at constant currency: $M $M GROWTH • Revenue SUBSCRIPTION 15.0 14.7 2% • ARPU impacted by faster growing Reckon One. • Subscription now 89% of available revenue. LOAN INCOME 0.5 0
Slide 19: Practice Management Accountant Group Financials
Practice Management Accountant Group Financials Ongoing subscription growth and an already impressive customer base. Revenue H1 FY18 H1 FY17 Financial highlights $M $M GROWTH • Revenue SUBSCRIPTION 11.9 11.7 2% • Good subscription revenue growth in difficult circumstances. UPFRONT AND SERVICE 0.3 0.
Slide 20: Practice Management Legal Group Financials
Practice Management Legal Group Financials Impressive customer base with opportunity to grow scan and print markets. Revenue HY18 HY17 Financial highlights $M $M GROWTH • Revenue SUBSCRIPTION 4.2 4.5 -7% • Strong scan growth, but weaker cost recovery renewals. UPFRONT AND SERVICE 1.2 2.2 -48% • Subs
Slide 21: Cashflow highlights
Cashflow highlights Development spend HY18 HY17 25 $M $M 22.8 OPERATING CASHFLOW: 20 19.6 CONTINUING BUSINESS 15.8 15.7 18.3 16.8 17.2 DISCONTINUED BUSINESS - 0.7 14.9 15 TRANSACTION COSTS (0.4) - 12.4 12.1 A$m DEVELOPMENT SPEND: 10.7 10 7.2 CONTINUING BUSINESS (7.2) (7.8) DISCONTINUED BUSINESS - (2
Slide 22: 5. Outlook
5. Outlook 22
Slide 23: Focus on growth
Focus on growth Execute on business plans for all divisions, including: • Target cloud growth • Grow new product revenue • Grow new market revenue 23
Slide 24: 6. Q & A
6. Q & A 24
Slide 25: Resources
Resources Website About us Investors Media reckon.com reckon.com/au/about-us reckon.com/au/investors reckon.com/au/media 25