Bravura Solutions Limited · ASX:BVS
Bravura Solutions — H1 2021 Earnings Presentation
36 slides from Bravura Solutions's earnings presentation, Feb 25, 2021
Slide 1: 1H21 Results Presentation
1H21 Results Presentation 25 February 2021
Slide 2: Important notice and disclaimer
Important notice and disclaimer The information contained in this document (including this notice) and discussed at this presentation (collectively, the Presentation) has been prepared by Bravura Solutions Limited (Bravura). The Presentation is subject to the conditions outlined below. Your receipt
Slide 3: Agenda
Agenda 1 Key Highlights 2 COVID-19 Impact and Strategy Update 3 Group Results 4 Segment Results 5 Looking Forward 6 Appendices
Slide 4: 1H21 Result in Line With Guidance
1H21 RESULT IN LINE WITH GUIDANCE ▪ Bravura’s 1H21 results reflect lower UK project work for both implementation and post go-live as a result of the one-off impact of COVID-19. ▪ Bravura delivered 1H21 NPAT of A$9.0m, broadly in line with guidance. ▪ Group revenue down 14%1, EBITDA2 down 38%1, and N
Slide 5: COVID-19 Impact and Strategy Update
COVID-19 Impact and Strategy Update
Slide 6: Impact of COVID-19
IMPACT OF COVID-19 ▪ Staff and client operations. Bravura’s employees are based in the UK, Australia, New Zealand, South Africa, India and Poland. While COVID-19 has impacted each of these countries differently, Bravura’s internal systems, which support Bravura’s employees to collaborate globally, h
Slide 7: Strategy Update
STRATEGY UPDATE Fund managers moving Reduced interest in Underserviced middle Need for lower Need to improve end- Market developments to provide a wealth large-scale customer experience tier of clients administration costs management capability implementations Technology strategy Componentisation/
Slide 8: Total Addressable Market
TOTAL ADDRESSABLE MARKET1 UK total addressable market Australia total addressable market UK ▪ Total addressable market (TAM) in the UK is estimated at ~GBP1.2b ~A$1.0b ~GBP1.2b per annum of client IT spend. ▪ The TAM comprises funds administration, platforms, DFMs, corporate DC, and SIPP/SSAS. BVS B
Slide 9: Financial Considerations
FINANCIAL CONSIDERATIONS Bravura’s transition from traditional contracts to subscription-based contracts is underway, underpinned by R&D, product componentisation, Sonata Alta development, digital products and recent acquisitions. Traditional client revenue mix Subscription-based client revenue mix
Slide 10: Group Results
es bravura v solutions Group Results
Slide 11: 1H21 Result in Line With Guidance
1H21 RESULT IN LINE WITH GUIDANCE ▪ Wealth Management revenue down 17% and EBITDA2 down 29%. A$m 1H20 1H21 $ chg % chg EBITDA margin2 decreased to 25% (29% in 1H20). The lower result was attributable to a COVID-related decline in UK professional services Wealth Management 1 91.0 75.2 -15.8 -17% work
Slide 12: 1H21 Results – Impact of Delta Acquisition
1H21 RESULTS – IMPACT OF DELTA ACQUISITION Excluding Including ▪ Bravura acquired Delta Financial Systems (Delta) for A$42m in October A$m, 1H21 acquisition Acquisition acquisition 2020. Wealth Management 1 73.2 2.0 75.2 ▪ Delta provides technology to power complex pensions administration in the UK
Slide 13: Revenue by Geography
REVENUE BY GEOGRAPHY 1H20 to 1H21 revenue waterfall bridge (A$m) ▪ Bravura saw group revenue decline 14% in 1H21 compared to 1H20. ▪ addition . to revenue ▪ reduction . to revenue ▪ The revenue decline was primarily attributable to lower revenues in 1.2 0.5 the UK, offset by slightly higher revenue
Slide 14: Long-Term Revenue and EBITDA
LONG-TERM REVENUE AND EBITDA Revenue (A$m) EBITDA1 (A$m) 1H 2H 274.2 1H 2H 257.7 57.8 221.5 48.6 191.9 139.1 184.7 130.3 38.6 32.3 152.1 118.6 24.8 98.4 32.6 89.9 20.1 80.4 14.4 20.2 17.5 135.1 7.7 127.4 115.7 102.9 9.4 23.7 25.5 94.8 93.5 71.7 18.2 18.5 15.8 12.5 8.1 2 FY15 FY16 FY17 FY18 FY19 FY20
Slide 15: Recurring Revenue
RECURRING REVENUE Licence fees (A$m) Project fees (A$m) Bravura’s commercial strategy is to grow our Recurring Revenue base Recurring Revenue, attached (A$m) Recurring Revenue, contracted (A$m) ▪ Contracted Recurring Revenue was up 8% in 1H21 compared to the pcp. 11.9 ▪ Attached Recurring Revenue de
Slide 16: Strong Financial Position
STRONG FINANCIAL POSITION ▪ Bravura is in a robust financial position, with cash of A$56.4m at balance date. A$m 30 Jun 2020 31 Dec 2020 Bravura continues to evaluate a pipeline of additional acquisitive and organic growth opportunities. Cash 99.1 56.4 ▪ Bravura acquired Delta Financial Systems (Del
Slide 17: Segment Results
es bravura v solutions Segment Results
Slide 18: Wealth Management
WEALTH MANAGEMENT ▪ Segment revenue down 17% and EBITDA down 29%. Segment EBITDA A$m 1H20 1H21 $ chg % chg margin1 down to 25% (29% in 1H20). Segment revenue 91.0 75.2 -15.8 -17% ▪ The decrease in segment revenue and earnings was attributable to a COVID-related decline in UK professional services wo
Slide 19: Funds Administration
FUNDS ADMINISTRATION ▪ Segment revenue down 8% and EBITDA1 down 14%. Segment EBITDA A$m 1H20 1H21 $ chg % chg margin1 declined to 42% (44% in 1H20). Segment revenue 44.1 40.5 -3.6 -8% ▪ Revenue and earnings were also negatively impacted by a COVID-related Segment EBITDA1 19.6 16.9 -2.7 -14% decline
Slide 20: Outlook
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Slide 21: Looking Forward
LOOKING FORWARD NEW SLIDE Outlook ✓ Industry structural demand for SaaS, microservices, cloud and subscription-based services is strengthening ✓ COVID-19 has accelerated digital transformation ✓ Bravura is starting to see increasing market confidence as a result of vaccine rollouts in the UK ✓ As va
Slide 22: Appendix A Additional Financial Disclosure
Appendix A Additional Financial Disclosure
Slide 23: Recurring Revenue by Half-Year
RECURRING REVENUE BY HALF-YEAR Licence fees (A$m) Project fees (A$m) Bravura’s commercial strategy is to grow our Recurring Revenue base Recurring revenue, attached (A$m) Recurring revenue, contracted (A$m) ▪ Contracted Recurring Revenue was up 8% in 1H21 compared to the pcp. 5.0 11.7 2.7 ▪ Attached
Slide 24: Statutory Income Statement
STATUTORY INCOME STATEMENT A$m 1H20 1H21 $ chg % chg Revenue from contracts with customers 133.4 114.5 -19.0 -14% Other income 2.5 1.4 -1.1 -44% Employee benefits expense -79.4 -73.3 6.1 -8% Depreciation and amortisation 1 -9.4 -10.4 -1.0 11% Foreign exchange gain/(loss) 0.0 0.9 0.9 nm Finance costs
Slide 25: Statutory Statement of Financial Position
STATUTORY STATEMENT OF FINANCIAL POSITION A$m 30 Jun 2020 31 Dec 2020 Cash 99.1 56.4 Trade receivables 43.8 50.1 Contract assets 12.7 13.0 Other current assets 9.2 11.4 Total current assets 164.8 130.9 Intangible assets 196.2 239.7 Property, plant and equipment 63.4 58.0 Contract assets 6.9 5.6 Othe
Slide 26: Statutory Cash Flow Statement
STATUTORY CASH FLOW STATEMENT A$m 1H20 1H21 A$m 1H20 1H21 Receipts from customers 127.8 113.8 Payments to suppliers and employees -123.4 -104.4 Interest received 0.9 0.2 EBITDA1 25.5 15.8 Income taxes paid -9.2 -1.4 Trade, other debtors, and contract assets -14.9 -4.5 Total operating cash flow (dire
Slide 27: Appendix B Sustainability
es bravur v solutions Appendix B Sustainability
Slide 28: Sustainability
SUSTAINABILITY Environment Social Governance ✓ Established Environment Work Group ✓ Increased paid leave for volunteering Reviewed and updated our approach to: ✓ Introduced new “Ways of Working” ✓ Sourcing sustainable power ✓ Anti-Slavery and Human Trafficking ✓ Implemented support programs for COVI
Slide 29: Appendix C Products and Services
Appendix C Products and Services
Slide 30: Products and Services
PRODUCTS AND SERVICES Bravura provides digital enterprise software solutions supporting sophisticated financial services products across front, middle and back office, including digital delivery across multiple devices to advisers and end consumers. Products Processes Features ▪ Investment products
Slide 31: Bravura's Products
BRAVURA’S PRODUCTS Sonata Microservices AdviceOS Financial planning software that Customer-centric solution that allows financial advisers to provide streamlines the administration of a Microservice products include comprehensive face to face financial range of financial products, unifies workflow a
Slide 32: Bravura Addresses Key Client Challenges
BRAVURA ADDRESSES KEY CLIENT CHALLENGES Challenges faced by participants… … can be solved by Bravura technology Evolving and complex 1 regulatory environment ✓ Regulatory risk management Demand for mobile and 2 “self-directed” technology Increasing ✓ Leading technology and innovation demand Bravura
Slide 33: Sonata Simplifies Legacy Client Systems
SONATA SIMPLIFIES LEGACY CLIENT SYSTEMS Unified, customer-centric solution Siloed, disparate legacy IT systems Advisers and clients Advisers and clients Move to a Call centre Call centre Call centre true customer- One common customer database and registry 1 2 3 centric solution One single code base
Slide 34: Appendix D Delta Acquisition
Appendix D Delta Acquisition
Slide 35: Delta – Complex UK Pensions Administration
DELTA – COMPLEX UK PENSIONS ADMINISTRATION Revenue components ▪ Bravura acquired Delta Financial Systems for A$42m in October 2020. ▪ Delta provides technology to power complex pensions administration in the UK market. Professional services ▪ Demand for complex pension administration is driven by: ▪
Slide 36: For More Information, Visit
For more information, visit: www.bravurasolutions.com/investors/ investors@bravurasolutions.com