Slide 1: IRESS Full Year Results 2017
IRESS Full Year Results 2017 22 February 2018 For the twelve months ended 31 December 2017 iress.com 1
Slide 2: Presentation overview
Presentation overview CONTENTS 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 3: Ongoing revenue and earnings growth
Ongoing revenue and earnings growth FY17 OVERVIEW Operating Revenue Segment Profit (1) NPAT $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 Earnings Per Share Dividends
Slide 4: Sustainable long term growth
Sustainable long term growth FY17 OVERVIEW Operating Revenue Segment Profit (1) NPAT 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 2014 2015 2016 2017 2
Slide 5: Key strategic highlights in 2017
Key strategic highlights in 2017 FY17 OVERVIEW Client delivery Product & Technology • 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 TSB • Digital superannua
Slide 6: IRESS Labs
IRESS Labs FY17 OVERVIEW 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 common activities workflow
Slide 7: Growth across geographies and segments
Growth across geographies and segments FY17 OVERVIEW • Revenue and earnings growth reflects contribution from acquisitions, successful client deliveries and continuing strong product demand. Results at higher end of November 2017 guidance. • Growth strengthened in second half: Revenue +3%, Segment P
Slide 8: Segment highlights
Segment highlights FY17 OVERVIEW APAC FM APAC WM United Kingdom • 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 • Buy-side demand contin
Slide 9: Segment overview
Segment overview iress.com 9
Slide 10: APAC Financial Markets
APAC Financial Markets SEGMENT OVERVIEW Continuing revenue resilience and AUD (m) H1 H2 2016 H1 H2 2017 2017/2016 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 83.8 - Revenue growth
Slide 11: ANZ Wealth Management
ANZ Wealth Management SEGMENT OVERVIEW Continuing strong revenue and AUD (m) H1 H2 2016 H1 H2 2017 2017/2016 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% Revenue and earnings growth
Slide 12: United Kingdom
United Kingdom SEGMENT OVERVIEW Results reflect delivery focus, GBP (m) H1 H2 2016 H1 H2 2017 2017/2016 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 delivery and increased clien
Slide 13: Lending
Lending SEGMENT OVERVIEW Strong operational momentum - GBP (m) H1 H2 2016 H1 H2 2017 2017/2016 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. Margin 84% 77% 81% 77% 80
Slide 14: South Africa
South Africa SEGMENT OVERVIEW Continuing underlying ZAR (m) H1 H2 2016 H1 H2 2017 2017/2016 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 position. Margin 77% 79%
Slide 15: Canada
Canada SEGMENT OVERVIEW Wealth footprint increasing CAD (m) H1 H2 2016 H1 H2 2017 2017/2016 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 contribution +16% Margin 47% 45
Slide 16: Functional segments
Functional segments SEGMENT OVERVIEW AUD (m) (1) H1 H2 2016 H1 H2 2017 2017/2016 Product and Technology 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% 25% 26% 25% 25% Inves
Slide 17: Financial information
Financial information iress.com 17
Slide 18: Sustainable revenue and earnings growth
Sustainable revenue and earnings growth FINANCIAL INFORMATION Revenue 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 APAC FM ANZ WM UK Lendi
Slide 19: 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 lower than expected revenue and earnings growth. Operating Revenue 389.7 430.0 10% Share based payments declined as result of increased forfeitur
Slide 20: Strong cash conversion, conservative balance sheet
Strong cash conversion, conservative balance sheet FINANCIAL INFORMATION 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 155.9 165.8 Total current li
Slide 21: Segment summary - reported
Segment summary - reported FINANCIAL INFORMATION AUD (m) Revenue Direct Contribution Contribution Margin % 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 23.8 21.1 18.6 81% 78% So
Slide 22: Depreciation and amortisation
Depreciation and amortisation FINANCIAL INFORMATION D&A - Operational 2016 2017 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 Proquote & Pulse 0.4 0.4 0.
Slide 23: Strategy overview
Strategy overview iress.com 23
Slide 24: Our business model and competitive advantages
Our business model and competitive advantages STRATEGY OVERVIEW 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 partnerships and our p
Slide 25: Key growth drivers and strategy
Key growth drivers and strategy STRATEGY OVERVIEW 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 advice requirements busin
Slide 26: Business focus in 2018
Business focus in 2018 STRATEGY OVERVIEW 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 super admin efficiency
Slide 27: Outlook
Outlook STRATEGY OVERVIEW • 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 provision in 2H17 not repeat
Slide 28: Disclaimer
Disclaimer 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 relied upon as advice
Slide 29: Contacts
Delivering outcomes today developing for tomorrow designing for the future CONTACTS Andrew Walsh, CEO John Harris, CFO +61 3 9018 5800 iress.com 29