Slide 1: ASX cover letter: 2011 Half Year Results Investor Presentation
25 August 2011 For personal use only The Manager Company Announcements Office Australian Stock Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam 2011 Half Year Results – Investor Presentation Please find attached a copy of an investor presentation on th
Slide 2: Half Year Results, Half year ended 30 June 2011
Half Year Results| June 2011 For personal use only Half Year Re esults Half yyear Ended 30 June 201 11 August 2011
Slide 3: IRESS H1'11 Results
Half Year Results| June 2011 IRESS H1’11 Results For personal use only • Underlying Group profit $29.8 million (H2’1 10: $30.3m, down 1.5%) excluding Asia $30.7m (H2’10 $31.0m, down 1.1%) • Revenue R growth th softer ft iin fi firstt half h lf in i line li with with market k t conditions. diti • Con
Slide 4: Segment Performance Against Previous Half - Financial Markets
Half Year Results| June 2011 Segment g Performance Again g nst Previous Half - For personal use only Financial Markets Aust & NZ South Africa (ZAR) (no prior period) • Op Rev up 0.6% (up 6.2% on PY) • Op Rev R51.8m (AUD 7.3m) • EBITDA d down 5 5.9% 9% (down (d 0 0.5% 5% on PY Y) • EBITDA R19 0 R19.0
Slide 5: Segment Performance Against Previous Half - Wealth Management
Half Year Results| June 2011 Segment g Performance Again g nst Previous Half – For personal use only Wealth Management Aust & NZ Asia (AUD) (start up phase) • Op Rev up 5.3% (up 11.1% on PY) • Op Rev $0.1m down $0.1m • EBITDA up 1 1.1% 1% (up ( 7 7.6% 6% on PY) • EBITDA $(0 6)m flat $(0.6)m • PAT up
Slide 6: Group Performance Against Prior Half
Half Year Results| June 2011 Group p Performance Against g Prior Half For personal use only • Adjusted Group Profit $29.825 m Down $0.441 m,, 1.5% on p prior half • Segment Contribution against prior year $A • Financial Markets Aust/NZ (2.153) • Financial Markets Canada (0.001) • Financial Markets R
Slide 7: EBITDA Margins
Half Year Results| June 2011 EBITDA Margins For personal use only EBITDA M argin:% Revenue per H2 H1 H2 H1 M edia Release 2009 2010 2 2010 2011 2008 2009 2010 Aust 57.5% 56.3% 56 6.4% 52.7% 55.3% 57.2% 56.3% Fin Mkts Can (CAD) 34.1% 33.6% 33 3.3% 32.9% 23.9% 31.7% 33.5% RSA (ZAR) 36.7% Aust 41 5% 41
Slide 8: Strategic Charges and Non-Recurring Expenses
Half Year Results| June 2011 For personal use only St t gi Charges Strategic Ch g N R Non-Recurring i g Expenses E • $8.861m for half (H2’10:$4.618m) • Net non-recurring expenses before tax of Change primarily from $4.361m of $0.388m, includes: amortisation charges arising on assets • 0.271 acquisit
Slide 9: Review of Group Recurring Subscription Revenue
Half Year Results| June 2011 Review of Group Recurring Subscription S Revenue* For personal use only 100 80 $A Millions 60 $ 40 20 0 H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - RSA Wlth Mgt - Asia * Excludes revenues on
Slide 10: Review of Group EBITDA
Half Year Results| June 2011 Review of Group EBITDA* For personal use only 50 40 $A Millions 30 $ 20 10 0 H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 Fin Mkts - Aust Fin Mkts - Can n Fin Mkts - RSA Fin Mkts - Asia -10 Wlth Mgt - Aust Wlth Mgt - RS SA Wlth Mgt - Asia *Defintion of EBITDA as per IRESS Media R
Slide 11: Change in Group Recurring Subscription Revenue
Half Year Results| June 2011 Change in Group Recurring Subscription S Revenue For personal use only 12 12 10 10 8 8 $A Millionss 6 6 $ 4 4 2 2 0 - H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 -2 2 -2 2 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - RSA Wlth Mgt - Asi
Slide 12: Relative Impact H1'11
Half Year Results| June 2011 Relative Impact H1’11 For personal use only 100% 80% 60% 40% 20% 0% Revenue EBITDA Tota al Direct Staff Total Strategic (Recurring Subs) Costs Charges -20% Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - RSA Wlth Mgt - Asia *Defin
Slide 13: Operating Cashflow per share
Half Year Results| June 2011 Operating p g Cashflow p per sharre* For personal use only Cash generation from the business impa acted by return to normal effective tax rate in H1’11 $0.70 40% Intro oduction of Emp ployee Share Trust $0.60 35% $0.50 Efffective Taxx Rate are $0 40 $0.40 cents per sha 3
Slide 14: Deductions on Employee Share Trust impacts on cashflow
Half Year Results| June 2011 Deductions on Employee Sha are Trust impacts on cashflow For personal use only per share h $0.12 Tax payments relative to long-term rate** $0.08 are ents per sha $0.04 $0.00 Approx 10 cps impact ce -$0.04 -$0 08 -$0.08 2003 2004 2005 2006 2007 2008 2009 2010 2011* H1 H2
Slide 15: IRESS Group Outlook
Half Year Results| June 2011 For personal use only IRESS Group p Outlook • Trading 2011 • Flat momentum from H2 2010 with re evenue growth late H1 aligning to project activity. • Flat aggregate experience over coursee of H1. • Material increase in demand for technnology solutions and project activit
Slide 16: Daily Trades on the ASX
Half Year Results| June 2011 1.6 Dailyy Trades on the ASX For personal use only 1.2 Number of Trades Millions 0.8 30 day 0.4 Moving Average 800 0.0 700 Jun-1 11 Jul-11 Aug-11 600 500 400 300 200 100 0 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Up to Ju
Slide 17: Financial Markets – Australia & NZ
Half Year Results| June 2011 For personal use only Financial Markets – Australlia & NZ • Reduced H1 2011 result from flatter mom mentum and increased operating costs: • Revenue increased 0.6% 0 6% on H2 2010 (uup 6 6.2% 2% pcp) • EBITDA decreased 5.9% on H2 2010 (down 0.5% pcp) • Net N t revenue ggr
Slide 18: Financial Markets – H1'11
Half Year Results| June 2011 Financial Markets – H1’11 For personal use only • IOS+ key product for integrated trading envvironment to multiple destinations • Institutional clients leading charge with clients at various stages. • IOS+ 5.09 in production with Tier1 broke er, in bridged configuration.
Slide 19: Financial Markets – Multi-market transition
Half Year Results| June 2011 Financial Markets – Multi-m market transition For personal use only • Multi-markets • Chi-X – conformance complete. Anticipa ating October market launch. • ASX PureMatch P M t h –conformance f process nextt week. k Launch L h postt Chi-X. Chi X • IRESS product range read
Slide 20: Financial Markets – Monthly Subscription Revenue
Half Year Results| June 2011 Financial Markets – Monthly Subscription Revenue For personal use only 80 8.0 70 7.0 6.0 $A Millions 5.0 $ 4.0 3.0 2006 2007 2008 2009 2010 2011 Up to August 2011 19
Slide 21: Financial Markets - Outlook
Half Year Results| June 2011 For personal use only Financial Markets - Outlook • 2011 outlook: • Revenue growth end H1/early H2 aligning to project activity activity, but few data points. points • Continued unprecedented level of clientt/project activity demands delivery focus. • Expect continuation
Slide 22: Canada - Overview
Half Year Results| June 2011 For personal use only Canada - Overview • Re-emerging result following flat prior halff. • Revenue (CAD) increased 7.0% 7 0% on H2 2010 (up 7.1% 7 1% on pcp) • EBITDA (CAD) increased 5.7% on H2 20 010 (up 5.1% on pcp) • Completion C l ti off severall positive iti iinitia
Slide 23: Canada – 2011
Half Year Results| June 2011 For personal use only Canada – 2011 • Institutional order management project • Rollout complete at large bank-owned bank owned dealer dealer. d • A second bank-owned dealer is schedulled to begin rollout later this year. • Other small and mid-sized firms beginning rollou
Slide 24: Canada – 2011
Half Year Results| June 2011 For personal use only Canada – 2011 • Buyside IOS+ extended with new features supporting rich sell-side integration while maintaining position of independent multi-broker EMS. • Implementation of IRESS Optical Network (ION) in Canada now underway. • Market M k td data t
Slide 25: Canada – Monthly Subscription Revenue
Half Year Results| June 2011 Canada – Monthly Subscripttion Revenue* For personal use only 1.6 $ Millions s 1.2 CAD$ Pre-IRESS full production level 0.8 offering 0.4 2006 2007 2008 2009 2010 2011 *Assumes 100% ownership Up to August 2011 24
Slide 26: Canada - Outlook
Half Year Results| June 2011 For personal use only Canada - Outlook • 2011 outlook • Trading has commenced in H2 flat compared with H1 H1, in line with market conditions. conditions • A number of client projects completing and a starting rollout phase. • The business continues to target positivve EB
Slide 27: Daily trades in Canada
Half Year Results| June 2011 Daily trades in Canada* For personal use only 600 Alpha commenced H2 08 H2'08 500 Chi-X commenced d H1'08 2006 400 Common Base from 2 TriAct & Omega 300 commenced H2'07 Pure Market commenced H1'07 200 100 - Jan-06 Jan-07 Jan-08 Ja an-09 Jan-10 Jan-11 TSX Value of trades
Slide 28: Average Daily Trades
Half Year Results| June 2011 Average Daily Trades For personal use only 4.0 3.0 2.0 Number of Trades ons 2.0 Millio 0.23 30 day 1.0 Moving 1.5 Average 0.27 0.0 Jun-11 Jul-11 Aug-11 Millions 1.0 M 1.33 0.59 05 0.5 0.0 CAN AUS TSX CHI‐X ALPHA ASSX Measured over 8 weeks to 28 July 2011 27
Slide 29: Comparative Message Rates (per trade per destination)
Half Year Results| June 2011 Comparative Message Ratess (per trade per destination) For personal use only 200 150 100 157 121 50 33 8 ‐ TSX CHI‐X ALPHA ASX CANADA AUS Measured over 8 weeks to 28 July 2011 28
Slide 30: Financial Markets – Asia
Half Year Results| June 2011 For personal use only Financial Markets – Asia • Investment in Asia continues to progress well: w • Local team building as operational activvity increases. • First of a number of phases in delivery with w major Singaporean bank. • IOS+ supporting international executionn
Slide 31: Financial Markets – South Africa
Half Year Results| June 2011 For personal use only Financial Markets – South Africa A • Steady growth in users and sites offset by lo ower than expected volume-based revenue g rates reduced in line with lower volumes,, and fewer tradingg days • Order routingg message y • OTC revenue share also impac
Slide 32: Financial Markets – South Africa
Half Year Results| June 2011 For personal use only Financial Markets – South Africa A • Portfolio/Wealth Management • JSE migration of backoffice now resche eduled to 2012. 2012 • Delay creates further opportunity for IPS S/XPLAN in private client and institutional space ahead of backoffice migratio
Slide 33: Financial Markets – South Africa – Outlook
Half Year Results| June 2011 For personal use only Financial Markets – South Africa A – Outlook • 2011 outlook • Effort Eff t to t localise l li and d implement i l t IRESS product d t suite it andd seekk aligned li d technology t h l opportunities remains the focus of 201 11, establishing a platfor
Slide 34: Wealth Management – Australia & NZ
Half Year Results| June 2011 For personal use only Wealth Management g – Austtralia & NZ • Resilient result • Revenue increased 5.3% 5 3% on H2 201 10 (up 11.1% 11 1% on pcp) • EBITDA increased 1.1% on H2 2010 0 (up 7.6% on pcp) • Positive momentum from new and organic og opportunities in the first
Slide 35: Wealth Management - H1
Half Year Results| June 2011 For personal use only Wealth Management g - H1 11 1 • XPLAN 2.0 released and well received for design and user-experience. In production with numerous clients and increasing demand to upgrade. • Numerous institutional XPLAN implementa ations underway with clients reposit
Slide 36: Wealth Management – Aust & NZ Monthly Subscription Revenue
Half Year Results| June 2011 Wealth Management – Aust & NZ Mthly Subscription Rev For personal use only 4.0 3.0 $A Milllions 20 2.0 1.0 0.0 2006 2007 2008 2009 2010 2011 Up to August 2011 35
Slide 37: Wealth Management Outlook
Half Year Results| June 2011 For personal use only Wealth Management g Outloo ok • Australia & New Zealand • Positive momentum from previous half will flow through to 2011 results. • These conditions with known revenue opportunities, o combined with the delivery costs associated with large project d
Slide 38: Wealth Management - South Africa
Half Year Results| June 2011 Wealth Management - Soutth Africa For personal use only • Revenue down 8.0% and EBITDA down 41 1.4 % on H2 2010 respectively (ZAR) • Overview • XPLAN 2.0 in production at major clientt over the half, and rolling out to other existing clients. • Established implementation
Slide 39: Wealth Management – Asia
Half Year Results| June 2011 For personal use only Wealth Management g – Asia a • Investment in Asia continues to progress well: w • Local team building as operational activvity increases. • Business development boosted and reggional awareness growing. • Hong Kong Advice network live on XPLA AN, wit
Slide 40: Wealth Management – UK initiative
Half Year Results| June 2011 For personal use only Wealth Management g – UK initiative i • Medium term growth initiative: • Interest in exposure to UK market, subjeect to our long-standing risk profile. • Ongoing assessment of advice market a and opportunity for IRESS solution set. set • Increased c
Slide 41: Office locations and contact details
For personal use only AUSTRALIA ASIA CANADA NEW ZEALAND SOUTH AFRICA Melbourne | +61 3 9018 5800 Hong Kong | +852 3965 3341 Toronto | +1 416 90 07 9200 Auckland | +64 9 300 5571 Johannesburg | +27 11 236 4700 Sydney | +61 2 8273 7000 Singapore | +65 6248 4622 Wellington | +64 4 462 6850 Durban | +27
Slide 42: Supplementary Information
Half Year Results| June 2011 Supplementary Information: For personal use only • Divisional dashboards • Strategic charges • Tax expense & franking • Share grants
Slide 43: Financial Markets - Australia
Half Year Results| June 2011 Financial Markets - Australia a For personal use only H1 2010 H1 2011 H1'10 5% 1% OPEX 6% 2% H1'11 %Chg LC 2% 5% 5% (A#039;000) (A#039;000) 3% 2% 3% Operating Revenue 50,847 54,008 6% EBITDA* 28,628 28,479 - -1% PAT* 20,095 19,532 - -3% Non Recurring Exp 119 (631) 84% 82% Avg
Slide 44: Financial Markets - Canada
Half Year Results| June 2011 Financial Markets - Canada For personal use only H1'10 4% 3% 1% OPEX 4% 4% 1% H1'11 H1 2010 H1 2011 2% 1% % %Chg LC 7% (CAD#039;000) (A#039;000) (CAD#039;000) (A#039;000) 9% Operating Revenue 11,086 11,910 11,878 11,719 7% EBITDA* 3,721 3,980 3,911 3,856 5% PAT* 2,371 2,536 2,530 2,
Slide 45: Financial Markets - RSA
Half Year Results| June 2011 Financial Markets - RSA For personal use only OPEX 6% 2% H1'11 H1 2010 H1 2011 %Chg LC 3% 5% (ZAR#039;000) (A#039;000) (ZAR#039;000) (A#039;000 0) 3% Operating Revenue 0 0 51,819 7,281 1 EBITDA* 0 0 19,010 2,674 4 PAT* 0 0 12,923 1,818 8 Non Recurring Exp 0 0 113 16 6 81% Avg Headco
Slide 46: Financial Markets - Asia
Half Year Results| June 2011 Financial Markets - Asia For personal use only H1 2010 H1 2011 %Chg LC L 1% OPEX 1%5% 1%1% H1'11 H1'10 10% (A#039;000) (A#039;000) 4% 7% Operating Revenue 235 517 120 0% 2% 1% EBITDA* (207) (498) 141 1% PAT* (209) (423) 102 2% Non Recurring Exp (135) 139 79% 88% Avg Headcount
Slide 47: Wealth Management - Australia
Half Year Results| June 2011 Wealth Management - Austra alia For personal use only H1'10 7% 2%1% OPEX 4% 1% H1'11 H1 2010 H1 2011 %Chg LC 0% 5% 0% 6% 4% (A#039;000) (A#039;000) Operating Revenue 21,308 23,672 11% % EBITDA* 9,027 9,714 8% % PAT* 5,381 6,330 18% % Non Recurring Exp (3) 82 85% 85% Direct Sta
Slide 48: Wealth Management - RSA
Half Year Results| June 2011 Wealth Management - RSA For personal use only H1'10 4% 4% OPEX 3% 4% H1'11 H1 2010 H1 2011 %Chg LC 9% 9% (ZAR#039;000) (ZAR$ 000) (A#039;000) (A$ 000) (ZAR#039;000) (ZAR$ 000) (A#039;000) (A$ 000)) 1% 2% 5% 6% Operating Revenue 23,544 3,505 21,880 3,091 -7% EBITDA* 7,738 1,150 5,147
Slide 49: Wealth Management – Asia
Half Year Results| June 2011 Wealth Management – Asia For personal use only H1'10 6% 0% OPEX 7% 3% H1'11 8% H1 2010 H1 2011 %Ch g LC 0% 15% (A#039;000) (A#039;000) 7% Operating Revenue 164 66 - -60% 1% EBITDA* (563) (591) 5% 6% PAT* (394) (415) 5% 68% 79% Non Recurring Exp 1 (12) Direct Staff (inc AL) Oth
Slide 50: Group Strategic Charges
Half Year Results| June 2011 Group Strategic Charges For personal use only 20 15 $AUD Millions 10 5 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fin Mkts Aust Fin Mkts Can Fin Mkts RSA Fm Asia a Wlth Mgt g Aust Wlth Mgt g RSA Wlth Mgt g Asia Anticipated Future Charges Description H1 '1 1 H2 '
Slide 51: Non-Amortising Intangibles
Half Year Results| June 2011 Non-Amortising Intangibles For personal use only Cost (AUD) Description $m Amortisation period Canada Fin Mkts LP Goodwill 8.260 Fin Mkts RSA Peresys Goodwill 12.050 Plantech Goodwilll 3.157 Visiplan Goodwill 10.695 Goodwill Wealth Mgt Aust will Transactive Goodw 0.285 W
Slide 52: Tax Expense & Franking
Half Year Results| June 2011 Tax Expense p & Franking g For personal use only • Tax Expense • Effective tax rate increased up to 28.4% 28 4% in H1 H1’11 11 (up from 16.2% 16 2% in H1’10) H1 10) • Rate change was flagged last year. Efffective tax rate in prior periods was low following transition of
Slide 53: Share Grants
Half Year Results| June 2011 Share Grants For personal use only • Value of staff share grants made in May 20 011 (excludes MD): • Deferred shares & Deferred Share Rightss $5.714m (2010: $5.052m) • Performance Rights $1 595m (2010: $1.435m) $1.595m $1 435m) • Increase aligns with headcount growth. •