Slide 1: Full Year Results
Full Year Results | December 2010 For personal use only Full Year Re esults Full Year Ended 31 Decembe er 2010 February 2011
Slide 2: IRESS 2010 Results
Full Year Results | December 2010 IRESS 2010 Results For personal use only • Underlying Group profit $58.4 million (200 09: $53.6m, up 8.9%) & excluding Asia $59.7 million up 11%. • Revenue R growth th softer ft iin second dhhalf lf in i lin line with ith market k t conditions. diti • Group (ex Asia
Slide 3: Segment Performance Against Prior Half
Full Year Results | December 2010 Segment g Performance Again g nst Prior Half For personal use only Financial Markets Wealth Management Aust & NZ Aust & NZ • Op Rev up 5.6% (up 5.5% on PY) • Op Rev up 5.5% (up 6.0% on PY) • EBITDA up 5 5.8% 8% (up ( 4 4.0% 0% on PY) • EBITDA up 6 6.5% 5% (up ( 1010
Slide 4: Group Performance Against Prior Year
Full Year Results | December 2010 Group p Performance Against g Prior Year For personal use only • Adjusted Group Profit $58.413 m Up p $4.782 m,, 8.9% on p prior yyear • Segment Contribution against prior year $A % • Financial Markets Aust/NZ 3.449 72 • Financial Markets Canada 0.885 18 • Wealth Ma
Slide 5: EBITDA Margins
Full Year Results | December 2010 EBITDA Margins For personal use only E B ITDA M a rgin :% R e v e n u e p e r H1 H2 H1 H2 M e d iaa R e lee a s e 2009 2009 2010 2010 2008 2009 2010 Aust 56.8% 57.5% 56.3% 56.4% 55.3% 57.2% 56.3% Fin M kts C a n (C AD ) 29 2% 29.2% 34 1% 34.1% 33 6% 33.6% 33 3% 33.3
Slide 6: Strategic Charges, Non-Recurring Expenses and Tax
Full Year Results | December 2010 For personal use only St t gi Charges Strategic Ch g N R Non-Recurring i g Expenses E • $9.560m for full year (2009:$13.916m) • Net non-recurring contribution before tax of Continued with amortisation of $0.237m, includes: purchased intangibles such as Computer • 0.
Slide 7: Review of Group Recurring Subscription Revenue
Full Year Results | December 2010 Review of Group Recurring Subscription S Revenue For personal use only 80 60 A Millions 40 $A 20 0 H1'05 H1'06 H1'07 H1'08 H1'09 H1'10 Fin Mkts - Aust Fin M Mkts - Can Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - RSA Wlth Mgt - Asia 7
Slide 8: Review of Group EBITDA
Full Year Results | December 2010 Review of Group EBITDA* For personal use only 50 40 30 $A Millions 20 10 0 H1'05 H1'06 H1'07 H1'08 H1'09 H1'10 -10 Fin Mkts - Aust Fin Mkts M - Can Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - RSA Wlth Mgt - Asia *Defintion of EBITDA as per IRESS Media Release e 8
Slide 9: Change in Group Recurring Subscription Revenue
Full Year Results | December 2010 Change in Group Recurring Subscription S Revenue For personal use only 14 14 12 12 10 10 $A Millions 8 8 6 6 4 4 2 2 0 - H1'05 H1'06 H1'07 H1'08 H1'09 H1'10 -2 -2 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - Asia Wlth Mgt M t - Aust A t Wlth Mgt M t - RSA Wlth M Mgtt -
Slide 10: Relative Impact 2010
Full Year Results | December 2010 Relative Impact 2010 For personal use only 100% 80% 60% 40% 20% 0% Revenue EBITDA Total Direct Staff Total Strategic (Recurring Subs) Costs Charges -20% Fin Mkts - Aust Fin Mktss - Can Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgtt - RSA Wlth Mgt - Asia *Def intion of EB
Slide 11: Operating Cashflow per share
Full Year Results | December 2010 Operating p g Cashflow p per sharre* For personal use only Cash generation from the business co ontinues to be very strong $0.70 $0.60 $0.50 $0 40 $0.40 H2 $0.30 H1 $0 20 $0.20 $0.10 $0.00 2002 2003 2004 2005 2006 6 2007 2008 2009 2010 * Calculated as Net Cash from
Slide 12: IRESS Group Outlook
Full Year Results | December 2010 For personal use only IRESS Group p Outlook • Solid growth in 2010 • Improving conditions through H1/earlly H2.H2 • Softened revenue growth in H2 in line e with broad market conditions. • Gradual restoration of cost base over 2010 moderating result. • Trading T di g
Slide 13: Daily Trades on the ASX
Full Year Results | December 2010 Daily Trades on the ASX For personal use only 900 800 700 600 500 400 300 200 100 0 Value of Trades Number of Trades Up to January 2011 13
Slide 14: Financial Markets – Australia & NZ
Full Year Results | December 2010 For personal use only Financial Markets – Australlia & NZ • Solid H2 result from first half momentum and modest price increase: • Revenue increased 5.6% 5 6% on H1 2010 • EBITDA increased 5.8% on H1 2010 • Net N t revenue ggrowth th softer ft iin H2 th than H1: H1 •
Slide 15: Financial Markets – 2010
Full Year Results | December 2010 Financial Markets – 2010 For personal use only • IOS+ in growing demand ahead of multi-m markets • IOS+ institutional demand heightened. Numerous N projects underway at various stages. • Operator Trading Workstation (OTW) with h BMR in production for key clients to
Slide 16: Financial Markets – Multi-markets
Full Year Results | December 2010 For personal use only Financial Markets – Multi-m markets • Regulatory update. • ASIC CP 145 completed. No clear timefrrame. • Micro-structure change remains significcant opportunity. • IRESS product range ready and additional services underway: • Increased broker i
Slide 17: Australia Financial Markets – Monthly Subscription Revenue
Full Year Results | December 2010 Australia Financial Markets – Monthly Subscription For personal use only Revenue 70 7.0 6.5 60 6.0 5.5 ns $A Million 5.0 4.5 4.0 3.5 3.0 2.5 2005 2006 2007 200 08 2009 2010 2011 Up to February 2011 17
Slide 18: Australia Financial Markets - Outlook
Full Year Results | December 2010 For personal use only Australia Financial Markets - Outlook • 2011 outlook: • Revenue growth in early months has ma aintained flatter profile of H2 2010. 2010 • Unprecedented level of client/project acctivity places strategic value on delivery despite broad climate.
Slide 19: Canada - Overview
Full Year Results | December 2010 For personal use only Canada - Overview • Solid yet moderated result for 2010 comp pared to recent years. • Results flat on prior half: • Revenue flat on H1 2010 at 11.103m (CCAD) • EBITDA flat fl t on H1 2010 to t 3.701m 3 701 (CAD D) • Contrasting result by halves
Slide 20: Canada – 2010
Full Year Results | December 2010 For personal use only Canada – 2010 • Institutional order management project • Continuing rollout and secondary phase es at large bank-owned bank owned dealer. dealer • Institutional rollout now extending to sm mall and mid-sized firms. • Incorporates post trade aut
Slide 21: Canada – 2010
Full Year Results | December 2010 For personal use only Canada – 2010 • Buyside IOS (EMS) presence now in 60+ buyside b firms. Broker-neutral professional market data and trading desktop genuine appeal. • Market data • Significant enhancements to consolidatted market data with liquidity fragmentatio
Slide 22: Canada – Monthly Subscription Revenue
Full Year Results | December 2010 Canada – Monthly Subscripttion Revenue* For personal use only 1.6 CAD $ Millions s 1.2 0.8 Pre-IRESS full production level offering 0.4 2005 2006 2007 2 2008 2009 2010 2011 *Assumes 100% ownership Up to February 2011 22
Slide 23: Canada - Outlook
Full Year Results | December 2010 For personal use only Canada - Outlook • 2011 outlook • While stabilising toward end of previouss period period, flat-negative flat negative momentum of H2 2010 will flow through to results in 2011. • Together with a number of new client prrojects in delivery and ro
Slide 24: Daily trades in Canada
Full Year Results | December 2010 Daily trades in Canada* For personal use only 1,000 Alpha commenced 900 H2'08 800 Chi-X co ommenced om Jan‐05 H1'08 700 600 mon Base fro TriAct & Omega 500 commenced H2'07 400 Pure Market Comm commenced H1'07 300 200 100 - Jan 05 Jan-05 Jan 06 Jan-06 Jan 07 Jan-07 J
Slide 25: Average Daily Trades
Full Year Results | December 2010 Average Daily Trades For personal use only 2.0 1.8 0.04 0 04 0.26 1.6 0.20 1.4 1.2 Miillions 1.0 0.8 1.36 0.6 04 0.4 0.52 0.2 0.0 CAN AUS TSX CHI‐X ALPHA PURE ASX Measured over 8 weeks to 4 February 2011 25
Slide 26: Comparative Message Rates
Full Year Results | December 2010 Comparative Message Ratess (per trade per destination) For personal use only 180 160 140 120 100 170 80 156 60 5 95 40 20 29 7 ‐ TSX CHI‐X ALPHA PURE ASX CANADA AUS Measured over 8 weeks to 4 February 2011 26
Slide 27: Financial Markets – Asia
Full Year Results | December 2010 For personal use only Financial Markets – Asia • Investment in Asian expansion continues to progress well: • Core product capability for initial require ements. • Operations established with skilled loca al staff. • Seed client opportunity now established d. • Curre
Slide 28: South Africa - Acquisition Overview
Full Year Results | December 2010 For personal use only South Africa - Acquisition q Ovverview IRESS acquired 100% equity in Peresys (P Pty) Ltd – 20 January 2011. Peresys is the leading financial markets te echnology provider in South Africa. Immediate and impressive scale on day one establis
Slide 29: South Africa - About Peresys
Full Year Results | December 2010 For personal use only South Africa - About Peresys ys Peresys is the leading financial markets te echnology provider in South Africa. Established in 1996 as subsidiary of Pere egrine Holdings. Independent provider since 12/2003, MB BO from Peregrine. Peregrine
Slide 30: South Africa – Acquisition Financials
Full Year Results | December 2010 For personal use only South Africa – Acquisition q F Financials Acquisition Financials Purchase price of ZAR 340.5m, plus exp pected ZAR 34.2m performance based earn-out payable over three years (approx AUD 51 1.0m and AUD 5.1m), Payable y in cash,, from exist
Slide 31: Indicative South Africa Financials
Full Year Results | December 2010 Indicative South Africa Finan ncials For personal use only Annualised figures for 9 months Acquisition Accounting to Dec 2010 AUDm • Expected Purchase price: ZAR 375m Info Revenue >15 5 >15.5 (~AUD 56.1m) 6 1 + transaction costs EBITDA Low 6.0’s • Anticipate bulk of
Slide 32: South Africa - Strategic Rationale
Full Year Results | December 2010 For personal use only South Africa - Strategic g Ratiionale South Africa Existing IRESS Wealth Management ope erations in SA. SA Financial Markets have domestic focus with range of participation and sophistication. Peresys Successful, well-established, and
Slide 33: South Africa – Market Overview
Full Year Results | December 2010 For personal use only South Africa – Market Overvview Market size 1,000 1 000 professional trading screens 2,500 market data screens Cash equities 30% of AD$V and 20% of ADV A of ASX South African Exchanges JSE (Cash Equities) SAFEX (Financial & Agricu
Slide 34: South Africa - Sell-side Order Management
Full Year Results | December 2010 For personal use only South Africa - Sell-side Orde er Management g Peresys is main provider of sell-side orderr management, exchange trading and FIX-based order routingg in South Africa. Represented at 35 of 60 JSE Equities Mem mbers and facilitating connectivi
Slide 35: South Africa – Institutional Products
Full Year Results | December 2010 For personal use only South Africa – Institutional Products P Order routing network Peresys FIX order routing network well establlished. Used by nine of top ten buy sides and insto brokers. b Supports multi-asset class routing locally and d from overseas int
Slide 36: South Africa - Retail Trading Products
Full Year Results | December 2010 For personal use only South Africa - Retail Trading g Products Key client engagements in retail online tra ading space well underway by Peresys. Though a segment g not yyet fullyy captured. p Demand and opportunity for rich web-based front-end for retail online
Slide 37: South Africa - Market Data
Full Year Results | December 2010 For personal use only South Africa - Market Data Approximately 2500 screens in South Africca. 20-30% of Australia. Main providers of dedicated market data screens: s I-Net Bridge dominates as long-standingg domestic provider. Profile Media and Mcgregor BFA a
Slide 38: South Africa - Portfolio Management
Full Year Results | December 2010 For personal use only South Africa - Portfolio Man nagement g Multi-asset class portfolio management so olutions for sell-side and private client advisers. Key functionality aggregates JSE BDA posiition management with other assets for consolidated management, m
Slide 39: Wealth Management
Full Year Results | December 2010 For personal use only Wealth Management g • Australia & New Zealand • Resilient result with revenue up 5.5% 5 5% % and EBITDA up 6 6.5% 5% on H1 2010 • Positive momentum from new and organic o opportunities in the first and second halves, with modest price increase
Slide 40: Wealth Management - 2010
Full Year Results | December 2010 For personal use only Wealth Management g - 2010 0 • IRESS appointed as Count Financial’s stra ategic software provider. Pilot complete and rollout commencing this quarter. • Remaining VisiPlan clients actively engage ed on upgrade to XPLAN. • Continued demand for i
Slide 41: Wealth Management - 2010
Full Year Results | December 2010 For personal use only Wealth Management g - 2010 0 • Increased demand and attention to web/m mobile/tablet interactions for distributed advice networks and client interaction. • XPLAN 2.0 to be launched early Q2 delive ering leading design and user-experience redeve
Slide 42: Wealth Management – Asia
Full Year Results | December 2010 For personal use only Wealth Management g – Asia a • Investment in Asian expansion continues to progress well: • Core product capability for initial require ements and technology migration. • Business development boosted and reggional awareness growing. • Seed XPLAN
Slide 43: Wealth Management – Aust & NZ Monthly Subscription Revenue
Full Year Results | December 2010 Wealth Management – Aust & NZ Mthly Subscription Rev For personal use only 4.0 3.5 3.0 Millions 2.5 2.0 $A M 1.5 10 1.0 0.5 0.0 2005 2006 2007 20 008 2009 2010 2011 Up to February 2011 43
Slide 44: Wealth Management Outlook
Full Year Results | December 2010 For personal use only Wealth Management g Outloo ok • Australia & New Zealand • Positive momentum from previous half will flow through to 2011 results, despite early months reflecting a net flat profile. • These conditions with known revenue opportunities, o combine
Slide 45: Supplementary Information
Full Year Results | December 2010 Supplementary Information: For personal use only • Opex Overview • Headcount & Staff Costs • Depreciation, Depreciation Interest & CAPEX • Strategic charges • Non Non-Recurring Recurring items • Tax Expense & Franking • Share Grants 45
Slide 46: Review of Group Opex
Full Year Results | December 2010 Review of Group Opex For personal use only Fi Mkts Fin Mkt - Canada C d (Assumes 100% Ownership) 14 Fin Mkts - Aust 5 12 4 CAD m 10 $Am 8 3 6 2 4 1 2 0 0 H1'07 H1'08 H1'09 H1'10 H1'07 H1'08 H1'09 H1'10 Comms & Other General Administration Occupancy Hardware & Softwa
Slide 47: Change in Headcount
Full Year Results | December 2010 Change in Headcount For personal use only 120 VisiPlan acquisition TE staff 100 80 Spotlight acqu s t o acquisition Change in FT 60 Sentryi acquisition 40 20 C - H1'07 H1'08 H1'09 H1'10 -20 Fin Mkts Aust Fin Mkts Canada Fin Mkts Asia Wltth Mgt Aust Wlth Mgt RSA Wlth
Slide 48: Group – Other Contribution
Full Year Results | December 2010 Group – Other Contribution For personal use only 3 2 1 Other Cont'n $A Millions 0 -1 Interest -2 Depn'n & Amort'n -3 4 -4 -5 H1'07 H1'08 H1'09 H1'10 Group – Capital Expenditure 14 12 10 Software (3rd party) Millions 8 Office Equipment 6 Furniture & Fittings AUD M 4
Slide 49: Group Strategic Charges
Full Year Results | December 2010 Group Strategic Charges For personal use only 10 $ A Millions 8 6 4 2 - H1'07 H1'08 H1'09 H1'10 H1'11 H1'12 Fm Aust Canada Fin Mkts Fm Asia W Wealth Mgt Aust Wealth Mgt RSA Wealth Mgt Asia Anticipated Future Charges Description H2'10 H1'11 H2'11 H1'12 H2'12 H1'13 H2
Slide 50: Non-Amortising Intangibles
Full Year Results | December 2010 Non-Amortising Intangibles For personal use only Cost (AUD) Description $m Amortisation period Canada Fin Mkts LP Goodwill 8.680 will Plantech Goodw 3.157 Visiplan p Goodw will 10.695 Wealth Mgt Aust Goodwill Transactive Good dwill 0.285 Are subject to regular impai
Slide 51: Non-Recurring items
Full Year Results | December 2010 Non-Recurring g items For personal use only • Non-Recurring Expenses / Contribution • Non Non-Recurring Recurring Contribution of $0 $0.237m 237m for the period (2009: $0 $0.214m) 214m) • 0.751 reduction in provision doubtful debts d • (0.321) realised FX losses • C
Slide 52: Tax Expense & Franking
Full Year Results | December 2010 Tax Expense p & Franking g For personal use only • Tax Expense • Effective tax rate increased from 2323.4 4 % in 2009 to 25 25.6% 6% in 2010 • Favourable impact from performance rightsr to deferred shares transition, which has resulted in an overlap of deductions (2
Slide 53: Share Grants
Full Year Results | December 2010 Share Grants For personal use only • Value of share grants made in May 2010 was w closer to historical levels. • Expense (P&L) in 2010 aligns more closelyy with grant value, as the migration from 3 year performance rights to 2 year deferred shares completed effectiv
Slide 54: For personal use only
iress MARKET TECHNOLOGY 12 In, J ‘el £" all ~ munities www.iress.com.au 54