IRESS Limited · ASX:IRE
IRESS — FY2015 Earnings Presentation
34 slides from IRESS's earnings presentation, Feb 25, 2016
Slide 1: 2015 Full Year Results
2015 Full Year Results Year ending 31 December 2015 Andrew Walsh – Managing Director & CEO John Harris - CFO 25 February 2016 iress.com
Slide 2: Sustainable growth in revenue and earnings
Sustainable growth in revenue and earnings Operating Revenue $Am 2014 2015 FY15 361.5 Operating Revenue 329.0 361.5 p10% FY14 329.0 Segment Profit (1) 111.4 119.2 p7% FY13 250.6 Segment Profit after SBP (2) 102.5 109.3 p7% Segment Profit Reported (NPAT) 50.7 55.4 p9% FY15 119.2 Basic EPS (c per shar
Slide 3: Strong momentum in H2 – particularly in UK WM
Strong momentum in H2 – particularly in UK WM Operating Revenue 2015 v 2014 2H15 v 1H15 2H15 v 2H14 Strong UK Wealth performance (local currency) in H2 (excl acquisitions): A&NZ FM - - q 1% • 7% revenue growth in H2 from H1 - A&NZ WM p 13% p 7% p 13% investment in implementation capacity in H1 conve
Slide 4: Business highlights
Business highlights Australia & NZ United Kingdom South Africa Canada Asia • Resilient financial • First half investment • Continued strong • Revenue resilient • Demand for CFD markets revenue in wealth capacity revenue growth (+1%) despite trading platform and despite challenging now converting to
Slide 5: Continuing diversification of revenue and earnings
Continuing diversification of revenue and earnings 2015 Operating Revenue 2015 Segment Profit Asia Canada 1% 6% Other* Lending 6% RSA 6% 7% ANZ FM Lending 30% 9% ANZ FM UK 48% OutsideA&NZ 17% 29% OutsideA&NZ 39% 2014: 45% 2014: 25% UK 25% ANZ WM 22% ANZ WM 32% Operating Revenue generated outside Aus
Slide 6: Financial markets resilient. Wealth management reflecting trends.
Financial markets resilient. Wealth management reflecting trends. Underpinned by ongoing investment in core products and technology Financial markets Wealth management • Institutional sell-side conditions remain challenging • Macro wealth management themes consistent globally and evolution continues
Slide 7: IRESS product and solution overview
IRESS product and solution overview Relevant product combination for trading, portfolio management, advice and mortgages Financial markets Wealth management Lending Market data and trading software Integrated wealth management Multi-channel mortgage sales and including order and execution platform o
Slide 8: United Kingdom growth is a significant opportunity
United Kingdom growth is a significant opportunity 65m people, £880bn FUM, 9000+ financial advisory businesses and over 200 private wealth managers Industry Trends Client Challenges IRESS Opportunity • Fragmented industry undergoing • Delivering scalability – driving • Increasing demand for integrat
Slide 9: 2015 strategic acquisitions in the United Kingdom
2015 strategic acquisitions in the United Kingdom Proquote and Pulse – relevant positions in trading, market data, connectivity and portfolio management Strategic Focus Overview of transactions • Increasing need for unified, flexible and reliable technology • Net of acquired surplus cash, combined n
Slide 10: Product innovation
Product innovation iress.com
Slide 11: Leveraging IRESS platform scale brings solution flexibility
Leveraging IRESS platform scale brings solution flexibility User-centered design examples leveraging IRESS core architecture • ViewPoint - IRESS’ next generation active trading platform. • Designed for exceptional user experience. • Built on the latest technologies leveraging IRESS core architecture
Slide 12: Leveraging IRESS platform scale brings solution flexibility
Leveraging IRESS platform scale brings solution flexibility Prime scaled-advice designed for client engagement leveraging XPLAN core • Prime - objective-based, scalable advice solution built leveraging IRESS’ wealth platform. • Delivers scalable and guided advice and allows people to access the advi
Slide 13: Leveraging IRESS platform scale brings solution flexibility
Leveraging IRESS platform scale brings solution flexibility Evolving advice will require deliberately unified digital experiences • Self-directed (‘robo-advice’) tools allowing consumers to receive end to end advice and product/investment selection through a digital portal. • Leveraging IRESS APIs,
Slide 14: Leveraging IRESS platform scale brings solution flexibility
Leveraging IRESS platform scale brings solution flexibility MSO platform to meet operating efficiency and digital strategies of our lending clients • MSO (V2) - highly configurable and functionally rich solution, to manage full Mortgage Sales and Originations process (from enquiry, to funds, to bank
Slide 15: Financial
Financial iress.com
Slide 16: Financial overview
Financial overview AUD (m) 2014 2015 Notes Operating Revenue 329.0 361.5 p 10% • Non-recurring items: • Transaction and integration costs associated with the acquisition Operating Costs (217.5) (242.3) p 11% of Proquote and Pulse Segment Profit 111.4 119.2 p 7% • Implementation of a new global HR sy
Slide 17: Sustainable revenue and segment profit growth
Sustainable revenue and segment profit growth 370 Operating Revenue 13.8 360 7.5 (1.2) 350 3.4 0.1 340 8.9 0.4 361.5 (0.4) 330 329.0 320 2014 Revenue ANZ FM ANZ WM Asia RSA Canada UK Lending FX 2015 Revenue Segment Profit 120 2.4 2.9 116 2.0 (1.5) 0.6 5.3 0.1 112 (4.1) 119.2 108 111.4 104 100 2014 S
Slide 18: Net debt and cash management
Net debt and cash management AUD (m) 2014 2015 p Cash 74.9 39.2 (35.7) (1) Borrowings (179.1) (202.4) (23.3) Net debt 104.2 163.2 (59.0) (1) Excludes capitalised borrowing costs ($1.9m) and accrued interest ($0.4m) • Strongly cash generative business – $90.7m cash from operations in 2015 (2014: $82.
Slide 19: Segment profit margins
Segment profit margins % Operating Revenue 1H14 2H14 2014 1H15 2H15 2015 ANZ FM AUD 47% 46% 46% 43% 43% 43% ANZ WM AUD 47% 44% 46% 46% 49% 48% UK (ex Lending) GBP 20% 27% 23% 19% 24% 22% South Africa ZAR 26% 32% 29% 33% 33% 33% Canada CAD 30% 12% 21% 13% 13% 13% Group (ex Lending) AUD 36% 36% 36% 33
Slide 20: Segment overview
Segment overview iress.com
Slide 21: Australia & New Zealand - Financial markets
Australia & New Zealand - Financial markets AUD (m) 2014 2015 • Revenue resilient amidst challenging market conditions. Revenue run-rate higher at year end despite BBY and CIMB withdrawing. Some user and third-party license relocation with market. Operating Revenue 108.9 108.6 0% Segment Profit 50.6
Slide 22: Australia & New Zealand - Wealth management
Australia & New Zealand - Wealth management • Revenue and segment profit growth reflect strong underlying demand for AUD (m) 2014 2015 XPLAN and platform capability to support multiple unified advice channels. Operating Revenue 71.4 80.3 p 13% Segment Profit 32.7 38.3 p 17% • Revenue growth driven b
Slide 23: United Kingdom – (excl Lending)
United Kingdom – (excl Lending) • Excluding acquisitions, total wealth management run rate revenue +8% GBP (m) 2014 2015 in 2015, +11% in H2 from H1. Sourcing revenue ~50% of total. Recurring revenue represents over 90% of total wealth revenue. Operating Revenue 41.0 44.6 p 9% • Investment in implem
Slide 24: UK - Lending
UK - Lending • Decline in revenue due to one-off items in 2014. Segment Profit growth GBP (m) 2014 2015 driven by full year of cost savings following business restructure in 2014. Operating Revenue 16.7 16.1 q 4% • MSO continues to facilitate 25% of loans originated in UK. Segment Profit 2.2 3.6 p 6
Slide 25: South Africa
South Africa • Continuing strong revenue and earnings growth reflects product range, ZAR (m) 2014 2015 strong local support, and strengthened position in local market. Operating Revenue 220.0 252.3 p 15% • Increase in Segment Profit reflects revenue growth partially offset by Segment Profit 63.1 82.
Slide 26: Canada
Canada CAD (m) 2014 2015 • Revenue resilience over the half amidst challenging sell-side conditions, particularly in mid-market institutional. Operating Revenue 18.5 18.6 p1% • Increased levels of mid-tier firm closures/mergers in H2 2015 - impacted by economy and trading, costs, and capital require
Slide 27: Asia
Asia • Strong revenue growth in 2015, following 19% growth in 2014. AUD (m) 2014 2015 Operating Revenue 1.9 2.5 p 34% • Revenue growth driven primarily by an increase in use and functionality of IRESS’ online trading platform by brokers offering CFD’s in Segment Profit (3.6) (4.0) q 11% Singapore. W
Slide 28: 2016 business focus across regions
2016 business focus across regions UK: Continued momentum in delivery and revenue. Value-creation following acquisitions. Successful delivery to landmark PWM clients. Product deployment and Canada: Focus on new sales of MSO. diversified growth from established cost base. Successful delivery of SE As
Slide 29: Appendices
Appendices iress.com
Slide 30: Strong cash flow and steady dividends
Strong cash flow and steady dividends Operating Cash Flow 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H2 Dividend 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H2 iress.com 30
Slide 31: Balance sheet
Balance sheet AUD (m) 2014 2015 Cash 74.9 39.2 Trade and other receivables 34.6 37.3 Total current assets 109.5 76.6 Plant and equipment 9.7 10.0 Intangibles 433.3 529.3 Deferred tax assets 21.4 28.4 Total non-current assets 464.4 567.7 Total Assets 573.9 644.3 Trade facility - 2.1 Trade and other p
Slide 32: Depreciation & Amortisation
Depreciation & Amortisation AUD (m) 2014 2015 Depreciation 6.3 6.1 Computer Software 13.9 16.5 Customer relationships 3.1 3.6 Customer list 0.1 - Brands - 0.1 Amortisation 17.1 20.1 Total Depreciation & Amortisation 23.4 26.3 Amortisation 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 Software 1.
Slide 33: 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 34: iress.com
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