Iress Limited · ASX:IRE
Iress — IRESS Market Technology — FY2009 Earnings Presentation
40 slides from Iress's earnings presentation, Feb 24, 2010
Slide 1: ASX cover letter: 2009 Full Year Results Investor Presentation
24 February 2010 For personal use only The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam 2009 Full Year Results – Investor Presentation Please find attached a copy of an investor presentation on the Co
Slide 2: Full Year Results, Full Year Ended 31 December 2009
Full Year Results | December 2009 For personal use only Full Year Re esults Full Year Ended 31 Decembe er 2009 February 2010
Slide 3: IRESS 2009 Results
Full Year Results | December 2009 IRESS 2009 Results For personal use only • Adjusted Group profit $53.6 million (2008 8: $48.5m, up 10.5%) • Resilient performance through financial crisis, c with Revenue up 3.4% and EBITDA up 8% on 2008 2008. • Common strategy in all businesses of lon ng term clien
Slide 4: Segment Performance Against Prior Half
Full Year Results | December 2009 Segment g Performance Again g nst Prior Half For personal use only Financial Markets Wealth Management Aust & NZ Aust & NZ • Op Rev down .1% (down 0.6% on • Op Rev down 0.8% (up 5.0% on PY) PY) • EBITDA up 1.6% 1 6% ((up 10 10.9% 9% on PY) • EBITDA up 1.0% (up 2.7%
Slide 5: Group Performance Against Prior Year
Full Year Results | December 2009 Group p Performance Against g Prior Year For personal use only • Adjusted Group Profit $53.631 m Up p $5.091 million,, 10.5% on p prior yyear • Segment Contribution against prior year $A % • Financial markets Aust/NZ 1.814 35 • Financial markets Canada 1.725 34 • We
Slide 6: EBITDA Margins
Full Year Results | December 2009 EBITDA Margins For personal use only EBITDA Margin:% Revenue H1 H2 H1 H2 per Media Release 2008 2008 2009 2009 2007 2008 2009 Aust Fin Mkts 55.2% 55.5% 56.8% 57.5% 54.8% 55.3% 57.2% Can Fin Mkts (CAD) 21.3% 26.3% 29.2% 34.1% (6.4%) 23.9% 31.7% Wealth Mgt Aust 39.1%
Slide 7: Strategic Charges, Non-Recurring Expenses and Tax
Full Year Results | December 2009 For personal use only St t gi Charges Strategic Ch g N R Non-Recurring i g Expenses E • $13.916m for full year (2008:$14.802m) • Net non-recurring contribution before tax of Continued with amortisation of purchased $0.214m intangibles such as Computer Software. Ther
Slide 8: Review of Group Recurring Subscription Revenue
Full Year Results | December 2009 Review of Group Recurring Subscription S Revenue For personal use only 80 $A Millions 60 40 20 0 H1'04 H1'05 H1'06 H1'07 H1'08 H1'09 Aust Fin Mkts Canada Fin Mkts W Wealth Mgt Aust Wealth Mgt RSA Asia 7
Slide 9: Review of Group EBITDA
Full Year Results | December 2009 Review of Group EBITDA* For personal use only 50 40 AMillions 30 20 $A 10 0 H1'04 H1'05 H1'06 H1'07 H1'08 H1'09 -10 Aust Fin Mkts Canada Fin Mkts Wealth Mgt Aust Wealth Mgt RSA Asia *Defintion of EBITDA as per IRESS Media Rele ease 8
Slide 10: Relative Impact H2'09
Full Year Results | December 2009 Relative Impact H2’09 For personal use only 100% 80% 60% 40% 20% 0% Revenue EBITDA To otal Direct Staff Total Strategic (Recurring Subs) Costs Charges -20% Aust Fin Mkts Canada Fin Mkts Wealth Mgt M Aust Wealth Mgt RSA Asia *Defintion of EBITDA as per IRESS Media Re
Slide 11: Operating Cashflow per share
Full Year Results | December 2009 Operating p g Cashflow p per sharre* For personal use only Cash generation from the business continues 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 2 2006 2007 2008 2009 * Calculated as Net Cash from Operati
Slide 12: IRESS 2009 Group Outlook
Full Year Full YearResults Results||December December2009 2009 For personal use only IRESS 2009 Group p Outlook • Growth weakened in late 2008 carrying into H1 2009, stabilising H2 2009 • Reduction most marked in Financial M Markets A&NZ • Wealth management revenue impacte ed also but offset with gr
Slide 13: Daily Trades on the ASX
Full Year Results | December 2009 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 12
Slide 14: Financial Markets – Australia & NZ
Full Year Full YearResults Results||December December2009 2009 For personal use only Financial Markets – Australlia & NZ • Revenue peaked in November 2008 tre ending down to stabilise late Q2 2009: • IRESS desktop – primary source of re eductions from downsizing • New revenue across products existed
Slide 15: Financial Markets – IOS+ progress
Full Year Full YearResults Results||December December2009 2009 Financial Markets – 2009 For personal use only • IOS+ progress: • Major institutional OMS enhancements nearing completion • ASIC short net position enhancements to be available for ASIC go-live go live SX market actions • IOS+ significan
Slide 16: Financial Markets – Multi-market readiness
Full Year Full YearResults Results||December December2009 2009 For personal use only Financial Markets – Multi-m market readiness • Range of IRESS products in production n and already multi-market proven (leveraging Canadian experience). • Awaiting new operator licences in Austrralia. • Key multi-ma
Slide 17: Australia Financial Markets - Outlook
Full Year Full YearResults Results||December December2009 2009 For personal use only Australia Financial Markets - Outlook • H1 2010 outlook: • Initial run rate inline with H2 average (due to transfer of revenue now in Asia) . • New revenue offsetting levels of canccellation (now at pre-crisis level
Slide 18: Australia Financial Markets – Monthly Subscription Revenue
Full Year Results | December 2009 Australia Financial Markets – Monthly Subscription For personal use only Revenue 6.5 6.0 5.5 5.0 ns $A Million 4.5 40 4.0 3.5 3.0 2.5 2004 2005 2006 200 07 2008 2009 2010 17
Slide 19: Change in Australia Financial Markets Revenue
Full Year Results | December 2009 Change in Australia Financia al Markets Revenue For personal use only 4.0 3.0 Millions 2.0 $A M 10 1.0 - H1'04 H1'05 H1'06 H1'07 H1'08 H1'09 (1.0) (2.0) News, Royalty & Comms Other Hardwa are/ DR Trading Services IRESS + Services 18
Slide 20: Daily trades in Canada
Full Year Results | December 2009 Daily trades in Canada* For personal use only Alpha commenced 800 H2'08 700 Chi-X commenced c H1'08 Common Base from Jaan‐05 600 500 TriAct & Omega commenced H2'077 400 Pure Market commenced H1'07 300 200 100 - Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 TSXNumber of
Slide 21: Canada - Overview
Full Year Full YearResults Results||December December2009 2009 For personal use only Canada - Overview • Result significantly better than anticip pated in H2 2009 adding to gains in H1: • Revenue increased 4.6% on H1 2009 to 10.053 (CAD) • EBITDA increased 22.2% on H1 20 009 to 3.433 (CAD) ( ) • Imp
Slide 22: Canada – 2009
Full Year Full YearResults Results||December December2009 2009 For personal use only Canada – 2009 • 41 of the top 50 brokers have at least one IO OS+ in use. • Institutional I tit ti l order d managementt projects j t proggressing i wellll ffor 2010 delivery d li with ith growing i d demand d for I
Slide 23: Canada - Outlook
Full Year Full YearResults Results||December December2009 2009 For personal use only Canada - Outlook • H1 2010 outlook: • Run rate started ahead of H2 2009 avverage • Revenue increases have continued • Costs at levels appropriate for producct initiatives currently underway. • EBITDA growth anticipa
Slide 24: Canada – Monthly Subscription Revenue
Full Year Results | December 2009 Canada – Monthly Subscripttion Revenue* For personal use only 1.6 CAD$ Millions 1.2 Pre-IRESS full production level offering 0.8 0.4 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 *Assumes 100% ownership 23
Slide 25: Financial Markets – Asia
Full Year Full YearResults Results||December December2009 2009 For personal use only Financial Markets – Asia • Decision to organically invest in expandding Asian capability and seek seed client opportunities which will guide funding. • Good progress has been made so far: • Expanded international ma
Slide 26: Wealth Management
Full Year Full YearResults Results||December December2009 2009 For personal use only Wealth Management g • Australia & New Zealand • Revenue down 0 0.8% 8% and EBITDA A up 1 1.6% 6% on H1 2009 • Downward run rate momentum intto H2 from early H1 cancellations. • Revenue reductions from cost cuttting
Slide 27: Wealth Management - 2009
Full Year Full YearResults Results||December December2009 2009 For personal use only Wealth Management g - 2009 9 • eApplications: • Two major lenders now in production for LIXI-based LIXI based loan lodgement and backchannel connectivity. Others lend ders to follow. • Insurance application process
Slide 28: Wealth Management – Asia
Full Year Full YearResults Results||December December2009 2009 For personal use only Wealth Management g – Asia a • SENTRYi acquisition in January 2010 0 seeds wealth management business in Asia. Asia • Immediate opportunities to add sales and account management staff to progress growth via SENTRYi
Slide 29: Wealth Management Outlook
Full Year Full YearResults Results||December December2009 2009 For personal use only Wealth Management g Outloo ok • H1 2010 outlook: • Australia & New Zealand • Efficiency and cost remain key drive ers • Regulatory R l t reform f and d consolidatio lid ti n create t uncertainty t i t for f clients
Slide 30: Wealth Management – Aust & NZ Monthly Subscription Revenue
Full Year Results | December 2009 Wealth Management – Aust & NZ Mthly Subscription Rev For personal use only 3.5 3.0 2.5 $A Milllions 2.0 1.5 1.0 05 0.5 0.0 2004 2005 2006 2007 2008 2009 2010 29
Slide 31: Board Succession
Full Year Full YearResults Results||December December2009 2009 For personal use only Board Succession • Neil Hamilton has advised his intention to step down as Chairman and from the Board at the AGM next May. • Peter Dunai is intended to replace Mr Hamilton H as Chairman. • Mr Dunai will have an ong
Slide 32: Supplementary Information
Full Year Results | December 2009 Supplementary Information: For personal use only • Opex O O Overview i • Headcount • Strategic charges • Non-Recurring Non Recurring items / Capex • Share Plans / SBP ex xpense 31
Slide 33: Review of Group Opex
Full Year Results | December 2009 Review of Group Opex For personal use only Canada Fin Mkts (Assumes 100% Ownership) 14 Aust Fin Mkts 5 12 4 10 CAD m $Am 8 3 6 2 4 1 2 0 0 H1'04 H1'05 H1'06 H1'07 H1'08 H1'09 H1'04 H1'05 H1'06 H1'07 H1'08 H1'09 C Comms &O Other h G General lAAd i i Administration i
Slide 34: Headcount & Direct Staff Costs
Full Year Results | December 2009 Headcount & Direct Staff Co osts* For personal use only 500 Full time equivaalent staff 400 300 200 100 - H1'05 H1'06 07 H1'0 H1'08 H1'09 Aust Fin Mkts Canada Fin Mkts We ealth Mgt Aust Wealth Mgt RSA Asia 25 20 $A Millions 15 10 5 0 H1'05 H1'06 07 H1'0 H1'08 H1'09
Slide 35: Strategic Charges - Amortising
Full Year Results | December 2009 Strategic g Charges g - Amortisin ngg For personal use only Amortising intangibles arising through acquisitions Cost (AUD) Description $m Amortisation period C Canada d Fi Fin Mkts Mkt R t Reuters C Commission i i Ch Cha arge 3 479 3.479 3 years ((ending di JJun 10)
Slide 36: Non-Amortising Intangibles
Full Year Results | December 2009 Non-Amortising Intangibles For personal use only Cost (AUD) Description $m Amortisation period Canada Fin Mkts LP Go oodwill 8.835 Plantech h Goodwill 3 449 3.449 Visiplan Goodwill 10.695 Goodwill Wealth Mgt Aust Transactivve Goodwill 0 285 Will be subject to regula
Slide 37: Anticipated Future Strategic Charges
Full Year Results | December 2009 Anticipated p Future Strategic g Charges g For personal use only Assumes no goodwill impairment is identified in future periods Description H1 '1 0 H2 '1 0 H1 '1 1 H2 '1 1 H1 '1 2 H2 '1 2 Canada Fin Mkts Reuters Commission Charge 0.073 - - - - - Vi i l S Visiplan So
Slide 38: Non-Recurring items
Full Year Results | December 2009 Non-Recurring g items.. For personal use only • Non-Recurring Expenses / Contribution • Non Non-Recurring Recurring Contribution of $0$0.213m 213m m for the period (2008: ($0 ($0.054m) 054m) • Primarily relates to realised exchangge gains/losses on foreign currency
Slide 39: 2009 Share Grants
Full Year Results | December 2009 2009 Share Grants For personal use only • In 2009 the gross value of share grants made e declined by 26.7% (-10.6% if we exclude the effect of grants made to Mr Peter Dunai in 2008 and d prior periods), yet SBP expense for the year recognised in the accounts increas
Slide 40: IRESS Market Technology
iress MARKET TECHNOLOGY In, ] the, 4 . | - www.iress.com.au - / 39
IRESS Market Technology — FY2009 Earnings Presentation on 6ix