Slide 1: ASX release cover letter
For personal use only ASX Market Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 22 February 2017 IRESS LIMITED - INFORMATION FOR RELEASE TO THE MARKET As required by the Listing Rules, IRESS encloses for release to the market a presentation to be provided to investors today at 09.
Slide 2: 2016 Full Year Results
For personal use only 2016 Full Year Results For the year ended 31 December 2016 22 February 2017 iress.com 1
Slide 3: Contents
Contents For personal use only Andrew Walsh – Managing Director & CEO John Harris - CFO 1. FY16 overview 2. Financial information 3. Q&A iress.com 2
Slide 4: FY16 overview
For personal use only FY16 overview iress.com 3
Slide 5: FY16 Overview: Result reflects strategic, focused growth
FY16 Overview For personal use only Result reflects strategic, focused growth Strong performance in key markets including United Kingdom and Australia Targeted investment in established segments and growth areas Well positioned for sustainable growth and returns iress.com 4
Slide 6: Strong result underpinned by strategic, focused growth
FY16 Overview Strong result underpinned by strategic, focused growth For personal use only On FY15 Operating revenue Segment Profit Reported NPAT +8% +4% +7% (+13% on a constant (+7% on a constant djskaldjskaljdkslajdskl currency basis) currency basis) adjskladjskladjskladjs kaldjskladjskladjskla Re
Slide 7: Disciplined growth strategy delivering returns
FY16 Overview Disciplined growth strategy delivering returns For personal use only $Am 2015 2016 Operating Revenue - reported 361.5 389.7 p8% Operating Revenue - constant currency basis (1) 361.5 409.9 p13% Segment Profit – reported (2) 119.2 123.5 p4% Segment Profit - constant currency basis (2) 11
Slide 8: 2016 business highlights
FY16 Overview 2016 business highlights • Major milestone achieved under a long-term partnership with prominent wealth manager Tilney Group to deliver an integrated private wealth Delivering value technology platform bringing together portfolio management, trading, market data, revenue management, re
Slide 9: Overview by region
FY16 Overview Overview by region For personal use only APAC United Kingdom South Africa Canada • Financial markets revenue growth • Strong underlying revenue and • Strong underlying revenue (+15%) • Revenue impacted by market amid ongoing challenging market earnings growth driven by and earnings (+2
Slide 10: Diversification of revenue and earnings
FY16 Overview Diversification of revenue and earnings Operating Revenue Segment Profit For personal use only 2015 2016 2015 2016 Canada South Africa Canada South Africa Canada South Africa 6% South Africa Canada 7% 2% 7% 4% 8% 1% 7% UK Lending UK Lending UK Lending UK Lending 1% 7% 6% 9% APAC FM APA
Slide 11: Strategic and complementary acquisitions
FY16 Overview Strategic and complementary acquisitions Financial Synergy INET BFA For personal use only • Leading independent provider of software to the Australian • Leading provider of market data in the South superannuation industry. Flagship product, Acuity, is the African market. core registry
Slide 12: Delivering value through innovation
FY16 Overview Delivering value through innovation For personal use only Product & Technology teams focused end-to-end needs of clients and users • Capitalising on the value of broad functionality and comprehensive connectivity • Ongoing integration of our product components and capability • Leveragi
Slide 13: Delivering value through innovation: ViewPoint and MSO
FY16 Overview Delivering value through innovation For personal use only During 2015 and 2016 we invested in new products and technologies and last year we delivered a number of these to clients: VIEWPOINT • ViewPoint delivers exceptional user experience with flexibile and responsive HTML5. • Fully i
Slide 14: Delivering value through innovation: Superannuation solutions
FY16 Overview Delivering value through innovation For personal use only SUPERANNUATION SOLUTIONS • XPLAN’s advice capability quickly leveraged to deliver an engaging member experience within existing Acurity Online member portal. • By taking advantage of existing XPLAN API, IRESS enables superfunds
Slide 15: Investing in our people
FY16 Overview Investing in our people IRESS is investing in our workplace and technology to better support flexibility, For personal use only collaboration and innovation Key objectives of Planned/completed Financial workplace investment activities impacts • Provide a great working environment • Lon
Slide 16: Financial information
For personal use only Financial information iress.com 15
Slide 17: Sustainable revenue and segment profit growth
Financial information Sustainable revenue and segment profit growth For personal use only Operating Revenue 32.7 (4.1) (20.1) 5.8 (1.9) 13.5 2.3 389.7 361.5 2015 Revenue APAC FM ANZ WM RSA Canada UK UK Lending FX 2016 Revenue Segment Profit 10.5 (6.3) (4.3) 2.6 (1.8) 4.5 (0.8) 123.5 119.2 2015 Segme
Slide 18: Segment profit margins
Financial information Segment profit margins Product and development teams are a material component of IRESS’ cost base. Meaningful For personal use only cost allocation is increasingly challenged by investment and operational activities across multiple products, geographies and periods. % Operating
Slide 19: Evolving segment reporting and cost allocations
Financial information Evolving segment reporting and cost allocations Over 50% of IRESS’ cost base is incurred in core functions, for which product and development is significant, and For personal use only benefits all segments Functional costs have been allocated to date based on a combination
Slide 20: Statutory financial results
Financial information Statutory financial results For personal use only • ‘Non-recurring items’ are primarily costs associated with the AUD (m) 2015 2016 acquisitions of Financial Synergy and INET in 2016 and integration cost associated with Proquote and Pulse Operating Revenue 361.5 389.7 p 8% acqu
Slide 21: Strong balance sheet, conservatively geared
Financial information Strong balance sheet, conservatively geared For personal use only AUD (m) Dec 2015 Dec 2016 AUD (m) Dec 2015 Dec 2016 Cash 39.2 23.0 Cash 39.2 23.0 Receivables and other assets 37.4 50.1 Bank borrowings(1) (202.4) (179.1) Total current assets 76.6 73.1 Net bank debt 163.2 156.1
Slide 22: Strong and sustainable cash flow and dividends
Financial information Strong and sustainable cash flow and dividends Cash Conversion For personal use only Operating Cash Flow 120 70 100% 100 60 80% 50 80 AUD (cents) AUD (m) 40 60 60% 30 40 20 40% 20 10 20% 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 0% H1 (RHS) H2 (RHS) Cashflow Per Share (L
Slide 23: Depreciation & Amortisation
Financial information Depreciation & Amortisation For personal use only D&A - Operational 2015 2016 Depreciation Plant & Equipment 6.1 6.4 Amortisation Software (3rd Party Purchased) 4.2 4.3 Total 10.3 10.7 D&A – Acquisition Related 1H16 2H16 1H17 2H17 1H18 2H18 Avelo 1.3 1.1 0.8 0.8 0.7 0.6 Proquot
Slide 24: Segment overview
For personal use only Segment overview iress.com 23
Slide 25: Business focus areas in 2017
Business focus areas in 2017 For personal use only UK: Continued momentum in delivery and revenue, and support. Value-creation following acquisitions through integrated solutions. Successful delivery to landmark PWM clients. Differentiated wealth solution positioned with ongoing regulatory change. D
Slide 26: APAC Financial Markets
APAC Financial Markets Revenue growth in Australia despite segment pressures; key client delivery in Singapore For personal use only • Revenue growth in Australia driven largely by increased sales of portfolio management solutions to existing and new buy-side clients. AUD (m) 2015 2016 Sell-side cos
Slide 27: Australia & New Zealand - Wealth Management
Australia & New Zealand - Wealth Management Continuing strong technology demand; Prime on delivery path For personal use only • Revenue growth reflects broad take-up from existing client base, key client projects, and contribution by Financial Synergy of $4.4m (2 month AUD (m) 2015 2016 contribution
Slide 28: United Kingdom
United Kingdom Strong demand and delivery success; no visible Brexit impact aside from FX For personal use only • Revenue growth reflects strong underlying demand, and full year GBP (m) 2015 2016 contribution from Proquote and Pulse. • Intermediary software growth driven by delivered XPLAN implement
Slide 29: United Kingdom - Lending
United Kingdom - Lending Successful MSO v2 delivery, strategic and financial momentum not reflected in 2016 results For personal use only • As expected, the ongoing transition of the business from upfront and services revenue to a recurring licence fee model had an GBP (m) 2015 2016 adverse impact o
Slide 30: South Africa
South Africa Breadth of product offering and scaled capability driving strong growth For personal use only • Continuing strong revenue and segment profit growth of 24% and 31% respectively, following growth in 2015 of 15% and 31% respectively. Strong ZAR (m) (including INET) 2015 2016 focus on produ
Slide 31: Canada
Canada Challenging conditions; diversifying efforts continue and priority For personal use only • Revenue reflects capital markets conditions that remain challenging, particularly for institutional equity brokers, with a number of firm closures, CAD (m) 2015 2016 consolidations and cost reduction in
Slide 32: Office locations and contacts
For personal use only AUSTRALIA NEW ZEALAND ASIA Melbourne | +61 3 9018 5800 Auckland | +64 9 300 5571 Hong Kong | +852 3965 3343 Sydney | +61 2 8273 7000 Wellington | +64 4 462 6850 Singapore | +65 6672 6288 Perth | +61 8 6211 5900 Brisbane | +61 7 3011 4700 Adelaide | +61 3 9018 5800 CANADA SOUTH
Slide 33: Disclaimer
Disclaimer For personal use only 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