Slide 1: Results Presentation
Results Presentation For the six months ended 30 June 2020 To be read in conjunction with Appendix 4D and Accounts
Slide 2: More than just a technology company!
Diversified Practice Management experts across multiple industries and geographies Talented Team and Winning Culture More than just a technology company! Cloud first Strong loyal Innovative customer bases Experts in our field International RECKON INVESTOR PRESENTATION HY 2020 2
Slide 3: Our purpose
Our purpose We’re passionate about helping people, businesses and their advisors become and stay successful. Priorities & outcomes Why How What The art of accounting is the We specialise in software, We’re a global organisation cornerstone of business but we’re more than just a that services diverse
Slide 4: Sam Allert, Chris Hagglund
Sam Allert RECKON CEO Chris Hagglund RECKON CFO RECKON INVESTOR PRESENTATION HY 2020 4
Slide 5: Our core business strengths
Our core business strengths Practice Management and Compliance for Accountants ACCOUNTANTS GROUP Small Business Accounting and Payroll BUSINESS GROUP Scan and print workflow Cost Recovery for Legal Firms LEGAL GROUP RECKON INVESTOR PRESENTATION HY 2020 5
Slide 6: Introduction
Introduction 2020 has certainly been disrupted and uncertain for individuals, and businesses, all over the world. We remain in a volatile environment with ongoing health and economic concerns. It is pleasing that in these uncertain times our business and our strategy has held up well. Our focus rema
Slide 7: Highlights
Highlights Small Business Payroll APS Cloud Legal PM Cashflow Accounting Growth Focus Development Strategy Improvement 41% increase in cloud Launch of new paid Major cloud release of NQBB solid business $6m reduction in net subscriptions reaching payroll app Workflow in July 2020 performance, prior
Slide 8: Results summary
Results summary REVENUE EBITDA NPAT $39.8 17.1 $ $ 5.4 million million million +1.5% over PcP +0.4% over PcP +1.5% over PcP RECKON INVESTOR PRESENTATION HY 2020 8
Slide 9: Business Group highlights
Business Group highlights 6% revenue growth (continues trend from 2HY19) Cloud User Growth (excludes free STP mobile app) Over 87k cloud users (41% annualised user growth). USERS 90K 87K 23% cloud revenue growth over HY19. 52% of available revenue is now cloud. 80k Free STP Mobile App launched late
Slide 10: Practice Management Accountant Group highlights
Practice Management Accountant Group highlights Major cloud release of Workflow in July 2020 – Reckon APS seat growth compliments APS and also sold as a stand alone product 83k 83k 82k 80k 81k Workflow compliments existing APS cloud products; Sync Direct (data synchronising tool), Practice IQ (Busin
Slide 11: Practice Management - Legal
Practice Management - Legal WorkFlow expert in three key areas: Strong start to 2020, but impacted by COVID for new sales from March. Advanced Uniform Scanning Now adding on new team, new products, targeting growth Print Management in big US market. Cost Recovery Compliments existing BG and AG produ
Slide 12: 2020 Strategic business initiatives
2020 Strategic business initiatives Business Group Mobile Expand Legal Cloud Growth Growth Accountancy Reach Growth Continued Reckon Expand mobile suite Delivery of new cloud Continued focus on the One Growth, via digital products Scan and Print solutions acquisition Attract new clients into for a w
Slide 13: Financial performance
Financial performance H1 FY20 H1 FY19 GROWTH $M $M % Revenue 39.8 39.2 +1.5% Overheads TOTAL 22.7 22.1 NORMAL 22.2 22.1 ADDITIONAL DOUBTFUL 0.5 - DEBT PROVISIONING EBITDA 17.1 17.1 +0.4% NPAT 5.3 5.2 +1.5% RECKON INVESTOR PRESENTATION HY 2020 13
Slide 14: Business Group Financials
Business Group Financials Subscription business with strong online growth. Revenue H1 FY20 H1 FY19 Financial performance $M $M GROWTH Revenue CLOUD SUBSCRIPTION 9.6 7.8 23% • Cloud revenue growth (23%). DESKTOP SUBSCRIPTION 8.0 7.6 6% • ARPU continues to be impacted by fast growing Reckon One produc
Slide 15: Practice Management Accountant Group Financials
Practice Management Accountant Group Financials Stable subscription revenue and an impressive customer base. Revenue H1 FY20 H2 FY19 Financial highlights $M $M GROWTH Revenue SUBSCRIPTION 11.3 11.4 -1% • New business impacted by COVID. UPFRONT AND SERVICE 0.2 0.3 -33% • Content market: strong start
Slide 16: Practice Management Legal Group Financials
Practice Management Legal Group Financials Impressive customer base with opportunity to grow scan and print markets. Revenue H1 FY20 H1 FY19 Financial highlights $M $M GROWTH Revenue SUBSCRIPTION 4.7 4.4 +7% • Strong start to 2020, but new sales impacted by COVID from March. UPFRONT AND SERVICE 1.1
Slide 17: Cashflow highlights and Development spend
Cashflow Development highlights spend H1 FY20 H1 FY19 25 22.8 $M $M 19.6 17.2 18.3 OPERATING CASHFLOW 17.7 15.3 20 16.8 16.4 14.9 DEVELOPMENT SPEND (9.8) (7.9) 14.3 12.4 12.1 DIVIDEND PAID (2.3) - 15 10.7 9.8 A$m FORGIVABLE USA LOAN 1.2 - PROCEEDS NET DEBT REDUCTION (6.3) (6.6) 10 7.9 7.5 5 Cash spe
Slide 18: Outlook
Outlook RECKON INVESTOR PRESENTATION HY 2020 18
Slide 19: A focus on Growth
A focus on Growth More than just a technology company! Practice Management and Compliance for Accountants ACCOUNTANTS GROUP A cloud suite for Accountants complimenting APS clients and opening up a larger addressable market. Small Business Accounting and Payroll BUSINESS GROUP Cloud growth across sma
Slide 20: NQBB & ZebraWorks
NQBB & ZebraWorks We’ve added an amazing team and complimentary cloud products to our already well established Legal business. Unlocking Growth potential with a Cloud Practice Cross sell synergies between Legal Group and Management Suite for Legal firms Accountant Group cloud development Enormous ma
Slide 21: Q&A
Q&A RECKON INVESTOR PRESENTATION HY 2020 21
Slide 22: Resources
Resources Website reckon.com About us reckon.com/au/about-us Investors reckon.com/au/investors Media reckon.com/au/media RECKON INVESTOR PRESENTATION HY 2020 22