Slide 1: Results Presentation: six months ended 30 June 2017
For personal use only Results Presentation For the six months ended 30 June 2017 To be read in conjunction with Appendix 4D and Accounts LAWYER PLUMBER ACCOUNTANT BUTCHER BUILDER
Slide 2: The Reckon Story
The Reckon Story For personal use only Our mission is to bring millions of businesses and professionals closer together with our software to create a brave new, connected economy... It’s been quite a ride already: 800,000+ registered businesses around the 2. Practice Management world have used Recko
Slide 3: The Agenda
For personal use only The Agenda 1. CEO update 2. Financial update 3. Outlook 4. Q & A 3
Slide 4: 1. CEO update
1. CEO update For personal use only Clive Rabie RECKON CEO 4
Slide 5: Half year 2017 focus
Half year 2017 focus For personal use only Reinvestment for future growth • Second and final year • Product development • Sales and marketing Unlock shareholder value • Document management business de-merged 5
Slide 6: Results summary
Results summary For personal use only Revenue EBITDA Development Spend $50.1 million $18.4 million $9.8 million 3.3% organic growth* 2.5% organic growth* 16.6% cashflow improvement *Note: at constant currency 6
Slide 7: Subscription revenue growth continues
Subscription revenue growth continues For personal use only H1 FY17 H1 FY16 Revenue $M $M GROWTH SUBSCRIPTION REVENUE 37.4 34.7 8% UPFRONT AND SERVICE REVENUE 6.9 6.9 - OTHER RECURRING REVENUE 2.3 3.0 -22% CONTENT REVENUE 3.6 3.9 -10% ORGANIC GROWTH (at constant currency) 50.1 48.5 3% BUSINESS SOLD
Slide 8: Three core areas of our business
Three core areas of our business We have a strongly diversified business across multiple markets, with exciting synergies between them. For personal use only Business Practice Management Document Management We provide accounting software to SME’s Market leaders in practice management Business de-mer
Slide 9: Business highlights
Business highlights For personal use only Subscription revenue grew by 8%. Online user growth Over 43k cloud users (+21% user growth). USERS 45k 18% cloud revenue growth over HY16. 40k 33% of revenue is now cloud. 35k Overall volume growth of 2%. 30k 25k Delivered 6 feature releases for Reckon One i
Slide 10: Practice Management highlights
Practice Management highlights For personal use only Subscription growth of 6% in accountants group. Reckon APS seat growth 3k seats added across the APS suite (6% seat growth). Impressive and expanding customer list. 95k Scan product in legal market generates more than 50% 86k 92k of new sales. 74k
Slide 11: Document Management highlights
Document Management highlights For personal use only Business de-merged on 4 August 2017. Increase in paying customers SEATS 5k new paying customers added in HY17. 60k Virtual Cabinet and SmartVault online portals 55k are currently used by 752k+ users to share 50k documents. 45k Countries operationa
Slide 12: 2. Financial update
2. Financial update For personal use only Chris Hagglund RECKON CFO 12
Slide 13: Financial performance
Financial performance H1 FY17 H1 FY16 GROWTH Revenue At constant currency: $M $M % For personal use only CONTINUING BUSINESS 42.3 42.0 DISCONTINUED 7.8 6.5 50.1 48.5 3% BUSINESS SOLD - 0.8 CURRENCY - 0.9 50.1 50.2 EBITDA At constant currency: CONTINUING BUSINESS 16.9 17.4 DISCONTINUED 1.5 0.5 18.4 1
Slide 14: Business financials
Business financials Subscription business with strong online growth. For personal use only Revenue H1 FY17 H1 FY16 Financial performance at constant currency: $M $M GROWTH • Revenue SUBSCRIPTION 14.7 13.5 8% • Volume growth 2%. PERPETUAL / SERVICE • ARPU impacted by faster growing Reckon One. 4.8 5.
Slide 15: Practice Management financials
Practice Management financials Strong subscription growth and an already impressive customer base. For personal use only Revenue H1 FY17 H1 FY16 Financial highlights $M $M GROWTH • Revenue ACCOUNTANTS GROUP • Strong subscription revenue growth. SUBSCRIPTION 11.8 11.1 6% • One-off upfront / service r
Slide 16: Document Management financials
Document Management financials Customer growth continues to accelerate. Global market opportunity. For personal use only Revenue H1 FY17 H1 FY16 Financial performance $M $M GROWTH • Revenue SUBSCRIPTION 6.4 5.4 19% • Strong revenue growth in all regions. UPFRONT AND SERVICE 1.5 1.2 21% • Subscriptio
Slide 17: Cashflow highlights
Cashflow highlights 25 Development spend 22.8 For personal use only H1 FY17 H1 FY16 20 19.6 18.3 $M $M 16.8 14.9 OPERATING CASHFLOW 16.3 15.4 15 12.4 12.1 DEVELOPMENT SPEND 9.8 11.8 A$m 10.7 RECKON LOANS 0.9 - 9.8 10 SMARTVAULT ACQUISITION - 5.8 DIVIDENDS PAID 3.4 1.7 5 0 2009 2010 2011 2012 2013 20
Slide 18: 3. Outlook
For personal use only 3. Outlook 18
Slide 19: Reckon One growth opportunity: customer feedback
Reckon One growth opportunity Strong, rapidly growing customer feedback. For personal use only Customer feedback “Reckon One provides all my “Reckon One makes it very easy to “I would recommend Reckon One accounting needs at a really balance the left and right side of to any volunteer organisation c
Slide 20: Reckon One growth opportunity
Reckon One growth opportunity For personal use only We’re only getting started Only 10% in the cloud of 5 million Self-Employed and SME’s United Kingdom Only 25% in the cloud of 3 million Self-Employed and SME’s Australia Only 50% in the cloud of 500,000 Self-Employed and SME’s New Zealand And inter
Slide 21: Practice Management strength
Practice Management strength We continue to add to our already impressive customer base at the fastest pace in years. For personal use only Leading accounting and legal firms across the world are using Reckon products. 21
Slide 22: Building a sustainable growing company
Building a sustainable growing company by investing in product development, sales and marketing initiatives. For personal use only Growing Proving Substantial We’re momentum success subscription ready Revenue and customer We’re executing on our base We’ve made and are making volumes continue strateg
Slide 23: 4. Q & A
For personal use only 4. Q & A 23
Slide 24: Resources
Resources For personal use only Website About us Investors Media reckon.com reckon.com/au/about-us reckon.com/au/investors reckon.com/au/media 24