Slide 1: 2019 results presentation
2019 results presentation For the twelve months ended 31 December 2019
Slide 2: Agenda
Agenda Andrew Walsh John Harris
Slide 3: Who we are
Who we are We are a technology company providing software to the financial services industry 4 WwW Award-winning financial software foJ@fe) “oOo 500,000+ users globally OQ (a) fa) 9,000+ clients ral 2,000+ people a 18 offices @ 9 countries
Slide 4: Our mission
Our mission To be essential and desirable to our clients and users. Our purpose We believe technology should help people perform better every day.
Slide 5: We help our clients find better ways to:
We help our clients find better ways to:
Slide 6: Key drivers of growth
Key drivers of growth Strategic priorities
Slide 7: Delivering long term growth and sustainable returns to shareholders
Delivering long term growth and sustainable returns to shareholders Operating revenue Segment Profit NPAT Operating cash flow Underlying earning per share 1 Dividend per share
Slide 8: 2019 business highlights
4 2019 business highlights
Slide 9: Business highlights
Business highlights Successful Continued Accelerating Increasing Scale wins & deliveries strong demand data strategy usability & efficiency Positive momentum in Increased sales and Acquisition of QuantHouse Global rollout of new Cloud and continuous automated super with two pipeline of client meets gr
Slide 10: Demand for comprehensive technology as financial advice evolves
Demand for comprehensive technology as financial advice evolves Successful Continued Unique Automation Regtech transitions success offering focus demand
Slide 11: Data strategy accelerated by recent acquisitions
Data strategy accelerated by recent acquisitions QuantHouse (May 2019) BC Gateways (Jan 2020) Supports evolving market data needs of Iress clients globally, BC Gateways’ blockchain platform allows including flexibility around use of data. Highly complementary to our data to be distributed in a timely
Slide 12: 2019 financial results
4 2019 financial results 12
Slide 13: 2019 financial highlights
2019 financial highlights Group Revenue growth: +10% (constant currency: +8%) Segment Profit growth: +10% (constant currency: +10%) Segment UK & Europe revenue growth: +20% (constant currency +16%) Australian Financial Advice revenue growth: +10% South Africa revenue growth: +6% (constant currency) Fu
Slide 14: Revenue +10%, segment profit +10%, strong second half
Revenue +10%, segment profit +10%, strong second half $AUDm - Reported 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Strong underlying Operating revenue 229.7 235.0 464.6 241.8 267.2 508.9 +10% performance from wealth businesses in Australia and Segment Profit (1) 67.5 70.2 137.7 74.1 78.0 152.1 +10% th
Slide 15: Wealth in Australia and UK driving underlying growth
Wealth in Australia and UK driving underlying growth Segment ($AUDm) 2018 2019 2019/2018 2019/ 2018 Revenue Reported currency change Constant currency change Underlying recurring revenue growth driven by Australian APAC 252.0 264.5 +5% +5% Financial Advice, the UK and UK & Europe 119.0 142.7 +20% +1
Slide 16: Segment overview
4 Segment overview 16
Slide 17: APAC
APAC AUD (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Financial Advice revenue +10% reflects new Xplan implementations, growth in independent Operating revenue licensees, increased software uptake in response to advice, compliance, and data needs. Industry Trading & Market Data 56.9 58.7 115.6 58.
Slide 18: Diversity and strength in Australia
Diversity and strength in Australia Iress’ retail client base in Australia is well diversified across a range of financial services businesses. Iress is strategically well positioned for the significant reshaping of financial advice underway where there is a re-weighting to independent advice firms and s
Slide 19: UK & Europe
UK & Europe GBP (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Total revenue +16%, reflects ongoing demand for Xplan, Private Wealth, Sourcing, and contribution from QuantHouse. Operating revenue 32.4 34.3 66.7 35.5 41.9 77.4 +16% Underlying UK revenue +6% and Margin +2% v 2018, reflecting client del
Slide 20: Mortgages
Mortgages GBP (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Strong client pipeline and delivery momentum in 2019 will drive financial results in future periods. Operating revenue 8.4 7.6 16.1 8.0 7.8 15.8 (2)% Yorkshire Building Society went live with MSO, positive client feedback. Direct contribut
Slide 21: South Africa
South Africa ZAR (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Revenue +6% reflects ongoing demand across product range, successful key client deliveries. Operating revenue 228.4 228.3 456.7 242.4 242.2 484.7 +6% Successful deployment of Trading and Portfolio Management software to Tier 1 financial
Slide 22: North America
North America CAD (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Total revenue +26% reflecting contribution from QuantHouse. Operating revenue 8.8 9.1 17.9 9.0 13.4 22.4 +26% Underlying revenue down marginally, reflecting lower non-recurring revenue and stable underlying recurring revenue Direct cont
Slide 23: Ongoing cost discipline across functional segments
Ongoing cost discipline across functional segments Product and Technology (P&T) AUD (m) 1H 18 2H 18 2018 1H 19 2H 19 2019 2019/2018 Reported costs declined to 23% of revenue v 25% in 2018 driven by ongoing focus on capability, efficiency, quality and speed. Direct contribution 57.6 56.5 114.1 56.5 61.
Slide 24: Changes to reporting segments in 2019
Changes to reporting segments in 2019 2018 segment name 2019 segment name Comment APAC FM APAC APAC FM revenue separately reported as “Trading & Market Data” ANZ WM APAC ANZ WM revenue separately reported as “Financial Advice & Superannuation” UK UK & Europe Includes QuantHouse’s European operations
Slide 25: Financial information
4 Financial information
Slide 26: Underlying NPAT +11% v 2018
Underlying NPAT(1) +11% v 2018 AUD (m) 2018 2019 2019/2018 Operating Revenue 464.6 508.9 +10% Substantial decline in non-operating costs v 2018. Operating Costs (326.9) (356.9) (9%) 2019 non-operating items include: Segment Profit 137.7 152.1 +10% Acquisition and integration costs for Financial Syner
Slide 27: Strong cash conversion, conservative balance sheet
Strong cash conversion, conservative balance sheet AUD (m) 2018 2019 Cash conversion (%) Total current assets 91.8 115.3 Total non-current assets 604.6 721.7 Total Assets 696.5 837.0 Total current liabilities 58.1 85.6 Total non-current liabilities 218.9 316.4 Total Liabilities 277.0 402.1 Net Asset
Slide 28: 2020 financial outlook
2020 financial outlook lress expects reported Segment Profit growth in 2020 of between 3% and 8% ($156m - $164m), on a constant 2019 currency basis, which includes the net impact of recent acquisitions of QuantHouse and BC Gateways. Execution of medium-term growth opportunities, particularly in supe
Slide 29: Appendices
4 Appendices
Slide 30: Depreciation and amortisation
Depreciation and amortisation D&A - Operational 1H18 2H18 1H19 2H19 Depreciation Plant & Equipment 4.2 5.0 5.6 5.8 Amortisation Software (3rd Party Purchased) 2.3 2.8 0.9 0.8 Leases - - 5.4 5.6 Total 6.5 7.9 11.9 12.2 D&A - Acquisition Related 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 Computer Softwar
Slide 31: Impact of FX, AASB16 and QH acquisition by half
Impact of FX, AASB16 and QH acquisition by half Reported Currency Acquisition of QH Underlying AASB 16 Adjustments Adjusted Underlying $AUDm 1H18 2H18 2018 1H19 2H19 2019 1H19 2H19 2019 1H19 2H19 2019 1H19 2H19 2019 1H19 2H19 2019 1H19 2H19 2019 Operating 229.7 235.0 464.6 241.8 267.2 508.9 2.2 3.3
Slide 32: Impact of AASB16 adoption and acquisition of QH
Impact of AASB16 adoption and acquisition of QH QuantHouse AUD (m) 2018 2019 AASB 16 Acquisition (1) 2019 Adjusted Operating Revenue 464.6 508.9 - 21.9 487.1 Operating Costs (326.9) (356.9) 4.4 (24.1) (337.2) Segment Profit 137.7 152.1 4.4 (2.3) 149.8 Share Based Payments (10.4) (17.7) - - (17.7) Seg
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: Contact
Contact Andrew Walsh, CEO John Harris, CFO +61 3 9018 5800 iress.com