Bravura Solutions Limited · ASX:BVS
Bravura Solutions — H1 2018 Earnings Presentation
22 slides from Bravura Solutions's earnings presentation, Feb 26, 2018
Slide 1: 1H18 Results Presentation
1H18 Results Presentation Bravura Solutions Limited 26 February 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer The information contained in this document (including this notice) and discussed at this presentation (collectively, the Presentation) has been prepared by Bravura Solutions Limited (Bravura). The Presentation is subject to the conditions outlined below. Your receipt
Slide 3: Agenda
AGENDA Key Highlights 4 Segment Highlights 10 FY18 Outlook 14 Appendix 15 BRAVURA SOLUTIONS 1H18 RESULTS 3
Slide 4: 1H18 Key Highlights
1H18 KEY HIGHLIGHTS Continued strong revenue growth with increasing operating leverage A$m 1H17 1H18 % chg ▪ Continued regulatory change, expanding digital distribution channels, and the desire for increased operating efficiency across the financial services industry, coupled with a maturing industr
Slide 5: Solid 1H18 Earnings Performance
SOLID 1H18 EARNINGS PERFORMANCE ▪ Wealth Management revenue up 26% and EBITDA up 40% A$m 1H17 1H181 $ chg % chg1 following new client wins, continuing project work from FY17 sales, and increased demand from existing clients Wealth Management 57.8 72.8 15.0 26% ▪ Sonata revenue up 35% and now makes u
Slide 6: Strong Growth in Recurring Revenue
STRONG GROWTH IN RECURRING REVENUE Recurring revenue (A$m) ▪ Recurring revenue is up 12% in 1H18 compared to the pcp and Implementation fees (A$m) comprises 68% of total revenue Licence fees (A$m) 191.9 184.7 ▪ Recurring revenue has grown as new clients are added and existing 15.1 12.9 clients add f
Slide 7: Strong Growth in Revenue and Earnings (Constant Currency)
STRONG GROWTH IN REVENUE AND EARNINGS (CONSTANT CURRENCY) Revenue (A$m)1 EBITDA (A$m)1 1H 2H 191.9 1H 2H 32.3 164.2 141.9 14.5 99.0 81.8 18.5 73.0 14.0 8.9 6.7 102.9 17.8 18.5 93.0 82.4 69.0 9.6 7.3 2 2 FY15 FY16 FY17 1H18 FY15 FY16 FY17 3 1H18 1. Presented on a constant currency basis 2. Exchange r
Slide 8: Continued Improvement in Margins and Returns
CONTINUED IMPROVEMENT IN MARGINS AND RETURNS EBITDA margin1 Return on assets1, 2 18% 20% 17% 18% 11% 11% 12% 8% FY15 FY16 FY17 1H18 FY15 FY16 FY17 1H18 1. Based on FY15 and FY16 pro forma EBITDA 2. Return on assets is based on annualised EBITDA over average total assets BRAVURA SOLUTIONS 1H18 RESULT
Slide 9: Strong Funding Position
STRONG FUNDING POSITION ▪ The balance sheet is in a robust financial position, with a net cash position of A$m 30 Jun 2017 31 Dec 2017 A$10m Cash 17.1 24.1 ▪ At balance date, A$14m was drawn down on the working capital facility Trade and other receivables 37.2 38.4 ▪ Bravura has significant investme
Slide 10: Wealth Management (Includes Sonata)
WEALTH MANAGEMENT (INCLUDES SONATA) A$m 1H17 1H18 $ chg % chg ▪ Revenue up 26% and EBITDA up 40% following new client wins, continuing project work from FY17 sales, and increased demand Segment revenue 57.8 72.8 15.0 26% from existing clients Segment EBITDA 15.4 21.6 6.2 40% ▪ Sonata revenue up 35%
Slide 11: Key Sonata Metrics
KEY SONATA METRICS Consistent growth in Sonata customers Solid growth in Sonata revenue (A$m) 92.8 1H 2H 66.8 50.9 41.4 31.7 22 20 16 24.0 12 56.7 35.1 41.9 17.4 FY15 FY16 FY17 1H18 FY15 FY16 FY17 1H18 Rising Sonata revenue per client (A$m) ▪ Clients across investment products and wrap platforms, su
Slide 12: Continuing Expansion in R&D Leverage
CONTINUING EXPANSION IN R&D LEVERAGE ▪ Net Sonata development was a significant A$m FY14 FY15 FY16 FY17 1H18 improvement on prior periods Sonata client development revenue 5.0 11.2 13.9 13.5 11.9 ▪ Capitalised R&D expenditure has declined to Sonata client development costs -5.4 -12.0 -11.1 -13.7 -8.
Slide 13: Funds Administration
FUNDS ADMINISTRATION ▪ Revenue down 16% and EBITDA down 26% due to the impact of A$m 1H17 1H18 $ chg % chg the previously flagged contract expiry Segment revenue 35.7 30.1 -5.6 -16% Segment EBITDA 17.2 12.8 -4.4 -26% ▪ EBITDA margin continued above 40%, with a strong pipeline of Segment EBITDA margi
Slide 14: FY18 Outlook
FY18 OUTLOOK Strengthened sales pipeline ▪ Bravura is well placed to take advantage of strong demand in the UK, ANZ, and South Africa ▪ Strong demand underpinned by the need for digital access, regulatory changes, and the replacement of legacy IT systems ▪ Both Funds Administration and Wealth Manage
Slide 15: Appendices
Appendices
Slide 16: Statutory Income Statement
STATUTORY INCOME STATEMENT A$m 1H17 1H181 $ chg % chg1 Wealth Management 57.8 72.8 15.0 26% Funds Administration 35.7 30.1 -5.6 -16% Revenue from continuing operations 93.5 102.9 9.4 10% Total operating expenses -72.6 -84.4 -11.8 -16% IPO transaction costs -2.7 0.0 2.7 nm EBITDA 18.2 18.5 0.3 2% Dep
Slide 17: Statutory Balance Sheet
STATUTORY BALANCE SHEET A$m 30 Jun 2017 31 Dec 2017 Cash 17.1 24.1 Trade and other receivables 37.2 38.4 Other current assets 4.1 4.5 Total current assets 58.4 67.0 Intangible assets 110.0 111.7 Other non-current assets 13.6 15.3 Total non-current assets 123.6 127.0 Total assets 182.0 194.0 Borrowin
Slide 18: Statutory Cash Flow
STATUTORY CASH FLOW A$m 1H17 1H18 A$m 1H17 1H18 Receipts from customers 110.5 117.7 Payments to suppliers and employees -90.6 -102.4 EBITDA 18.2 18.5 Payments of IPO transaction costs -2.2 0.0 Trade, other debtors, and accrued revenue -6.6 -1.4 Income taxes paid -1.0 -0.8 Deferred revenue 6.4 3.6 To
Slide 19: What Sonata Does
WHAT SONATA DOES END TO END DIGITAL ENTERPRISE SOFTWARE FOR FINANCIAL SERVICES FRONT OFFICE & DISTRIBUTION MIDDLE & BACK OFFICE product design product creation multi-channel digital distribution transaction processing customer and advisor servicing internal reporting BRAVURA SOLUTIONS 1H18 RESULTS 1
Slide 20: Sonata Addresses Key Client Challenges
SONATA ADDRESSES KEY CLIENT CHALLENGES Challenges faced by participants… … can be solved by Sonata Evolving and complex 1 regulatory environment ✓ Regulatory risk management Demand for mobile and 2 “self-directed” technology Increasing ✓ Leading technology and innovation demand Sonata for modern add
Slide 21: Sonata Simplifies Legacy Client Systems
SONATA SIMPLIFIES LEGACY CLIENT SYSTEMS Siloed, disparate legacy IT systems Unified, customer-centric solution Advisors & Clients Advisors & Clients Move to a Digital multi-channel delivery Call centre 1 Call centre 2 Call centre 3 true customer Single, configurable code base centric Product Product
Slide 22: For more information, visit
For more information, visit: www.bravurasolutions.com/investors/ investors@bravurasolutions.com