Praemium Ltd · ASX:PPS
Praemium — FY2017 Earnings Presentation
19 slides from Praemium's earnings presentation, Aug 14, 2017
Slide 1: FY2017 Annual results: Another record-breaking year
For personal use only FY2017 Annual results Another record-breaking year 14 August 2017 Praemium Limited ACN: 098 405 826
Slide 2: Disclaimer
Disclaimer For personal use only The material contained in this document is a presentation of general information about the Praemium Group’s activities current as at the date of this presentation (14 August 2017) and is supplementary to the Group’s financial results released to the ASX on 14 August
Slide 3: Praemium today
Praemium today For personal use only Strong pedigree • Software company founded 2001 in Melbourne • ASX listed in 2006, market cap today $163 million* • Expanded to nine offices globally with over 200 staff • Over 800 clients covering $100 billion in assets • Proprietary technology • Scalable busine
Slide 4: Integrated technology solution
Integrated technology solution For personal use only Investment Platforms Software as a Service (SaaS) asset-based pricing subscription-based pricing Separately Managed Accounts (SMA) Portfolio administration & reporting • Australia platform, including • Non-custodial reporting retail superannuation
Slide 5: FY2017 financial results
FY2017 financial results FY16 FY17 For personal use only Group Financial Results ($m) ($m) Revenue 30.1 35.4 Product commissions (0.8) (2.6) Key financial highlights Revenue (net) 29.3 32.8 (6.2) (6.8) Revenue growth 17% Cost of operations Gross margin 23.1 26.0 GM % 78.9% 79.3% Gross margin up 13%
Slide 6: Sustained revenue growth
Sustained revenue growth For personal use only 40.0 Product Revenue ($ million) Total revenue up 17% Australian business, revenue growth 15% 30.0 International business, revenue growth 25% Portfolio services SMA Planning software 20.0 Other SMA revenue up 44% Total FUA up 28% Higher margins
Slide 7: Consistent earnings growth
Consistent earnings growth For personal use only H1 H2 $m FY17 FY17 FY17 FY16 7th consecutive half of profit growth EBITDA (pre R&D incentive) 2.0 3.5 5.5 2.9 EBITDA (pre R&D incentive) up 90% from FY16 UK R&D incentive 0.8 - 0.8 1.3 EBITDA (underlying*) 2.8 3.5 6.3 4.2 EBITDA margin up to 18%,
Slide 8: FY2017 by segment
FY2017 by segment For personal use only Segment EBITDA 12.0 ($m) Australia maintains strong earnings Australian business, revenue growth 15% 6.0 FY15 Maintained strong EBITDA margin of 46% FY16 FY17 - Continued improvement in UK business EBITDA improvement 33% (20% in GBP) Revenue up 26%, ex
Slide 9: Australia highlights
Australia highlights For personal use only Client inflows by Cohort 900 ($ million) Record year for Australian SMA Class of FY 2017 Class of FY 2016 Platform FUA up 29% to $3.9 billion 600 Class of FY 2015 Record inflows of $1.3 billion Class of FY 2014 SuperSMA up 127% to $657 million, now co
Slide 10: International highlights
International highlights For personal use only International FUA Smart Investment Management AUA 1,500 (£) (£m) 500 Funds Platform Models 1,000 Platform + models Funds 250 500 - - H2 F14 H1 F15 H2 F15 H1 F16 H2 F16 H1 F17 H2 F17 FY15 FY16 FY17 Record year for International SMA Record year for Smarti
Slide 11: International step change in momentum
International step change in momentum For personal use only £m UK Revenue and Expenses trend FUM £b Quarterly Gross Inflows 7.0 (£m) 1.5 13% CAGR (£m) 120 58% CAGR 100 1.0 80 FUA (£b) 3.5 Revenue (£m) 60 Expenses (£m) 0.5 40 20 0.0 - 0 FY12 FY13 FY14 FY15 FY16 FY17 F16 Q1 F16 Q2 F16 Q3 F16 Q4 F17 Q1
Slide 12: Praemium SMA - a proven market leader
Praemium SMA - a proven market leader For personal use only 1,200 Gross Inflows Model portfolios Aust ($m) Int Strategic asset allocation aligned to client attitude to risk 800 Insourced investment management Record half & Beneficial ownership/tax efficiency 400 year Cost effective/transparent - Pra
Slide 13: Market forces driving disruption
Market forces driving disruption For personal use only AUS platform market (2016-2020) Market Shift to Technology SMA Platform growth independence disruption Compulsory Aligned adviser Scalable SMA super/pension model under displacing contributions regulatory scrutiny traditional wraps Australian pl
Slide 14: SMA delivering productivity boost
SMA delivering productivity boost For personal use only Comparing users vs non-users of Managed Accounts Improves efficiency Improves scale Increases profit Average Adviser client base Average Adviser FUA Improved YoY profitability (# clients/adviser) ($m/adviser) trend (% of advisers) Non-user 106
Slide 15: Clear strategic focus
Clear strategic focus For personal use only Serve global markets Australia Integrated technology UK Offshore markets, Leading SMA platform technology serving ex-pat community Comprehensive portfolio reporting capability Digital portals Capture retirement sector CRM and advice tools SMSF tools SMA-ba
Slide 16: Looking forward
Looking forward For personal use only Grow our Launch into Improve our core offer new markets financial performance New digital account opening to Introduce international equities Profitable and growing increase client adoption for the Australian SMA Australian business Release a digital “fact find”
Slide 17: Appendix: Cashflow
Appendix: Cashflow For personal use only $m FY16 FY17 Operating cashflows Operating cashflow 1.6 6.5 Strong operating cashflow improvement, consistent with EBITDA growth R&D incentive 0.9 0.1 Catch-up of Australian company tax with FY16 Tax paid (0.9) (3.1) paid in full plus FY17 instalments One
Slide 18: Appendix: Balance sheet
Appendix: Balance sheet For personal use only $m Jun’16 Jun’17 Solid balance sheet to fund growth Cash 10.4 9.0 Receivables 5.3 6.7 $9.0 million in cash reserves following Wensley Mackay acquisition and tax payments Intangibles 4.3 4.4 Increase in receivables from higher H2 billing Other assets
Slide 19: Appendix: One-off costs
Appendix: One-off costs For personal use only Acquisition, restructure & other costs FY2017 ($m) H1 H2 FY17 General Meeting expenses* were incurred by the General Meeting - 1.0 1.0 former board in terminating the CEO and Interim placements - 0.2 0.2 defending the subsequent shareholder requisition