Slide 1: IRESS 2011 Financial Results Presentation cover letter
22 February 2012 For personal use only The Manager Company Announcements Office Australian Stock Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam IRESS 2011 Financial Results Presentation Please find attached a presentation relating to the company’s fu
Slide 2: Full Year Results - December 2011
Presentation Title| Subtitle (change on master slide) FULL YEAR RESULTS – DECEMBER 2011 For personal use only FULL YEAR RESULTS - DECEMBER 2011
Slide 3: IRESS 2011 Results
Presentation Title| Subtitle (change on master slide) IRESS 2011 RESULTS FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Underlying Group profit $59.8 million (2010: $58.4m, up 2.4%). Before growth investments $62.0m (2010 $59.7m, up 3.7%) • Revenue growth softer in first half in line with
Slide 4: Segment Performance Against Prior Half: Financial Markets
Presentation Title| Subtitle (change on master slide) SEGMENT PERFORMANCE AGAINST PRIOR HALF FULL YEAR RESULTS – DECEMBER 2011 FINANCIAL MARKETS For personal use only • Aust & NZ • South Africa (ZAR) H2’11 (no full prior half) • Op Rev up 1.7% (up 4.2% on PY) • Op Rev R62.4m AUD 8.0m • Seg Profit do
Slide 5: Segment Performance Against Prior Half: Wealth Management
Presentation Title| Subtitle (change on master slide) SEGMENT PERFORMANCE AGAINST PRIOR HALF FULL YEAR RESULTS – DECEMBER 2011 WEALTH MANAGEMENT For personal use only • Aust & NZ • South Africa (ZAR) • Op Rev up 7.5% (up 12.2% on PY) • Op Rev up 2.6% (down 6.3% on PY) • Seg Profit up 8.9% (up 8.7% o
Slide 6: Group Performance Against Prior Year
Presentation Title| Subtitle (change on master slide) GROUP PERFORMANCE AGAINST PRIOR YEAR FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Underlying Group Profit $59.788 m Up $1.375 m, up 2.4% on prior year • Segment Contribution against prior year $A • Financial Markets Aust/NZ (3.268) •
Slide 7: Group Segment Profit Margins
Presentation Title| Subtitle (change on master slide) GROUP SEGMENT PROFIT MARGINS FULL YEAR RESULTS – DECEMBER 2011 For personal use only Group Segment Profit Margin:% Revenue per Media Release H1 2010 H2 2010 H1 2011 H2 2011 2009 2010 2011 Aust 56.3% 56.4% 52.7% 50.6% 57.2% 56.3% 51.7% Fin Mkts Ca
Slide 8: Strategic Charges and Non-Recurring Expenses
Presentation Title| Subtitle (change on master slide) FULL YEAR RESULTS – DECEMBER 2011 For personal use only STRATEGIC CHARGES NON-RECURRING EXPENSES • $17.827m for year (2010:$9.560m) Net non-recurring expenses before tax of •Change primarily from $9.125m of ($0.955)m, includes: amortisation charg
Slide 9: Group Recurring Subscription Revenue
Presentation Title| Subtitle (change on master slide) GROUP RECURRING SUBSCRIPTION REVENUE* FULL YEAR RESULTS – DECEMBER 2011 For personal use only 90 80 70 60 $A Millions 50 40 30 20 10 - H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Au
Slide 10: Group Segment Profit
Presentation Title| Subtitle (change on master slide) GROUP SEGMENT PROFIT * FULL YEAR RESULTS – DECEMBER 2011 For personal use only 50 40 30 $A Millions 20 10 - H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 -10 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - UK Wlth M
Slide 11: Change in Group Recurring Subscription Revenue
Presentation Title| Subtitle (change on master slide) CHANGE IN GROUP RECURRING SUBSCRIPTION REV. FULL YEAR RESULTS – DECEMBER 2011 For personal use only 14 12 10 8 $A Millions 6 4 2 - H1'06 H1'07 H1'08 H1'09 H1'10 H1'11 -2 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aus
Slide 12: Relative Impact H2'11
Presentation Title| Subtitle (change on master slide) RELATIVE IMPACT H2’11 FULL YEAR RESULTS – DECEMBER 2011 For personal use only 100% 80% 60% 40% 20% 0% Revenue (Recurring Segment Profit* Total Direct Staff Total Strategic Subs) Costs Charges -20% Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin
Slide 13: Operating Cashflow per Share
Presentation Title| Subtitle (change on master slide) OPERATING CASHFLOW PER SHARE* FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Cash generation from the business impacted by return to normal effective tax rate in H1’11 $0.70 40% $0.60 35% $0.50 Effective Tax Rate cents per share $0.40
Slide 14: IRESS Group Outlook
Presentation Title| Subtitle (change on master slide) IRESS GROUP OUTLOOK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Trading 2012 • Ongoing challenging environment. • Mixed experience into first half, with both revenue commencing from projects, and widespread focus on cost savings at
Slide 15: Daily Trades on the ASX
Presentation Title| Subtitle (change on master slide) DAILY TRADES ON THE ASX FULL YEAR RESULTS – DECEMBER 2011 For personal use only 800 700 600 500 400 300 200 100 0 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Number of Trades Value of Trades 14
Slide 16: Financial Markets – Australia & NZ
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS – AUSTRALIA & NZ FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Reduced H2 2011 result from flatter momentum and increased operating costs: • Revenue increased 1.7% on H1 2011 (up 2.3% pcp) • Segment Profit decreased
Slide 17: Financial Markets - 2011
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - 2011 FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Multi-markets transition/opportunities • 10,000 users upgraded for consolidated market data all venues • 19 of 22 brokers live on ChiX launch used IOS+ • 59 IOS+ s
Slide 18: Financial Markets – Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS – MONTHLY SUBSCRIPTION FULL YEAR RESULTS – DECEMBER 2011 REVENUE For personal use only 8.0 7.0 6.0 $A Millions 5.0 4.0 3.0 2006 2007 2008 2009 2010 2011 2012 Up to February 2012 17
Slide 19: Financial Markets - Outlook
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - OUTLOOK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • 2012 outlook: • Revenue growth end H2/early H1 aligning to project deliveries. • Revenue losses from Minc & MF Global lowered run rate into 2012. • Continued le
Slide 20: Canada - Overview
Presentation Title| Subtitle (change on master slide) CANADA - OVERVIEW FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Resilient result. • Revenue (CAD) increased 7.1% on H1 2011 (up 14.6% on pcp) • Segment Profit (CAD) increased 15.4% on H1 2011 (up 21.9% on pcp) • Margin improvement fro
Slide 21: Canada – 2011
Presentation Title| Subtitle (change on master slide) CANADA – 2011 FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Positive progress on institutional order management with clients and prospects. Now in broader client base rollout. Continues to be core strategic focus. • IRESS BMR shows co
Slide 22: Canada – Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) CANADA – MONTHLY SUBSCRIPTION REVENUE* FULL YEAR RESULTS – DECEMBER 2011 For personal use only 1.6 CAD$ Millions 1.2 Pre-IRESS full production level offering 0.8 0.4 2006 2007 2008 2009 2010 2011 2012 *Assumes 100% ownership Up to February 2012 2
Slide 23: Canada - Outlook
Presentation Title| Subtitle (change on master slide) CANADA - OUTLOOK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • 2012 outlook • Trading has commenced flat in aggregate in H1 in mixed conditions. • Continuing uncertainty with TMX/Alpha merger. Alpha status is now as full exchange, and
Slide 24: Daily Trades in Canada
Presentation Title| Subtitle (change on master slide) DAILY TRADES IN CANADA* FULL YEAR RESULTS – DECEMBER 2011 For personal use only 700 Alpha commenced 600 H2’08 Chi_X 500 commenced Common Base from 2006 H1’08 400 Triact & Omega commenced H2’07 300 Pure Market commenced 200 H1’07 100 - Jan-06 Jan-
Slide 25: Average Daily Trades
Presentation Title| Subtitle (change on master slide) AVERAGE DAILY TRADES FULL YEAR RESULTS – DECEMBER 2011 For personal use only 2.5 2.0 0.25 0.27 1.5 Millions 1.0 1.45 0.55 0.5 0.0 CAN AUS TSX CHI-X ALPHA ASX * Measured over 8 weeks (excluding holidays) to 25 January 2012 24
Slide 26: Comparative Message Rates
Presentation Title| Subtitle (change on master slide) COMPARATIVE MESSAGE RATES FULL YEAR RESULTS – DECEMBER 2011 (PER TRADE PER DESTINATION) For personal use only 200 150 100 166 122 50 13 27 - TSX CHI-X ALPHA ASX CANADA AUS * Measured over 8 weeks (excluding holidays) to 25 January 2012 25
Slide 27: Financial Markets – Asia
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS – ASIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Revenue growth over the year: • Progressing with growing exposure to new opportunities in the region (organic and through seed relationships). • Impact of MF Globa
Slide 28: Financial Markets – Retail Product Suite
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS –RETAIL PRODUCT SUITE FULL YEAR RESULTS – DECEMBER 2011 For personal use only • IRESS product set proving globally differentiated and very portable: • Rich multi-asset/currency/language online trading solution providing differen
Slide 29: South Africa - Overview
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA - OVERVIEW FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Good growth result for the division after allowing for partial Jan 2011 contribution • Revenue (ZAR) increased 20.4% on H1 2011 • Segment Profit (ZAR) increased 20.
Slide 30: South Africa – 2011
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA – 2011 FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Retail product suite (Trader/Investor/mobile) in production and well received • Hedge fund EMS solution in production • Trading architecture evolving, creating new oppo
Slide 31: South Africa – Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA – MONTHLY SUBSCRIPTION REVENUE* FULL YEAR RESULTS – DECEMBER 2011 For personal use only 10 9 ZAR Millions 8 7 6 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 *Revenue variances partly due to Message Volumes fluctuations Up to February 2012 30
Slide 32: South Africa - Outlook
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA - OUTLOOK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • 2012 outlook • Trading has commenced with slight momentum in H1. • Numerous opportunities for combined product offering and service model. • Client project activity
Slide 33: Wealth Management – Australia & NZ
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – AUSTRALIA & NZ FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Good growth from ongoing demand and delivery: • Revenue increased 7.5% on H1 2011 (up 13.2% on pcp) • Segment Profit increased 8.9% on H1 2011 (up 10.0%
Slide 34: Wealth Management - 2011
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - 2011 FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Clients and projects • Increased involvement in numerous institutional XPLAN transitions • Clients focussing on scalable advice platform and efficiencies • Private
Slide 35: Wealth Management – Private Wealth
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – PRIVATE WEALTH FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Private wealth management increasingly prominent • Global trend from commission/transaction to asset management/advice. • Desire for margin control, part
Slide 36: Wealth Management – Aust & NZ Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – AUST & NZ MTHLY FULL YEAR RESULTS – DECEMBER 2011 SUBSCRIPTION REV For personal use only 5.0 4.0 $A Millions 3.0 2.0 1.0 0.0 2006 2007 2008 2009 2010 2011 2012 Up to February 2012 35
Slide 37: Wealth Management Outlook
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT OUTLOOK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • 2012 outlook: • Positive momentum from H2 to influence 2012 results, with early trading continuing this trend. • A number of institutional rollouts and new produc
Slide 38: Wealth Management - South Africa
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - SOUTH AFRICA FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Revenue up 2.6% and Segment Profit up 44.6 % on H1 2011 respectively (ZAR) • Several institutional XPLAN transitions underway or commencing in 2012. • Expe
Slide 39: Wealth Management – Asia
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – ASIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Continuing exposure to opportunities in the region. Focus on product positioning and business building. • Confidence in medium-long term growth segments across tie
Slide 40: Wealth Management – UK
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – UK FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Strategic medium-long term growth initiative in UK commenced November 2011. • Established with significant seed client and experienced team. Represents low risk prof
Slide 41: Contact IRESS
Presentation Title| Subtitle (change on master slide) CONTACT IRESS FULL YEAR RESULTS – DECEMBER 2011 For personal use only AUSTRALIA NEW ZEALAND ASIA Melbourne | +61 3 9018 5800 Auckland | +64 9 300 5571 Hong Kong | +852 3965 3341 Sydney | +61 2 8273 7000 Wellington | +64 4 462 6850 Singapore | +65
Slide 42: Supplementary Information
Presentation Title| Subtitle (change on master slide) SUPPLEMENTARY INFORMATION FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Divisional dashboards • Strategic charges • Tax expense & franking • Share grants 41
Slide 43: Financial Markets - Australia
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - AUSTRALIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only g RSA H1 2011 H2 2011 %Chg LC H1'11 6% 2% 6% 0% H2'11 5% 6% (A#039;000) (A#039;000) 2% 2% 3% 3% Operating Revenue 54,008 54,910 2% Segment Profit* 28,479 27,810 -2% P
Slide 44: Financial Markets - Canada
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - CANADA FULL YEAR RESULTS – DECEMBER 2011 For personal use only H1'11 4% 4% 1% 4% 2% H2'11 H1 2011 H2 2011 1% 3% 1% %Chg LC 9% (CAD#039;000) (A#039;000) (CAD#039;000) (A#039;000) 9% Operating Revenue 11,878 11,719 12,727 12,235 7% Segment
Slide 45: Financial Markets - RSA
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - RSA FULL YEAR RESULTS – DECEMBER 2011 For personal use only H1'11 H2'11 6% 2% 3% 3% H1 2011 H2 2011 5% 2% 5% %Chg LC 3% 3% (ZAR#039;000) (A#039;000) (ZAR#039;000) (A#039;000) 3% Operating Revenue 51,819 7,281 62,391 8,040 20% Segment Prof
Slide 46: Financial Markets - Asia
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - ASIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only g 1% 0% H2'11 RSA H1 2011 H2 2011 H1'11 1%5% 1% %Chg LC 4% 22% (A#039;000) (A#039;000) Operating Revenue 517 544 5% Segment Profit* (498) (956) 92% 3% 1% 3% PAT* (423) (76
Slide 47: Wealth Management - Australia
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - AUSTRALIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only g H1'11 4% 1% 4% 2% H2'11 RSA H1 2011 H2 2011 %Chg LC 0% 6% 0% 5% 4% 5% (A#039;000) (A#039;000) Operating Revenue 23,672 25,451 8% Segment Profit* 9,714 10,574 9% PAT
Slide 48: Wealth Management - RSA
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - RSA FULL YEAR RESULTS – DECEMBER 2011 For personal use only H2'11 Management H1 2011 H2 2011 H1'11 3% 4% 3% 3% %Chg LC 9% 9% (ZAR#039;000) (A#039;000) (ZAR#039;000) (A#039;000) 2% 3% Operating Revenue 21,880 3,091 22,442 2,900 3% 6% 5% Se
Slide 49: Wealth Management – Asia
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – ASIA FULL YEAR RESULTS – DECEMBER 2011 For personal use only g H1'11 3% 1% H2'11 RSA H1 2011 H2 2011 %Chg LC 7% 13% (A#039;000) (A#039;000) 15% Operating Revenue 66 93 41% 17% Segment Profit* (591) (729) 23% 1% 6% 55% PAT* (415) (51
Slide 50: Group Strategic Charges
Presentation Title| Subtitle (change on master slide) GROUP STRATEGIC CHARGES FULL YEAR RESULTS – DECEMBER 2011 20 For personal use only 15 $A Millions 10 5 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fin Mkts Aust Fin Mkts Can Fin Mkts RSA Fm Asia Wlth Mgt Aust Wlth Mgt UK Wlth Mgt RSA Wlth
Slide 51: Non-Amortising Intangibles
Presentation Title| Subtitle (change on master slide) NON-AMORTISING INTANGIBLES FULL YEAR RESULTS – DECEMBER 2011 For personal use only Cost (AUD) Description $m Amortisation period Canada Fin Mkts LP Goodwill 8.155 Fin Mkts RSA Peresys Goodwill 10.492 Plantech Goodwill 3.157 Visiplan Goodwill 10.6
Slide 52: Tax Expense & Franking
Presentation Title| Subtitle (change on master slide) TAX EXPENSE & FRANKING FULL YEAR RESULTS – DECEMBER 2011 For personal use only • Tax Expense • Effective tax rate increased to 31.3% in 2011 (up from 25.6% in 2010) • Rate change was flagged last year. Effective tax rate in prior periods was low
Slide 53: Share Grants
Presentation Title| Subtitle (change on master slide) SHARE GRANTS FULL YEAR RESULTS – DECEMBER 2011 • Value of staff share grants made in May 2011 (excludes MD): For personal use only • Deferred shares & Deferred Share Rights $5.714m (2010: $5.052m) • Performance Rights $1.595m (2010: $1.435m) • In