Slide 1: 2015 Result Presentation
For personal use only 2015 Result Presentation 16 FEBRUARY 2016
Slide 2: 2015 Highlights
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Slide 3: 2015 Highlights
2015 Highlights For personal use only Continued growth in revenue at the Group level Group revenue +4.3% Organic contract wins and product take-up across Practice Management 98.1 100.8 105.1 segment delivering volume and revenue growth Reckon One gaining traction in the Australian market. Overal
Slide 4: 2015 Highlights (cont.)
2015 Highlights (cont.) For personal use only Transition to subscription largely complete with enhanced customer lifetime value Group revenue (2015) 87% of Practice Management1 revenue now subscription (up from 85% in 2014) 19% 72% of Business product revenue now subscription (up from 50% in 201
Slide 5: 2015 Highlights (cont.)
2015 Highlights (cont.) For personal use only The Group’s existing businesses delivered solid revenue and EBITDA growth again in 2015, with new business initiatives causing some short term P&L impact as they are scaled across markets Reckon EBITDA 43 42 41 (2.6) 40 4.8 39 A$m 38 (2.7) 41.9 37 36 35
Slide 6: Building on our success
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Slide 7: Building on our success: the business today and in the future
Building on our success The business today and in the future For personal use only Reckon has a number of well identified growth opportunities which it intends to exploit through a combination of organic growth, targeted investment in product development and complementary acquisitions Where we are t
Slide 8: New reporting segmentation
Building on our success (cont.) New reporting segmentation For personal use only Going forward, Reckon will report under three new segments that better reflect the various opportunities available to the Group The Group’s development of Practice Management and Document Management strategies within
Slide 9: 1. Scale proven international businesses
Building on our success (cont.) 1. Scale proven international businesses For personal use only The Group’s existing international businesses (nQueue, Virtual Cabinet) represent exciting, validated growth opportunities ready for further investment Practice Management nQueue Group revenue by geograp
Slide 10: 2. SmartVault acquisition
Building on our success (cont.) 2. SmartVault acquisition For personal use only SmartVault provides Reckon with a high-growth access point to USA accountants/SMEs and is expected to generate cross-segment benefits Strategic acquisition of leading online document management product among US accountan
Slide 11: 3. Build on our strong domestic market position
Building on our success (cont.) 3. Build on our strong domestic market position For personal use only Reckon has an opportunity to leverage its leading customer base, product functionality and price point to drive further growth in its ANZ businesses, while further improving the quality of earnings
Slide 12: 4. Reckon online products opportunity
Building on our success (cont.) 4. Reckon online products opportunity For personal use only The Group’s investment in online accounting products is designed to deliver great products that are well positioned to take advantage of the very large market opportunity brought by the shift to the cloud Rec
Slide 13: 5. Harness the power of the connected practice
Building on our success (cont.) 5. Harness the power of the connected practice For personal use only Reckon is the only software provider in the market that can take data from an end client’s file (regardless of source) and integrate it with a full suite of practice and collaboration functionality M
Slide 14: 6. Accelerated investment into targeted priorities
Building on our success (cont.) 6. Accelerated investment into targeted priorities For personal use only The Group is scaling its experienced development team to drive growth initiatives and take advantage of market opportunities Development costs and as a % of revenue1 2015 development spend of $
Slide 15: 7. Continuing our track record of results from growth investments
Building on our success (cont.) 7. Continuing our track record of results from growth investments For personal use only The Company’s track record of growth investments positions it well to execute its growth strategy with confidence Strategic acquisitions Reckon has a history of acquiring and suc
Slide 16: 2015 Performance
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Slide 17: 2015 Performance: Revenue growth
2015 Performance Revenue growth For personal use only 2015 Growth 2014 Comments Subscription product revenue 63.1 20.0% 52.6 Volume growth and transition to subscription Transition of Advantage/Upgrade products in the Other recurring revenue 7.6 (46.9%) 14.3 Business Group moving to subscription Tra
Slide 18: Practice management (new reporting segment)
2015 Performance (cont.) Practice management (new reporting segment) For personal use only Key highlights Practice management – results for the year to 31 Dec 2015 Segment revenue of $59.9m, up 5.7% from $56.7m in 2014 2015 Growth 2014 Segment EBITDA of $20.2m, up 3.7% from $19.5m in 2014 Subscr
Slide 19: Practice management: APS seat growth
2015 Performance (cont.) Practice management (new reporting segment) For personal use only APS seat growth APS Practice Management revenue by type $24m $23m $23m CAGR 86k 100% +19.5% 74k 90% 67k 80% 70% APS Seats 49k % of revenue 60% 42k 50% 40% 30% 20% 10% 0% CY11 CY12 CY13 CY14 CY15 2013 2014 2015
Slide 20: Document management (new reporting segment)
2015 Performance (cont.) Document management (new reporting segment) For personal use only Key highlights Document management – results for the year to 31 Dec 2015 Segment revenue of $9.8m, up 34% from $7.3m in 2014 2015 Growth 2014 Segment EBITDA of $4.7m, up 54% from $3.1m in 2014 Subscription
Slide 21: Business
2015 Performance (cont.) Business For personal use only Key highlights Business – results for the year to 31 Dec 2015 Segment revenue of $35.4m, down 3.8% from $36.8m in 2014 2015 Growth 2014 Segment EBITDA of $19.1m, down 0.2% from $19.2m in 2014 Subscription product revenue 22.5 38.4% 16.3 O
Slide 22: Group performance
2015 Performance (cont.) Group performance For personal use only 2015 Growth Revenue $105.1m +4.3% EBITDA $36.6m (1.3%) Adjusted1 EBITDA $39.2m +5.7% NPAT $15.1m (14.1%) Adjusted1 NPAT $19.8m +4.6% 1. Adjusted for new market expenditure STRICTLY CONFIDENTIAL PAGE 21
Slide 23: Balance sheet and cashflow
2015 Performance (cont.) Balance sheet and cashflow For personal use only The Group maintains a robust balance sheet and strong operating cashflow which provides capacity to invest in growth opportunities Highlights Selected balance sheet and cashflow items Net debt of $48.3m (up from $41.2m pcp)
Slide 24: 2016 Outlook
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Slide 25: 2016 Outlook: Future opportunities
2016 Outlook Future opportunities For personal use only Multiple growth opportunities have been identified across each segment which will deliver a business with increased scale and quality across a number of geographies Continue strategic focus on product Continue new market expansion Take advantag
Slide 26: 2016 Outlook: financial guidance
2016 Outlook Future opportunities For personal use only Accelerated investment by the Group in 2016 is expected to generate significant benefits in the medium term, with high EBITDA conversion from new business revenue growth arising from a largely fixed cost base Outlook - overview FY16 outlook – f
Slide 27: Appendix: Reconciliations
For personal use only A APPENDIX Reconciliations
Slide 28: Segment reconciliation
Segment reconciliation For personal use only Practice Management Document Management A$m CY15 CY14 A$m CY15 CY14 Revenue Revenue Accountant Group 47.4 46.2 International Group 22.3 17.7 Add: nQueue revenue 12.5 10.4 Less: nQueue revenue (12.5) (10.4) Practice Management 59.9 56.7 Document Management
Slide 29: Thank you
Thank you For personal use only Clive Rabie Group CEO E: clive.rabie@reckon.com Chris Hagglund CFO E: chris.hagglund@reckon.com Presentation disclaimer The information may not be reproduced or distributed to any third party or published in whole or in part for any purpose. The information contained