Slide 1: IRESS 2013 Full Year Results – Presentation (ASX cover letter)
26 February 2014 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 2013 Full Year Results – Presentation Please find attached a presentation relating to the company’s
Slide 2: Full Year Results - 2013
For personal use only FULL YEAR RESULTS - 2013 FEBRUARY 2014
Slide 3: Transformed IRESS Group in 2013
TRANSFORMED IRESS GROUP IN 2013 • Group Revenue up 21.2% on 2012 For personal use only • Group Segment Profit up 5.8% on 2012 • RESILIENT RESULT FOR PRE-ACQUISITION BUSINESS • Excluding Avelo, Group Revenue up 4.2% and Segment Profit down 0.6% on 2012 • Record outperformance by Australian Wealth Man
Slide 4: Change in Operating Revenue
CHANGE IN OPERATING REVENUE* 260 For personal use only 37.0 250.6 240 AUD Millions 220 1.4 9.1 0.3 0.6 1.7 206.7 200 GROUP AU FM AU WM CAN RSA ASIA UK GROUP 2012 2013 *Includes revenues on recoveries for services such as news, market data costs, provision of client communication networks, maintenanc
Slide 5: Segment Profit Bridge
SEGMENT PROFIT BRIDGE 90 For personal use only 88 4.2 88.2 86 AUD Millions 4.3 0.9 84 0.2 0.0 2.7 82 83.4 80 GROUP AU FM AU WM CAN RSA ASIA UK GROUP 2012 2013
Slide 6: Group Recurring Subscription Revenue
GROUP RECURRING SUBSCRIPTION REVENUE* 200 For personal use only 150 AUD Millions 100 50 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 AU FM AU WM CAN RSA ASIA UK *Excludes revenues on recoveries for services such as news, market data costs, provision of client communication networks, main
Slide 7: Group Segment Profit
GROUP SEGMENT PROFIT* 100 For personal use only 80 60 AUD Millions 40 20 - -20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 AU FM AU WM CAN RSA ASIA UK *Definition of Segment Profit as per IRESS Media Release.
Slide 8: Change in Segment Profit
CHANGE IN SEGMENT PROFIT 20 16.7 For personal use only 15.4 15 10 8.1 4.8 3.0 AUD Million 5.7 6.1 4.9 3.5 5 (5.7) 0 (5) (10) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FM AU WM AU CAN RSA ASIA UK *Definition of Segment Profit as per IRESS Media Release.
Slide 9: Operating Cashflow per Share
OPERATING CASHFLOW PER SHARE* For personal use only *Calculated as Net Cash from Operations ÷ No. of shares on issue at end of period
Slide 10: Group Cost Re-allocations H2 2013
GROUP COST RE-ALLOCATIONS H2 2013 AUD $m FM AU WM AU CAN RSA ASIA FM UK For personal use only Segment Profit in H1 25.434 13.084 2.583 3.350 (1.854) (0.282) Market Data Reallocation 1.006 (0.342) - (0.398) (0.106) (0.161) Staff Costs Reallocation 0.842 (0.568) 0.058 (0.238) 0.045 (0.138) Transaction
Slide 11: Group Segment Profit - Margins
GROUP SEGMENT PROFIT - MARGINS For personal use only % Revenue per Media Release H1 2012 H2 2012 H1 2013 H2 2013 2010 2011 2012 2013 AU FM AUD 49.7% 50.0% 47.5% 48.8% 56.3% 51.7% 49.9% 48.2% AU WM AUD 44.5% 42.3% 44.2% 43.7% 42.6% 41.3% 43.4% 43.9% CAN CAD 30.3% 27.8% 25.0% 28.5% 33.5% 34.2% 29.1% 2
Slide 12: Relative Impact H2 2013
RELATIVE IMPACT H2 2013 100% For personal use only 80% 60% 40% 20% 0% -20% Revenue (Recurring Subs) Segment Profit* Total Direct Staff Costs Total Strategic Charges AU FM AU WM CAN RSA ASIA UK *Definition of Segment Profit as per IRESS Media Release.
Slide 13: Australia & NZ - Financial Markets
AUSTRALIA & NZ - FINANCIAL MARKETS For personal use only • Revenue profile reflects resilient result: • Strong uptake of multi-market trading desktop. IOS+ OTW now used by 35+ brokers as primary • Revenue flat on H1 13 (flat 0.0% pcp) trader workstation. • Segment Profit increased 2.7% on H1 2013 •
Slide 14: Australia & NZ - Wealth Management
AUSTRALIA & NZ - WEALTH MANAGEMENT For personal use only • Differentiated product, delivery and integrated • Scaled strategic technology partner alongside services continues to produce strong growth: clients to achieve FoFA projects in 2013 • Revenue increase 12.8% on H1 (up 20.1% pcp) • XPLAN conti
Slide 15: South Africa
SOUTH AFRICA For personal use only • Strong South African result in local currency for • Resilient subscription revenue over the period, the year after moderated H2 result: with additive volume-based revenue. • Revenue (ZAR) increased 1.8% on H1 (up 10.2% pcp) • Broadened product set and implementat
Slide 16: South Africa
SOUTH AFRICA For personal use only Financial Markets Private Wealth Management • Strong contribution from volume based • Competitively differentiated product - tight remuneration inline with equity market and integration across advisory and trading functions, services with strong local relevance • S
Slide 17: Canada
CANADA For personal use only • Continued pressure in client base reflected in • Demand for IRESS solutions that extend workflow financial result: and realise cost benefits experienced in larger clients. Additional deployments expected during • Revenue (CAD) decreased 8.5% on H1 (down the year 9.5% p
Slide 18: United Kingdom – Avelo Acquisition
UNITED KINGDOM – AVELO ACQUISITION For personal use only • Successful acquisition of Avelo completed 9 September 2013 • Largest and most significant single change in IRESS’ history, transforming the group • Establishes significant regional platform for growth opportunities (organic and inorganic) •
Slide 19: United Kingdom – Avelo Acquisition
UNITED KINGDOM – AVELO ACQUISITION For personal use only • Intensive design phase post-completion to • Adjustment to people structures to accommodate validate pre-acquisition integration planning increased scale and scope of businesses and to leverage capability strengths in line with strategy • Int
Slide 20: United Kingdom Wealth Management
UNITED KINGDOM WEALTH MANAGEMENT • Seed client for Avelo’s nextgen platform, a top 10 For personal use only • Revenue and segment contribution by Avelo in 2013 : distributor, to accelerate XPLAN deployment. • Revenue £12.8m in 2013, impacted by lower • Demand from broad set of AdviserOffice clients
Slide 21: United Kingdom – Enterprise
UNITED KINGDOM – ENTERPRISE For personal use only • Centred on Mortgage Sourcing & Origination • Strong demand from existing clients Nationwide (MSO) platform - a large-scale software solution Building Society and Barclays, supplemented by to leading lending institutions, providing project engagemen
Slide 22: Asia
ASIA UK FINANCIAL MARKETS For personal use only • CFD trading platform now used by majority of • Experienced team based in London responding to local Singaporean brokers. opportunities regionally for price, feature and service competitive solutions. • Good progress with integrated core trading and •
Slide 23: IRESS Group Outlook
IRESS GROUP OUTLOOK For personal use only • Trading into early 2014 for the group has commenced with flat to positive momentum • Key contributions to 2014 financial result: • Annualised impact of subscription revenue reductions in 2013 • Positive yet moderated growth in Australia wealth management •
Slide 24: Appendices
For personal use only APPENDICES
Slide 25: Balance Sheet
BALANCE SHEET BALANCE SHEET For personal use only 2013 2012 2013 2012 Current Assets Current Liabilities Cash assets 71.4 56.0 Trade payables (21.1) (8.3) Trade receivables 25.7 12.1 Other payables (17.5) (6.1) Other receivables 11.2 2.3 Borrowings Current 0.0 0.0 Tax Assets 0.0 1.5 Current tax paya
Slide 26: Debt
DEBT For personal use only Debt $m External Debt - 5 year term (AUD) 90.0 External Debt - 3 year term (AUD) 90.5 Total External Debt 180.5 Net Liability under cross currency swap – 3/5 year term (AUD to GBP) 10.9 Credit risk associated with swap (0.29) Provision for interest expense payments 0.72 De
Slide 27: Total Acquisition Related Costs
TOTAL ACQUISITION RELATED COSTS • The acquisition of Avelo incurred costs to complete the transaction and integrate the For personal use only acquired business. The total costs incurred were $30.509m and fell broadly into the following groupings: Acquisition Related Costs $m Advisor fees directly as
Slide 28: Treatment of Total Acquisition Costs
TREATMENT OF TOTAL ACQUISITION COSTS For personal use only • These costs of $30.509m have been allocated based on the nature of the item and present to the Group's result as follows: ITEM AUD $ m High level impact on financial statements Acquisition and implementation costs incurred in the 9.846 Exp
Slide 29: Non-Recurring & Strategic Charges
NON-RECURRING & STRATEGIC CHARGES Non-Recurring / Non Core Costs incurred in 2013 For personal use only Acquisition and Implementation costs incurred 9.846 # Costs provided for associated with integration activities 3.844 # Derivative costs 2.661 # Sub-total: Non-Recurring Acquisition Costs 16.351 N
Slide 30: Group Strategic Charges
GROUP STRATEGIC CHARGES 20 For personal use only 15 AUD millions 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 AU FM AU WM CAN RSA ASIA UK AUD m Description H1'13 H2'13 H1'14 H2'14 H1'15 H2'15 H1'16 H2'16 AU FM Peresys Software 3.934 3.934 3.934 3.934 3.934 3.934 0.381 - AU WM Fundclick Software 0.
Slide 31: Non-Amortising Intangibles
NON-AMORTISING INTANGIBLES For personal use only Description Cost (AUD) $m Amortisation period Plantech Goodwill 3.157 Visiplan Goodwill 10.695 AU WM Transactive Goodwill 0.285 DMS Goodwill 1.042 Goodwill CAN LP Goodwill 9.016 Peresys Goodwill 9.358 Will be subject to regular RSA impairment testing
Slide 32: Share Grants
SHARE GRANTS • Value of staff share grants made in May 2013 (excludes MD): For personal use only • 3 year term Deferred shares & Deferred Share Rights $6.926m (2012: $6.363m) • Performance Rights $1.253m (2012: $1.510m) • Actual allocation issued to MD 130,000 Performance Rights and 55,000 Deferred
Slide 33: IRESS Group
IRESS GROUP H1'13 H2'13 For personal use only 4% 2% 4% 2% H1 2013 H2 2013 % Chg 7% 7% (AUD'000) (AUD'000) AUD 1% 1% 4% 4% Operating Revenue 105,391 145,235 37.8% Segment Profit* 40,943 47,258 15.4% Segment PAT* 22,568 22,389 (0.8%) Non-Recurring Exp (1,829) (18,210) Avg Headcount FTE 712 1,012 42.1%
Slide 34: Australia & NZ – Financial Markets
AUSTRALIA & NZ – FINANCIAL MARKETS H1'13 H2'13 For personal use only 5% 0% 5% 0% H1 2013 H2 2013 % Chg 9% 9% (AUD'000) (AUD'000) AUD 2% 2% Operating Revenue 53,521 53,497 (0.0%) 4% 4% Segment Profit* 25,434 26,131 2.7% Segment PAT* 16,438 13,716 (16.6%) Non-Recurring Exp (667) (9,809) Avg Headcount
Slide 35: Australia & NZ – Wealth Management
AUSTRALIA & NZ – WEALTH MANAGEMENT H1'13 H2'13 2% For personal use only 6% 2% 6% 2% 2% H1 2013 H2 2013 0% 0% % Chg AUD 5% 5% (AUD'000) (AUD'000) Operating Revenue 29,599 33,375 12.8% Segment Profit* 13,084 14,589 11.5% Segment PAT* 8,523 9,662 13.4% Non-Recurring Exp (135) (2,154) Avg Headcount FTE
Slide 36: Canada
CANADA H1'13 For personal use only H2'13 2% 8% 1% H1 2013 H2 2013 % Chg LC 9% 4% (CAD'000) (AUD'000) (CAD'000) (AUD'000) 3% 2% Operating Revenue 10,481 10,107 9,592 10,041 (8.5%) 2% 3% 4% Segment Profit* 2,620 2,525 2,736 2,865 4.4% Segment PAT* 1,586 1,529 1,686 1,766 6.3% Non-Recurring Exp (8) (7)
Slide 37: South Africa
SOUTH AFRICA H1'13 For personal use only H2'13 6% 5% H1 2013 H2 2013 % Chg LC 4% 5% (ZAR'000) (AUD'000) (ZAR'000) (AUD'000) 6% 7% Operating Revenue 99,062 10,612 100,809 10,969 1.8% 1% 2% 4% Segment Profit* 31,396 3,350 27,485 2,969 (12.5%) 4% Segment PAT* 21,055 2,247 17,195 1,857 (18.3%) Non-Recur
Slide 38: Asia
ASIA H1'13 H2'13 2% For personal use only 6% 6% 2% H1 2013 H2 2013 % Chg 10% 10% (AUD'000) (AUD'000) AUD Operating Revenue 712 893 25.5% 1% 1% Segment Profit* (1,854) (2,096) (13.0%) 4% 4% Segment PAT* (1,416) (1,554) 9.8% Non-Recurring Exp (483) 239 Avg Headcount FTE 36 35 (5.0%) 77% 77% Monthly Su
Slide 39: United Kingdom
UNITED KINGDOM H1'13 For personal use only H2'13 1% H1 2013 H2 2013 4% 4% 19% 2% (GBP'000) (AUD'000) (GBP'000) (AUD'000) 4% Operating Revenue 553 841 21,041 36,460 Segment Profit* (1,053) (1,597) 1,660 2,799 2% 4% Segment PAT* (795) (1,205) 950 1,593 2% Non-Recurring Exp (23) (40) (2,557) (4,594) 5%
Slide 40: Contact IRESS
CONTACT IRESS 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 6672 6288 Perth | +61 8 6211 5900 Brisbane | +61 7 3011 4700 Adelaide | +61 3 9018 5800