Alfa Financial Software Holdings PLC · LSE:ALFA
Alfa Financial Software — H1 2018 Earnings Presentation
21 slides from Alfa Financial Software's earnings presentation, Sep 4, 2018
Slide 1: H1 2018 Interim Results
H1 2018 Interim Results 4 September 2018
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the fo
Slide 3: Agenda
Agenda Financial review Viv Maclachlan, CFO Business and sales update Andrew Denton, CEO Summary Andrew Denton, CEO Q&A Definitions
Slide 4: Financial Review
Financial Review Viv Maclachlan, CFO
Slide 5: H1 2018 – at a glance
H1 2018 – at a glance Financial and operational highlights £32.9 m (21%) £8.6 m 26% Operating profit Revenue Revenue movement(1) Operating profit margin H1 2017: £45.1m At constant currency H1 2017: £21.4m Adjusted H1 2017: 47% Adj EBIT EBIT(1) margin(1) 337 92% 5 15 Ongoing Headcount Staff retentio
Slide 6: Income Statement analysis: key metrics
H1 2018 Income Statement analysis An overview of key metrics H1 H1 2017 2018 % Overview Key Financial Metrics £m £m Movement Revenue 45.1 32.9 (27%) Revenue – constant currency 41.8 33.0 (21%) • Revenues impacted by: Operating profit 14.0 8.6 (39%) - Smaller number of software implementations with A
Slide 7: Income Statement analysis: Software implementation revenues
H1 2018 Income Statement analysis Software implementation revenues No. of 8 7 7 6 5 customers Software implementation revenues 35 • 5 ongoing software implementations 30 29.1 − 2 ongoing projects which pre-date 1 Jan 17 25.2 − 2 new customers won in June 2017 25 − 1 new customer won in March 2018 18
Slide 8: Income Statement analysis: ODS revenues
H1 2018 Income Statement analysis ODS revenues No. of customers > £100k 8 8 11 13 15 ODS revenues 14 11.7 • Customer numbers increased from H1 2017 due 12 to completed implementations during 2017 10.8 10.4 10 • New ODS revenues generated £4.9 million − Average ODS revenue per new customer was £1.0 £
Slide 9: Income Statement analysis: Maintenance revenues
H1 2018 Income Statement analysis Maintenance revenues No. of 26 26 26 27 28 customers Maintenance revenues 14 12.3 • Ongoing maintenance increased by 11% in 12 comparison to H1 2017 due to - Underlying annual increases generally agreed in May 10 9.2 9.5 of each year; and - Benefits of increased por
Slide 10: Income Statement analysis: Expense analysis
H1 2018 Income Statement analysis Expense analysis £m H1 H2 H1 2017 2017 2018 Expenses Personnel expenses 18.2 16.3 18.1 Advertising and marketing 0.4 0.4 0.4 • Personnel expenses account for 74% of operating Depreciation and amortisation 0.2 0.3 0.4 expenses (excluding exceptional items) (H1 Proper
Slide 11: Cash flow data
H1 2018 Cash flow data A high level analysis H1 H1 £m 2017 2018 Cash and cash equivalents Operating profit 14.0 8.6 • Cash increase of £5.0 million Depreciation and amortisation 0.2 0.4 Share based payments 4.4 0.1 • H1 2018 Free Cash Flow Conversion of 109% compared to 53% in H1 2017 due to Unreali
Slide 12: Balance Sheet
H1 2018 Balance Sheet A high level analysis £m Dec 2017 Jun 2018 Total non-current assets 26.2 27.1 Balance sheet Current assets • Non-current assets increase due to investment in HR and finance system Trade receivables and contract assets 12.4 16.2 Prepayments and other receivables 2.4 1.5 • Trade
Slide 13: Business and sales update
Business and sales update Andrew Denton, CEO
Slide 14: Enabling business agility…
Enabling business agility… Alfa continuing to enable change for our customers and potential customers Market update • We continue to see the following trends in H1 2018: − A drive towards multi-country systems consolidation − Operational efficiency − Digital Alfa operating in − Cloud 26 Countries •
Slide 15: Focusing on customers…
Focusing on customers… Pipeline remains healthy and recent conversion of medium sized opportunity with an existing customer Ongoing customer relationships - Recent medium sized upgrade and extension - Leading retail bank - Existing customer with a new line of business - 4 ongoing customer implementa
Slide 16: Delivering with the best people…
Delivering with the best people… Retaining talent whilst managing costs Recruitment and retention • Recruitment plans slowed after Trading Update on 1 June 2018 − No experienced hire recruitment in 2018 − Graduate hires: 16 in H1 2018 and 6 in H2 2018 − Geographically balanced across US and UK • Inc
Slide 17: Leading with the best technology……
Leading with the best technology…… Planning for the next generation of Alfa Systems Alfa next generation • Focus in H1 2018 has been on − Functional development − Modularisation − Digital • H2 2018 will see accelerated progress on our move to Platform − Faster, incremental delivery; increased stabil
Slide 18: Summary
Alfa’ Summary Andrew Denton, CEO
Slide 19: Summary
Summary • 4 ongoing software implementations and 1 paused Customer • ODS customers increasing activity and opportunity for additional work focused • Pipeline still strong although pace of conversion has not changed materially • Secular growth trends including responding to regulatory change Business
Slide 20: Q&A
Q&A
Slide 21: Definitions
Definitions Measures not specifically defined by IFRS Adjusted EBIT Total contracted value • Adjusted EBIT is defined as profit from continuing operations before income • TCV is calculated by analysing future contracted revenue based on the taxes, finance income, IPO-related expenses and share based
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