Aptitude Software Group Plc · LSE:APTD
Aptitude Software — H1 2019 Earnings Presentation
22 slides from Aptitude Software's earnings presentation, Jul 24, 2019
Slide 1: Interim results for the six months ended 30 June 2019
Interim results for the six months ended 30 June 2019 24 July 2019
Slide 2: Presenting Team
Presenting Team Experienced team transitioning to new leadership Tom Crawford, Chief Executive Officer • Joined the Group in 2002 and appointed Chief Executive Officer of Aptitude Software in 2013 • Stepping down from the Board in 2020 as wife continues to recover from a serious health issue • Worki
Slide 3: Overview
Overview The successful start of a new era solely focused on the Aptitude Software business • Successfully completed sale of Microgen Financial Systems on 28 June 2019 for aggregate cash consideration of £51.4 million. Proposed cash return of £45 million in Q3 2019 • Aptitude Software is now totally
Slide 4: Financial Performance
Financial Performance 13% organic revenue growth to £28.8 million 30 Software and subscription 25 revenue 51% £14.1m 20 52% 54% Revenue (£m) 19% (H1 2018: £11.8m) 15 10 Services revenue 49% 46% 48% 5 £14.7m 0 H1 2018 H2 2018 H1 2019 8% (H1 2018: £13.6m) Software and subscription revenue Services
Slide 5: Financial Performance
Financial Performance Financially strong, increasing profitability and robust balance sheet Adjusted Interim dividend Profit from operating profit cover maintained discontinued ops £5.1m 1.8p £22.4m 31% (H1 2018: £3.9m) (2018: 2.2p) (2018: £2.3m) Operating margin Adjusted Continuing Cash prior to
Slide 6: Aptitude at a Glance
Aptitude at a Glance Increasing global presence in multiple sectors Revenue by Region, H1 2019 ARR, Continuing Growth Key Sectors 30 • Insurance 25 • Banking 20 • TMT £million 15 52% 48% International 10 North America 5 0 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 RevStream acquisition Revenue by Typ
Slide 7: Aptitude Product Portfolio
Aptitude Product Portfolio AAH is our foundation product, complemented by regulatory focused applications Our products take data from: • Complex systems • Multiple siloed data sources • Multiple business Revenue entities Management TMT To create a: IFRS 15 IFRS 15 IFRS 17 IFRS 16 • Unified and singl
Slide 8: Aptitude Accounting Hub ('AAH')
Aptitude Accounting Hub (‘AAH’) Our core offering represents a significant opportunity for the group • Key application for enterprises targeting transformation of their finance organisation • Centralises and automates finance, accounting and reporting processes, delivering detailed financial data fo
Slide 9: Aptitude Insurance Calculation Engine ('AICE')
Aptitude Insurance Calculation Engine (‘AICE’) Aptitude Software’s latest regulatory offering, key focus in short and medium term • AICE allows an insurer to perform all the calculations and complex accounting required to be compliant with IFRS 17 (comes into force 1 January 2022) • In conjunction w
Slide 10: Aptitude Revenue Management ('ARM')
Aptitude Revenue Management (‘ARM’) New business opportunity continues with SaaS revenue management offering • Joint product management of SaaS-based Aptitude RevStream and the specialised Aptitude Revenue Recognition Engine to facilitate shared use of future functionality as products evolve • SaaS
Slide 11: Aptitude Lease Accounting Engine ('ALAE')
Aptitude Lease Accounting Engine (‘ALAE’) SaaS offering allowing compliance with IFRS 16 / ASC 842 • Supports the more efficient and accurate implementation of IFRS 16 and ASC 842 lease accounting standards which came into force on 1 January 2019 driving continued demand across 2018/19 H1 2019 Highl
Slide 12: Go-To-Market and Client Engagement
Go-To-Market and Client Engagement Investing substantially in the depth and breadth of our client engagement • Direct salesforce in Boston, London and Singapore who leverage our Global Partner Network to source and influence prospects • Significant investment in Account Management continues with the
Slide 13: Global Partner Network
Global Partner Network Source of new business and implementation capability • Most new business opportunities are sourced or influenced by our Global Partner Network • We leverage our partners’ relationships, credentials and geographic reach to target new markets and new countries • Highlights in H1
Slide 14: Software and Subscription Revenue
Software and Subscription Revenue Annual Recurring Revenue of £27.5 million (at 30 June 2019) provides future visibility On-Premise Annual Licence Fee SaaS Subscription Model Model • Currently established with • Appropriate deployment Aptitude Revenue Management methodology for larger and Aptitude L
Slide 15: Professional Services
Professional Services Growing contribution from Solution Management Services Implementation Services Solution Management Services • Typically charged on a Time & • New service helping clients with Materials basis post go-live business as usual • Blended resource model of operation including upgrade
Slide 16: Aptitude Innovation Centre
Aptitude Innovation Centre Long-established and high quality facility in Wroclaw, Poland • High quality and long-established centre in Poland with over 100 software engineers meaning we can maintain our differentiation • Modern development methodologies mean teams are able to rapidly and frequently
Slide 17: Microgen Financial Systems Disposal
Microgen Financial Systems Disposal Completed 28 June 2019, £51.4 million aggregate cash consideration • £51.4 million aggregate cash consideration received on 28 June 2019 • Microgen Financial Systems’ 2018 continuing revenue and adjusted operating profit were £17.3 million and £6.5 million respect
Slide 18: Conclusion
Conclusion Successful start to a new era • Totally focused on the specialised provision of powerful financial management software to large global businesses • Solid long-term growth prospects driven by enterprises moving to digitise their finance operations empowered by technological advancement • O
Slide 19: Appendix
Appendix AX Aptitude’ SOFTWARE
Slide 20: Income Statement
Income Statement Strong organic growth in revenue and operating profit H1 2019 H1 2018 FY 2018 £’000 £’000 £’000 Software and Subscription Revenue 14,132 11,812 24,814 Services Revenue 14,699 13,611 27,460 Total Revenue 28,831 25,423 52,274 Operating Costs (23,772) (21,556) (43,499) Adjusted Operati
Slide 21: Cash Flow
Cash Flow Cash flow in-line with seasonal expectations • H1 2019 ????????? H1 2018 FY 2018 £’000 £’000 £’000 Cash generated from operations 6,992 (1,098) 15,042 Interest and tax paid (1,506) (1,473) (3,508) Cash flows generated from operating activities 5,486 (2,571) 11,534 Purchase of property, pla
Slide 22: Balance Sheet
Balance Sheet Strong balance sheet with £45 million cash return scheduled for Q3 H1 2019* H1 2018 FY 2018 £’000 £’000 £’000 Goodwill and intangible assets 30,696 67,951 62,979 Property, plant and equipment 3,653 5,630 5,417 Trade and other assets 19,108 22,334 19,042 Cash and cash equivalents 69,897
Aptitude Software Group — H1 2019 Earnings Presentation on 6ix