Slide 1: Half Year Results 30 June 2014
For personal use only Half Year Results 30 June 2014 Andrew Walsh – Managing Director & CEO 21 August 2014 iress.com
Slide 2: Disclaimer
DISCLAIMER For personal use only The material in this presentation is intended to be general background information on IRESS Limited and its activities, current at the date of the presentation. The information is provided in summary form and does not purport to be complete. It is not intended to be
Slide 3: Transformed Iress Group
TRANSFORMED IRESS GROUP For personal use only Sound progress on strategy to diversify earnings with scale positions Solid continued performance in Australasia Result positively impacted by full-period UK contribution Continued progress with UK strategy following successful integration Significant re
Slide 4: Key Financial Results
KEY FINANCIAL RESULTS For personal use only Full period contribution of UK acquisition • Group Revenue up 17.2% on H2 13, up 61.5% PCP • Group Segment Profit up 25.6% on H2 13, up 44.9% PCP Resilient result for ex-UK business • Excluding contribution from UK , Group Revenue up 1.0% and Segment Profi
Slide 5: Operating Revenue
OPERATING REVENUE* For personal use only 180 0.4 170 9.2 170.2 160 AUD Millions 14.3 150 (0.6) 1.2 0.1 0.3 140 145.2 130 120 GROUP AU FM AU WM CAN RSA UK WM UK ENT OTHER GROUP H2 2013 H1 2014 *Includes revenues of recoveries for services such as news, market data costs, provision of client communica
Slide 6: Segment Profit
SEGMENT PROFIT For personal use only 65 60 0.3 59.3 6.2 AUD Millions 55 4.8 50 (0.0) (0.1) (0.9) 1.8 45 47.3 40 GROUP AU FM AU WM CAN RSA UK WM UK ENT OTHER GROUP H2 2013 H1 2014 iress.com 6
Slide 7: Resilient & Diversifying Total Information Revenue
RESILIENT & DIVERSIFYING 160 Total Information Revenue* For personal use only 140 120 100 AUD Millions 80 60 40 20 - H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 AU FM AU WM CAN RSA UK WM UK ENT OTHER iress.com * Total Info Revenue represents Subscription Revenue and Other Info Revenue, and exclu
Slide 8: Large Australian Role
LARGE AUSTRALIAN ROLE For personal use only 70 Segment Profit 50 AUD Millions 30 10 -10 H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 AU FM AU WM CAN RSA UK WM UK ENT OTHER iress.com 8
Slide 9: Strong Regular Cashflow
STRONG REGULAR CASHFLOW For personal use only 80 70 60 50 AUD Millions 40 30 20 10 0 2005 2007 2009 2011 2013 H1 H2 iress.com 9
Slide 10: Segment Profit Margins
SEGMENT PROFIT MARGINS For personal use only % Operating Revenue H2 2012 H1 2013 H2 2013 H1 2014 AU FM AUD 50.0% 47.5% 48.8% 46.9% AU WM AUD 42.3% 44.2% 43.9% 47.4% AU AUD 47.4% 46.3% 46.9% 47.1% CAN CAD 27.8% 25.0% 28.5% 30.1% RSA ZAR 29.1% 31.7% 27.3% 25.6% UK WM GBP 12.6% 21.4% UK ENT GBP 4.5% 28
Slide 11: ANZ – Financial Markets
ANZ – FINANCIAL MARKETS For personal use only Ongoing investment, support and resilience • Revenue profile reflects resilient result : • Increasing subscriptions of IOS+ OTW against ASX BEST. OTW now used by 37 brokers as primary trader • Revenue +0.6% H2 13 (+0.6% PCP) workstation, and growing use
Slide 12: ANZ – Wealth Management
ANZ – WEALTH MANAGEMENT For personal use only Ongoing growth and opportunities • Integrated functionality and modular flexibility continue • Regulatory and public focus on segment heightened. to position XPLAN as the most comprehensive advice Expect structural and technological responses. platform.
Slide 13: South Africa
SOUTH AFRICA For personal use only • Solid South African local currency result. Segment Strong local currency performance Profit impacted by cost and provisions : • IRESS Pro continuing to progress well competitively • Revenue (ZAR) +6.5% H2 13 (+8.3% PCP) • Algo volume-based revenue up following pr
Slide 14: Canada
CANADA For personal use only • Client action to control costs continues to limit Retail advisory desktop unlocked immediate revenue growth in sell-side business : • Priority growth opportunities in retail advisory. Attainable • Revenue (CAD) -2.2% H2 13 (-10.5% PCP) market exceeds existing business:
Slide 15: United Kingdom
UNITED KINGDOM For personal use only Differentiating competitive characteristics for IRESS wealth tech in UK and region • Technology, independence, and scale are differentiating competitive characteristics • Positive response from UK client base, with proactive demand. Competitive response focussed
Slide 16: United Kingdom – IRESS plays leading role in UK lending market
UNITED KINGDOM For personal use only IRESS plays leading role in UK lending market • Leading IRESS technology role in UK: • Mortgage Sales & Originations (MSO) is an end-to-end, multi-channel mortgage platform for lenders - 25% of all UK mortgages are transacted through MSO. • IRESS Trigold mortgage
Slide 17: UK - Wealth Management
UK - WEALTH MANAGEMENT For personal use only • Wealth Management revenue incorporates pre-existing • Large corporate and institutional responses to RDR and acquired wealth businesses : continue to heavily rely on technological underpinnings to compliantly manage multi-channels, integration, cost • R
Slide 18: UK – Enterprise (Lending)
UK – ENTERPRISE (LENDING) For personal use only • Result includes impact of project revenue and • IRESS & Nationwide Building Society confirmed non-recurring license : as ‘Best use of IT in Retail Banking’ at FSTech Awards for Nationwide’s unified mortgage platform • Revenue £12.0m H1 2014 from £7.5
Slide 19: Other Segments
OTHER SEGMENTS For personal use only UK Financial Markets SE Asia • Strategy to leverage local and regional scale, • Leading online CFD trading platform in with specific differentiated product capabilities Singapore : and high levels of support, is presenting opportunities in a competitive market. •
Slide 20: IRESS Group Outlook
IRESS GROUP OUTLOOK For personal use only • Trading into early H2 2014 for the group has commenced with positive activity. • Software implementation projects in retail segments continuing across all regions. • Key contributions to 2014 financial result : • Strong growth in Australian Wealth Manageme
Slide 21: Appendices
For personal use only APPENDICES iress.com 21
Slide 22: Balance Sheet
BALANCE SHEET For personal use only H2 2013 H1 2014 H2 2013 H1 2014 Current Assets Current Liabilities Cash assets 71.4 68.2 Trade payables (21.1) (14.1) Trade receivables 25.7 19.0 Other payables (17.5) (21.6) Other receivables 11.2 14.8 Borrowings Current 0.0 0.0 Tax Assets 0.2 0.0 Current tax pay
Slide 23: Treasury / Tax Expense
TREASURY / TAX EXPENSE For personal use only Treasury Tax Expense • Primary balances comprise • Effective tax rate for six months to June 14 was 12.7% (Full year 2013: 33.5%) • Interest expense arising on external debt • Low rate arises from : • Amortisation of debt establishment costs • Deductions
Slide 24: Reconciliation to NPAT
RECONCILIATION TO NPAT For personal use only Segment profit can be reconciled to NPAT as follows: $m June 2014 June 2013 Segment Profit 59.335 40.943 Operating depreciation and amortisation (4.332) (3.753) Strategic charges (7.334) (5.105) Share based payments (4.333) (4.663) Net Treasury costs (4.0
Slide 25: Non Recurring Expense
NON RECURRING EXPENSE For personal use only $m Primary balances comprise: Restructuring costs in UK 2.218 Avelo acquisition costs Comprises costs known and flagged 1.165 but unable to be accrued at Dec 13 Operational (i.e. non-treasury related) FX - Unrealised FX Loss 1.762 - Released FX Gain (0.257
Slide 26: Strategic Charges
STRATEGIC CHARGES 20 For personal use only 15 AUD millions 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 AU FM AU WM CAN RSA UK OTHER AUD $ m Description H1'13 H2'13 H1'14 H2'14 H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 AU FM Peresys Software 3.934 3.934 3.934 3.934 3.934 3.934 0.381 - - - AU WM Fundclic
Slide 27: 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 8.488 Peresys Goodwill 8.721 Will be subject to regular RSA impairment testing
Slide 28: Share Grants
SHARE GRANTS For personal use only • Value of staff share grants made in May 2014 (excludes MD) : • 3 year term Deferred shares & Deferred Share Rights $7.068m (2013: $6.926m) • Performance Rights $1.100m (2013: $1.253m) • Actual allocation issued to MD 126,000 Performance Rights and 58,000 Deferred
Slide 29: IRESS Group
IRESS GROUP For personal use only H2 2013 H1 2014 % Chg H2 2013 Operating Revenue H1 2014 1% (AUD'000) (AUD'000) AUD 9% 1% 13% Operating Revenue 145,235 170,158 17.2% 32% 16% 37% Segment Profit 47,259 59,335 25.6% 22% Segment PAT^ 30,040 38,227 27.3% 7% Total Non-Core Expense (26,042) (13,230) 49.2%
Slide 30: IRESS Group - Headcount
IRESS GROUP - HEADCOUNT For personal use only H2 2013 H1 2014 16% 14% 30% 30% FM WM Enterprise (Lending) 54% 56% 1,600 1,200 OTHER UK ENT 800 UK WM RSA CAN 400 AU WM AU FM 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 2010 2010 2011 2011 2012 2012 2013 2013 2014 iress.com 30
Slide 31: For personal use only
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 CANADA SOUTH