Iress Limited · ASX:IRE
Iress — H1 2018 Earnings Presentation
28 slides from Iress's earnings presentation, Aug 23, 2018
Slide 1: Iress Limited - Results for Announcement to the Market
The Manager Company Announcements Office Australian Stock Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000 23 August 2018 IRESS LIMITED - RESULTS FOR ANNOUNCEMENT TO THE MARKET In accordance with the Listing Rules, please find enclosed for immediate release to the market a presentation to b
Slide 2: IRESS Half Year Results 2018
IRESS Half Year Results 2018 23 August 2018 For the six months ended 30 June 2018 s iress.com 1
Slide 3: Agenda
Agenda Who we are 3 1H18 overview 6 Segment overview 11 Financial information 19 Outlook 23 Andrew Walsh John Harris Managing Director & CEO Chief Financial Officer iress.com 2
Slide 4: Who we are
Who we are iress.com 3
Slide 5: World-leading solutions for data, trading, wealth and lending
World-leading solutions for data, trading, wealth and lending ~90% 12,000 9,000+ professional trading revenue clients across SMEs to global banks and market data users is recurring subscription 50,000+ 1,829 people 11 years Over half in product XPLAN rated as #1 advice software users and technology
Slide 6: Key growth drivers and strategic priorities
Key growth drivers and strategic priorities Key drivers of growth Demand for software Demand for broader Increasing Market consolidation that increases Increasing integrated solutions regulatory increasing business efficiency and demand for to enable client requirements complexity reduces the cost t
Slide 7: 1H18 overview
1H18 overview iress.com 6
Slide 8: 13% Segment Profit growth v pcp (+11% constant currency)
13% Segment Profit growth v pcp (+11% constant currency) ● +9% Australian wealth revenue growth v pcp - Organic growth across broad range of clients - Good momentum in superannuation ● +12% UK revenue growth v pcp (constant currency +6% v PCP) - Positive currency tailwinds. Client activity in 1H18 n
Slide 9: Top line growth and positive operating leverage
Top line growth and positive operating leverage $AUDm - Actual 1H17 2H17 1H18 1H18 / 1H17 1H18 / 2H17 Revenue growth and operating efficiency Operating Revenue 211.8 218.1 229.7 8% 5% drive double digit segment profit growth Segment Profit 59.6 65.8 67.5 13% 3% Segment Profit Margin 28% 30% 29% 1% (
Slide 10: Segment Summary
Segment Summary Revenue growth and operating leverage drives +13% Segment Profit v pcp Reported Currency Constant Currency 1H18/ 1H18/ 1H18/ 1H18/ Segment ($AUDm) 1H17 2H17 1H18 1H17 2H17 1H17 2H17 APAC FM 57.5 57.5 56.9 (1%) (1%) (1%) (1%) Key contributors to ANZ WM 61.6 63.5 67.0 9% 6% 9% 6% under
Slide 11: Key first half achievements
Key first half achievements Clients UK delivery Lending Data analytics Key client milestones Strong sales and delivery integrated for XPLAN clients What Wealth & trading Integrations Digital solutions to more clients 30+ to be for super we deliver in more markets added in 2018 funds Labs Operational
Slide 12: Segment overview
Segment overview iress.com 11
Slide 13: APAC Financial Markets
APAC Financial Markets Revenue remains resilient despite ongoing headwinds ● Resilient revenue through buy-side demand AUD (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 for IRESS’ portfolio solution. Good interest in wealth and trading solution for retail brokers Operating Revenue 57.5 57.5 56.9 (1%) (1%)
Slide 14: ANZ Wealth Management
ANZ Wealth Management Organic growth reflects increasing demand from a broad range of clients ● Organic revenue growth following increased AUD (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 users of CRM, portfolio and financial Operating Revenue 61.6 63.5 67.0 9% 6% modelling tools. Direct Contribution 46.0
Slide 15: United Kingdom
United Kingdom Significant client activity in 1H18. Revenue momentum expected to increase in second half. ● Operating revenue + 6% v pcp, +2% v GBP (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 previous half. Reported revenue growth does not reflect 1H18 activity. Operating Revenue 30.7 31.7 32.4 6% 2% Dir
Slide 16: Lending
Lending Increased implementation activity and strong pipeline driving earnings growth and margin expansion. ● Operating revenue growth +32% v pcp GBP (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 heightened by project delivery and implementation. Operating Revenue 6.4 7.6 8.4 32% 10% Direct Contribution 4.
Slide 17: South Africa
South Africa Client momentum continues with broad demand and significant client win ● Broad demand for software across product ZAR (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 suite offset by standalone market data terminal decline and some client cost focus. Operating Revenue 219.3 218.5 228.4 4% 5% Dire
Slide 18: Canada
Canada Recurring revenue growth, wealth implementations continue ● Recurring revenue increased during the half CAD (m) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 reflecting client wins and retention. Operating Revenue 8.5 9.1 8.8 3% (4%) ● Decline v 2H17 due to the timing of non Direct Contribution 4.1 4.9
Slide 19: Functional segments
Functional segments Focused investment driving improved operational leverage Product and Technology AUD (m) (1) 1H17 2H17 1H18 1H18/1H17 1H18/2H17 Visible increase in operating leverage. Costs flat on 2H17 (excluding previously disclosed remuneration adjustments). Direct Contribution 53.8 54.5 56.2
Slide 20: Financial information
Financial information iress.com 19
Slide 21: Financial results reflect targeted investment
Financial results reflect targeted investment 1H18/ 1H18 / AUD (m) 1H17 2H17 1H18 1H17 2H17 Targeted non-operating costs in line with guidance: Operating Revenue 211.8 218.1 229.7 8% 5% ● Business restructuring delivering efficiency, quality and operational leverage Operating Costs (152.3) (152.3) (
Slide 22: Strong cash conversion, conservative balance sheet
Strong cash conversion, conservative balance sheet ● Cash conversion 99% reflecting timing of unbilled revenue and payments (average of 90-95% over medium term) ● Conservative balance sheet (1.4x leverage ratio) ● Increase in net debt driven largely by investment in new offices (now complete) ● Inve
Slide 23: Depreciation and amortisation
Depreciation and amortisation D&A - Operational 1H17 2H17 1H18 Depreciation Plant & Equipment 3.5 4.5 4.2 Amortisation Software (3rd Party Purchased) 2.5 2.4 2.3 Total 6.0 6.8 6.5 D&A - Acquisition Related 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 Computer Software Avelo 0.7 0.8 0.6 0.6 0.2 0.2 0.2 0.
Slide 24: Outlook
Outlook iress.com 23
Slide 25: FY18 Outlook
FY18 Outlook ● IRESS continues to expect 2018 Segment Profit growth to be within the range of 3-7% (on a 2017 constant currency basis(1)) in line with previous guidance. ● If average first half FX rates(2) continue for the remainder of the year, reported Segment Profit for 2018 will be in the range
Slide 26: Questions
Questions iress.com 25
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by IRESS Limited (IRESS). The information contained in this presentation is intended to be general background information about IRESS and its subsidiaries’ activities, current at the date of the presentation. The information is provided in summary form
Slide 28: Delivering outcomes today for tomorrow
Delivering outcomes today developing for tomorrow designing for the future CONTACTS Andrew Walsh CEO John Harris CFO +61 3 9018 5800 iress.com 27