Slide 1: 2023 Full year results
2023 Full year results Results presentation 21 February 2024 1
Slide 2: 2023 in review
2023 in review Strategy update Financials Summary 2023 in review Marcus Price 2
Slide 3: 2023 overview
2023 in review Strategy Update Strategy update Financial results Financials Summary 2023 overview FY23 ● Significant transformation initiated by Iress Underlying EBITDA Reported EPS To achieve ● Business our reset wellvision underwayand respond - focus shifting of $128.3m (76.4c) to organic revenue i
Slide 4: Transformation Update
2023 inReview 2023 in review Strategy update Financial results Financials Summary Transformation Update Cost management Asset sales Revenue initiatives Actions taken to arrest multi-year cost Focus shifting to organic revenue initiatives to MFA sold 1 Oct 2023 for $50.5m momentum in heightened inflat
Slide 5: Business unit performance
2023 in review Strategy update Financials Summary Business unit performance Marcus Price 5
Slide 6: BUs established - Providing greater transparency and accountability
2023 in review Strategy update Financials Outlook Summary BUs established - Providing greater transparency and accountability Core 58% Managed 42% FY23 Revenue APAC Wealth APAC TGMD Super Managed - UK Managed - Other $625.7m $130.4m $178.5m $54.2m $167.9m $94.7m FY23 Underlying EBITDA $47.2m $40.5m
Slide 7: FY23 APAC Wealth Management
2023 in review Strategy update Financials Outlook Summary FY23 APAC Wealth Management Business strategy ● Provide technology that makes it easier to deliver financial advice to more people ● Revenue growth of 5-7% per year within medium term Revenue Underlying EBITDA* Underlying EBITDA margin $130.4m
Slide 8: FY23 APAC Trading & Market Data
2023 in review Strategy update Financials Outlook Summary FY23 APAC Trading & Market Data Business strategy ● To be the preeminent provider of innovative trading, market data & connectivity solutions that optimise performance & enhance decision making for market participants ● Revenue growth of 5-7%
Slide 9: FY23 Superannuation
2023 in review Strategy update Financials Outlook Summary FY23 Superannuation Business strategy ● Become a leading technology provider that empowers super funds to deliver for their members ● Achieve 30-40% market share for super software, up 10% over next 3-4 years Revenue Underlying EBITDA* Underl
Slide 10: FY23 Managed Portfolio - UK
2023 in review Strategy update Financials Outlook Summary FY23 Managed Portfolio - UK Business strategy ● Empower management, drive improved performance ● Maximise the value of the UK business with segment driven strategies Revenue Underlying EBITDA* Underlying EBITDA margin $167.9m $34.7m 20.7% FY2
Slide 11: FY23 Managed Portfolio - Other
2023 in review Strategy update Financials Outlook Summary FY23 Managed Portfolio - Other Business strategy ● Empower management, drive improved performance ● Manage for value and patient approach to releases of capital Revenue Underlying EBITDA* Underlying EBITDA margin $94.7m $8.4m 9.0% FY23 highli
Slide 12: Financials
2023 in review Strategy update Financials Summary Financials Cameron Williamson 12
Slide 13: CFO agenda
2023 in review Strategy update Financials Summary CFO agenda FY23 results P&L Delivered at top end of revised guidance Revenue Held during transformation Costs Proactive measures taken mid year Transformation on track and in line with expectations Significant and non-operating items Review undertaken
Slide 14: Financial Results
2023 in review Strategy update Financials Summary Financial Results $AUDm FY22 FY23 $ vs PCP % vs PCP Headline Financials ● Underlying EBITDA -12%; higher costs Recurring revenue 568.6 577.2 8.6 2% ● Revenue growth steady at 2% Non-recurring revenue 47.0 48.5 1.5 3% ● Staff costs 2% higher with 2H23
Slide 15: Revenue - modest growth through transformation
2023 in review Strategy update Financials Summary Revenue - modest growth through transformation $Am Continuing operations 8.9 (4.9) Divested businesses (MFA) 625.7 4.3 4.1 615.6 (2.3) +2% Revenue APAC APAC Revenue TGMD Super UK Other FY22 Wealth FY23 +2% +1% Core Managed Portfolio ● Revenue growth
Slide 16: Cost - proactive measures implemented mid year
2023 in review Strategy update Financials Summary Cost - proactive measures implemented mid year $Am Cost out program partially realised in 2H23, with full benefits in FY24 Notable cost inflation in 1H23 and flow Accounting adjustment in 2H23. on effect from 2H22 Overall flat vs 1H23 Other opex optimisa
Slide 17: Significant and non-operating costs
2023 in review Strategy update Financials Summary Significant and non-operating costs $AUDm 2022 2023 $ vs PCP % vs PCP FY23 ● 2023 significant and non-operating costs Underlying EBITDA 146.4 128.3 (18.1) (12%) of $57.8m, materially higher than 2022 ● Full transformation program costs of Tech uplift &
Slide 18: Commitment to transparent reporting - Moving to Adjusted EBITDA
2023 in review Strategy update Financials Summary Commitment to transparent reporting - Moving to Adjusted EBITDA Adjusted EBITDA ● At Investor Day in April 2023, commitment made to more transparent reporting to bring Iress into line with contemporary best practice ● Adjusted EBITDA to replace Under
Slide 19: Capital management plan
2023 in review Strategy update Financials Summary Capital management plan Commitment made at half year to provide updated capital management plan addressing: Underlying and Target debt R&D investment Dividend Shareholder sustainable earnings and leverage capital policy returns The overarching object
Slide 20: FY23 Cash flow & Balance sheet
2023 in review Strategy update Financials Summary FY23 Cash flow & Balance sheet Free cash flow $Am Leverage ratio Net Debt $Am (pre cap mgmt) FY23 FY23 ● 2023 free cash flow lower with significant transformation and one-off technology uplift activity ● Leverage and net debt peaked in mid-2023, reducing
Slide 21: Capital settings - Target state
2023 in review Strategy update Financials Summary Capital settings - Target state Current state Transition Future state Debt - leverage ratio Delivered via asset sales, Debt - leverage ratio complemented by 2.5x free cash flow over next 12 months 1.0x - 1.5x Increased R&D with targeted level to Softw
Slide 22: FY24 Guidance
2023 in review Strategy update Financials Summary FY24 Guidance Pathway to Rule of 40 for Iress Group Guidance1 By end of FY24: ● Transformation program with external consultants to Underlying EBITDA complete Adjusted EBITDA ● Improved customer pricing models better aligned to Previous Current value
Slide 23: Summary & Outlook
2023 in review Strategy update Financials Summary Summary & Outlook Summary Marcus Price 23
Slide 24: Summary
2023 in review Strategy update Financials Summary Summary Iress is at an inflection point. Transformation has created capacity to innovate and grow. Iress Transformation Iress in 2025 and beyond ● Transformational year creating pre-conditions for growth - doubling down on core businesses and core cap
Slide 25: Appendix
Appendix 25
Slide 26: FY23 → NPATA
FY23 → NPATA $AUDm 2023 1H23 2H23 Statutory Net Profit (Loss) After Tax (137.5) (139.8) 2.3 Adjustments: Add: Amortisation of acquired intangibles 24.4 6.3 18.1 Impairment of acquired intangibles 130.4 130.4 - Derecognition of acquired intangibles 13.3 12.5 0.8 Deduct: Gains on disposal of subsidiary
Slide 27: FY23 → Underlying NPAT
FY23 → Underlying NPAT $AUDm 2023 1H23 2H23 Statutory Net Profit (Loss) After Tax (137.5) (139.8) 2.3 Adjustments: Add: Tech uplift & non-recurring projects 16.9 12.1 4.8 Other non-recurring items 5.3 4.2 1.1 M&A related activity 6.9 0.9 6.0 Transformation costs 15.1 7.6 7.5 Transformation related re
Slide 28: BU Summaries
BU Summaries 28
Slide 29: APAC Wealth FY22 → FY23
APAC Wealth1 FY22 → FY23 A$m 1H22 2H22 FY222 1H232 2H23 FY23 Recurring revenue 65.1 64.3 129.4 64.2 64.8 129.0 Non-recurring revenue 1.6 1.7 3.3 0.7 0.7 1.4 Operating Revenue 66.7 66.0 132.7 64.9 65.5 130.4 Staff costs (22.6) (20.8) (43.4) (24.8) (21.3) (46.1) Cost of sales (3.5) (4.5) (8.0) (4.2) (
Slide 30: APAC Trading & Market Data FY22 → FY23
APAC Trading & Market Data2 FY22 → FY23 A$m 1H22 2H22 FY222 1H232 2H23 FY23 Recurring revenue 85.1 86.0 171.1 87.2 87.6 174.8 Non-recurring revenue 1.7 1.6 3.3 1.6 2.1 3.7 Operating Revenue 86.8 87.6 174.4 88.8 89.7 178.5 Staff costs (23.0) (22.0) (45.0) (23.2) (21.0) (44.2) Cost of sales (27.4) (28
Slide 31: Superannuation FY22 → FY23
Superannuation FY22 → FY23 A$m 1H22 2H22 FY221 1H231 2H23 FY23 Recurring revenue 20.3 21.8 42.1 24.1 19.3 43.4 Non-recurring revenue 3.3 4.5 7.8 4.3 6.5 10.8 Operating Revenue 23.6 26.3 49.9 28.4 25.8 54.2 Staff costs (18.9) (19.7) (38.6) (21.2) (21.3) (42.5) Cost of sales - (0.2) (0.2) (0.5) (0.2)
Slide 32: Managed Portfolio - UK FY22 → FY23
Managed Portfolio - UK1 FY22 → FY23 A$m 1H22 2H22 FY222 1H232 2H23 FY23 Recurring revenue 69.0 68.4 137.4 70.4 76.3 146.7 Non-recurring revenue 12.3 9.3 21.6 9.8 11.4 21.2 Operating Revenue 81.3 77.7 159.0 80.2 87.7 167.9 Staff costs (38.4) (35.3) (73.7) (37.6) (38.0) (75.6) Cost of sales (9.4) (9.3
Slide 33: Managed Portfolio - Other FY22 → FY23
Managed Portfolio - Other1 FY22 → FY23 A$m 1H22 2H22 FY222 1H232 2H23 FY23 Recurring revenue 45.3 43.4 88.7 42.9 40.4 83.3 Non-recurring revenue 4.5 6.4 10.9 10.1 1.3 11.4 Operating Revenue 49.8 49.8 99.6 53.0 41.7 94.7 Staff costs (25.9) (26.1) (52.0) (26.4) (20.2) (46.6) Cost of sales (10.7) (10.0
Slide 34: Managed Portfolio - UK - Old Segments
Managed Portfolio - UK - Old Segments UK Mortgages UK Other Total Managed - UK A$m 1H231 2H23 FY23 1H231 2H23 FY23 1H231 2H23 FY23 Recurring revenue 11.4 12.8 24.2 59.0 63.5 122.5 70.4 76.3 146.7 Non-recurring revenue 6.3 5.2 11.5 3.5 6.2 9.7 9.8 11.4 21.2 Operating Revenue 17.7 18.0 35.7 62.5 69.7
Slide 35: Managed Portfolio - Other - Old Segments
Managed Portfolio - Other - Old Segments South Africa Canada Other Total Managed - Other A$m 1H231 2H23 FY23 1H231 2H23 FY23 1H231 2H23 FY23 1H231 2H23 FY23 Recurring revenue 19.9 19.9 39.8 11.9 12.4 24.3 11.1 8.1 19.2 42.9 40.4 83.3 Non-recurring revenue 1.0 1.4 2.4 0.2 0.4 0.6 8.9 (0.5) 8.4 10.1 1
Slide 36: Disclaimer
Disclaimer The material in this presentation is intended to be general background information on Iress Limited and its activities, current at the These risks and uncertainties could cause actual results, performance or events to differ materially from those expressed or date of the presentation. The
Slide 37: Contact
Contact Marcus Price Managing Director & CEO Cameron Williamson Chief Financial Officer +61 3 9018 5800 iress.com © Iress 2023 37