Slide 1: Results Presentation Year Ended December 2008
For personal use only Results Presentation Year Ended December 2008 Clive R Cli Rabie bi – Group G CEO Chris Hagglund – Group CFO Brian Armstrong – CEO Professional Division Gavin Dixon – CEO Business Division 1
Slide 2: Overview
For personal use only Overview • Reckon is taking strong strides towards achieving its mission: “to be the leading Australian provider of best of Class”: – Accounting Software Solutions – Personal wealth management solutions – Practice Management Solutions for professionals – Content and service pro
Slide 3: Performance Highlights – December 2008
For personal use only Performance Highlights – December 2008 Reckon Group Revenue up 8% to $60.8m EBITDA up 15% to $19.0m NPAT up 14% to $11.3m Professional Division Business Division Operating revenue up 15% to $21 $21.3m 3m Operating revenue up 5% to $38 $38.6m 6m EBITDA up 46% to $5.3m EBITDA up
Slide 4: Performance Highlights – year ended December 2008
For personal use only Performance Highlights – year ended December 2008 – Operating cash flow $16.3m – Final Fi l di dividend id d off 3.5 3 5 cents t per share h – Dividend franked to 100% – Dividend payout ratio is 71% – EPS growth 14% to 8.5 cents 4
Slide 5: Trends over last years
For personal use only Trends over last 5 years 2004 2005 2006 2007 2008 Revenue 36 6m 36.6m 42 3m 42.3m 45 6m 45.6m 56 2m 56.2m 60 8m 60.8m Cumm Growth 66% EBITDA 7.8m 8 10.1m 0 13.0m 30 16.5m 65 19.0m 90 Cumm Growth 143% NPBT 7.4m 9.3m 11.0m 13.3m 15.1m EPS 4.0 5.1 6.2 7.5 8.5 cents* cents cents ce
Slide 6: Half year analysis - year ended December 2008
For personal use only Half year analysis - year ended December 2008 2008 1st Half 2nd Half Revenue 60.8m 31.5m 29.3m Growth 8% 11% 6% EBITDA 19.0m 9.4m 9.6m Growth 15% 15% 16% NPAT 11.3m 5.6m 5.7m Growth 14% 12% 17% 6
Slide 7: Margin trends over years
For personal use only Margin trends over 4 years 2005 2006 2007 2008 EBITDA (pre R&D and Royalties) 16.0m 19.3m 23.0m 25.5m Margin 38% 42% 41% 42% EBITDA 10.1m 13.0m 16.5m 19.0m Margin 24% 29% 29% 31% The current year has been positively impacted by: • Significantly lower 3rd party product sales in
Slide 8: Cash Flow Highlights – year ended December 2008
For personal use only Cash Flow Highlights – year ended December 2008 2008 2007 Cash Balance at December 2008 $16.1m Operating cash flow $16.3m $14.6m Acquisitions A i iti 2 $1 3 $1.3m $2 3 $2.3m Development Cost Expenditure1 $4.6m $3.7m q Fixed Asset Acquisitions $0.7m $ $0.5m $ Dividends Paid $7.2
Slide 9: Revenue Breakdown – year ended June 2008
For personal use only Revenue Breakdown – year ended June 2008 100% 90% 80% 70% 61% 61% 61% 60% Recurring Revenue 50% Full Product Service Revenue 40% 30% 16% 22% 26% 20% 10% 23% 17% 13% 0% Professional Business Group Prior year recurring 60% 59% 59% revenue 9
Slide 10: Acquisition Update
For personal use only Acquisition q Update p • Acquired BillBack and Corporate Services divisions from Espreon effective 2 Januaryy 2009 for $18m • EBITDA purchase multiple of 3.6x (based on June 2008 results) • The Corporate Services business is a provider of documentation for company formation, se
Slide 11: Business Division
For personal use only Business Division 11
Slide 12: Business Division - year ended December 2008
For personal use only Business Division - year ended December 2008 2008 1st Half 2nd Half Operating Revenue $38.6m $20.6m $18.0m Operating revenue growth 5% 10% 0% EBITDA $13.7m $ $6.8m $ $6.9m $ EBITDA growth 7% 10% 3% 12
Slide 13: Business Division – Operating revenue growth
For personal use only Business Division – Operating revenue growth 2008 1st Half 2nd Half Total Sales 5% 10% 0% Quickbooks (Australia) 7% 10% 5% - Retail (sell-in) 0% 3% -4% 10% 13% 8% - Direct Di t Other 1% 11% -8% 13
Slide 14: Business Division - Small Product Strategy
For personal use only Business Division - Small Product Strategy • Followed Intuit’s strategy in the USA - Introduced QBi Lite $29.95 in retail to attempt t influence to i fl E Excell users tto move to t accounting ti package k (estimate ( ti t off 40% off smallll business not using accounting softw
Slide 15: Business Division - 2008 Highlights
For personal use only Business Division - 2008 Highlights g g • Release of QuickBooks 2008 QBi Series • M j ttechnology Major h l change h - now scalable l bl tto mid-size id i enterprises t i • Strong growth from QuickBooks customer base especially Enterprise • Growth 21% • Continued success with E
Slide 16: Key 2009 Strategies
For personal use only Key 2009 Strategies • Leverage QuickBooks 2009 QBi Series release • Leverage scalability of QuickBooks Enterprise • Further SAAS products through Reckon Data Centre solutions • Integrate Espreon Corporate Services into Reckon • Market Espreon/Shelco products into Reckon partner
Slide 17: Professional Division
For personal use only Professional Division 17
Slide 18: Professional Division - year ended December 2008
For personal use only P f Professional i l Division Di i i - year ended d dDDecember b 2008 2008 1st Half 2nd Half Operating Revenue $21.3m $10.6m $10.7m Operating revenue growth 15% 13% 17% New sales & service revenue growth 11% 8% 15% Recurring revenue growth 17% 16% 18% EBITDA $5.3m $2.6m $2.7m E
Slide 19: Professional Performance – Year ended December 2008
For personal use only Professional Performance – Year ended December 2008 Software revenue • Reflects impact of strong new business growth • Reflects impact of take up of full product range by Gro ing Maintenance Revenue Growing Re en e Stream Growth in New Clients clients Growth in sales to existin
Slide 20: Professional Division - 2008 Highlights
For personal use only Professional Division - 2008 Highlights • Continued strong organic growth • Positioning strategy well received by market • Consolidated our position as supplier of choice to leading firms • Significant growth in large clients – high demand for additional services • Cli t manage
Slide 21: Practice Management Software of the Year award
PRACTICE ANAGEMENT SOFTWARE QF THE YEAR WINNER Accountable ™ Technolo gy A momentous battle between three practice management ttans saw APS prove victorious for this year’s award. The judges said there were ‘three good entries’, but were swayed towards APS by the quakty of their clients’ comments. C
Slide 22: Business Model
Business Model Product Market Service Price © © © © ersonal use only « Proven Safe Flexible Innovation Expertise Depth Modern Reliable Accounting Profession Professional Service firms Leading firms Forward thinking Company relationship rather than product relationship Caring Passionate Committed Kno
Slide 23: Professional Division - Strong revenue growth
For personal use only Professional Division - Strong revenue growth Australia • Strong revenue growth – up 19% • 96 new firms switched to APS in 2008 • Major wins include 12 New Top 100 Firms New Zealand • Major win – Big 4 firm – all core products • 14 new firms switched to APS in NZ including 2 ne
Slide 24: Professional Division Growth Strategies
For personal use only Professional Division Growth Strategies • Expansion in the Accounting & Legal markets • Expansion in the USA • Expanded integrated compliance offering • Leverage APS & Billback opportunities in all countries • New Products •Advance Advance Company Register •.Net Tax •Billback E
Slide 25: Accounting Solutions
Accounting Solutions High Value High Expertise Capacity Workflow & Extranet Resource & Intranet Planning Ny ed Document Practice Business Process Management Automatic Accounts Compa: Production Secretarial Low Value Expertise @ Compliance and Productivity Solutions Low Value (2) Business Solutions M
Slide 26: Milestones
1994 2001 2003 2004 2006 2007 2008 2009 2000 Milestones For personal use only Positioning Products Users 0 - 6,000 17,000 21,000 26,000 29,000 35,000+ Team 70 85 120 165 1. SQL Server 1. Business 1. Accredited PM 1. Integrated 1. Total 1. .Net Tax First with Platform Intelligence Solution by CRM Int
Slide 27: Legal Solutions
For personal use only Legal g Solutions High Value High Expertise Client Document Expense Extranet Relationship & Email Management & Intranet M Management t M Managementt Imaging Business Process Cost Business & Scanning Automation Recovery Intelligence Microsoft Financial Advancedocs Microsoft Offi
Slide 28: For personal use only
For personal use only • photocopy activity • fax transmissions • printing • scan activity • telephone calls • mobile pphone calls • on-line searches • credit card charges • courier costs • taxi costs • a myriad sundry expenses 28
Slide 29: For personal use only
Financial Business Intelligence For personal use only & Payroll Professional Accounting Document Management g Practice Management Tax Compliance Client Relationship Management Desktop Super Business Process Automation Corporate Compliance 29
Slide 30: Future Opportunities
For personal use only Future Opportunities • Continued organic growth • Professional division – leverage full product suite • Business division focus – continue to leverage QBi • Roll out of integrated compliance and secretarial offerings • Integrate new acquisition • Continue to seek out other suit
Slide 31: Questions
For personal use only Questions Thank you 31