Iress Limited · ASX:IRE
Iress — H1 2012 Earnings Presentation
54 slides from Iress's earnings presentation, August 2012
Slide 1: Half Year Results – June 2012
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012
Slide 2: IRESS H1 12 Results
Presentation Title| Subtitle (change on master slide) IRESS H1 12 RESULTS HALF YEAR RESULTS – JUNE 2012 • Group revenue (before investments) down 0.8% on H2 11, up 3.0% pcp. • Aggregate revenue growth flat over the first half. • Resilient result in light of conditions. • Appreciation of AUD negative
Slide 3: Segment Performance Against Prior Half: Financial Markets
Presentation Title| Subtitle (change on master slide) SEGMENT PERFORMANCE AGAINST PRIOR HALF HALF YEAR RESULTS – JUNE 2012 FINANCIAL MARKETS • Aust & NZ • South Africa(ZAR) H1’12 (partial H1’11) • Op Rev down 0.7% (up 1.0% on PY) • Op Rev R64.0m up 2.5% • Seg Profit down 2.5% (down 4.8% on PY) • Seg
Slide 4: Segment Performance Against Prior Half: Wealth Management
Presentation Title| Subtitle (change on master slide) SEGMENT PERFORMANCE AGAINST PRIOR HALF HALF YEAR RESULTS – JUNE 2012 WEALTH MANAGEMENT • Aust & NZ • South Africa (ZAR) • Op Rev up 2.5% (up 10.2% on PY) • Op Rev up 8.1% (up 10.8% on PY) • Seg Profit up 9.8% (up 19.5% on PY) • Seg Profit up 6.0%
Slide 5: Group Performance Against Prior Half
Presentation Title| Subtitle (change on master slide) GROUP PERFORMANCE AGAINST PRIOR HALF HALF YEAR RESULTS – JUNE 2012 • Underlying Group Profit $27.757 m Down $2.206 m, down 7.4% on prior half • Segment Contribution against prior half $A • Financial Markets Aust/NZ (0.825) • Financial Markets Can
Slide 6: Group Segment Profit Margins
Presentation Title| Subtitle (change on master slide) GROUP SEGMENT PROFIT MARGINS HALF YEAR RESULTS – JUNE 2012 Segment Profit Margin: % Revenue per Media Release H2 2010 H1 2011 H2 2011 H1 2012 2009 2010 2011 Aust 56.4% 52.7% 50.6% 49.7% 57.2% 56.3% 51.7% Fin Mkts Can (CAD) 33.3% 32.9% 35.4% 30.3%
Slide 7: Strategic Charges, Non-Recurring Expenses and Tax Expense
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 STRATEGIC CHARGES NON-RECURRING EXPENSES • $7.516m for half (H2’11:$8.966m) Net non-recurring expenses before tax of •Change primarily from the Visiplan ($0.028)m, includes: software becoming fully written down • (0.
Slide 8: Group Recurring Subscription Revenue
Presentation Title| Subtitle (change on master slide) GROUP RECURRING SUBSCRIPTION REVENUE* HALF YEAR RESULTS – JUNE 2012 90 80 70 60 $A Millions 50 40 30 20 10 - H1'07 H1'08 H1'09 H1'10 H1'11 H1'12 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - UK Wlth Mgt
Slide 9: Group Segment Profit
Presentation Title| Subtitle (change on master slide) GROUP SEGMENT PROFIT * HALF YEAR RESULTS – JUNE 2012 50 40 30 $A Millions 20 10 - H1'07 H1'08 H1'09 H1'10 H1'11 H1'12 -10 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - UK Wlth Mgt - RSA Wlth Mgt - Asia *
Slide 10: Change in Group Recurring Subscription Revenue
Presentation Title| Subtitle (change on master slide) CHANGE IN GROUP RECURRING SUBSCRIPTION REV. HALF YEAR RESULTS – JUNE 2012 14 12 10 8 $A Millions 6 4 2 - H1'07 H1'08 H1'09 H1'10 H1'11 H1'12 -2 Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Aust Wlth Mgt - UK Wlth Mgt -
Slide 11: Relative Impact H1'12
Presentation Title| Subtitle (change on master slide) RELATIVE IMPACT H1’12 HALF YEAR RESULTS – JUNE 2012 100% 80% 60% 40% 20% 0% Revenue (Recurring Segment Profit* Total Direct Staff Total Strategic Subs) Costs Charges -20% Fin Mkts - Aust Fin Mkts - Can Fin Mkts - RSA Fin Mkts - Asia Wlth Mgt - Au
Slide 12: Operating Cashflow per Share
Presentation Title| Subtitle (change on master slide) OPERATING CASHFLOW PER SHARE* HALF YEAR RESULTS – JUNE 2012 $0.70 40% $0.60 35% $0.50 Effective Tax Rate cents per share $0.40 30% $0.30 $0.20 25% $0.10 $0.00 20% 2003 2005 2007 2009 2011 H1 H2 Effective Tax Rate (RHS) * Calculated as Net Cash fr
Slide 13: IRESS Group Outlook
Presentation Title| Subtitle (change on master slide) IRESS GROUP OUTLOOK HALF YEAR RESULTS – JUNE 2012 • Trading 2012 • Continued poor conditions and difficulties in client base. • Client technology initiatives offset by cost reductions, downsizing, consolidation. • Strong demand in specific segmen
Slide 14: Australia & New Zealand
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012 AUSTRALIA & NEW ZEALAND
Slide 15: Financial Markets
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS HALF YEAR RESULTS – JUNE 2012 • Reduced H1 2012 result from flatter revenue: • Revenue decreased 0.7% on H2 2011 (up 1.0% pcp) • Segment Profit decreased 2.5% on H2 2011 (down 4.8% pcp) • Revenue profile reflects resilient resul
Slide 16: Financial Markets - 2012
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - 2012 HALF YEAR RESULTS – JUNE 2012 • Australian multi-markets update: • 20/25 ChiX participants use IOS+ in part or all of trading architecture. • BMR in production with 16 clients. • IRESS Trade-through Analysis (TTA) importa
Slide 17: Daily Trades on the ASX
Presentation Title| Subtitle (change on master slide) DAILY TRADES ON THE ASX HALF YEAR RESULTS – JUNE 2012 700 600 500 400 300 200 100 0 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Number of Trades Value of Trades 17
Slide 18: Market Fragmentation – Canada & Australia
Presentation Title| Subtitle (change on master slide) MARKET FRAGMENTATION – CANADA & AUSTRALIA HALF YEAR RESULTS – JUNE 2012 COMPARATIVE MESSAGE RATES (PER TRADE PER DESTINATION) 180 170* 157 158 Number of Messages per Trade 121 120 112 105 60 47 33 26 8 11 0 0 TSX CHI-X ALPHA PURE ASX CXA Aug-11 A
Slide 19: Financial Markets – Subscription Revenue
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS –SUBSCRIPTION REVENUE HALF YEAR RESULTS – JUNE 2012 8.0 7.0 6.0 $A Millions 5.0 4.0 3.0 2007 2008 2009 2010 2011 2012 Up to August 2012 19
Slide 20: Financial Markets - Outlook
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - OUTLOOK HALF YEAR RESULTS – JUNE 2012 • 2012 outlook: • Continued focus on cost management by clients and caution on outlook remains. • Client project activity continues and demands delivery focus. • Gradual lessening of best
Slide 21: Wealth Management
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT HALF YEAR RESULTS – JUNE 2012 • Strong growth driven by product differentiation and delivery: • Revenue increased 2.5% on H2 2011 (up 10.2% on pcp) • Segment Profit increased 9.8% on H2 2011 (up 19.5% on pcp) • Revenue growth re
Slide 22: Wealth Management - 2012
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - 2012 HALF YEAR RESULTS – JUNE 2012 • XPLAN advice platform meeting business and FoFA needs: • Single dealer platform spanning all advice channels and importantly cross-referrall capability: online, scaled advice, call centre,
Slide 23: Private Wealth Management
Presentation Title| Subtitle (change on master slide) PRIVATE WEALTH MANAGEMENT HALF YEAR RESULTS – JUNE 2012 • Private wealth management increasingly prominent globally: • Capturing global trends of increased direct investment focus, and transition from execution-only to portfolio-generated orders.
Slide 24: Wealth Management – Subscription Revenue
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT – SUBSCRIPTION REVENUE HALF YEAR RESULTS – JUNE 2012 5.0 4.0 $A Millions 3.0 2.0 1.0 0.0 2007 2008 2009 2010 2011 2012 Up to August 2012 24
Slide 25: Wealth Management Outlook
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT OUTLOOK HALF YEAR RESULTS – JUNE 2012 • 2012 outlook: • Positive revenue momentum from first half into early trading. • Growth driven by institutional rollouts and organic & prospective demand across client base for FoFA differe
Slide 26: Canada
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012 AUSTRALIA CANADA & NEW ZEALAND
Slide 27: Canada - Overview
Presentation Title| Subtitle (change on master slide) CANADA - OVERVIEW HALF YEAR RESULTS – JUNE 2012 • Reduced result: • Revenue (CAD) decreased 7.6% on H2 2011 (down 1.0% on pcp) • Segment Profit (CAD) decreased 21.2% on H2 2011 (down 9.1% on pcp) • Half comparison impacted by one-off implementati
Slide 28: Canada - Overview
Presentation Title| Subtitle (change on master slide) CANADA - OVERVIEW HALF YEAR RESULTS – JUNE 2012 • Continued delivery on Canadian Institutional OMS with full order lifecycle capability now in early release. An integrated single solution at competitive price point expecting many opportunities in
Slide 29: Broadening Product/Business Segments
Presentation Title| Subtitle (change on master slide) BROADENING PRODUCT/BUSINESS SEGMENTS HALF YEAR RESULTS – JUNE 2012 • IRESS Professional Market Data • Localised features and content continue to be delivered as userbase extends. • Differentiated offer with tight integration to trading, and local
Slide 30: Daily Trades in Canada
Presentation Title| Subtitle (change on master slide) DAILY TRADES IN CANADA* HALF YEAR RESULTS – JUNE 2012 600 Alpha commenced H2’08 Chi_X 500 commenced H1’08 Common Base from 2007 Pure Market 400 commenced H1’07 300 Triact & Omega commenced H2’07 200 100 - Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Slide 31: Canada – Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) CANADA – MONTHLY SUBSCRIPTION REVENUE HALF YEAR RESULTS – JUNE 2012 1.6 CAD$ Millions 1.2 0.8 0.4 2007 2008 2009 2010 2011 2012 *Assumes 100% ownership Up to August 2012 31
Slide 32: Canada - Outlook
Presentation Title| Subtitle (change on master slide) CANADA - OUTLOOK HALF YEAR RESULTS – JUNE 2012 • 2012 outlook • Trading has continued to reflect the deteriorating conditions. • Continued strategic work with clients on core trading architecture and extending to adjacent business units matching
Slide 33: South Africa
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012 AUSTRALIA CANADA SOUTH AFRICA & NEW ZEALAND
Slide 34: South Africa
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA HALF YEAR RESULTS – JUNE 2012 • Solid South African result across segments given investment ahead of revenue growth: • Total revenue increased 4.0% (ZAR) on H2 2011 (up 19.7% pcp) • Segment Profit declined 7.8% (ZAR) on H2 2011 (up 1
Slide 35: South Africa – 2012
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA – 2012 HALF YEAR RESULTS – JUNE 2012 • Seamless transition to evolved trading architecture, offering new opportunities • JSE trading engine now deployed in SA, live from July. • Cash and derivative exchange gateways now deployed on I
Slide 36: South Africa – 2012
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA – 2012 HALF YEAR RESULTS – JUNE 2012 • Private Wealth Management – in production, strong pipeline, numerous implementations: • Strong RSA offering intersecting financial markets and wealth strengths. • Solution solves specific local
Slide 37: South Africa – Monthly Subscription Revenue
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA – MONTHLY SUBSCRIPTION REVENUE HALF YEAR RESULTS – JUNE 2012 16 ZAR Millions 12 8 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Up to August 2012 37
Slide 38: South Africa - Outlook
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA - OUTLOOK HALF YEAR RESULTS – JUNE 2012 • 2012 outlook • Trading has commenced with positive momentum from H1. • Investment in financial markets delivery and architecture during H1 provides confident platform for revenue growth in me
Slide 39: Asia
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012 AUSTRALIA CANADA ASIA & NEW ZEALAND
Slide 40: Asia
Presentation Title| Subtitle (change on master slide) ASIA HALF YEAR RESULTS – JUNE 2012 • Revenue growth delayed but progressing positively: • Material impact divisionally by MF Global collapse late 2011. Working to offset through replacement and additional platform opportunities. • Two new CFD pla
Slide 41: United Kingdom
Presentation Title| Subtitle (change on master slide) HALF YEAR RESULTS – JUNE 2012 HALF YEAR RESULTS - JUNE 2012 AUSTRALIA CANADA UNITED KINGDOM & NEW ZEALAND
Slide 42: Wealth Management (UK)
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT HALF YEAR RESULTS – JUNE 2012 • Strategic medium-long term growth initiative in UK commenced November 2011. • Established with significant seed client and experienced team. Represents low risk profile compared to normal green fi
Slide 43: Financial Markets (UK)
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS HALF YEAR RESULTS – JUNE 2012 • Leveraging UK infrastructure investment across wealth management and financial markets. • Redundant data centres now operational in London. • International market data and order routing in place f
Slide 44: Contact IRESS
Presentation Title| Subtitle (change on master slide) CONTACT IRESS HALF YEAR RESULTS – JUNE 2012 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 6
Slide 45: Supplementary Information
Presentation Title| Subtitle (change on master slide) SUPPLEMENTARY INFORMATION HALF YEAR RESULTS – JUNE 2012 • Divisional dashboards • Strategic charges • Tax expense & franking • Share grants 45
Slide 46: Financial Markets - Australia
Presentation Title| Subtitle (change on master slide) FINANCIAL MARKETS - AUSTRALIA HALF YEAR RESULTS – JUNE 2012 H2 2011 H1 2012 %Chg LC H2'11 6% 0% 6% 1% H1'12 6% 5% (A$'000) (A$'000) 2% 2% 3% 4% Operating Revenue 54,910 54,549 -1% Segment Profit* 27,810 27,106 -3% PAT* 18,979 18,154 -4% Non Recur
Slide 47: Wealth Management - Australia
Presentation Title| Subtitle (change on master slide) WEALTH MANAGEMENT - AUSTRALIA HALF YEAR RESULTS – JUNE 2012 H2 2011 H1 2012 %Chg LC H2'11 4% 2% 3%1% H1'12 5% 6% (A$'000) (A$'000) 0% 0% 5% 5% Operating Revenue 25,451 26,076 2% Segment Profit* 10,574 11,607 10% PAT* 6,910 7,610 10% Non Recurring
Slide 48: Canada
Presentation Title| Subtitle (change on master slide) CANADA HALF YEAR RESULTS – JUNE 2012 H2 2011 H1 2012 H2'11 3% 4% 2% 3% 2% H1'12 %Chg LC 3% 1% 2% (CAD$'000) (A$'000) (CAD$'000) (A$'000) 9% 10% Operating Revenue 12,728 12,236 11,756 11,309 -8% Segment Profit* 4,512 4,341 3,557 3,418 -21% PAT* 2,
Slide 49: South Africa
Presentation Title| Subtitle (change on master slide) SOUTH AFRICA HALF YEAR RESULTS – JUNE 2012 H2'11 H1'12 3% 3% 4% 4% H2 2011 H1 2012 %Chg LC 7% 6% 2% 2% (ZAR$'000) (A$'000) (ZAR$'000) (A$'000) 4% 4% Operating Revenue 84,833 10,940 88,234 10,816 4% Segment Profit* 30,272 3,830 27,899 3,468 -8% PA
Slide 50: Asia
Presentation Title| Subtitle (change on master slide) ASIA HALF YEAR RESULTS – JUNE 2012 1% 5% 1% H1'12 H2'11 H2 2011 H1 2012 18% 7% %Chg LC (A$'000) (A$'000) 1% 4% Operating Revenue 638 339 -47% 8% Segment Profit* (1,685) (2,113) 25% 1% PAT* (1,279) (1,594) 25% 6% 66% Non Recurring Exp (138) (261)
Slide 51: United Kingdom
Presentation Title| Subtitle (change on master slide) UNITED KINGDOM HALF YEAR RESULTS – JUNE 2012 H2'11 0%3%0% 1% H1'12 1%4% 1% H2 2011 H1 2012 9% %Chg LC (GBP$'000) (A$'000) (GBP$'000) (A$'000) Operating Revenue 0 0 14 22 Segment Profit* (78) (119) (807) (1,238) PAT* (54) (83) (577) (886) Non Recu
Slide 52: Group Strategic Charges
Presentation Title| Subtitle (change on master slide) GROUP STRATEGIC CHARGES HALF YEAR RESULTS – JUNE 2012 20 15 $A Millions 10 5 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fin Mkts Aust Fin Mkts Can Fin Mkts RSA Fm Asia Wlth Mgt Aust Wlth Mgt RSA Wlth Mgt Asia UK AUD $ m Description H1 '1
Slide 53: Non-Amortising Intangibles
Presentation Title| Subtitle (change on master slide) NON-AMORTISING INTANGIBLES HALF YEAR RESULTS – JUNE 2012 Cost (AUD) Description $m Amortisation period Canada Fin Mkts LP Goodwill 8.498 Fin Mkts RSA Peresys Goodwill 10.551 Plantech Goodwill 3.157 Visiplan Goodwill 10.695 Goodwill Wealth Mgt Aus
Slide 54: Share Grants
Presentation Title| Subtitle (change on master slide) SHARE GRANTS HALF YEAR RESULTS – JUNE 2012 • Value of staff share grants made in May 2012 (excludes MD): • Deferred shares & Deferred Share Rights $6.363m (2011: $5.714m) • Performance Rights $1.510m (2011: $1.595m) • Increase aligns with headcou