Bravura Solutions Limited · ASX:BVS
Bravura Solutions — Non-Deal Roadshow (June 2009)
31 slides from Bravura Solutions's roadshow presentation, Jun 30, 2009
Slide 1: Bravura Roadshow: Company Overview & Recapitalisation
Bravura Roadshow: Company Overview & Recapitalisation 30 June 2009 Not for distribution or release in the United States (US) or to, or for the account or benefit of US persons.
Slide 2: Disclaimer
Disclaimer The information contained in this presentation does not purport to include all the information that a person may require to evaluate whether or not to vote in favour of the Recapitalisation Proposal, to exercise their rights entitlement (assuming the Recapitalisation Proposal is approved)
Slide 3: Contents
Contents Company and industry overview Recapitalisation Proposal Operational and financial performance 3
Slide 4: Company and industry overview
Company and industry overview 4
Slide 5: Bravura – At a glance
Bravura – At a glance A leading global supplier of superannuation, life insurance, investment, portfolio administration, transfer agency and financial messaging software and services Headquartered in Sydney Represented in 9 countries and 14 locations 570 employees Over 180 financial services clients
Slide 6: Bravura – An award-winning innovator
Bravura – An award-winning innovator Rank 2 in BRW Fast Starters list in 2009 (rank 1 in 2008 and 2007) Winner of the 2009 Australian Business Award for International Trade in the IT&T industry Featured in 2009 Finextra Innovation Showcase in financial messaging and connectivity category Won Europea
Slide 7: Bravura – what we do
Bravura – what we do Calculations - tax, Software for: Valuations & modeling fees, premiums, reinsurance New business Compliance and Reporting & processing auditing correspondence Transaction & batch Client & product Payments & general processing maintenance ledger 7
Slide 8: Business model
Business model Bravura’s business model is to generate up- up-front revenues as well as recurring revenue streams thereafter. One-off revenues Recurring revenues Contract signed Initial licence fee Professional service fees (implementation) Annual licence fee (e.g. Based on accounts, FUM) Profession
Slide 9: Key technology partners
Key technology partners Partnerships with leading technology suppliers reduce business risk 9
Slide 10: Key customers and segments
Key customers and segments Super/Pension Life Insurance Portfolio Admin s Investment Investment Transfer Agency Financial Messaging 10
Slide 11: Analysis of revenue
Analysis of revenue1 Geographic Product Superannuation 15% eBusiness & Financial Messaging 9% Transfer agency 54% Investment/life 15% Portfolio administration 7% 1. 6 months ended 31 December 2008 11
Slide 12: Industry growth outlook
Industry growth outlook The financial services industry is forecast to spend US$364.5 billion globally by 2010 on information technology, with a 2008- 2008-2010 CAGR of ~0.9%. The highest growth regions IT spending: global financial services (US$bn) for IT spending in the 358.0 353.3 364.5 342.0 21.
Slide 13: Industry fragmentation
Industry fragmentation Segment EMEA competitors Asia Pac Competitors Segment EMEA competitors APAC competitors Rufus Software Superannuation In -house In -house & Pensions IT systems IT systems Life Insurance In -house In -house IT systems IT systems Platform In -house In -house IT systems IT system
Slide 14: Acquisition strategy
Acquisition strategy 8 acquisitions undertaken over the past 5 years Diversified product base Enabled geographic expansion – reduced risk Dedicated acquisition integration teams Results of acquisitions: Tacit tripled revenue within 12 months of Bravura ownership Essential acquisition exceeding forec
Slide 15: Recapitalisation Proposal
Recapitalisation Proposal 15
Slide 16: Overview of Recapitalisation Proposal
Overview of Recapitalisation Proposal Underwritten non-renounceable Rights Issue Rights Issue Opportunity to subscribe for 1.57 new shares for every 1 existing share at $0.15 per share Raise approximately $28 million after costs Subject to completion of Rights Issue Underwriter entitled to receive a
Slide 17: Background
Background Deteriorating global economic conditions have significantly impacted the financial services industry Access to debt and equity capital for smaller companies remains difficult BOSI debt facilities must be restructured and reduced by 15 August 2009 Prudent to raise additional equity finance
Slide 18: Operating environment
Operating environment Bravura’s client base has been adversely affected by the global financial crisis Decision making and approval processes for capital expenditure commitment being impeded Longer sales cycle Signing of new licence agreements impacted in the short term Agreements are delayed rather
Slide 19: Going forward
Going forward Diversify funding sources Focus on margin improvement Focus on balance sheet strength allowing financial flexibility Improve cash flow More aggressive with contract payment terms Enhanced expense control Enhance financial reporting and controls Delivery of long-term shareholder value 1
Slide 20: Reasons to vote in favour
Reasons to vote in favour Opportunity to increase investment in Bravura and 1 participate in future upside 2 Reduces indebtedness to BOSI Substantially strengthen Bravura’s balance sheet and 3 provides operational stability 4 Removes Lift Capital uncertainties 5 No superior alternative 6 Independent
Slide 21: Potential disadvantages and risks
Potential disadvantages and risks 1. Independent Expert has concluded that the Recapitalisation Proposal is ‘not fair’ because: Underwriter will pay $0.15 for each shortfall share whereas fair market value of a Bravura share on a fully diluted control basis is $0.20 to $0.31 Underwriter will receive
Slide 22: Implications of not proceeding
Implications of not proceeding Bravura Will be unable to meet its repayment obligations to BOSI – this may have significant financial implications for the company May suffer difficulties in obtaining new clients and retaining existing key clients Will have expended significant costs May need to look
Slide 23: Non-renounceable Rights Issue
Non-renounceable Rights Issue1 Non-renounceable Rights Issue on the basis of 1.57 rights for every 1 share held Rights entitlement at $0.15 per share Independent Expert’s estimated fair market value on a fully diluted control basis is $0.20 to $0.31 – this valuation incorporates a control premium as
Slide 24: Timetable
Timetable Event Date Explanatory Memorandum mailed to Shareholders 23 June 2009 Latest proxy forms can be lodged 11.00 am (Sydney time), 22 July 2009 Eligibility for voting determined 7.00 pm (Sydney time), 22 July 2009 General Meeting to vote on Recapitalisation Proposal 11.00 am (Sydney time), 24
Slide 25: Recommendation
Recommendation The Independent Directors recommend voting IN FAVOUR of all five resolutions Dependent upon shareholders voting in favour of ALL five resolutions Affects shareholders’ investment in Bravura and is critical to Bravura’s objective of returning the company to financial stability Importan
Slide 26: Operational & financial performance
Operational & financial performance 26
Slide 27: FY09 forecast financials
FY09 forecast financials Revenue (A$m) 136.2 135.0 - 140.0 Revenue Year to 30 June 100.1 Revenue remaining stable over prior year FY09 forecast: 30.0 A$135.0m to A$140.0m 9.6 Sales cycle taking longer FY05A FY06A FY07A FY08A FY09F Reflecting market conditions EBITDA (A$m) Year to 30 June 18.6 16.0 -
Slide 28: Factors impacting FY09F
Factors impacting FY09F Delay in new licence revenue Longer sales cycle Risk and compliance focus from customers/prospects Reduced discretionary spend from existing clients Restructuring costs – $1.5m as at Dec 31, 2008 Redundancy costs Recapitalisation Foundation client investment – $2.4m as at Dec
Slide 29: Operational leverage
Operational leverage Improving EBIT margins Sales contribution Utilisation Annuity revenue Cost reduction Headcount (EMEA) Discretionary spend Enhanced contribution from acquisitions Utilise low cost countries for R&D 29
Slide 30: Financial focus
Financial focus Restructuring costs reduced in FY10 Acquisition integration complete Reduction in interest costs $0.5 million Diversify funding Increase annuity revenue stream Gross margin improvement in services Improved cash flow management Foreign currency risk management Enhance financial relate
Slide 31: Summary
Summary Preferred software vendor for large institutions in the markets we serve Focus on delivery of existing business and profitable growth through consolidation of acquisitions Return company to sound financial footing Long-term shareholder value 31