Praemium Ltd · ASX:PPS
Praemium — H1 FY2018 Earnings Presentation
16 slides from Praemium's earnings presentation, Feb 12, 2018
Slide 1: FY2018 half-year results: Positioned to accelerate growth
For personal use only FY2018 half-year results Positioned to accelerate growth 12 February 2018 Praemium Limited ACN: 098 405 826 1
Slide 2: Disclaimer
Disclaimer For personal use only The material contained in this document is a presentation of general information about the Praemium Group’s activities current as at the date of this presentation (12 February 2018) and is supplementary to the Group’s financial results released to the ASX on 12 Febru
Slide 3: Praemium today
Praemium today Strong pedigree For personal use only • Software company founded 2001 in Melbourne • ASX listed in 2006, market cap today $278 million* • Nine offices globally with over 230 staff • Over 800 clients covering $100 billion in assets • Global reach to large addressable markets Our aim Em
Slide 4: Integrated technology solution
Integrated technology solution For personal use only Investment Platforms Software as a Service (SaaS) asset-based pricing subscription-based pricing Separately Managed Accounts (SMA) Portfolio administration & reporting • Australia platform, including retail • Non-custodial reporting system superan
Slide 5: SMA disrupting the platform market
SMA disrupting the platform market For personal use only SMA segment forecast to expand rapidly1 Market growth Aus platform market Compulsory (2016-2020) SMA segment super/pension could deliver contributions 75% of industry net flows. Expected to SMA grow from $18b Platform to $60b by 20201 Shift to
Slide 6: Praemium SMA a scalable solution
Praemium SMA a scalable solution For personal use only FUA / FTE Opex / FUA Employee costs / Revenue 40 ($m) (%) (%) 0.4% 150% 0.4% 30 0.3% 0.3% 100% 20 0.2% 0.2% 50% 10 0.1% 0.1% - 0.0% 0% H2 FY15 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18 H2 FY15 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18 H2 FY15 H1 FY1
Slide 7: Praemium SMA setting new records
Praemium SMA setting new records Gross Inflows For personal use only 1,600 ($m) Increasing inflow momentum Aust Int Record inflows this half of $1.5 billion Highest inflows for Australian SMA Matched previous record for International SMA 800 Annualised inflows up 54% to $2.5 billion - H1 F14
Slide 8: Highlights for the half
Highlights for the half 25% Revenue For personal use only Key deliverables Launch of International Models The Australian SMA now live with global securities 51% Launch of digital acceptance EBITDA Paperless, fast account opening Launch of Portfolio Admin Service 37% Cost-efficient administration of
Slide 9: H1 FY2018 financial results
H1 FY2018 financial results H1, FY17 H1, FY18 For personal use only Group Financial Results Key financial highlights ($m) ($m) Revenue 17.2 21.5 Product commissions (1.0) (2.2) Revenue growth 25% Revenue (net) 16.2 19.3 Cost of operations (3.2) (3.7) Gross margin 13.0 15.6 Gross margin up 20% GM % 8
Slide 10: Continued revenue growth
Continued revenue growth For personal use only 22.0 Product Revenue ($m) Total revenue up 25% Portfolio Services SMA Planning software Australian business, revenue growth 21% International business, revenue growth 34% 11.0 SMA revenue up 47% Total FUA up 37% from H1 FY17 Higher margins with
Slide 11: Sustained earnings growth
Sustained earnings growth For personal use only H1 H1 Change Change $m FY17 FY18 $ % 8th consecutive half of profit growth EBITDA (pre R&D) 2.0 3.5 1.5 74% UK R&D incentive 0.8 0.7 (0.1) (11%) EBITDA (pre R&D incentive) up 74% EBITDA (underlying) 2.8 4.2 1.4 51% EBITDA margin up to 20%, from 16%
Slide 12: H1 FY18 EBITDA by segment
H1 FY18 EBITDA by segment For personal use only H1 FY18 $m Aus UK ASIA Corp Total EBITDA uplift of $1.4 million comprising: Aus $0.9m, up 19% Revenue 13.6 7.7 0.2 21.5 Expenses (7.9) (8.1) (0.8) (0.5) (17.3) UK $0.3m, 43% improvement EBITDA* 5.7 (0.4) (0.6) (0.5) 4.2 Asia $0.2m, 18% improvemen
Slide 13: Looking forward: Strategic priorities
Looking forward: Strategic priorities For personal use only Australia: Expand platform functionality To capitalise on the → Significantly expand the investment menu shift in Australia’s → Evolve the SMA into a UMA – Unified Managed Account → Add new asset classes (e.g. term deposits) wealth market →
Slide 14: Strategy on track
Strategy on track Australia: expanding investment range International: approaching inflexion For personal use only Aus SMA investment range R&E £m UK Revenue to Expenses FUA £m (#) (£m) 5.0 1,500 700 17% CAGR 60% CAGR 600 FUM Revenue 500 Expenses 1,000 400 2.5 300 200 500 100 0 2015 2016 2017 - - H1
Slide 15: Appendix: Cashflow
Appendix: Cashflow For personal use only $m H1 FY17 H1 FY18 Operating cashflow 2.7 4.1 Operating cashflows Tax paid (2.3) (1.6) Strong operating cashflow improvement, One-off costs (0.3) (0.6) consistent with EBITDA growth Net Operating Cashflow 0.1 1.9 Australian company tax instalments for FY1
Slide 16: Appendix: Balance sheet
Appendix: Balance sheet For personal use only $m Jun’17 Dec’17 Solid balance sheet to fund growth Cash 9.0 9.7 Receivables 6.7 7.9 $9.7 million in cash reserves Intangibles 4.4 4.8 Increase in receivables from higher H1 billing Other assets 4.1 4.1 No debt 24.2 26.5 Australian company tax pa