Praemium Ltd · ASX:PPS
Praemium — FY2013 Earnings Presentation
27 slides from Praemium's earnings presentation, Sep 4, 2013
Slide 1: FY2013 Annual Results Presentation
For personal use only FY2013 Annual Results Presentation 4 September 2013
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 (4 September 2013). It is provided in summary and does not purport to be complete. You should not rely u
Slide 3: Agenda
Agenda For personal use only Company update FY2013 results Forward strategy 2
Slide 4: Who we are
Who we are For personal use only • Company founded in 2001 ASX Listed • Listed on Australian Stock Exchange (ASX) in 2006 • Head office in Melbourne, Australia Global • Locations across London, Jersey, Hong Kong & Footprint Shenzhen • Over 130 staff • Technology provider to the financial services ma
Slide 5: What we do
What we do For personal use only Software Investment services platform Helping wealth Investment managers provide administration efficient financial services utilising planning and portfolio Separately Managed administration services Account (SMA) to investors technology 4
Slide 6: FY2013—Key achievements
FY2013—Key achievements For personal use only Completed acquisition of WealthCraft Became a Responsible Entity (RE) in Australia Raised $4.2m to satisfy RE regulatory capital requirements Replaced BlackRock as RE of the Australian SMA Successfully launched Praemium SMA into the international ex-pat
Slide 7: Revenue mix
Revenue mix For personal use only FY2012 Revenue FY2013 Revenue % % Portfolio Admin Financial Planning / CRM Investment Platform Revenue mix change driven by two acquisitions in FY2013 6
Slide 8: Two acquisitions completed
Two acquisitions completed For personal use only Software services Investment platform WealthCraft Systems Limited Customised Portfolio Service (CPS) Hong Kong based company with Praemium takes over as Responsible Shenzhen subsidiary Entity Australia’s market leading SMA platform WealthCraft
Slide 9: Investments paying off
Investments paying off For personal use only Customised Portfolio Service (CPS) Strong growth in FUA* to $885 million To generate incremental revenue of $2.6 million (annualised) Already recouped acquisition investment Growth in FUA beyond $1 billion highly accretive 1,000 CPS FUA* ($m) 750
Slide 10: Strong capital base
Strong capital base For personal use only 10,000,000 FY2013 Group Cash ($) 8,000,000 6,000,000 Regulatory threshold 4,000,000 2,000,000 - Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Investment in growth while maintaining capital well above regulatory threshold
Slide 11: Agenda
Agenda For personal use only Company update FY2013 results Forward strategy 10
Slide 12: Results summary
Results summary For personal use only RESULTS SUMMARY FY2013 FY2012 Change Change $000 $000 $000 % Revenue 14,095 13,045 1,050 8% Expenses 14,387 16,713 (2,326) (14%) EBIT* (292) (3,668) 3,376 92% Net Profit / (Loss) after Tax 4,359 (3,945) 8,304 210% Earnings per Share 1.2 (1.4) 2.6 185% Cash 8,061
Slide 13: Revenue growth in all regions
Revenue growth in all regions For personal use only 15,000 ASIA Recurring revenue UK ($000) AUS 10,000 5,000 - FY2010 FY2011 FY2012 FY2013 AUS growth from CPS acquisition (half-year only) UK growth from increasing FUM Note: excludes revenue received as share issues in FY10 and FY11 12
Slide 14: Earnings improvement
Earnings improvement For personal use only Underlying EBITDA ($m) (1.0) (2.5) (4.0) (5.5) (7.0) FY11 FY12 FY13 Significant improvement post-restructure Continued investment in FY13-14 for future growth Note: refer page 13 for definition of underlying EBITDA 13
Slide 15: Contribution by segment
Contribution by segment For personal use only PRAEMIUM GROUP FY2013 ($m) AUS UK ASIA Corporate GROUP External Revenue 11.9 2.1 0.1 - 14.1 Other Income 0.3 0.6 0.0 - 0.8 Revenue & other income 12.2 2.6 0.1 - 14.9 Employee Expenses (6.3) (4.7) (0.6) (0.2) (11.8) Operating Expenses (1.9) (1.5) (0.1) (0
Slide 16: Segments half on half
Segments half on half For personal use only 3.0 Underlying EBITDA by Segment ($m) 2.0 1.0 - (1.0) (2.0) H1 FY13 H2 FY13 (3.0) AUS UK ASIA Corporate Underlying EBITDA H2 $0.08m, H1 ($1.0m) AUS generated $1m uplift in H2 Note: refer page 13 for definition of underlying EBITDA 15
Slide 17: AUS driving profitability
AUS driving profitability For personal use only 40% AUS Underlying EBITDA to Revenue (%) 30% 20% 10% 0% H1 FY11 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 38% EBITDA margin achieved for H2 FY2013 CPS acquisition to drive sustained earnings growth Note: refer page 13 for definition of underlying EBITDA
Slide 18: Investing back into the business
Investing back into the business For personal use only 500 Quarterly Operating Cashflow ($000) 250 - (250) (500) Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Annual operating cash outflow $245,000 Q2-Q3 FY13: Acquisition costs & investing in sales 17
Slide 19: Agenda
Agenda For personal use only Company update FY2013 results Forward strategy 18
Slide 20: Overall strategy
Overall strategy For personal use only Portfolio Administration Reigniting growth for our proven leader, V-Wrap Global SMA Platform The next generation investment platform Financial Planning & CRM (WealthCraft) Taking wealth management to a new level 19
Slide 21: Portfolio administration (AUS)
Portfolio administration (AUS) For personal use only V-Wrap is the best-in-class portfolio administration system Unique account reconstruction technology Unrivalled corporate actions processing Increasing number of SMSF portfolios Considerable investment planned Continue to enhance reporting
Slide 22: SMA: The next generation
SMA: The next generation For personal use only Managed Individual Accounts investment Wrap Platforms Platforms products (i.e. IMA, SMA…) (i.e. insurance bonds, retail managed funds…) • Big in USA • Accelerating in Australia SMA = Separately Managed Accounts IMA = Individually Managed Accounts 21
Slide 23: Still early stage ex-US
Still early stage ex-US For personal use only Benefits of investing in an SMA SMA Managed Direct Shares Funds Tax efficient ✔ X ✔ Transparent ✔ X ✔ Lower brokerage costs ✔ N/A X Customisable/flexible ✔ X ✔ Access to professional managers ✔ ✔ X Beneficial ownership ✔ X ✔ A large, well established mar
Slide 24: Praemium's journey
Praemium’s journey For personal use only SMA Pedigree SMA Platform (CPS*) 2005: Australia SMA developed in 2005 in • BlackRock partnership with Merrill • ANZ Lynch (the US SMA market leader) and Praemium as software provider Built upon Praemium’s core Portfolio Administration portfolio administr
Slide 25: WealthCraft
WealthCraft For personal use only FoFA* compliant Solid start Expanding the menu of financial planning in Australia tools Considerable interest from Praemium’s existing client base Existing WealthCraft clients looking to Growing adopt SMA platform Asian Significant opportunity for wealth p
Slide 26: Putting it together
Putting it together For personal use only CPS dps (SMA Platform) WealthCraft V-Wrap Financial Investment Model CRM strategy portfolios (Portfolio Administration) planning Investment Reporting 25
Slide 27: Key objectives in FY2014
Key objectives in FY2014 For personal use only Launch SMSF compliance and reporting in V-Wrap Continue to expand WealthCraft functionality and global availability Provide packaged solutions of WealthCraft & SMA to international wealth managers Launch new investor portal Expand asset class menu for A