Silverlake Axis Ltd. Corporate Presentation Q2 FY2015

Transcription

1 Silverlake Axis Ltd Corporate Presentation Q2 FY2015

2 Disclaimer This presentation may contain statements regarding the business of Silverlake Axis Ltd and its subsidiaries (the Group ) that are of a forward looking nature and are therefore based on management s assumptions about future developments. Such forward looking statements are typically identified by words such as believe, estimate, intend, may, expect, and project and similar expressions as they relate to the Group. Forward looking statements involve certain risks and uncertainties as they relate to future events. Actual results may vary materially from those targeted, expected or projected due to various factors. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, interest rate charges and regulatory developments. Such factors that may affect the Group s future financial results are detailed in our listing prospectus / circulars, listed in this presentation, or in the management discussion and analysis section of the company s result report and filing with the SGX. The reader is cautioned to not unduly rely on these forward-looking statements. We do not undertake any duty to publish any update or revision of any forward looking statements. The information contained in this presentation has not been independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither Silverlake Axis or any of its affiliates, advisers or representatives shall have any liability whatsoever for any loss arising, whether directly or indirectly, from any use or distribution of this presentation or its contents. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in Silverlake Axis. 2

3 Presentation Outline Investment Merits Business Overview Major Developments Results & Financials Prospects 3

4 Key Points A leading IT software and services company in the high growth Asia Pacific Region - 40% of leading SE Asian banks use Silverlake s software and services - 25 years track record of successful implementation of Silverlake s enterprise software applications in over 150 customer sites with 100% success rate Earnings turnaround with EPS growth in FY2011, FY2012, FY2013 & FY2014 Positive trends in banking industry Increasing need of a common core platform for regional banks as well as need to keep up with regulatory changes, compliance and competition Strong balance sheet with net cash of RM334.3m as of 31 December 2014 Strong margins above most peers Strong EBIT margin with growth in SIBS licensing and maintenance & enhancement services revenue from new contracts 4

5 Presentation Outline Investment Merits Business Overview Major Developments Results & Financials Prospects 5

6 Business Overview A leading long term value based provider of core banking, insurance, payment and retail solutions and application services to major financial institutions, retailers and conglomerates in Asia since % of leading South-East Asia banks use the Silverlake Axis Integrated Banking Solution (SIBS) to process their banking transactions everyday 100% success track record in delivering End-to-End Core Banking, Payment and Retail solutions implementation and enhancement, backed by strong management and key software development team Provides proven, cost-effective and innovative front, middle and back office banking, payment, insurance and retail solutions 6

7 Business Evolution & Transformation FY 2014 Revenue RM500.7 mil FY 2005 Revenue RM27.8 mil Branch Banking Maintenance RM8.4 m 30% RM19.4 m 70% Sale of Branch Banking Solution RM19.0 m Branch 14% Banking Maintenance Sale of Hardware Products Sale of Branch Banking RM20.9 m Solution RM16.4 m 14% 11% FY 2008 Revenue RM146.9 mil Licensing of SIBS RM90.6 m 61% Sale of Hardware Products RM32.4 m 6% Software Project Services RM71.8 m 14% Credit and Cards Processing RM19.5 m 4% Licensing of Application Software RM147.7 m 30% Insurance Processing RM19.0 m 4% Application Maintenance & Enhancement Services RM210.3 m 42% Asia Pacific s Largest Digital Economy Solutions Company 2003 to to to & Beyond Axis Systems Limited (Listed on SGX in 2003) Delivery Channels & Branch Banking Solutions Silverlake Axis Limited (Post SIBS Acquisition 2006) Core Banking & Payments Solutions 7 SSB, QR, Isis, Merimen, CVSB & Finzsoft * Acquisitions Structured Software Maintenance & Project Services, Retail, Logistics, Integration Software, Insurance, Mobility & Internet Solutions Digital Economy Transformation Partnerships Across Asia and Beyond Note: Silverlake Solution Limited (SSB), QR Technology Sdn Bhd (QR), Isis International Pte Ltd (Isis), Merimen Group, Cyber Village Sdn Bhd (CVSB), Finzsoft Solutions Limited (Finzsoft) * Refer to SAL s announcement on 18 December 2014 for entry into a lock-up agreement in relation to a full takeover offer for shares in Finzsoft Solution Ltd.

8 Cumulative Revenue Per Customer Relationship Growing Core Customer Revenues Software Licence Expansion/ Upgrade Increasing Value Add to Customers Software Licence Expansion/ Upgrade Software License Time Series Recurring License Revenue Initial Software License Maintenance & Enhancement Services Project Services Annual Recurring Maintenance Revenue Repeatable Project Implementation Revenue Time 8

9 Leading & Growing Market Share Silverlake Axis Has More Than 150 Customers Who Are Leaders in the Markets They Serve and Known for Their Products & Services Innovation and Operational Excellence LEADING MARKET SHARE Core System Platform Partner of Choice for 3 of the 5 Largest ASEAN Financial Institutions Over 40% of the Top 20 Largest Banks in South-East Asia run on SIBS EXPANDING MARKET SHARE Anchor Customers in China, Japan, Middle East, South Asia Silverlake Customer As of Jan. 30, 2015 As of Jan. 1, 2005 Source: Bloomberg 9

10 Prominent Core Banking Provider in Asia Pacific Market Country Australia China Hong Kong India Indonesia Malaysia Philippines Singapore South Korea Taiwan Thailand Vietnam Prominent Core Banking Applications Internal/ Older proprietary, SAP, Oracle, Hogan Local/ Internal/ Older Systems, Temenos, TCS Local/ Internal/ Older Systems Infosys, Oracle, TCS FNS Silverlake Axis Silverlake Axis Silverlake Axis, FIS, Infosys Silverlake Axis Local core banking applications, Hyundai Internal and proprietary systems Silverlake Axis, FIS Silverlake Axis, Temenos, Hyundai Note: The list of prominent core banking vendors in each market changes when non-top 10 institutions are included Source: Table 1 - Leading Core Banking Players in the Top 10 Bank Segments in 12 Asia/Pacific Countries, IDC Financial Insights,

11 Leader in the IDC MarketScape Global Core Banking Survey Based on the December 2014 IDC MarketScape Global Core Banking Survey*, Silverlake is ranked as the Leader in Core Banking System based on Capablities and Strategies *Note: Survey is done by IDC Financial Insights and is based on analysis and buyer perception. IDC is a leading provider of data-driven research and analysis in the Asia Pacific 11

12 Comprehensive Core Banking Solution Silverlake Axis Integrated Banking Solution (SIBS) 12

13 Board of Directors Profile Goh Peng Ooi Founder & Group Executive Chairman Mr. Goh Peng Ooi was appointed as the Group Executive Chairman of Silverlake Axis Ltd ( the Company ) on 23 May Prior to that, he was the Non-Executive Chairman of the Company since He founded Silverlake Group in 1989 and has built it to become an established provider of cross industry high performance banking, payment and retail solutions. Dr. Kwong Yong Sin CEO & Group Managing Director Dr. Kwong Yong Sin was appointed as the Group Managing Director on 1 November He was previously the Managing Director of Silverlake Corporation from 2001 to 2005 where he completed several key SIBS customer transformation projects. Prior to Silverlake, he was the Partner and Senior Vice President of Ernst & Young and Cap Gemini E&Y Consulting. Y Bhg. Datuk Sulaiman bin Daud Non-Executive Director Datuk Sulaiman bin Daud was appointed a Director in He was a Director of the Agricultural Bank of Malaysia for two years and later became Chairman for eight years. Under his leadership, the Bank was transformed into a corporatised entity, today known as AGRO Bank. Y Bhg. Tan Sri Dato Dr. Lin See- Yan Independent Non-Executive Director Tan Sri Dato Dr. Lin See-Yan was appointed a Director in Tan Sri is currently an independent strategic and financial consultant. Prior to 1998, he was Chairman and CEO of the Pacific Bank Group and for 14 years previously, he was the Deputy Governor of Bank Negara Malaysia (Central Bank of Malaysia). Ong Kian Min Independent Non-Executive Director Mr. Ong Kian Min was appointed a Director in Mr. Ong is concurrently an Advocate and Solicitor practicing as a consultant with Drew & Napier LLC and a Senior Adviser with Alpha Advisory Pte. Ltd., an independent corporate advisory group providing advice to companies and businesses in the Asia Pacific region. Lim Kok Min Independent Non-Executive Director Mr. Lim Kok Min was appointed a Director on 15 June He is currently the Chairman of IREIT Global Group Pte Ltd. He is the immediate past Chairman of Gas Supply Pte Ltd, the Singapore Institute of Directors, of Building & Construction Authority and of Senoko Power Limited. 13

14 Key Management Profile Wong Yok Koon Senior EVP, SIBS Core Solutions Ms. Wong is one of the pioneer employees and was instrumental in driving the Group s core banking solution portfolio growth. She has over 25 years experience in core banking development and deployment at major regional and local financial institutions. Today, she continues to be responsible for core product development of Silverlake Axis Integrated Banking Solution (SIBS) particularly in cards and payments, and works with clients in their digital economy transformation. Hoong Lai Ling Senior EVP, Administration & Finance Ms. Hoong is responsible for overseeing the Group s financial and administrative functions. She has 23 years of experience in auditing and financial managerial positions. She is a qualified accountant from the Malaysian Institute of Certified Public Accountants and was trained in Pricewaterhouse Malaysia. Prior to her current role, she was an accountant at Silverlake System from 1996 to She is also a member of the Malaysian Institute of Accountants. Mary Yau Siew Moi Senior EVP, SIBS Core Solutions Ms. Yau has been a key driver in the Group s growth over the past 25 years and is one of the pioneer employees. Under her leadership, she has grown and enriched the capabilities of the core banking solution portfolio particularly in lending solutions. She is currently responsible for core product development of Silverlake Axis Integrated Banking Solution (SIBS) and works collaboratively with the other entities in the Group to offer digital transformation propositions to customers. Jean Aw Peng Mei Senior EVP, Digital Enterprise Solutions Ms. Aw is responsible for driving the Group s digital enterprise strategy by combining and creating digital solution propositions from our core and acquired businesses. She joined the Group in 2014 and brings 25 years experience in business and technology transformation of a number of global, regional and local banks. Prior to her current role, she was Vice President at OCBC Bank and was previously Director at Ernst & Young Advisory Services. 14 Lau Siow Ling Senior EVP, Structured Services Ms. Lau has 28 years of IT industry experience in sales, marketing and operations, spending 16 years in IBM Malaysia before joining the Group. She was previously the IBM iseries Country Manager. She is currently responsible for the Silverlake Axis Integrated Banking Solution (SIBS) Application Maintenance and Management business, whereby she engages with our clients in ensuring the smooth running of their daily business operations and keeping up with the dynamic industry changes. Lee Cheen Siong EVP, SIBS Channel Solutions Mr. Lee has been with the Group since 2000 focusing on the development and implementation of Branch Delivery and Channels Solutions at major regional and local financial institutions. Today, his focus is on channels convergence and product development. He was appointed as EVP in June Prior to his current role, he was the country manager for Silverlake Axis in Beijing, China. Mr. Lee has 18 years of experience in the banking software industry.

15 Key Management Profile Hidetoshi Neda Managing Director, Silverlake Japan Ltd Mr. Neda is responsible for the growth and expansion of Silverlake Axis Group s business in Japan and joined the Group in In his 23 years experience in the Credit Card and Retail Banking industries, he played a lead role in the Japan credit card market by developing new credit card products, payment products and services. These business products were successfully implemented in MasterCard, Citibank N.A., Shinsei Bank, Tokyo Star Bank and SBI Group. Sua Shii Huey Director, Cyber Village Sdn Bhd Ms. Sua joined Cyber Village in its founding year. She has more than 18 years business development and project management experience, specializing in e-commerce implementations and managing small to large enterprise scale e-business projects. Prior to Cyber Village, she was part of the team which set up the first image bank/stock photo company in Malaysia - Ultra Dimension and successfully signed up stock photo agencies in Singapore, Hong Kong and China. Trevor Lok Theng Hey CEO, Merimen Group Mr. Lok is one of the pioneer employees of Merimen since 2002 and played an instrumental role in its early success. He is currently responsible for the overall strategy and operations of Merimen s business and leading Merimen s business development and expansion. Before assuming his current role in 2013, he actively led the development of Merimen s insurance policy solutions. He has over 12 years of experience in insurance solutions and services industry. Sanjeev Dhar Managing Director, Isis Group Mr. Dhar joined the Group in 2011 and is responsible for enterprise payment and integration technology platform business. He leads the R&D of Implementable Architectures and Compliance, and is responsible for managing Isis day to day operations, product development and technology strategy. Prior to joining the Group, he was Senior Vice President at Isis since 1996 where he spearheaded all product development. He has over 19 years of experience in banking technologies, financial systems and digital banking infrastructure. Shieh Yee Bing Director, Cyber Village Sdn Bhd Ms. Shieh is one of the pioneer employees of Cyber Village since She focuses on Cyber Village s large enterprise scale projects and development of key banking accounts. Today, besides overseeing Cyber Village s day to day operations, she also leads product development with special focus on portal and internet mobile financial self-service solutions. She has over 18 years experience in e- business projects across financial services, logistics, and education industries. Andrew Ooi Su Jin CTO, Merimen Group Mr. Ooi is responsible for the technical framework in which all Merimen solutions are built upon since the founding years. He assumed the role of Chief Technology Officer in Prior to Merimen, he worked as a Software Engineer in Sunway Workflow Automation (SWA), and was involved in the design and development of insurance automation systems. He has over 15 years of experience in insurance claim solution and services industry. 15

16 Presentation Outline Investment Merits Business Overview Major Developments Results & Financials Prospects 16

17 Acquisitions Made: Silverlake Solution Ltd (Structured Software Maintenance & Project Services) Isis International Pte Ltd (Enterprise Payment & Integration Platform) Merimen Group (Insurance Claims & Policies Processing Software as a Service SaaS Platform) Finzsoft Solutions Ltd * (Solutions for Banks & Financial Institutions in New Zealand and Australia) QR Technology Sdn Bhd (Retail & Logistic Solution) Cyber Village Sdn Bhd (Mobile & Internet Solution) In addition to broadening the Group s income base, these acquisitions have added depth and range to the Group s portfolio of software solutions and services to deliver and support our customers transformations initiatives to compete and profit from the digital economy * Refer to SAL s announcement on 18 December 2014 for entry into a lock-up agreement in relation to a full takeover offer for shares in Finzsoft Solution Ltd. 17

18 Silverlake Axis Digital Economy Solution The Silverlake Collaborative Architecture (CORE + SCCIM) drives our industry and cross industry solution roadmap for digital economy enterprises Notification ICMS Virtual Real Mobile Super Mall Mobile Advertisement GeoGate Augmented Reality Identity Access Management Personalization Offers Mobile Game Industry Services Smart Mobile ewallet Banking Mobile POS Mobile Loyalty Programme Portals Web POS Social Network Services Technology Services Mobile Alert SIBS Delivery Service Processor (DSP) Omni Channel Services Mobile Stock Trading Enterprise to Enterprise Collaboration (SCCIM*) CORE Integration Silverlake Axis Card System (SCS) Internet Mobile Convergence Mobile Apps (ios, Android, Windows, BB) Silverlake Axis Integrated Banking Solution (SIBS) CORE Solutions Silverlake Axis Retail Merchandising System (PROFIT) Silverlake Axis Insurance Solution (MERIMEN) Smart Devices, Branch Teller Tablets and Web & Sales Facebook Web Internet Banking ATM Banking Express epayment Banking Virtual Card eremittance eprocurement P2P Loan Payment Origination eloyalty Contact Collection Centre Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Silverlake Axis Integrated Provident Fund System (SIPFS) SCCIM.OS SIIBS DSP Complement (DSP-C) SCCIM.OS. Payment Customer Relationship Management (CRM) SCCIM.OS. Data Online Share Trading Self/ Kiosk Service 18 *SCCIM: Silverlake Collaborative Capability and Intelligence Model

19 Silverlake Axis Digital Economy Core Capabilities and Ecosystem Offerings Online Stores Physical Stores Digital Payment Logistic Business Platform Capabilities Omni Channel Services Hospitality Ecosystem Warehouse SCCIM * QR Retail Merchandising System (PROFIT) CORE Integration CORE Regional Financial Institutions Domestic Financial Institutions Healthcare Ecosystem Workshops & Repair Centres Exchanges & Payment Gateways Islamic Financial Institutions Insurers Merimen Software-As- A-Service Insurance Platform Motor Part Suppliers Loss Adjustors Solicitors Insurance Intermediaries Education Ecosystem Cyber Village Mobile & Internet Solution Isis Integration and Enterprise Payment Platform Silverlake Axis Integrated Banking Solution (SIIBS) Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Silverlake Axis Card Solution (SCS) 19 * Silverlake Collaborative Capability and Intelligence Model

20 Silverlake Axis Banking Ecosystem Online Stores Physical Stores Digital Payment Logistic Business Platform Capabilities Omni Channel Services Hospitality Ecosystem Healthcare Ecosystem Warehouse SCCIM * CORE Integration CORE Regional Financial Institutions Domestic Financial Institutions Core System Platform Partner of Choice for Top 3 of the 5 Largest ASEAN Financial Institutions Motor Part Suppliers Workshops & Repair Centres Loss Adjustors Insurers Insurance Intermediaries Education Ecosystem Exchanges & Payment Gateways Islamic Financial Institutions Over 40% of the Top 20 Largest Banks in South-East Asia run on SIBS Solicitors 100% Successful Implementation Track In Over 100 Core Institution Migrations In Asia & Middle East Cyber Village Mobile & Internet Solution Isis Integration and Enterprise Payment Platform Silverlake Axis Integrated Banking Solution (SIIBS) Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Compliant in 20 Countries Banking Ecosystem (i.e. e-govt, Financial Exchanges, Payment Gateways) Silverlake Axis Card System (SCS) 20

21 Silverlake Axis Insurance Ecosystem Online Stores Physical Stores Digital Payment Logistic Business Platform Capabilities Omni Channel Services Hospitality Ecosystem Warehouse SCCIM * CORE Integration CORE Regional Financial Institutions Domestic Financial Institutions Healthcare Ecosystem Exchanges & Payment Gateways Islamic Financial Institutions Primary markets are Malaysia, Singapore and Indonesia Motor Part Suppliers Workshops & Repair Centres Loss Adjustors Solicitors Insurers Insurance Intermediaries Education Ecosystem Over 80 insurers, encompassing most major international insurers and many bankaffiliated insurers, covering both conventional and takaful operators Over 4,000 automobile workshops and repair centres Over 25 major automobile brands Over 250 loss adjusters and law firms Merimen Software-As-A-Service Insurance Platform Over 3,500 insurance intermediaries 21

22 Silverlake Axis Retail Ecosystem 16 installations across the fastest growing markets in Asia: China, Malaysia, Philippines, Singapore, Thailand, Vietnam, Cambodia & Indonesia Over 45,000 Suppliers More than 350 Retail Outlets Online Stores Physical Stores Digital Payment Warehouse Logistic Business Platform Capabilities Omni Channel Services SCCIM * CORE Integration CORE Hospitality Ecosystem Regional Financial Institutions Domestic Financial Institutions Healthcare Ecosystem Workshops & Repair Centres Exchanges & Payment Gateways Islamic Financial Institutions Insurers Motor Part Suppliers Loss Adjustors Insurance Intermediaries Education Ecosystem QR Retail Merchandising System (PROFIT) Solicitors 22

23 Presentation Outline Investment Merits Business Overview Major Developments Results & Financials Prospects 23

24 1H FY2015 Results Summary (RM Million) 1H FY2015 1H FY2014 % change Revenue Gross Profit Pre-tax Profit Income Tax (7.7) (12.2) (37) Net Profit

25 Q2 FY2015 Results Summary (RM Million) Q2 FY2015 Q2 FY2014 % change Revenue (1) Gross Profit Pre-tax Profit Income Tax (4.4) (8.2) (46) Net Profit

26 RM ' m Revenue by Business Activities H FY2015 1H FY Maintenance & Enhancement Services Software Licensing Software Project Services 1.6 Sale of Software and Hardware Products Insurance Processing Credit and Cards Processing % change + 21% + 26% (36%) (78%) (2%) (10%) 26

27 1H FY2015 Selected Ratios 1H FY2015 1H FY % 66% 60% 50% 60% 58% 55% 55% 49% 40% 30% 20% 10% 6% 10% 0% Gross Profit Margin Pretax Profit Margin Net Profit Margin Effective Tax Rate 27

28 Dividend Dividend (Singapore cents per share) First Interim Second Interim Third Interim Final Special Total FY FY FY * * Second interim cash dividend is payable on 13 March

29 Balance Sheet (RM millions) 31 Dec Jun 2014 CURRENT ASSETS Trade and other receivables Cash and bank balances NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES* NON-CURRENT LIABILITIES* Loans and borrowings Other payables* SHAREHOLDERS EQUITY TOTAL LIABILITIES & EQUITY * The decrease in current and non-current liabilities and other payable as at 31 December 2014 was mainly due to the 3 rd tranche payment for the acquisition of Merimen Group and lower accruals of sub-contractor fees 29

30 Presentation Outline Investment Merits Business Overview Major Developments Results & Financials Prospects 30

31 Technology Spending Drivers Compliance Competition Basel 3 & AML Major New Regulations 4 Core Banking Transformation Delivery Channels Modernisation 1 Regional & Global Competition Universal Banking Expansion (Conventional, Islamic, Micro-banking) Regulatory/Risk Compliance Consolidation Mergers & Acquisitions Strategic Alliances 3 Performance Management 2 Cost Efficiency Economies of Global Processing Hubs Improving Return on IT Investment 31

32 IT Budget Deployment BAU Projects Singapore $4bn $1bn Currency: US$ Thailand, Indonesia, Malaysia combined $3bn $1.5bn China $16bn $4bn Australia $10bn $3bn India $5bn $2bn How new IT budgets will be spent Note: BAU: Business As Usual spending which generally falls under Bank s Operating Expenditure category including Maintenance & Enhancement Governance, Risk & Compliance 5% 28% Multi Channels & Distribution Enterprise Data Management 16% 12% Business Process Re-engineering Enterprise & Retail Payments 9% 30% Core Refreshment/ Replacement Source: IDC Financial Insights Asia Pacific,

33 Dr Raymond Kwong CEO & Group Managing Director Thank You Silverlake Axis Ltd Meeting request, please contact: Lee Teong Sang Mobile: