INTEGRATED RESEARCH LIMITED — AGM Information 2009

Nov 11, 2009

Integrated Research Limited 2009 Annual General Meeting

12 November 2009 ABN: 76 003 588 449

Performance monitoring software for business-critical systems

Agenda

• Peter Adams, Chief Financial Officer

– Our 2009 results

• Mark Brayan, Chief Executive Officer

– Our future

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Performance monitoring software for business-critical systems

FY09 financial results

• Net profit after tax up 36% on last year to $7.9m

• New licence sales up 11% to $21.7m

• Total revenue up 14% to $42.7m

• 4 cent dividend (interim and final)

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• 2.5 cent final dividend (5% franked)

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• 47 % IP Telephony new licence sale growth

• � 14 % HP Nonstop new licence sale growth

• � Favourable currency movements assisting result

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Performance monitoring software for business-critical systems

Financial results

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30 June 2009 30 June 2008 % change
A$000’s A$000’s
Licence fees 21,723 19,623 11%
Maintenance fees 19,217 16,344 18%
Consulting and other services 1,744 1,417 23%
Total revenue 42,684 37,384 14%
R&D expenses 8,244 8,717 (5%)
Sa es l & Marketing 18 932, 17 114, 11%
General & Admin 6,142 4,345 41%
Interest Income 454 462 (2%)
PBT 9,820 7,670 28%
PAT 7,863 5,776 36%
Cashflow from operations 7,644 5,946 29%
EPS (cents) 4.72 3.47 36%
Dividends for the year (cents) 4.0 3.0 33%
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Performance monitoring software for business-critical systems

Review of operations - Geography

Revenue by	30 June 2009	30 June 2008	% change
Geographic region	$000’s	$000’s
(In local currency)
Americas ($US)	19,710	20,720	(5%)
Europe (GBP)	3,321	2,863	16%
Asia Pacific ($A)	7,317	7,357	(1%)

� Business model strong despite financial crisis:

– American recovery in second half but full year slight decline – Steady growth in Europe and flat in Asia

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Performance monitoring software for business-critical systems

Products & Customers Review of operations -

Billings by Product Line($A)	30 June 2009 $000’s	30 June 2008 $000’s	% change
NonStop / Infrastructure and Payments	27,135	22,642	20%
IP Telephony / Communications	10,810	7,345	47%
Distributed Systems / Infrastructure	3,875	5,528	(30%)
Total($A)	41,820	35,516	18%

• Strong growth in IP Telephony (Communications)

• NonStop solid performance (Infrastructure and Payments)

• Distributed Systems stronger in FY08 due to a few very large deals

• Not adjusted for currency impact

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Performance monitoring software for business-critical systems

R&D spending

30 June 2009	30 June 2008	30 June 2007
A$000’s	A$000’s	A$000’s
Gross spending 9,001	10,098	7,831
Development – Cap. 5,790	7,255	5,454
Capitalised % 64%	72%	70%
Amortised 5,033	5,874	3,992
Net Expense 8,244	8,717	6,369
% of revenue 19%	23%	18%

� R&D investment in new products and features

� Significant R&D improvements in 2009 have led to better product quality and greater customer satisfaction

• Committed to historical R&D investment level as a percentage of revenue

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Performance monitoring software for business-critical systems

Balance sheet

Key balance	30 June 2009	30 June 2008
sheet items	A$000’s	A$000’s
Cash at bank	14,459	11,148
Receivables	11,012	10,157
Development cap.	13,323	12,641
D f d R e erre evenue	11 463 ,	9 293 ,
Net assets	27,246	23,791

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Performance monitoring software for business-critical systems

Ten year revenue in AUD

Ten-year Revenue History - A$ Millions

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$45.0
$40.0
$35.0
$30.0
$25.0
$20.0
Other Revenue
$15.0
Licence Fees
$10.0
$5.0 Maintenance
$0.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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Performance monitoring software for business-critical systems

Since 2001 Dividends paid / declared -

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4.5
4
�
Dividend growth due
3.5 to strong results and
cashflow
3
�
FY 2009: Dividends
2.5
were partially franked
2
�
FY 2010: Dividends
1.5
anticipated to be
1 Final partially franked
Interim
0.5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009
cents
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�
Dividend growth due
to strong results and
cashflow
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Financial Year
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Performance monitoring software for business-critical systems

Agenda

• Peter Adams, Chief Financial Officer

– Our 2009 results

• Mark Brayan, Chief Executive Officer

– Our future

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Performance monitoring software for business-critical systems

Our aspirations

� Significantly grow the company

� Reduce earnings volatility

• Currency

• Impact of large deals

� Build on strong foundation

• Solid history

• Proven products

• Tier-one customers

� Execute strategies for growth:

– New products and services

• More channels to market

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Performance monitoring software for business-critical systems

Strong foundation

� Solid history

• Founded in 1988 - 21-year business critical heritage

• Global company - Consistently profitable - no debt

• ASX listed 2000

� Proven world-class products

• Infrastructure monitoring - real-time, scalable, deep and flexible

• Communications and Payments – improve service and ROI

� Global, tier-one customer base

• Customers in 50+ countries - 30% of all Global 1000 companies

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Performance monitoring software for business-critical systems

Our value to customers and consumers

Megan makes a Uses ATM to Flight is delayed last minute onwithdraw cash line booking

Meets via Megan heads videoconference home using laptop

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Our global customers rely on PROGNOSIS for their mission critical Infrastructure , and their Payments Performance monitoring software for business-critical systems and Communications networks

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- Growth strategy New products and services

3. Consulting services to increase product use and � Implementation, integration and training services �

penetration and develop Customized development repeatable solutions � Unique and repeatable solutions

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2. Unique solutions in highgrowth mission critical applications

• Device and switch management � Return on VoIP investment

• � Ensure maximum availability � Fast problem resolution � Improve customer service � Improve call quality � Reduce TCO � Increase service levels

1. Exploit PROGNOSIS for real-time monitoring of high-end infrastructure

• Real-time monitoring to maximize uptime

• � Root cause analysis to reduce mean time to repair � Dramatic cost savings with enterprise-class monitoring solution

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Performance monitoring software for business-critical systems

New product growth

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AUD($’000)
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Total IPT revenue Total WUL revenue
16000
14000
12000
10000
8000
6000
4000
2000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009
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Performance monitoring software for business-critical systems

Global trends – IP communications

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90
� Total installed IPT lines to increase 134% by 2013 APAC
80
� EUROPE
80% of organisations to move to IPT by 2011
70 � AMERICAS
54% plan to use 3 [rd] party monitoring tools
60
50
40
30
20
10
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gartner, Webtorials 2009
Performance monitoring software for business-critical systems
Millions
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- more channels to market Growth strategy

Global network of IR offices and value-added resellers

Strategic alliances and managed service providers

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� Enterprise sales
� Partner support
Lar g e
Enterprise
Enterprise
Americas Europe Head Office
� Sales � Sales � Marketing
� Support � Support � R&D SMB
� Finance
� AP sales
450 Customers
50 Countries
30% of Global 1000
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• All segments

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Performance monitoring software for business-critical systems

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• Avaya chose PROGNOSIS to replace their product

� 250 phone entitlement shipped with every PBX

� - Licence keys available on line

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• Up-sell via Avaya global reseller channel

• Highly scalable and low cost of sale

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Performance monitoring software for business-critical systems

Our aspirations

� Significantly grow the company

� Reduce earnings volatility

• Currency

• Impact of large deals

� Build on strong foundation

• Solid history

• Proven products

• Tier-one customers

� Execute strategies for growth:

– New products and services

• More channels to market

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Performance monitoring software for business-critical systems

Thank You

Performance monitoring software for business-critical systems