INTEGRATED RESEARCH LIMITED — AGM Information 2013

Nov 13, 2013

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Integrated Research Limited FY2013 Annual General Meeting

14 November 2013 ABN: 76 003 558 449

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5 of the world’s
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www.ir.com

Agenda

Chairman’s Address Steve Killelea Financial Results Peter Adams Growth Strategy Darc Rasmussen Questions Steve Killelea

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Providing Business Insight™

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Chairman’s Address

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5 of the world’s
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www.ir.com

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Financial Results

www.ir.com

Financial Results

	30 June	30 June
	2013	2012	%
	A$000’s	A$000’s	change
Licence fees	26,632	28,861	(7.7%)
Maintenance fees	17,717	16,406	8.0%
Consulting fees	4,510	3,341	35.0%
Total revenue	48,859	48,608	0.5%
R&D expenses - net	10,777	10,134	6.3%
Sales, consulting &	23,279	23,004	1.2%
marketing expenses
General &	4,280	4,278	0.0%
Administrative
expenses
PBT	11,570	11,568	0.0%
PAT	9,078	9,035	0.5%

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• Strong second half profit growth of 16%

• Consulting growth – fouth consective year

• Cost base – continuing investment in R&D

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Balance Sheet

	30 June	30 June
	2013	2012
	$000’s	$000’s
Cash at bank	14,827*	12,038
Trade receivables	23,564	21,381
Intangible assets	15,040	13,849
Deferred revenue	14,729	11,885
Net assets	30,010	29,233

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Shareholder Returns

	2013	2012	2011
Basic earningsper share	5.40¢	5.41¢	4.47¢
Dividends per share
(interim and final)	5.0¢	5.0¢	4.0¢
Franking percentage	36%	58%	65%
Return on equity	30%	31%	27%

• Cash at 31 July 13: $18.1M

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Providing Business Insight™

Review of Operations - Products

	June	June
Revenue by	2013	2012	%
Product Line ($A)	$000’s	$000’s	change
Unified
Communications (UC)	21,760	21,448	1.5%
Infrastructure	19,566	20,558	(4.8%)
Payments	3,023	3,261	(7.3%)
Consulting Services	4,510	3,341	35.0%
Total Revenue	48,859	48,608	0.5%

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• UC revenue delayed by successful Avaya partner re-evaluation

• IR awarded Avaya DevConnect partner of the year

• Consulting 4th consecutive year of growth

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Providing Business Insight™

Review of Operations - Regions

Revenue by	30 June	30 June
Geographic region (In	2013	2012
local currency)	000’s	000’s	% change
Americas ($US)	35,247	33,137	6.4%
Europe (GBP)	4,519	4,687	(3.6%)
Asia Pacific ($A)	7,496	8,668	(13.5%)

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• Americas up with strong second half.

• Europe recovery in second half.

• Asia Pacific pipeline building for FY14.

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Providing Business Insight™

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Growth Strategy

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WHO
WE ARE
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WHAT
WE DO
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Integrated Research

IR is the leading global provider of Prognosis for performance management solutions for Unified Communications, Payments and IT Infrastructure.

Capabilities

Prognosis provides availability and performance management, diagnostics and insight for mission critical systems

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Providing Business Insight™

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WHY WE
SUCCEED
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Competitive Advantage

• IR has a world-class R&D capability

• Prognosis is real-time, scalable, extensible and flexible

• Prognosis supports multiple platforms, vendors and applications

• IR has over 1,000 enterprise customers globally

• IR is profitable, debt-free and growing

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WHY
CUSTOMERS
BUY
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Value Proposition

Prognosis increases technology performance, minimizes outages, reduces cost and ensures user satisfaction

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Growth Strategy

Create, sell and support Prognosisbased products and services

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Deliver profitable growth from existing markets and customers

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Create new products to open new markets

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CEO : Initial Reflections

• Payments Market is growing

• Strength in changing & growing UC Market

• Growth Opportunity in Europe and Asia Pacific

• New Contact Centre Solution Market opportunity

• Game Changing Prognosis 10 Release

• Strategic Marketing

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1

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Growth Strategy – Payments

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Growing Market

Asia Pacific – High growth from a high base Americas – Very strong growth from a high base Europe – Very strong growth from a solid base

ACI Strategic Partnership Joint Strategy Structured Plan Aligned Execution

2

European & Asia Pacific Execution Clear Strategy New Leadership Domain competency Focused Execution

3

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Providing Business Insight™

UC Market Trends

Enterprise Telephony Equipment Market Share: % of Global Revenue

Vendor	CY2011	CY2012	Delta
Avaya	15.4%	14.6%	(5.2%)
Cisco	19.6%	19.0%	(3.1%)
Others(Largest 11%)	63.8%	64.6%	1.2%
Microsoft Lync	1.2%	1.8%	50%

• Microsoft on the move, Top Down & Bottom Up

Enterprise Telephony Seat Licenses: % of Global Market

% of Global Market
Region	CY2011	CY2012
Americas	33.1%	32.4%
Europe	31.0%	29.9%
Asia Pacific(excl Japan)	20.2%	21.1%

• IR Opportunity in Europe & Asia Pacific

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Providing Business Insight™

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Prognosis 10

All new User Experience

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new
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Foundation for innovation for years to come

HTTPS: secure delivery

Early Adopter Program

Mash up: business specific

• Release : November 2013

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• 43 Customers

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• Global program:

HTML 5: any device Mobile: access anywhere

• 50% Americas

• 25% Europe

• 25% APAC

• All product lines:

• 55% UC

• 10% Payments

• 25% NonStop

Export: share everything Search: find anything

• 10% Distributed Systems

Biggest release in company history

• 60 person years

• ~$10M Investment

• 610+ person years now in Prognosis

Other core elements:

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64bit: for the highest scalability & lowest footprint Insight: Big Data Analytics

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Providing Business Insight™

Contact Centre

New Market Opportunity

Builds on Prognosis for UC

• Reduced Cost to develop, deliver & service

• Always business critical

• Higher Speed to Market

• Clearly measurable ROI

• Spend 8x of Normal UC User

Competitive Advantage

• Total Enterprise + Contact Centre solution

Contact Centre Market Share:

First Customers

• Presidio (IT Service Provider)

Vendor	CY2012
Avaya	32.6%
Cisco	15.1%

• Standard Bank of South Africa

Market Size : $2 Billion

• Avaya dominate market share

• Top 2 vendors ~50% of Market

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Providing Business Insight™

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Summary

Summary FY13

Looking forward

• Second half profit up 16%

• Total Revenue $48.9 up 1%

• No debt

• Cashflow from operations up 19% to $17.5m

• 128 new customers

• Consulting Revenue Growth of 35%

• Payments Market is growing

• Strength in changing & growing UC Market

• Prognosis 10 Released

• Growth Opportunity in Europe and Asia Pacific

• New Contact Centre Solution Market opportunity

• Strategic Marketing

• Infrastructure : Solid result of $19.6m Revenue

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Providing Business Insight™

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Providing Business Insight™