2. AGM Agenda
• Welcome & Procedural matters
• Notice of Annual General Meeting
• Financial Reports
• Resolution 1 – Election of Craig Coleman as Non Exec Director & Chairman
• Resolution 2 – Adoption of Remuneration Report
• Resolution 3 – Ratification of Shares issued to Wyllie Group
• Resolution 4 – Ratification of Shares issued to Provisio vendors
• AGM Investor Update:
• Chairman’s Address
• Managing Directors updates & questions
Slide 2
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3. Disclaimer
• The Company and its respective directors, employees, agents and consultants shall have no liability
(including liability to any person by reason of negligence or negligent misstatement) for any statements,
opinions, information or matters (express or implied) arising out of, contained in or derived from, or any
omission from the Presentation, except liability under statute that cannot be excluded. The presentation
contains reference to certain intentions, expectations and plans for the Company. These intentions,
expectations and plans may or may not be achieved. They are based on certain assumptions which may or
may not be met or on which views may differ. The performance and operations of the Company may be
influenced be a number of factors, many of which are outside the control of the Company.
• No representation or warranty, express or implied, is made by the Company or any of its representative
directors, officers, employees, advisors, or agents that any intentions, expectations or plans will be achieved
either totally or partially or that any particular rate of return will be achieved. Actual results and
developments will almost certainly differ materially from those express or purport to be inclusive or to
contain all information which its recipients may require in order to make an informed assessment of the
Company’s prospects. You should conduct your own investigation and perform your own analysis in order to
satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained
in this presentation before making any investment decision.
Slide 3
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4. To consider and if thought fit, to pass, with or without
amendment, the following Resolution as an Ordinary
Resolution:
“That Mr Craig Coleman who retires in accordance with clause
7.1(e)(2B) of the Company’s Constitution and being eligible,
offers himself for re-election, be re-elected as a Non-Executive
Director and Chairman.”
For Against Abstain Total
113,816,386 230,674 62,874 114,109,934
Slide 4
RESOLUTION 1 – RE-ELECTION OF CRAIG
COLEMAN AS NON-EXEC DIRECTOR & CHAIRMAN
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5. RESOLUTION 2 – REMUNERATION REPORT
To consider, and if thought fit, pass the following resolution as
an ordinary resolution:
“That the Remuneration Report of the Company for the
financial year ended 30 June 2013 is adopted
For Against Abstain Total
90,428,674 420,180 23,261,080 114,109,934
Slide 5
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6. RESOLUTION 3 – RATIFICATION OF SHARE ISSUE
TO WYLLIE GROUP
To consider and if thought fit, to pass, with or without
amendment, the following Resolution as an Ordinary
Resolution:
“That for the purpose of ASX Listing Rule 7.4, and for all other
purposes, the allotment and issue of 30,000,000 shares to
Wyllie Group Pty Ltd on the terms and conditions set out in the
Explanatory Statement is approved”
For Against Abstain Total
68,687,336 281,169 45,081,429 114,049,934
Slide 6
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7. RESOLUTION 4 – RATIFICATION OF SHARE ISSUE
TO PROVISIO VENDORS
To consider and if thought fit, to pass, with or without
amendment, the following Resolution as an Ordinary
Resolution:
“That for the purpose of ASX Listing Rule 7.4, and for all other
purposes, the allotment and issue of 2,133,620 shares to the
vendors of Provisio Software on the terms and conditions set
out in the Explanatory Statement is approved”
For Against Abstain Total
113,703,136 342,777 4,021 114,049,934
Slide 7
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9. Slide 9
Corporate Snapshot
Note: Gearing = Net Debt / (Net Debt + Total book value of equity).
Note: EV/EBITDA (fwd) based on FY14 EBITDA guidance of $8m; EV/EBITDA (ttm) based on FY13 underlying EBITDA of $5.8m
Source: Rubik Annual Report 2013, Financials via Bloomberg as at close 18/11/2013
0
50
100
150
200
250
300
350
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13
Rubik share price ASX300 Index
ASX300 IT Sector Index
= base
12 month share price performance
Share data (ASX: RFL)
Current Price $0.24
Market
Capitalisation
$62.7m
12 month price
range
$0.08-
$0.31
Number of shares 261.3m
Avg. daily volume 0.6m
Financials and key ratios
Cash $3.8m
Borrowing $7.2m
Net Debt $3.4m
Enterprise Value $66.1m
EV/EBITDA (fwd) FY14 8.3x
EV/EBITDA (ttm) FY13 11.4x
Gearing 15%
• Craig Coleman (Chairman, Non-executive)
• Andrew Moffat (Non-executive)
• John Wilson (Non-executive)
• Ian Hunter (Non-executive)
• Wayne Wilson (MD Wealth Segment)
• Dr Ken Carr (MD Banking Segment)
• Paula Kensington (Corporate CFO)
Board
Executive
Governance and Leadership Team
Key Financials
~28% TSR
~150% TSR
• Software for Australian financial planners
• Planning and practice support software
• Strong Institutional customer base
• Core banking systems for Australian institutions
• Unique hosted ‘pay as you go’ offering
• Further channels and collections/payments products
Wealth
Segment
Banking
Segment
Business description
• Australian Fintech- Information Technology for
Financial Services industry participants
Industry
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10. Slide 10
Presentation summary
1 Where we have been
2 Where we are now
3 Where we are going
• Started in FY08; identified Australian FINTECH as attractive
segment- favourable industry trends have materialised
• Start up phase of broader Banking software acquisitions; then
transformational Wealth acquisition- now driving returns
• We are harnessing learnings from the first 2 phases; moving
to a tightly focused and customer orientated business model
• Building an Australia-based Fintech company of relevance
• Operating in profitable niches, high recurring revenues
• Supporting Wealth and Banking operating segments through
portfolio direction setting /resource allocation and
scale/capability advantages in shared back-end (inc hosting)
• Wealth offers strong growth prospects, Banking presents
uncertain upside and further ‘strong fit’ deals are considered
• Corporate ambition for ASX300 membership in 3 years
• Flight path of significant growth – average ~30%pa operating
segment EBITDA targets to FY16
• Solid investor proposition- low downside given strong
recurring revenue, plus solid upside from Wealth and further
speculative upside from Banking and Wealth
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11. Slide 11
1 Where we have been
2 Where we are now
3 Where we are going
• Started in FY08; identified Australian
FINTECH as a highly attractive segment
with favourable industry trends
• These trends have materialised,
making the market highly attractive
• After learning about the market and
displaying investment patience, started
making acquisitions; despite delays in
traction, now starting to drive returns
• We are driving returns by harnessing
learnings from the first 2 phases;
moving to a focused and customer
orientated business model
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
12. Slide 12
Rubik started in FY08; we wanted to be in the FINTECH space- and still do
Australian FINTECHSoftware/IT Aus. Financial Services
Favourable provider economics
• Highly scalable business, strong
growth potential especially for
‘off the shelf’ products
• Recurring license revenues
• Hosting/SaaS model emerging,
increasing software market size
and profitability
Robust customer dynamics
• Large ecosystem of long-
established potential customers
• FS industry is profitable and
poised for further growth-
especially Australian Wealth
• Large contract potential given
scale of institutional customers
• Strong relationships and low
churn with reputable and highly
regulated customer base
Large, fragmented and growing market
• $2.3bn market in Australia, $30bn in Asia
• Fragmented market; long tail of specialist
providers, opportunities for acquisitions to
enhance governance and scale
• Financial institutions increasingly
preferring buy over build on applications
• Attractive consumption pricing model and
cost savings from SaaS
Favourable tailwinds have now emerged and gained strength;
highly attractive market
FY08
Today
Favourable provider
economics continuing
Some inertia in adopting
hosting but strong momentum
Briefly checked by GFC but
sound underlying industry
Source: Ovum for market sizes
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13. After a long start-up period, Rubik is now at the point of driving returns
FY10FY09 FY11 FY12 FY13 FY14
FY10FY09 FY11 FY12 FY13 FY14
Achieved first
installation of T24
software at MCU
Sold non-core
asset (Shelf
Company)
Completed more
complex T24 ‘go
live’
Acquired Temenos
T24 Core Banking
System license
Completed COIN Acquisition
(Institutional software)
Completed Provisio
Acquisition
(scaled advice software)
Completed Visor Acquisition
(Independent Financial
Adviser software)
Wealth
Banking
FY08: Rubik performs initial
raising, acquired Swift Call
(Phone, IVR and Internet)
Acquired El-Ten (internet
banking, BPAY interface,
card origination)
Acquired Admerex
(collections
software)
Transformational
acquisition
Driving
returns
• Broad focus, accumulating software across the banking value chain (e.g. internet/
mobile…)and positioning these around a world class core banking product
• Traction hampered by GFC and slower than expected adoption of SaaS
• ‘Patient Cashbox’- scanning and identifying transformational acquisition
• Patience and focus in
negotiating and integrating
pivotal Wealth acquisition
• Driving organic growth and
returns in existing segments
• Patiently scanning for further
profitable niche acquisitions
Start-up and learning the landscape
Slide 13
Investment $7m Investment $0.2m Investment $6m
Investment $26.4m Investment $0.2m Investment $4.4m Total Investment Wealth
$31m
Total Investment Banking
$13.2m
Total Group Investment
$44.2m ** Note: Investment costs represent actual purchase price paid and excludes transaction costs, transition costs and
ongoing working capital requirements
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14. Banking
Wealth
Share price performance reflects change in competitive focus and earnings growth
Slide 14
Rubik Share Price
FY10FY09 FY11 FY12 FY13 FY14
$0.30
$0.20
$0.10
$0.00
$0.30
$0.20
$0.10
$0.00
Broader focus: tried to be all things to
all people; operating on many fronts
Narrower focus: operate in
profitable niches where we
have a competitive advantage
Offerings
Competitive
Focus
Superior product: trying to compete
on superior functionality
Superior customer focus:
competing on value
proposition, customer service
Transformational
acquisition
Start-up and learning the landscape
Driving
returns
Valuation At/below net cash position: market
uncertain of value creation potential
As earnings stream: market belief
builds in current earnings streams
and growth becomes plausible
Source: Financials via Bloomberg as at close 18/11/2013
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15. Slide 15
1 Where we have been
2 Where we are now
3 Where we are going
A Wealth
• Who we are now
• Current operating portfolio
• Portfolio strategy
B Banking
C Open to further M&A
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
16. Who we are now
Slide 16
• Same mission as start-up in 2008: ‘Building an Australian based FINTECH company of relevance’
• We design, build, host and support software and data for Financial Services industry participants
• We provide financial planning software to wealth advisers and core banking systems including
other related banking software
o We focus on delivering customer value in profitable niches
• We have a reliable and established market position
o We are big enough for solid governance and trust from institutional partners, remaining agile to be
entrepreneurial and responsive to our customers
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17. Rubik Mission
Building an Australia based FINTECH company of relevance
Centralised portfolio management
Portfolio governance: target setting, resource allocation and deal making capability
Wealth Segment
• Software for financial advisers
o Comprehensive financial planning tools enabling full
compliance to burdensome regulations
o Planner workflow, CRM and practice management
• One of two clear market leaders, strong market share with
‘big 5’ institutional planners through COIN product
• Leading scaled advice product through Provisio acquisition,
and strong exposure to independent market through Visor
Banking Segment
• Pay as you go, hosted
core banking systems
for small/medium
existing Australasian
institutions and all new
entrants
• Channels (software
internet and phone
banking)
3rd Segment?
• Consider further
opportunities in
profitable niches in FS-
related IT
• Only where we will
unlock value through fit
with our portfolio
management and
shared back-end
Back office scale economies
Common back-end: shared hosting capability, development quality methods and support services,
Portfolio summary:
Operating segments in profitable FinTech niches, clear value adds from centre
Slide 17
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18. Slide 18
$12.6m
$6.6m
$10.3m
$3.0m
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Revenue EBITDA
Corporate centre:
FY13 Operating segment financials
Consolidated result
-$3.7m-
$5.8m$22.9m
Wealth
Banking
Segment strategy: Solid foundation and growth prospects from Wealth, further
upside from Banking and potential 3rd Segment
• Game changing upside potential from scaled/direct advice
o Forecast market shift to scaled/direct advice a major
opportunity given our leading share at ‘big 5’ institutional
planners and our scaled advice capability and product
• Sustain and grow our ‘core’ earnings stream
o Driving improvements in product, user experience and customer
value proposition (e.g. drive hosting/ SaaS)
o Various opportunities in plan for incremental growth
3rd
Segment?
• Patiently scan for profitable niche buys in FS-related IT
o Highly selective acquirers- burden of proof on ‘why us’ vs others
o Value focus- EBITDA per share accretive – composed deal making
• Real EBITDA upside potential
o Unexciting base case contribution- continued challenges in
overcoming core system switching costs for existing institutions
o Possibility of strong upside given additional core banking sales
(including new entrant customers) over fixed cost base
Slide 18
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20. Slide 20
1 Where we have been
2 Where we are now
3 Where we are going
A Wealth
o Provides planning software for financial advisors
o Solid position- in top 2 in consolidating market
o Very large underlying Australian wealth
management market with strong growth forecast
o Product and retention strong - but not complacent
o Well positioned for future wealth trends
B Banking
C Open to further M&A
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
21. • ‘Advisers’/’planners’ provide
financial advice to clients and are the
key access point to steer customer
investment choice
• Wraps / mastertrusts provide a
menu of products (therefore steer
planners fund choices) and
administer client funds
Wealth Segment: We provide planning software for financial advisers
Slide 21
• Design, creation and operation
of managed funds
Wealth market
value chain
What our
software
does:
Who we
service:
We provide financial advisers with software
Planner Tools
• Financial planning advice calculators
• Enables compliance to complex regulatory
requirements- generating ‘statements of advice’-
both comprehensive and scoped/scaled advice
• Connect to research providers, data feeds and
live product pricing data
Practice Management
• Planner workflow
• CRM and sales tools
• Compliance reporting
Traditional Planners
• Institutional Advisers
• Boutiques
• IFAs
Emerging advice segments
• Industry super
• SMSFs
• Other scaled advice
Our customers include all types of advisers
Advising Funds ManagementPlatforms
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22. Wealth Segment: Strong upside anticipated, low downside potential
Slide 22
$0m
$2m
$4m
$6m
$8m
$10m
$12m
$14m
Revenue Operating
Costs
EBITDA
Recurring
Non-
recurring
• Most (83%-FY13) of our Wealth segment revenue is earned as
licence fee or consumption based usage fees on a recurring
basis
• We also earn project (non-recurring) revenue for bespoke
configurations for individual customers
o This is driven by customer customisation and multiple releases
being ‘live’- intention is to migrate non-recurring income to
recurring through aligning customers onto latest release
• Our main cost is development labour- as such largely fixed.
o Software is easily scalable- Increasing revenue over our largely
fixed cost base would generate proportionally higher EBITDA
o E.g. 10% increase in revenue could drive >30% EBITDA increase
COIN Visor Provisio
Conventional comprehensive
planning software for Instos
Conventional comprehensive
planning software for IFAs
Unconventional Scaled
Advice planning software,
primarily for institutions
Currently 3 customer-facing product brands
FY13 Financial Performance Our business model
Operating
Costs
(>75%
fixed dev’t
labour
costs)
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23. Wealth Segment: Exposure to large underlying market with strong growth prospects
Slide 23
0
400
800
1,200
1,600
2,000
2011 2014 2017 2020 2023
Australian wealth industry
Pieces of Advice (‘000s)
$0m
$200m
$400m
$600m
$800m
$1000m
$1200m
$1400m
2003 2007 2011 2015 2019 2023
CAGR 6.25%
CAGR 9%
Australian Retail Funds
Retail Fund growth has been strong and
is expected to continue
Number of pieces of advice growing
Note: CAGR = Compound Annual Growth Rate
Source: Rice Warner, Credit Suisse, Plan for Life
• Increased fund flows- employer super contribution
legislation offsetting wave of baby boomer retirements
• Investment returns likely to improve (above GFC era
average returns)
• Shift to scaled advice forecast, driven by FoFA and
other regulation, plus social and technological trends
• Comprehensive planning advice expected to hold firm
despite rise in scaled advice
Key
Comprehensive Advice
Scaled Advice
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24. 0%
20%
40%
60%
80%
100%
Dec-09 Dec-12
Wealth Segment: Solid position within current software planning market
Slide 24
Strong position serving the Big 5 instos that
now lead the advice market
Decent boutique presence
through COIN
Source: Money Management Top 100 Dealers Survey, Plan for Life, Credit Suisse, Investor Trends Planner Technology Report
Indep-
endent
WBC
CBA
Boutique
# Advisers
Big 5
Instos
Recently gained exposure to
IFA segment through Visor
acquisition
Australian Market: Rubik presence:
Great coverage of ‘big 5’ instos-
>40% of all planners, and >80%
of big 5 salaried planning groups
Market share by # of planners
Market consolidating towards COIN &
Xplan; smaller players losing share
• 2 clear market leaders, with share gains for Rubik and
IRESS in their flagship COIN & Xplan product brands
• Rubik clear second to IRESS ; long established positions
• Long tail of smaller players, but these have lost share
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25. Wealth Segment: Strong product and retention but not complacent
Source: Investment Trends (market share from planner survey, products scores from expert functionality review) Note: *Adviser NETgain is Westpac only, and rated below ‘good’ in 2 key areas)
t
Product Functionality Score
Strong product but not complacent;
investing in development
Customer retention excellent; investing
further in COIN user experience
• We have a very strong product
o Only Xplan and COIN score ‘good’ or better on all aspects
o 2 clear product leaders* contesting the market
• But not complacent- significant work underway
o Previous owners of COIN under-invested in development
o Our recent development on ‘must-haves’ e.g. compliance to
FoFA and database integrity (achieved quality certification)
o Now executing a focused product development plan
0%
25%
50%
30%
50%
70%
90%
XPlan
COIN&
Visor
Adviser
NETgain
MidWinter
Adviser
Logic
n-link
MoneyOne
Estimated Market Share
Slide 25
• Our customer retention is very strong
o Didn’t lose a single customer during transition
o Internal focus on retention rather than new sales
o Switching costs make market churn relatively infrequent
• But not complacent – user and buyer value focus
o Investing in COIN user experience and customer value
proposition to defend and grow core revenue streams
0%
10%
20%
30%
Market COIN
18% market churn is primarily smaller
software companies losing share to
COIN and Xplan (often driven by
planner consolidation to big 5)
Churn rate (2013)
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26. Wealth Segment: Well positioned for future software planning market trends
Slide 26
Planner software providers to benefit from
industry emphasis shifting to advisory
Major growth predicted in scaled advice;
COIN uniquely positioned to lead market
Industry
emphasis
shifting to
advisory
Software
positioned
to drive
productivity
• FoFA regulatory changes putting
competitive focus onto advisory to
win customers
o Commissions restricted in
platforms and funds
o Lower recurring revenues in
these areas
• Software tools positioned to drive
productivity improvements
• Potential to unlock significant
value e.g. through enhancing
planner productivity, further
integration to platforms
Trends in wealth market set to benefit
leading planner software providers
0
400
800
1,200
2011 2014 2017 2020 2023
Australian Wealth industry pieces of scaled advice (‘000s)
• Major industry growth predicted in scaled advice
• i.e. modular advice rather than comprehensive plans
• Driven by FoFA regulatory changes
• Previously unadvised segments to enter value chain
• Rubik uniquely positioned to lead in scaled advice
• Industry leading scale product, capability and market
share through Provisio
• Strong enduring customer relationships at 4 out of the
5 big institutions’ salaried planners
CAGR: 15%
Source: Credit Suisse for pieces of scaled advice forecast
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27. Wealth Segment: Clear path ahead to execute on solid growth initiatives
Slide 27
Strategic
Imperative
Initiatives
Plausible
Incremental
Segment EBITDA
growth by FY16
Why we are confident of success
Product
augmentation
• Product enhancement
• Scaled and scoped advice
• Hosting and system
integration
$8m
(incremental on FY13
underlying segment
EBITDA of $6.6m)
• Clear prioritised road map, sufficient resourcing
• Leading Provisio product and know-how combined
with strong COIN big 5 customer relationships
• Mature and proven hosting capability- SaaS and
hosted planning software already proven by Xplan
Customer
acquisition &
service
capability
developments
• Enhanced sales & marketing
• Greater service in training,
education, compliance
management and reporting
• Clear opportunities to improve in sales and marketing
practices and results with minimal cost
• Training/compliance management a logical layer to
increase retention
Product renewal
• Introduce entirely new GUI
• Integrate existing smart
capabilities and refresh where
appropriate
• Sufficient development resources to deliver on
requirements
Carefully pursue
adjacencies
• Mortgage market
opportunities
• Self managed super fund
opportunities
• Asian opportunities (long-
term i.e. post FY16)
• Encouraging early discussions with partners
• Clear fit for planning tools with SMSF and mortgages
• Asia- not confident of returns- low focus for now, but
monitoring our key institutional customer needs as
they ponder entry into Asian Wealth market at scale
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28. Slide 28
1 Where we have been
2 Where we are now
3 Where we are going
A Wealth o Focusing on building around core banking product –
also offer channels, collections and payments software
o Provide core banking systems in unique disruptive
business model suite of software products for financial
institutions
o Significant upside available from new sales given fixed
cost base
B Banking
C Open to further M&A
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
29. Banking Segment overview: Becoming more solid- with potential upside
Slide 29
1. Core Banking
• Exclusive license to provide Temenos T24 core banking software; complete
‘pay as you go’ core banking solution with internationally admired
functionality
• Mortgage bureau system managing multi-client loan books including ex-Rams
2. Channels
• Internet, mobile, phone and cards banking software used in 3rd party core
systems or integrated into our core banking offering
3. Collections & Payments
• CWX collections software enabling financial institutions and other large
companies to improve their cash flow and productivity by improving
collections
• SPX payments software replaces and automates banks payment processing
o Customers across Asia; difficult and hotly contested markets
Banking with strong operating leverage – above breakeven
• Less prospective for solid EBITDA growth than Wealth
• However, high barriers to exit and strong operating leverage- above breakeven
• Investments in sales cycles, including some unconventional targeting
$0m
$5m
$10m
$15m
Revenue Operating
Costs
EBITDA
Recurring
Non-
recurring
FY13 Financial Performance What we do
Significant upside plausible but uncertain
Operating
Costs
(75%+
fixed dev’t
labour
costs)
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30. Banking Segment: Portfolio Overview
Slide 30
Core Banking Software
Collections & Payments
Software
Channels Software
• Bank in a box: Complete real time
core banking capability on a pay-
as-you-go basis
• Separately have acquired mortgage
administration platform for large bureau
customer with well known loan book
brands (e.g. ex Rams)
Product
Customer
value
proposition
• Bank in a box:
o Reduced costs,
o Rapid product development
and launch
o Ability to operate business
anywhere, anytime on any
device
o Easy to scale system if demand
increases
o Rubik operates & secures IT
infrastructure, software and
systems
• CWX Collections: collection
software for corporate and
mercantile credit collections
• SPX Payments: automates
payment processing between
mutuals and big banks
• CWX Collections:
o Workflow and automatic billing
and overdue escalation
protocols
o Intuitive, flexible software
providing real time view of debt
situation
• SPX Payments:
o Fast, easy and secure payments
vs manual alternative
o Cost savings through payment
automation
• Internet, Phone & Mobile & IVR
Banking: allows for banking
systems to be offered through
different channels
• Cards Management: facilitates
issuing and management of cards
through core banking systems
• Internet, Phone & Mobile & IVR
Banking:
o 24/7 responsive access,
anywhere, anytime
o Industry-leading scalability with
minimal hosting requirements
o Rapid implementation time and
flexible configuration
o Seamless cross channel
integration
• Cards Management:
o Ability to manage cards through
core banking system
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31. Banking Segment: Our main Core Banking offering- Bank in a Box
Slide 31
World class product
• Rubik has exclusive license to provide Temenos T24
hosted core banking software in Australia
o Temenos T24 is the world’s number one core banking
system
- #1 by installations globally, by installations in
each region, and by new sales
• Rubik has configured T24 for the Australian regulatory
and product environment
o Rubik’s channels software comes pre-plugged in
Unique value proposition
• Hosted, pay as you go core banking system as SaaS-
customers only need a web connection- Rubik
provides the data storage and processing
o Disruptive low-cost offering enabled through hosting
model
Strong customer interest but inertia
• Significant opportunity from the ~100 target
customers, but significant challenge in initiating sales
given customer switching barriers
o Two successful integrations, with significant experience
effects, but still significant integration/data migration
activity for each sale to current ADI
• Catalyst for industry adoption could come via new
entrants, which reduces switching barriers
Bank in a Box Product- Hosted Core banking SaaS Bank in a Box
Hosted Software as a Service (SaaS)
- Secure dual site setup with DRP & BCP in place
-Managed hardware, network, software and services
All provided as an OPEX service with long stable contracts
Bank In A Box
Hosted Software as a Service (SaaS)
- Secure dual site setup with DRP & BCP in place
-Managed hardware, network, software and services
All provided as an OPEX service with long stable contracts
Customer Channels
Social
Media
-Facebook etc
Phone Banking
Cards
Internet
Banking
- Online Banking
- Factor 2
authentication
- Online Apps
Mobile
Banking
- SMS Banking
- Mobile Apps
-Coupons and
offers
Payments
Printing
House
Corporate
GL
AML
ATO
ExternalBatchInterfaceCapability
Cards Switch
Collections
ATM Switch
Credit
Checking
ExternalRealTimeInterfaceCapability
Fraud
Monitoring
TEMENOS CORE
Front Office
- CRM
- Marketing
- Campaigns
-Business
Intelligence
- Big Data
Middle Office
- Functionality to
meet regulatory,
accounting,
compliance,
reporting &
management
needs
Back Office
- Processing of
customer
requests
- Imaging and
document
management
Retail, Mortgages, Commercial lending, Treasury are typical banking
applications provided by BIAB
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32. Banking Segment: Portfolio dynamics
Sub-segment How we entered the market Addressable Market Considerations
Core banking
• Bought Temenos T24 Core Banking
system licence in September 2008
• Acquired RBX core banking
software as part of Admerex
acquisition in December 2008
• First installation of T24 software at
MCU in February 2010
Small Australian ADIs:
~$150m pa for mutuals
more with new entrants
• Significant challenges in traction with
new sales
• Need to overcome switching costs for
Credit Unions in changing system-
despite superior product and cost
offering
Channels
• Acquired Swift Call in January
2008, a provider of Internet, Phone
and IVR banking services
• Acquired El-Ten Technology in
March 2008, attaining internet
banking, core system/BPAY
interfaces and credit card
origination capabilities
As above plus other
Australian financial
institution (not big 4
banks)
~$100m pa
• Strong product in phone but market
shifting to mobile
• Difficulties in gaining commercial
acceptance to plug into core banking
competitor systems
Collections and
Payments
• Acquired Admerex’s CWX
collections software and SPX
payment engine software in
December 2008
Collections- International
Corporations with large
scale billing requirements
(e.g. utilities)
Plus debt factoring firms
>$1bn
• Different customer base to Core banking
and Channels
• Significant challenge in co-ordinating
sales and service over global customer
footprint
Slide 32
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33. Banking portfolio strategy
Slide 33
Rubik positioned to benefit from smaller ADIs upgrading technology
Significant upside available should Rubik win more contracts
• RFL is positioned to be a major beneficiary of technology upgrades by smaller ADIs.
o Many of the smaller financial institutions, primarily building societies and credit unions, targeted by Rubik’s banking
product are currently evaluating options for new core banking systems.
• RFL’s bank-in-a-box infrastructure is in place and has a strong value proposition; effort has been shifting onto sales to
bring the bank-in-a-box product to market.
o Strong experience curve in migrations across different systems- integration efficiency to rise
o Sales to new bank-in-a-box customers have not been included in management’s guidance and represent earnings upside
• There are hundreds of current potential customers in Australia, 90 potential institutions who have 4.5m customers
(excluding the big 4) creating a $150mn addressable market.
o Each new contract Rubik can secure creates reference sites for new customers, building a recurring revenue base and
increasing the value of the investment.
• 2 new contracts announced in FY12 to add to the existing client, with 2 more clients in the pipeline for FY2014
o We are now rejecting smaller clients that are uneconomical, along with uneconomical and unnecessary customisation
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34. Banking growth initiatives
Slide 34
Sub-Segment Initiatives
EBITDA
growth
Reasons for confidence:
Core banking
• Enhanced value proposition-
lead on hosted, pay as you go
systems
• Enhanced proactive sales
effort to identify and
stimulate new entrants
0-?
• High upside potential given new sales drop through to
bottom line once implementation complete
• Strong product and unique proposition-but challenging
switching costs and customer inertia- catalyst may
come through our unmatched offering for new ADIs
• Uncertain capability to drive significant organic growth
Channels
• Careful product investments-
assess partnership
opportunities
• Uncertain potential to drive significant organic growth
• However, retention has been strong, so improvements
should hit the bottom line
Collections and
Payments
• Review options for enabling
focus across geographies
• Review credit analysis module
(buy/partner/likely not build)
• Uncertain potential to drive significant organic growth
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35. Slide 35
1 Where we have been
2 Where we are now
3 Where we are going
A Wealth
• Open to another acquisition, but
only for right fit
• Proven capability and history of
earnings accretive acquisitions
• Patient scanning, deal making and
transition management critical
B Banking
C Open to further M&A
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
36. Previous inorganic opportunity performance
Slide 36
Previous deal value drivers
Careful target identification and patient deal making
• Great care taken with target identification; sat on large cash stockpile
prior to COIN acquisition
• Patient deal making; COIN acquisition took over a year to eventuate
• Share some upside with tech co founder/owners to achieve
engagement and alignment, and enable sale at reasonable valuation
Generate value through synergies and customer relationships
• Generate value through back office support synergies and aligning
interests e.g. retaining and incentivising founders
• Acquisitions add value through key customer relationships e.g. Visor
providing key IFA relationships
Careful transition of acquisitions into existing business
• Rubik model is not to fully integrate operations and sales of acquired
businesses- enables easier transition, agile and entrepreneurial
business units and drives exit optionality for easy carve-outs
• Careful transition of customers
o e.g. focus on retaining COIN customers instead of seeking out new sales
o COIN customers welcomed change of management and customer
engagement strategy
Investment as
multiple of
current
underlying
EBITDA *
Investment as
multiple of
deal-time
underlying
EBITDA
VISOR 0.21x 0.27x
COIN 3.52x 4.80x
Provisio 5.95x 4.12x
Admerex ~0.35x 1.33x
Swiftcall/El
Ten
~2.50x 6.54x
*Based on forecast EBITDA FY14 (excluding corporate costs)
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37. Significant organic growth potential in other segments (more certain in Wealth,
more risky from Banking), and no desire to put the core business at risk
Continue to scan market patiently for profitable niches in Australian FS-related IT
• Further inorganic opportunity may exist- but contingent on right target and
right deal structure- high burden of proof on ‘fit’
• A few potential opportunities at this stage, but nothing clear
• Remain as highly selective acquirers- burden of proof on ‘why us’
Scope for further inorganic opportunities
Slide 37
Composed deal-making, careful transition and integration
will be our focus should a suitable target approach us
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38. Slide 38
1 Where we have been
2 Where we are now
3 Where we are going
• Corporate ambition for ASX300
membership in 3 years
• Flight path of significant growth –
average ~30%pa operating
segment EBITDA targets to FY16
• Solid investor proposition- low
downside given strong recurring
revenue, plus solid upside from
wealth and further speculative
upside from banking and wealth
Agenda: Rubik Financial Investor Presentation Nov-13Forpersonaluseonly
39. Our Corporate Ambition- 40%pa TSR to gain entry into the ASX300 in 3 years
Slide 39
Required market cap for
ASX300 entry
ASX 300 Index
$0m
$50m
$100m
$150m
$200m
$250m
0
1000
2000
3000
4000
5000
6000
7000
2009 2010 2011 2012 2013 2014 2015 2016
~$180m market cap needed to
enter ASX300 today
Note: TSR= Total Shareholder Return. Uses baseline share price of $0.27c as at Oct-13, and assumes market cap proportional to TSR growth for simplicity- i.e. assumes no dividends paid
Source: Bloomberg
We want to get into ASX300 in 3
years: need ~$180m market cap
Target ambitious but plausible
at our market cap
Implies 3 yr ~40%pa TSR,
arriving at RFL share price of 69c
All Ords company results
of >40% pa 3yr TSR
Market Cap
range
% of periods
$0-50m 17%
$50-100m 18%
$100-200m 12%
$200-500 8%
>$500m 5%
Rubik’s
market
cap range
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
2012 2013 2014 2015 2016
RFL Share Price
3 yr target
Target market cap of $180m
implied a share price of 69c
and ~40% TSR over 3 years
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40. 3 year flight path- growth targets are challenging but achievable
Slide 40
• Assuming no expansion in EBITDA:EV multiple,
the target market cap growth must all be
driven by ~40%pa EBITDA increases
o Therefore, Rubik’s FY16 corporate EBITDA
target is ~$16.5M
o Current EV:EBITDA multiple of 8.3x (forward
looking) should be defendable given right
growth trajectory (potential for further uplift)
• However, the required operating segment
growth rate is lower, at ~ 30%pa;
o Assuming corporate cost increases are
contained at ~10%pa
o Requires only ~20%pa revenue growth if we
conservatively assume half of cost base is fixed$5.8m
$9.5m
$5.8m
$5.0m
$3.7m
$0m
$5m
$10m
$15m
$20m
$25m
$30m
FY13
Underlying
reported
EBITDA
Growth
required in
reported
EBITDA
Required FY16
Underlying
reported
EBITDA
FY13 Operating
Segment
EBITDA
Growth
required in
Operating
Segment
EBITDA
Required FY16
Operating
Segment
EBITDA
i.e. before corporate cost netted off
40%pa growth required to hit FY16
EBITDA target and enter ASX300…
Assuming same EV:EBITDA
multiple, ~40%pa EBITDA needed…
…translating to ~30% pa target
for Operating Segment EBITDA
~40%pa
…however, if corporate costs are
restrained, a more manageable
~31%pa required
~30%pa
Corporate
Costs
Underlying
reported
EBITDA
$9.5m
>$21m
Corporate
Costs
Underlying
reported
EBITDA
Note: Time period used for calculation is 3 years
Source: RFL Annual report 2013
EBITDA
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41. Slide 41
Operating segment targets- $8m increase in Wealth EBITDA, $4m from rest of business
Source: RFL Annual report 2013, Iress Latest is latest available annual report- CY12 report i.e. 12 months ended December -12- before the significant UK acquisition.
Note: * Iress ANZ Wealth software segment result was 43% margin, highly comparable to the ~40% in Rubik’s flight path
$6.6m
$3.0m
~$8m
~$4m
$0m
$5m
$10m
$15m
$20m
$25m
~$7m
~$14m
Operating segment EBITDA
Non-Wealth
Wealth
$9.5m
>$21 m
Further upside
possible beyond
target
Baseline:
FY13 Underlying
Operating
Segment EBITDA
Plausible Wealth
uplift to FY16
Uplift required
from banking and
other segments
3 yr Horizon:
Required FY16
Operating
Segment EBITDA
Non-Wealth
Wealth
RFL
FY13
RFL
FY16
Iress
CY12
Revenue $23m ~$40m $207m
Underlying
EBITDA
$5.8m ~$16m $75m
Underlying
EBITDA
margin
~25% ~40% ~36%*
By comparison, this level of growth
would result in a much smaller
revenue than peer Iress’ CY12 scale,
but at similar margins
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42. Why invest summary
Slide 42
Established
position in
attractive
markets
• Exposure to large, solid underlying
Australian FINTECH market with
strong long-term growth drivers
• Established position as one of the 2
leaders in the wealth adviser
software market; strong share
amongst Big 5 institutions
Strong annuity
income streams
Solid growth
prospects in
core operations
Significant
further upside
available
• Majority of Wealth and Banking
revenue is recurring- defendable
given strong relationships and
retention dynamics
• Not complacent about our position-
making necessary product and
service investments to defend
annuity income
• Well positioned for anticipated
wealth industry shift to scaled
advice- market leading tools and
incumbency at key institutions
• Revenue growth over relatively fixed
cost base in Wealth would translate
to significant EBITDA impact
• Significant Wealth upside available
from mortgage market and SMSF
opportunities
• Considerable further upside in
Banking given new core banking
sales over relatively fixed cost base
• Further acquisitions - only
significantly EBITDA per share
accretive deals considered
Lower risk than many ‘tech’ companies… …and positioned for substantial growth
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43. Slide 43
Glossary
Term Meaning in this presentation
ADI Authorised Deposit-taking Institution: highly regulated customer-facing banking institution
Advice Wealth management advice- either comprehensive or scaled/scoped, and provided via advisors or direct
Advisers Appropriately qualified person giving financial planning advice
Bank in a Box Rubik's hosted ‘pay as you go' core banking system, provided with our channel software plugged in
Core Banking System Vital central IT data system for ADIs, managing storing and reporting all products and transactions
Corporate Services Cost Finance & administration, IT support costs supporting both segments
Direct advice Wealth management advice provided via internet
Fintech Information Technology for Financial Services industry
FoFA Future of Financial Advice reforms- part of series of reforms to increase transparency and customer value in wealth management
FS Financial Services
Hosting Third party management off site of computing environments
New Entrant ADIs Any new ADI- possible Australian equivalent (COLES?) to the UK Supermarket’s entering FS in retail banking of E.g. Tesco /Sainsburys
Operating Segment Individual business divisions with separate managing director’s and p&l responsibilities
Planners Term Interchangeable with advisers – see above
Platforms Base systems to provide CORE activities
SaaS Software as a service- typically hosted externally and paid for on a consumption basis
Scaled Advice /Scoped Advice
Scaled advice is personal advice that is limited in scope, either by being in response to a limited range of issues or by addressing a
specific area of the investor's needs
Temenos and T24 Number 1 global CORE banking software provider; T24 is their CORE banking product
TSR Total Shareholder Return- measure of shareholder value creation from share price appreciation and dividends (assumed as reinvested)
Underlying After adjusting for abnormal items and discontinued operations
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