MYOB FY13 Results and Investor Presentation · or apply for securities in MYOB or any of its subsidiaries. The information in the Presentation is an overview and does not contain

MYOB Finance Australia Limited ACN 161 013 654

Registered office: Level 3, 235 Springvale Road, Glen Waverley, VIC 3150 27 February 2014 Market Announcements Office ASX Limited

MYOB FY13 Results and Investor Presentation MYOB today announces results for the period ending 31 December 2013. Accounts have been published for the 14 month period ended 31 December 2013 for MYOB Finance Australia Limited (the issuer of MYOB Subordinated Notes) and for the year ended 31 December 2013 for MYOB Holdings Pty Limited (the holding company for the MYOB group). Tim Reed (Chief Executive Officer) and Richard Moore (Chief Financial Officer) will present MYOB's FY 13 results and provide an update to the market through an investor call scheduled for 3.00pm (AEST) today. The call will be followed by a Q&A session. Details of the investor call are provided below. An Investor Presentation is attached to this announcement.

MYOB FY13 Results call—27 February 2014, 3.00pm (AEST) Password: "Software" City Toll numbers Toll free numbers

Adelaide +61-8-8121-0034 1-800-505-544

Brisbane +61-7-3102-0103 1-800-505-544

Canberra +61-2-6100-0227 1-800-505-544

Hong Kong +852-3001-3803

Melbourne +61-3-9010-0399 1-800-505-544

New Zealand +64-9-970-4612 0800-456-282

Perth +61-8-9467-8822 1-800-505-544

Singapore +65-6883-9168 800-120-5199

Sydney +61-2-8214-9002 1-800-505-544

Ian Boylan Company Secretary MYOB Finance Australia Limited

Tim Reed Chief Executive Officer

Richard Moore Chief Financial Officer

27 February 2014

MYOB FY13 Results Presentation

MYOB FY13 RESULTS PRESENTATION 02

Important notice

The information contained in this document (including this notice) or discussed at the presentation (collectively, the Presentation) has been prepared by MYOB Holdings Pty Limited (MYOB).

The Presentation is subject to the conditions outlined below. Your receipt of the Presentation evidences your acceptance of those conditions.

The Presentation is not a prospectus, product disclosure statement, disclosure document or other offer document under Australian law or under any other law. It does not, and is not intended to, constitute an offer for subscription, financial product advice, invitation, solicitation or recommendation by any person or to any person with respect to the purchase or sale of any securities or financial products in any jurisdiction and also does not form the basis of any contract or commitment to sell or apply for securities in MYOB or any of its subsidiaries.

The information in the Presentation is an overview and does not contain all the information necessary to make an investment decision. It is intended to be a summary of certain information relating to MYOB and its subsidiaries (MYOB Group) and does not purport to be a complete description of the MYOB Group. It is provided for information purposes only and is subject to change without notice.

The information contained in the Presentation have been prepared without taking account of any person’s investment objectives, financial situation or particular needs and nothing contained in the Presentation constitutes investment, legal, tax or other advice. You must not rely on the Presentation but make your own independent assessment and rely upon your own independent taxation, legal, financial or other professional advice.

No representation or warranty, expressed or implied, is made as to the accuracy, reliability, adequacy or completeness of the information and opinions contained in the Presentation. The Presentation may contain certain forward looking statements, including estimates, projections and opinions (Forward Statements). Forward Statements may involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of the MYOB Group, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. No representation is made or will be made that any Forward Statements will be achieved or will prove to be correct. Actual future results and operations could vary materially from the Forward Statements. Similarly no representation is given that the assumptions upon which Forward Statements may be based are reasonable. Circumstances may change and the contents of this document may become outdated as a result.

To the maximum extent permitted by law, the MYOB Group and each of its affiliates, directors, officers, partners, employees, advisers and agents and any other person involved in the preparation of the Presentation disclaim all liability and responsibility (including without limitation, any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use or reliance on anything contained in, or omitted from, the Presentation. The MYOB Group accept no responsibility or obligation to inform you of any matter arising or coming to their notice, after the date of the presentation or this document, which may affect any matter referred to in the Presentation.

Agenda


At MYOB we are passionate about making cloud accounting easy for every businessWe provide solutions that are easy to use, available anytime, anywhere, and deliver the best value in our market.

MYOB FY13 RESULTS PRESENTATION

Agenda

04

Business and Strategy Update FY13 Financial Summary

Summary Appendix

01 02 03

Executive Summary

04 05

Agenda


MYOB FY13 Executive summary

MYOB FY13 RESULTS PRESENTATION 06MYOB FY13 RESULTS PRESENTATION

MYOB is the leading business solutions provider in Australia and New Zealand

MYOB is delivering superior cloud solutions, supporting existing clients moving to the cloud as well as attracting many new businesses to our cloud solutions

MYOB has driven double digit growth through rapid client adoption of cloud solutions and has a pipeline of innovation that will be delivered to clients in 2014

MYOB today

“Going live means more time to focus on the business and plan ahead more realistically. I would definitely

recommend MYOB software and AccountRight to anyone – without a doubt.”

Annie Quested, Raygas


Driven by the uptake of cloud solutions and BankLink acquisition

$247

13%

Revenue OF

with

million

growth

$121

14%

eBitDA OF

with

million

growth

Double digit growth in FY2013

Summary of 2013


MYOB MYOB

Upcoming release of MYOB PayDirect is a category first and highlights the capability of MYOB’s cloud offerings

Increased focus on micro business accounting and competitive position with the launch of MYOB Essentials in Q2 2014

PayDirect EssentialsMaking business life easier by being at the centre of a mobile, connected world via a suite of cloud solutions

“It will make our business life easier as we can use a cloud solution with the full advanced features of

MYOB accounting software, meaning no compromise in capabilities.”

Peter Meyers, Purna Yoga P/L

Executing on vision

Summary of 2013


BankLink surpassing expectations

BankLink acquisition has surpassed expectations, significantly enhancing product suite and generating strong synergies

Rapid cloud transformation

Market for cloud-based accounting solutions continues to grow quickly - now accounts for half of all new MYOB product registrations and one quarter of the subscriber base has migrated

Enlarged sales force

Significant investment in sales force to cater to rising client demand for cloud solutions and to support upcoming product launches

Strong financial performance

In line with strong financial performance, cash flow generation and covenant headroom continue to improve

“I think MYOB will surpass their existing competitors because of the technology changes they’re doing with

the one ledger. The implementation of the practice suite into client ledgers is huge for accountants.”

Natasha McDowall from Tael Solutions.

Summary of 2013

Agenda

10MYOB FY13 RESULTS PRESENTATION

MYOB FY13 Business and Strategy Update


Understanding our clients’ world

New SME Businesses SME Revenue Expectations

SOURCE http://abr.business.gov.au/StatisticalSearch.aspx

10,000

JAN

- 10

JUL

- 10

JAN

- 11

JUL

- 11

JAN

- 12

JUL

- 12

JAN

- 13

JUL

- 13

20,000

0

GST ReGiSTRaTionS (monTh)GST ReGiSTRaTionS (LTm)

30,000300,000

100,000

200,000

0

Improving Business Confidence

SOURCE NAB Economics: Monthly Business Survey SOURCE MYOB Business Monitor

CONF 1990s RECN RISE FALL NETCONF GFC

TRENDSEASONALLY ADJUSTED

I I III II IIIII III IIIIV IV IV

2011 2012 2013

20 40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

10

0

-10

-20

-30

-40

BUSineSS ConFiDenCe (neT BaLanCe)

SME business creation closely correlated with GST registrations

2013 growth bodes well for 2014

early signs of a more positive SME environment in 2014

As a market leader with 20+ years’ experience, MYOB understands the current and future needs of SMEs.

Key Takeaways

2013 Revenue Result 2014 Revenue Expectations

-32%

-8%

24%

34%

18%

-16%


MYOB clients moving to the cloudRapid technology adoption by MYOB’s clients.

DEC

- 11

JUN

- 12

DEC

- 12

JUN

- 13

DEC

- 13

20%

30%

40%

50%

10%

52% of new product registrations are now cloud solutions – up from 25% last year

22% of paying base was actively using cloud files at end of 2013 – up from 7% last year

MYOB Online registrations (L3M) Cloud users % of total paying clients

“Absolutely LOVING the speed of MYOB AccountRight Live 2013.3. Time to make sure you’re on this

release AND on the cloud!” Pam Pitt, 2 Peas Pty Ltd

“We have been in the cloud for a couple of months now and really

love it. MYOB is so great to use.”Craig Colman, Colman Ltd

5%

10%

15%

20%

25%

DEC

- 11

JUN

- 12

DEC

- 12

JUN

- 13

DEC

- 13


Cloud across more segments

MYOB at the centre of the connected worldMYOB continues to develop cutting edge cloud technology, with the up-coming launch of mobile payments – an Australian & New Zealand accounting industry first.

CRM / HRM

Websites

Big Data/ Business Intelligence

2014

Cloud

Connected Services

Future

2015+

“The move of technology into the cloud brings a huge range of benefits to users, such as ‘anywhere, anytime’ access, and

increased collaboration between a business and their customers.”Maria Mullane, Managing Director at Aspire Solutions Ltd

Wellington and Wairarapa, New Zealand

AR windows app

AR API

2012 - 1213


MYOB EssentialsMYOB Essentials is a clearly positioned product with a cashbook and new functionality to meet the evolving needs of micro businesses.

Key Takeaways

Product Overview

Clearly segmented cloud offering for micro businesses+ MYOB essentials replaces and expands upon MYOB LiveAccounts+ Reduces any perceived overlap with MYOB AccountRight

Enhanced product offering+ new cashbook for easy online

cash accounting

An API provides for integration into Client Accounting, MYOB PayDirect and an ecosystem of partners

Available from April 2014

“After having a sneak peek of MYOB Essentials range, my team loves it. It will make client accounting even

more efficient thanks to its flexibility, visibility and simplicity, which allows us even more time to add

value to the client relationships.” Natasha McDowall, Tael Solutions

MICRO (DIY and DIFY)0-5 Employees

SMAll5-30 Employees

MEDIUM30-200 Employees

Business(Do most internally)

Style of Collaboration

Accountant(Do it for me)

SIZE OF BUSINESS


MYOB PayDirect …leading the next wave of cloud-based technology

how it Works: Connected to the Cloud

Take eFtPOS or credit card payments from customers using a card reader

Accept credit card payments directly on iPhone and Android mobile devices

Payments applied to invoices and automatically recorded in MYOB AccountRight & MYOB Essentials

MYOB’s technology innovation is at the forefront and will drive growth in MYOB’s user base.

Key Takeaways

Interesting, @myob introduces PayDirect - allows businesses to get instant mobile

payments. Excellent.Ben Kepes, journalist.

Expands potential client base Encourages existing clients to take-up cloud offering

Multiple benefits for MYOB clients

+ Manage business on the go+ easy, secure way to get paid fast+ enables SMes to improve their cash flow

Limited release in Q1 in Australia, general release in Q2 2014, New Zealand launch 2H 2014


MYOB add-on solutionsMYOB released an API to AccountRight Live in 2H 2013. MYOB now has more than 1,200 developer partners with almost 800 working against the API and over 70 having released solutions to the market. These solutions enhance the MYOB platform by extending the capability beyond what exists inside the product.

“MYOB’s move into the cloud is looking really good. For us the API is the critical piece and

means our Mobileezy field sales and order entry software will be right there with you.”

David M Bennett, Managing Director at Anigo Systems

Agenda


MYOB FY13 Financial Summary


A$m; FY ended 31 Dec(1) 2011 2012 2013 V%

Revenue 204.3 217.6 246.6 13%

Gross Profit 187.8 200.5 224.0 12%

Operating Expenses (86.9) (94.0) (103.1) 10%

EBITDA 101.0 106.5 120.9 14%

13% revenue growth

92% recurring revenue

10% increase in OPEx to fund strategic growth initiatives

14% EBITDA growth

49% EBITDA margin

Note:1: FY13 includes 7 months contribution from BankLink (acquisition completed 31 May 2013)

Summary of FY 2013 resultsStrong revenue growth with continued investment in business.

Key Takeaways

Income Statement


the market for cloud-based accounting solutions continues to grow, particularly at the micro segment

>50% of new users purchasing cloud solutions by year end

Historic Revenue

MYOB’s growing subscriber base driving an increase in recurring revenue to 91%

Upcoming launch of MYOB essentials enhances and strengthens competitive position

Large opportunity to monetise non-paying installed desktop base

Market Segments Products

Micro & Small Business

Market and Divisional Update

perpetual licence revenuerecurring revenue

20

0

40

60

80

100

120

140

2010 2011 2012 2013

87 91 102 114

2321

17

11109 112

119125

91%

A$m

[CAGR 9%]

[CAGR 5%]

Business Division – 51% of revenueStrong growth in subscription and maintenance revenue as cloud user base grows.

Division Overview

“From an accountant point of view, usability, price and functionality

works for our clients and gives MYOB an advantage over its competitors.”

Matthew Jones, Jones Accounting Services.

“If you are serious about running the best accounting software into the future, then MYOB AccountRight

Live is the answer.“Peter Mayer, Purna Yoga P/L


Increased client demand, investment in sales team and acquisition of BankLink driving growth in accountant base and revenue.

31%Revenue growth

Strategic investment in sales force in 2014 to cater for demand increase in SME products

97% Recurring revenue

BankLink has proven to be a highly strategic acquisition, outperforming expectations in the first year

Accountants Division – 39% of revenue

Continued innovation and improved integration between Accountant and SME products helps deliver connected accounting vision and the common ledger

Historic Revenue(1)


Accountants

Market and Divisional UpdateDivision Overview

10

0

30

40

50

70

80

90

20

60

100

2010 2011 2012 2013

63 67 71 74

20

6671

74

97

97%

A$m

perpetual licence revenue recurring revenue [banklink]recurring revenue

[CAGR 6%]

[CAGR 14%]

“The new platform is comfortable, intuitive and easy. In terms of functionality, it’s easier to access client records and it’s also easier entering timesheets. It’s simple to navigate and you can link into the various

fields a lot more logically than with the classic.”Val Coburn, Farquhar Accountants

Note:1: FY13 includes 7 months contribution from BankLink (acquisition completed 31 May 2013)


Continued expansion of the partner network in Australia and New Zealand, now the largest in our tier.

18%Growth in subscription revenue

Introduction of additional functional modules such as CRM and social media integration

67% Recurring revenue

9% Revenue growth

New cloud-based ERP solutions under development

5

0

15

20

10

25

2010 2011 2012 2013

8 10 12 13

20

7 7

7

71516

18

20

67%

A$m

perpetual licence revenuerecurring revenue

[CAGR 18%]

[CAGR 9%]

Historic Revenue


Medium-sized Businesses

Market and Divisional Update

Enterprise Division – 8% of revenueStrong growth continues as partner network expands and new functional modules are added.

Division Overview

“EXO has given us a vehicle to forecast and plan our business.”

Perri Kallergis, Town and Country

“Job costing and accounting in one package has freed up our time

dramatically.”Shamilla Jayasuriya, Landells


7010

600

50 0 400

30

110 40 1000

90

20

800

2010 20102011 20112012 2012 20122013 2013 2013

MYOB HeadcountMYOB R&D ExpenditureMYOB Operating Cost Base

94.1 103.2 29 79829 77730 84736 1000

A$m A$m spent on R&D Total Number of MYOB Employees @ 31 December

10% increase in operating cost base More than A$120m spent on R&D over last four years 153 employees added in 2013

14% EBITDA growth

Highly successful BankLink acquisition22%

Paying clients using the cloud

>50% New clients registering cloud solutions

13% Revenue growth

New suite of cloud solutions with enhanced features in market in 2014

Continued investment driving MYOB success

Ongoing significant investment is delivering resultsInvestment in business through 2012 and 2013 has driven MYOB success in FY13.

“Based in Bathurst in regional NSW ARLive has revolutionised the way I interact with clients. Reduced travel times have given me

the opportunity to provide more services to clients. With Live bank feeds I can monitor accounts more regularly providing more

frequent financial reporting to clients which gives them the ability to plan and respond much quicker.”

Leanne Berry, Owner at The Numbers Game, NSW.


Strong and stable balance sheetStrong cash generation and pay down of debt continue to strengthen MYOB’s balance sheet.

Balance Sheet $ Million Dec 2012 Dec 2013

Cash 5 34

Goodwill 740 810

Intangible Assets 455 453

Other Assets 22 36

TOTAL ASSETS 1,222 1,333

Senior Debt 408 474

Subordinated Notes 155 155

Other Liabilities 103 96

TOTAL LIABILITIES 666 725

TOTAL EQUITY 556 608

Senior leverage Ratio 4.01x 3.64x

Total leverage Ratio 5.45x 4.86x

Balance sheet continues to improve, driven by earnings growth and strong cash flow

Continued amortisation of intangible assets (commercialised software, customer relationships and brand)

Strong cash generation, with cash increasing by $40 million before $12 million debt repayment in December 2013

Increase in goodwill, senior debt and equity from BankLink acquisition

Key Takeaways


4.0

3.0

6.0

5.0

(x)

LTM Dec 2012 LTM Dec 20131

Total Leverage Ratio2

5.45x4.86x

2.0

1.0

5.0

4.0

3.0

LTM Dec 2012

(x)

LTM Dec 20131

Senior Leverage Ratio

4.01x

4.40x

3.64x

1.6

1.0

2.8

2.2

(x)

LTM Dec 2012 LTM Dec 20131

Interest Coverage Ratio

2.39x 2.40x

1.60x

1.0

0.8

1.8

1.4

1.6

1.2

LTM Dec 2012

(x)

LTM Dec 20131

Cash Flow Cover Ratio

1.35x

1.62x

1.05x

30% Covenant Headroom



NOTE 1: Includes 5 months pro forma contribution from BankLink (acquisition completed 31 May 2013) NOTE 2: No formal covenant for Total Leverage

Credit profile continues to strengthenIn line with strong financial performance, cash flow generation and covenant headroom continue to increase.

MYOB RatioSenior Debt Covenant


A$m; FY ended 31 Dec FY2012 FY2013

EBITDA 106.5 120.9

Change in NWC (4.8) (3.5)

Capital expenditure (12.5) (17.9)

Operating cash flows 89.2 99.5

Cash conversion 84% 82%

Net cash movement (4.5) 28.4

Cash & cash equivalents 5.3 33.6

Financial highlights

Key Takeaways

82% operating cash conversion

Healthy cash position going into 2014

Cash flow profileStrong cash flow conversion continues resulting in healthy cash position.

$99.5million operating cash to cover $53 million of interest payments

$11.5million senior debt repayment made in December 2013

$28.4million Net cash movement

Agenda


MYOB FY13 Summary


Leverage level reduced

Strong financial performance and cash flow conversion reducing leverage levels

Revenue growth

Consistently delivers revenue growth

Investment

Ongoing significant investment in both product development and sales channels

Earnings Quality

Recurring revenue increased to 92% of total revenue improving the quality of earnings

Bigger and better

MYOB generates more than 2.5x the revenue of its nearest competitor and works with 1.2 million businesses and 40,000+ accountants and other business partners

Innovation

MYOB is innovating and delivering on its new generation product development

• Release of mobile payments highlights the capability of MYOB’s cloud offerings

• Increased focus on micro business accounting and competitive position with launch of MYOB Essentials

Cloud growth

The market for cloud-based accounting solutions continues to grow strongly with MYOB performing strongly in both new client acquisition and migration of the paying base

Summary of 2013

Agenda


MYOB FY13 Q&A

Agenda


MYOB FY13 Appendix


MYOB Holdings Income Statement

A$m; Full Year ended 31 Dec 2012 2013 V%

P&L

Revenue 217.6 246.6 13%

COGS (17.1) (22.6) 32%

Gross Profit 200.5 224.0 12%

Expenses (94.0) (103.1) 10%

EBITDA 106.5 120.9 14%

EBITDA Margin 48.9% 49.0%

Other Costs (12.9) (14.7) 14%

Depreciation/Amortisation (63.1) (65.0) 3%

EBIT 30.5 41.2 35%

Net interest (46.3) (52.8) 14%

Debt Cost Amortisation (6.2) (7.2) 17%

Profit Before Tax (22.0) (18.8) -15%

Tax 7.2 4.7 -35%

NPAT (14.8) (14.1) -5%

NPATA 27.2 28.9 6%

Income Statement


Financial Covenant Analysis

$Million, unless otherwise notedProforma LTM Sep 2012 from

Prospectus

LTM 31 Dec 2012

LTM Jun 2013 LTM Dec 2013Senior Facility

Covenants

Note Covenants

Suspension of Interest Condition

Restriction of Additional Debt and

Distributions

LTM CovenantA EBITDA 106.7 107.5 121.2 126.9

LTM CovenantA Cashflow 92.9 89.5 99.9 107.4

LTM CovenantA Cashflow conversion 87.1% 83.3% 82.4% 84.6%

Cashflow Cover Ration1 (times) 1.47 1.35 1.53 1.62 Not less than 1.05Not less than or equal

to 1.10

Senior Leverage Ratio2 (times) 4.04 4.01 3.95 3.64 Not greater than 4.40

Interest Cover Ratio3 (times) 1.92 2.39 2.53 2.40 Not less than 1.60

Total Leverage Ratio4 (times) 5.45 5.45 5.23 4.86 Not greater than 5.50

NOTES1. Cashflow/debt service

2. Senior net debt/EBITDA3. EBITDA/Senior net cash interest costs

4. Senior net debt + subordinated notes /EBTDA

A. Jun-13 Adjusted to include 11 months of BankLink pro-forma EBITDA; Dec-13 adjusted to include 5 months

Financial covenants - detailStrong cash flow and interest coverage.


Covenant cashflow (covenant EBITDA adjusted for movements in net working capital and capex) of $107.4 million results in a 84.6% cash flow conversion ratio

• Covenant EBITDA, cashflow and debt service adjusted to add 11 and 5 months of BankLink pro-forma EBITDA and debt service, for Jun-13 and Dec-13, respectively

Cashflow cover of 1.62x (up from 1.35x)

• 30% headroom vs senior debt covenants

• 27% headroom vs Notes covenants

Senior leverage of 3.64x (down from 4.01x)


Interest cover of 2.40x (in line with Dec-12)


Total leverage of 4.86x (down from 5.45x) Overall MYOB is performing well within its senior debt and notes covenants

Financial covenants - detailStrong cash flow and interest coverage.


Thank you

Documents

MYOB FY13 Results and Investor Presentation · or apply for securities in MYOB or any of its subsidiaries. The information in the Presentation is an overview and does not contain