Bravura : AGM addresses by the Chairman and the CEO

ASX Release
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24 November 2021
	2021 Annual General Meeting
	Chairman's Speech
Introduction
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Welcome to the Bravura Solutions 2021 AGM.

2021 proved once again to be a challenging year as the COVID-19 pandemic continued to impact the markets in which we operate.

Despite this, we responded to changing market conditions, evolving Bravura's strategy to stay well ahead of client needs, and met the ambitious targets we set ourselves in this environment.

personalUnder the leadership of the previous CEO, Tony Klim, and our COO and incoming CEO, Nick Parsons, and their experienced executive team, Bravura delivered on its strategic goals growing its addressable market and increasing

our proportion of contracted revenue.

In October 2020, Bravura acquired Delta Financial Systems, broadening Bravura's product offering in the UK complex pensions administration market. I'm pleased to report that the Delta acquisition has performed to our expectations and is providing our clients with a material extension to the value of Bravura's service offering.

With a solid financial position, growing client base and a product suite enhanced by ongoing investment in R&D, Bravura is well placed to take advantage of improved client demand to deliver revenue and earnings growth as the pandemic recedes and market conditions improve.

Financial results

Moving to our financial performance, I am pleased to report that despite the unprecedented market challenges, particularly in the UK, Bravura achieved its earnings guidance and continued to deliver a solid financial performance,

Forsupporting ongoing dividends for our shareholders.

In FY21, the business recorded revenue of A$243 million, representing an 11% decline on the previous year, reflecting pandemic impacted market conditions. Group EBITDA was A$49.3 million, compared to A$57.8 million in the previous year. The Group's reported NPAT was A$34.6 million, slightly lower than the A$40.1 million of FY2020. However, encouragingly, Bravura's Contracted Recurring Revenue increased by 15% in FY21.

As at 30 June 2021, the company had a solid net cash position of A$73.6 million.

The Board is pleased to declare a final unfranked dividend of 6.0 cents per share for the year, a 0.5 cent per share increase on the final FY20 dividend. Along with the interim dividend of 2.6 cents per share declared earlier in the year, Bravura delivered a full-year dividends of 8.6 cents per share.

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Business overview

onlyAt Bravura, our mission is to deliver innovative technology solutions that power the world's financial institutions. Our purpose is to make our customers successful by providing a broad suite of global software solutions and services that drives the success of their businesses. Our technology is the essential administration engine that powers the wealth management and funds administration industries across the APAC and EMEA regions. Presently, Bravura has 17 offices throughout 6 countries across these markets.

Bravura proudly boasts a longstanding international client list that includes some of the world's largest blue-chip financial institutions, including Fidelity International, Prudential, Aware Super, Mercer, Westpac NZ, TAL, JPMorgan,

Partners Life, Suncorp, STANLIB Wealth, Bank of New York Mellon, Legal & General, Schroders, Lloyds, Citi and Aegon, useto name a few.

The strong demand for Bravura's broad and growing product range is driven by clients' need for speed to market, enhanced digital capabilities, navigating maturing and evolving financial regulation and extracting operational efficiencies. Bravura remains committed to supporting our clients through these evolving industry trends and will continue to invest in enhancing the functionality of our product range to grow our market offering.

personalBusiness Performance

During FY21, Bravura navigated challenging market conditions across our business units.

The impacts of the pandemic on Bravura's business were mainly two-fold. Firstly, it brought market uncertainty that resulted in a lengthening of Bravura's sales cycle across the board, and temporary hesitancy around new contracts and project work, primarily in the UK. Secondly, the pandemic, along with regulatory pressures, accelerated the need for financial service companies across all regions to reduce operational costs. Bravura has delivered this in FY21 through assisting clients with automation and digital self service capability.

Despite revenue and earnings being negatively impacted by a COVID- related decline in UK professional services work, we continued to strengthen our market position, with full-period contributions from our FY20 Mid-winter and FinoComp acquisitions, and integration of the Delta acquisition. There also remains potential to deliver greater costs savings by transitioning clients to the cloud.

Addressing specific markets, in the UK there was reduced interest in big bang implementations, as well as an underserviced middle tier of potential clients. Consolidation within the platform and advice markets challenged the value chain status quo, with larger adviser firms considering a vertically integrated business model. In the Funds

ForAdministration market, there was further consolidation, with larger funds managers sweeping up smaller asset managers.

In Australia, regulatory pressure and merger activity saw super funds undertaking strategic reviews of their operating models to understand whether new technology driven operating models can deliver the material cost savings.

All markets experienced a heightened desire for lower operational costs, together with an increased interest in automation, as well as a greater need for improved end-customer digital experiences.

As I mentioned previously, we also announced the acquisition of Delta Financial Systems in October 2020 for a total consideration of up to A$41.5 million. Delta is an award-winning UK software company that provides technology to power complex pensions administration in the UK market. The acquisition broadens Bravura's product suite, in which

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Delta's products represent a natural extension to Bravura's core Sonata offering. The acquisition also provides opportunity to offer Bravura's other products to Delta's client base.

onlyOur solid balance sheet and skilled management team combined with the long-term nature of our client relationships positions the company for significant long-term growth.

CEO Transition

In August this year, we announced after thirteen years of dedicated service, Mr. Tony Klim was stepping down from the Chief Executive Officer role and the appointment of our Global COO, Nick Parsons, as the company's Chief Executive Officer, effective 3 September 2021.

useFor our shareholders who have not yet had the opportunity to meet Nick, he joined Bravura as its Chief Technology Officer in 2007 and has undertaken a wide range of senior leadership roles in the business during his tenure including Business Development Director and more recently as Global COO. Based in London, Nick has over 30 years of experience in the IT industry specialising in financial sector solutions.

The Board is extremely grateful for Tony's leadership and service to the company over many years and are delighted Nick accepted the offer to be appointed Bravura's Chief Executive Officer. His appointment ensures a smooth

transition of that role, given his deep industry expertise, outstanding client relationships, and long tenure with personalBravura. We are extremely confident Nick will continue to meet and exceed the expectations of our clients,

employees and successfully deliver our strategy, supporting ongoing growth in shareholder value.

Strategy and Growth

In FY21, Bravura's strategic direction was underpinned by our $50.4 million investment in R&D focused on automation, digital self-service modules and other microservices, as well as our recent acquisitions. We also continued to progress our commercial strategy of transitioning from a traditional revenue model to consumption- based pricing. This approach enables our clients to spread their tech investment over a longer period, lower their cost to serve by buying only what they need, and access greater automation and digital tools.

The Delta acquisition provides us with capability in the complex UK pensions - SIPP and SSAS - markets. And the integration of our FY20 acquisitions - Midwinter and FinoComp - are making a valuable addition to Bravura's new ecosystem of microservices and generating significant client interest and uptake.

This ecosystem of flexible products and services is ideally placed to help new and existing clients reduce costs through Forautomation, while also meeting demand for digital first experiences through best of breed technologies. Having honed our offering in FY21, Bravura is confident in broadening our total addressable market and returning to growth

in the years ahead.

Acknowledgments

On behalf of the Board, I would like to thank our valued shareholders for their commitment to Bravura Solutions over the past financial year. I welcome our new shareholders who have invested in our business for the next stage of Bravura's growth journey. We appreciate the trust you have placed in us to deliver on our business goals.

We also again thank and acknowledge Tony Klim's leadership, service and dedication to Bravura over many years.

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Under the leadership of Nick Parsons and his executive team, we remain confident in delivering on our strategic objectives for the year and on our ambitions for continued growth into the future.

onlyFinally, I would like to take this opportunity to thank our Bravura staff of over 1,400 and all of our business partners, ocated around the world, for their efforts and commitment during the year. The company's many achievements would not have been possible without their hard work and commitment.

I also thank the ongoing support of our clients, especially throughout the challenges of the past two years. Our dedicated team remains committed to continuing to develop and deliver innovative and world-class solutions that meet your needs.

useI will now hand over to our CEO, Nick Parsons, to discuss Bravura's operational highlights and growth strategy in more detail.

personalFor

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2021 Annual General Meeting

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I troduction

Thank you, Neil, and good afternoon.

2021 was a challenging year and I'm pleased to say Bravura rose to meet the challenge and deliver a year of solid financial performance, despite a continued impact from COVID-19.The strength and resilience of the business is a testament to our great people and the great work of my predecessor, Tony Klim, who I had the pleasure of working

useclosely with over a number of years and as I stepped into the CEO role.

Bravura remains well-positionedto continue its trajectory of sustainable growth. We have responded to the challenging market conditions, particularly in the UK, by evolving Bravura's strategy to stay well ahead of client needs. This will lead to greater flexibility for clients in the speed of their implementation and will help them smooth their IT spend.

FY21 results

personalAfter four consecutive years of growth across all our key financial metrics, the unprecedented impact of COVID 19 on our UK project work and the sales pipeline in 2021 resulted in an 11% decline in total revenues, a 15% decline in

EBITDA and a 14% decline in Reported NPAT. It is pleasing to note, however, that the FY21 Reported NPAT of $34.6 million was towards the top end of our guidance and represents a solid performance in the market environment.

While COVID-19did negatively impact our UK business in FY2021, in APAC, Bravura's work with clients and prospects continued to progress well, with greater sales activity, albeit over longer timeframes. In Australia, we were able to leverage the consolidation in superannuation to sell Sonata Alta to deliver cost savings to providers.

In the UK, the pandemic created business hesitancy around new contracts, projects and professional services work, however, UK presales activity remained high as the vaccine rollout restored business confidence. Bravura also focussed on cost controls to partially offset the impact of COVID-19.In the first half of the financial year, we undertook headcount reduction while still retaining key talent for our return to growth. The associated restructuring achieved annual savings of A$11.5 million.

Our recent acquisition of Delta also made a positive revenue and EBITDA contribution, while our Midwinter and FinoComp acquisitions demonstrated significant traction.

ForThe resilience shown by the business during FY2021 is a reflection of the long-termnature of Bravura's client relationships, our high proportion of recurring revenue and these strategic acquisitions. It is also the result of the continuing evolution of our commercial and technology strategies. In FY2021, we worked across our product portfolio to increase componentisation and build out microservices, developing Sonata Alta, improving automation, advancing cloud enablement and expanding our digital-firstand advice capabilities. In doing so, we moved towards a consumption-basedmodel and an ecosystem of microservices. Going forward, these new technologies will prove essential for providers seeking to respond to increasing margin pressures and meet rising customer expectations for digital-firstfinancial services that match their everyday tech experiences.

This evolution of Bravura's commercial and technology strategies expands the total addressable market and moves the business towards a higher proportion of Contracted Recurring Revenue, up 15% in FY2021. It is also aligned with our mission of developing innovative technology solutions that power the world's financial institutions. The COVID-

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