Agenda

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Agenda

• 2003 Half Year Results
• Significant Achievements Last six Months
• Outlook

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2003 Half Year Results

• Record revenues up 13
• Expenses up 28
• Record RD expenditure up 12
• Profit down 18

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2002 Actual v 2003 Actual

• Business growing strongly in a difficult market
• Revenue (ex interest) up 13
• The problem
• Revenue growth below our expected target of 20
• Committed to a substantial investment program 12
  months ago
• Increased RD
• Increased staff levels in our regional service
  network
• Added approximately 100 new staff last year based
  on this assumption
• This year we are hit with 100 of these costs
  last year on average only 50 of these costs hit
  our PL

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2002 Actual v 2003 Actual
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Actions Taken

• Reset our costs to a lower Revenue Growth target
  for the next two years
• Maintain existing staff levels - Minimal new
  staff planned for this year
• Complete existing RD projects realise value
• People are our major asset maintain a positive
  culture
• Staff redeployed to where they can have the
  biggest impact
• Restructure of the company
• Discussed later
• Maintain dividend of two cents for the year
• We are confident with the way forward

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2002 Actual v 2003 Actual

• Balance sheet strong
• Cash 17.9m
• Debt/Equity 3.7
• Operating Cashflow 4.5m (vs NPAT 3.16m)
• Transparency of results all RD fully expensed
• On target for
• Return on Equity of 18
• Adjusted Return on Equity of 36
• Cash includes short term investments

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Comparative Performance - Revenues
Estimated figures only based on company
information
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Comparative Performance
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Comparative RD Expenditure
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Significant Achievements Last Six Months

• Signed 25 new contracts in the half year
• Strong performance in a difficult market!
• Finance One Suite continues to perform strongly
• Almost all deals involved Finance One
• Retail One gathers traction
• One new contract won
• Salvation Army (Southern Region)
• Strong Opportunities ahead
• People One gathers traction
• Five new contracts won
• Australian Ethical Investments
• Baulkham Shire Council (not signed as of Dec
  2002)
• City of Port Adelaide/Enfield
• Insearch
• Tasmanian Audit Office

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Significant Achievements Last Six Months

• Proclaim One
• Four new contracts won
• City of Burnside
• City of Port Adelaide/Enfield
• City of Stirling
• Marlborough District Council
• Leading supplier in Local Government in Australia
• Second Council in NZ (Marlborough District
  Council)
• Good opportunities going forward in NZ
• Student One
• New contract won
• Insearch
• Limited opportunities in the short-term
• Long term looks good as our competitors will
  struggle
• Strategy Last man standing
• Exploring opportunities in Malaysia

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Significant Achievements Last Six Months

• Continued penetration in New Zealand
• Four new contracts won
• Harbourside (NZ)
• Southland Building Society (NZ)
• State Services Commission (NZ)
• Marlborough District Council (NZ)
• Good opportunities going forward
• Continued penetration in Malaysia
• Two new contracts won
• Orbit Software Technologies Sdn Bhd (MA)
• Teliti Computers Sdn Bhd (MA)
• Difficult market reduce costs by employing
  locals

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Significant Achievements Last Six Months

• Continuing success with Project Services
• Three new contracts won
• Access Queensland
• Queensland Office of State Revenue
• Telwater Pty Ltd

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New Contracts By Sector

• Local Government
• Baulkham Hills Shire Council
• City of Burnside
• City of Port Adelaide/Enfield
• City of Stirling
• Marlborough District Council
• State/Federal Government
• Environmental Protection Authority of Victoria
• Harbourside New Zealand
• Public Trustee Queensland
• State Services Commission New Zealand
• Tasmanian Audit Office
• Access Queensland
• Queensland Office of State Revenue
• State Records South Australia

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New Contracts By Sector

• Corporate
• Australian Fast Foods Pty Limited (Red Rooster)
• Australian Ethical Investment
• Australian Wine and Brandy Corporation
• BP Valley Fuel Pty Ltd
• Enertrade
• Prime Infrastructure
• Southland Building Society NZ
• Teliti Computers Sdn Bhd
• Orbit Software Technologies Sdn Bhd
• Telwater Pty Ltd

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New Contracts By Sector

• Retail
• Salvation Army (Southern Region)
• Higher Education
• Insearch

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Significant Achievements Last Six Months

• Continuation of organisational restructure Act
  Locally, Think Globally
• Move from Departmental to Regional reporting
  lines - done
• Remove head-office General Managers - done
• Appointed Regional Managers - done
• Appointed Product Managers - done
• All costs posted to regions/products - done
• Forecast and business cases prepared by Regions
  Product Areas - done
• New reporting system to provide PL by Regions
  Product areas - done
• Incentives based on Profit (not Revenue) - in
  progress

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Significant Achievements Last Six Months

• Support Centre Initiative
• From the back end to become the front end of our
  company
• Restructured
• Integrated Help Desk and Development Team as one
  group
• Top line consultants with many years experience
  with our products to turnaround information
  requests quickly
• Top line developers to fix problems quickly and
  to undertake minor enhancements to improve
  product use-ability

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Significant Achievements Last Six Months

• Continued RD into
• Finance One Suite R10.2 February 2003
• Retail One and Sales One R10.2 February 2003
• People One R10.2 February 2003
• Proclaim One R9.1 March 2003
• Student One R2.4 August 2003
• ADF.NET R6.0 October 2003
• Continued RD into new technologies
• Microsoft .NET (MDF)
• J2EE (JDF)
• Continued RD into new generation of Smart
  Internet Applications
• ADF.NET nearing completion
• Finance One.NET has just started, with release
  planned for late 2003

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Significant Achievements Last Six Months

• Partnership with EMS Solution for Asset Intensive
  Industries
• City of Stirling
• Australian Inland Gas and Water
• Redcliffe City Council
• Partnership with Chameleon for Advanced Budgeting
• National Library
• Australian Victorian Arts Center
• Pine Rivers Shire Council
• First step to getting a deep understanding of new
  industries/sectors

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Significant Achievements Last Six Months

• Share Buy Back
• Shares bought back 19,679,092 (6.19)
• Average price 25.13 cents
• Total cost 4,944,372
• Improvement to EPS approximately 6.5

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Outlook for 2003 Full Year

• We are on track
• Good pipeline for the next half year

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Looking Forward

• Post Y2k indigestion
• Normal business replacement is approximately
  every eight to ten years for corporate
  applications
• Almost 40 of normal business occurred in the two
  years prior to Y2K

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10 Year Business Replacement Cycle for Enterprise
Applications

• 40 business done in two years to Y2K
• Expect some improvement in late 2003/2004 year
• Expect 2005 to return to normal levels

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Outlook for 2004 and 2005

• Expect lower level of revenue growth
• Manage our costs to trend with revenue growth
• Limit new staff
• Limit salary increases
• Tight control of general expenses
• Limit RD growth
• Translate revenue growth into profit growth

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Outlook for 2005

• Replacement of Y2k systems will begin
• The big issue will be customer satisfaction
• Those who lose customers vs Those who retain them
• Customers are a lot wiser they have made costly
  mistakes
• We have already started replacing our
  competitors systems

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Outlook for 2005

• What we are doing
• Keep our customers happy
• Support Centre Initiative
• Decentralised organisational structure allow us
  to act locally
• Account Management initiative
• Regular customer surveys
• Regular user conferences
• Our regional consultants not using third
  parties to do implementations
• State of the Art Technology
• .NET initiative
• Have our new products ready with strong reference
  base
• Retail One and People One

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Outlook for 2005

• Finance One
• Replacement of systems because of dissatisfaction
  in 2 Years
• Finance One will perform strongly because of its
  strong functionality, customer base and
  availability of Finance One.NET
• Retail One
• Older systems will need to be replaced
• Competitors old technology and not total
  solutions
• We need to build a strong reference base and
  round-off the product
• Expect to perform strongly because of our State
  of The Art technology coupled with full
  integration across Point of Sale, Supply Chain
  and Financials

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Outlook for 2005

• People One
• Older systems will need to be replaced
• Competitors old technology
• We need to build a strong reference base and
  round-off the product
• Challenge Human Resources is weak - needs to be
  addressed in the next two years
• Needs to be managed carefully because of RD
  control
• Expect to perform strongly because of our full
  integration between Timesheets, Payroll, HR and
  Financials

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Outlook for 2005

• Proclaim One
• Good opportunities going forward in both
  Australia and New Zealand
• Student One
• Limited opportunities in Australia considering
  geographical expansion into Asia
• New geographies for expansion
• Considering UK
• New markets being considered
• Professional services
• Asset intensive industries

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