Jasper McMahonBusiness Development Director: Jasper McMahon Business Development Director CIC Securities IT Conference Paris 22nd October 2002


Agenda: Agenda Introduction – group overview Our markets Our market positioning Our operational approach and financial performance Summary


Misys – group overview: Misys – group overview Core activity Revenue mix


Misys – group performance: Misys – group performance Banking & Securities Division £303 million £63 million 3, 000 Healthcare Systems Division Financial Services Division Revenue Profit Employees £286 million £50 million 2, 200 £447 million £30 million 1, 300 Locations Offices in 28 + countries 90%+ of world top 50 banks >60% of world top 250 banks Offices in 62 US locations 85, 000 physicians 1, 200 hospitals 600 homecare providers Offices in 7 UK locations 7, 000+ IFAs (RIs) in Misys networks 2, 000 general insurance brokers Note: Adjusted to exclude goodwill amortisation, exceptional items. Customers


Comparison of cumulative earnings and cash flow per share: Comparison of cumulative earnings and cash flow per share p


IFA Networks Business: IFA Networks Business Strong business model Leading market position Well-placed to exploit changes in regulatory regime Built from inception by Misys but … …not a software products business Planned flotation to maximise shareholder value Misys group focus on software products markets


Misys: building a world class software products group: Misys: building a world class software products group Market focus: the two largest software products markets – banking & healthcare Management team: depth of experience & discipline Specialist skills: customer service product management technology management salesforce management financial management Financial strength: resilient recurring revenues, strong cash flow


Misys strategy: Misys strategy Our objective How we achieve it By being in markets with strong underlying growth By exploiting strong market positions and growing share By managing our businesses efficiently and maximising our margins To deliver ‘mid-teens’ growth over the medium term


Misys strategy: Misys strategy Our objective How we achieve it By being in markets with strong underlying growth By exploiting strong market positions and growing share By managing our businesses efficiently and maximising our margins To deliver ‘mid-teens’ growth over the medium term


Target market characteristics: Target market characteristics Strong growth in underlying market Growth in spend on IT/services Growth in share of software products / transaction processing Consolidation within software/services market Banking & Securities US Healthcare         Regulation a key growth driver  


Banking – underlying market growth: Banking – underlying market growth Volume of messages carried by SWIFT network Source: SWIFT April 2002


Banking & securities software marketsEstimated annual spend – ILF + maintenance: Banking & securities software markets Estimated annual spend – ILF + maintenance Retail Corporate Treasury Securities Asset management Total = US $7.1bn Source: Misys estimates


Banking – mix of business by order sizeILF order intake 01-02: Banking – mix of business by order size ILF order intake 01-02 £1.0m


US Healthcare – underlying market($ trillions): US Healthcare – underlying market ($ trillions) CAGR = 8% 15.9% GDP 13.1% GDP Source: Centers for Medicare & Medicaid Services (formerly HCFA), March 2001


Healthcare – exploiting core market positions to enter attractive new markets: Healthcare – exploiting core market positions to enter attractive new markets Core markets New/emerging markets Practice management systems Financial transactions (EDI) Acute care departmental systems Ambulatory clinical systems (EMR) Clinical, administrative transactions (EDI) Acute care enterprise clinical systems 10% 10% 5% 20%+ 100%+ 20%+ x% Approximate market growth rate


Misys strategy: Misys strategy Our objective How we achieve it By being in markets with strong underlying growth By exploiting strong market positions and growing share By managing our businesses efficiently and maximising our margins To deliver ‘mid-teens’ growth over the medium term


Exploiting strong market positions and growing share : Exploiting strong market positions and growing share We have leading positions in each of our target markets


Leading market positions – Banking & Securities : Leading market positions – Banking & Securities Misys Temenos I-flex Trema Sungard New name sales 2001 38 35 29 11 6 1,163 450 145 129 45 Live sites International Banking (back office systems) Source: IBS Magazine, March 2002


Leading market positions – Healthcare : Ambulatory Practice management systems Transaction processing Clinical systems (EMR) Departmental systems Home care clinical/ financial systems Acute Post acute Market share Market position 11% 12% c. 5% 11% c. 5% No 1 vendor in core mid market segments Leading provider of transaction processing services Top 5 vendor in emerging market No 1 vendor in largest departmental market Top 5 vendor Market Leading market positions – Healthcare


Exploiting strong market positions and growing share : Exploiting strong market positions and growing share We have leading positions in each of our target markets We build these positions through a combination of acquisition and organic development


Banking – exploiting distribution strength to deliver organic growth: Banking – exploiting distribution strength to deliver organic growth 93 94 95 96 97 98 99 00 01 OPICS cumulative customer base Pre-acquisition: 7 sales staff in 3 centres 60 customers in 19 countries Post-acquisition: 134 sales staff in 24 centres 210 customers in 61 countries


Exploiting strong market positions and growing share : Exploiting strong market positions and growing share We have leading positions in each of our target markets We build these positions through a combination of acquisition and organic development We strengthen our competitive advantage by targeted investment in development and technology


Building competitive advantage in the product portfolio: Building competitive advantage in the product portfolio Business requirements Examples of Misys development initiatives Market leading functionality Robust, ‘future proof’ technology Seamless linkages between best of breed products Summit: aggressive development to broaden instrument coverage and extend from front to middle/back office Midas: development programme employing Java to create modern, thin client solution Meridian: modern product (Java programming and XML messaging) developed internally and now employed across whole Banking Division portfolio


Technological change creates opportunity: Technological change creates opportunity We are witnessing a ‘once in a generation’ shift in technology Adoption of thin client solutions will be widespread among large enterprises – especially banks .NET is the biggest change in Microsoft technology since Windows 3.1 Java is the emerging standard for server developments Misys is well placed to take advantage of this shift We have skills in the relevant new technologies We have the scale to invest efficiently in substantial development The transition in our product portfolio will be evolutionary Much of the necessary development work already well advanced


Exploiting strong market positions and growing share : Exploiting strong market positions and growing share We have leading positions in each of our target markets We build these positions through a combination of acquisition and organic development We strengthen our competitive advantage by targeted investment in development and technology We exploit the linkages between our businesses to build competitive advantage


Healthcare – exploiting operational linkages between businesses: Healthcare – exploiting operational linkages between businesses Market Physicians Integrated delivery networks (IDNs) Fastest growing segment Disproportionate IT spend Hospitals


Misys strategy: Misys strategy Our objective How we achieve it By being in markets with strong underlying growth By exploiting strong market positions and growing share By managing our businesses efficiently and maximising our margins To deliver ‘mid-teens’ growth over the medium term


Managing our businesses efficiently: Managing our businesses efficiently We are an experienced management team, with a strong operational culture, applying general management disciplines to technology-based businesses


Managing our businesses efficiently: Managing our businesses efficiently We are an experienced management team, with a strong operational culture, applying general management disciplines to technology-based businesses We focus on establishing our own, strong distribution channels


Slide30: Moscow Luxembourg Utrecht Tokyo Sydney Hong Kong Paris Singapore Zurich Manila Frankfurt London Brussels New York Madrid Lisbon Dubai Kuala Lumpur Johannesburg Riga Jakarta Mexico City Bahrain Milan Seattle Establishing our own strong, distribution channels – Banking Bangkok Bangalore Dublin Warsaw Beijing


Slide31: Raleigh Training, Sales and Engineering Support Offices Misys Healthcare Systems head offices Tucson Establishing our own strong, distribution channels – Healthcare


Managing our businesses efficiently: Managing our businesses efficiently We are an experienced management team, with a strong operational culture, applying general management disciplines to technology-based businesses We focus on establishing our own, strong distribution channels We focus on establishing efficient ‘manufacturing’ processes


Establishing efficient manufacturing processes: Establishing efficient manufacturing processes Banking & Securities Division Healthcare Systems Division Financial Services Division Midas: core development, maintenance centre in Manila* Equation: core development, maintenance centre in Manila *; ongoing user interface projects in India Retail: core development centre in Bangalore * Opics: major development centre in Mexico * planned Summit: ongoing development projects in Romania Risk: ongoing development projects in India Physician Systems: major Tiger project undertaken in India; ongoing projects in Ukraine Hospital Systems: core development centre in Bangalore * MFS: core Oasys development project undertaken in India MIFAS: Business Monitoring Unit in India planned * Misys owned facilities


Managing our businesses efficiently: Managing our businesses efficiently We are an experienced management team, with a strong operational culture, applying general management disciplines to technology-based businesses We focus on establishing our own, strong distribution channels We focus on establishing efficient manufacturing processes And we focus – relentlessly – on cash


A relentless focus on cash: A relentless focus on cash Physician Systems Debtor Days


Misys strategy: Misys strategy Our objective How we achieve it By being in markets with strong underlying growth By exploiting strong market positions and growing share By managing our businesses efficiently and maximising our margins To deliver ‘mid-teens’ growth over the medium term


Misys: building a world class software products group: Misys: building a world class software products group Market focus: the two largest software products markets – banking & healthcare Management team: depth of experience & discipline Specialist skills: customer service product management technology management salesforce management financial management Financial strength: resilient recurring revenues, strong cash flow