Reports Analyst Briefing Note Brady | Página 2

straightforward  and  solutions  can  be  scaled  quickly  and  easily  to  meet  the  changing  needs  of  a  client’s  business.  By  employing  their  SOA  and  Cloud   Technologies,  Brady’s  aim  is  to  deliver  a  powerful  and  flexible  set  of  ‘best  of  breed’  enterprise  solutions  and  services.   Brady  offers  a  range  of  software  products  and  services  across  all  commodities  and  metals  recycling  as  follows:   Brady   Energy   –   Includes   ETRM,   a   comprehensive   Energy   Trading   and   Risk   Management   solution;   Brady   Energy   Logistics,   a   pan-­‐European   solution   for   balancing,   scheduling   and   nomination   of   electric   power;   Brady   EDM,   an   energy   data   management   solution;   and   Brady   Energy   Settlement,  a  cross-­‐border  market  settlement  solution.   Brady  Commodities  -­‐  CTRM  solutions  for  metals,  raw  materials,  agricultural  and  soft  commodities  trading   Brady  Recycling  –  Includes  CRES,  Brady  Recycling’s  Commodity  Recycling  Enterprise  Solution  for  commercial  recyclers  and  brokers;  and  the   IMPACT  solution  for  mills/consumers  of  recycled  and  bulk  commodities   Company  Strategy   With  a  solid  balance  sheet,  significant  cash  reserves  and  access  to  a  variety  of  institutional  investors  via  the  AIM,  Brady  PLC  has  been  committed  to   an  aggressive  growth  strategy  and  is  now  challenging  the  top  CTRM  vendors  in  terms  of  revenues,  installed  base  and  span  of  operations.  Executing   this  strategy,  Brady  has  become  one  of  the  top  five  CTRM  vendors  on  a  revenue  basis  as  of  2012.  Gavin  Lavelle,  the  company’s  CEO,  has  continued   his  commitment  to  invest  in  existing  products,  services  and  technologies,  complemented  by  additional  acquisitions,  if  appropriate,  to  fuel  growth.   The  company’s  acquisition  strategy  to  date  has  been  mostly  additive,  acquiring  complimentary  products  that  broaden  its  functional  footprint  or   expand  its  coverage  into  new  commodities  and  geographies.  For  example,  starting  in  the  metals  derivative  and  refined  metals  markets,  Brady  has   extended  its  solution  set  to  cover  metal  raw  materials,  scrap  and  recycling.     In  the  European  energy  markets,  Brady’s  acquisition  of  two  nomi nally  competitive  Norway-­‐based  vendors  has  brought  some  consolidation  to  that   market   -­‐  Navita  had  a  strong  footprint  in  physical  energy  and  Viz  in  derivatives  and  risk  management.  With  those  acquisitions,  Brady  has   removed   both  product  and  management  overlap  to  gain  financial  efficiency  and  improve  pricing  power.  With  the  addition  of  a  pan  European  power  and  gas   scheduling  and  nomination  solution,  Brady  now  has  a  comprehensive  solution  for  the  majority  of  the  European  power  markets.  This  acquisition  has   also   provided   Brady   a   valuable   base   of   over   130   customers   for   future   product   up-­‐sell   and   additional   deep   industry   expertise.   Though   the   integration  of  the  Navita  acquisition  did  require  significant  time,  the  Brady  energy  product  line  and  strategy  has  now  been  fully  consolidated  and   the  approach  seems  now  to  be  bearing  fruit.     In   the   softs   commodity   market,   Brady   has   developed   a   sizable   list   of   clients   for   their   fully   integrated   solution   platform,   with   capabilities   across   trading,   risk,   operations,   settlement,   logistics,   trade   finance   and   accounting.   Though   initially   developed   for   the   mainland   European   trading   community,  Brady  has  seen  significant  growth  in  the  Americas,  African  and  Asian  continents,  most  notably  in  the  US  cotton  market.   Headquartered   in   London,   Brady   is   the   largest   native   European   CTRM   vendor   and   has   the   broadest   product   coverage   for   Europe.   While   the   company  is  acknowledged  as  a  global  leader  for  metals,  it  is  important  to  note  that  50%  of  the  new  business  signed  in  2014  was  outside  of  Europe,   a   significant   milestone   for   the   comapny.   As   of   the   EOY   2013,   some   72%   of   its   revenues   currently   originate   in   Europe   and   the   Middle   East,   with   the   Americas  now  representing  23%  and  Asia  5%.  Brady  is  progressively  working  to  continue  to  establish  itself  as  the  de  facto  leader  in  Europe  across   all  commodities,  while  simultaneously  further  extending  its  global  leadership  in  metals  and  extending  its  geographic  footprint  globally.     Its   CTRM   solution   for   bulk   commodities   and   metals   is   very   competitive   and   has   significant   global   appeal.   In   North   America,   Brady’s   recycling   product  (acquired  via  SAI)  has  given  the  company  the  leading  position  in  the  metals  recycling  space  as  well,  with  6  of  the  top  10  North  American   recycling  companies  reliant  on  the  software.  However,  Brady  must  use  its  European  strength  as  a  springboard  with  which  to  challenge  globally  and   in  some  instances,  this  may  mean  adding  features  and  functionality  or  further  acquisitions.   The  company  is  well  positioned  on  the  technology  side.  Its  products  are  based  on  a  set  of  technologies  that  facilitate  web/cloud  delivery  and  the   company  has  had  a  good  deal  of  success  in  growing  revenues  via  its  cloud-­‐based  offerings  in  line  with  their  goal  of  increasing  recurring  revenues.   The  company’s  success  to  date  bodes  well  for  future  growth  as  ComTech  does  expect  cloud  deployment  of  CTRM  products  to  grow  at  a  faster   rate   than   traditional   licensed   on-­‐premises   software   (15%   per   annum   compared   to   3-­‐5%   for   traditionally   installed   products).   In   line   with   its   cloud   strategy,   Brady   has   upgraded   its   services   and   support   capabilities   and   is   able   to   offer   a   broad-­‐based   package   of   services   around   cloud   deployment   that  many  of  its  competitors  are  not  yet  able  to  provide.   Though   the   company’s   acquisitions   to   date   are   viewed   as   “successful”,   each   new   acquisition   has   potential   risk   related   to   the   difficulties   of   integrating   technologies,   processes   and   cultures.   As   has   been   observed   in   the   past   with   other   vendors,   being   able   to   technically   integrate   and   optimize   the   product   portfolio   can   be   difficult,   as   can