Transcript Inset SAI Global logo & The better business people tag

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Gateways to the world
Ross Wraight
Chief Executive Officer
Sydney
10 April 2006
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History - SAI Global & Standards Australia
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In December 2003 Standards Australia sold all of its commercial
undertakings into SAI Global
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Simultaneously SAI Global listed on the ASX
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SAI Global is now an independent company with a broad,
mainly institutional shareholder base
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Largest shareholder owns around 10%
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Business Summary
SAI Global is an international professional services
company operating in the standards, regulatory and
compliance markets.
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Listed on the ASX in the S&P/ASX 300 with a
market cap of $350M
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2005/6 Est. revenues $150+ million
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About $70M in Europe, North America and Asia
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2004/5 EBITDA of $19.4 million
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1st half 2005/6 revenue of $68.9M and EBITDA
$12.8M
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740 staff with 260 offshore
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Physical operations in more than 20 countries
including Australia, NZ, Indonesia, Mexico, India,
the UK, Europe, Thailand & US
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Customers all over the world
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Business Divisions
Four synergistic businesses
Business Publishing
Publishes, distributes and provides added value
services in standards, legal and property markets
Compliance Services
Delivers regulatory and compliance management,
training, awareness and process solutions to global
corporations and large government agencies
Professional Services
Provides training and consulting services related to
standards and business improvement methodologies
Assurance Services
Provides conformity assessment services to
management system and product standards.
EBITDA
Sales
Business
Publishing
35%
Assurance
Services
39%
Compliance
Services
11%
Professional
Services
15%
Assurance
Services
34%
Compliance
Services
14%
Business
Publishing
45%
Prof essional
Services
7%
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Business Growth
SAI Global Historical Performance
Financial
Years ($M)
2001
2002
2003
2004
2005
AIFRS
1st Half
2006
Revenue
68.3
73.5
83.2
96.6
105.9
68.9
EBITDA
7.0
10.3
12.2
16.2
19.4
12.8
EBIT
8.6
12.6
14.9
9.2
NPAT
5.6
8.3
11.4
5.9
Adjusted
NPAT
7.8
10.5
14.1
8.8
EPS (Cents)
5.6
8.3
11.3
5.5
Cash EPS
(cents)
7.3
10.4
14.0
8.2
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Key Performance Indicators
Normalised
04/05
Pro-forma
03/04
Pro-forma
02/03
Gross margin (%)
59.7
59.5
55.9
EBITDA margin (%)
18.7
16.8
15.1
EBIT margin (%)
14.4
13.1
10.6
NPAT/sales (%)
10.5
8.5
6.8
Cost/income ratio (%)
83.2
84.7
89.2
Earnings per share (cents)
11.3
8.3
5.6
Adjusted earnings per share (cents)
14.0
10.4
7.3
9.2
7.4
n/a
Dividends per share (cents)
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Business Model – SAI Global
Sources of
Intellectual
Property
Commercialisation of Intellectual Property
Business
Publishing
Develop
and
license
Intellectual
Property
Publish
and
distribute
(35% of
revenue)
Compliance
Services
Deliver
compliance,
regulatory
awareness
solutions
(11.0% of
revenue)
Professional
Services
Enhance
through
training &
consulting
services
(15% of
revenue)
Assurance
Services
Provide
assurance
through
conformity
assessment &
certification:
(39% of
revenue)
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Value proposition for our services
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Helping our customers improve their business
Taking the burden out of regulatory and internal
compliance
Protecting brands and reputations
Pushing information and training where and when its
needed
Simplifying cross border trade and language exchange
Providing supply chain confidence
Improving and sustaining business
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Business Competitors
• The first organization of our type to list on a stock exchange
and there is no direct equivalent
• In the international technical publishing space we compete
with IHS, Reed Elsevier, Thomson and national standards
bodies
• In the regulatory compliance space there are numerous
competitors but few who offer end-to-end solutions as we do
• The training and consulting market is highly fragmented and
we have numerous competitors
• In the certification space we compete with organizations such
as SGS, Lloyds Register, BSI & Bureau Veritas
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Global Industry Demand Drivers
Regulation
Demand to manage risks and
compliance
Demand for supply chain
confidence
Demand for continuous
business improvement
Greater
demand for
standards,
compliance,
training and
assurance
services
Increasing
industry
turnover
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SAI Key Features
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Leading Australian market position
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Strong branding
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Key intellectual property
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Expanding offshore
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Global capability
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Strong cash flows and low capital expenditure
requirements
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Business Publishing Division
1st Half
05/06
04/05
Pro-forma
03/04
Pro-forma
03/02
$M
$M
$M
$M
Revenue
23.3
30.3
29.4
27.6
EDITDA
6.8
9.0
8.3
7.3
EBITDA
Margin (%)
29.0
29.8
28.4
26.3
Revenue
EBITDA
31,000
10,000
30,000
9,000
29,000
8,000
28,000
7,000
27,000
6,000
26,000
5,000
25,000
4,000
24,000
3,000
00/01
01/02
02/03
03/04
04/05
00/01
01/02
02/03
03/04
04/05
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Business Publishing Strategy
Features
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Mainly recurrent revenue
Little competitive pressure in Standards market
Efficient, transportable and scalable business model
Business model produces excellent financial outcomes
2005 Anstat acquisition adds $20M revenue in full year
Trends
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Increasing use of electronic delivery services
Limited growth opportunity in traditional geographic and
Standards product markets
Penetration of non-traditional markets from acquisitions
such as the recent Anstat purchase
Platform services to others
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Business Publishing Strategy
Strategic Intent
Build a $100+ million technical publishing, distribution and
information business
Key Enablers
• Entrepreneurial approach to opportunity identification
and closure
• Aggressive targeting of new business opportunities
• Maintenance of “state of the art” delivery platform
• Maintenance of existing business
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Compliance Services
Features
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Fragmented market
Blue chip client base
End-to-end solution capability
Growing recurring revenue base
Solutions underpinned by OCCAM and Lawlex technology
Trends
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Growing regulatory demand for compliance
Clients seeking cost effective solutions in multiple
languages and countries.
Consolidation occurring at the technology end
OCCAM and Lawlex toolsets developing as products in
their own right
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Compliance Services Strategy
Strategic Intent
Establish SAI Global compliance services as the leading global
scale business in the international compliance management,
training, awareness and solutions market
Key Enablers
• Maintenance/improvement of core underlying
business performance
• People capable of delivering the vision
• Presence in key geographic market
• Content capability and range
• Toolset development capability
• Effective pricing and marketing models for solutions,
retail and tools markets
• Developing opportunities through SAI Global relationships
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Professional Services Division
1st Half
05/06
04/05
Pro-forma
03/04
Pro-forma
03/02
$M
$M
$M
$M
Revenue
10.4
23.0
22.2
14.0
EDITDA
0.7
1.8
1.1
0.4
EBITDA
Margin (%)
6.7
8.0
5.0
2.9
EBITDA
Revenue
2,000
25,000
1,500
20,000
1,000
15,000
500
10,000
0
5,000
(500)
(1,000)
0
00/01
01/02
02/03
03/04
04/05
00/01
01/02
02/03
03/04
04/05
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Professional Services
Features
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Business development component of our value chain
Few recurring revenue streams with services seen as
discretionary expenditure by customers
Need to improve growth and profit trends
Consulting model still developing
Trends
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Traditional standards based product sales depend on new
product releases
Significant growth in business improvement products
Electronic training or blended learning model starting to
grow strongly – technology now available through
compliance services
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Professional Services
Strategic Intent
Diversify product range and develop sources of recurring
revenue that drive growth and profitability improvement
Key Enablers
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Continue to develop non-standards based products
Exploiting electronic training through OCCAM platform
Development of information based products
Review opportunities for seminars business
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Assurance Services Division
1st Half
05/06
04/05
Pro-forma
03/04
Pro-forma
03/02
$M
$M
$M
$M
Revenue
28.4
49.9
44.0
39.6
EDITDA
4.6
8.2
6.7
4.5
EBITDA
Margin (%)
16.4
16.5
15.3
11.5
EBITDA
Revenue
55,000
9,000
50,000
8,000
7,000
45,000
6,000
40,000
5,000
35,000
4,000
3,000
30,000
2,000
25,000
1,000
0
20,000
00/01
01/02
02/03
03/04
04/05
00/01
01/02
02/03
03/04
04/05
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Assurance Services
Features
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Recurrent revenue streams
Strong Australian market share
Competitive advantage from “Five Ticks” StandardsMark
Solid growth and profit model
Trends
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Supplier driven industry consolidation
Customer driven industry consolidation
Consumer and customer confidence
Brand protection
Major product maturity in developed economies
Growth in new products
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Assurance Services
Strategic Intent
Establish SAI Global as a leading international assurance business
Key Enablers
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Physical presence in key geographic markets
Integrated value added customer offering i.e. QMS, EMS,
workplace safety, ISMS;
Grow sector schemes; Food safety; corporate governance
and social responsibility
Consistent international delivery platform
People capable of delivering
International market intelligence
Brand/image development
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Shareholder Structure
• 112.9 million shares issued:
94 million - Institutions
19 million - Retail – including
9.6 million – key Anstat staff (escrowed 12 mths)
2.2 million - key Easy i staff (escrowed 12 mths)
• Market capitalisation $350M April 2006
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Strategic Intent
• Build SAI Global into an international brand
• Continue to leverage ITC, Easy i ,Anstat and web
publishing capabilities.
• Develop brand across Asia and the Northern
hemisphere.
• Continue to consolidate acquisitions.
• Bulk up North America, Europe and Asia.
• Improve margins and productivity.
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Looking forward
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Strong business model which is easily scalable
Improving organic growth
Continued industry rationalization in response to customer
demand and globalization
Listed structure, balance sheet and cash generation
capacity provides opportunity for continued growth through
acquisitions
Positioned to continue to grow revenue and profits globally
More information? Visit www.saiglobal.com