Transcript Inset SAI Global logo & The better business people tag

1
The Gateway to World Business
Emerging Leaders
Conference
May 2006
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Our Business
SAI Global is an international professional services company
operating in the international standards, regulatory and compliance
markets. SAI provides a gateway for:
-
Business, legal, regulatory, technical and standards information
-
Regulatory, risk and compliance training and awareness
-
Business improvement, training and consulting services
-
Assurance services in the area of standardization, conformity
assessment and business improvement
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Business Summary
–
SAI is a top 300 company listed on the ASX with a
market capitalisation $360M, May 4, 2006
–
2004/5 revenues A$106 million
–
2004/5 EBITDA of A$19.4 million
–
After full year of acquisitions 2006/07 revenue in
excess of A$190 million
–
740 staff with 281 offshore
–
Physical operations in Europe, United States,
Thailand, Indonesia, Mexico, India, Australia and
New Zealand
–
Customers across the world
–
70% of revenue is annuity type
–
Capex is small
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Business Growth
SAI Global Historical Performance
Financial Years
($M)
AGAAP
2001
AGAAP
2002
AGAAP
2003
AGAAP
2004
AIFRS
2005
AIFRS
1st Half 06
Revenue
68.3
73.5
83.2
96.6
105.9
68.9
EBITDA
7.0
10.3
12.2
16.2
19.2
12.8
EBIT
8.6
12.6
15.6
9.2
NPAT
5.6
8.3
11.5
5.9
Adjusted
NPAT
6.2
9.8
13.4
8.8
EPS(cents)
5.6
8.3
11.4
5.5
Cash EPS
(cents)
7.3
10.4
13.3
8.2
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Business Competitors
• SAI is the first organization of its type to list on a stock
exchange and has no direct equivalent
• In the international technical publishing space SAI competes
with, IHS, Reed Elsevier, Thomson and national standards
bodies
• Numerous competitors in regulatory compliance space but
few offer SAI’s end-to-end solutions
• The training and consulting market is highly fragmented and
SAI has numerous competitors
• In the certification space SAI competes with organizations
such as SGS, Lloyds Register, BSI & Bureau Veritas
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Industry Demand Drivers
Regulation
Demand to manage risks and
compliance
Globalization
Demand for supply chain
confidence
Demand for continuous business
improvement
Greater
demand for
standards
related
training and
assurance
services
Increasing
industry
turnover
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Value proposition for our services
In essence, SAI Global helps organizations comply with the
requirements that shape the business world, it:
– Provides easy on-line access to millions of items of
Standards, regulatory and technical information
– Takes the burden out of regulatory and internal compliance
– Protects brands and reputations
– Pushes information and training where and when its needed
– Simplifies cross border and language exchange
– Provides supply chain confidence
– Improves and sustains business
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Business Model - SAI Global
Sources of
Intellectual
Property
Develop
&
license
Intellectual
Property
Commercialisation of Intellectual Property
Business
Publishing
Compliance
Services
Publish,
Index
& distribute
(39% of
revenue)
Deliver
compliance,
regulatory
awareness
solutions (9%
of revenue)
Professional
Services
Enhance
through
training &
consulting
services
(11% of
revenue)
Assurance
Services
Provide
assurance
through
conformity
assessment &
certification:
(41% of
revenue)
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Business Overview – Business Mix
Revenue by business - pre ILI
Publishing
32%
Assurance
45%
Revenue by business - post ILI
Assurance
41%
Compliance
10%
Professional
Services
13%
EBITDA by business - pre ILI
Professional
Compliance
Services
9%
11%
EBITDA by business - post ILI
Assurance
26%
Assurance
33%
Publishing
50%
Professional
Services
4%
Compliance
13%
Publishing
39%
Professional
Services
3%
Compliance
10%
Publishing
61%
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Strategic Rationale – Geographic Mix
Revenue by region - pre ILI
Europe
18%
US
14%
Other
1%
Other
1%
Europe
23%
Australia
67%
EBITDA by region - pre ILI
Europe
16%
Revenue by region - post ILI
Australia
60%
US
16%
EBITDA by region - post ILI
Other
1%
Other
1%
Europe
29%
US
7%
Australia
76%
Australia
59%
US
11%
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Business Publishing Gateway
Build a $100 million plus technical publishing, distribution and
Revenue
31,000
information business
29,000
27,000
25,000
•
23,000
21,000
19,000
17,000
15,000
00/01
01/02
02/03
03/04
04/05
1H
05/06
•
•
•
•
•
EBITDA
10,000
9,000
8,000
7,000
•
6,000
5,000
4,000
3,000
00/01
01/02
02/03
03/04
04/05
1H
05/06
Catalogue of more than 700,000 Standards and 150 million
database items
Mainly recurrent revenue
Business model produces excellent financial outcomes and is
efficient, transportable and scalable
Increasing use of electronic delivery services
Growth opportunity in global Standards and database markets
Penetration of non-traditional markets through Anstat and ILI
acquisitions
Aggressive targeting of new business opportunities
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Professional Services Gateway
Diversify product range and develop sources of recurring revenue
that drive growth and profitability improvement
Revenue
25,000
20,000
15,000
10,000
5,000
0
00/01
01/02
02/03
03/04
04/05
1H
05/06
EBITDA
2,000
1,500
1,000
500
0
(500)
(1,000)
00/01
01/02
02/03
03/04
04/05
1H
05/06
•
•
•
•
•
•
•
Continue to develop non-standards based products
Development of information based products
Business development component of our value chain
Few recurring revenue streams
Standards based product sales depend on new product releases
Significant growth in business improvement products
Electronic training model starting to grow strongly (technology
now available through compliance services)
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Assurance Services Gateway
Establish SAI Global as a leading international assurance business
Revenue
60,000
•
•
•
50,000
40,000
30,000
20,000
10,000
0
00/01
01/02
02/03
03/04
04/05
1H
05/06
•
•
•
EBITDA
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
00/01
01/02
02/03
•
•
03/04
04/05
1H
05/06
Recurrent revenue streams, solid growth and profit model
Physical presence in key geographic markets
Products deliver brand protection, consumer and customer
confidence
Integrated offering i.e. QMS, EMS, workplace safety, ISMS
Consistent international delivery platform with people capable of
delivering
Competitive advantage from “Five Ticks” StandardsMark
Supplier and customer driven industry consolidation
Growth in new products such as food safety, corporate
governance and social responsibility
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Acquisition History
•
•
SAI Global has made 12 acquisitions with seven being
completed since listing in December 2003, most recent:

Easy i - May 2005 - A$28.3 million

Anstat - August 2005 – A$50 million

EFSIS December 2005 - A$12 million

CCS March 2006 – A$720 thousand

ILI May 2006 - A$81 million
All acquisitions continue to perform in-line with guidance
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ILI Acquisition - Overview
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ILI a key part of SAI’s strategic intent to build a A$100+ million
revenue, international technical publishing, distribution and
information business

Annualized publishing revenues will now exceed A$70 million, up from current
A$50 million

Establishes SAI Global as a significant international competitor in the standards
and technical information space

Delivers front end to SAI’s business model in Europe and North America

Delivers a major and stable annuity earnings engine

Broadens the product base through database services

Provides the opportunity to tender for major international contracts

Further reduces reliance on individual publishing contracts
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ILI Business Overview
• ILI is an international standards publishing and database
subscription services business
• Expected FY2006 revenue of A$20.1 million
 51% from sale of international standards
 49% from database subscription services
 Revenue split 1/3 each UK, other Europe and North America
• Expected FY2006 EBIT of A$8.4 million
 27% from sale of international standards
 73% from database subscription services
• ILI is based in the UK with operations in other parts of Europe
and North America
• 50 employees (35 in the UK and 15 in the USA)
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ILI Business Overview – IP Providers
USA Military Specifications
and many others
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ILI Business Overview – Publications
• Sales of standards provide 51% of ILI’s revenue and 27% of ILI’s EBIT
• Licences to sell standards are not limited to territory and have different
royalty arrangements depending on supplier
• Non-exclusive licences with more than 250 international standards
bodies including BSI (UK), ASTM (USA) and NFPA
• Exclusive distributor of Irish Standards – agreement similar to SAI Global
arrangement with Standards Australia
• Distributor of USA Military Specifications
• Sales are both hard copy and electronic depending on supplier
agreements and customer requirements
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ILI Business Overview - Databases
• Database subscription sales are a major profit driver of the
business - 49% of revenue and 73% of EBIT, a trend that is likely to
grow
• 100% subscription service – provides access to bibliographic
searchable databases that allow customers to quickly identify the
standard or specification that they require
• Key databases are:
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Standards Infobase (700,000 Standards)
Metals and Materials Infobases (14,000 related Standards and
materials and 70,000 grades)
Eurolaw (Industry treaties, directives, regulation and case law)
Logicom (150 million items)
• Logicom currently has only one competitor in the USA government
procurement space
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Financial Information – ILI Historical
Trading and FY2007 Projections
A$ 000's
Proforma
FY2003
Proforma
FY2004
Proforma
FY2005
Proforma
FY2006
Revenue
18,759
19,012
19,570
20,109
2.3%
21,174
5.3%
EBITDA
6,436
6,659
7,564
8,443
9.5%
9,290
10.0%
EBIT
6,280
6,527
7,480
8,384
10.1%
9,230
10.1%
EBITDA Margin
EBIT Margin
34.3%
33.5%
35.0%
34.3%
38.7%
38.2%
42.0%
41.7%
1
1
Assumes FX rate of A$1 = US$0.74
Projected
CAGR
FY2007
43.9%
43.6%
Growth
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FY2006 Group Outlook
•
Existing businesses continue to trade well
•
Recent acquisitions are trading in-line with guidance
provided
•
More acquisitions possible as part of industry
rationalization
•
More information? Visit www.saiglobal.com or call Investor
Relations on +61 2 8206 6863