Transcript Inset SAI Global logo & The better business people tag

1
Thinking Business
Full Year Results Presentation
Full Year Ended 30 June 2006
ASX Code: SAI
SAI Global Limited
ABN: 67 050 611 642
2
Agenda
1. Results and Highlights
2. Financial Overview
3. Operational Performance
4. Outlook
5. Q and A
3
1. Results Highlights
Ross Wraight
Chief Executive Officer
“Our business strategy is being executed delivering solid
financial outcomes. SAI Global has grown revenue and profit
strongly since listing in December 2003. These results
correlate directly with our strategic intent to build a global
company. We have now established SAI’s key business
capability in Europe, North America and Australia and made
good progress in the high growth Asian region.”
4
Consolidated Trends
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
30,000
25,000
20,000
15,000
10,000
5,000
0
00/01
01/02
02/03
03/04
04/05
05/06
00/01
01/02
Revenue
02/03
03/04
04/05
05/06
04/05
05/06
EBITDA
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
00/01
01/02
02/03
03/04
EBITDA Margin
04/05
05/06
00/01
01/02
02/03
03/04
NPAT
5
Financial Outcomes
–
Underlying Business Performance
• Revenue1 up 50.7% to $159.7 million,
• EBITDA up 56.2% to $30.1 million
–
AIFRS Reported Results
• NPAT up 20.7% to $14.0 million,
• EPS up 8.7% to 12.5 cents
–
Underlying Cash Earnings
• Cash earnings up 52.9% to $19.6 million,
• Cash earnings per share up 36.2% to 17.3 cents
1.
Excludes interest income
6
Financial Outcomes
•
Cost to income ratio down to 82.8% from 83.6%
•
Operating cash flow strong at $21.8 million up 43.4% from $15.2 million
•
Dividend per share of 10.4 cents up 13.0% from 9.2 cents last year
•
Total dividend payments (interim and final) of $13.4 million up 35.8%
•
Net assets up 175% from $70 million to $192.6 million
•
Conservatively geared balance sheet
•
Cash in the bank of $49.6 million (pre Anstat earn-out of $9.6 million)
7
Business Strategy Delivers
•
Strong Publishing & Assurance performances and the new Compliance Division
supported by Professional Services, drove the Company’s continued strong
revenue and profit growth
•
SAI Global’s business model now deployed in Europe, North America and
Australia
•
Business Publishing expanded and diversified with acquisitions of Anstat and ILI
•
Compliance Services enhanced with Lawlex
•
Further restructuring of Professional Services
•
Assurance Services scaled up with acquisitions of EFSIS and CCS and
operations commencing in Japan
•
Capital raising solidly supported
8
Market / Business Trends
•
Global industry trends remain favourable
•
Industry rationalization continues
•
Non-Australian revenues 31% of total in FY06, will increase in FY07
•
Global infrastructure rolling out to support next growth phase, ITC, global brand,
divisional management and enhanced corporate leaders in ITC, HR and
marketing in place
•
Balance sheet in strong shape with significant financing capacity available
9
2. Financial Overview
Geoff Richardson
Chief Financial Officer
10
Financial Summary1
FY06
$M
FY05
$M
Change
%
159.7
(129.6)
30.1
105.9
(86.7)
19.2
50.7
49.5
56.2
Depreciation
Amortization
EBIT
(2.6)
(5.5)
22.0
(1.8)
(2.1)
15.3
41.9
164.0
43.3
Finance costs - net
Profit before tax
Tax expense
Profit after tax
Minority interest
(3.1)
18.9
(4.8)
14.1
(0.1)
0.2
15.5
(3.9)
11.6
-
21.1
20.8
21.1
Net profit after tax (NPAT)
14.0
11.6
20.7
Revenue2
Operating expenses
EBITDA
1. All figures presented are in accordance with AIFRS
2. Excludes interest income
11
Reconciliation of NPAT to Cash Earnings
FY06
$'000s
FY05
$'000s
Change
%
14,038
11,634
20.7%
805
151
Amortization of identifiable intangible assets
5,494
2,081
Unwind of discount on earn-out
1,227
AIFRS reported NPAT
Non-cash items:
Equity based charge
-
21,564
13,866
Tax impact of non-cash items
(2,005)
(1,075)
Cash earnings2
19,559
12,791
52.9%
17.3
12.7
36.2%
1
Cash earnings per share (cents)
1. The amount by which the actual tax payments in respect of the year ended 30 June 2006 will exceed the income tax expense
reported. The income tax expense reported includes movements in deferred tax balances and over provisions from prior years..
2. No adjustment is made for depreciation as this charge is indicative of the annual capital investment made by the group.
12
Balance Sheet
FY06
$M
FY05
$M
Change
%
Cash
Intangibles
Other assets
Total assets
49.6
244.5
58.2
352.3
10.9
90.8
31.0
132.7
355.0%
169.3%
87.7%
165.5%
Debt
Deferred revenue
Other liabilities
Total liabilities
65.5
34.2
60.0
159.7
25.4
17.2
20.1
62.7
157.9%
98.8%
198.5%
154.7%
Net assets
192.6
70.0
175.1%
Net gearing
7.6%
17.2%
(55.6)%
Net asset backing (cents)
134.5
68.1
97.5%
13
3. Operational Performance
Tony Scotton
Chief Operating Officer
14
Business Publishing
FY06
$M
FY05
$M
Change
%
Revenue
55.4
30.2
83.1
EBITDA
16.3
9.0
81.1
EBITDA margin (%)
29.5
29.8
(1.0)%
Total:
60,000
50,000
18,000
35.0%
16,000
30.0%
14,000
40,000
25.0%
12,000
30,000
10,000
20.0%
8,000
15.0%
20,000
6,000
10,000
4,000
10.0%
5.0%
2,000
0
0
00/01
01/02
02/03
03/04
Revenue
04/05
05/06
0.0%
00/01
01/02
02/03
03/04
EBITDA
04/05
05/06
15
Business Publishing
•
Business model enhanced with acquisition of Anstat and ILI.
•
Strong operational performances from both Standards Publishing and Anstat – solid
start from ILI
•
Focus on developing capability while maintaining operational performance
–
.NET technology, on line select expansion and mini-shop development in Standards
Publishing
–
Lawlex update and news-feed development
–
ILI Logicom launch
•
Focus shifting to identifying and leveraging global assets to yield revenue and cost
synergies
•
Outlook – continued solid revenue and profit growth
16
Compliance Services
FY06
$M
FY05
$M
Revenue
14.4
1.4
EBITDA
3.0
0.1
EBITDA margin (%)
20.6
6.0
Change
%
1
1. Easy acquired in May 2005, therefore only tw o months included in FY05 results
17
Compliance Services
•
First year for Compliance Services Division – Easy i plus 10 months of Lawlex
compliance
•
Strong year on year performances (revenue and profit) but results a little below
expectation
–
Higher than expected customised solutions resulted in increase in deferred revenue
•
Quality revenue and profit contribution – EBITDA margin 20.6%
•
Operational focus on product and strategy development
•
Need to achieve critical mass – combined strong organic growth and acquisition
•
Outlook – strong growth expected from this division
18
Professional Services
FY06
$M
FY05
$M
Change
%
Revenue
22.6
23.0
(1.9)%
EBITDA
1.3
1.8
(28.1)%
EBITDA margin (%)
5.9
8.0
(26.3)%
25,000
2,000
10.0%
20,000
1,500
5.0%
1,000
15,000
0.0%
500
10,000
-5.0%
0
5,000
-10.0%
(500)
0
00/01
01/02
02/03
03/04
Revenue
04/05
05/06
(1,000)
-15.0%
00/01
01/02
02/03
03/04
EBITDA
04/05
05/06
19
Professional Services
•
Natural disasters and automotive industry impacted USA business
in first half
•
Small decline in revenue - EBITDA affected by restructuring cost
•
Global Divisional Head appointed and Australian business
restructured further
•
Remains an important element of our business model – supports
the development of our other businesses
•
Focus continues on developing electronic capability and
establishing recurring revenue base
•
Outlook – historical trends to continue
20
Assurance Services
FY06
$M
FY05
$M
Change
%
Revenue
67.7
49.9
35.8%
EBITDA
10.4
8.2
26.1%
EBITDA margin (%)
15.4
16.5
(6.7)%
12,000
80,000
70,000
18.0%
16.0%
10,000
14.0%
60,000
50,000
8,000
40,000
6,000
12.0%
10.0%
8.0%
30,000
4,000
20,000
10,000
6.0%
4.0%
2,000
0
00/01
01/02
02/03
03/04
Revenue
04/05
05/06
2.0%
0
0.0%
00/01
01/02
02/03
03/04
EBITDA
04/05
05/06
21
Assurance Services
•
Global capability enhanced with
–
Acquisition of EFSIS and CCS in the UK
–
Commencement of operations in Japan
–
Signing JV agreement in China
•
Owned offices in 12 countries, representative offices in 7 others – important gaps
still remain
•
Focus unchanged
•
–
Improving customer service (built enhanced survey tool)
–
Driving high growth products (health and safety, information security)
–
Improving operational efficiencies (higher utilisation, fewer exceptions)
–
Building global delivery platform
Outlook – continued solid revenue and profit growth, increased focus on
multinational accounts
22
Consolidated Trends
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
30,000
25,000
20,000
15,000
10,000
5,000
0
00/01
01/02
02/03
03/04
04/05
05/06
00/01
01/02
Revenue
02/03
03/04
04/05
05/06
04/05
05/06
EBITDA
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
00/01
01/02
02/03
03/04
EBITDA Margin
04/05
05/06
00/01
01/02
02/03
03/04
NPAT
23
4. Outlook
•
Solid revenue and profit growth expected to continue
•
Organic revenue growth rate guidance lifted to (6-8%)
•
Solid platform will drive further growth
•
Further acquisitions likely
•
Market gaps in Continental Europe, South America and Eastern
Europe elevated focus
•
China opened
24
AIFRS Guidance FY07
Revenue:
Revenue growth to exceed 25%. Impact
of any acquisitions as per announcements.
Amortisation:
$8.3m - $8.7m (including Publishing License
Agreement), depending on exchange rate
movement.
Discount on earn-out:
$850K
Tax Rate:
30%.
Reported NPAT growth
In excess of 30%, but with a second half bias.
Earnings per share
Continued growth
25
5.
Q&A