ABN Amro Presentation

Transcription

1 APPLIED INFORMATION SERVICES 1 ABN Amro Presentation Sydney ASX Code: SAI 2 April 2007 SAI Global Limited ABN: SAI has a solid growth and earnings outlook Ross Wraight Chief Executive

2 2 Agenda 1. Telarc SAI 2. Company Overview and Growth Drivers 3. Financial Overview 4. Operational Performance and Growth Strategy 5. Outlook 6. Questions

3 3 1. Telarc SAI SAI will merge its New Zealand branch operations with the country s largest assurance provider Telarc Limited, a wholly owned subsidiary of the Testing Laboratory Registration Council. The deal will see: Telarc and SAI Global merge their operations into Telarc which is to be renamed Telarc SAI Limited SAI will hold a 25% strategic stake in Telarc SAI Telarc s Australian based clients will be serviced by SAI Global Telarc SAI will offer both management systems and product certification audit services

4 4 2. Who is SAI Global? SAI Global is an applied information services company. We: Are your source for global technical and business information Provide end-to-end training solutions around critical business information Help you understand, implement and manage the information associated with business systems and processes Enable you to verify your understanding of information by providing independent assessment, certification and registration.

5 5 2. Who is SAI Global? SAI Global is an applied information services company. We: Are your source for global technical and business information Provide end-to-end training solutions around critical business information Help you understand, implement and manage the information associated with business systems and processes Enable you to verify your understanding of information by providing independent assessment, certification and registration.

6 6 2. How does SAI s business model work? PUBLISHING COMPLIANCE ASSURANCE Standards Legislation Databases Distribution Property Databases Search Other Technical Alerts News feeds Monitoring Awareness and understanding Conformity Assessment - Product - Food - Systems Provide Information Apply Business Solutions Audit Effectiveness Supported by TRAINING and BUSINESS IMPROVEMENT SOLUTIONS (Professional Services)

7 7 2. How big is SAI? SAI is a top 300 company listed on the ASX with a market capitalisation $515M, March 22, /07 revenues greater than A$210 million 2006/07 EBITDA greater than A$42 million More than 871 employees with 426 offshore Physical operations in Asia-Pacific, Europe and North America Customers across the world 70% of revenue is annuity type Capital expenditure is small

8 8 2. Who competes with SAI? 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 and Thomson The training and consulting market is highly fragmented and SAI has numerous competitors There are numerous competitors in the regulatory compliance space but few offer SAI s end-to-end solutions. Competitors include: Complinet and Lexis Nexis for alerts and news feeds Paisley and Methodware for monitoring systems LRN and Integrity interactive for communication and awareness In the certification space SAI competes with organizations such as SGS, Lloyds Register, BSI & Bureau Veritas

9 9 2. Who are SAI s clients? SAI s clients vary in size, industry sector and geographic presence. They range from large, blue chip, multi-nationals and government organizations to small to medium sized enterprises They are professionals such as engineers, accountants, architects, electricians, plumbers and IT specialists Annuity style contracts vary from a few hundred dollars to a few million dollars Clients include Daimler Chrysler, Merck, Staples, PWC, ABN Amro, Computer Associates, Tesco, Rio Tinto

10 10 2. What is SAI s value proposition to clients? SAI Global helps organizations comply with the requirements that shape the business world. We: Provide easy on-line access to millions of items of Standards, regulatory and technical information Take the burden out of regulatory and internal compliance Protect brands and reputations Push information and training where and when its needed Simplify cross-border and language exchange Provide supply chain confidence Improve and sustain business

11 11 2. What is driving SAI s growth? Demand drivers: Regulation Reputation damage costs escalating Introduction of punitive legislation Boardroom awareness and increased risk exposure Brand reputation protection Fraud and corruption control Globalization Demand for supply chain confidence Greater demand for compliance services High growth rates

12 12 3. How has SAI performed over the past 5 years? SAI Global Historical Performance Financial Years ($M) AGAAP 2001 AGAAP 2002 AGAAP 2003 AGAAP 2004 AIFRS 2005 AIFRS 2006 Revenue EBITDA EBIT NPAT Cash Earnings EPS(cents) Cash EPS (cents)

13 13 3. How has SAI performed over the past 5 years? Financial Performance - Group

14 14 3. What is SAI s revenue split? Revenue by business Revenue by region Asia Nth America FY AS BP Europe Australia PS Asia AS BP Nth America Post-Midi acquisition PS CS Europe Australia BP=Publishing, CS=Compliance, PS=Professional Services, AS=Assurance

15 15 4. What is SAI s Publishing strategy? Build a $100+ million international, technical publishing, distribution and information business Approximately A$70 in revenue, mainly recurrent revenue Delivers a major and stable annuity earnings engine with EBITDA margins around 31% Operations in Australia, Europe and North America Non-exclusive licenses with more than 250 international standards bodies including BSI (UK), ASTM (USA) and NFPA Exclusive distributor of Irish Standards and Australian Standards Distributor of USA Military Specifications Revenue and profit growth expected to continue

16 16 4. Who provides IP to SAI? USA Military Specifications and many others

17 17 4. What is SAI s Compliance strategy? Establish a leading global scale business in the international compliance management, training, awareness and solutions market Cost effective electronic solutions in multiple languages and countries Presence in key geographic markets with content capability and range Effective pricing and marketing models for solutions, retail and tools markets Solutions underpinned by proprietary technology Fragmented market Blue chip client base Organic growth exceeding 20%

18 18 4. How does the Compliance model work? Apply Business Solutions Risk & Compliance Framework (common to all programs) Know what affects you Create Policy Communicate & Train Monitor Activity Report on Activity Audit Results Compliance Guidelines & Update Services Learning Content & Services Risk & Compliance Monitoring Toolkit & Implementation Services Audit Services SAI Change Management & Project Management Services (recommended through all stages of the process)

19 19 4. What is SAI s Assurance strategy? Establish SAI Global as a leading international assurance business. 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

20 20 4. What is SAI s Training & Business Improvement Solutions strategy? Diversify product range and develop sources of recurring revenue that drive growth and profitability improvement 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

21 21 4. How are SAI s recent acquisitions performing? Company acquired Date Purchase Price Performance (Relative to acquisition assumptions) CRS January A$6.1M Meeting acquisition assumptions 2005 Easy I May 2005 A$28.3M Contract sales in line with expectations. Higher deferral of revenue than expected Anstat August A$50M Significantly exceeding acquisition assumptions 2005 EFSIS December 2005 A$12M Exceeding acquisition assumptions ILI May A$81M Meeting acquisition assumptions 2006 Certo September 2006 A$7.1M Exceeding acquisition assumptions Midi January A$59M Meeting acquisition assumptions 2007

22 22 5. What is the outlook for SAI? Demand for SAI s products and services remains robust More acquisitions possible Directors expect continued dividend growth from current levels, having regard to future business conditions and opportunities, the level of retained earnings and the cash flow requirements of the company Franking capability is reducing. The directors expect the next two dividends to be 85% franked.

23 23 5. What is the outlook for SAI? Revenue: Revenue growth to exceed 30%. Impact of any further acquisitions as per announcements EBITDA: EBITDA growth in excess of 40% Amortization: $8.7m - $9.1m (including Publishing License Agreement), depending on exchange rate movements Discount on earn-out: circa $750K Tax Rate: 30%. Earnings per share: Continued growth

24 24 6. Questions Visit or call Investor Relations on