emerging leaders conference may 2006
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The Gateway to World Business. Emerging Leaders Conference May 2006. Our Business SAI Global is a n international professional services company operating in the international standards, regulatory and compliance markets. SAI provides a gateway for: - PowerPoint PPT PresentationTRANSCRIPT
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Emerging Leaders Conference May 2006
The Gateway to World Business
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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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– 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$190 million
– 740 staff with 281 offshore
– Physical operations in Europe, United States, Thailand, Indonesia, Mexico, India, Australia and New Zealand
– Customers across the world
– 70% of revenue is annuity type
– Capex is small
Business Summary
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Business Growth
SAI Global Historical Performance
Financial Years ($M)
AGAAP2001
AGAAP2002
AGAAP2003
AGAAP2004
AIFRS2005
AIFRS1st 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
Greater demand for standards
related training andassurance services
Increasing industry turnover
Regulation
Demand to manage risks and compliance
Globalization
Demand for supply chainconfidence
Demand for continuous business improvement
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Value proposition for our services
In essence, SAI Global helps organizations comply with therequirements 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 Publishing
Professional Services
Develop & license IntellectualProperty
Publish, Index& distribute(39% of revenue)
Sources of Intellectual Property
Commercialisation of Intellectual Property
Enhance throughtraining & consulting services(11% of revenue)
Provide assurancethroughconformity assessment & certification:(41% of revenue)
Assurance Services
ComplianceServices
Deliver compliance, regulatory awareness solutions (9% of revenue)
Business Model - SAI Global
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Business Overview – Business MixRevenue by business - pre ILI
Publishing32%
Professional Services
13%
Assurance45%
Compliance10%
Revenue by business - post ILI
Professional Services
11%
Compliance9%
Publishing39%
Assurance41%
EBITDA by business - pre ILI
Professional Services
4%Compliance
13%
Assurance33%
Publishing50%
EBITDA by business - post ILI
Compliance10%
Professional Services
3%
Assurance26%
Publishing61%
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Strategic Rationale – Geographic MixRevenue by region - pre ILI
US14%
Europe18%
Other1%
Australia67%
EBITDA by region - pre ILI
US7%
Europe16%
Other1%
Australia76%
Revenue by region - post ILI
US16%
Other1%
Europe23%
Australia60%
EBITDA by region - post ILI
Other1%
Australia59%
US11%
Europe29%
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Business Publishing Gateway
Build a $100 million plus technical publishing, distribution and
information business
• 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
Revenue
15,000
17,000
19,000
21,000
23,000
25,000
27,000
29,000
31,000
00/01 01/02 02/03 03/04 04/05 1H05/06
EBITDA
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
00/01 01/02 02/03 03/04 04/05 1H05/06
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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 • Significant growth in business improvement products• Electronic training model starting to grow strongly (technology
now available through compliance services)
Professional Services Gateway
Revenue
0
5,000
10,000
15,000
20,000
25,000
00/01 01/02 02/03 03/04 04/05 1H05/06
EBITDA
(1,000)
(500)
0
500
1,000
1,500
2,000
00/01 01/02 02/03 03/04 04/05 1H05/06
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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
Assurance Services Gateway
Revenue
0
10,000
20,000
30,000
40,000
50,000
60,000
00/01 01/02 02/03 03/04 04/05 1H05/06
EBITDA
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
00/01 01/02 02/03 03/04 04/05 1H05/06
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• 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
Acquisition History
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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
ILI Acquisition - Overview
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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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USA Military Specifications and many others
ILI Business Overview – IP Providers
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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:
- 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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1 Assumes FX rate of A$1 = US$0.74
Financial Information – ILI Historical Trading and FY2007 Projections
A$ 000's1
Pro-forma
FY2003
Pro- forma
FY2004
Pro-forma
FY2005
Pro-forma
FY2006 CAGRProjected
FY2007 Growth
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 34.3% 35.0% 38.7% 42.0% 43.9%EBIT Margin 33.5% 34.3% 38.2% 41.7% 43.6%
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• 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
FY2006 Group Outlook