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SAI Global Limited ABN: 67 050 611 642

SAI Global Limited ASX Code: SAI Macquarie Emerging Leaders 7 May 2009. SAI Global Limited ABN: 67 050 611 642. Corporate Overview. Listed on ASX in December 2003 Approximately 154 million shares on issue M arket capitalisation of (approx) $A400 million

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SAI Global Limited ABN: 67 050 611 642

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  1. SAI Global Limited ASX Code: SAI Macquarie Emerging Leaders 7 May 2009 SAI Global Limited ABN: 67 050 611 642

  2. Corporate Overview • Listed on ASX in December 2003 • Approximately 154 million shares on issue • Market capitalisation of (approx) $A400 million • Board consists of CEO plus five non-executive directors • Offices in 25 countries across Asia-Pacific, Europe and North America • 1,400 employees, circa 40% offshore

  3. Our Business & Value Proposition SAI Globalprovides solutions that help businesses understand and comply with their technical requirements and regulatory obligations in a cost effective manner by providing: • Easy and generally on-line access to need-to-know technical business information and associated embedded workflow solutions • Products, tools and services that reduce the burden and cost of regulatoryand internal compliance • Assessment of conformance to various national, international and internal standards thereby providing confidence around processes, products and supply chain

  4. Our Business & Our Services Publishing (Information Services) • Standards, regulatory and technical information, databases and workflow solutions Compliance • Alerts and news feeds, governance, risk and compliance (GRC) products and services and online courseware Assurance • System and product related conformity assessment services and related training services

  5. Key Investment Features Both defensive and growth characteristics to the business Defensive: • Strong demand drivers • High proportion of annuity or non-discretionary revenue streams • Leading market position in our businesses in Australia, which underpin performance • Business model resilience to economic slowdowns Growth: • Increasing exposure to higher growth products, geographic markets and business sectors • Market share gains • Industry consolidation globally

  6. Demand Drivers Regulatory environment • Constantly changing • Punitive remedies Boardroom • Heightened awareness of compliance and risk management obligations Brand Protection • Brand impact of regulatory failures • Need for supply chain confidence • System and product conformity Globalisation • Increasing globalisation of trade flows • Greater demand for • SAI’s • services • Sustained growth rates

  7. Nature of Revenue Streams 1 1. Based on Espreon revenue net of disbursements • Annuity style = subscription arrangement or renewable contracts exist with SAI • Non-discretionary = “must have” products and services for customers • Discretionary = neither annuity nor non-discretionary revenue

  8. Geographic and Service mix 1. Based on Espreon revenue net of disbursements

  9. Consolidated Trends CAGR >25% CAGR >30% CAGR >15% *FY08 EBITDA and EBITDA margin are shown before non-recurring items

  10. Publishing (Information Services) • Profitability currently underpinned by Publishing License Agreement (PLA) with Standards Australia (15+5 years from Dec 03) • Non-exclusive licenses with more than 250 international standards bodies • Current revenues in Standards distribution estimated to be around 5% of addressable market (USD 830M) • Main competitor is IHS (listed on NYSE), but also competes with SDOs in local markets • Transitioning from being a publisher (distributor) of third party IP to an information services provider with a focus on work flow solutions

  11. Publishing (Information Services) • Nature of revenue: Mix 67% 6% 27% 100% • Annuity style = subscription arrangement or renewable contracts exist with SAI • Non-discretionary = “must have” products and services for customers • Discretionary = neither annuity nor non-discretionary revenue

  12. Publishing (Information Services) • Annual organic revenue growth trend currently 4% - 6%, but expected to increase over time • EBITDA margins in excess of 40% 1 1 CAGR >25% CAGR >28% 1. Excludes Espreon

  13. Publishing (Information Services) Strategy: • Continue transformation into embedded, value-adding information services supplier in targeted verticals • Focus on “operational excellence” to optimise distribution • Fully develop core tailored product offerings • Expand presence in Asia Pacific through resellers and partnerships • Continue to gain market share through enhanced associations, permissions and products • Collaborate with Compliance division on publishing opportunities presented by deep reach into selected compliance segments

  14. Compliance Services • Growing annuity revenue base • Double digit market growth driven by changing regulatory environment • Blue chip customer base • No dominant global player - many small niche players in GRC solutions • Major competitors in the provision of on-line regulatory courseware are LRN, Integrity Interactive and Corpedia • World wide addressable market estimated at USD4.1Bn of which content is USD2.2Bn, GRC USD1.1Bn, training and awareness USD200M, consulting USD600M and hotline services USD50M

  15. Compliance Services • Nature of revenue: Mix 65% 15% 14% 6% 100% • Annuity style = subscription arrangement or renewable contracts exist with SAI • Non-discretionary = “must have” products and services for customers • Discretionary = neither annuity nor non-discretionary revenue

  16. Compliance Services • Medium term annual organic revenue growth of 10% - 15% expected • EBITDA margins in excess of 25% achievable CAGR >30% CAGR >40%

  17. Compliance Services Strategy: • Secure and enhance market leadership position in regulatory on-line learning • Integrate LMS and GRC technologies enabling a customer-managed, end-to-end compliance solution • Focus GRC and content on targeted verticals where SAI can ascend to market leading positions • Build a “thought leadership” and “consulting community” • Make technology a core competency • Optimise and fully leverage the organisation’s resources

  18. Assurance Services • Market leading positions in Australia, North America and food sector – growing global capability • Competitive advantage from “Five Ticks” StandardsMark • Supplier and customer driven industry consolidation occurring • Strong underlying demand drivers emanating from the desire of business to provide products and services that have integrity, are safe and comply with national, international and internal standards and specifications • Global TIC market estimated at USD 80bn, of which the certification portion is approximately USD 6bn

  19. Assurance Services • Nature of revenue: Mix 81% 8% 11% 100% • Annuity style = subscription arrangement or renewable contracts exist with SAI • Non-discretionary = “must have” products and services for customers • Discretionary = neither annuity nor non-discretionary revenue

  20. Assurance Services • Sustainable annual organic revenue growth of 5% - 7% • EBITDA margins in “high teens” achievable CAGR >15% CAGR >20%

  21. Assurance Services Strategy: • Continue to build geographic capability • Presence in “top” 25 countries (now 19) • Use a mix of acquisition, JV and organic start ups • Specifically target/ focus on Europe • Enable enhanced global account capability • Seamless account management model and structure • World class end-to-end business processes • A single, global, scaleable IT system • Drive high growth product development • Enhance our Product Lifecycle management capability • Develop a cohesive Supply Chain offering • Exploit emerging opportunities in food and the environment

  22. Espreon • Espreon is a national provider of property information and conveyancing & lending workflow solutions • Customers include major Australian banks (lenders) and top 200 law firms (conveyancers) • Espreon is both the largest provider of property information required to execute a property transaction and the largest property settlement agent in the Australian market • Revenue is driven by transaction volumes, not transaction values • Employs circa 230 staff with offices in all States and major centres

  23. Espreon Business Model Lending Workflow Platform ConveyanceWorkflow Platform Information Services Settlement, Stamping & Registration Services

  24. Espreon • Nature of revenue: Revenue Mix Gross Net 85% 58% 15% 42% 100% 100% Net revenue = Gross revenue less disbursements • Annuity style = subscription arrangement or renewable contracts exist with SAI • Non-discretionary = “must have” products and services for customers • Discretionary = neither annuity nor non-discretionary revenue

  25. Espreon Rationale for the acquisition: • It is consistent with SAI’s core strategy to build information services businesses that provide need-to-know information and workflow solutions • The combination of Espreon’s and SAI’s property businesses will result in an Australian property services business with a strong market position • Espreon’s and SAI’s businesses have complementary strategies with no substantial overlap • It is financially compelling - integration of the businesses will generate cost savings and the acquisition will deliver EPS accretion throughout the market cycle

  26. Espreon • SAI Ownership at 62.5%, Vectis at 36.2% • Consideration: • Cash (new debt) $ 8.8M • 8.5M SAI shares, VWAP $2.20 $18.8M • Incidentals $ 1.2M $28.8M • FY10 EPS accretion of circa 5% expected • Intention is to delist Espreon – as per SAI’s Bidder’s Statement

  27. Balance Sheet

  28. Borrowings – Maturity Analysis

  29. Outlook – FY09 • Whilst the impact of the current economic climate is evident in some of our businesses overall demand for our products and services remains firm • The outcome for the year will be a record result for the SAI Group • The profit guidance range remains unchanged with the impact of the recent strength of the Australian dollar mitigating to some extent the expected positive contribution from the Espreon acquisition

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