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SAI Global Full Year 2006 Results Presentation

This presentation highlights the financial and operational performance of SAI Global for the full year ended 30 June 2006. The company's business strategy and growth in revenue and profit are discussed, along with the performance of its various divisions.

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SAI Global Full Year 2006 Results Presentation

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  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 • Outlook • 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

  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 • 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

  11. Reconciliation of NPAT to Cash Earnings

  12. Balance Sheet

  13. 3. Operational Performance Tony Scotton Chief Operating Officer

  14. Business Publishing 18,000 35.0% 16,000 30.0% 14,000 25.0% 12,000 20.0% 10,000 8,000 15.0% 6,000 10.0% 4,000 5.0% 2,000 0 0.0% 00/01 01/02 02/03 03/04 04/05 05/06 EBITDA

  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

  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 2,000 10.0% 1,500 5.0% 1,000 0.0% 500 -5.0% 0 -10.0% (500) (1,000) -15.0% 00/01 01/02 02/03 03/04 04/05 05/06 EBITDA

  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 12,000 18.0% 16.0% 10,000 14.0% 8,000 12.0% 10.0% 6,000 8.0% 4,000 6.0% 4.0% 2,000 2.0% 0 0.0% 00/01 01/02 02/03 03/04 04/05 05/06 EBITDA

  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

  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

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