1 SAI Global Limited ABN: Half-Year Results Presentation Half-Year Ended 31 December 2006 ASX Code: SAI APPLIED INFORMATION SERVICES “SAI builds a platform for future growth” Ross Wraight Chief Executive 15 February 2007
2 Agenda 1.Results & Highlights 2.Financial Overview 3.Operational Performance 4.Midi Acquisition 5.Outlook 6.Q and A
3 1. Results & Highlights Ross Wraight Chief Executive Officer
4 Financial Outcomes –Underlying Business Performance Revenue 1 up 46.7% to $100.8 million, EBITDA up 50.6% to $19.3 million –AIFRS Reported Results NPAT up 38.1% to $8.1 million, EPS up 3.6% to 5.7 cents –Underlying Cash Earnings Cash earnings up 35.5% to $12.3 million, Cash earnings per share up 1.2% to 8.6 cents 1.Excludes interest income
5 Financial Outcomes Cost to income ratio down to 82.6% from 83.2%, despite increased investment in resources and infrastructure Operating cash flow strong at $12.3 million up 60.6% from $7.7 million Dividend per share of 5.2 cents up from 5.0 cents last year. Franking reduced to 85%. Total dividend payment of $7.5 million up 32.4% Net assets up 97% from $97 million to $190.5 million Conservatively geared balance sheet % at 31 December, subsequently increased to 32.3% following the acquisition of Midi Cash in the bank of $33 million at 31 December, subsequently reduced to $17 million following the acquisition of Midi
6 Consolidated Trends
7 Business Performance Strong Publishing & Assurance performances and solid contributions from Compliance and Professional Services, drove the Company’s continued strong revenue and profit growth Organic growth edging towards 8% - acquisitions enhancing overall performance. Operational focus on integration, - establishing effective corporate infrastructure and profile – finance, IT, HR, brand/marketing - divisional integration – business systems, products and organisation Business model refined
8 SAI Global Business Model Distribution Databases Search Apply Business SolutionsProvide Information Conformity Assessment - Product - Food - Systems Audit Effectiveness PUBLISHING Supported by TRAINING and BUSINESS IMPROVEMENT SOLUTIONS (Professional Services) Standards Legislation Databases Property Other Technical Alerts News feeds Monitoring Awareness and understanding COMPLIANCEASSURANCE
9 Geoff Richardson Chief Financial Officer 2. Financial Overview
10 Financial Summary
11 Reconciliation of NPAT to Cash Earnings
12 Balance Sheet
13 3. Operational Performance Tony Scotton Chief Operating Officer
14 Business Publishing
15 Business Publishing Continued strong revenue and profit growth Acquisitions and solid organic growth in Standards Publishing and Property Information EBITDA margins higher at 31.9% Operational Focus –Migration to single web shop delivery platform commenced –Standards Publishing, Anstat, and ILI being fully integrated –Product cross-selling commenced –Search commenced for Global Head of Division Revenue and profit growth expected to continue in second half
16 Compliance Services – as reported
17 Compliance Services - analysed
18 Compliance Services Results include Easy i and the whole Lawlex business Strong revenue growth due to high organic growth rates for all compliance solutions Profit growth not reflecting sales increase because of addition of sales resources to drive growth and increase in deferred revenue Integration a key priority especially following Midi acquisition –Single international organisation being established –Combining LMSs in Easy i and Midi –Product cross selling commencing Continuing development of new range of products and services Stronger second half expected
19 Assurance Services
20 Assurance Services Continued revenue and profit growth, driven by acquisitions and organic growth in core business. EFSIS exceeding acquisition assumptions but at lower margins than core business Products maturing in developed markets - focus on new product development. Global Head of Assurance commenced Closed key geographic gaps –Joint Venture in Japan –Joint Venture in China –Certo acquisition in Italy Solid second half expected
21 Professional Services
22 Professional Services Small increase in revenue, but expanded EBITDA and margins achieved through restructuring initiatives. Standards training continues to be an important support activity to other businesses. Continued diversification away from purely standards related services towards business improvement products e-learning products showing encouraging growth Similar second half performance expected
23 4. Midi Acquisition Completion occurred on 19 January 2007 Midi is one of the leading compliance services businesses in the USA Purchase price of US$45M, funded by new long-term debt of US$30M and from existing cash reserves Results will be consolidated from 19 January 2007, minimal impact on FY07 EPS expected. Midi has an established annuity revenue model with high growth rates and a blue chip customer base. Excellent strategic fit with SAI’s other compliance assets which are to be combined under the SAI brand
24 5. Outlook 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.
25 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 5. Outlook
26 6. Q & A