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Microequities 6th Rising Stars Microcap Conference 13th of June 2012
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MICROCAP CONFERENCESydney Hilton | 13th June 2012 | supported by
EQU
ITIESRISIN
G STA
RSm
icro6
th
EQUITIESRISING STARS
MICROCAP CONFERENCE| 13th JUNE 2012 | SUPPORTED BY
micro6th
9.00-9.25 Careers Multilist (ASX CGR) Daniel Riley (CEO)9.25-9.50 BigAir Group (ASX BGL) Jason Ashton (CEO)9.50-10.15 XRF Scientific (ASX XRF) Vance Stazzonelli (CEO)
10.15-10.30 MORNING COFFEE BREAK
10.30-10.55 Calliden Group (ASX CIX) Nick Kirk (CEO)10.55-11.20 Amcom Telecom (ASX AMM) David Hinton (CFO)11.20-11.45 Clover Corporation (ASX CLV) Ian Brown (CEO)
MORNING SESSION
1.00-1.25 ThinkSmart (ASX TSM) Ned Montarello (CEO)1.25-1.50 Vocus Telecom (ASX VOC) James Spenceley (CEO)1.50-2.15 Laserbond (ASX LBL) Wayne Hooper (CEO)
2.15-2.30 AFTERNOON COFFEE BREAK
2.30-2.55 ISS Group (ASX ISS) Richard Pang (CEO)2.55-3.20 Cash Converters Int (ASX CCV) Ian Day (Gral Manager)3.20-3.45 Runge (ASX RUL) David Meldrum (MD)
AFTERNOON SESSION
EQUITIESRISING STARS
MICROCAP CONFERENCE| 13th JUNE 2012 | SUPPORTED BY
micro6th
ABOUT MICROEQUITIES
Microequities is a specialised Microcap asset manager. Established in 2005 as an independent investment research house devoted
to Microcaps, Microequities expanded into funds management in early 2009 by launching its flagship Deep Value Microcap Fund.
In 2012, Microequities launched a second Fund, the High Income Value Microcap Fund.
Microequities’ investment managers and analysts operate uniquely within the Microcap asset class. This asset class offers investors
access to Australian companies with an attractive growth profile, but also necessitates a systematic and process driven research
approach to investing.
ABOUT THE AUSTRALIAN SECURITIES EXCHANGE (ASX)
ASX Limited is the listed holding company for a number of licensed operating subsidiaries, together forming the ASX Group (ASX),
which offer a range of market services linked by a common purpose: to provide core financial markets services and infrastructure to
meet the needs of a wide range of financial markets stakeholders, and for a globally competitive and vibrant Australian economy.
ASX is a multi-asset class, vertically integrated exchange group, ranked one of the world’s top-10 largest by market capitalisation.
Its activities span primary and secondary market services, central counterparty risk transfer, and transaction settlement for both
the equities and fixed income markets. ASX functions as a market operator, clearing house, payments system facilitator and central
securities depository. It also oversees compliance with its operating rules, promotes standards of corporate governance among
Australia’s listed companies and helps to educate retail investors.
With a market capitalisation of over A$1.3 trillion the Australian equities market is consistently weighted in global indices (MSCI
and S&P/Citigroup Global Equities Indices BMI) among the top five equity markets in the world. Among Asia–Pacific stock
markets it is second only to Japan in terms of free float market capitalisation. The Australian equity market has experienced
outstanding growth in recent years, with annual turnover increasing fourfold and market capitalisation doubling in the last ten
years. In the same period liquidity has doubled to 100%.
CAREERS MULTILIST ASX- CGR Presented by Daniel Riley (MD)
Contents
• Business Overview
• Growth Strategy
• Financial Summary
Business Overview “Careers MultiList helps its clients gain a competitive advantage through
innovative human capital solutions”
What does this mean?
Recruitment; Outsourced (services delivered by agency partners)
Onsite (services delivered by agency partners)
Project responsibility (candidates supplied by agency partners, project managed by CML)
Services (related to recruitment);
Migration practice
Labour Agreement, sponsorship for on-hire
Contract management and outsourced payroll
Agency Partners (subscription fees from recruitment agencies);
Business development support
Operational support (incl finance & payroll)
Cost savings on advertising and insurance through group schemes
Business Overview
Careers MultiList services exist through a combination of in-house
development and acquisition;
Business Division Human Capital Services
Careers MultiList • Business development support for recruitment agency partners
• Operational support
• HR services
• Cost savings
CMLpayroll
(100% owned by
Careers MultiList)
• Back-office payroll, online timesheets & invoicing
• Finance and managed collections
• Trade credit insurance
Lester Associates
(100% owned by
Careers MultiList)
• Migration practice
• Contract management services, including sponsorship for on-hire
Zenith Management
(100% owned by
Careers MultiList)
• Project management
• Staffing and technical services provided to Libraries
Business Overview – Client Analysis
Client analysis
Business Division
Number
of
Agency
clients
Number
of
End-user
clients
% of
earnings
from
Agency
clients
% of
earnings
from
End-user
clients
Careers MultiList 94 30 45% 55%
Lester Associates 90 20 80% 20%
Zenith Management Services N/A 60 N/A 100%
Business Overview - History
Key events
Early 2002 Company established by Greg and Daniel
Riley
November 2009 Acquisition of Zenith Management Services
February 2010
Company listed on ASX. Acquisition of Lex
Brown subcontractor business
Acquisition of Lester Australia September 2011
December 2011 Launch of CMLpayroll
Business Overview – Revenue Streams Multiple revenue streams – human capital services
Recruitment
Agency fees
Services
Invoices from agency partners for the
supply of staff to recruitment contracts
negotiated by Careers MultiList + fees
generated by Zenith for supply of staff
Recurring fees from agency partners to
access Careers MultiList services
Income from services complementary to
recruitment, including migration, contract
management, payroll outsourcing and
cataloguing services for library clients
Segment Reporting
Contribution to Profit
Segments NPBT ($000's)
-
200
400
600
800
1,000
1,200
Services Agency fees Recruitment
2010
2011
2012 Forecast
Segment Reporting
Contribution to Revenue
The sharp rise is sales revenue for services in FY2012 can be attributed primarily to the acquisition of Lester Associates in Sept11. While services income is recurring in nature and highly valued, it is lower margin income than Agency fees and Recruitment
Sales Revenue ($000's)
-
10,000
20,000
30,000
40,000
50,000
60,000
Services Agency fees Recruitment
2010
2011
2012 Forecast
Growth Strategy
Three core growth strategies
• Cross-sell opportunities
• Agency Partner fees
• New services
- developed in-house
Growth Strategy – Cross Sell • Introduce Careers MultiList (CML) services to Lester Associates (LA) agency customers
• Introduce Lester Associates services to Careers MultiList agency partners and end-user
clients
CML
Services
LA
Clients
CML
Clients
LA
Services
Growth Strategy Agency Partner Fees
There are currently 94 agency partners of Careers MultiList
Careers MultiList’s target is to increase the number of agency partners to
110 by the end of FY13.
New agency partners will include search specialists that join under the
CMLpartners brand
Fees from new agency partners are expected to contribute an additional
$180k to $220k to annual earnings once the target number of 110 is
reached.
New services developed in-house
• CMLpayroll
• CMLpartners
• Managed Services / Recruitment Process Outsourcing (RPO)
Growth Strategy – New Services
Growth Strategy – New Services
(CMLPayroll) Outsourced Payroll Online timesheets & induction
Payroll processing and invoicing
Advanced online user interface for candidates, clients and consultants
Charge is 0.5% of invoice value to end-user client
Finance, Collections and Insurance Payroll administration and legal (as described above)
Immediate payment of 80% of client’s invoice value (remainder on receipt from client)
Managed collections
Credit risk insurance
Charge is 2.0% of invoice value to end-user client
Trials of CMLpayroll commenced Dec11 and became fully operational in Feb12. There are now 9 agencies using CMLpayroll, generating top-line revenue of $400,000+ per week. CMLpayroll Gross Profit is 2% to 2.5% of top-line revenue.
Growth Strategy – New Services
(CMLpartners)
• CMLpartners is a network of search consultants, for whom CMLpartners
develops business and facilitates networking between members of the Group
• Fees are derived from member subscription and fee splits on roles sourced by
CMLpartners on behalf of members of the network
• Launched in November 2011, this initiative is still in its start-up phase
www.cmlpartners.com.au
Growth Strategy – New Services
Managed Services (RPO)
Tier 1 Flexible Onsite
Tier 2 Database Search
Tier 3 Agency Managed
Tier 4 CML Partners
Careers MultiList’s agency network structure provides access to a large number of
specialist consultants. Consultants are accessed as needed, so overheads are flexible. This
structure means that RPO services can be delivered by Careers MultiList cost efficiently to
all businesses, including SME’s.
Financial Summary
• Earnings Information
• Segment Reporting
• Review of 1HY2012
• FY2012 Outlook
• Capital Structure and Dividend Policy
Earnings Information
Actual Forecast
Half year ended
31 December
2010
Full year ended
30 June 2011
Half year ended
31 December
2011(1)
Full year to
30 June 2012(2)
Revenue $9.30m $17.89m $28.96m $69.02m
EBITDA $0.62m $1.35m $1.00m $2.01m
Net profit after tax $0.38m $0.83m $0.61m $1.25m
Earnings per share 0.76c 1.61c 1.10c 2.24c
Dividends per share 0.5c ff 1.0c ff 0.5c ff 1.0c ff
(1) Includes earnings from Lester Associates for the period 19Sept11 to 31Dec11
(2) Includes earnings from Lester Associates for the period 19Sept11 to 30Jun12
Review of 1HY2012
“We are pleased with the Group’s significant increase in earnings for the six months to
31 December 2011. The strong result reflects the combination of good performances
from our existing operations and the successful integration of the recently acquired
Lester Associates.
Revenue growth was primarily due to the inclusion of the trading results of Lester
Associates which was acquired on 19th September 2011. Lester Associates is a
contract management and migration practice that generates its revenues from payroll
services. These revenues are recurring in nature and highly valued, although they
tend to produce lower margins than the traditional business of Careers MultiList.
The Board is pleased that the acquisition of Lester Associates has performed to
expectations and the result includes the initial acquisition and business integration
costs. The acquisition has strategically transformed the Group and provides
substantial growth potential.”
FY2012 Outlook
The integration of the Lester Associates business into the group is
proceeding well since acquisition in September 2011. The 2HY2012 result
will include a full 6 months earnings of the acquired business
A strong 1HY2012 result reflects emerging opportunities and income from
the Careers MultiList growth strategy
Significant growth in full year profit is expected, with NPAT for FY2012
forecast to reach $1.25m. This represents a 50% increase over the FY2011
result (2011: $0.83m)
Disclaimer The information presented herein contains predictions, estimates and other forward looking statements that are
subject to risk factors that are associated with the human resource management sector. The persons involved in or
responsible for the production and publication of this report believe that the information herein has been obtained
from reliable sources and that any estimates, opinions conclusions or recommendations are reasonably held at the
time of compilation.
Although Careers MultiList believes that its expectations are based on reasonable assumptions, it can give no
assurances that its goals will be achieved.
Important factors that could cause results to differ materially from those included in the forward‐looking statements
include timing and extent of changes in the employment cycle, government regulation, changes to the number of
preferred supplier agreements, reduction in franchise partner numbers and the ability of Careers MultiList to meet its
stated goals.
The purpose of this presentation is to provide background information to assist in obtaining a general understanding
of Careers MultiList's proposals and objectives. This presentation is not to be considered as a recommendation by
Careers MultiList or any of its subsidiaries, directors, officers, affiliates, associates or representatives that any person
invest in its securities. It does not take into account the investment objectives, financial situation and particular needs
of each potential investor. If you are unclear in relation to any matter or you have any questions, you should seek
advice from an accountant or financial adviser.
May 2012
BIGAIR GROUP LIMITED ASX- BGL Presented by Jason Ashton(CEO)
Agenda
Company structure
BigAir at a glance
BigAir timeline
1H12 highlights
Growth opportunities
Allegro acquisition
Guidance
Investor relations
Q&A
BigAir at a glance • Two divisions both offering High Speed Broadband (HSBB)
• Both divisions make use of the company’s high speed national fixed wireless network
• High speed Fixed Wireless Ethernet for Business
• Higher speeds with greater flexibility and lower costs
• Extensive metropolitan fixed wireless footprint across 9 major markets
• Wholesale focus provides low cost channel to market
• We own the network, no reliance on Telstra or NBN for HSBB
• High speed Broadband for Communities
• Leading service provider in Tertiary Student Accommodation market
• Exclusive operator at more than 120 locations with ~27,000 students
• Prepaid service offering delivered using both WiFi and Ethernet
• Student traffic usage is highest during evenings when business traffic is low
Company structure
BigAir Group Limited (BGL)
Fixed Wireless
Clever Communications Australia Limited
100%
BigAir Fixed Wireless Division 100%
Allegro 100%
1 June 2012
Broadband for Communities / Student Accommodation
AccessPlus Pty Ltd
100%
BigAir Universe Broadband Pty Ltd
100%
Allegro 100%
1 June 2012
BigAir timeline
1H12 Highlights
0
1
2
3
4
5
1H10 1H11 1H12
1.451.75
4.57
$m
EBITDA
21%
161%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1H10 1H11 1H12
0.62 0.67
1.3
cps
EPS
Growth opportunities • Business market
– Growth of cloud computing magnifies high bandwidth connectivity needs
– Companies will require alternate paths, both wired and wireless, to ensure
uninterrupted access as they transfer their critical services into the cloud
– Fixed Wireless Broadband Access (“FWBA”) offers significant value and is increasingly
seen as an attractive alternative to fixed line offering fast speeds and increased
reliability
• Community Broadband
– Expansion into new student accommodation sites
– Investment by universities to boost accommodation capacity
– Private rental shortages – increased demand for student accommodation
– Further acquisitions to build scale in other similar verticals that can leverage BigAir’s
infrastructure and systems
Allegro acquisition
Acquisition details
• Expected completion date 31 May 2012
• $3.75 million in cash payable on the date of completion paid from cash
reserves;
• $3.75 million in BigAir shares (issued at 36.8 cents, 60 day VWAP);
• Earn-out capped at a maximum of $3.0 million cash based on over
performance;
• Revenue in range of $5 - $6 million expected in FY13
• EBITDA contribution $2 million post synergy
• Queensland based Fixed Wireless network founded in 2005
• Invested more than $5 million in network and spectrum
• Extensive SEQ coverage (Brisbane, Gold Coast, Sunshine Coast)
• Recent new footprint in growth markets of Gladstone and Mackay
• 60 sites and 8,000 student beds in student accommodation Internet market
Guidance
• Strong sales pipeline
• Realising further synergies from
acquired businesses
• April 2012 underlying EBITDA
exceeded $900k
• Annualised underlying EBITDA
“run rate” based on April 2012 is
now at $10.8 million
• Allegro acquisition to be
consolidated from June 1st 2012
Investor relations
Current Snapshot
ASX Ticker BGL
Shares on Issue 151,491,368
Share Price* 38c
Market Cap* $57.57m
Options on issue 4,230,000
Substantial holders: Microequities Asset Mgt 7.05% JMAS Pty Ltd 6.32%
Directors: Mr Jason Ashton - Managing Director Mr Nigel Jeffries - Non Exec. Director Mr Vivian Stewart - Non Exec. Director Mr Paul Tyler - Non Exec. Chairman
Share price performance
Disclaimer
This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not guarantees of BigAir's future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. This presentation only contains information required for a preliminary evaluation of the Company and in particular only discloses information by way of summary within the knowledge of the Company and its Directors. An investor should seek its own independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to any investment in BigAir Group Limited. Other than to the extent required by law (and only to that extent) the Company and its officers, employees and professional advisers make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility or liability for, the contents of this presentation.
XRF SCIENTIFIC LTD ASX- XRF Presented by Vance Stazzonelli (acting CEO)
Corporate Snapshot
Capital Structure Share Price Performance – 1 Year
Shares on issue 128,823,764
Options on issue 3,333,333 20c (30/12/12)
Share price 25c
Market cap $32.2m (undiluted)
Cash (31 March 2012) $6.5m (5 cents per share)
Debt (31 March 2012) $0.1m
Enterprise Value $25.8m
Directors & Management Shareholder Breakdown
Ken Baxter Non Executive Chairman Directors & Management 19%
David Brown Non Executive Director Top 20 Shareholders 62%
John Parsons Non Executive Director
Fred Grimwade Non Executive Director Substantial Shareholders (Non Management)
David Kiggins Non Executive Director Skye Alba Pty Ltd 7.26%
Vance Stazzonelli CFO & COO (Acting CEO) Private Portfolio Managers 5.03%
Steve Prossor Commercial Manager
Danny Verbeeten Technical Manager/Chemist
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
Company Overview
X-Ray Flux and chemicals
Platinum Labware Specialised furnaces and general laboratory
equipment
Manufacturer of consumables and equipment for mining and industry, for X-Ray Fluorescence (XRF) analysis – a powerful long-established analytical technique, vital to the discovery, evaluation, qualification and production of most metals (except gold)
Offices in Perth and Melbourne with 60 employees across Australia
The XRF Analysis Process
Drill core is sent from the field to the laboratory
The drill core is then processed into a fine dust
The mineral dust is then fused into a glass bead using XRF Scientifics' products
The glass disk is presented into
an x-ray spectrometer
for analysis
Our Products
Products
Laboratory Exploration
Mining Rail
Stock & Blend
Shipping
Industry
Samples
Sam
ple
s
X-Ray Flux Fusion Machines Platinum Labware
Blue Chip Client Base
95%
5%
Sales Revenue Exposure
Mining
Industry45%
50%
5%
Sales Exposure to Commodities (Estimated)
Iron Ore
Other Base Metals
Non Mining (Industry)
Financial Performance
($m) *1H12 1H11 Variance
Revenue 12.4 8.6 Up 44%
EBIT 2.2 1.5 Up 47%
NPAT 1.6 1.0 Up 58%
Operating cash flow 2.0 0.6 Up 222%
EPS (cents) 1.3 1.0 Up 30%
Number of employees 63 65 Down 3%
14,706
16,807
12,478
20,302
12,363
08 09 10 11 1H12
Sales Revenue ($'000)
921
1,951
303
2,635
1,620
08 09 10 11 1H12
NPAT ($'000)
*Includes Sigma Flux and Precious Metals contribution 1H12: 6 months (PCP: 5 months)
Divisional Performance
29%
40%
31%
Divisional Sales
Chemicals Labware Technology
51% 34%
15%
Divisional NPBT
Chemicals Labware Technology
Growth Strategy
Organic Growth
• Increased volumes in mining
• Geographical expansion
• Brazil • Africa • Russia • China
• New product releases
• Adoption of XRF as an analytical technique
Acquisitions Criteria
• Complementary business in the laboratory supply and manufacture sector
• Be a business we understand
• Have a technology base and barriers to entry
• Strong synergies with our existing business
• EPS accretive
• Cash flow positive
Summary
Excellent results for the 1H12 with trading conditions expected to remain strong for 2H12
Strong growth in full-year dividend for 2012 expected
Robust balance sheet of $6.5m cash (5 cents per share) and no material debt ($100k)
Strong exposure to volumes in the mining industry, with an estimated 45% of sales revenue exposed to iron ore
Opportunities for mergers and acquisitions
Contact Information
Tel: (08) 9244 9600 88 Guthrie St. Osborne Park WA Vance Stazzonelli – Acting CEO [email protected]
Disclaimer
No responsibility for contents of Investor Presentation •To the maximum extent permitted by law, XRF Scientific Limited and representatives: •make no representation, warranty or undertaking, express or implied, as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient; •accept no responsibility or liability as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient; and •accept no responsibility for any errors or omissions from this Investor Presentation whether arising out of negligence or otherwise.
Accuracy of projections and forecasts
•This Investor Presentation includes certain statements, opinions, estimates, projections and forward looking statements with respect to the expected future performance of XRF Scientific Limited. These statements are based on, and are made subject to, certain assumptions which may not prove to be correct or appropriate. Actual results may be materially affected by changes in economic and other circumstances which may be beyond the control of XRF Scientific Limited. Except to the extent implied by law, no representations or warranties are made by XRF Scientific Limited, its advisers or representatives as to the validity, certainty or completeness of any of the assumptions or the accuracy or completeness of the forward looking statements or that any such statement should or will be achieved. The forward looking statements should not be relied on as an indication of future value or for any other purpose.
No offer to sell or invitation to buy
•This Investor Presentation does not, and should not be considered to, constitute or form part of any offer to sell, or solicitation of an offer to buy, any shares in XRF Scientific Limited, and no part of this Investor Presentation forms the basis of any contract or commitment whatsoever with any person. This Investor Presentation does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not permitted under applicable law. Distribution of this Investor Presentation in or from certain jurisdictions may be restricted or prohibited by law. Recipients must inform themselves of and comply with all restrictions or prohibitions in such jurisdictions. Neither XRF Scientific Limited, its advisers or representatives accept any liability to any person in relation to the distribution or possession of this Investor Presentation from or in any jurisdiction.
CALLIDEN GROUP ASX- CIX Presented by Nick Kirk (CEO)
Contents
• Who is Calliden?
o Our Recent History
o Insurance Portfolio
o Market Share
• Strategic Review
o Managing General Agency Model
• Snapshot of 2011
o Insurance Industry’s Catastrophic Year
o Financial Impact on Calliden
• Progress in 2012
o Outlook
CALLIDEN INSURANCE LIMITED
Calliden Group Limited (CIX)
AGENCY BUSINESS
SHARED EQUITY VENTURES
Calliden Group Limited is an ASX
listed general insurance group
with an APRA licensed insurer
(Calliden Insurance Limited) and
with equity interest specialised
insurance agencies.
Our Story
START 2005 2006 2007
2008
2009
2010
FEB MAR AUG OCT DEC JUL
AUG
OCT JAN JUN JUN DEC
JUL
NAME CHANGE
APRA LICENCE
YOUNG & COOL
AUSTRALIAN UNITY
GENERAL INSURANCE
LIMITED
(50%)
(50%) (100%) (50%)
(100%)
(50%)
FMG (50%)
CALLIDEN INSURANCE LIMITED (ONE INSURANCE CO.)
SALE OF 2011 APR
DOMESTIC INSURANCE AGREEMENT
DEC JUN
SALE OF AGENCY AGREEMENT
DEC
Our Portfolio
* All figures are based on year end 31.12.11
GWP Breakdown
Growth has been steady but results have ben
volatile and consequently returns to
shareholders disappointing.
Financial Progress
Gross Written Premium ($m) Group Profit ($m)
-$6.0
-$2.4
$1.3
$9.1
-$0.4
$10.1
-$10.2
-$15.0
-$10.0
-$5.0
$0.0
$5.0
$10.0
$15.0
$12
$52
$124
$200
$218 $212
$246
$0
$50
$100
$150
$200
$250
$300
The natural
environment
Reinsurance changes
The economic
environment
Regulatory
environment
• APRA LAGIC 1.1.2013
• Capital requirements increasing
Strategic Review Change in Business Model Review driven by industry environment.
• Mansions
• NSW Home Warranty
• Callibrate Business Pack
More than 30% of Calliden’s premium is now placed
with capital providers other than Calliden
Insurance Limited.
Calliden is transitioning more of its business to
that of Managing General Agent using third party
insurers in addition to portfolios written by
Calliden Insurance Limited.
Strategic Review Change in Business Model
Capital intensive and highly
regulated
Reliant on third party
insurers
Profit generated by
combination of:
• Underwriting results
• Investment results
Profit generated by commission
Dependent on reinsurance
protection No reinsurance needed
Complex accounting and
actuarial processes Less complex
Potential for higher profit
and higher losses More predictable returns
Agency Insurance Company
Strategic Review Change in Business Model
MGA
MGA model de-risks business by delivering more
predictable returns whilst maintaining upside
through Calliden Insurance Limited.
2011 Insurance Industry’s Catastrophic Year
Reinsurance reinstatement 0.8m
Back up cover 1.2m
Increased claims handling fees 0.6m
Reduced investment income 1.0m
Subtotal $3.6m
TOTAL $4,949m $52.1m $14.9m
Additional Costs Calliden $
* Source: ICA, excludes IBNR claims
Calliden’s exposure relative to industry
experience.
2011 Insurance Industry’s Catastrophic Year
Brisbane & Ipswich / Lockyer Valley
Floods – Jan 2,380m 24.3m 2.1m
Rural Victorian Floods – Jan 122m 4.3m 2.0m
Tropical Cyclone Yasi – Feb 1,405m 5.1m 2.0m
Melbourne Storms / Flooding – Feb 419m 8.1m 2.1m
WA Bushfires – Feb 35m 0.1m 0.1m
WA Bushfires – Nov 53m 0.0m 0.0m
Victorian Hail - Dec 681m 10.2m 3.0m
Subtotal $5,095
m $52.1m $11.3m
Event Calliden Net
Claims $
Calliden Gross
Claims $
Industry
Estimate $*
Recent catastrophe experience in Australia is
unprecedented with losses way in excess of
longer term averages.
Calliden (as if) Losses Using ISA Projections*
2011 Catastrophe Experience in Context
2000-06 Average
Overall Average
2009-2011 Average
0
10
20
30
40
50
60
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
To
tal L
osses (
$m
)
Year
• Source: ISA & ICA. The chart shows Calliden’s history of theoretical losses since 1990, in 2011 dollars, based on its 2011 portfolio.
Gross Written Premium
Net Earned Premium
Investment Income
Profit / (Loss)
Shareholders Equity
212
117
8.2
10.1
107
246
126
7.9
(10.
2)
94
16%
8%
(4%)
n/a
(12%
)
2010-11 %
change 2011 $m 2010 $m
(incl. JVs)
2011 Full Year Financial Result
2011 Investment Income
Investment Portfolio
AA
74%
A+
26%
by Rating 31 Dec 2011
Cash @
Call 31%
Term
Deposits
69%
by Asset 31 Dec 2011
HY1 $000s return HY2 $000s return Annual Return
Investment
Income 3,497 3,175 6.4%
JV Investment
Income 730 544 68%
Income 2011
Secure, low risk, high quality term deposits
and cash.
Progress in 2012 Underwriting
• 2012 reduced by 1% over 2011
Reducing
Acquisition
Expenses
• Geographic zone limits for
strata
• Exit broker landlords
Catastrophe
Exposure
Management
• Home 15% with further 10% WEF
June
• Domestic Strata 19%
• Farm 15%+
• Commercial Pack 2-12%
• Motor 9%
Premium Increases
• Restructure in place
• On track Expense Management
• In place with effect 14.5.12
Great Lakes
Australia
– Business Pack
Progress in 2012
• c.$350k increase in claims
reserves
Discount Rate
Changes
Progress in 2012 Q1 Weather Events
CAT121 South-West QLD
Flooding
CAT122 NSW & VIC Flooding
Policy
numbers in
CAT zones
reduced by
23%
Exposure in
CAT zones
reduced by
17%
Flood
exposures in
CAT zones
1:20 50% reduction
1:50 35% reduction
1:100 44% reduction
Industry
6,400 claims
$125m cost
Calliden
1 claim
$70k cost (before
RI)
Industry
8,900 claims
$108m cost
Calliden
30 claims
$517k cost
(before RI)
Improved underwriting, supported by better
flood mapping, significantly reduced our
exposure to latest catastrophe events.
Outlook
• Transition up to 50% agency
o Slow process
o Discussion ongoing
• Tight control maintained on expenses
• Control of catastrophe exposure
• Prices continuing to increase, particularly
on Home
• New APRA capital standard (LAGIC) with
effect from 1.1.2013
• Growth in agency business in 2013 and beyond
o New products and segments
o Organic growth
• Modest full year 2012 profit $1-3m
AMCOM TELECOMMUNICATIONS ASX- AMM Presented by David Hinton (CFO)
Amcom Telecommunications
• Market Cap ~ $260m
• Telco/IT Sectors
• Network owner/operator
• Recurring annuity style revenue model
• Strong financial position with low net debt
• Well positioned for further growth
Products
• Data Networks
• Internet
• Data Centre
• Hosted IP Voice & Video
• IT Integration
• IT in the Cloud
• Managed Services
Strategically well positioned
Ideally placed to leverage the opportunity:
• Customer relationships ~ 900 Corporate & Government
• Fibre Networks
• Data Centres
• Private Cloud offerings
• Execution capability – acquisition of L7 Solutions
Own / Other Networks
Own Networks
• Perth ~ 1,800km
• Adelaide ~ 230km
• Darwin ~ 180km
Third Party Networks
• Melbourne – 3rd Party
• Sydney – 3rd Party
• Brisbane – 3rd Party
P
D
A
M
S
B
National Network Reach
Customers Select Amcom
• Pricing - Simple, competitive, flexible and easy to understand
• Network performance & reliability
• Customer service culture
• Strong account management
• Innovative solutions tailored to customers’ requirements
Channels to market
1. Direct sales teams
• Vertical market focus
2. Wholesale to other Telco’s
3. Resellers ~160
• Business Partners sell an “Amcom”
product
• Resellers “white label”
Based on Data Networks and Internet Revenue
52%
26%
12%
11%
Corporate Wholesale
Reseller
Government
Annuity Revenue
• Recurring billing relationship
• Start FY1 with base
• Add new sales
• Less churn
• Competitive Loss
• Price
• Replace
• Consolidate
• Project End
• Start FY2 with higher base
FY1 Base
FY2 Base
Sales Churn
1HFY12 Result Highlights
• Strong sales growth across all product lines
• Fibre sales for the first half up 45% on PCP
• Product offering broadened – cross sell and acquire new
customers
• Acceleration of Cloud through the acquisition of L7
• Clean structure with the in specie distribution of iiNet
Shareholding
• Investing in FY12 for next step change in FY13
1HFY12 Result
Revenue 55.9 41.4 p 35%
EBITDA 16.6 13.8 p 20%
NPAT - Operating Units 8.4 7.0 p 20%
Profit - in specie 18.6 -
Acquisition expenses and other once off items (0.5) -
Equity Accounted Earnings - 2.9
NPAT - Reported 26.5 9.9 p 169%
Earnings per share (Operating Units) 3.5c 2.9c p 21%
Earnings per share (Reported) 11.0c 4.2c p 168%
Dividend per share 1.8c 1.8c
ROE normalised 14.8% 14.5% p 2%
Reported Results ($m) 1H12 1H11 Var %
Consistent Track Record (3 YR CAGR)
55.9
Revenue ($m)
31%
1H09 1H10 1H11 1H12
41.4
29.0
25.0
8.4
NPAT*($m)
33%
7.0
4.8
3.5
3.5
EPS*(cps)
23% 2.9
2.6 1.9
1.8
Dividend (cps)
26% 1.8
1.2
0.9
1H09 1H10 1H11 1H12
1H09 1H10 1H11 1H12 1H09 1H10 1H11 1H12
* Before iiNet related amounts and once off items
+ 30¢ in specie
Growth Strategy
IT - The Opportunity
CONVERGING PRODUCTS
Cloud IP Voice
Managed Services Unified Communications
TELCO IP Voice
Data Networks Internet
Data Centres
IT IT Integration Managed Services Consultancy
The IT and Telco sectors converging
L7 Business
The IT and Telco sectors converging
• ~ 130 IT Professionals
• ~ 200 Corporate & government customers
• Moving towards the delivery of IT-as-a-service
#1 Partner in WA
The Emerging Cloud
Cloud is an emerging
market, customers will be
moving from on-premise
into the Cloud
IP Telephony
IT
Cloud On Premise
Amcom
L7
Amcom
L7
On-premise
“…by 2015, 50% of all CIOs expect to operate the majority of their
applications and infrastructure via the Cloud.” Gartner
Customer choice and transition path to the Cloud
Solid Position for Growth
Proven track record to deliver over the past five years
Earnings from “essential” annuity based services
Bolstered IT capabilities with L7 – more products to sell
Strong cash flow generation with low debt levels
* Net profit after tax from wholly owned operations in FY12 before once-off items
Outlook
• Amcom maintains guidance of double digit earnings growth*
• Full year benefit of FY12 will drive accelerated growth in FY13
Appendix
1HFY12 EBITDA Contribution
$13.8m
1H12 1H11
$16.6m $2.3m
$0.6m
Fibre Business
Services
Corporate
p 20%
$2.8m
EBITDA Growth
$(0.1)m
Drivers
• Exposure to buoyant
economy, particularly WA
• Fibre network products in
demand
Outcomes
• Benefits of scale
• Margin change with
adjacent products
• Increased free cash
1H FY12 Cash Flow
EBITDA 16.6 13.8 p 21%
Interest paid (0.3) (0.5)
Tax paid (3.3) (1.9)
Working Capital & Other 1.1 (0.5)
Operating Cash Flow* 14.1 10.9 p 30%
($m) 1H12 1H11 Var %
1H12 1H11
4.5¢
5.8¢
30%
Operating Cash Flow
per share (¢)
* iiNet dividend $2.1m excluded from PCP
1H FY12 Cash Flow Conversion
Ungeared Free Cash* to
Underlying NPAT
Cash Flow conversion accelerating as business scales
1H10
$2.1m
43%
$4.8m
1H11
$3.4m
48%
$7.0m
* Operating Cash Flow before interest, tax and iiNet dividend less Capex
1H12
$7.8m
$8.4m
93%
Free
Cash
Capex Efficiency
1H12 1H11
Stay in Business
Capex
Growth Fibre
Capex
Growth Cloud
Capex
$2.9m
$5.3m
$1.7m
$7.3m*
$2.6m
$9.9m $9.9m
* Includes $2.0m Northern Territory Government Build
Growing Efficiency
Capex to connect $1
of Fibre Revenue
1H10 1H11 1H12
64¢
82¢
$1.00
Some of the statements in this presentation constitute “forward-looking statements” that do not directly
or exclusively relate to historical facts. These forward-looking statements reflect Amcom
Telecommunications Limited’s current intentions, plans, expectations, assumptions and beliefs about
future events and are subject to risks, uncertainties and other factors, many of which are outside
Amcom Telecommunications Limited’s control. Important factors that could cause actual results to
differ materially from the expectations expressed or implied in the forward-looking statements include
known and unknown risks. Because actual results could differ materially from Amcom
Telecommunications Limited’s current intentions, plans, expectations, assumptions and beliefs about
the future, you are urged to view all forward-looking statements contained in this presentation with
caution.
This management presentation may not be copied or otherwise reproduced.
Disclaimer
CLOVER CORPORATION ASX- CLV Presented by Ian Brown (CEO)
2
MANAGING FOR GROWTH
• Vision, strategy & structure
• Clover’s development
• Financial performance
• Clover’s products
• Competitive strengths and challenges
• Growth drivers & innovation
• Priorities & outlook
3
STRATEGIC VISION
Clover Corporation seeks to:
• Identify, develop and commercialise speciality functional and nutritional
ingredients in the growing “nutraceutical” market
• Develop and commercialise leading edge proprietary and patented delivery
technology including encapsulation
• Work with innovative and multinational industry partners to leverage core
technical and manufacturing strengths to innovate and launch new products
and expand in core markets
• While retaining a conservative financial base, deliver growth on earnings and
dividends
4
COMPANY DESCRIPTION
• Focus on two business units:
– Clover Corporation focuses on innovation & obtaining the optimal return from proprietary
technology
– Nu-Mega Ingredients commercialises proprietary ingredient delivery and encapsulation
technology in targeted value added markets
• Work with customers to identify, design, develop, test & launch new products
• Generate sales directly and through specialist distribution partners
• Maintain strong links with technical & academic agencies including CSIRO
• Employ 33 staff, including 4 PhD’s, with offices in Sydney, Melbourne,
Brisbane and UK
Clover Corporation
• 1988 Private Co.
• 1999 – ASX listed
• JV with Heinz for tuna oil processing
• Research in encapsulation
2002-2007
• Clover Corp JV with Food Spectrum = Nu-Mega Ingredients
• Uses encapsulated tuna oil in foods & infant formula
• Focus on Asian and European markets
• 2004 – Clover Corp JV to form FFI for proprietary soy ingredients
2007-2011
• Nu-Mega Ingredients 100% subsidiary of Clover Corporation
• 2008 - New Innovation & Sales facility in Brisbane
• Development of the innovations program
• Multi-year supply contracts with infant formula companies
• 2009 - Frost & Sullivan Ingredient Company of the Year
• 2011 – AGP NPD program with CSIRO
5
KEY COMPANY DEVELOPMENTS
6
SUMMARY OF FINANCIAL
PERFORMANCE
FP2011 (13 months) FY2010 FY2009 FY2008 FY2007
Sales Revenue $35.6 m $34.9 m $21.1 m $21.6 m $16.5 m
Total Revenue $36.0 m $35.9 m $22.9 m $22.9 m $17.7 m
Profit before tax $6.1 m $1.6 m $4.5 m $3.0 m $1.3 m
Profit after tax $4.60 m ($0.97) m $3.1 m $4.1 m $0.6 m
EPS (cents) 2.70 cents (0.59) cents 1.87 cents 2.5 cents 0.38 cents
Dividend 1.50 cents/share 1.25 cents/share 1.00 cent/share 1.00 cent/share
Shares on issue 165.2 m 165.2 m 165.2 m 165.2 m 165.2 m
Total contributed
equity $32.9 m $32.9 m $28.3 m $27.0 m $23.7 m
Cash total $7.4 m $12.2 m $9.2 m $10.8 m $11.0 m
7
0
10
20
30
40
FY07 FY08 FY09 FY10 FP11
million ($)
HISTORICAL SALES REVENUE GROWTH
Sales Revenue
CAGR (over 4 years) = 21% p.a.
FP11 represents 13 months
8
0
2
4
6
8
10
12
14
16
18
20
FP11 FP11 (normalised) FY12
million ($)
SALES REVENUE +27.8% IN THE FIRST HALF FY2012
Sales Revenue
Normalised period for 1 August to 31 January
* Normalised results are non-statutory measures and represent results from continuing operations.
Expenses totalling $970,000 in respect of the joint venture, Future Food Ingredients Pty. Limited have
been excluded from the normalised results.
CLOVER HALF YEAR RESULTS
ended 31 January 2012
$m 4D Reported
31 Jan 2012
4D Normalised*
31 Jan 2012
4D Reported
31 Dec 2010
PCP
1 Aug’10 – 31 Jan ‘11
Revenue $17.93 $17.93 $14.03 $15.395
Profit before tax $2.80 $3.77 $2.68 $3.29
Depreciation/Amort/
Interest
($0.257 )
$0.154
($0.257)
$0.154
($0.121)
$0.300
($0.117)
$0.276
EBITDA $2.90 $3.87 $2.50 $3.13
EBIT $2.64 $3.61 $2.38 $3.01
Tax ($1.10) ($1.10 ) ($0.73) ($0.99)
NPAT $1.70 $2.67 $1.95 $2.30
EPS cents 1.03 1.62 1.18 1.39
ROE (annualised) 12.4% 19.5% 13.9% 17.4%
9
* Normalised results are non-statutory measures and represent results from continuing operations. Expenses totalling $970,000 in
respect of the joint venture, Future Food Ingredients Pty. Limited, have been excluded from the normalised results.
OVERVIEW OF NU-MEGA
PRODUCTS
10
Tuna oil Algal & other oils Other bioactives
Refine Purchase from various sources
Tuna oil
Emulsion
Microencapsulated
Powders
Maximize the use of proprietary bioactive delivery technology
• Clover’s core strengths;
– Focus on growing value added markets
– Commercially focused R&D programs with high returns
– Ability to leverage R&D relationships with customers &
research communities
– Proprietary & patented technology
– High quality products & excellent reputation with clients
– Dedicated and skilled staff
• Long term commercial relationships
• Expanding product portfolio supported by
sound science
• Long product life cycle supported by rigorous
customer evaluation
• Excellent customer & applications support
• Specialised distribution network
• Low capital – high ROE model
COMPETITIVE STRENGTHS A CULTURE OF COMMERCIAL INNOVATION
12
0.00
0.50
1.00
1.50
2.00
FY07 FY08 FY09 FY10 FP11
million ($)
HISTORICAL RESEARCH & DEVELOPMENT EXPENDITURE
R&D Expenditure * All expensed
FP11 represents 13 months
13
FOCUS ON GROWTH MARKETS & VALUE ADDED PRODUCTS
• Clover’s key market – encapsulated
powders & nutritional delivery systems
for infant formula & other value added
applications
• Infant formula market is projected for
strong global growth (CAGR +12% p.a.*)
• Focus value added opportunities in
growing & emerging markets
– China +60% increase in sales revenue in FY2011
Australia/New Zealand 16%
Asia 73%
Europe 7%
Americas 4%
Oil 6%
Encapsulated Powders 93%
Soy 1%
FP2011 Geographic
FP2011 Products
* Frost & Sullivan Report , 2011
14
MULTIPLE GROWTH DRIVERS & DELIVERY
• Maintaining a position at the forefront
of technical development for bioactive
delivery and encapsulation technology
– 4 patent applications filed in FP2011
• Identifying value added applications
– Infant formula (CAGA +12%)*
• Working with our customers to develop
& provide market relevant proprietary
products in a timely manner
– Multi-year supply agreements with major infant
formula companies in FY2012
• 5 new products launched for customer
evaluation & evaluation in 2011 (usually
a 2-4 year process)
Product mix in FP2011
* Frost & Sullivan Report , 2011
15
IMPACT IN FP2011 OF NEW PRODUCTS &
THE DIVERSIFICATION OF BIOACTIVES
Sales Revenue from New Products
in FP2011
Sales with Diversified Bioactives
in FP2011
* Increased 5% from FY2010 * Increased 14% from FY2010
INNOVATION LEADS TO NEW
PRODUCTS & REVENUES
16
TECH 1
TECH 2
TECH 3
TECH 4
TECH 5
TECH 6
(OWNED) Infant formula ENCAPSULATION Omega 3 lipids
(LICENSED) ENCAPSULATION
ENCAPSULATION
ENCAPSULATION
ENCAPSULATION
EMULSION
(LICENSED)
(OWNED)
(OWNED/
LICENSED)
(OWNED/
LICENSED)
Omega 3 &/or 6 lipids
Omega 3 &/or 6 lipids
Single or multiple bioactives
Single or multiple bioactives
Omega 3 lipids
Infant formula /
Functional foods
Infant formula /
Functional foods /
Medical foods
Infant formula /
Functional foods / Medical
foods / Pharmaceutical
Infant formula /
Medical foods
Infant formula /
Functional foods /
Medical foods
Company
rights Form Bioactive
Application
# Carbohydrate based encapsulation system for foods.
# Carbohydrate & protein encapsulation system with enhanced stability.
# Carbohydrate & protein system for targeted Gastrointestinal delivery.
# Specialist encapsulations system for infant formula manufacture.
# Specialised delivery system for infants.
# Delivery system for sensitive bioactives with improved sensory performance
17
PRIORITIES & OUTLOOK FP2012
• 27% increase in sales revenue for the first half FY2012
– Continued expansion in growing markets such Asia and Oceania
– Market is competitive for Clover and its customers
– Robust sales from existing product portfolio
• 3-year supply agreement with multi-national infant formula manufacturer
• Novel Food approval in Canada for the use of Clover’s powders in Toddler formula/foods
• Expansion of innovation program with CSIRO Australian Growth Partnership program ($1.2 million over
3 years)
• Upgrade of the Altona manufacturing facility ($1.5 million)
• Exploring offshore licensing & manufacturing opportunities
• Currently in negotiations with alternative distributors for the development of the functional food
opportunities in the Americas and Europe
• Customer evaluation of new products is underway
• Positive outlook for the second half of FY2012
18
THANK YOU
Questions?
19
DISCLAIMER
The release, publication or distribution of this presentation in certain jurisdictions may be restricted by
law and therefore persons in such jurisdictions into which this presentation is released, published or
distributed should inform themselves about and observe such restrictions.
This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to
subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction
in contravention of applicable law.
Persons needing advice should consult their stockbroker, bank manager, solicitor, accountant or other
independent financial advisor. Certain statements made in this presentation are forward-looking
statements. These forward-looking statements are not historical facts but rather are based on Clover
Corporation’s current expectations, estimates and projections about the industry in which Clover
Corporation operates, and its beliefs and assumptions. Words such as "anticipates," "expects," "intends,"
"plans," "believes," "seeks,” "estimates," and similar expressions are intended to identify forward-looking
statements.
These statements are not guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors, some of which are beyond the control of Clover Corporation, are difficult
to predict and could cause actual results to differ materially from those expressed or forecasted in the
forward-looking statements. Clover Corporation cautions shareholders and prospective shareholders not
to place undue reliance on these forward-looking statements, which reflect the view of Clover Corporation
only as of the date of this presentation. The forward-looking statements made in this presentation relate
only to events as of the date on which the statements are made. Clover Corporation will not undertake any
obligation to release publicly any revisions or updates to these forward-looking statements to reflect
events, circumstances or unanticipated events occurring after the date of this presentation except as
required by law or by any appropriate regulatory authority.
Ned Montarello Executive Chairman & CEO
6th EDITION | Sydney Hilton | 13th June 2012
Disclaimer
No recommendation, offer, invitation or advice
This presentation is not a financial product or investment advice or recommendation, offer or invitation by any person or to any person to sell or purchase securities in ThinkSmart Limited (“ThinkSmart”) in any jurisdiction. This presentation contains general information only and does not take into account the investment objectives, financial situation and particular needs of individual investors. Investors should make their own independent assessment of the information in this presentation and obtain their own independent advice from a qualified financial adviser having regard to their objectives, financial situation and needs before taking any action. This presentation should be read in conjunction with ThinkSmart’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange.
Exclusion of representations or warranties
No representation or warranty, express or implied, is made as to the accuracy, completeness, reliability or adequacy of any statements, estimates, opinions or other information, or the reasonableness of any assumption or other statement, contained in this presentation. Nor is any representation or warranty, express or implied, given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, prospective statements or returns contained in this presentation. Such forecasts, prospective statement or return are by their nature subject to significant uncertainties and contingencies many of which are outside the control of ThinkSmart. Any such forecast, prospective statement or return has been based on current expectations about future events and is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described. To the maximum extent permitted by law, ThinkSmart and its related bodies corporate, directors, officers, employees, advisers and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use or reliance on anything contained in, or omitted from, this presentation.
Jurisdiction
This distribution of this presentation including jurisdictions outside Australia, may be restricted by law. Any person who receives this presentation must seek advice on and observe any such restrictions.
Nothing in this presentation constitutes an offer or invitation to issue or sell, or a recommendation to subscribe for or acquire securities in any jurisdiction where it is unlawful to do so. The securities of ThinkSmart have not been, and will not, be registered under the US Securities Act of 1933 (as amended) (“Securities Act”), or the securities laws of any state of the United States. Neither this presentation or any copy hereof may be transmitted in the United States or distributed, direct or indirectly, in the United States or to any US person including (1) any US resident, (2) any partnership or corporation or other entity organised or incorporated under the laws of the United States or any state thereof, (3) any trust of which any trustee is a US person, or (4) any agency or branch of a foreign entity located the United States. No securities may be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws.
Investment Risk
An investment in ThinkSmart securities is subject to investment and other known and unknown risks, some of which are beyond the control of ThinkSmart. ThinkSmart does not guarantee any particular rate of return or the performance of ThinkSmart securities.
History
1996:
Incorporation
Dick Smith contract
2002:
UK business signs Dixons
2007:
IPO
2012:
Fifth consecutive year of profit growth
ThinkSmart today
Multi- territory: Multi- product:
Rental: consumer Rental: commercial Payment Plan
Transformation agenda
SUSTAINABLE GROWTH
Funding platform
Distribution network
Product diversification
Asset quality
Management capability
Funding platform
• New committed facilities and securitisation in place
• Diversified sources of funding
• Committed facilities are sufficient to support growth
0
50
100
150
200
250
2009 2010 2011
$'m
illio
ns
Funding Capacity
UndrawnDrawn
Distribution network
• Long-standing relationships with all key retail partners
• All key existing deals run to 2014 and beyond
• New products diversify distribution beyond electronic retailers
Product diversification
TERRITORY TARGET MARKET PRODUCT TYPE LAUNCH DATE
Australia
Consumer Multi-segment
Payment Plan
February 2012
UK
Commercial Multi-segment
Rental
May 2012
FIDO
THINKSMART BUSINESS LEASING
Asset quality
• Significant focus on enhancing Group credit performance:
Investment in risk management systems and capability in 2011
Tighter criteria to approve customer assessment
• Product diversification will further improve credit profile
• Important medium term implications:
Lower cost of funds
Reduced requirement for subordination
Management capability
• Significant time invested to upscale internal capability
• New additions over the last 12 months – all now in place
Expanded Board – new NED with additional banking experience
Group CFO
Managing Director and Head of Business Development in the UK
Head of Sales in Australia and UK
• Depth and breadth of talent significantly improves our ability to execute
Lease accounting
• Higher total profits...spread over contract term
• Lease accounting provides a richer and more stable income stream
Note1 – Example based on an indicative 36 month contract originated in July 12 with a Settled Value of $1,500
Net income: $700
Brokerage
Year 1 Year 2 Year 3
$450
$nil $nil
Net income: $875
Lease accounting
$170
$450
$180
+25%
Year 4
$250
Year 1 Year 2 Year 3 Year 4
$75
2012 – transition year
• Income spread more evenly over contract life
• Negative impact on P&L in transition year Lease accounting
• Under-performance from electronic sector
• Exacerbated by short-term factors Australian retail sector
• Longer than expected launch phases
• No change to medium term expectations Launch of new products
• Strong income and profit growth to continue
• Mutually accretive relationship with Dixons Continued growth in UK
Financial potential
• 2013 financial results will include income from business written in 2011, 2012 and 2013
Lease accounting
• Establish a significant position in the established Australian payment plan market
Volume growth – Australia
• Provide a niche offering to satisfy untapped commercial demand in the UK
Volume growth - UK
• Investment in operational capability complete
• Overheads expected to broadly track CPI Scalable business model
Q&A
CONTACT DETAILS:
Ned Montarello
Executive Chairman & CEO
Phone: (08) 94637401
Alistair Stevens
CFO
Phone: (08) 94637449
Microequities Microcap Conference
13th June 2012
Vocus is a multi-award winning next
generation provider of critical
telecommunications infrastructure
Vocus Overview
2011 Telecommunications Carrier of the Year Award
2012 Placed 6th 2011 Placed 9th 2010 Placed 28th
#1 Fastest Growing Technology Company in Australia
#2 Fastest Growing Technology Company in Asia Pacific
3
What We Do
Internet Fibre and Ethernet Voice Data Centre and
Cloud Services
• Operate Australia’s largest
wholesale IP backbone after
Telstra and Optus
• Provide Internet access to
ISPs and Telcos in Australia,
New Zealand, Singapore and
US
• Provide an Internet offering
to the corporate sector
• 21 Points of Presence
(“POPs”) in Australia
5 POPs in NZ
4 POPs in USA
1 POP in Singapore
• Next generation ready:
Australia’s largest IPv6
provider
• Operate Data Centres in
• Auckland [1]
• Christchurch [1]
• Sydney
• Melbourne
• Perth
• Lease individual rack units or
private suites
• Sell bundled connectivity and
Data Centre services
• NZ Cloud Services [1]
• Online Data Backup
• Virtual Private Servers
• Own and operate fibre optic
networks in CBD and Metro
areas of
• Brisbane
• Sydney
• Melbourne
• Have an extensive Carrier
Ethernet network to provide
managed Ethernet services
• Provide International
Ethernet between USA,
Singapore, New Zealand and
Australia for corporate
connectivity
• Provide call termination
services to domestic and
international destinations
• Port traditional Voice
numbers to VoIP for ISPs
• Provide wholesale phone
numbers to ISPs for their
client’s use
[1] Once Maxnet acquisition completes 4
What we provide and where
Perth Adelaide
Melbourne
Sydney
Brisbane
Auckland
Singapore
Canberra
Vocus Data Centres
Vocus Fibre
Vocus Internet and Voice
Vocus Domestic Ethernet Network San Jose
Hawaii
Fiji
Connects Australia and New Zealand to the world
Christchurch DR
L.A.
5
FY12 Guidance
FY12 Guidance
Source: Management accounts (unaudited)
Notes: Underlying EBITDA excludes FX gains and losses. FY12E includes unaudited actuals to April 12 and estimated contribution from the Maxnet acquisition.
Revenue
• Vocus expects revenue to range
between $45 to $47 million for FY12,
an approximate 45% increase on FY11
Underlying
EBITDA
• Vocus expects Underlying EBITDA to
range between $16.0m and $16.5m
for FY12, an approximate 63%
increase on FY11 9.8
16 -
16.5
FY11A FY12E
31.0
45 - 47
FY11A FY12E
7
Historical Trend Financial Performance
• Strong growth from
both organic and
acquired businesses
• Efficiencies and
economies of scale
with new products
and shared cost base
Source: Management accounts (unaudited)
Notes: Underlying EBITDA excludes FX gains and losses. FY12E includes unaudited actuals to April 12 and estimated
contribution from the Maxnet acquisition.
0
5
10
15
20
25
30
35
40
45
50
FY08A FY09A FY10A FY11A FY12E
Revenue ($m) Underlying EBITDA ($m)
0
2
4
6
8
10
12
14
16
18
FY08A FY09A FY10A FY11A FY12E
63%
growth
to FY12
45%
growth
to FY12
8
• Major investment made in Fibre
Network in FY12 based on
customer demand
• Data Centre Expansion of
Sydney Facility in both FY11
(SYD02) and FY12 (SYD03)
FY12 has been an expansion year
9
0.30
0.54
1.01
-
0.20
0.40
0.60
0.80
1.00
1.20
FY10 FY11 FY12E
Mil
lio
ns
Overall maintenance capex spend
Maintenance Capex
1.18 1.27 1.49
2.09 1.98 0.37
8.13
-
2
4
6
8
10
12
14
FY10 FY11 FY12E
Mil
lio
ns
Growth capex spend by Product
Core Network Data Centre Fibre
• Separated existing business [blue]
and acquired business [orange] for
greater clarity
• Voice business contributed little
growth from FY11 to FY12
• Continued demonstrated growth in
core business
• Organic new product growth
accelerated in FY12
Combination of Organic and Acquisition Growth
Source: Management accounts (unaudited)
0
5
10
15
20
25
30
35
40
45
50
FY10A FY11A FY12E
Acqusition Growth Acquisition Base Base
Revenue ($m)
10
• Strong growth in all Products
aside from Voice
• Expanding product balance with
Data Centre and Fibre &
Ethernet products
• Corporate market will drive
additional growth and margins in
all products
Towards a balanced product set
Total Revenue by Service (%)
Source: Management accounts (unaudited)
Internet 54%
Internet 45%
Voice 29%
Voice 21%
Data Centres 9%
Data Centres
18%
Fibre and Ethernet
14%
0
5m
10m
15m
20m
25m
30m
35m
40m
45m
FY11A FY12E
Internet Voice Data Centres Fibre and Ethernet Other
11
• Increased diversity of
customer base
• Huge growth in number
of orders across the
business reflects
growing number of
products offered
More orders providing customer diversity
Sales Order Growth
Sales Orders
in Quarter
0
20
40
60
80
100
120
140
Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12
Nu
mb
er
of
Sa
les O
rde
rs
12
21.00
21.50
22.00
22.50
23.00
23.50
24.00
24.50
25.00
25.50
26.00
26.50
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12
Mo
nth
s
• Vocus’ weighted average
remaining contract
duration has increased in
FY12 due to significant
growth in Data Centre and
Fibre
• Provides greater
contracted future income
Trend in Contract Duration
Contract Duration (Months)
Weighted Average
Remaining Contract
Duration
13
• Total original IRU borrowing $45m
• Liability reduced by $17m since inception
• Remaining $28m (44% hedged)
• Reduced liability by $2.4m in 5 months to May 2012
IRU and FX Hedging
IRU Liability and Hedge Position
Total original IRU borrowing (AUD) Current IRU borrowing (AUD) Hedged amount at spot (AUD)
45.1 28.1 12.3
0 10m 20m 30m 40m 50m
Source: Management accounts at May 12 (unaudited)
14
Product Updates
15
• 23% revenue growth
• Internet Product Includes
Wholesale Internet
Corporate Internet
Includes Delivery of
o DSL
o Fibre
o Ethernet
Internet Products
0
5
10
15
20
25
FY10A FY11A FY12E
Internet Revenue ($m)
FY11 FY12E
Traffic Growth 128% 80%
Total Customers 94 212
Number of Internet POPs 23 31
New Corporate Customers 0 30
16
• 8% revenue growth
• Business has historically
grown but requires renewed
focus in FY13
• Voice network combined with
the Fibre and IP network
should provide a strong value
proposition and cost structure
going forward
Voice Products
Voice Revenue ($m)
0
2
4
6
8
10
12
FY10A FY11A FY12E
17
• Sydney expansion SYD03a ready June 30th
• Maxnet acquisition provides Data Centres in
Auckland and Christchurch once completed
• Vocus will operate 7 Facilities across 5 cities
Data Centre Products
Data Centre Revenue ($m)
0
2
4
6
8
10
FY10A FY11A FY12E
Photos of Sydney expansion space (SYD03a) 9th June
18
Maxnet Acquisition – Data Centre and Cloud
Acquisition Undertaken Maxnet Limited Business
Auckland’s premier Data Centre
Tier 2+ Auckland DC 420sqm up to 30kW &
128sqm Christchurch DC with approximately 200
and 50 racks, respectively
Services offered include co-location, connectivity,
on-line backup and end-to-end virtualisation to
business and wholesale clients.
Vocus expects the acquisition to expand its Data
Centre presence in New Zealand and
compliments the Company’s existing Internet
operations.
The acquisition also provides Vocus with one of
New Zealand’s most established providers of
Cloud Services, marking Vocus’ next step into the
high growth Cloud market.
Initial Purchase Price NZ$8.5m
Deferred Consideration NZ$1.0m
Expected Annual EBITDA NZ$2.0m 19
• 186% revenue growth
Fibre and Ethernet Products
Fibre and Ethernet Revenue ($m)
0
2
4
6
FY10A FY11A FY12E
Vocus Dark Fibre Network Key Statistics
Geographic location CBD and Metro areas in Sydney, Melbourne and Brisbane
Fibre length
59km (at acquisition) 176km (as at June 2012) 235km (underway, expected completion August 2012) 275km (planned, expected by December 2012)
Data Centres connected
9 (on acquisition) 14 (August 2011) 22 (October 2011) 27 (Jan 2012) 43 (June 2012)
On-net buildings 166
Current utilisation <5% of fibre capacity
Vocus GIS Fibre tracking tool
20
Fibre Development
-
50
100
150
200
250
-
50
100
150
200
250
Jan 11 Mar 11 May 11 Jul 11 Sep 11 Nov 11 Jan 12 Mar 12 May 12 Jul 12
Nu
mb
er
of
Serv
ices
Kilo
metr
es
Vocus Fibre Network Development
Fibre Network Kilometres Dark Fibre Services
Acquisition of DRN fibre
network by Vocus
Average remaining
contract duration for
Fibre at May 2012 is 35
months
21
• Demonstrates Vocus’
immediate success in sales
• Vocus expects Capex
required to sell new
contracted revenue to
continue to decrease
• Network utilisation remains
<5% with large potential to
sell more services on
existing infrastructure
Increasing Returns on Fibre Capex
3.29
1.23 1.04
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Digital River* 1H12 2H12E
Fibre capex $1 for each $1 of contracted revenue
Growing Efficiency
* Digital River capex efficiency is calculated using the purchase price of Digital River
and contracted revenue arising from the acquisition
22
Sales & Marketing Expansion
Sales Expansion
• Significant Investment in Sales and Marketing Teams
At Listing – FY10 FY12E
Number of Sales Offices 1 5
Sales & Marketing Team 3.5 16
Marketing Events 9 19
Marketing Budget $172k $425k
24
Expanded Sales Offices in FY12
Perth [1 Staff]
Melbourne [2 Staff]
Sydney [7 Staff]
Brisbane [3 Staff]
Auckland [3 Staff]
Vocus Sales Offices [16 Staff]
25
Expanding Marketing Activity in FY12
26
• Channel manager hired to manage sales activity
outside the primary Corporate and Wholesale
channels
Resulting shift from Wholesale focus
Channel Products Segments
Corporate
• Internet
• Data Centres
• Fibre & Ethernet
Corporates
Wholesale
• Internet
• Voice
• Data Centres
• Fibre & Ethernet
Telcos
Service Providers
Hosting Providers
Corporate 18%
Wholesale 82%
FY12E Sales by Channel
Corporate 4%
Wholesale 96%
FY11 Sales by Channel
27
• Vocus is experiencing strong
organic customer growth
• Exciting growth from International
carrier customers
• Continued low churn rate
Resulting Customer Growth
Customer Growth
Source: Billing Data
Notes: Customer numbers at 2012 Q3 Mar 12 excludes customers from the Maxnet
acquisition
13 28
45 54
67 81
96 103
111 112
133 145
301 309
337
363
Ju
n 0
8
Se
p 0
8
De
c 0
8
Mar
09
Ju
n 0
9
Se
p 0
9
De
c 0
9
Mar
10
Ju
n 1
0
Se
p 1
0
De
c 1
0
Mar
11
Ju
n 1
1
Se
p 1
1
De
c 1
1
Mar
12
Perth data centre
and dark fibre
acquisition
E3 data centre
acquisition
Organic
Growth
28
Example Customers
29
Sales Mix Evolution
100%
Q3 2010
31%
51%
18%
Q3 2012
60% 18%
22%
Q3 2011
Internet Fibre/Ethernet Data Centre
30
FY13 What to Expect
• Expansion of Fibre Network
• Strategic Acquisitions
• Growth from Corporate market
• Integration of Maxnet and other acquired
businesses
What to expect in FY13
32
Corporate Detail
Shareholdings
1. SPENCELEY MANAGEMENT PTY LTD <SPENCELEY FAMILY A/C> 7,417,888 12.15
2. IWPE NOMINEES PTY LIMITED <IWPE FUND 3 A/C> 6,666,667 10.92
3. TAMEION PTY LTD <TAMEION SUPER FUND A/C> 5,163,881 8.46
4. TAMEION PTY LTD <MCCONNELL II FAMILY A/C> 2,340,545 3.84
5. FIRST CAPITAL PARTNERS PTY LIMITED 2,000,000 3.28
6. INVESTEC BANK (AUSTRALIA) LIMITED 2,000,000 3.28
7. IWPE NOMINEES PTY LIMITED <IWPE FUND 3A A/C> 1,333,333 2.18
8. LAYER 10 PTY LTD <WILTONGATE A/C> 1,322,916 2.17
9. COGENT NOMINEES PTY LIMITED 999,614 1.64
10. MR DANIEL LACHLAN WHITFORD 990,000 1.62
11. ALSUMARY PTY LTD <THE ALSUMARY SUPER FUND A/C> 764,696 1.25
12. DALESAM PTY LTD <JON BRETT SUPER FUND A/C> 764,695 1.25
13. ROMAN EMPIRE PTY LTD 627,598 1.03
14. MR MCDONALD WHITFORD RICHARDS 627,500 1.03
15.W DONNELLY SERVICES PTY LTD <THE DONNELLY SUPER FUND
A/C>551,038 0.90
16.SPENCELEY MANAGEMENT PTY LTD <SPENCELEY FAMILY S/F
A/C>532,112 0.87
17. MR MARK DE KOCK 472,959 0.77
18. TUWELE PTY LIMITED <ROSELLA SUPERANNUATION A/C> 451,386 0.74
19. GALLIUM PTY LTD 426,992 0.70
20. GDL INVESTMENTS PTY LIMITED 426,992 0.70
35,880,812 58.79
25,146,863 41.21Total Remaining Holders Balance
Rank Name Shares held % of total
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
(TOTAL)
• Shares on issue at 31 May 2012:
61,027,675
• Employee options on issue at 31 May 2012:
2,967,500
• Shareholders on listing:
685
• Shareholders at 31 May 2012:
2,922
34
James Spenceley
CEO
Mark de Kock
Executive Director, Strategy
Rick Correll
CFO
Level 1, Vocus House
189 Miller Street
North Sydney
P: +61 2 8999 8999
F: +61 2 9959 4348
www.vocus.com.au
Contacts
35
This presentation contains forward looking statements that involve risks and uncertainties.
These forward looking statements are not guarantees of Vocus' future performance and
involve a number of risks and uncertainties that may cause actual results to differ
materially from the results discussed in these statements.
This presentation only contains information required for a preliminary evaluation of the
company and in particular only discloses information by way of summary within the
knowledge of the company and its directors. An investor should seek its own independent
professional advice in relation to the technical, financial, taxation, legal and commercial
matters relating to any investment in Vocus Communications Limited.
Other than to the extent required by law (and only to that extent) the company and its
officers, employees and professional advisors make no representation, guarantee or
warranty (expressed or implied) as to, and assume no responsibility or liability for, the
contents of this presentation.
Disclaimer
36
LASERBOND ASX- LBL Presented by Wayne Hooper (CEO)
LaserBond Can:
Reclaim worn industrial parts at a fraction of the cost of
replacement.
Dramatically improve resistance to wear and corrosion.
Provide longer service life and
improved performance of critical components
LaserBond Has:
The most advanced surface
engineering systems.
The broadest capabilities in the country, offering the most
appropriate solution for each application.
Our Clients Achieve:
Lower running costs
Minimised down-time and breakdowns
Reduced waste of high value materials
Increased productivity/up time
Reduced spare parts inventory
Core Products & Technologies LaserBond® Cladding
• Welded (metalurgical) bond.
• Limited & precisely controlled heat input.
• Minimised decomposition of hard phases such as carbides, resulting in superior wear resistance.
• Minimised dilution with base material, resulting in superior performance.
• Suitable for aggressive, high impact environments.
• We can guarantee a LaserBond™ layer will not come off.
Application Example
John Hefko – BlueScope Steel Mechanical Engineer said: “We used to change welder carryover rolls every six weeks but after 54 months the original LaserBond® clad rolls are still going strong with negligible wear”
Thermal Spraying
Produces high performance surfaces with a mechanical bond. No risk of distortion or metallurgical changes to the component. High Pressure High Velocity Oxy-Fuel) HP HVOF • Results in surfaces of the highest possible quality and performance. • Produces extremely wear resistant coatings. Electric Arc Spraying • Predominantly used for economical rebuilds. Plasma Arc Spraying • Typically used for high melting point materials such as ceramics
Large Capacity Machine Shops Including CNC and conventional equipment Allows the complete rehabilitation of worn components, and the manufacture of new components
Metallographic laboratory Allows the tuning of surface engineering system parameters and coating materials for the highest performance. Includes Scanning Electron Microscope, macro & micro hardness testing, bond strength testing & metallographic preparation equipment.
LaserBond services a long list of blue-chip
industrial clients in the mining industry as well as aluminum
processing, energy, pulp & paper,
petrochemical/refining, plastics, steel
production, auto/marine
propulsion, water reticulation and other
industries ….
Long list of blue-chip industrial clients. Servicing • mining industry • aluminum processing • energy • pulp & paper • petrochemical/ refining • plastics • steel production • auto/ marine propulsion • water reticulation and other industries ….
Overview ASX Code: LBL (Data as at 28th May 2012)
Shares on Issue 83,926,210
Share Price (VWAP over 10 trading days) $0.22
Market Cap (based on VWAP) $18.5 Million
Cash on Hand $2.8 million
Outstanding Convertible Notes Convertible at lower of 15c or 85% VWAP by 30/6/12 Entered in April 2010 when VWAP was approx 6.6c
$120,000 (800,000 shares if converted at 15c)
Major Shareholders Wayne Hooper ,
10.7%
Greg Hooper , 10.0%
Tim McCauley , 1.2%
Diane Hooper , 9.7%
Rex Hooper , 8.4%
Lillian Hooper , 8.5%Loretta Peachey ,
5.9%
From Placement,
10.8%
Other , 34.8%
LaserBond® Strengths Our IP
• Forefront of surface engineering technology since 1993.
• LaserBond® developed by the company to address particular performance challenges.
• First LaserBond® cladding system built by the company and commissioned in 2001. (2 more since)
• Latest LaserBond® system includes solid state laser technology for improved productivity and reduced energy consumption.
• Specialised laboratory facilities have been used to develop materials and applications, and entrench significant IP.
Sales by Region
NSW
57%
Qld
40%
SA
1%
WA
0%Vic / Tas
2%
Sales by Segment
Mining & Minerals
Processing, 57.7%
Primary Metals
Manufacture, 19.6%
Building Products &
Construction, 5.6%
Transport & Associated
Infrastructure, 3.8%
Other , 13.3%
Financial Performance Revenue ($m)
EBIT ($,000)
0
500
1,000
1,500
2,000
2,500
FY2008 FY2009 FY2010 FY2011 1H2012
Half Year (to Dec 31) Full Year (to Jun 30)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY2008 FY2009 FY2010 FY2011 1H2012
Half Year (to Dec 31) Full Year (to Jun 30)
• 19 years of continuous profits since
establishment as a family company
1992, with outstanding growth since
listing in Dec 2007.
• History of robust performance
through boom-and-bust economic
cycles.
• Maiden final dividend (since listing)
of 0.5c per share fully franked for
FY2011.
• Interim Dividend of 0.3c per share
fully franked for 1H2012.
• Forecast FY2012 EBIT of $1.5 to
$1.7 million after significant
investment for growth.
Growth Strategy
Geographic Expansion
Organic growth + New Products & Services
Discussions initiated with a number of potential opportunities for expansion throughout Australia. Particular focus on Western Australia and South Australia. Successful Share Placement May 2012 raising $2.1 million towards geographic expansion.
Continued focus on expanding the range of applications for our technologies. Expansion into larger premises in NSW July / August 2012, removing space constraints allowing further development of new, high volume applications. Recent investment in capital equipment, human resources and other expansion in machine shop capacity driving business from existing new customers.
Outlook Mining & Minerals
Processing Industries increasingly focused on maintenance cost
management
The growing number of operational mines and related transport and processing infrastructure provides a growing market as mine and processing operators focus on maintenance cost management and infrastructure efficiency. This should be relatively resilient to fluctuations in commodity prices.
New industries
• Tremendous opportunity to grow our customer base, both in terms of number of customers and industries. • Currently developing a number of new applications, some involving potentially high volumes. • Many existing industries can benefit from our technology, and concentrated sales & marketing efforts will yield results. • Confidence relatively new industries will utilise our technologies, such as the burgeoning CSG extraction, processing and transport industries.
A carbon constrained world
Laserbond assists reduction of customers total carbon footprint through increased productivity and efficiency, reduced scrap, and lower maintenance costs. Close to 30GJ of energy is used to produce 1 tonne of steel and a worn machine component made from this 1 tonne of steel may be reclaimed by Laserbond’s processes using 1GJ of energy.
Disclaimer No responsibility for contents of Investor Presentation.
To the maximum extent permitted by law, LaserBond Limited and representatives:
• make no representation, warranty or undertaking, express or implied, as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient;
• accept no responsibility or liability as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient; and
• accept no responsibility for any errors or omissions from this Investor Presentation whether arising out of negligence or otherwise.
Accuracy of projections and forecasts
• This Investor Presentation may include certain statements, opinions, estimates, projections and forward looking statements with respect to the expected future performance of LaserBond Limited. These statements are based on, and are made subject to, certain assumptions which may not prove to be correct or appropriate. Actual results may be materially affected by changes in economic and other circumstances which may be beyond the control of LaserBond Limited. Except to the extent implied by law, no representations or warranties are made by Laserbond Limited, its advisers or representatives as to the validity, certainty or completeness of any of the assumptions or the accuracy or completeness of the forward looking statements or that any such statement should or will be achieved. The forward looking statements should not be relied on as an indication of future value or for any other purpose.
No offer to sell or invitation to buy
• This Investor Presentation does not, and should not be considered to, constitute or form part of any offer to sell, or solicitation of an offer to buy, any shares in LaserBond Limited, and no part of this Investor Presentation forms the basis of any contract or commitment whatsoever with any person.
• This Investor Presentation does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not permitted under applicable law.
• Distribution of this Investor Presentation in or from certain jurisdictions may be restricted or prohibited by law. Recipients must inform themselves of and comply with all restrictions or prohibitions in such jurisdictions. Neither LaserBond Limited, its advisers or representatives accept any liability to any person in relation to the distribution or possession of this Investor Presentation from or in any jurisdiction.
ISS GROUP LIMITED ASX- ISS Presented by Richard Pang (CEO)
ISS Group Today
• ISS Group was established in 1995 and listed on the ASX in 2004.
• ISS Group delivers operational management software solutions to the global Oil and Gas, Mining, Metals, Minerals and Manufacturing industries . – Software Products, Consulting Services, Support Services
• Oil and Gas, and Mining provide the majority of revenues
• Major focus on Production Operations solutions
• Strong Annuity Stream
• Zero Debt
• Reintroduced dividends in 2011
• Direct sales model (at the present time)
• “BabelFish” the brand is obtaining global recognition
• Global Customer Footprint
Major ISS Customers
Offices and People
• Australia
– Perth (HQ)
– Adelaide
• Singapore
• Southampton
• Houston
• 138 People globally
Customer Engagement
Adding value, close engagement and long term relationships with our customers is core to the ISS operating philosophy and guiding principles
ISS’s Niche: IT vs OT
Purpose
Focus:
Architecture
Visualisation
Ownership
Connectivity
Examples
IT World:
Manage Information, Optimise and Report, Business Critical
Transactional or batch, RDBMS or Text
Business Intelligence / Analytics, Big Data, Cubes / OLAP
CFO, CIO, and IT Community
Corporate Network, IP Based
ERP, EAM, Analytics, BPM, Billing
OT World: (ISS Group)
Operate Assets, Integrity and Delivery, Mission Critical
Event driven, Real time, Embedded Software, Rules Engines
Real-Time, Mash-ups / Ad-hoc, Diagnostics
Geologists, Engineers, Operators…
SCADA, DCS, Historians
Hydrocarbon Accounting, Data Modelling, Production Optimisation, Well Testing
An independent world of ‘Operational Technology’ (OT) is developing separately from IT groups. If IT organisations do not engage with OT environments to assess convergence, create alignment and seek potential integration, they may be sidelined from major technology decision – and place OT systems at risk. Gartner, Inc.
ISS delivers Operation Technology software solutions for production companies focussed on more effective operations of their assets
Capital Structure
Capital Structure Q3 2011/2012
ASX Code ISS
Share Price (28th May 2012) 16.5c
52 Week Range 8.5c – 22.5c
Issued Shares 136.15M
Market Capitalization (28th May 2012) $22.46M
Working Capital (Q3 2012) $9.6M
Net Tangible Assets / Share (Q3 2012) 9.1c
Balance Sheet
Note: there are no intangible assets on the balance sheet, ISS does not capitalize R&D
Balance Sheet Q3 2011/2012
Current Assets $11.8M
Non-Current Assets $3.0M
Total Assets $14.8M
Current Liabilities $2.4M
Non-Current Liabilities $0.0M
Total Liabilities $2.4M
Net Assets $12.4M
Total Equity $12.4M
Financial Results
2009 2010 2011 Q3 YTD 2012
Revenue 18.3M 18.7M 17.5M 15.6M
Projects 10.3M 10.0M 9.4M 7.4M
License 4.9M 4.9M 4.3M 5.5M
Support 0.9M 0.7M 0.7M 0.5M
Maintenance 2.0M 3.0M 2.9M 2.1M
Other 0.2M 0.1M 0.2M 0.1M
EBITA (2.0M) 3.7M 1.5M 2.9M
Margin % (10.9%) 19.8% 8.6% 18.6%
NPAT (11.1M)* 3.6M 1.1M 2.2M
Margin % (60.7%) 19.3% 6.3% 14.1%
Note: 2009 included 8.1 million impairment of non-current assets (goodwill)
2011/2012 Highlights
• ISS will achieve revenue and profit growth for the full year relative to 2010/2011
• Foreign Exchange exposure minimised
• New customers
– Chevron Australian, Oil Search PNG, Karara Mining, Newfield, TDJV, Panoramic Resources, Singapore LNG
– Continued engagement with existing customers and focus on account management showing excellent results
• Positioned well for revenue and profit growth in 2012/2013
– Larger sales team and increased focus on account management and marketing
– Resource sector is still strong (from an operational perspective), we believe this will continue next year
– Many capital projects are currently reaching operational phase
– ISS Groups products and delivery capabilities are being recognised through direct requests for information and project awards
Thank You
Questions & Answers
Disclaimer
This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not guarantees of ISS Groups future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements.
This presentation only contains information required for a preliminary evaluation of the Company and in particular only discloses information by way of summary within the knowledge of the Company and its Directors. An investor should seek its own independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to any investment in ISS Group Limited (ASX: ISS)
Other than to the extent required by law (and only to that extent) the Company and its officers, employees and professional advisers make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility or liability for, the contents of this presentation.
CASH CONVERTERS INTERNATIONAL LTD ASX- CCV Presented by Ian Day (General Manager)
Franchise operations10%
Store Operations15%
Cash advance admin24%
Personal loans -Safrock51%
Cash Converters Overview
Services
Sale of second hand goods through owned stores, franchises and webshop
Cash advance loans (30 day unsecured loan)
Personal loans (unsecured instalment loan)
Pawn broking (90 day secured loan)
Buy backs (30 day option to repurchase)
Competitive advantages
Modern retailing practices
Highly skilled staff with standardised systems
High ethical standards
Appeal to a wide cross section of the community
Retailer of second hand goods and provider of personal financial services operating through owned and franchised stores
Revenue by segment at 2012 HY
Franchise operations10%
Store Operations51%
Cash advance admin7%
Personal loans -Safrock32%
EBIT by segment at 2012 HY
Corporate Snapshot
$m 2007 2008 2009 2010 2011
Revenue 46.0 74.4 94.8 127.8 187.6
PBT 16.7 21.6 23.3 31.2 38.7
5 Year Summary – Financial Year Ended
Board of Directors
Reginald Webb (Non Executive Chairman)
Peter Cummins (Managing Director)
John Yeudall (Non Executive Director)
William Love (Non Executive Director)
Joseph Beal (Non Executive Director)
Shares on issue : 379.8m Major shareholders EZCORP Inc 124,418,000 32.76% Fidelity Management & Research Company 22,900,000 6.03% NovaPort Capital Pty Ltd 12,494.210 3.29% Alison J Madden 11,726,597 3.09%
History
1984 First retail outlet established
1988 Seven stores open, franchising begins with two stores
1990 Commence national expansion
1991 First store opened in the UK
1994 First store opened in non-English speaking market (France)
1999 First payday loan
2005 Opened first company store in Bolton UK
2006 Acquired MON-E and Safrock Group
2007 Acquired first franchised stores in UK & Australia
2008 Launched Cash Converters online shopping – Webshop
2009 Launched personal loans and cash advances in UK
2011 Launched online lending
2011 Total UK store numbers exceed 200 for the first time
Regulatory Environment
Australia
Joint Parliamentary Committee on Corporations and Financial Services report on phase 2 reforms proposed by the government as set out in the Consumer Credit and Corporations Legislation (Enhancements) Bill 2011
The Committee concluded on 2 December 2011 that the proposed fee caps comprising a 10% establishment fee and a 2% monthly fee are unworkable.
The Committee has recommended that the Government revisit key aspects of its reform package with further industry consultation – which took place in Feb of 2012
Minister Shorten released an amended Bill in April which has caps of 20% for establishment fees and 4% monthly charge.
United Kingdom
Bristol University have been sponsored by the Govt to research the effects of a rate cap
OFT earlier concluded that price controls would not be an appropriate solution
OFT currently reviewing the lending practises of 50 Pay day lenders including CCV to see if there is any further regulation required.
BUSINESS OVERVIEW
Store Locations
Potential store growth in NSW where CCV is under represented
Currently 3 owned stores and 13 franchised stores
Majority of store growth will come from the UK
Currently 54 owned stores and 154 franchised stores
High level of corporate owned stores in Australia and UK with a strong management team and systems in place to assist in growth and management of further corporate stores
Country Store Numbers Country Store Numbers
Australia 146 UK 208
Belgium 20 Ireland 4
Holland 8 USA 7
Italy 1 New Zealand 13
France 78 South Africa 46
Spain 73 Thailand 1
Portugal 5 Singapore 6
Canada 34 Malaysia 7
Global store network – 669 stores
Country Store Numbers Country Store Numbers
Australia 146 UK 208
Belgium 20 Ireland 4
Holland 8 USA 7
Italy 1 New Zealand 13
France 78 South Africa 46
Spain 73 Thailand 1
Portugal 5 Singapore 6
Canada 46 Malaysia 7
WA Stores
10 corporate 13 Franchised
SA Stores
2 Corporate 19 Franchised
Tas Stores
4 franchised
Qld Stores
15 Corporate 30 Franchised
NSW & ACT Stores
3 Corporate 13 Franchised
Vic Stores
13 Corporate 24 Franchised
UK Operations
Cash Converters opened its first UK store in 1991
Experienced management team in place
Substantial market size, population of +60 million and well accepted industry sector
Total of 208 stores
154 franchise stores
54 corporate owned stores
Further opportunity for growth:
Opening new stores
Acquisitions
Acquiring franchised stores
Target 400 UK stores in total
Opening c.16-20 new stores p.a. – c.3-4 years to reach maturity
Increasing sales of finance products
Increasing online presence
FINANCIAL REVIEW
2012HY Financial highlights
Strong revenue growth of 28.2% to $111.7 million
Adjusted net profit1 after tax increased 7% to $15.3m (2010HY: $14.3m)
Nine “greenfield” stores opened in H1 (7 in the UK and 2 in Australia)
Total UK store numbers finished the half-year at 208, an increase of 14
Revenue for company owned stores in both the UK and Australia grew by 25.7%
Impressive personal loan book growth
Australia: 31.2% growth to $62.1 million ( book as 31 May 2012 = $67.6m)
UK: 269.5% growth to £8.5 million (book as at 31 May 2012 = £11.3m)
24.7% growth in EBIT from personal loans and cash advances to $20.7million
Interim dividend of 1.75 cents per share, fully franked, announced representing payout ratio of approximately 50% of NPAT
1 Reported statutory NPAT of $13.2m reflects the impact of stamp duty on acquisitions ($665k), independent IT review ($53k), store acquisition additional earn-out payment ($580k), additional legal and professional fees ($615k) and redundancy costs ($88k). These one off costs include costs incurred relating to the EZCORP Inc strategic alliance which was terminated during the half year period
Corporate & franchise store operations
54 corporate stores in UK and 43 in Australia
520 franchised stores globally with 154 in UK, 103 in Australia and 263 in RoW
Franchising enabled the rapid global expansion of the Cash Converters business
Opportunity to acquire franchisees on low multiples
Management team and systems in place to acquire further franchises and open further corporate stores
Average acquisition price of 4.2 EBIT in 2011 (2010: 3.9 x EBIT)
PBT of $4.3m (2010: $5.6m) from corporate owned stores
Australia $3.9m (2010: $4.4m)
UK $0.4m (2010: $1.3m)
Profit declined largely due to one-off costs and “greenfield” openings and their associated profit “drag”
LFL store growth in Australia was 1.4% for retail sales and 11.6% pawn broking interest growth
UK achieved 8.6% retail growth, however, pawn broking interest fell by 12.6% and buyback income by 6.9%
PBT from franchised stores declined to $2.8m (2010: $3.4m) primarily due to acquisitions of franchisees
0
10
20
30
40
50
60
70
80
90
100
2005 2006 2007 2008 2009 2010 2011
Sto
re n
um
bers
Australia UK
Personal loans
Safrock
Personal, unsecured, instalment loans
Average loan: $1,200 over 7 months
Australia loan book at 31 December 2011: $62.1m
UK loan book at 31 December 2011: £8.5m
Australia debt write off of principal advances: 6.3%
UK debt write off of principal advances : 11.0%
Customers increased by 290% since 2005
PBT from personal loans increased 21.6% to $12.9m (2010: $10.6m)
UK Finance Division PBT increased to $1.44m (2010: -$270k)
A record for the month of December of $13.2m (2010: $10.9m) advanced in Australia and £1.5m (2010: £0.7m) in UK
$6.5m of loans advanced through online platform
Online lending launched in the UK in October 2011 with £0.43m was lent.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
$0m
$5m
$10m
$15m
$20m
$25m
$30m
$35m
$40m
$45m
$50m
$55m
2007 2008 2009 2010 2011
Cu
sto
me
rs
Lo
an
Bo
ok
at
ye
ar
en
d $
m
Safrock loan book Customer loans
Cash advance administration
MON-E
Administration fees from cash advance/payday loans
Australia - $111.7m of loans advanced to 58,262 customers
UK - £13.0m of loans advanced during the period to 17,589 customers
Customers numbers in Australia increased 199% since 2005
Australia
Cash Advance 14.7% growth in active customers to 58,261
Average loan $364
Bad debt 3%
UK
Cash Advance 36.5% growth in active customers to 17,589
Average loan £104
Bad debt 3%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
2007 2008 2009 2010 2011
Cu
sto
mers
Valu
e o
f lo
an
s a
dvan
ced
over
the fin
an
cia
l year
$m
MON-E Loaned MON-E Customers
GROWTH STRATEGY
Strategy:
Continue to open new franchised and company owned stores in both Australia and the UK to maintain our competitive advantage
Acquire as many franchised stores as are available in the short to medium term to grow profits
Expect to pay a multiple in the order of 3 to 4.5 times Enterprise Value
Acquisitions will be funded by a combination of debt and retained profits
Continue to grow the cash advance & personal loan business in Australia and the UK, both in-store and online ( UK at the bottom of J curve for both products)
Continue to grow our online retail offering, “Webshop”
Growth Strategy
Summary & outlook
Summary
Well positioned to take advantage of significant growth opportunities in the UK and other geographies
Substantial franchisee network provides opportunities to acquire established stores to offset some of the profit “drag” of greenfield sites
Significant opportunity to keep growing the loan book in Australia through increased penetration, new products and new channels (e.g. online)
Substantial opportunity for growth of both Cash Advance and personal loans in the relatively new UK market
Outlook
Questions still remain over the outcome of the Australian regulatory review but the proposed caps of 20% on establishment fees and 4% monthly fees is workable for CCV.
APPENDICES
Appendix
Product Overview Safrock Mon-e Pawn Broking
Geography Australia and the UK
Australia and the UK Both Australia and UK
Security Unsecured Secured
Unsecured Secured
Loan Size $1,000 to $2,000
(avg is $1,500)
$2,000 to $5,000 $50-$1,000
(avg is $303)
(avg is $90)
Loan Duration Usually four to
seven months
usually have a term of
between one to two years
usually repaid within four
weeks
Varies from a minimum of
1 month to a maximum of
3 months. Goods may be
redeemed by their owner
at any time.
Credit Check Yes No
N/A
Loan capital
provider
Cash Converters Franchisee Franchisee
RUNGE LIMITED ASX- RUL Presented by David Meldrum (MD)
Disclaimer:
This presentation has been prepared by Runge Limited (Runge) and is given to recipients in confidence. No part of this presentation may be circulated, reproduced or provided to any third party and the matters referred to in it must not be disclosed to third parties, in whole or in part.
No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information conta ined in this presentation,
including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters
contained in the presentation (“forward-looking statements”). Such forward-looking statements are by their nature subject to significant uncertainties
and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of
Runge and its Directors and officers) which may cause the actual results or performance of Runge to be materially different f rom any future results or
performance expressed or implied by such forward-looking statements.
This presentation provides information in summary form only and is not intended to be complete. It is not intended to be rel ied upon as advice to
investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.
Due care and consideration should be undertaken when considering and analysing Runge’s financial performance. All references to dollars are to
Australian Dollars unless otherwise stated.
To the maximum extent permitted by law, neither Runge nor its related corporations, Directors, employees or agents, nor any other person, accepts any
liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or
otherwise arising in connection with it.
This presentation should be read in conjunction with other publicly available material. Further information including histor ical results and a description of
the activities of Runge is available on our website, www.runge.com
2
3
Who We Are
We are the largest consolidated group of independent
mining professionals in the world
We employ leading experts in mine planning
We provide the technical input for the largest mining IPOs
in the world
We provide the technical due diligence for the largest
mining M&A transactions globally
We provide planning systems for the largest mines in the
world
4
Where We Are
Over 450 Employees
21 offices across 12 countries
Customers including the
world’s largest multinational
miners
5
Where We Have Come From
6
What We Have Been Doing
Over the last six months we have:
Completed over 600 technical assignments including IPOs
on global stock exchanges, M&A deals and independent
engineering reports
Implemented over 200 software solutions including
services to the world’s largest mining houses
Conducted over 3,000 laboratory tests to keep mines safe
and productive
Helped forge new mining industries in countries like
Mongolia
7
What We Have Been Doing
Over the last six months we have:
Implemented new account management structure for
customer engagement
Developed new systems to improve operational and
project management
Developed new technology strategy for software
development and maintenance
Aligned regional and personal KPIs with corporate
strategy and performance
The Runge Advantage
Runge combines it’s extensive global mining
domain knowledge with technology and
business focused processes to assist
mining operations in predicting the future value of their mining
assets.
8
9
What Are We Seeing
Competition for mining professionals in Australia still strong, but we see signs
of softening
Uncertainty in global financial markets causes volatility of capital raisings in
Asia
Push for nationalisation of mining industry
Increase in project exploration activities in Africa
Mining companies integrate technologies across their businesses
Volatility in Coal Seam Gas activity
Tightening of access to capital
Margin squeeze across most commodities
10
Profitable Growth
Expanding regional capabilities around software sales and
support
Software pricing strategy around increasing after sales
options
Focus on product architecture to reduce future
development costs
Improve utilisation of our people
Focus on adding value to our clients
11
Financial Results and Revenue Mix
* Operating revenue and EBITA exclude Key Man insurance proceeds in 1H12 and Impairment of developed software in FY11
59% 14%
8%
9%
9% 1%
Advisory Consulting Technical Consulting
Licence fees Maintenance fees
Laboratory testing Other miscellaneous
Operating Revenue *
FY09 FY10 FY11 1H12
$m
$m $m $m
Consulting fees 59.5 57.5 68.7 38.3
Technology 17.8 16.6 18.7 9.1
Licence fees 10.5 8.6 9.9 4.1
Maintenance fees 7.3 8.0 8.8 5.0
Laboratory testing 3.6 4.0 5.8 4.4
Other 2.1 0.9 1.0 0.5
Total operating revenue 83.0 79.0 94.2 52.3
Operating EBITA 12.7 5.8 9.3 4.1
Margin 15.0% 7.3% 9.9% 7.8%
12
Regional Revenue Overview
Australia Americas Asia Africa GeoGAS Consolidated
$m % Rev $m % Rev $m % Rev $m % Rev $m % Rev 1H12
Consulting 31% 18% 20% 3% 2% -
Advisory 12.8 7.2 10.0 0.8 - 30.8
Technical 3.4 2.1 0.3 0.5 1.2 7.5
Technology 9% 4% 2% 3%
Licence 1.9 0.8 0.8 0.6 4.1
Maintenance 2.6 1.1 0.4 0.9 5.0
Laboratory 8%
Testing 4.4 4.4
Other - - - - - 0.5
Total 20.7 11.2 11.5 2.8 5.6 52.3
Total Rev % 40% 22% 22% 5% 11% 100%
13
Financial Position
2H11 1H12
$m $m
Cash and deposits 9.3 9.9
Receivables 20.6 19.6
Inventory 2.3 3.3
Property, plant & equipment 9.1 10.0
Intangible assets 29.7 29.4
Other assets 6.5 6.6
Total assets 77.5 78.8
Trade and other creditors 7.7 4.4
Borrowings 5.5 9.1
Provisions 6.9 6.6
Other liabilities 12.7 11.7
Total liabilities 32.8 31.8
Net assets 44.7 47.0
■ Strong balance sheet, Net Cash of $0.8
million
■ No significant changes in assets and
liabilities, net assets $47.0 million
■ Low level of debt, interest cover of 12x
EBITA
■ Intangibles of $29.4 million
■ Goodwill, $24.3 million
■ Developed software, $1.7 million
■ Internal systems, $3.4 million
■ Borrowings of $9.1 million at 31 December
2011
■ $15 million facility extended for 3 years
in September 2011
Q & A
