Slide 1: Full Year Results Presentation
Full Year Results Presentation Year ended 30 June 2016 For personal use only David Griffith - Managing Director, IPH Limited Dr. Andrew Blattman - CEO, Spruson & Ferguson Malcolm Mitchell - Group Chief Financial Officer, IPH Limited John Wadley - Deputy Chief Financial Officer, IPH Limited 1
Slide 2: Disclaimer
Disclaimer For personal use only This document has been prepared by IPH Limited (IPH) and comprises written No representation, warranty or assurance (express or implied) is given or made materials/slides for a presentation concerning IPH. by IPH that the forward looking statements contained in this
Slide 3: Contents
Contents For personal use only 1. FY16 Highlights 2. FY16 Business Performance & Market Update 3. Acquisitions 4. FY16 Financial Results 5. Outlook & Growth Strategy 6. Appendices 3
Slide 4: FY16 Highlights
For personal use only 4 1 | FY16 HIGHLIGHTS
Slide 5: Financial Highlights
Financial Highlights FY16 NPAT has increased by 50% For personal use only Underlying NPAT of $46.9m (EPS 26.2c), 50% ahead of FY15. Underlying Results (#039;m) FY16 FY15 Chg % Revenue $143.1 $94.5 51% Like vs like (ie constant currency, excl. acquisitions) earnings growth in EBITDA $65.0 $42.5 53%
Slide 6: Operational Highlights
Operational Highlights A year of acquisitions, expansion and organic growth For personal use only Key milestones: 1. Acquisitions 2. Asia 3. Australia Pizzeys (Sep 2015). IPH and Spruson & Ferguson (Asia) maintain the No.1 Strengthening market position patent market position in Singapore with
Slide 7: FY16 Business Performance & Market Update
2 | FY16 BUSINESS PERFORMANCE & MARKET UPDATE For personal use only
Slide 8: Business Snapshot
Business Snapshot For personal use only EMPLOYEES BRANDS OFFICES 420+ CLIENTS PATENT MARKET SHARE FILINGS 6,000 + 22% 25% No.1 in Australia No.1 in Singapore 16,000 + 4,000 + Patent applications Trademark applications 8
Slide 9: Market Overview – Patents
Market Overview – Patents Primary (Incoming) Markets For personal use only Fig. 1: PCT international applications filed in United States of America, Japan and European Patent Office1) by applicants from the respective countries 2) 140,000 Re-normalisation of US PCT filings post America CAGR = 3.89
Slide 10: Market Overview – Patents: Secondary Markets
Market Overview– Patents Secondary Markets For personal use only Fig. 2: Asia Market - Patent applications filed in key jurisdictions in Asia1) Fig. 3: China Market - Patent applications filed in China1) 50,000 1,000,000 CAGR = 8.1% CAGR = 24.1% Strong, consistent High-volume, 40,000 growth in Asia.
Slide 11: IPH Market Share - Patents
IPH Market Share - Patents IPH and Spruson & Ferguson - No.1 in Australia and Singapore For personal use only Fig. 6: IPH market share in Australia1) Fig. 7: IPH market share in Singapore2) 30% 30% 22% 24% 25% 24% 20% 20% 15% 11% 10% 10% 0% 0% FY14 FY15 FY16 CY13 CY14 CY15 Spruson & Ferguson Fisher
Slide 12: Filings by IPH companies
Filings by IPH companies Increased number of applications filed by the group through organic growth and acquisitions For personal use only Fig. 9: Patent filings by IPH group1) Fig. 10: Trademark filings by IPH group1) 18,000 4,500 16,436 4,020 14,000 11,448 3,000 2,438 9,786 2,127 10,000 1,500 6,00
Slide 13: Acquisitions
For personal use only 13 3 | ACQUISITIONS
Slide 14: Acquisitions
Acquisitions Consolidation of the fragmented IP market in Australia For personal use only Pizzeys Callinans Cullens Completed acquisition on 30 September Completed acquisition on 2 November Completed acquisition on 30 June 2016. 2015. 2015. Queensland based patent & trade mark Brisbane & C
Slide 15: FY16 Financial Results
4 | FY16 FINANCIAL RESULTS For personal use only
Slide 16: Underlying Revenue & EBITDA
Underlying Revenue & EBITDA Acquisitions, expansion & organic growth have delivered significant increases in Revenue & EBITDA For personal use only Revenue Revenue EBITDA EBITDA Chg% Chg% #039;m FY16 FY15 FY16 FY15 Australian IP 93.3 53.6 74% 42.3 23.6 79% Asian IP 54.3 42.9 27% 26.9 21.1 27% 147.6 96.
Slide 17: Underlying NPAT & EPS
Underlying NPAT & EPS NPAT increased by 50%; EPS increased by 32% For personal use only Year ended FY16 FY15 Underlying Underlying 30 June 2016 Statutory Statutory Adjustments Earnings Adjustments Earnings Income Income FY16 FY15 Statement Statement #039;m Total revenue 143.1 143.1 93.8 0.7 94.5 Recove
Slide 18: Revenue & EBITDA FY13 - FY16
Revenue & EBITDA FY13 - FY16 For personal use only Underlying Revenue #039;m Underlying EBITDA #039;m Australia IP Asia IP New Businesses Corporate & Interco Australia Asia New Businesses Corporate & Interco 143.1 65.0 37.7 12.4 94.5 42.5 1.7 81.7 0.4 76.4 26.9 0.0 53.9 0.0 42.9 28.6 30.0 21.1 26.3 31.2 0
Slide 19: Like vs like Revenue & EBITDA
Like vs like Revenue & EBITDA Underlying growth in line with market trends For personal use only Underlying Adjusted Adjusted Currency 4) AUD/USD AUD/EUR SGD/AUD Revenue New Currency Revenue Revenue Revenue Chg% #039;m Businesses 1) Adjustment 2) HY15 0.8970 0.6918 1.1430 FY16 FY16 FY15 3) 2HY15 0.7813
Slide 20: Cash flow Statement
Cash flow Statement High cash conversion For personal use only Year ended 30 June 2016 FY16 FY15 Minimal working capital requirements. Cash Flow Cash Flow Statement Statement #039;m High proportion of earnings are converted to Statutory EBITDA 59.5 38.5 cash. Non-cash movements 1.6 1.1 Change in wo
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet Strong balance sheet For personal use only Statutory Statutory Balance Sheet Balance Sheet as at 30 Jun 2016 as at 30 Jun 2015 $58.5m cash #039;m Cash and cash equivalents 58.5 5.4 No bank borrowings Trade and other receivables 38.0 27.4 Other current assets 3.9 2.1 Und
Slide 22: Earnings Currency Sensitivity
Earnings Currency Sensitivity1) For personal use only Revenue net of Recoverable Expenses Operating Expenses SGD EUR 4% 4% SGD 26% AUD 35% AUD USD 74% 56% Other 1% Currency 2) +/- 5% USD 3.6m SGD (0.3)m EUR 0.3m Notes 1) Based on current IPH Group operating earnings and FY16 average FX rates, with a
Slide 23: Outlook & Growth Strategy
5 | OUTLOOK & GROWTH STRATEGY For personal use only
Slide 24: FY17 Outlook
FY17 Outlook To continue to deliver sustainable growth For personal use only Organic growth and development of existing IPH will continue to execute on its strategic growth businesses: initiatives: The group’s Australian & Asian businesses are Expansion into new secondary IP markets where expect
Slide 25: FY17 Corporate Matters
FY17 Corporate Matters For personal use only Forthcoming principals’ escrow release: IPH intends to facilitate a share sale facility for escrowed principals (being former trustees of Spruson & Ferguson) to conduct any sale of shares in a structured and orderly fashion once escrow restrictions are
Slide 26: IPH Growth Strategy
IPH Growth Strategy Delivering on the vision of becoming the leading IP group in secondary markets and adjacent areas of IP For personal use only Australia: acquisition of four IP services firms: Fisher Adams Kelly, Callinans, Pizzeys and Cullens. Asia: Expanding IPH’s presence in existing and n
Slide 27: Appendices
For personal use only 27 6 | APPENDICES
Slide 28: IPH Limited - Overview
IPH Limited - Overview For personal use only IPH Limited (“IPH”) is the holding company of Spruson & FAKC - established over 30 years ago and is a leading firm Ferguson (“S&F”), Fisher Adams Kelly Callinans (“FAKC”), in Queensland, in late 2015 acquired Melbourne based Pizzeys, Practice Insight
Slide 29: Revenue Snapshot
Revenue Snapshot Highly diversified client base, annuity style client relationships. The majority of revenue derives from patent business. For personal use only Revenue split by Revenue split by Revenue split by Service Line Geographical Location Client 2% 5% 11% 2% 9% 35% 65% 84% 87% Australia Asia
Slide 30: IPH Organisational Structure (simplified)
IPH Organisational Structure (simplified) For personal use only 30
Slide 31: Business Model - IPH's IP service firms
Business Model - IPH’s IP service firms For personal use only Clients: Fortune Global 500 companies, multinationals, public sector research organisations, SMEs and professional services firms worldwide. Majority of clients are from USA, Europe and Japan. Largest client – 2%. Long-standing cl
Slide 32: Corporate Information
IPH Limited Corporate Information For personal use only Directors Ordinary Shares on Issue Number % Mr. Richard Grellman AM - Chairman Free float 98,113,541 52% Mr. David Griffith - Managing Director Escrowed ** 90,769,779 48% Total 188,883,320 100% Ms Robin Low Dr Sally Pitkin Top 20 115,123,314 61
Slide 33: Investment Highlights
Investment Highlights For personal use only 1 IPH Limited (“IPH”) is the holding company of Spruson & Ferguson (“S&F”), Fisher Adams Kelly Callinans (“FAKC”), Pizzeys, Cullens and Practice Insight (“PI”). S&F, established in 1887, is a leading Intellectual Property (“IP”) firm in Asia-Pacific; t
Slide 34: Investment Highlights (cont'd)
Investment Highlights (cont’d) For personal use only 6 Experienced Strong board with complementary skill sets. Board, Long standing, experienced management team. management & Highly qualified and experienced professional IP team. personnel A number of senior professional promotions across th