Slide 1: BSA Strategic Review
BSA Strategic Review October 2008 For personal use only
Slide 2: Contents
For personal use only Contents 1. Background 2. Board Review 3. Outcomes 4. Plan 5. Summary Page 2
Slide 3: Background: Platform for Growth
For personal use only 1.1 Background: “Platform for Growth” • Board led review of the company • Why; Timely given appointment of new chairman Ross Johnston 2008 FY result at $16.1 million EBITDA provides platform Next steps and positioning critical to future success of BSA; Company has two major bus
Slide 4: Reliance on Key Contracts
For personal use only 1.2 Reliance on Key Contracts 300 18.0 Loss of Direct Telstra 16.1 16.0 Installation and 14.3 250 Maintenance Contract 243.9 14.0 200 12.0 Revenue $ Million EBITDA/NPAT - $ Closure of Broadcast 159.0 10.0 Million 150 Services 7.5 9.0 8.0 131.0 8.0 100 119.1 6.0 100.2 4.0 4.6 50
Slide 5: Revenue & EBIT by Business Unit
For personal use only 1.3 Revenue & EBIT by Business Unit 300.0 16.0 Revenue 14.0 EBIT- 2008 250.0 12.0 13.1 10.0 11.6 200.0 8.0 6.0 150.0 243.9 161.6 6.4 4.0 100.0 2.0 -4.9 0.0 82.3 Contracting Building Services Shared Services Group 50.0 -2.0 Solutions -4.0 0.0 Contracting Building Services Group
Slide 6: Background: Contracting Solutions
For personal use only 1.4 Background Business model as at 30th June 2008 1. Contracting Solutions Strengths Weaknesses 1. Manages High volume, low value tickets of work 1. Customer concentration too narrow. on behalf of large corporate customers, which are 2. Limited Organic growth outside. performe
Slide 7: Background: Building Services
For personal use only 1.4 Background “Platform for growth” Business model as at 30th June 2008 2. Building Services Strengths Weaknesses 1. Mechanical (HVAC) business that provides 1. Geographic limitations in VIC/ACT & SA. design, fabrication, installation and maintenance 2. Annuity business (maint
Slide 8: Board Review
For personal use only 2.0 Board Review
Slide 9: Scope of the board review
For personal use only 2.1 Scope of the board review • Strategic assessment undertaken by Wilson HTM • Board/management has assessed all options available • SWOT analysis of both divisions – review both strengths and weaknesses • Determine a 3-5 year growth strategy • Review what should be appropriat
Slide 10: Portfolio Options Considered by Board
For personal use only 2.2 Portfolio Options Considered by Board Option Comment Decision 1. Share buyback to improve Buybacks are limited to 10% of a company’s X No EPS and return on equity. issued capital over a 12 month period (without Short term benefit only. shareholder approval). 2. Merger or Tr
Slide 11: Key Outcomes of the Options Assessment
For personal use only 2.3 Key Outcomes of the Options Assessment Preferred Option- “Augmentation Strategy” Reduce earnings volatility through diversification of earnings base Establish long term dividend payout ratio @40-50% of earnings Augment organic growth in contracting solutions business Achiev
Slide 12: Outcomes
For personal use only 3.0 Outcomes
Slide 13: Facility Services Business Model - Why?
For personal use only 3.1 Facility Services Business Model- Why? Large growing sector in early phase of consolidation “We must effectively service Australia's finest and largest organisations” Key Statistics • Total maintenance expenditure in Australia estimated at $26 billion, • Over half of all ma
Slide 14: Become a leading Facility Services business - how we will do it
For personal use only 3.2 Become a leading Facility Services business – how we will do it Tap High Growth Facility Services Markets 1.Commercial Facility Facility Facility Installation Contracting Consulting 2.Roads HVAC- Mechanical Tickets of Work Essential Services Fire Maintenance Energy 3.Teleco
Slide 15: Become a leading Facility Services Business - how will we do it
For personal use only 3.3 Become a leading Facility Services Business – how will we do it Organisational settings: Effective, experienced and committed Board Clear Strategy- financial/non financial objectives Experienced Management Management incentives aligned to strategy outcomes Strategy executio
Slide 16: How we will grow our Facility Services operations
For personal use only 3.4 How we will grow our Facility Services operations Strategic Approach – organic growth and acquisitions 1. Organic Growth • Through taking Facility contracting into adjacent spaces. 2. Pursue significant Facility Installation acquisitions • Recognised as market leading busin
Slide 17: Organic growth options for Facility Services
For personal use only 3.5 Organic growth options for Facility Services Contracting Organic growth opportunities for Facility Contracting: SECTOR SERVICES HVAC, Fire System service and maintenance, Commercial building management Energy Audit and management, Electrical & Plumbing, Security. TOW-Genera
Slide 18: Growth by acquisitions - well defined targets
For personal use only 3.6 Growth by acquisitions – well defined targets Facility Installation Businesses will be sought in the following sectors Electrical & Cabling Installation (large scale Ventilation and fire system services projects) Building Tenancy remediation & Make Plumbing Good Mechanical
Slide 19: Our Acquisition strategy - must meet key hurdles
For personal use only 3.7 Our Acquisition strategy – must meet key hurdles Acquisitions, joint ventures or major development activity must satisfy three stringent criteria: Step 1 Must make strategic sense Match BSA’s business model objectives Strategic rationale High growth preferred market sector
Slide 20: Plan
For personal use only 4.0 Plan
Slide 21: Development and growth Priorities
For personal use only 4.1 Development and growth Priorities Facility Contracting Solutions; Identify other markets/partners to leverage our existing capabilities Seek more consistent revenues Bolster management capacity in this area (development) Identify organic growth opportunities through leverag
Slide 22: Stronger financial platform to support growth
For personal use only 4.2 We will establish a stronger financial platform to support growth Responsible Financial Management • Net Debt : Net Debt plus Equity Currently 28% move to 40% - very manageable Supported by strong cashflow and more recurring revenue • Financial discipline around acquisition
Slide 23: Building an Outstanding Company
For personal use only 4.3 Building an Outstanding Company Success in 2012 would look like • Significant improvement in shareholders’ returns • Peer group multiple & liquidity in scrip • Responsible capital management • Continued strength of cash flows • Continued strong performance in key financial
Slide 24: Foundation to support growth
For personal use only 4.4 Foundation to support growth AREA FOCUS PROGRESS COMMENT -Strategy Committee -Complete -R. Johnston (Chairman) -Appoint CFO -Complete -K. Nixon appointed People -Corporate Development -Complete -M. Givoni (Non executive) -Business Development -Scoping role/focus -Support Se
Slide 25: Shared Services team to support growth objectives
For personal use only 4.5 Shared Services team to support growth objectives Key Attributes • Cost effective scalability • Rapid Integration of Acquisitions • Standardisation of process • Excellence in delivery • Operational efficiencies • Economies of scale Core operating businesses focused on compe
Slide 26: Creating jobs through training
For personal use only Creating jobs through training
Slide 27: For personal use only
For personal use only Continue to strengthen long term relationships with key customers through the delivery of exceptional service and investment in appropriate technologies. Page 27
Slide 28: Summary
For personal use only 5.0 Summary
Slide 29: In summary
For personal use only 5.1 In summary • To become a leading Australian Facility Service company • Pursue growth opportunities through acquisition and organically • Broaden our revenue streams – multiple sources and recurring • Strengthen our financial platform • Scalable support functions for our bus
Slide 30: Questions
For personal use only Questions Page 30