Slide 1: FY15 Interim Results Briefing
For personal use only FY15 INTERIM RESULTS BRIEFING 23rd February 2015 DATA#3 LIMITED (DTL)
Slide 2: Our business
Our business For personal use only Consulting (a new business) Application Making our Solutions Software customers more Solutions (a new business) successful and delivering exceptional performance and shareholder returns Managed Infrastructure Solutions Solutions 2 1
Slide 3: Key metrics return to growth
Key metrics return to growth For personal use only Revenue Up 1.8% $406.4M Product Down 0.9% $329.7M Services Up 16.4% $75.8M Gross Profit Up 8.6% $62.4M Product Up 6.6% $30.6M Services Up 10.6% $31.9M Gross margin Up 1.0 pp 15.4% Product Up 0.7 pp 9.3% Services Down 2.2 pp 42.0% Expenses Up 5.7% $5
Slide 4: Growth reflects strategic shift in business mix
Growth reflects strategic shift in business mix For personal use only Total revenue ($M) Services revenue ($M) 80 75.8 500 436.0 66.6 406.2 406.4 65.1 378.0 399.1 59.1 400 60 51.6 307.0 300 39.4 40 200 20 100 0 0 1H10 1H11 1H12 1H13 1H14 1H15 1H10 1H11 1H12 1H13 1H14 1H15 Product revenue ($M) Mainte
Slide 5: Growth reflects strategic shift in business mix
Growth reflects strategic shift in business mix For personal use only Software Solutions Managed Solutions • Revenue down 3.1% to $241.2M • Revenue up 4.7% to $36.0M but with improvement in gross • Continued investment profit impacted profitability • Product down 4.1% to $230.6M • Services up 25.3%
Slide 6: Return to growth in gross profit
Return to growth in gross profit For personal use only Total gross profit ($M) Services gross profit ($M) 70 31.9 59.4 61.6 62.4 29.2 28.8 57.5 30 27.6 54.9 24.4 43.4 20.0 45 20 20 10 -5 0 1H10 1H11 1H12 1H13 1H14 1H15 1H10 1H11 1H12 1H13 1H14 1H15 Product gross profit ($M) Services gross margin 31.
Slide 7: Strong growth in QLD and WA underpinned overall result
Strong growth in QLD and WA underpinned overall result For personal use only % change in gross profit Solid growth for our QLD business led 1H15 vs. 1H14 by growth in Managed Services and hardware product sales into state government. 40% 37% A flat result in NSW underpinned by strong sales in softwa
Slide 8: Expenses track in line with broader market
Expenses track in line with broader market For personal use only Internal staff costs ($M) 60 50 43.8 44.7 46.7 49.2 Internal staff costs up 5.4% as 40 36.8 headcount increased to 31.1 30 support the sales focused 20 plan and in line with increases 10 in the broader market. 0 Operating expenses up 7
Slide 9: Profit and earnings reflect improved performance
Profit and earnings reflect improved performance For personal use only NPAT ($M) EPS (cents) 10 6 7.9 5.2 8 7.2 5 4.7 4.4 6.8 6 4 3.1 4.7 3.6 3 2.32 4 2.6 1.67 2 2 1 0 0 1H10 1H11 1H12 1H13 1H14 1H15 1H10 1H11 1H12 1H13 1H14 1H15 Interim dividend (cents) 4 3.80 Solid growth in gross profit in 3.45 3
Slide 10: Improving product margins and solid services growth drove increased profit
Improving product margins and solid services growth drove increased profit For personal use only Movement in NPBT elements compared to 1H14 5.2 5.0 3.7 $M 3.0 1.0 1.0 0.6 -0.3 0.1 1H14 NPBT Product Services Unallocated Unallocated 1H15 NPBT -1.0 segment segment corporate corporate profit profit reve
Slide 11: Solid cashflow management allowed internal funding of investments
Solid cashflow management allowed internal funding of investments For personal use only • Strong balance sheet • No material debt • Cash flow ‘seasonality’ in line with trend • Average daily 1H cash balance up from $60.2M to $60.8M • Payments for acquisitions and investments (net of cash acquired) o
Slide 12: Increased people numbers reflect market share focus and growth in services
Increased people numbers reflect market share focus and growth in services For personal use only 1H15 average 800 777 776 784 headcount 699 769 excluding Business 750 Aspect (BA), or 748 707 712 695 703 702 698 including BA. 700 691 689 681 680 Increases only in 676 677 650 revenue driving business
Slide 13: Contractor numbers reflect solid growth particularly in augmentation
Contractor numbers reflect solid growth particularly in augmentation For personal use only 1H15 average contractor numbers up 400 4.5% to 326. 347 One augmentation 343 350 334 332 contract transitioned 323 308 314 308 to outsourcing. 300 300 308 309 Stable market pricing. 301 Seasonality in Q2 in 25
Slide 14: Acquisitions and investments
For personal use only Acquisitions and investments
Slide 15: Business Aspect
Business Aspect For personal use only • Effective 5th September 2014 • Fully relocated into Data#3 offices but separately branded and managed • Expansion of consulting capability into NSW, ACT and VIC progressing • Integration activities largely completed with some additional costs in 1H • Pipeline
Slide 16: Discovery Technology
Discovery Technology For personal use only • 42.5% investment effective 1st August 2014 • Additional 14.2% available until 30th June 2015 • Not integrated into Data#3 but fully engaged with Data#3 as a reseller with significant opportunities in pipeline • Start up business not yet in profit • Very s
Slide 17: 1H FY15 Summary
For personal use only 1H FY15 SUMMARY
Slide 18: 1H FY15 Summary
1H FY15 SUMMARY For personal use only “Our strategy remains well articulated, relevant and its execution saw us finish the half well ahead of the pcp. The board was pleased to declare a dividend of 2.1 cps, an increase of 40% on pcp” 18
Slide 19: Significant success in 1H15
For personal use only Significant success in 1H15
Slide 20: Major retail centre owner: AMP Capital – Macquarie Centre
Major retail centre owner For personal use only AMP Capital – Macquarie Centre • $440M centre • Design, implementation and management of Wi-Fi and Wi-Fi Analytics • Discovery Technology CCeX application • 5 year contract • Extend to other centres “New customer services and real-time customer analyti
Slide 21: Healthcare
Healthcare For personal use only • Largest not for profit health care provider • 10,000 staff • Wide ranging provision of product and services • Bendigo Hospital • Wi-Fi networking • Clinical apps – nurse call / duress / workflows 21
Slide 22: Staff augmentation transitions to a managed service
Staff augmentation transitions to a managed service For personal use only British American Tobacco • Shift from contractor provision to long term contract with service levels • 5 year contract • One supplier, fixed price, one invoice and cost savings “Cost savings combined with improved service” 22
Slide 23: Infrastructure as a service Cloud Panel
Infrastructure as a service Cloud Panel For personal use only • Government preferred direction • Whole of Government • Complements existing panel arrangements • Opex/consumption pricing 23
Slide 24: Strategy and Outlook
For personal use only Strategy and Outlook
Slide 25: Strategic assumptions for FY15
Strategic assumptions for FY15 For personal use only • Technology investment will remain subdued but will increasingly shift to outsourcing and cloud in a Hybrid IT environment • The ‘product centric’ sectors will continue to suffer the impact of commoditisation and demand scale to grow profitably •
Slide 26: Our FY15 strategy
Our FY15 strategy For personal use only Our strategy is the pathway to enable our customers’ success. It unites Outstanding Solutions (which will increasingly transition from product centric to service centric), Remarkable People and Organisational Excellence through our Solutions Framework. We beli
Slide 27: Our FY15 strategy: Key priorities
Our FY15 strategy 5 Key priorities For personal use only Outstanding Solutions transitioning from primarily product centric to increasingly service centric in a Hybrid IT world Remarkable People who are high performing, innovative, skilful and confident of their future Organisational Excellence thro
Slide 28: Outstanding Solutions
Our FY15 strategy 5 Key priorities For personal use only Outstanding Solutions transitioning from primarily product centric to increasingly service centric in a Hybrid IT world Increasingly service centric solutions underpinned by service centric partner technologies Relevant to Business IT and the
Slide 29: Remarkable People
Our FY15 strategy 5 Key priorities For personal use only Remarkable People who are high performing, innovative, skilful and confident of their future Understand and adapt to the environment in which we operate Clear development pathways that transition skills and capabilities Compensation plans that
Slide 30: Organisational Excellence
Our FY15 strategy 5 Key priorities For personal use only Organisational Excellence through optimisation, alignment and continuous improvement Simplify and improve Rationalise structures to align with and drive our transition New systems to automate business processes Enhanced management processes th
Slide 31: Customer Success
Our FY15 strategy 5 Key priorities For personal use only Customer Success for Business IT and the Business Consumer Increasingly valued in helping customers transition and achieve their business objectives Offer thought leadership and innovation, consistency and flexibility Lower risk through our lo
Slide 32: Exceptional Performance
Our FY15 strategy 5 Key priorities For personal use only Exceptional Performance that consistently improves returns to shareholders Exceed FY14 profit from organic business as the foundation for continued growth Increase profit via new partnerships and complementary acquisitions 32 1
Slide 33: FY15 Guidance
FY15 Guidance For personal use only “Even given difficult conditions in the government sectors, the solid 1H result and high activity levels helps underpin our full year guidance to improve on last year’s NPBT of $10.9 million” 33
Slide 34: Q&A
For personal use only Q&A
Slide 35: Appendix – Financial Summary
APPENDIX 1 – FINANCIAL SUMMARY For personal use only 35
Slide 36: Appendix – Segment Summary
APPENDIX 2 – SEGMENT SUMMARY For personal use only 36
Slide 37: Disclaimer
DISCLAIMER For personal use only This presentation has been prepared by Data#3 Limited (“the Company”). It contains general background information about the Company’s activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. T
Slide 38: Interested in how Data#3 can help?
Interested in how Data*3 can help? www.data3.com.au | 1300 23 28 23 Follow Us twitter.com/Data3Limited facebook.com/Data3Limited
Slide 39: For personal use only
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