Slide 1: ASX Announcement: FY22 Investor Briefing Presentation
ASX Announcement For personal use only 18 August 2022 FY22 Investor Briefing Presentation Attached is a copy of the IPH Limited FY22 Investor Briefing Presentation. This will be presented at an analyst/shareholder briefing at 10.30am (AEST). The briefing will be webcast and accessible on the IPH web
Slide 2: FY22 results; Smart & Biggar to join IPH
For personal use only FY22 results Smart & Biggar to join IPH 18 August 2022 Presented by: Dr. Andrew Blattman Managing Director & CEO, IPH Limited John Wadley Chief Financial Officer, IPH Limited iphltd.com.au
Slide 3: Disclaimer
Disclaimer For personal use only The following disclaimer applies to this presentation. Please consider its contents carefully. By Forward looking information accepting this presentation, you acknowledge that you are receiving it on the basis set out in the This presentation contains certain forward
Slide 4: Contents
Contents For personal use only 1 FY22 highlights 04 2 FY22 results 06 3 Smart & Biggar to join IPH 12 4 Looking ahead for FY23 20 5 Appendix 24 FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 3
Slide 5: FY22 highlights
01 For personal use only FY22 highlights FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 4 FY22 results and Smart & Biggar to join IPH
Slide 6: Establishing a strong platform for future growth
Establishing a strong platform for future growth Leveraging the power of the IPH network to deliver a strong result For personal use only 11% Delivering on our growth Underlying EBITDA1 strategy $137.4m Canada’s leading IP agency firm, Smart & Biggar to join IPH Referrals from Successfully integrate
Slide 7: FY22 results
02 For personal use only FY22 results FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 6
Slide 8: Financial overview
Financial overview Strong Underlying Result assisted by currency benefit For personal use only Revenue $385.1m 6% Final Dividend1 16.0 cents per share (50% franked) 3% EBITDA $115.9m 2% Underlying EBITDA2 $137.4m 11% Statutory NPAT $52.6m 2% Underlying NPAT2 $86.7m 14% Underlying Diluted EPS 3% 12%
Slide 9: Asia delivers double digit earnings growth on like-for-like basis
Asia delivers double digit earnings growth on like-for-like basis Organic growth and integration synergies drive like-for-like growth For personal use only Australia – New Zealand Asia Group Revenue 1% Revenue 10% Revenue 2% EBITDA 1% EBITDA 10% EBITDA 2% EBITDA margin 2% EBITDA margin – EBITDA marg
Slide 10: Underlying Results
Underlying Results Underlying EBITDA $137.4m up 11% assisted by organic growth and currency benefit For personal use only FY22 Statutory Underlying Adjustments Millions Adjustments Income Statement Earnings FY222 Share based payments expense (4.9) Total revenue 385.1 385.1 Recoverable expenses (103.
Slide 11: Cash flow statement
Cash flow statement FY22 Cash Flow Statement FY21 Cash Flow Statement IPH continues to generate excellent cashflow #039;m with cash conversion of 100% For personal use only Statutory EBITDA 115.9 113.3 Non-cash movements • Cash conversion of 100% reflects strong collections Change in working capital 7.
Slide 12: Share based payments
Share based payments Share based payments expense will be recognised in Underlying EBITDA from FY23 For personal use only Presently share based payments expense is excluded from underlying EBITDA. From FY23 onwards, consistent with market practice it will no longer be shown as a non-underlying expen
Slide 13: Smart & Biggar to join IPH
03 For personal use only Smart & Biggar to join IPH FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 12
Slide 14: Smart & Biggar to join IPH
Smart & Biggar to join IPH IPH has reached agreement to acquire the IP agency practice of Smart & Biggar, which will hold an interest in the legal practice of Smart & Biggar, as permitted by Canadian regulation. For personal use only Highlights Smart & Biggar, Canada’s leading Intellectual Property
Slide 15: Transaction summary
Transaction summary A compelling transaction for IPH, its clients, employees and shareholders For personal use only Smart & Biggar • Smart & Biggar is Canada’s leading IP firm by number of patent filings, filing over 6,200 patents and over 1,800 trade marks in 20211 • Smart & Biggar is a full servic
Slide 16: Realising our vision
Realising our vision A significant strategic transaction for IPH, further delivering on its vision to be the leading IP services group in secondary IP markets For personal use only 1) IPH internal filing data for FY22 including Smart & Biggar on a pro-forma basis. 2) Average AUD:CAD for the 12 month
Slide 17: Transaction consideration
Transaction consideration For personal use only Consideration • The consideration for the acquisition is CAD 348m (AUD 3871) • Represents a multiple of approximately 10x pro forma adjusted Smart & Biggar EBITDA for the 12 months to June 20222 Cash • Upfront cash consideration of CAD 241m; considerat
Slide 18: Financial impact and funding
Financial impact and funding Compelling financial benefits for IPH shareholders For personal use only Financial impact Earnings • Expected underlying1 EPS accretion of approximately 10% in the first full year of ownership • Cost savings of approximately $4-6m expected to be achieved over the first t
Slide 19: Smart & Biggar financial performance
Smart & Biggar financial performance Significant contribution of legal revenue For personal use only Financial summary Basis of Smart & Biggar financial reporting The financial summary below is based on Smart & Biggar management’s unaudited Smart & Biggar currently reports on a calendar year basis f
Slide 20: Management and vendor alignment
Management and vendor alignment IPH has a strong track record of successfully integrating IP services firms into its network For personal use only Management Vendor alignment • Smart & Biggar’s leadership team • The transaction structure and has an outstanding international consideration achieves on
Slide 21: Looking ahead for FY23
04 For personal use only Looking ahead for FY23 FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 20
Slide 22: Summary and Priorities for FY23
Summary and Priorities for FY23 Leveraging our enhanced platform for further growth For personal use only • IPH is now one of the largest IP services groups in secondary IP markets with an expanded international platform. • Consolidate and grow our position in our core geographies: > Australia/New Z
Slide 23: For personal use only
For personal use only FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 22
Slide 24: Thank you
For personal use only Thank you iphltd.com.au www.iphltd.com.au
Slide 25: Appendix
05 For personal use only Appendix FY22 results and Smart & Biggar to join IPH www.iphltd.com.au 24
Slide 26: Like for Like Revenue and EBITDA
Like for Like Revenue and EBITDA 10% increase in like for like EBITDA from strong organic growth in Asia and synergies in Australia/NZ For personal use only Underlying New Accounting Currency Adjusted Underlying Chg% Revenue Jun 22 Businesses2 FX Movements3 Adjustment4 Revenue Jun 22 Revenue Jun 21
Slide 27: Underlying Results
Underlying Results Underlying EBITDA $137.4m up 11% assisted by organic growth and currency benefit For personal use only FY22 Statutory Underlying FY21 Statutory Underlying Adjustments Adjustments Income Statement Earnings FY222 Income Statement Earnings FY21 Total revenue 385.1 385.1 363.5 363.5 R
Slide 28: Revenue and EBITDA
Revenue and EBITDA For personal use only Underlying Revenue $’m Underlying EBITDA $’m Australia IP Asia IP New Businesses Data & Analytics Serv Corp & Interco Australia IP Asia IP New Businesses Data & Analytics Serv Corp & Interco 137.4 385.1 369.4 124.3 363.5 0.6 0.8 2.7 4.2 114.5 0.4 22.5 5.1 51.
Slide 29: Patent market – Australia
Patent market – Australia Like-for-like EBITDA growth achieved despite IPH filing growth lower than market For personal use only Australian patent IPH Group market share 45,000 45.0% 42,034 41,037 38.1% filings – market1 40,000 (excluding innovation patents)2 40.0% 36.2% 36,310 36,628 36,408 34.0% •
Slide 30: Patent market – Singapore
Patent market – Singapore Maintained #1 position For personal use only 16,000 Singapore patent IPH Group 30.0% 14,353 14,028 filings – market1 14,000 13,117 market share2 25.0% 24.0% • IP Office of Singapore (IPOS) • IPH maintains number one market 23.3% 23.0% 23.0% note an increased lag in filing 1
Slide 31: IPH patent filings – Asia
IPH patent filings – Asia1 China filings up 15.3% For personal use only • IPH increased filings across these 1000 15.1% key jurisdictions (outside of Singapore) by 9.4%. 900 6.1% • IPH patent filings in China increased 15.3% 800 by 15.3% • Network continues to be attractive to 700 large clients. In
Slide 32: Trade mark market – Australia
Trade mark market – Australia Strengthened #1 position in the market For personal use only Australian trade mark IPH Group 80,000 25.0% 23.1% filings – market (excl. 70,000 69,242 65,150 market share3 21.3% Int’l Registrations)1 63,537 58,734 • IPH trade mark filings in Australia 20.0% 20.0% 58,319
Slide 33: Smart & Biggar – Canada’s leading IP agency firm to join IPH
Smart & Biggar – Canada’s leading IP agency firm to join IPH For personal use only Strategic transaction extends IPH’s international network beyond the Asia Pacific • Smart & Biggar, Canada’s leading IP agency firm will join the IPH group for consideration of CAD 348m (AUD 387m1) • A significant str
Slide 34: Strong results in Asia demonstrate organic growth
Strong results in Asia demonstrate organic growth China patent growth of 15.3 % and network referrals up 4.5% For personal use only • IPH patent filings in China increased by 15.3%. • IPH maintains number one market share position in Singapore in CY22 YTD Mar. • Growth in all key Asian jurisdictions
Slide 35: AJ Park case study
AJ Park case study Proven track record of acquiring and integrating firms while capturing synergies and improving margins For personal use only AJ Park EBITDA and Margin Accretion Post Acquisition 25 30% • At the time of acquisition, AJ Park was a successful privately held firm operating at an EBITD
Slide 36: Enablers – our people
Enablers – our people Strengthening our people offering For personal use only Building group-wide people and leadership capability Initiatives to support health & wellness • Record year for promotions – including 14 Principal appointments. • Established a partnership with Smiling Mind to deliver a s
Slide 37: Ongoing commitment to sustainability
Ongoing commitment to sustainability IPH continues to make progress on key sustainability focus areas For personal use only Our People Diversity Governance & • 31 promotions across member firms • Women represent 34% of Senior Executive Risk management (including 14 Principal promotions) and Principa
Slide 38: Expanded IPH network offering
Expanded IPH network offering There are strong similarities between Smart & Biggar and IPH’s existing IP businesses For personal use only Spruson & Ferguson Spruson & Ferguson Smart & Biggar Griffith Hack Pizzeys AJ Park Australia Singapore Year founded 1890 1887 1997 1904 1981 1891 • Patent • Paten
Slide 39: Smart & Biggar to join IPH
For personal use only Smart & Biggar to join IPH 18 August 2022 Presented by: Dr. Andrew Blattman Managing Director & CEO IPH Limited iphltd.com.au www.iphltd.com.au
Slide 40: Disclaimer
Disclaimer For personal use only The following disclaimer applies to this presentation. Please consider its contents carefully. By Forward looking information accepting this presentation, you acknowledge that you are receiving it on the basis set out in the This presentation contains certain forward
Slide 41: Transaction summary
Transaction summary IPH has reached agreement to acquire the IP agency practice of Smart & Biggar, which will hold an interest in the legal practice of Smart & Biggar, as permitted by Canadian regulation. For personal use only Highlights Smart & Biggar, Canada’s leading Intellectual Property (IP) ag
Slide 42: Transaction summary (continued)
Transaction summary (continued) A compelling transaction for IPH, its clients, employees and shareholders For personal use only Smart & Biggar • Smart & Biggar is Canada’s leading IP firm by number of patent filings, filing over 6,200 patents and over 1,800 trade marks in 20211 • Smart & Biggar is a
Slide 43: Overview of Smart & Biggar
Overview of Smart & Biggar Smart & Biggar is one of Canada’s preeminent IP services firms For personal use only History Awards • Established in 1890, Smart & • Smart & Biggar has been Biggar has a similar rich history recognised by many awards as to IPH’s existing member firms Canada’s premier IP fi
Slide 44: Realising our vision
Realising our vision A significant strategic transaction for IPH, further delivering on its vision to be the leading IP services group in secondary IP markets For personal use only 1) IPH internal filing data for FY22 including Smart & Biggar on a pro-forma basis. 2) Average AUD:CAD for the 12 month
Slide 45: Transaction consideration
Transaction consideration For personal use only Consideration • The consideration for the acquisition is CAD 348m (AUD 3871) • Represents a multiple of approximately 10x pro forma adjusted Smart & Biggar EBITDA for the 12 months to June 20222 Cash • Upfront cash consideration of CAD 241m; considerat
Slide 46: Financial impact and funding
Financial impact and funding Compelling financial benefits for IPH shareholders For personal use only Financial impact Earnings • Expected underlying1 EPS accretion of approximately 10% in the first full year of ownership • Cost savings of approximately $4-6m expected to be achieved over the first t
Slide 47: Smart & Biggar financial performance
Smart & Biggar financial performance Significant contribution of legal revenue For personal use only Financial summary Basis of Smart & Biggar financial reporting The financial summary below is based on Smart & Biggar management’s unaudited Smart & Biggar currently reports on a calendar year basis f
Slide 48: Management and vendor alignment
Management and vendor alignment IPH has a strong track record of successfully integrating IP services firms into its network For personal use only Management Vendor alignment • Smart & Biggar’s leadership team • The transaction structure and has an outstanding international consideration achieves on
Slide 49: Expanded IPH network offering
Expanded IPH network offering There are strong similarities between Smart & Biggar and IPH’s existing IP businesses For personal use only Spruson & Ferguson Spruson & Ferguson Smart & Biggar Griffith Hack Pizzeys AJ Park Australia Singapore Year founded 1890 1887 1997 1904 1981 1891 • Patent • Paten
Slide 50: Thank you
For personal use only Thank you ABN 49 169 015 838 Mail to: GPO Box 3898 Level 22, Tower 2 Sydney 2001, Australia Darling Park, 201 Sussex St P. +61 2 9393 0301 Sydney NSW 2000 F. +61 2 9261 5486 Australia info@iphltd.com.au iphltd.com.au www.iphltd.com.au