Slide 1: Half Year Results Presentation
For personal use only Half Year Results Presentation Half year ended 31 December 2015 (“HY16”) 23 February 2016 Presenters David Griffith - Managing Director, IPH Limited Dr. Andrew Blattman - CEO, Spruson & Ferguson Malcolm Mitchell - Group 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 materials/slides for a presentation concerning IPH. This presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or other
Slide 3: Contents
Contents For personal use only 1. HY16 Highlights 2. HY16 Business Performance and Market Update 3. Acquisitions 4. HY16 Financial Performance 5. FY16 Strategic Initiatives 6. Appendices 3
Slide 4: 1. HY16 Highlights
For personal use only 4 1. HY16 Highlights
Slide 5: Financial Highlights
Financial Highlights For personal use only HY16 adjusted NPAT has increased by 75% on HY15 Underlying (constant currency, excl. acquisitions) earnings growth Adjusted NPAT of $23.4m (EPS 13.8c), 75% ahead of HY15 Continuing net benefits derived from foreign Adjusted Adjusted Change% Earnings E
Slide 6: Operational Highlights
Operational Highlights For personal use only Strong operational performance across the group Acquisitions: IPH continues its growth through strategic acquisitions - Pizzeys (Sep’15) - Callinans (Nov’15) - Strong pipeline of acquisitions and development opportunities Group: IPH companies filed to
Slide 7: Operational Highlights (cont'd)
Operational Highlights (cont’d) For personal use only Strong operational performance across the group Practice Insight: strong focus on product development and sales/marketing - market-focused product development - new sales and support office in Munich to provide better reach in key markets (Euro
Slide 8: 2. HY16 Business Snapshot and Market Update
For personal use only 2. HY16 Business Snapshot and Market Update 8
Slide 9: Market Overview – Global Trend in Patents
Market Overview – Global Trend in Patents For personal use only Growing trend in international PCT patent applications Growing trend of PCT applications lodged in key jurisdictions (USA and Japan) gives confidence in the increasing number of PCT national phase patent applications to be filed in th
Slide 10: Market Overview – Asian Patent Market
Market Overview – Asian Patent Market Growing patent market in Asia For personal use only SG, ID, TH, MY VN & PH Total Patent Filings 12000 10000 8000 CY10 CY11 6000 CY12 CY13 CY14 4000 CY15 (1) 2000 0 Singapore Indonesia (3) Thailand (2) Malaysia Vietnam Philippines 10 Data Source: WIPO, IPH (1) CY
Slide 11: Market Overview – AU & SG Patent Markets
Market Overview – AU & SG Patent Markets For personal use only Growing patent market in Australia and Singapore Increasing number of patent applications filed at It is estimated that over 10,500 patent applications IP Australia in CY15. were filed at IPOS in CY15. Total Patent Filings in Austral
Slide 12: Market Overview – IPH patent market share in AU & SG
Market Overview – IPH patent market share in AU & SG For personal use only No 1 IP group in Australia and Singapore Australia: IPH (incl. SF, FAKC and Pizzeys) has 20.5% Singapore: IPH (SF (Asia) ) has 25% patent market patent market share and holds no. 1 market position share and holds no. 1 ma
Slide 13: Market Overview – IPH patent market share in Asia
Market Overview – IPH patent market share in Asia For personal use only IPH continues to maintain strong patent market position in key jurisdictions in Asia SF (Asia) Patent Market Share - Asia (CY 14) 30% 25% 25% 20% 15% 13% 10% 9% 7% 6% 5% 4% 1% 0% Singapore Malaysia Philippines Indonesia Viet Nam
Slide 14: Filings by IPH companies
Filings by IPH companies For personal use only Increasing number of patent and trade mark applications filed by IPH companies FY12 FY13 FY14 FY15 HY16 Patents Spruson & Ferguson (Australia) 4,674 5,303 4,523 4,488 2,311 Spruson & Ferguson (Asia) 4,662 5,056 5,263 5,718 3,254 Fisher Adams Kelly - - -
Slide 15: 3. Acquisitions
For personal use only 15 3. Acquisitions
Slide 16: Pizzeys
Pizzeys For personal use only Continuing the consolidation of the fragmented IP market in Australia Completed acquisition on 30 September 2015 Brisbane & Canberra based patent & trade mark attorneys, established for over 20 years Strong foreign client base Total consideration $72.1m; conside
Slide 17: Callinans
Callinans For personal use only Merger with FAK to provide critical mass. Further market consolidation Completed acquisition on 2 November 2015 Melbourne based patent & trade mark attorneys Both local and foreign client base Total consideration $5.5m; consideration settled 50% in cash and th
Slide 18: 4. HY16 Financial Results
For personal use only 4. HY16 Financial Results 18
Slide 19: Income Statement
Income Statement Growth, acquisitions and continuing benefits derived from currency movements For personal use only Six months ended HY16 HY15 31 December 2015 Reported Reported Income Adjusted Income Adjusted Statement Adjustments 1) Earnings HY16 Statement Adjustments 2) Earnings HY15 #039;m Total re
Slide 20: Like vs Like Earnings
Like vs Like Earnings Spruson & Ferguson continues its growth For personal use only Six months ended Adjusted Constant Adjusted Adjusted 31 December 2015 Earnings Currency Earnings Earnings HY16 Acquisitions Adjustment HY16 1) HY15 Vrnc #039;m Vrnc % #039;m Total revenue 69.0 (14.0) (7.7) 47.3 43.2 4.1 +9
Slide 21: Segment Breakdown
Segment Breakdown Earnings growth across all businesses For personal use only Six months ended Australia Asia Adjusted Australia Asia Adjusted 31 December 2015 HY16 HY16 Eliminations 1) Earnings HY15 HY15 Eliminations 1) Earnings Earnings Earnings HY16 Earnings Earnings HY15 #039;m Total revenue 42.8
Slide 22: Revenue and EBITDA FY13 - FY15 & HY16
Revenue and EBITDA 1) FY13 - FY15 & HY16 For personal use only Revenue #039;m EBITDA 1) #039;m Australia Asia Australia Asia New Businesses New Businesses Interco 42.3 94.6 32.1 30.0 21.1 79.2 28.6 4.0 74.2 42.9 69.0 31.2 10.2 13.7 26.3 14.0 15.0 28.8 54.2 21.2 50.1 50.5 18.4 16.3 28.8 13.1 (2.2) (2.5) (2
Slide 23: Cash Flow Statement
Cash Flow Statement Strong cash flow For personal use only Low CAPEX & minimal working capital requirements = Strong cash generation, supports high dividend pay-out ratio Six months ended 31 December 2015 HY16 HY15 HY16 Adjusted HY15 Adjusted Cash Flow Cash Flow Cash Flow Cash Flow Statement Adjus
Slide 24: Consolidated Balance Sheets
Consolidated Balance Sheets For personal use only Reported Balance Sheet Reported Balance Sheet Reported Balance Sheet Strong balance sheet as at as at as at 31 Dec 2015 30 Jun 2015 31 Dec 2014 #039;m $77m cash Cash and cash equivalents 77.0 5.4 4.8 Trade and other receivables 33.4 27.4 20.7 Other cu
Slide 25: Earnings Currency Sensitivity
Earnings Currency Sensitivity 1) For personal use only Revenue net of Recoverable Expenses Operating Expenses SGD EUR 5% 6% AUD SGD 30% 29% Other 1% AUD USD 71% 58% Currency 2) +/- 5% USD 3.3m SGD (0.3)m EUR 0.3m 25 Notes 1) Based on current IPH Group adjusted earnings and HY16 average FX rates, wit
Slide 26: 5. FY16 Strategic Initiatives
For personal use only 5. FY16 Strategic Initiatives 26
Slide 27: Future Growth Initiatives
Future Growth Initiatives IPH continues to pursue its growth objectives. Goal – “To be the leading IP group in secondary markets”. For personal use only 1 Maintain and grow patent market share in Singapore Open offices and acquire well established IP firms in other Asian countries Asian Growth
Slide 28: 6. Appendices
For personal use only 28 6. Appendices
Slide 29: IPH Limited - Overview
IPH Limited - Overview IPH Limited (“IPH”) is the holding company of Spruson & Ferguson (“S&F”), Fisher Adams For personal use only Kelly Callinans (“FAKC”), Pizzeys & Practice Insight (“PI”). S&F - Established in 1887 - A leading Intellectual Property (“IP”) firm in Asia Pacific - Top-tier IP g
Slide 30: Business Snapshot
Business Snapshot For personal use only The majority of revenue derives from patent business. Highly diversified client base, annuity style client relationships and strong cash conversion Revenue split by service line and location Revenue split by clients (FY15) 2 Australia Asia Patents & Trade Lega
Slide 31: IPH Limited – Group Structure (simplified)
IPH Limited – Group Structure (simplified) For personal use only IPH Limited (Australia) Practice Insight Spruson & Ferguson IPH Services Fisher Adams Kelly Pizzeys (Australia and Germany) (Australia) (Australia) Callinans (Australia) (Australia) Spruson & Ferguson Lawyers Spruson & Ferguson (M) Spr
Slide 32: IPH Limited – Corporate Information
IPH Limited – Corporate Information For personal use only Ordinary Shares on Issue Number % Directors Free float 97,602,816 52% Mr Richard Grellman AM - Chairman Escrowed ** 88,726,874 48% Mr David Griffith - Managing Director Total 186,329,690 100% Ms Robin Low Dr Sally Pitkin Top 20 81,713,255 44%
Slide 33: IPH's Regional Hub Strategy
IPH’s Regional Hub Strategy For personal use only Key to IPH’s strategy is its operation of IP service hubs along with local offices in key countries. IPH operates two key IP hub (Australia and Singapore) – “one-stop” service for clients co-ordinating IP applications in 25 countries across Asia
Slide 34: Stages of IP Lifecycle
Stages of IP Lifecycle For personal use only IPH generates revenue from all stages of the IP lifecycle Timelines Up to 31 months Generally 2-5 years Up to 20 years Patents Renewal / Phase Filing Prosecution Management / Enforcement Timelines Up to 6 months Up to 21 months Indefinite Trade Marks 34
Slide 35: 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 and Practice Insight (“PI”) S&F, established in 1887, is a leading Intellectual Property (“IP”) firm in Asia Pacific Long track
Slide 36: Investment Highlights (cont'd)
Investment Highlights (cont’d) For personal use only 6 Experienced Board, Strong board with complementary skill sets management & Long standing, experienced management team personnel Highly qualified and experienced professional IP team 7 High barriers to Entrenched market position, large pi