Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — Morgans Conference October 2017
29 slides from Kelly Partners's conference presentation, Oct 11, 2017
Slide 1: Kelly+Partners Group Holdings (KPG) Morgans conference October 2017
For personal use only Kelly+Partners Group Holdings (KPG) Morgans conference October 2017 Copyright © 2017 Kelly + Partners All Rights Reserved.
Slide 2: Disclaimer
Disclaimer —— For personal use only SUMMARY INFORMATION FORWARD LOOKING STATEMENTS This document has been prepared by Kelly Partners Group Holdings Limited ACN This document contains certain “forward-looking” statements. Forward-looking 124 908 363 (Company). This document contains information in a
Slide 3: Contents
Contents For personal use only 1. Great Accountant? 2. Market 3. Focus 4. Expertise 3
Slide 4: Do you have a GREAT ACCOUNTANT?
For personal use only Do you have a GREAT ACCOUNTANT?
Slide 5: Client system
Client system —— For personal use only Cradle to Grave, multi-generational Co-ordinated 1. Forward-looking advice 2. Accessible 3. No surprises 4. Better off (changing lives) 5
Slide 6: Long history of revenue growth
Long history of revenue growth —— 37% Revenue CAGR 36% Revenue CAGR For personal use only Over the past 11 years, Kelly+Partners has exhibited from 2007 to 2016 (historical) from 2007 to 2018 (including forecast) consistent strong revenue growth $40m $35m $30m $25m $20m $25m $15m $5m $0m 2007 2008 2
Slide 7: A successful network with strong growth record
A successful network with strong growth record —— For personal use only Kelly+Partners has grown to a network of 16 operating businesses with 5,300 client groups across the Greater Sydney area. Kelly+Partners People Kelly+Partners Clients Kelly+Partners Financials 38 / 191 5,300 $36.7m Operating Bus
Slide 8: Market
For personal use only MARKET
Slide 9: Australian accounting market is large, but fragmented
Australian Total market revenue $20bn accounting Typical client base Typical accounting provider market For personal use only Big 4 Firms is large, ASX-listed and $4.5bn PWC multi-national 23% of total EY companies DELOITTE but KPMG fragmented $0.9bn 5% of total National Mid-Tier Firms —— Large and
Slide 10: Australia's tax law is increasing in complexity
Australia’s tax law is increasing in complexity… —— For personal use only Increasing tax compliance and legislative complexity are key drivers for accounting and taxation services. Tax law volume growth Paying taxes in Australia is considered of ~14x since 1950s more difficult relative to some other
Slide 11: Death & taxes
Death & taxes —— For personal use only Shrinking tax base demographics Ongoing government budget deficits Heightened corporate disclosure Tax Payers Societal pressure to increase personal taxes Competitive pressure to Increasing tax complexity, reduce corporate taxes compliance and collaboration Sou
Slide 12: Focus: geography - client - services - model
For personal use only FOCUS geography – client – services - model
Slide 13: Brand Position – 'insurgent'
Brand Position – ‘insurgent’ —— For personal use only Kelly Partners wants to be known as a insurgent brand. Insurgent Brands have a strong sense of who they're and what they stand for – They’re on the side of the customer. v v v v v v 13
Slide 14: Geography
Geography —— For personal use only Hong Kong Norwest Central Coast Central Tablelands Parramatta Western Sydney Northern Beaches Oran Park North Sydney South West Sydney Sydney CBD Southern Highlands Wollongong 14
Slide 15: Client & long term relationships
Client & Long term relationships… Services: For personal use only Client type Typical tenure Typical service providers SME segment Large corporates 3-5 years Big 4, national mid-tier —— SMEs 10+ years Kelly+Partners SME clients typically have stable, Retail Annual National franchises long-term relat
Slide 16: Group Structure
Group Structure —— For personal use only Over its 11 year history, the Company has completed 14 transformations and built 7 greenfields offices. All businesses are majority-owned1, with centralised back in North Sydney & Hong Kong. Kelly Partners Group Holdings Ltd Note 1: Except Kelly Partners Oran
Slide 17: Business model
The parent company KPG provides: Business model Intellectual property (Brand & Systems) —— For personal use only Centralised expert management services Kelly+Partners is a A controlling equity interest (>50%) single-brand owner- driver accounting Across 16 operating businesses in 13 locations networ
Slide 18: A more effective accounting model
A more effective accounting model —— For personal use only Kelly+Partners is an expanding network of single-brand owner-driver accounting practices, with a focus on the underserviced SME market. Mission + Values Market Brand Structure Clearly defined mission and values SME focus in Greater Sydney ar
Slide 19: Owner-driver operating model
Owner-driver operating model —— For personal use only Kelly+Partners’ operating model creates a strong long-term alignment of interests between the parent company and the underlying Operating Business Owners. Target Partner Key Terms of Operating Model Characteristics Alignment with Kelly+Partners’
Slide 20: Owner-driver business structure
Owner-driver business structure —— For personal use only Ownership / assets Financial return / debt + Capital + Distribution: equity interest + Back office KPG + Fees: centralised management services + Ip + Fees: intellectual property 100% Subsidiary company 51% + Fixed assets + Debt: acquisition +
Slide 21: Expertise
For personal use only EXPERTISE
Slide 22: Small firms face major challenges
Small firms face major challenges —— For personal use only Traditional small accounting firms are facing pressure points from multiple angles. Kelly+Partners offers a complete transformation solution for all stakeholders. Pressure points for small partnerships Kelly+Partners solution Succession plan
Slide 23: Business growth model
Business growth model 13. Exit Age | Injury | Good | Bad —— For personal use only 12. Succession 11. Growth Organic | Acquired strategy 10. Communication 9. Brand 8. Operations People | Process | Clients | Financial 7. Business Model 6. Structure 5. Strategy 4. Philosophy 3. Vision 2. Values 1. Miss
Slide 24: Growth Strategy
Growth To grow Revenue, EBITDA and Partner Profits in Strategy Sydney and then nationally through offices that —— For personal use only are majority owned and use Kelly+Partners: Centralised Systems and Brand expert processes management And have a minimum 2 owner driver directors and $2 million (ide
Slide 25: Three ways to grow
1. 2. 3. 3 Ways To Grow Organic Network New growth expansion services —— For personal use only Steady growth from Continue to partner Ongoing SMEs driven by with private convergence of audit, increasing tax accounting firms, and tax, financial advice, complexity and help solve the superannuation/SMS
Slide 26: Organic growth
1.Organic Historical organic growth revenue growth —— For personal use only Over the past 10 years, organic revenue growth for the Kelly+Partners network has ~4% pa Kelly+Partners targets 5% averaged: annual revenue growth and 32.5% EBITDA margin for each Operating Business. Revenue EBITDA growth Ma
Slide 27: Network growth
Network growth —— For personal use only Kelly+Partners has identified Newcastle a further 8 locations in Greater Sydney as targets for future network expansion. Windsor Hornsby Leura Macquarie Park Bondi Junction Liverpool Miranda Transforming the SME accounting market 27
Slide 28: New services
3. New Kelly+Partners Network Services —— For personal use only Specialist Tax Wealth Solution Business Finance Consulting Investment Solution Personal Finance SMSF Solution Property Consulting M&A Life Insurance and Advice Capital Raisings Business Insurance Corporate Restructure Risk Assessment St
Slide 29: Thank You
For personal use only Market – Focus - Expertise Thank You
Kelly Partners Group Holdings — Morgans Conference October 2017 on 6ix