Slide 1: FY23 Results Investor Presentation
17 August 2023 FY23 Results Investor Presentation Attached is a copy of the IPH Limited FY23 Results Investor Presentation. An analyst/shareholder briefing will be held at 10.30am (AEST). The briefing will be webcast and accessible on the IPH website at www.iphltd.com.au. For more information, pleas
Slide 2: 2023 Full Year Results Investor Presentation
2023 Full Year Results Investor Presentation Full year ended 30 June 2023 Presented by: Dr. Andrew Blattman Managing Director & CEO, IPH Limited John Wadley Chief Financial Officer, IPH Limited iphltd.com.au
Slide 3: Disclaimer
Disclaimer 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 otherwise dispose of, issue
Slide 4: Contents
Contents 1 FY23 year in review 5 2 FY23 financial results 7 3 Market update 15 4 Delivering on our strategy 20 5 Looking ahead to FY24 25 6 Appendix 28 www.iphltd.com.au 2023 Full Year Results Investor Presentation 3
Slide 5: About the IPH Group
About the IPH Group A leading international IP services group 1) Approximate employee numbers across the Group. 2) Management estimated market share based on local IP office filing data: Australia (FY23 as at 16/7/23), Singapore (CY23 YTD April as at 20/7/23), New Zealand (FY23 as at 6/7/23), Canada
Slide 6: FY23 year in review
01 FY23 year in review www.iphltd.com.au 2023 Full Year Results Investor Presentation 5
Slide 7: Strong underlying result
Strong underlying result Building on growth step-outs Underlying EBITDA1 $170.0m 28% Consolidating our acquisitions Smart & Biggar exceeding expectations Delivering on growth step-outs 20% Underlying NPAT1 Continued to assess complementary acquisition $99.0m opportunities in Canada and in other core
Slide 8: FY23 financial results
02 FY23 financial results www.iphltd.com.au 2023 Full Year Results Investor Presentation 7
Slide 9: Financial overview
Financial overview Earnings improvement assisted by Smart & Biggar contribution and currency benefit 9% Revenue1 $496.2m 29% Final Dividend2 17.5 cents per share (35% franked) 37% 28% EBITDA Underlying EBITDA3 $159.0m $170.0m Statutory NPAT $64.5m 23% Underlying NPAT2 $99.0m 20% Diluted EPS 28.4 cen
Slide 10: Like-for-Like earnings
Like-for-Like earnings Continued solid performance from Singapore hub; China / Hong Kong impacted by supply chain de-risking Australia – New Zealand Asia Group Revenue -1% Revenue 4% Revenue Steady EBITDA -5% EBITDA Steady EBITDA -3% EBITDA margin -5% EBITDA margin -4% EBITDA margin -3% 1) Like for
Slide 11: Resilient in the face of cyber security challenge
Resilient in the face of cyber security challenge Effective response and business continuity implemented What happened How we responded • On 13 March 2023, IPH detected a • Immediately isolated systems, portion of its IT environment was subject enacted business continuity and to unauthorised access:
Slide 12: Underlying Results
Underlying Results Adjustments Millions Underlying EBITDA up 28% Remeasurement of deferred consideration (6.3) Other 0.2 FY23 Statutory Underlying Adjustments to revenue (6.1) Adjustments Income Statement Earnings FY233 Total revenue1 496.2 (6.1) 490.1 Business acquisition costs 10.7 Total expenses
Slide 13: Cash flow statement
Cash flow statement #039;m FY23 Cash Flow Statement FY22 Cash Flow Statement Cash conversion impacted by one-off accounting items Statutory EBITDA 159.0 115.9 Non-operating adjustments (7.5) 7.6 • Cash conversion remains high at 88%. Operating EBITDA 151.5 123.5 • Operating non-cash items in both perio
Slide 14: Balance sheet
Balance sheet Balance Sheet as at 30 Jun 2023 Balance Sheet as at 30 Jun 2022 Growth in balance sheet following #039;m acquisition of Smart & Biggar Cash and cash equivalents 103.3 88.4 Trade and other receivables 141.8 92.8 Other current assets 32.9 15.8 Total current assets 278.0 197.0 As a result of
Slide 15: Foreign currency sensitivity
Foreign currency sensitivity FY23 Service Charges4 Earnings currency Balance sheet sensitivity sensitivity Other 5% • Based on the USD profile in FY23 in the • The Group is also exposed to FX on IPH Group, a 1c movement in the the level of its foreign denominated AUD/USD exchange rate equates to cas
Slide 16: Market update
03 Market update www.iphltd.com.au 2023 Full Year Results Investor Presentation 15
Slide 17: Patent market – Australia
Patent market – Australia IPH Group filings began to stabilise in second half Australian patent 50,000 IPH Group market share 45.0% filings – market1 (excluding innovation patents)2 38.1% 36.2% 45,000 40.0% • Australian patent market 42,034 • IPH filings in FY23 decreased 7.8% on the 41,037 34.0% (e
Slide 18: Patent market – Singapore
Patent market – Singapore Maintained #1 position; strong performance with Singapore hub like-for-like revenue up 8% and EBITDA up 7% Singapore patent 16,000 IPH Group market share2 30.0% filings – market1 14,028 14,353 14,532 • IPH grew share of market in CY23, based on preliminary data. For the fir
Slide 19: IPH patent filings – Asia
IPH patent filings – Asia1 Solid growth in Indonesia and Malaysia offset by lower filings into China • Patent filings in Asia decreased by 1.7% 1200 in FY23 against a strong prior year. • IPH patent filings in Malaysia up 13%, Indonesia up 11%. Hong Kong was flat and China down 22%. 1000 • IPH shows
Slide 20: Expanding in Asia, pursuing growth in ANZ
Expanding in Asia, pursuing growth in ANZ Key business development initiatives targeting organic growth Expanding in Asia: • In May, IPH announced the establishment of a new team and office in Manila, Philippines, expanding IPH’s presence to 10 IP jurisdictions. • The new Manila office is the 10th o
Slide 21: Delivering on our strategy
04 Delivering on our strategy www.iphltd.com.au 2023 Full Year Results Investor Presentation 20
Slide 22: Smart & Biggar performance exceeding expectations
Smart & Biggar performance exceeding expectations Enhances IPH's international network with opportunity for further consolidation in Canada • Smart & Biggar is the number one patent filer in Canada.1 • Initial synergies of in excess of CAD 3.0m have been identified since acquisition (of which c. CAD
Slide 23: Our strengthened commitment to sustainability
Our strengthened commitment to sustainability Refreshed sustainability strategic priorities and stronger environmental impact measurement Governance, Privacy & Data Security Client Experience Impact & Innovation Manage risk effectively, maintain transparency and drive Deliver exceptional client serv
Slide 24: Building capability and supporting our people
Building capability and supporting our people Expert IP professionals, recognised in their field www.iphltd.com.au 2023 Full Year Results Investor Presentation 23 www.iphltd.com.au 2023 Full Year Results Investor Presentation 23
Slide 25: Generative AI changing the innovation ecosystem
Generative AI changing the innovation ecosystem AI will change the way we protect innovations • Protection of inventions with AI involvement: Key jurisdictions currently accept that technologies created solely by AI systems, without any human input, cannot be patented. However, complexity remains ar
Slide 26: Looking ahead to FY24
05 Looking ahead to FY24 www.iphltd.com.au 2023 Full Year Results Investor Presentation 25
Slide 27: Summary and Priorities for FY24
Summary and Priorities for FY24 Leveraging our enhanced platform for further growth Maintain stability and drive organic revenue growth in Australian / NZ business Continue to assess complementary acquisition opportunities in Canada and other core secondary IP markets: • In Canada, a number of furth
Slide 28: Thank you
Thank you iphltd.com.au www.iphltd.com.au
Slide 29: Appendix
06 Appendix www.iphltd.com.au 2023 Full Year Results Investor Presentation 28
Slide 30: Like-for-Like earnings
Like-for-Like earnings Continued solid performance from Singapore hub offset by lower performance in China / Hong Kong Underlying New Accounting Currency Adjusted Underlying Reported Chg% Revenue Jun 23 Businesses FX Movements Adjustment Revenue Jun 23 Revenue Jun 22 HY23 Australia & NZ IP 289.8 0.7
Slide 31: Underlying Results
Underlying Results Underlying EBITDA up 28% reflects Smart & Biggar contribution and currency benefit FY23 Statutory Underlying FY22 Statutory Underlying Adjustments Adjustments Income Statement Earnings FY233 Income Statement Earnings FY22 Total revenue1 496.2 (6.1) 490.1 385.1 385.1 Recoverable ex
Slide 32: Supplementary information
Supplementary information Items below EBITDA The table below details components included in Profit before Tax not included in EBITDA. FY24 assumptions1 are estimated and movements from FY23 to FY24 are predominately due to an additional 3 months of Smart & Biggar. Category FY23 FY24 Comments Depreci
Slide 33: Patent market trends
US PCT Applications2 CAGR 15 Year (CY07 to CY22) = 0.6% Patent market trends 70,000 CAGR Post-GFC (CY10 to CY22) = 2.2% Long-term trends stable 60,000 50,000 40,000 Australian Patent Filings1 CAGR 15 Year (FY08 to FY23) = 0.2% CAGR Post-GFC (FY10 to FY23) = 1.0% 30,000 20,000 45,000 10,000 0 40,000
Slide 34: Revenue and EBITDA
Revenue and EBITDA 170.00 Underlying Revenue $’m Underlying EBITDA $’m 31.40 490.20 - 0.10 137.40 - 385.00 93.80 124.30 369.40 363.50 114.50 5.10 0.60 17.80 2.70 0.40 - 54.30 51.50 22.50 118.90 89.70 256.70 110.20 110.40 43.40 2.40 96.10 0.50 43.60 15.20 38.60 102.70 93.50 103.50 103.30 286.00 289.8
Slide 35: Patent lifecycle
Patent lifecycle Long-life cycle supports consistent revenues and earnings Each year more than half+ of the total patent applications filed in Australia Typical (indicative) foreign patent route in Australia come through the PCT system in the form of PCT National Phase patent applications. • The pro