Slide 1: 2020 Full Year Results
2020 Full Year Results Investor Presentation Year ended 30th June 2020 20th August 2020 Presented by: Dr. Andrew Blattman Managing Director / CEO, IPH Limited John Wadley Chief Financial Officer, IPH Limited www.iphltd.com.au 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by IPH Limited (IPH) and comprises written No representation, warranty or assurance (express or implied) is given or materials/slides for a presentation concerning IPH. made by IPH that the forward looking statements contained in this presentation are accur
Slide 3: Table of contents
Table of contents 01 FY20 highlights 02 FY20 results 03 Market overview 04 Operations review 05 Looking ahead to FY21 06 Appendix 2020 Full Year Results Investor Presentation | www.iphltd.com.au 3
Slide 4: About IPH Limited
About IPH Limited Asia-Pacific’s leading IP professional services group 1. Approximate employee numbers across the Group. 4 2. IPH Management estimate based on IP office filing information: Australia (IP Australia) – FY20 14/07/20; Singapore (IPOS) – CY19 as at approx. 3/08/20; New Zealand (IPONZ) –
Slide 5: FY20 Highlights
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Slide 6: Operational highlights
Operational highlights Continued delivery of strategic priorities Strategic priorities for FY20 Results in FY20 01 Xenith integration successfully completed, including Successful Xenith IP integration integration of Watermark business into Griffith Hack and divestment of Glasshouse Advisory practice
Slide 7: COVID-19 update
COVID-19 update Prudent approach during an uncertain period Current market environment Caring for our people Managing the business • IPH is a resilient business and maintains a • Comprehensive COVID-19 response and • Continued conservative cost significant pipeline of work as a result of COVIDSafe p
Slide 8: Financial highlights
Financial highlights Growth across most financial metrics in challenging market conditions Revenue 43% Dividend1 14% $370.1m 28.5 cents per share (15c final) Xenith contribution3 (since 15 August 2019) EBITDA 32% Underlying EBITDA2 41% $106.9m 3% $113.2m $126.0m Revenue $25.7m 44% NPAT 3% Underlying
Slide 9: Financial highlights – pre-AASB16
Financial highlights – pre-AASB16 Compares performance had the prior year accounting standard still applied Revenue 43% FY Dividend1 14% $370.1m 28.5 cents per share (15c final) Xenith contribution3 (since 15 August 2019) EBITDA 18% Underlying EBITDA2 28% $106.9m 3% $101.6m $114.5m Revenue $21.2m 19
Slide 10: FY20 Results
FY20 Results 02 10
Slide 11: Revenue and EBITDA
Revenue and EBITDA Well placed in a challenging environment Underlying Revenue ($m) Underlying EBITDA ($m) Australia and New Zealand IP Australia and New Zealand IP Adjacent businesses Adjacent businesses Asia IP Asia IP New businesses New businesses Corporate Corporate 1. Underlying EBITDA in FY20
Slide 12: Like for Like Revenue and EBITDA
Like for Like Revenue and EBITDA Continuing growth in Asia Underlying Adjusted Underlying New Accounting FX Currency Revenue1 Revenue Revenue Chg% Businesses2 Movements3 Adjustment4 June 20 June 20 June 19 Australia & NZ IP 277.7 (107.5) 0.1 (6.8) 163.5 171.6 (5%) Asian IP 102.7 0.7 (4.8) 98.6 93.5
Slide 13: Underlying NPAT and EPS
Underlying NPAT and EPS Underlying EPS growth of 16% Year ended FY20 Statutory Underlying AASB 16 FY20 Pre-AASB FY19 Statutory Underlying Adjustments Adjustments 30 June 2020 Income Statement Earnings FY202 Adjustments Income Statement Income Statement Earnings FY19 Total revenue 370.1 (0.5) 369.6 3
Slide 14: Cash flow statement
Cash flow statement IPH continues to generate strong cash flows Commentary Year ended 30 June 2020 FY20 Cash Flow Statement FY19 Cash Flow Statement #039;m • Cash conversion in excess of 100% reflects the strong final quarter of FY19. The Statutory EBITDA 113.2 85.9 cash receipts of this revenue were r
Slide 15: Balance sheet
Balance sheet Strong balance sheet with leverage ratio of 0.6 times #039;m Balance Sheet as at 30 Jun 2020 Balance Sheet as at 30 Jun 2019 Commentary Cash and cash equivalents 82.9 35.3 Trade and other receivables 89.1 63.4 • Balance sheet movements reflect the acquisition of Xenith IP Investments - 39
Slide 16: Impact of foreign currency
Impact of foreign currency USD weakened in 2H Earnings currency sensitivity Balance sheet sensitivity FY20 currency profile HKD 5% • Based on the USD profile in FY20 in the IPH Group, • The Group is also exposed to FX on the level of its USD SGD a 1c movement in the AUD/USD exchange rate denominated
Slide 17: Market Overview
Market Overview 03 17
Slide 18: IPH group global filings
IPH group global filings Scale helps to mitigate the periodic fluctuations in filings in certain markets Scale comparison of total IPH Group filings to key national markets (Filings through IPH Australian offices and our external agents1) patent market (FY20) • IPH (as a group) is a significant glob
Slide 19: Patent market – Australia
Patent market – Australia Mature market with stable filings Australian patent market filings1 IPH Group filings and market share2 • Australian patent market declined by 0.6% from FY19 to FY20. • The IPH group maintains number one patent market position in Australia. • Removing innovation patent fili
Slide 20: Patent market – Singapore
Patent market – Singapore IPH continues to hold the #1 market share position in Singapore Singapore patent market filings1 IPH Group filings and market share2 • Singapore patent market • Preliminary data indicates market growth of 1.7% in CY20 • IPH Group filings increased by 22.2% in CY19 compared
Slide 21: IPH Patent Filings - Asia
IPH Patent Filings - Asia Prior year growth consolidated Filings in key Asian jurisdictions by IPH offices1 (1.0%) (2.6%) • Strong 1HFY20 growth of 28.5% across these jurisdictions. • 2HFY20 compares against a very strong 2HFY19 due to a significant filing from one 6.8% client across multiple jurisd
Slide 22: China growth story
China growth story Growing IPH’s position in this significant IP market • Increase in both patent and trademark filings into IPH Beijing Increase in patent filings for IPH Beijing and Hong Kong practice. and Hong Kong practices in FY20 • Nearly 7% increase in patent filings in Beijing practice for F
Slide 23: Trade mark market – Australia
Trade mark market – Australia Second half trade mark total market impacted by self-filers Australian trade mark market filings1 IPH Group filings and market share2 • In FY20 Australian trade mark filings • The IPH Group continues to be the leading Australian increased by 0.7%. trade mark group by ma
Slide 24: Patent market trends
Patent market trends Historical context to current disruption Australian patent filings1 US PCT applications2 • GFC is the most relevant comparison • Lapsing rates of Australian patent applications in the • Lead indicator for filings in secondary markets remains generally to the current economic dow
Slide 25: Operations review
Operations review 04 25
Slide 26: Xenith IP financial performance & synergies
Xenith IP financial performance & synergies Harnessing potential of consolidated business for FY21 Synergies delivered Business performance FY19 12 months 10.5 months • Delivered previously announced • In addition to synergies captured, the underlying operating businesses synergies for FY20 of $3.5m
Slide 27: Xenith IP integration successfully completed
Xenith IP integration successfully completed Significant integration program achieved Watermark integration into Griffith Hack Divestment of Glasshouse Advisory R&D tax and EMDG practice to Grant Thornton Full integration, including IT systems, was achieved on schedule, as planned in July 2020. Foll
Slide 28: AJ Park update
AJ Park update Strengthening client service proposition in New Zealand Proposed acquisition of Baldwins IP AJ Park continues to hold the number 1 position for patents and trade marks in New Zealand. • Proposed acquisition of Baldwins IP by AJ Park was announced in June 2020. Continued referrals to I
Slide 29: Investing in our people
Investing in our people Continued focus on our people across the group Our people at IPH 900+ Employees across the region Providing strong career paths Rewarding & recognising our people • Continued career advancement and opportunities for people in key • Employee incentive awards for FY20 will be r
Slide 30: WiseTime update
WiseTime update Growing customer base Continued revenue growth Growing customer base • Revenue growth in FY20. for WiseTime autonomous time-keeping technology Sales outcomes • Early adopter growth from small to medium sized firms following v2 launch in September • In Q4FY20, several large IP practic
Slide 31: Looking ahead to FY21
Looking ahead to FY21 05 31
Slide 32: Looking ahead to FY21
Looking ahead to FY21 Continued focus on growth strategy despite COVID-19 impacts Strategic priorities for FY21 01 04 Continue to leverage the expanded group Focus on attracting, motivating, developing and focus on Asia to develop network effect and retaining our people 02 Continue margin expansion
Slide 33: Looking ahead to FY21
Looking ahead to FY21 IPH remains well positioned to manage in an uncertain environment IPH remains a resilient business with strong cash flow IPH continues to adopt a prudent approach to generation and solid balance sheet metrics with no managing the business in a COVID-19 environment: near term re
Slide 34: Thank you
Thank you 34
Slide 35: Appendix
Appendix 06 35
Slide 36: Strategic direction
Strategic direction Continued focus on IPH’s growth strategy 2020 Full Year Results Investor Presentation | www.iphltd.com.au 36
Slide 37: Patent lifecycle
Patent lifecycle Long-life IP cycle supports consistent revenues and earnings Each year more than half+ of the Typical (indicative) foreign patent application route in Australia total patent applications filed in Australia come through the PCT system in the form of PCT National Phase patent applicat
Slide 38: www.iphltd.com.au
Asia Pacific's leading IP professional services group www.iphltd.com.au 38