Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — Shareholder Meeting (November 2024)
39 slides from Kelly Partners's shareholder meeting presentation, Nov 20, 2024
Slide 1: 2024 AGM
20 November 2024 2024 AGM KELLY PARTNERS GROUP HOLDINGS LIMITED (ASX: KPG) Brett Kelly Kenneth Ko Founder and CEO CFO 600 100 37 4 $108m $134m 44.9m 17.4cps 28% Team Partners Businesses Countries FY24 Revenue Rev run rate Shares FCF per share ROIC + Org Gr
Slide 2: Win Win Win Win Business
Win Win Win Win Business 2 2024 AGM
Slide 3: Kelly+Partners' Performance since inception and since IPO
Kelly+Partners’ Performance since inception and since IPO 3 2024 AGM
Slide 4: Kelly+Partners' Performance since inception and since IPO
Kelly+Partners’ Performance since inception and since IPO 4 2024 AGM
Slide 5: Kelly+Partners' Shares issued and bought back to date
Kelly+Partners’ Shares issued and bought back to date 5 2024 AGM
Slide 6: New Owners' Manual published October 2024
New Owners’ Manual published October 2024 6 2024 AGM
Slide 7: Leading Platform
Leading Platform People 600 team members 35 office locations 52 partnerships 93% Great Place Inc. 100 operating partners 26 Australia and 9 global Since inception to Work® Clients 23,000 active clients 95% tax & accounting 5% organic growth p.a. +70 NPS vs across Australia & US Proportion of FY24 re
Slide 8: Businesses
Businesses 30 35 +5 / +17% UNITED STATES: 7 INDIA: 1 HONG KONG: 1 AUSTRALIA: 26
Slide 9: 18 Years of Growth (Doubled 6 times) due to KPG Business System
18 Years of Growth (Doubled 6 times) due to KPG Business System Double Double Double Double Double Double Revenue 2007 2008 2009 2013 2017 2022 $140.0 1 Year 1 Year 4 Years 4 Years 5 Years 3 Years $120.0 $100.0 12 3 4 5 6 $108.1m $134.0m $86.5m $80.0 30% $55.3m $m Revenue $64.9m $42.5m $60.0 CAGR* $
Slide 10: Progress in 5-year periods
Progress in 5-year periods 1. Start-up 2. Foundation 3. Build 4. Accelerate $120.0m $108.1m $100.0m $80.0m 30%Revenue $60.0m CAGR $48.9m $40.0m $30.2m $30.0m $16.0m 28% Margin $20.0m 33% Margin $8.7m $7.8m 29% Margin $5.1m $8.0m $2.0m $0.0m $3.4m FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY1
Slide 11: Performance
Performance Strong revenue growth EBITDA 2.5x since FY19(1) Successful programmatic acquisition strategy A$m A$m Number of acquisitions 108 30 22% 5YR CAGR 23% 5YR CAGR 33 acqns L5Y 84 20 9 65 20 8 16 7 45 49 13 6 40 11 3 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY2
Slide 12: Strategy
Strategy Objective Top 10 in Australia Go Global Grow to become a top 10 accounting firm in Australia Growing Kelly+Partners Business System in global markets Scope # Financial Review Top 100 Accounting Firms ($m) Deloitte Australia Revenue $2,780.00 EY Australia $2,500.00 PwC Australia $2,350.00 KP
Slide 13: USA Opportunity
USA Opportunity Kelly+Partners now has 7 office locations in US (California, Texas, Florida) which represent 12.2%-15.2% of Group Revenues Australia California Texas Florida Population 26.4m 39.0m 30.0m 22.2m GPD $1.7tn $3.6tn $2.6tn $1.3tn (USD $trillion) Land (thousands sq 2,996 164 269 66 miles)
Slide 14: USA Progress
USA Progress • 2 offices in Florida and North Carolina # Location Revenue to Group ($AUD) • Revenues of $USD7.0m-$USD8.2m 1 Woodland Hills, CA $1.8m to $2.5m ($AUD10.8m-$AUD12.5m), accounting for ~10% of Group revenues 2 Burbank, CA $4.0m to $4.8m • Kelly+Partners purchased 50.1% of interest 3 San A
Slide 15: KPG in 10 seconds
KPG in 10 seconds Profit & loss Balance sheet Cashflow Revenue Margin Parent NPATA Return Gearing Cashflow Efficiency +29.2% +4.4% +52.3% 40.6% -0.37x +30.7% +2.5% Revenue EBITDA Underlying NPATA Return Net debt to underlying Operating Cash Growth Margin Growth on Equity EBITDA cashflow Conversion F
Slide 16: Capital Allocation – FY
Capital Allocation – FY KPG aims to build per-share intrinsic value by: FY18 FY19 FY20 FY21 FY22 FY23 FY24 Improving the earning power of our operating 34.0% 27.7% 32.5% 33.4% 30.9% 27.3% 29.6% 1. businesses EBITDA margin of operating businesses 17.2% 6.4% 6.6% 4.8% 26.5% 28.7% 26.3% 2. Further incr
Slide 17: EPS & Free Cashflow per Share (Owners' earnings per share)
EPS & Free Cashflow per Share (Owners’ earnings per share) 25.00 50,000,000 45,418,414 45,142,289 45,000,000 45,000,000 45,000,000 45,000,000 20.00 40,000,000 17.44 17.84 35,000,000 15.00 14.03 13.99 30,000,000 13.33 11.33 11.72 25,000,000 11.11 10.00 8.67 20,000,000 8.55 15,000,000 5.00 10,000,000
Slide 18: Opportunistic AND Programmatic PARTNERSHIPS
Opportunistic AND Programmatic PARTNERSHIPS ~4x Pre-IPO 6 8 37 Firms 50,150 8% Prospects 4,070 IPO 8% Leads 331 9 8 7 Opportunities 6 X 4 3 3 3 2 2 Conversions 1 1 1 1 X 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 202
Slide 19: Capital allocation
Capital allocation 19 2024 AGM
Slide 20: ROIC
ROIC “And when we think about Invested Capital, we think about the shareholder capital that has been invested in the businesses, plus any Adjusted Net Income less any distributions. Obviously, when you divide Adjusted Net Income by Invested Capital, you get a measure of the return on our shareholder
Slide 21: Additional Investment
Additional Investment • Additional investment of $2.0m Sources of capital Use of capital (1.8% of revenue) to ensure we can • Internal cashflow • Invest in existing operations • Pay down debt handle next stage of growth Additional investment has reduced • Issue debt • Buy other companies • Pay divid
Slide 22: Financial Highlights
Financial Highlights 22 2024 AGM
Slide 23: Financial Highlights
Financial Highlights FY24 Financial Highlights (m) KPGHL & Controlled Entities KPGHL Attributed (parent only) *FY23 P&L adjusted to exclude discontinued operations for like for like comparison P&L and Cashflow FY23* FY24 % Change FY23 FY24 % Change Revenue $83.7 $108.1 29.2% – – – 1 Owner earnings –
Slide 24: Income Statement
Income Statement Revenue of EBITDA margin at Income Statement Summary ($m) FY23 FY24 ∆% Professional services revenue $83.7 $108.1 29.2% $108.1m 27.8% Other income Total Revenue $0.9 $84.5 $1.8 $110.0 111.5% 30.1% (+$24.5m, up 29.2%), (FY23: 22.7%) driven both by organic revenue growth has improved
Slide 25: FY24 Profitability
FY24 Profitability Accounting Accounting Accounting Total inc. Acquired – Acquired – Total inc. Operating Businesses Other Services Total Established Growth Subscale Subscale Accounting AU* Accounting US* Acquired Revenue $72.2 $7.5 $4.8 $84.6 $3.1 $87.7 $16.2 $4.2 $108.1 EBITDA^ $22.2 $1.3 $2.1 $25
Slide 26: Balance Sheet
Balance Sheet Lockup Days WIP Days Debtor Days • Net Debt / Underlying EBITDA of 1.28x (FY23: 1.65x) due to a full year’s profit contribution from acquisitions 60.0 56.4 56.0 48.1 3.7 completed in the prior year, as well as an increase in the 50.0 11.4 profitability of the Group. 5.8 40.0 Days • Gro
Slide 27: Debt & Liquidity
Debt & Liquidity $100.0m $90.0m Loan type (m)* Parent Op. Bus Total Debt Cash, $3.3m Working Capital Debt $0.2 $4.2 $4.5 $80.0m Property Debt $0.0 $4.0 $4.0 $40.4m $85.6m Acquisition & other term debt $9.1 $30.9 $40.0 $70.0m Cash & Available Headroom, Gross Debt – FY24 $9.3 $39.1 $48.4 Headroom $37.
Slide 28: Cashflow
Cashflow • Cash from Operations pre AASB 16 of $20.2m Cash from Operations (CfO) Free Cashflow to Firm (FCFF) after increased by 30.7% (FY23: $15.4m) scheduled debt reductions • Free Cashflow to Firm increased 44.1% • Cash Conversion1 of 96.9% (FY23: 94.4%) and is within our expected 85%-100% conver
Slide 29: Parent & NCI Waterfall
Parent & NCI Waterfall • The profit attributable to the parent vs. NCI represent a 24%/76% split and differs from the ownership interests of ~51%/49%. 51% This is due to the following items: 49% $11,226 ($1,436) • Income tax expense of $1.4m of the parent entity. As the $10,871 majority of operating
Slide 30: Book Recommendation
Book Recommendation 30 2024 AGM
Slide 31: Shareholders
Shareholders 31 | 2024aGM
Slide 32: Online Voting Guide
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Slide 33: Resolution 1 - Adoption of Remuneration Report
Resolution 1 - Adoption of Remuneration Report To consider and, if thought fit, to pass, with or without amendment, the following resolution as an Ordinary Resolution: “That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of
Slide 34: Resolution 2 - Re-election of Mr Ryan Macnamee as Director
Resolution 2 - Re-election of Mr Ryan Macnamee as Director To consider and, if thought fit, to pass, with or without amendment, the following resolution as an Ordinary Resolution: “That Mr Ryan Macnamee, a Director who retires by rotation in accordance with the Company’s Constitution and ASX Listing
Slide 35: Resolution 3 - Re-election of Ms Ada Poon as Director
Resolution 3 - Re-election of Ms Ada Poon as Director To consider and, if thought fit, to pass, with or without amendment, the following resolution as an Ordinary Resolution: “That Ms Ada Poon, a Director who retires by rotation in accordance with the Company’s Constitution and ASX Listing Rule 14.4
Slide 36: Resolution 4 - Renewal of the Proportional Takeover Approval Provisions
Resolution 4 - Renewal of the Proportional Takeover Approval Provisions in the Constitution To consider and, if thought fit, to pass, with or without amendment, the following resolution as a Special Resolution: “That, for the purposes of section 648G and 136(2) of the Corporations Act and for all ot
Slide 37: Resolution 5 - Approval of Provision of Financial Assistance
Resolution 5 - Approval of Provision of Financial Assistance to the KPGH Subsidiary To consider and, if thought fit, to pass, with or without amendment, the following resolution as a Special Resolution: “That, for the purposes of section 260A and 260B of the Corporations Act and for all other purpos
Slide 38: Q&A 2024 AGM
Q&A 38 | 2024AGM
Slide 39: Thank You
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Kelly Partners Group Holdings — Shareholder Meeting (November 2024) on 6ix