Slide 1: FY23 Investor Briefing Presentation
17 August 2023 FY23 Investor Briefing Presentation For personal use only Attached is a copy of the IPH Limited FY23 Investor Briefing Presentation. An analyst/shareholder briefing covering both FY23 results and “Ridout & Maybee - Canadian IP firm to join Smart & Biggar”, as announced this morning, w
Slide 2: FY23 Results; Ridout & Maybee to join IPH
For personal use only FY23 Results Ridout & Maybee to join IPH 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 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 4: Contents
Contents For personal use only 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 27 6 Appendix 30 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 For personal use only 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
Slide 6: FY23 year in review
01 For personal use only 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 For personal use only 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 Ca
Slide 8: FY23 financial results
02 For personal use only 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 For personal use only 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
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 For personal use only Australia – New Zealand Asia Group Revenue -1% Revenue 4% Revenue Steady EBITDA -5% EBITDA Steady EBITDA -3% EBITDA margin -5% EBITDA margin -4% EBITDA m
Slide 11: Resilient in the face of cyber security challenge
Resilient in the face of cyber security challenge Effective response and business continuity implemented For personal use only 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 t
Slide 12: Underlying Results Adjustments
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 For personal use only Total revenue1 496.2 (6.1) 490.1 Business acquisition cost
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 Operating EBITDA 151.5 123.5 For personal use only • Cash conversion remains high at 88%. • Operating non-ca
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 For personal use only Total current assets 278.
Slide 15: Foreign currency sensitivity
Foreign currency sensitivity FY23 Service Charges4 Earnings currency Balance sheet For personal use only 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 exchan
Slide 16: Market update
03 For personal use only 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 For personal use only 38.1% 36.2% 45,000 40.0% • Australian patent market 42,034 • IPH filings in FY23 decreased 7.8%
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 IPH Group market share2 For personal use only 16,000 30.0% filings – market1 14,028 14,353 14,532 • IPH grew share of market in CY23, based on prelimi
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% For personal use only 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
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: For personal use only • 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 Manil
Slide 21: Delivering on our strategy
04 For personal use only 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 For personal use only • Initial synergies of in excess of CAD 3.0m have been identified since acquis
Slide 23: Canadian IP firm Ridout & Maybee to join Smart & Biggar and IPH
Canadian IP firm Ridout & Maybee to join Smart & Biggar and IPH Further consolidates IPH presence in Canadian IP market and consistent with growth strategy + For personal use only Highlights: • Total purchase consideration for the transaction is approximately CAD 65m (c. AUD 74m). • The transaction
Slide 24: Transaction summary
Transaction summary Consideration The consideration for the acquisition is CAD 65m (c. AUD 74m). For personal use only Ridout & Maybee’s pro forma adjusted EBITDA for the 12 months to Dec 2022 was CAD 8.2m (c. AUD 9.4m) Cash • Cash consideration of CAD 46m (70% of purchase price) consideration • Ini
Slide 25: 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 For personal use only Manage risk effectively, maintain transparency and drive Deliver e
Slide 26: Building capability and supporting our people
Building capability and supporting our people Expert IP professionals, recognised in their field For personal use only www.iphltd.com.au 2023 Full Year Results Investor Presentation 25 www.iphltd.com.au 2023 Full Year Results Investor Presentation 25
Slide 27: Generative AI changing the innovation ecosystem
Generative AI changing the innovation ecosystem AI will change the way we protect innovations For personal use only • 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,
Slide 28: Looking ahead to FY24
05 For personal use only Looking ahead to FY24 www.iphltd.com.au 2023 Full Year Results Investor Presentation 27
Slide 29: 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 For personal use only Continue to assess complementary acquisition opportunities in Canada and other core secondary IP markets: • In Can
Slide 30: Thank you
For personal use only Thank you iphltd.com.au www.iphltd.com.au
Slide 31: Appendix
06 For personal use only Appendix www.iphltd.com.au 2023 Full Year Results Investor Presentation 30
Slide 32: 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 For personal use only Austr
Slide 33: 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 For personal use only Total revenue1 496.2 (6.1) 490.1 385.
Slide 34: Supplementary information
Supplementary information Items below EBITDA The table below details components included in Profit before Tax not included in EBITDA. For personal use only FY24 assumptions1 are estimated and movements from FY23 to FY24 are predominately due to an additional 3 months of Smart & Biggar. Category FY23
Slide 35: 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% For personal use only 30,000 CAGR Post-GFC (FY10 to FY23) = 1.0% 20,000 4
Slide 36: Revenue and EBITDA
Revenue and EBITDA 170.00 Underlying Revenue $’m Underlying EBITDA $’m 31.40 For personal use only 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.
Slide 37: Patent lifecycle
Patent lifecycle Long-life cycle supports consistent revenues and earnings For personal use only 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 a