Slide 1: 2019 Full Year Results
2019 Full Year Results Investor Presentation Year ended 30th June 2019 20th August 2019 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 FY19 highlights 02 FY19 results 03 Market overview 04 Operations review 05 Xenith IP acquisition update 06 Looking ahead to FY20 07 Appendix 2019 Full Year Results Investor Presentation | www.iphltd.com.au 3
Slide 4: FY19 highlights
FY19 highlights 01 4
Slide 5: Operational highlights
Operational highlights Delivering results across all FY19 strategic priorities Strategic priorities for FY19 Results in FY19 01 Leverage existing network to grow our Asian business Double-digit organic growth for the third consecutive half fuelled by take up of Asian offering 02 Continue to evaluate
Slide 6: Financial highlights
Financial highlights Double-digit growth across all financial metrics Revenue 15% FY Dividend 11% $259.5m 25 cents per share (13c final) EBITDA 23% Underlying EBITDA1 21% $85.9m $89.7m NPAT 31% Underlying NPAT2 21% $53.1m $62.9m Diluted EPS 29% Underlying Diluted EPS 20% 26.7 cents per share 31.7 ce
Slide 7: FY19 results
FY19 results 02 7
Slide 8: Revenue and EBITDA
Revenue and EBITDA Organic and acquisitive growth Adoption of new Underlying Revenue $’m Underlying EBITDA $’m accounting standard Australia and New Zealand IP Australia and New Zealand IP (AASB16) to impact Data & analytics services Data & analytics services treatment of leases in Asia IP Asia IP F
Slide 9: Like for Like Revenue and EBITDA
Like for Like Revenue and EBITDA Double-digit growth in Asia Underlying Adjusted Underlying New Accounting FX Currency Revenue1 Revenue Revenue Chg% Businesses2 Movements3 Adjustment4 June 19 June 19 June 18 Australia & NZ IP 171.6 (15.2) 0.0 (4.1) 152.4 155.4 (2%) Asian IP 93.4 (0.3) (5.2) 87.9 78.
Slide 10: Underlying NPAT and EPS
Underlying NPAT and EPS EPS growth of 20% Year ended FY19 Statutory Underlying FY18 Statutory Underlying Adjustments Adjustments 30 June 2019 Income Statement Earnings FY192,3 Income Statement Earnings FY18 Total revenue 259.5 (2.9) 256.6 226.0 226.0 Recoverable expenses (74.6) (74.6) (66.0) (66.0)
Slide 11: Cash flow statement
Cash flow statement Cash conversion remains strong Commentary Year ended 30 June 2019 #039;m FY19 Cash Flow Statement FY18 Cash Flow Statement • Continued strong cash conversion Statutory EBITDA 85.9 70.1 Non-cash movements 0.0 (3.0) • Strong cashflows support high Change in working capital (3.7) (2.4)
Slide 12: Balance sheet
Balance sheet Robust balance sheet Commentary #039;m Cash and cash equivalents Balance Sheet as at 30 Jun 2019 35.3 Balance Sheet as at 30 Jun 2018 26.2 • $65.5m of bank borrowings. Increase of $33m due to borrowing Trade and other receivables 63.4 57.1 Investments 39.2 - for XIP 19.9% stake. Decrease
Slide 13: Impact of foreign currency
Impact of foreign currency Earnings currency Balance sheet IPH currency profile sensitivity sensitivity (IPH FY19 excluding XIP) NZD 24% • Based on the USD profile in FY19 in • The Group is also exposed to FX on HKD the IPH Group, a 1c movement in the level of its USD denominated cash Operating 9% A
Slide 14: Market overview
Market overview 03 14
Slide 15: Patent market - Australia
Patent market - Australia Group maintains #1 patent market share in flat market 1 3 Australian patent market filings IPH Group filings and market share • The Australian patent market has grown 0.8% from FY18 to FY19 • IPH Group continues to hold the No.1 patent market position in • Review of US PCT
Slide 16: Patent market - Singapore
Patent market - Singapore Maintaining healthy market share in growing market 1 2 Singapore patent market filings IPH Group filings and market share • Overall the Singapore market is up 6.8% from CY17 to CY18 • IPH Group filings up 1.3% in CY18 over CY17 • In CYTD19, the overall market is up 4.7% and
Slide 17: Patent market - Asia
Patent market - Asia Diversified portfolio underpins growth IPH Group filings in key 33.4% 1 jurisdictions in Asia 20.0% • Positive growth exhibited in most Asian jurisdictions, notably Thailand (43.2%), Vietnam (33.6%), Indonesia (33.4%) and Malaysia (20.0%) (16.3%) 43.2% • Total growth in these ju
Slide 18: Trade mark market - Australia
Trade mark market - Australia Holding market share 1 3 Australian trade mark market filings IPH Group filings and market share • The Australian trade mark market decreased by 8.2% from FY18 to FY19 • IPH Group continues to hold the No.1 trade mark market position in • Australian trade mark filings a
Slide 19: Operations review
Operations review 04 19
Slide 20: AJ Park
AJ Park Delivering on acquisition business case Highlights Performing ahead of expectations delivering A$10.8m EBITDA (including the cost of the incentive plan implementation) AJ Park No.1 AJ Park No.1 Improved margin to 22% (17% prior year) filer of filer of trade patents in marks in New IPH incent
Slide 21: Successful Spruson & Ferguson integration
Successful Spruson & Ferguson integration Integration of FAKC, Cullens and Spruson & Ferguson Spruson & Ferguson integration Combination of Spruson & Ferguson, FAKC and Cullens successfully completed in July 2018 Incentive plan rolled out to eligible staff for FY19 Queensland clients benefiting from
Slide 22: Focus on WiseTime
Focus on WiseTime Sale of Practice Insight products enables focus on WiseTime Practice Insight Sale of products Building momentum with WiseTime Practice Insight’s Filing Analytics and Citation Eagle Practice Insight’s sales and development product businesses were sold to CPA Global Services activiti
Slide 23: Xenith IP acquisition update
Xenith IP acquisition update 05 23
Slide 24: Update on acquisition of Xenith IP
Update on acquisition of Xenith IP Scheme Implementation Integration • Scheme of Arrangement successfully implemented on • IPH welcomes the Xenith businesses and their high quality people 15 August 2019 into the IPH Group • Xenith businesses are now 100% owned and part of the IPH Group • Integration
Slide 25: Benefits for IPH shareholders
Benefits for IPH shareholders Consistent with IPH’s strategy to pursue acquisitions with strategic and financial merit Strategic rationale Financial rationale Unique domestic acquisition opportunity to acquire leading Immediately EPS accretive to IPH earnings domestic brands many with over 100 years
Slide 26: Xenith financial performance FY19
Xenith financial performance FY19 Unaudited performance in line with market consensus Scheme of Arrangement implemented Revenue1 (1%) on 15 August 2019 $125.5m Xenith’s businesses will contribute to IPH’s FY2020 Underlying EBITDA1 15%4 financial results, from implementation date $19.7m A summary of
Slide 27: IPH acquisition of Xenith IP
IPH acquisition of Xenith IP 2019 Full Year Results Investor Presentation | www.iphltd.com.au 27
Slide 28: Looking ahead to FY20
Looking ahead to FY20 06 28
Slide 29: Looking ahead to FY20
Looking ahead to FY20 Continued focus on implementing IPH’s growth strategy Strategic priorities for FY20 01 Successful Xenith IP integration 04 WiseTime growth in sales 02 Maintain market leading position in Australia / New Zealand and continued 05 Digital platform development margin expansion 06 C
Slide 30: Thank you
Thank you 30
Slide 31: Appendix
Appendix 07 31
Slide 32: Strategic direction
Strategic direction Continued focus on IPH’s growth strategy 2019 Full Year Results Investor Presentation | www.iphltd.com.au 32
Slide 33: 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 34: IPH corporate information
IPH corporate information Leading intellectual property group in Asia-Pacific Directors Ordinary Shares on Issue Number Holders %1 • Mr. Richard Grellman AM Free float 208,301,702 7,660 97.8% Chairman Escrowed • Dr. Andrew Blattman CEO and Managing Director • AJ Park (31 Oct 19) 4,621,547 18 2.2% •
Slide 35: www.iphltd.com.au
Asia Pacific's leading IP professional services group www.iphltd.com.au 35