Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — Corporate Update (October 2023)
19 slides from Kelly Partners's corporate update, Oct 5, 2023
Slide 1: Strategic Review Update
KELLY PARTNERS GROUP HOLDINGS LIMITED KELLY PARTNERS GROUP HOLDINGS (ASX: KPG) STRATEGIC REVIEW UPDATE For personal use only October 2023 KP+GH
Slide 2: Strategic Review Update
STRATEGIC REVIEW UPDATE = As part of the Strategic Review announced on 11 August 2023, Kelly Partners Group Holdings Limited (“KPG”) continues to review its strategy, capital structure and governance in the context of its Australian and emerging US growth strategy 1 For personal use only 2. 3. 4, 5.
Slide 3: General Observations from Strategic Review
GENERAL OBSERVATIONS FROM STRATEGIC REVIEW SECTION 1 KP+GH
Slide 4: Founder-led companies outperform
1} FOUNDER-LED COMPANIES OUTPERFORM Research shows companies in which the founder is still deeply involved perform more than three times better than non-founder led companies. Relative TSR of Founder-led vs other companies The most sustainable profitable companies. (indexed Total Shareholder Return
Slide 5: Programmatic acquirers generate superior returns
2} PROGRAMMATIC ACQUIRERS GENERATE SUPERIOR RETURNS Programmatic growth strategies are the Programmatic M&A consistently outperforms ps enencl pesear or Men Sete best performing of all M&A approaches” other approaches across sectors" Bi) eI B critical areas for success: Excessannual TSR by M&A appro
Slide 6: For personal use only
700 700 For personal use only 600 600 500 500 400 400 300 300 200 200 100 100 -- -- Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23
Slide 7: For personal use only
For personal use only 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -
Slide 8: KPG outperforms select sector participants and compares favourably with best-in-class compounders
KPG OUTPERFORMS SELECT SECTOR PARTICIPANTS AND COMPARES FAVOURABLY WITH BEST-IN-CLASS COMPOUNDERS 3 Median estimates xe >, ETL eoce| ten jnamten Sh nanvenes a RGP Banos ACBIZ i 1 i \ | \ I \ = I \ Cc ' f L i [e) } H Market cap (A$) $3.1bn $3.9bn $25bn | $192m | $183.3bn I ® | g FY24E revenue growth
Slide 9: For personal use only
For personal use only $10bn+ revenue $1bn+ ✓ revenue ✓ ✓ ✓ $300m+ ✓ revenue
Slide 10: Value creation from ceasing dividends
5] VALUE CREATION FROM CEASING DIVIDENDS Illustrative pro forma analysis demonstrates the incremental earnings potential from ceasing dividends and reinvesting capital. ‘Commentary Illustrative pro forma historical Under! g NPATA assuming reinvestment of + Illustrative analysis shows pro forma histo
Slide 11: Observations on KPG's US Strategy
OBSERVATIONS ON KPG’S US STRATEGY SECTION 2 KP+GH
Slide 12: Observations on KPG's US strategy
OBSERVATIONS ON KPG’S US STRATEGY For personal use only KPG's Strategic Review has confirmed the following with respect to its US growth strategy: 1. 2 3 4. 5. The US presents an opportunity for KPG expansion, with the accounting services industry over 10x the size of Australia Many demand drivers i
Slide 13: The US market presents an opportunity for KPG expansion
THE US MARKET PRESENTS AN OPPORTUNITY FOR KPG EXPANSION US GDP is ~15x the size of Australia’s and shares many of the characteristics that drove KPG's growth over the past five years. US economy vs Australia For personal use onl 12 Source: Note! United States China 18.0 Japan t 42 Germany 4] India '
Slide 14: Many demand drivers in Australia are identical in the US market
2 IN THE US MARKET MANY DEMAND DRIVERS IN AUSTRALIA ARE IDENTICAL Strong tailwinds in the US market bodes well for KPG's growth outlook as it looks to enter the US market. g taxes in the US is even more difficult than in Australia Ease of paying taxes (ranked easiest to hardest}!!! y United Arab Emi
Slide 15: California is the perfect beachhead to begin expansion in the US market
CALIFORNIA IS THE PERFECT BEACHHEAD TO BEGIN EXPANSION IN THE US MARKET California is a gateway to the APAC region and a logical beachhead for KPG’s expansion, as it’s the US’ most populous state and the world’s 5th largest economy despite a much smaller footprint than Australia. sao ai aera ey SN C
Slide 16: For personal use only
Minority For personal use only Accounting & audit 17% 12% Tax 29% 28% 29% 34% 10% Management advisory Other 100% 37% 55% 50% ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Source: Public filings, Merger Market, Accounting Today Top 100 Firms 2023.
Slide 17: Comparison of KPG against select US operator
5} COMPARISON OF KPG AGAINST SELECT US OPERATOR Acomparison to CBIZ demonstrates KPG's relative performance and provides a reference point for valuation in the US listed market. KP+GH Doverview Sewn size CLPesiness mix Yn Krowth strategy Valuation and returns (Chenchmarking Cm Trading valuations" ©
Slide 18: For personal use only
▪ ▪ ▪ For personal use only ▪ ▪ ▪ ▪ ▪ ▪
Slide 19: Disclaimer
DISCLAIMER SUMMARY INFORMATION This document has been prepared by Kelly Partners Group Holdings Limited ACN 124 908 363 (Company) of Level 8, 32 Walker Street, North Sydney NSW 2060. This document contains information in a summary form and general background information about the Company's activitie
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