Slide 1: FY14 Results Briefing
For personal use only FY14 Results Briefing 21 August 2014 DATA#3 LIMITED (DTL)
Slide 2: FY14 Financial Performance
For personal use only FY14 FINANCIAL PERFORMANCE
Slide 3: Robust business model saw top line growth
ROBUST BUSINESS MODEL SAW TOP LINE GROWTH For personal use only • Total revenue up 8.1% to $833.6M • Product revenue up 9.0% to $697.3M • Services revenue up 3.5% to $134.8M • Other revenue up 23.4% to $1.5M • Total gross profit down 2.7% to $119.2M • Product GP down 3.4% to $66.0M • Services GP dow
Slide 4: Full year revenue up
FULL YEAR REVENUE UP For personal use only Total revenue ($M) Product revenue ($M) 1000 800 811 834 689.1 697.3 771 700 586.4 639.6 800 698 599 600 513.6 600 531 500 450.0 400 400 300 200 200 100 0 0 FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY11 FY12 FY13 FY14 Services revenue ($M) 130.2 134.8 140 12
Slide 5: Margins held up reasonably well given market conditions
MARGINS HELD UP REASONABLY WELL GIVEN MARKET CONDITIONS For personal use only Total gross profit ($M) Services gross profit ($M) 140 70 120.0 122.5 118.9 56.1 58.3 56.8 120 111.7 60 51.7 100 90.0 50 42.9 82.7 37.1 80 40 60 30 40 20 20 10 0 0 FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY11 FY12 FY13 FY1
Slide 6: Regional movement in GP
REGIONAL MOVEMENT IN GP For personal use only % change in gross profit No significant lift in Qld FY14 vs. FY13 Government IT investment and a subdued corporate sector saw QLD slow further. 20% Solid growth in NSW and VIC 10% 7% SA was most challenged location 0% Underlying GP in WA grew QLD NSW VIC
Slide 7: Market demands & investment drove expenses up
MARKET DEMANDS & INVESTMENT DROVE EXPENSES UP For personal use only Internal staff costs ($M) 100 90.2 92.9 87.9 77.0 80 63.5 Internal staff costs up 2.9% 58.0 60 due to higher selling costs to 40 deliver revenue and the need 20 to retain competitive scale in 0 all locations FY09 FY10 FY11 FY12 FY13
Slide 8: Lower gross profit & higher expenses drove profit, earnings, dividends down
LOWER GROSS PROFIT & HIGHER EXPENSES DROVE PROFIT, EARNINGS, DIVIDENDS DOWN For personal use only NPAT ($M) EPS (cents) 15.0 16 13.7 12 14 12.1 9.74 12 10.9 10 8.88 9.8 7.88 10 8 7.09 7.5 6.38 8 6 4.89 6 4 4 2 2 0 0 FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY11 FY12 FY13 FY14 DPS (cents) 7.70 NPAT de
Slide 9: Movement FY13 to FY14
MOVEMENT FY13 TO FY14 For personal use only Consolidated comparison FY13 to FY14 20.0 17.5 15.0 10.9 10.0 $M 5.0 0.6 0.3 0.0 -0.5 -0.7 -1.5 -2.2 -2.6 -5.0 9
Slide 10: Movement FY13 to FY14: Segment comparisons
MOVEMENT FY13 TO FY14 For personal use only Segment comparisons FY13 to FY14 20.0 17.5 15.0 10.9 10.0 $M 5.0 3.8 -9.0 -1.7 0.3 0.0 FY13 NPBT Product Services Unallocated Unallocated FY14 NPBT -5.0 segment segment corporate corporate profit profit revenue costs -10.0 -15.0 10
Slide 11: Balance sheet fundamentals remain strong
BALANCE SHEET FUNDAMENTALS REMAIN STRONG For personal use only • Cash flow ‘seasonality’ consistent with previous years • Strong operating cash flow of $29.4 million, with cash flow conversion of 3.9 times • Full year average daily cash balance up from $31.1M to $36.3M • Closing cash balance $103.4M
Slide 12: Cashflow & balance sheet trends
CASHFLOW & BALANCE SHEET TRENDS For personal use only Net operating cash flow by half Net operating cash flow by 150.0 year ($M) year ($M) 101.6 50 44.9 100.0 89.4 66.0 40 28.9 30.5 29.4 50.0 30 19.6 0.0 20 1H 2H 1H 2H 1H 2H 10 4.8 -50.0 FY12 FY12 FY13 FY13 FY14 FY14 0 -37.1 -58.9 -100.0 -72.2 FY09
Slide 13: Our Business
For personal use only OUR BUSINESS
Slide 14: FY14 started with structural realignment and consolidation
FY14 STARTED WITH STRUCTURAL REALIGNMENT AND CONSOLIDATION For personal use only • Aligned around our customers’ movement to HYBRID IT a combination of on premise, outsourced and cloud • Realigned the 5 areas of specialisation into 3 o Software Solutions o Infrastructure Solutions o Managed Solution
Slide 15: FY14 Structure
FY14 STRUCTURE For personal use only National Initiatives States Telstra, Supply Chain Education Business technology solutions From product to cloud Software Infrastructure Managed Solutions Solutions Solutions Project Services Service Desk Cloud Consulting Cloud Delivery HR Supply Chain Group Admin
Slide 16: Strong national footprint
STRONG NATIONAL FOOTPRINT For personal use only 16
Slide 17: Strong partnerships
STRONG PARTNERSHIPS With leading global vendors For personal use only 17
Slide 18: Strong partnerships: endorsed by many awards
STRONG PARTNERSHIPS Endorsed by many awards For personal use only Global award • Microsoft - Devices and Deployment Partner of the Year National awards • Lenovo – Innovation Partner of the Year • Microsoft - Enterprise Partner of the Year • Sophos – LAR Partner of the Year (for Australia and New Zea
Slide 19: Operational Performance
For personal use only OPERATIONAL PERFORMANCE
Slide 20: Software Solutions: Offerings
SOFTWARE SOLUTIONS Offerings… For personal use only A complete software solution from on premise to outsourced to cloud • Supply and manage the license • Deploy and manage the software, and • Customise and improve user adoption of software 20
Slide 21: Software Solutions: FY14 performance
SOFTWARE SOLUTIONS FY14 performance… For personal use only • Growth in revenue & gross profit in an, at best, flat market • Combination of increasing market share, maximising vendor channel program incentives, and further gains in operational efficiency • Increased selling costs to service contracts
Slide 22: Infrastructure Solutions: Offerings
INFRASTRUCTURE SOLUTIONS Offerings… For personal use only • Lifecycle hardware asset management services • Procurement, quality control, deployment, tracking, & disposal • Multi-vendor maintenance services • Unified communication & collaboration for mobile business users • Hybrid IT infrastructure f
Slide 23: Infrastructure Solutions: FY14 performance
INFRASTRUCTURE SOLUTIONS FY14 performance… For personal use only • Revenues declined 10% and gross profit declined 8% • Market conditions impacted hardware procurement • Strong contract maintenance services offsetting the Fiona Stanley Hospital contract in FY13 • Project services gross profit increa
Slide 24: Managed Solutions: Offerings
MANAGED SOLUTIONS Offerings… For personal use only • Workforce recruitment, contracting, augmentation • Business user operational support • Full operational infrastructure outsourcing • Development and delivery of Data#3’s Hybrid cloud infrastructure-as-a-service 24
Slide 25: Managed Solutions: FY14 performance
MANAGED SOLUTIONS FY14 performance… For personal use only • Workforce solutions strong in a challenging market - revenue up 9%, and gross profit up 5% • Outsourcing revenues up 3% but onboarding & transition projects drove gross profit down by 3%. Contracts structured to provide increasing returns o
Slide 26: People satisfaction
PEOPLE SATISFACTION Held to prior years… For personal use only People satisfaction /5 5 3.9 4.0 4.0 4.0 4.0 4 667 permanent 3 23 casual 2 322 contractors 1 >1,000 people 0 800 FY10 FY11 FY12 FY13 FY14 638 648 641 667 600 502 Net Promoter 400 277 352 348 322 240 % Recommend Data#3 200 100 92.8 94.5 9
Slide 27: FY15
For personal use only FY15
Slide 28: A market uniquely in transition
A MARKET UNIQUELY IN TRANSITION For personal use only IBM S/3 INTERNET IBM S360 CLOUD iPhone IBM PC 1960 1970 1980 1990 2000 2010 28
Slide 29: Three elements to the transition
THREE ELEMENTS TO THE TRANSITION For personal use only IT IT consumption Risk shifting commoditising changing 29
Slide 30: Implications of the transition
IMPLICATIONS OF THE TRANSITION For personal use only IT IT consumption Risk shifting commoditising changing From Data centre HYBRID IT implementation to desktop product From product to adoption and related outsource to services cloud New apps and Competitive and From Capex to service types price sen
Slide 31: Our response to the trends
OUR RESPONSE TO THE TRENDS For personal use only IT IT consumption Risk shifting commoditising changing Sales efficiency New Consulting People services augmentation Investment in supply chain Business Maturing selective automation Productivity 31 sourcing solutions Services ‘Rapid’ service Investing
Slide 32: Supporting references
SUPPORTING REFERENCES For personal use only IT IT consumption Risk shifting commoditising changing 32
Slide 33: Shareholder perspective
SHAREHOLDER PERSPECTIVE For personal use only In a market in transition, is DTL positioned to grow revenues, profit and dividends? We think we are and as our customers re-architect their IT strategies, we believe we’re positioned strongly with new solutions and references 33
Slide 34: Shareholder perspective: when can we expect this
SHAREHOLDER PERSPECTIVE For personal use only When can we expect this to happen? We’re seeing conditions improving which should translate in time to more positive sentiment toward investment. This in turn will lead to more significant take-up in apps, aaS and transformational services 34
Slide 35: Acquisition of interest in Discovery Technology
For personal use only ACQUISITION OF INTEREST IN DISCOVERY TECHNOLOGY
Slide 36: Investment details
INVESTMENT DETAILS For personal use only • $2.5M for 42.5% ownership • Funding from cash flow with no impact on dividends • Option to June 2015 for additional 16.2% • Option to June 2017 for balance • Board position + Reseller rights for CCX - Connected Customer eXperience – Wi-Fi content management
Slide 37: Market opportunity
MARKET OPPORTUNITY For personal use only • 68% adults own a smartphone • 86% users look for info • 88% take action as a result • CCX delivers meaningful content from which mobile visitors can take action • Ground floor opportunity in a fast growing market • Strategic repositioning to apps and servic
Slide 38: FY15 Outlook
For personal use only FY15 OUTLOOK
Slide 39: FY15 Guidance
FY15 GUIDANCE For personal use only “Having taken costs and capacity out in the previous two years, the 2015 plan targets growth through market share gain and the introduction of additional complementary revenues. Our financial objective is to improve on the 2014 result.” 39
Slide 40: Q&A
For personal use only Q&A
Slide 41: Appendix – Financial Summary
APPENDIX – FINANCIAL SUMMARY For personal use only 41
Slide 42: Disclaimer
DISCLAIMER For personal use only This presentation has been prepared by Data#3 Limited (“the Company”). It contains general background information about the Company’s activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. T
Slide 43: Interested in how Data#3 can help?
Interested in how Data*3 can help? www.data3.com.au | 1300 23 28 23 Follow Us twitter. com/Data3Limited facebook.com/Data3Limited
Slide 44: For personal use only
AjuO SSN jeUuoOsJed JOS