Slide 1: 2021 Half Year Results Investor Presentation
2021 Half Year Results Investor Presentation Half year ended 31st December 2020 Thursday, 18 February 2021 Presented by: Dr. Andrew Blattman Managing Director & CEO, IPH Limited John Wadley Chief Financial Officer, IPH Limited iphltd.com.au
Slide 2: Disclaimer
Disclaimer 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 otherwise dispose of, or is
Slide 3: Contents
Contents 1 HY21 highlights 5 2 HY21 results 7 3 Market overview 14 4 Operations review 21 5 Looking ahead for FY21 24 6 Appendix 30 www.iphltd.com.au 2021 Half Year Results Investor Presentation 3
Slide 4: About the IPH Group
About the IPH Group Asia-Pacific’s leading IP professional services group 1) Approximate employee numbers across the Group. 2) IPH Management estimate based on IP office patent filing information: Australia (IP Australia) – 1H FY21 as at 3/02/21; Singapore (IPOS) – CY20 as at approx. 31/01/21; New Z
Slide 5: HY21 highlights
01 HY21 highlights www.iphltd.com.au 2021 Half Year Results Investor Presentation 5
Slide 6: Solid result in challenging conditions
Solid result in challenging conditions Underlying Earnings growth and strong cash generation despite COVID-19 and currency headwinds Underlying EBITDA1 Interim Dividend2 $61.7 million 2% 14 cents per share (50% franked) 4% Operating Cashflow Legacy Xenith3 $52 million 39% EBITDA margin From 20% in F
Slide 7: HY21 results
02 HY21 results www.iphltd.com.au 2021 Half Year Results Investor Presentation 7
Slide 8: Financial highlights
Financial highlights Solid Underlying result while increase in non-cash amortisation of intangibles from acquisitions impacts Statutory Result Legacy Xenith3 Revenue $179.8m Interim Dividend1 14 cents per share (50% franked) 4% improvement Underlying EBITDA: $15m EBITDA $56.7m 1% Underlying EBITDA2
Slide 9: Like for Like Revenue and EBITDA
Like for Like Revenue and EBITDA 8% increase in like for like EBITDA from strong organic growth in Asia and synergies in Australia/NZ Underlying New Accounting Currency Adjusted Underlying Chg% Revenue Dec 20 Businesses2 FX Movements3 Adjustment4 Revenue Dec 20 Revenue Dec 19 Australia & NZ IP 135.6
Slide 10: Underlying NPAT and EPS
Underlying NPAT and EPS Underlying NPAT growth of 3% Half Year ended HY21 Statutory Underlying HY20 Statutory Underlying Adjustments Adjustments 31 December 2020 Income Statement Earnings HY212 Income Statement Earnings HY20 Total revenue 179.8 179.8 179.8 (0.5) 179.3 Recoverable expenses (52.3) (52
Slide 11: Cash flow statement
Cash flow statement Half Year ended 31 December 2020 HY21 Cash Flow Statement HY20 Cash Flow Statement Double-digit growth in operating cash flow #039;m with cash conversion over 100% Statutory EBITDA 56.7 57.4 Non-cash movements • Cash conversion of 105% reflects strong collections despite economic en
Slide 12: Balance sheet
Balance sheet #039;m Balance Sheet as at 31 Dec 2020 Balance Sheet as at 30 Jun 2020 Maintaining strong financial position Cash and cash equivalents 59.8 82.9 Trade and other receivables 69.6 89.1 Other current assets 15.3 9.1 • Cash movement includes debt repayment ($32.7m) and dividend ($25.7m) Total
Slide 13: Foreign currency sensitivity
Foreign currency sensitivity Earnings currency Balance sheet Operating expenses Service Charges sensitivity sensitivity • Based on the USD profile in FY20 in • The Group is also exposed to FX on Other the IPH Group, a 1c movement in the level of its USD denominated 7% NZD the AUD/USD exchange rate c
Slide 14: Market overview
03 Market overview www.iphltd.com.au 2021 Half Year Results Investor Presentation 14
Slide 15: Global scale of Group's IP filings
Global scale of Group’s IP filings Filings through IPH entities or through external agents in all markets1 40000 Global patent and trade mark filings1 • IPH (as a group) is a significant global patent and trade mark filer, both in our home markets as well as outgoing filings from ‘local’ clients int
Slide 16: Patent market - Australia
Patent market - Australia Improvement in IPH market position since AGM update 40000 45.0% Australian patent 36,415 36,310 36,628 36,408 IPH Group filings – market1 35000 market share (excluding 40.0% 38.1% • Australian patent market increased by 11.3% in 1H FY21 compared with the 30000 innovation pa
Slide 17: Patent market - Singapore
Patent market - Singapore IPH grows filings 5.7% in CYTD November filings 16,000 30.0% Singapore patent IPH Group filings – market1 14,000 14,028 market share3 12,780 25.0% 24.5% • Preliminary data for CY20 indicates • Data for CY20 YTD November2 23.3% 23.2% 23.0% market decline of 9.0% compared 12,
Slide 18: IPH patent filings – Asia
IPH patent filings – Asia1 Significant filing growth in Hong Kong and China – growth markets for IPH 600 • 1H FY21 compares against a strong 1H FY20 due to significant filings from one client across multiple jurisdictions. • Removing the effect of this one client, 500 we have seen total growth acros
Slide 19: Trade mark market – Australia
Trade mark market – Australia1 Maintains No. 1 position in a changing market 70,000 25.0% Australian trade 63,537 IPH Group mark filings - market 60,000 58,156 58,319 58,734 market share4 21.3% 19.7% • In 1H FY21, Australian trade mark • IPH trade mark filings in Australia 20.0% filings increased by
Slide 20: Patent market trends
Patent market trends No discernible impact to long-term trends Australian Patent Filings CAGR (FY05 to FY20) = 0.9% CAGR Post-GFC (FY10 to FY20) = 1.4% US PCT Applications CAGR (CY05 to CY20) = 1.1% CAGR Post-GFC (CY10 to CY20) = 2.1% 45,000 70000 60000 40,000 50000 40000 35,000 30000 20000 30,000 1
Slide 21: Operations review
04 Operations review www.iphltd.com.au 2021 Half Year Results Investor Presentation 21
Slide 22: Integration & synergy capture
Integration & synergy capture Proven track record of business improvement Transformation Baldwins of legacy IP acquisition Xenith group • AJ Park acquisition of Baldwins was completed on 16 October 2020 Griffith Hack and • Full physical and systems integration achieved by 7 December 2020 • Divestmen
Slide 23: Investing in the future of the IP profession and our people
Investing in the future of the IP profession and our people Helping our people develop rewarding careers within the group Building our leadership capability and Leveraging our people capability talent opportunities across the Group • Strong career opportunities for our people with more than 40 Princ
Slide 24: Looking ahead for FY21
05 Looking ahead for FY21 www.iphltd.com.au 2021 Half Year Results Investor Presentation 24
Slide 25: New IPH brand is a cornerstone of the group's ambitions
New IPH brand is a cornerstone of the group’s ambitions www.iphltd.com.au 2021 Half Year Results Investor Presentation 25
Slide 26: Renewed focus on organic growth
Renewed focus on organic growth Leveraging the combined power of the network • Review of Marketing & BD activity completed across the Group. • Recruitment in progress for a Chief Commercial Officer to support organic growth and to leverage the combined power of the IPH network. www.iphltd.com.au 202
Slide 27: Looking ahead
Looking ahead The IPH group is geared for growth Coming out of 2020 as a stronger group, ready to further leverage our network: • Demonstrated ability to achieve business improvement from acquisitions • Right-sizing of operations has created more efficient operating model • Increased operational
Slide 28: www.iphltd.com.au 2021 Half Year Results Investor Presentation
www.iphltd.com.au 2021 Half Year Results Investor Presentation 28
Slide 29: Thank you
Thank you iphltd.com.au www.iphltd.com.au
Slide 30: Appendix
06 Appendix www.iphltd.com.au 2021 Half Year Results Investor Presentation 30
Slide 31: Revenue and EBITDA
Revenue and EBITDA Underlying Revenue $’m Underlying EBITDA $’m Australia IP Asia IP New Businesses Data & Analytics Adjacent Serv Businesses Corp & Interco Australia IP Asia IP New Businesses Adjacent Data Businesses & Analytics Serv Corp & Interco 114.5 369.5 2.7 17.8 89.7 2.4 256.6 110.4 74.0 71.
Slide 32: Strategic direction
Strategic direction Focus on IPH’s growth strategy www.iphltd.com.au 2021 Half Year Results Investor Presentation 32
Slide 33: Patent lifecycle
Patent lifecycle Long-life cycle supports consistent revenues and earnings 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 applications. • The pro