Slide 1: FY13 Results Briefing
For personal use only FY13 Results Briefing 23rd August 2013 DATA#3 LIMITED (DTL)
Slide 2: FY13 Financial Performance
For personal use only FY13 FINANCIAL PERFORMANCE
Slide 3: Revenue down but gross profit up
REVENUE DOWN BUT GROSS PROFIT UP For personal use only • Total revenue down 5.0% to $771.0M • Product revenue down 7.2% to $639.6M due to changes in software licensing contracts • Services revenue up 8.1% to $130.2M • Other revenue down 36.1% to $1.2M • Total gross profit up 2.1% to $122.5M • Sales
Slide 4: Revenue & gross profit trends
REVENUE & GROSS PROFIT TRENDS For personal use only Total revenue ($M) Services revenue ($M) 1000 140 130.2 5 year CAGR 16.2% 811.4 120.4 771.0 120 5 year CAGR 10.0% 109.8 800 697.7 599.2 100 81.0 85.0 600 530.5 79.6 80 363.7 60 400 40 200 20 0 0 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 201
Slide 5: Expenses reflected investment
EXPENSES REFLECTED INVESTMENT For personal use only • Internal staff expenses up $2.3M or 2.7% to $90.2M • Operating expenses up $1.8M or 12.7% to $16.0M with additional $1.9M cost for internal infrastructure, systems and premises • Rent up $1.0M to $6.0M • Depreciation & amortisation up $0.9M to $2
Slide 6: Expense trends
EXPENSE TRENDS For personal use only Internal staff costs ($M) Internal cost ratio (%) 100 87.9 90.2 5 year CAGR 12.8% 77.0 90 86.7 80 63.5 85 83.1 83.4 58.0 81.9 60 49.4 84.3 85.1 80 40 20 75 0 70 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Operating Expenses ($M) Dep’n & Amort’n ($
Slide 7: Maintaining shareholder returns
MAINTAINING SHAREHOLDER RETURNS For personal use only While profit and earnings declined … • EBITDA down 3.8% from $19.4M to $18.7M • EBIT down 8.9% from $18.3M to $16.7M • NPBT down 11.5% from $19.7M to $17.5M • NPAT down 11.3% from $13.7M to $12.1M • Earnings per share down 11.3% to 7.88 cents … s
Slide 8: Profit trends
PROFIT TRENDS For personal use only EBITDA ($M) NPBT ($M) 25 25 21.8 5 year CAGR 7.7% 21.2 5 year CAGR 6.0% 19.4 18.7 19.7 20 20 17.5 16.3 15.8 14.5 14.2 15 12.9 15 13.0 10 10 5 5 0 0 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 EBIT ($M) NPAT ($M) 25 16 15.0 5 year CAGR 6.4% 20.5 5 y
Slide 9: Shareholder return trends
SHAREHOLDER RETURN TRENDS For personal use only EPS (cents) 30 June share price ($) 12 1.32 5 year CAGR 6.0% 9.74 1.40 10 8.88 1.20 1.11 1.08 7.88 8 7.09 1.00 5.89 6.38 0.80 6 0.80 0.60 0.56 0.60 4 0.40 2 0.20 0 0.00 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 ROE (%) DPS (cents) 60%
Slide 10: Strong cashflow & balance sheet
STRONG CASHFLOW & BALANCE SHEET For personal use only • Cash flow ‘seasonality’ consistent with previous years • Full year average cash balance of $31.1M, down from $36.7M due to temporary funding required for Fiona Stanley Hospital contract • Closing cash balance up 20% from $70.8M to $85.3M • Net
Slide 11: Cashflow & balance sheet trends
CASHFLOW & BALANCE SHEET TRENDS For personal use only Net operating cash flow ($M) 140.0 89.4 90.0 66.0 59.6 40.0 NTA ($M) 30 27.8 26.7 -10.0 25.6 1H '11 2H '11 1H '12 2H '12 1H '13 2H '13 20.9 -37.1 20 17.9 -60.0 16.0 -54.8 -58.9 10 Cash ($M) 85.3 80 70.8 0 56.1 57.0 2008 2009 2010 2011 2012 2013 6
Slide 12: Our Business
For personal use only OUR BUSINESS
Slide 13: Our Business
For personal use only OUR BUSINESS 13 1
Slide 14: Our national footprint
OUR NATIONAL FOOTPRINT For personal use only 14
Slide 15: Strong partnerships
STRONG PARTNERSHIPS With leading global vendors For personal use only 15
Slide 16: Strong partnerships: endorsed by many awards
STRONG PARTNERSHIPS Endorsed by many awards For personal use only Global awards • Microsoft - Devices and Deployment Partner of the Year Regional awards • Autodesk – Highest Billings in ANZ for Volume Channel • Cisco - Smart Services Partner of the Year for Asia Pacific Japan and Greater China • HP
Slide 17: Operational Performance
For personal use only OPERATIONAL PERFORMANCE
Slide 18: Software licensing
SOFTWARE LICENSING Revenue down but underlying profit grows For personal use only Revenue ($M) 500 483.4 450 428.1 5 year CAGR 24.5% 400 356.7 350 319.6 • Revenue down 11.4% to $428.1M 292.8 due to change in timing of 300 invoicing and a shift to a 250 commission structure 200 • Underlying gross pro
Slide 19: Infrastructure solutions
INFRASTRUCTURE SOLUTIONS WA contract offsets weak performance For personal use only Revenue ($M) 350 5 year CAGR 11.8% • Total revenue up 7.5% to $306.0M 301.1 306.0 300 284.7 • Products up 3.2% to $215.0M • Project services down 2.2% to 248.3 $30.0M 250 • Managed services up 33.5% to 197.6 $61.0M 2
Slide 20: People solutions
PEOPLE SOLUTIONS 17% decline in contractor activity For personal use only Revenue ($M) 50 5 year CAGR -4.4% 44.7 45 41.4 39.2 40 38.3 35.7 35 30.7 30 • Revenue down 13.7% to $35.7M 25 • Contractor placement 20 activity down 17% over the 15 year but increased at year end 10 • Permanent placement 5 ac
Slide 21: People satisfaction
PEOPLE SATISFACTION Held in difficult circumstances For personal use only People satisfaction /5 5 4.0 4.1 3.9 4.0 4.0 4.0 4 641 permanent 3 50 casual 348 contractors 2 >1,000 people 1 0 800 2008 2009 2010 2011 2012 2013 638 648 641 600 502 400 352 348 Net Promoter 277 240 % Recommend Data#3 200 100
Slide 22: State performance: Queensland and NSW
STATE PERFORMANCE Echoed market and our positioning For personal use only Queensland • Significant scale and remained a leader • Constrained government expenditure impacted product and contracting but offset by solid software licensing and managed services • Reappointed as panel supplier to whole of
Slide 23: State performance: Victoria, SA, WA
STATE PERFORMANCE Echoed market and our positioning For personal use only Victoria • Economy slowed rapidly to be our most challenging • Several projects deferred or funding withdrawn • Top line declined only 10% however with higher costs, contribution to profit declined more substantially South Aus
Slide 24: Significant contracts: Fiona Stanley Hospital
STATE PERFORMANCE Significant contracts For personal use only Fiona Stanley Hospital Perth • Largest ever infrastructure contract • Supply contract for Cisco communications infrastructure • Configuration and implementation services • 5 year contract maintenance agreement • Several follow on contract
Slide 25: Significant contracts: Qld Government
STATE PERFORMANCE Significant contracts For personal use only Qld Government hardware and related services • 3 years + 2 year option • Covers all agencies and other approved entities • Exclusive supply of • HP server, desktop PC and notebook equipment • A wide range of peripheral equipment from Ingr
Slide 26: Significant contracts: Ipswich City Council
STATE PERFORMANCE Significant contracts For personal use only Ipswich City Council • Benchmark for cloud adoption • Extension of existing user support contract • New 5 year contract moving from on-premise to cloud • Ownership of all data centre equipment and data centre lease transferred to Data#3 •
Slide 27: Bid activity and conversion
BID ACTIVITY AND CONVERSION Remained slow & competitive For personal use only 1H Full Year 1H Full Year FY12 FY12 FY13 FY13 Submitted bids 207 386 179 397 Decided bids 69 249 72 248 Won 42 121 35 109 % won 61% 49% 49% 44% Undecided 138 137 107 149 % undecided 67% 36% 60% 38% 27
Slide 28: Strategic priorities
STRATEGIC PRIORITIES Solid performance For personal use only Aligning our offerings with the changing market Building out our cloud infrastructure and service desk and the associated sales capacity Increasing our capacity to deliver technology independent consulting services, and solutions incorpora
Slide 29: FY13 summary: gross profit to NPBT
FY13 SUMMARY In simple terms For personal use only Gross Profit (GP) to NPBT compared to FY13 3.0 2.5 2.0 1.0 0.1 $M 0.0 GP Interest People Rent Dep'n & Other Opex NPBT -0.6 amort'n -1.0 -0.9 -1.0 -2.0 -2.3 -2.2 -3.0 29
Slide 30: FY13 summary
FY13 SUMMARY Solid performance in difficult market For personal use only • Challenging market, down on FY12 overall • Solid underlying gross profit performance • Strong performance from Software Licensing • Fiona Stanley Hospital win in WA • Higher cost base (investments in premises, infrastructure
Slide 31: FY
For personal use only FY 14
Slide 32: Planning assumptions: markets and technologies
PLANNING ASSUMPTIONS For personal use only MARKETS • No change in sentiment • FY14 unchanged to FY13 TECHNOLOGIES • The big ‘disruptors’ and drivers of strategic IT decisions will be mobile, cloud, collaboration (incl. social) and ‘Big Data’ • Cloud and commoditisation will create a Hybrid IT enviro
Slide 33: Planning assumptions: customers, people, solutions
PLANNING ASSUMPTIONS For personal use only CUSTOMERS • Dynamic of negative sentiment and ‘disruptive’ technologies will continue to constrain investment • Transformation of IT departments to Business IT; and business user to Business Consumer PEOPLE • Aggressive competition for the best people will
Slide 34: Maximising our performance: simplification
MAXIMISING OUR PERFORMANCE Simplification For personal use only Simplification through a restructure from 5 areas of specialisation to 3 + a new consulting business From IT Solutions to Business technology solutions From product to cloud 34
Slide 35: Software Solutions – product to cloud
MAXIMISING OUR PERFORMANCE Simplification For personal use only Simplification through a restructure from 5 areas of specialisation to 3 + a new consulting business Software Solutions – product to cloud • Software licensing and asset management • Software development, customisation, deployment and m
Slide 36: Infrastructure Solutions – product to cloud
MAXIMISING OUR PERFORMANCE Simplification For personal use only Simplification through a restructure from 5 areas of specialisation to 3 + a new consulting business Infrastructure Solutions – product to cloud • Sale, asset management and contract support of IT products • Infrastructure design, deplo
Slide 37: Managed Solutions – product to cloud
MAXIMISING OUR PERFORMANCE Simplification For personal use only Simplification through a restructure from 5 areas of specialisation to 3 + a new consulting business Managed Solutions – product to cloud • ‘services delivered by people’ • Permanent and contract labour • Labour augmentation • Field ser
Slide 38: Consulting services
MAXIMISING OUR PERFORMANCE Simplification For personal use only Simplification through a restructure from 5 areas of specialisation to 3 + a new consulting business Consulting services • Roadmaps for our customers’ transformation to Business IT and the Business Consumer • Improving business performa
Slide 39: Consolidation, productivity & lower cost
MAXIMISING OUR PERFORMANCE Consolidation, productivity & lower cost For personal use only Consolidation of internal functions into 2 shared services business driving productivity and lowering cost 39
Slide 40: Extending and transforming our solutions
MAXIMISING OUR PERFORMANCE Extending and transforming our solutions For personal use only Continued extension and transformation of the business technology solutions we offer 40
Slide 41: By getting the big things right: managed and infrastructure
MAXIMISING OUR PERFORMANCE By getting the big things right For personal use only MANAGED SOLUTIONS • Expanding in Western Australia • Extending the self-service and management portals for ‘as a service’ to integrate other non-Data#3 cloud platforms into our customers’ Hybrid IT environments • Buildi
Slide 42: By getting the big things right: software and consulting
MAXIMISING OUR PERFORMANCE By getting the big things right For personal use only SOFTWARE SOLUTIONS • Improving the internet portal experience for our customers for purchasing; asset registration and management; and renewals • Improving the sale process to articulate and sell the value proposition f
Slide 43: FY14 outlook summary
FY14 OUTLOOK SUMMARY For personal use only “We see no change in market conditions in FY14. The investments we are making position us well for improving business conditions. We remain watchful for non-organic growth options. Our overall financial objective for FY14 is to at least match FY13 performan
Slide 44: Q&A
For personal use only Q&A
Slide 45: Appendix – Financial Summary
APPENDIX – FINANCIAL SUMMARY For personal use only 45
Slide 46: 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 47: 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 48: For personal use only
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