For personal use only RXP Services Limited

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1 RXP Services Limited Full Year Results ending 30 June 2013 August 2013 Ross Fielding - Chief Executive Officer Paul Fielding - Group Executive Operations Ben Meek - Group Executive Strategy & Innovation Jason Young - Group Executive Sales and Delivery Copyright 2013 RXP Services Ltd. 1

2 Introduction Listed on ASX 28 November 2011 RXP is a provider of ITC Professional Services in Australia and Hong Kong with access to offshore capabilities in Malaysia and Dubai Business is based on a Practice based model, structured around technology verticals with centralised administration to control and govern the operations Offices in Melbourne, Sydney, Canberra and Hong Kong Growth strategy centred on organic and acquisitive growth Scalable business model led by Ross Fielding and a strengthening management team with extensive ICT consulting and business experience Copyright 2013 RXP Services Ltd. 2

3 Our Business We combine exceptionally talented people with proven methods to deliver solutions that enable our clients to increase revenue, improve customer satisfaction and engagement, and improve EBIT. We are an ASX listed ICT consulting services company that has provided professional services to S&P / ASX 200 corporations and government bodies in Australia and Asia for over 20 years. We are a client focussed, practice led organisation. Our practices: group our capabilities in a way that optimises engagement with clients. integrate and work as one rxp when we engage end to end services structured to support optimal delivery while providing our staff with career progression and learning opportunities. Melbourne (Head Office) strategic advisory services Sydney business intelligence & information management web and mobile development business process optimisation integration project services infrastructure & cloud services Canberra Hong Kong Copyright 2013 RXP Services Ltd. 3

4 Why RXP Customers choose us because together we unlock and optimise the business value of every client we represent. We have shared values and proven proprietary methods which empower us to achieve great outcomes. We build each delivery team based on cultural fit, business & technical domain knowledge, career development, location, duration and availability. We establish a collaborative approach that forms real partnerships and deliver greater results, together. Large teams can create complexity and overhead. We believe in allocating a small team of highly skilled professionals to deliver outstanding results. Our incremental delivery approach also ensures that value is delivered sooner. The right team, at the right time, achieving value sooner. Small teams, great people, guaranteed Specialisation always wins Unashamedly clever thinkers Methods that lead the way to the right outcome Often the most simple answer to the problem is the best. We consider project challenges from a holistic and multiple perspectives. Our technical depth and insight will ensure clients make the right technology and process choices. Our practices have been established around specialised expertise that are the most important to our clients and gets runs on the board faster. Clever thinking is inherent in our approach. Our proprietary Transpire methods, aligned to leading and emerging industry standards, ensure that we progress down the most optimal route with the right preparation Copyright 2013 RXP Services Ltd. 4

5 Highlights Revenue ($M) EBITDA ($M) % EBITDA Margin Staff FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 Results within Market Guidance of Revenue $26M - $30M, EBITDA $4.5M - $6.0M Cash flows from operations increasing on the back of growth in underlying revenue Zero debt with $11.2M in cash as at 30 June 2013 to fund further organic and acquisitive growth Successfully acquired PLC, STC, NSI Technology and Zenith Solutions during the period with Transpire being acquired after balance date Copyright 2013 RXP Services Ltd. 5

6 The journey so far Listed on ASX Raised $8.5M Acquisition of PLC Provided Enterprise Content Capability in Hong Kong Acquisition of STC Launched our BI capability in Aust. Acquisition of NSI Expanded our apps development and infrastructure/cloud offerings Acquisition of Zenith Opened Canberra presence and augmented our BI with Data Management Nov 11 Dec11 Jan 12 Feb12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Revenue $12.1M EBIT $0.53M People 116 Revenue $11.3M EBIT $1.2M People 173 Revenue $30.2M EBIT $4.9M People 212 Copyright 2013 RXP Services Ltd. 6

7 Acquisitions - NSI Technology Ramon Ali Managing Director is arguably one of the most talented and experienced technology infrastructure individuals in Australia and his team of experts are leading RXP s push into mobility and cloud services In the mobility space, NSI helps clients define their mobile strategy by leveraging their experience and expertise. The NSI team conducts a competitive analysis and user research to ensure solutions are best suited for the clients target audience NSI is an Apple consulting Partner In the cloud space, NSI is a Salesforce and Microsoft Cloud Alliance Gold Partner having demonstrated their proficiency in SFDC implementations including attaining the required certifications and the requisite customer satisfaction score NSI have experience in providing virtualisation services for over 10 years, The transition to providing advanced cloud based design implementation services upon public cloud platforms is growing momentum Copyright 2013 RXP Services Ltd. 7

8 Acquisitions - Zenith Solutions One of Australia s leading professional services organisation specialising in data and information management for structured data Provide Data Consulting Services, Data Delivery Services, Industry Workshops and Technical Training Expanded the capability of Business Intelligence and extended our geographical reach into the lucrative Canberra region Expanded and extended key partnerships with IBM, Oracle, SAP and Microsoft Fully integrated with all major contracts successfully novated under the RXP banner Copyright 2013 RXP Services Ltd. 8

9 Acquisitions - Transpire Highly regarded strategic advisory firm founded by renowned strategist and industry veteran, Ben Meek. Since 2006, Transpire has been working with executives in some of Australia s leading enterprises, providing management and technology advice and transformation consulting services, helping them drive growth in business value while reducing their overall business risk. The new Strategic Advisory Services capability we have established through this acquisition dovetails perfectly with our existing Practices and provides a new avenue to value for our clients. The adoption of the Transpire methodology will strengthen our Practices and become the benchmark for furthering successful services to be delivered to our clients. Copyright 2013 RXP Services Ltd. 9

10 Our People Strengthened Executive team with the addition of Jason Young, Ramon Ali, Brad Taylor, Tim Moon and Ben Meek Continued focus on People & Talent - single framework in place driving shared leadership Staff incentive plans in place based on a balanced scorecard approach Our focus on people remains: clever thinking, great people, great teams, delivering outcomes for clients Run a balanced resourcing model between permanent and contract staff in line with overall market conditions The right team, at the right time Achieving the right outcomes Copyright 2013 RXP Services Ltd. 10

11 The Numbers Dashboard Revenue EBIT EBIT % Reported Result $30.2M $4.9M 16.3% Market Guidance $26 - $30M $4.5 - $6.0M Results within Market Guidance of Revenue $26M - $30M, EBITDA $4.5M - $6.0M Strong overall revenue result with continued momentum into FY14 Adjusted EBIT $5.15M Non-capitalised expenses relating to acquisitions and capital raisings ~$95K Exit from recruitment services ~$150K Copyright 2013 RXP Services Ltd. 11

12 Income Statement 1 st Half 2 nd Half FY13 $M FY12 $M Revenue 11,360 18,799 30,159 12,080 REPORTED EBIT 1,253 3,663 4, Net interest (16) 4 (12) (3) PROFIT BEFORE TAX 1,237 3,667 4, Income tax (384) (1,048) (1,419) (160) NPAT 853 2,619 3, EBIT margin (%) Basic EPS (cents) Strong second half result and strong growth over previous FY Revenue exceeded top end of market guidance of between $26-30M EBIT margin within market guidance of between $ M EBIT margin increased to 16.3%, with room for further improvement Copyright 2013 RXP Services Ltd. 12

13 Balance Sheet FY13 ($M) FY12 ($M) Assets Cash 11, Receivables 5,771 3,212 Other Goodwill 37,054 19,732 Other 1, TOTAL ASSETS 55,868 29,941 Liabilities Trade and other Payables 3,939 3,220 Deferred Liabilities 5,521 5,458 Accrued Staff Provisions 1, Other TOTAL LIABILITIES 10,612 9,732 NET ASSETS 45,256 15,209 Contributed Equity 41,695 15,186 Reserves 53 - Retained Earnings 3, TOTAL EQUITY 45,256 15,209 Strong cash balance - $11.2M Strong net working capital position Zero debt Increase in goodwill the result of acquisitions during the period with no impairments recorded or anticipated in FY14 Increase in contributed equity the result of shares issued for acquisitions, capital raisings and accrued expenses less capital expenses Copyright 2013 RXP Services Ltd. 13

14 Cash Flow Cash Flow from Operations $ 000 1,274 1,274 1, June 12 Qtr June 13 Qtr March13 Qtr June 13 Qtr Net cash flow from operations has grown from ~$800K to $1.274M per quarter over FY13 Continuing growth in net operating cash flows quarter on quarter in line with underlying revenue growth Growth in net operating cash flows expected to continue in FY14 Copyright 2013 RXP Services Ltd. 14

15 Our Spread of Revenue - by Industry Government 20% Banking & Finance 27% Retail / Other 10% Health 11% Utilities16% Telco & Media 10% Transport & Distribution 6% #Note based on July 2013 actuals Copyright 2013 RXP Services Ltd. 15

16 Our Spread of Revenue - by Practice Business Process Optimisation 8% Integration 21% Business Intelligence & Information Management 17% Strategic Advisory Services 7% Applications Development 14% Infrastructure & Cloud 6% Project Services 27% #Note based on July 2013 actuals Copyright 2013 RXP Services Ltd. 16

17 Our Spread of Revenue - by Geography Hong Kong 10% Canberra 8% Melbourne44% Sydney 38% #Note based on July 2013 actuals Copyright 2013 RXP Services Ltd. 17

18 Outlook Aggressive growth strategy to continue by focusing on leveraging the current in demand services (Practice x-sell), including fully leveraging Transpire acquisition Maintain focus on targeted acquisitions in Australia, Hong Kong and Singapore Current detailed discussions with a number of potential targets and expect to be in a position to announce in the next quarter Several new key/major client opportunities being negotiated and/or finalised Health, Banking & Finance, Engineering & Construction, Government as well as key Hong Kong opportunities FY14 Revenue forecast to grow > 40% Expect FY14 EBITDA margin to continue to grow Cash flow from operations expected to continue to grow in line with forecast revenue growth Based on forecast cash flow from operations, the company will consider beginning our dividend policy in the first half of calendar 2014 Copyright 2013 RXP Services Ltd. 18

19 Acquisitions - The Criteria We have a simple goal when we do an acquisition zero unplanned staff loss, zero loss of clients and zero loss of partners We have a simple set of criteria Do the people in the acquired company fit culturally? Does the acquisition have track record of delivery, is it profitable? Does the acquisition add in demand capabilities/services? Does the acquisition increase our client footprint? Does the acquisition increase our geographical footprint? Does the acquisition build on our key strategic partnerships? Does the acquisition build staff loyalty? Does the acquisition help build the RXP brand? Copyright 2013 RXP Services Ltd. 19

20 Our Strategic Compass - priorities for the year ahead 1. Grow our People & Capabilities Grow RXP Brand Awareness Grow our Client Base Increase Practice Penetration Develop & Expand our Practices Develop & Expand our Partnerships Clever thinking is inherent in our approach. Our proprietary Transpire methods, aligned to leading and emerging industry standards, ensure that we progress down the most optimal route with the right preparation 7. Develop & Expand our Geographies Copyright 2013 RXP Services Ltd. 20

21 Summary Strong result in a sector that is portrayed as difficult Well positioned to deliver strong growth in revenues and profits through: The full year impact of and fully leveraging recent acquisitions Continuation of Practice x-sell Finalisation of new key/major client opportunities With zero debt, $11.2M in cash and increasing positive cash-flows from operations, RXP is well positioned to take advantage of strategic acquisition opportunities that are presenting themselves The executive team continues to strengthen the with a number of key personal joining the company: Jason Young (Group Executive Sales & Delivery) Ben Meek (Group Executive Strategy and Innovation) Ramon Ali (Practice Director Cloud Services) Summary of Priorities for FY14 Continue to improve top-line-bottom-line margins Continue to integrate and leverage cross-sell opportunities Continue to undertake acquisitions that increase our geographic reach, increase our service offerings and/or increase our client base Copyright 2013 RXP Services Ltd. 21

22 Important notice This presentation was not prepared for and should not be relied upon to provide all necessary information for investment decisions. Although great care & diligence has been taken to ensure the accuracy of this presentation, RXP Services Limited gives no warranties in relation to the statements and information contained herein and disclaims all liability arising from persons acting on the information and statements in this presentation. Due to the dynamics and changing risk profiles of investment markets, RXP Services Limited reserves the right to change its opinion at any time. All investors are strongly advised to consult professional financial advisors whose role it is to provide professional financial advice, taking into account an individual investor s investment objectives, financial situations and particular needs. Copyright 2013 RXP Services Ltd. 22

23 Copyright 2013 RXP Services Ltd. 23