2020 Half Year Results Investor Presentation Half year ended 31 st December 2019 13 th February 2020 Presented by: Dr. Andrew Blattman Managing Director / CEO, IPH Limited John Wadley Chief Financial Officer, IPH Limited www.iphltd.com.au 1
Disclaimer This document has been prepared by IPH Limited (IPH) and comprises written No representation, warranty or assurance (express or implied) is given or materials/slides for a presentation concerning IPH. made by IPH that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will This presentation is for information purposes only and does not constitute or form be achieved or prove to be correct. Except for any statutory liability which part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any cannot be excluded, IPH and its respective officers, employees and solicitation of any offer to sell or otherwise dispose of, purchase or subscribe for, any advisers expressly disclaim any responsibility for the accuracy or securities, nor does it constitute investment advice, nor shall it or any part of it nor completeness of the forward looking statements and exclude all liability the fact of its distribution form the basis of, or be relied on in connection with, any or whatsoever (including negligence) for any direct or indirect loss or damage contract or investment decision. which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom. Certain statements in this presentation are forward looking statements. You can identify these statements by the fact that they use words such as “anticipate”, Subject to any continuing obligation under applicable law or relevant listing “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” rules of the ASX, IPH disclaims any obligation or undertaking to and words of similar import. disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any These forward looking statements speak only as at the date of this presentation. forward looking statements or any change in events, conditions or These statements are based on current expectations and beliefs and, by their nature, circumstances on which any statement is based. Nothing in these materials are subject to a number of known and unknown risks and uncertainties that could shall under any circumstances create an implication that there has been no cause the actual results, performances and achievements to differ materially from change in the affairs of IPH since the date of the presentation. any expected future results, performance or achievements expressed or implied by such forward looking statements. 2 2020 Half Year Results Investor Presentation | www.iphltd.com.au Cover image: Federation Square, Melbourne, Australia
Table of contents 01 02 03 HY20 highlights HY20 results Market overview 04 05 06 Operations review FY20 strategic priorities Appendix 3 2020 Half Year Results Investor Presentation | www.iphltd.com.au
About IPH Limited Asia-Pacific’s leading IP professional services group 1. Approximate employee numbers across the Group. 2. IPH Management estimate based on IP office filing information: Australia (IP Australia) – 1H FY20 as at 30/01/20, Singapore (IPOS) – CY19 as at approx. 29/01/20, New Zealand (IPONZ) – 1H FY20 as at 6/01/20. 3. IPH Management estimate based on IP office filing information: Australia (IP Australia) – 1H FY20 as at 23/01/20, based on market share of the top 50 agents; New Zealand (IPONZ) – FY20 YTD Nov as at 19/12/19. 4 4. Refers to the number of primary offices of IPH group businesses in the Asia Pacific region.
Half year 2020 highlights 01 5
Operational highlights Expanded business continues to deliver value and drive growth Highlights – HY20 Enhanced performance of Xenith IP businesses as part of the IPH group Double-digit organic growth in Asia business continues to drive revenue growth Successful completion of first 100 days of Xenith IP integration Integration of Watermark business into Griffith Hack announced Leveraging network effect to deliver continued growth IPH corporate platform strengthened to help drive strategic priorities 6 2020 Half Year Results Investor Presentation | www.iphltd.com.au
Financial highlights Growth across all financial metrics with application of new AASB16 accounting standards for HY20 Revenue 44% Interim Dividend 1 13% $179.8m 13.5 cents per share (fully franked) Xenith contribution 4 (since 15 August 2019) EBITDA 41% Underlying EBITDA 2 49% $48.8m 8% $57.4m $60.4m Revenue $11.5m 82% NPAT 12% Underlying NPAT 3 30% Underlying $27.2m $36.3m EBITDA Diluted EPS 6% Underlying Diluted EPS 23% 12.9 cents per share 17.3 cents per share 1. Represents 83% of cash NPAT. This is NPAT adjusted for net acquisition intangibles amortisation, net share-based payment expense and cash rent paid. 2. Underlying EBITDA excludes costs incurred in pursuit of acquisitions, revaluations of deferred settlements & earn outs, new business establishment costs and accounting charges for share based payments. 3. Underlying NPAT excludes amortisation expense on intangible assets arising from acquisitions. 7 4. Compared to 4.5 months in the prior comparative period.
Financial highlights – pre-AASB16 Compares performance had the prior year accounting standard still applied Revenue 44% Interim Dividend 1 13% $179.8m 13.5 cents per share (fully franked) Xenith contribution 4 (since 15 August 2019) EBITDA 28% Underlying EBITDA 2 36% $48.8m 8% $52m $54.9m Revenue $9.5m 50% NPAT 14% Underlying NPAT 3 31% Underlying $27.7m $36.7m EBITDA Diluted EPS 8% Underlying Diluted EPS 23% 13.2 cents per share 17.4 cents per share 1. Represents 83% of cash NPAT. This is NPAT adjusted for net acquisition intangibles amortisation, net share-based payment expense and cash rent paid. 2. Underlying EBITDA excludes costs incurred in pursuit of acquisitions, revaluations of deferred settlements & earn outs, new business establishment costs and accounting charges for share based payments. 3. Underlying NPAT excludes amortisation expense on intangible assets arising from acquisitions. 8 4. Compared to 4.5 months in the prior comparative period.
HY20 Results 02 9
Like for Like Revenue and EBITDA Consolidated business helps drive double-digit growth in Asia (pre-AASB16) Underlying Adjusted Underlying New Accounting FX Currency Revenue 1 Revenue Revenue Chg% Businesses 2 Movements 3 Adjustment 4 Dec 19 Dec 19 Dec 18 Australia & NZ IP 133.8 (43.6) 0.6 (2.6) 88.2 84.7 4% Asian IP 50.6 0.7 (2.1) 49.2 42.9 15% Wisetime 0.1 0.1 0.3 Glasshouse 1.2 (1.7) (0.5) Corporate 0.9 0.2 (1.5) (0.4) (1.1) Eliminations (7.3) 1.0 (6.3) (4.0) 179.3 (45.1) 0.8 (4.7) 130.3 122.8 6% Underlying Adjusted Underlying New Accounting FX Currency EBITDA 1 EBITDA EBITDA Chg% Businesses 2 Movements 3 Adjustment 4 Dec 19 Dec 19 Dec 18 Australia & NZ IP 42.6 (8.8) 0.6 (2.4) 32.0 30.1 6% Asian IP 20.4 0.7 (1.0) 20.1 17.0 18% Wisetime (0.7) (0.7) (0.6) Glasshouse (0.6) 0.6 Corporate (6.2) 1.9 (1.5) (5.8) (6.4) Eliminations (0.6) 1.0 0.4 0.3 54.9 (6.3) 0.8 (3.5) 45.9 40.4 14% 1. Underlying revenue and EBITDA excludes costs incurred in pursuit of acquisitions, revaluations of deferred settlements & earn outs, new business establishment costs and accounting charges for share based payments. 2. New business represents 4.5 months of Xenith as it traded in FY19. Excludes additional contribution generated under IPH ownership. 3. Accounting FX movements represents change in realised and unrealised FX as reported in the financial statements. 10 4. Currency adjustment represents the performance had the prior period exchange rates applied.
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