for personal use only - asx · in the cloud space, nsi is a salesforce and microsoft cloud alliance...

Copyright 2013 RXP Services Ltd. 1

RXP Services LimitedFull Year Results ending 30 June 2013August 2013

Ross Fielding - Chief Executive OfficerPaul Fielding - Group Executive OperationsBen Meek - Group Executive Strategy & InnovationJason Young - Group Executive Sales and Delivery

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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 centralisedadministration 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 experienceFor

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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.

business intelligence &

information management

business intelligence &

information management

strategic advisory services

strategic advisory services

business process

optimisation

business process

optimisation

infrastructure & cloud servicesinfrastructure & cloud services

integrationintegrationweb and mobile

development

web and mobile

development

project servicesproject services

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) Sydney

Canberra Hong Kong

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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.

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.

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

Unashamedly clever

thinkers

Methods that lead the way

to the right outcome

Specialisation always wins

The right team, at the right time, achieving

value sooner.

Small teams, great people, guaranteed

Our practices have been established around specialised expertise that are the most important to our clients and gets runs on the board faster.

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Highlights

Revenue ($M) EBITDA ($M) Staff% EBITDA Margin

12.1

30.2

0.53

4.9

4.3

16.3

116

212

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

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The journey so far

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

Acquisition of NSIExpanded our apps development and infrastructure/cloud offerings

Acquisition of ZenithOpened Canberra presence and augmented our BI with Data Management

Acquisition of PLCProvided Enterprise Content Capability in Hong Kong

Acquisition of STCLaunched our BI capability in Aust.

Revenue $30.2M

EBIT $4.9M

People 212

Revenue $11.3M

EBIT $1.2M

People 173

Listed on ASXRaised $8.5M

Revenue $12.1M

EBIT $0.53M

People 116

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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

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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

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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.

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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

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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 ~$150KFor

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Income Statement

1st Half 2nd Half FY13 $M FY12 $M

Revenue 11,360 18,799 30,159 12,080

REPORTED EBIT 1,253 3,663 4,916 534

Net interest (16) 4 (12) (3)

PROFIT BEFORE TAX 1,237 3,667 4,904 531

Income tax (384) (1,048) (1,419) (160)

NPAT 853 2,619 3,485 371

EBIT margin (%) 11.02 19.48 16.30 4.42

Basic EPS (cents) 5.4 1.2

� 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 $4.5-6.0M

� EBIT margin increased to 16.3%, with room for further improvementFor

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Balance Sheet

FY13 ($M) FY12 ($M)

Assets

Cash 11,209 781

Receivables 5,771 3,212

Other 503 430

Goodwill 37,054 19,732

Other 1,331 786

TOTAL ASSETS 55,868 29,941

Liabilities

Trade and other Payables 3,939 3,220

Deferred Liabilities 5,521 5,458

Accrued Staff Provisions 1,152 505

Other - 549

TOTAL LIABILITIES 10,612 9,732

NET ASSETS 45,256 15,209

Contributed Equity 41,695 15,186

Reserves 53 -

Retained Earnings 3,508 23

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

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Cash Flow

� 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

798

1,274

1,167

1,274

Cash Flow from Operations $’000

June 12Qtr

June 13Qtr

March13Qtr

June 13Qtr

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Our Spread of Revenue - by Industry

Banking & Finance 27%

Utilities16%

Health 11%

Government 20%

Transport & Distribution 6%

Retail / Other 10%

Telco & Media 10%

#Note – based on July 2013 actuals

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Our Spread of Revenue - by Practice

Business Intelligence & Information

Management 17%

Infrastructure & Cloud 6%

ApplicationsDevelopment 14%

Integration 21%

Business ProcessOptimisation 8%

Project Services 27%

Strategic AdvisoryServices 7%


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Our Spread of Revenue - by Geography

Melbourne44%

Sydney 38%

Hong Kong 10%

Canberra 8%


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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 2014For

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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?1.

Does the acquisition have track record of delivery, is it profitable?2.

Does the acquisition add “in demand” capabilities/services?3.

Does the acquisition increase our client footprint?4.

Does the acquisition increase our geographical footprint?5.

Does the acquisition build on our key strategic partnerships?6.

Does the acquisition build staff loyalty?7.

Does the acquisition help build the RXP brand?8.For

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Our Strategic Compass - priorities for the year ahead

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

Grow our People & Capabilities1.

Grow RXP Brand Awareness2.

Grow our Client Base3.

Increase Practice Penetration4.

Develop & Expand our Practices5.

Develop & Expand our Partnerships6.

Develop & Expand our Geographies7.

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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 baseF

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This presentation was not prepared for and should not be relied upon toprovide all necessary information for investment decisions. Although greatcare & diligence has been taken to ensure the accuracy of this presentation,RXP Services Limited gives no warranties in relation to the statements andinformation contained herein and disclaims all liability arising from personsacting on the information and statements in this presentation.

Due to the dynamics and changing risk profiles of investment markets, RXPServices Limited reserves the right to change its opinion at any time. Allinvestors are strongly advised to consult professional financial advisors whoserole it is to provide professional financial advice, taking into account anindividual investor’s investment objectives, financial situations and particularneeds.

Important notice

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for personal use only - asx · in the cloud space, nsi is a salesforce and microsoft cloud alliance...

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