Annual Meeting October 2014 Ron Baxter Chairman Ian Campbell Chairman Elect Geoff Lewis Managing...
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Transcript of Annual Meeting October 2014 Ron Baxter Chairman Ian Campbell Chairman Elect Geoff Lewis Managing...
Annual MeetingOctober 2014
Ron Baxter
Chairman
Ian Campbell
Chairman Elect
Geoff Lewis
Managing Director/CEO
2
Company Overview
Ronald Baxter: Outgoing Chairman
Geoff Lewis: Managing Director, CEO
Ian Campbell: Chairman Elect
Stephen Johnston: Non Executive Director
Grant Pestell: Non Executive Director
ASX code: ASZ
Number of Shares on Issue: 206,720,839
Share Price: $0.77
Market Capital: $160 million
The ASG Board
The ASG Executive Team
Geoff Lewis: Managing Director, CEO
Dean Langenbach: COO, CFO
Gerald Strautins: Executive - Strategy
3
Ron Baxter Chairman
4
Evolution of the Business ModelStrategy Foundation
Managed Service pedigree; client relationships; long term contracts
Origins of the New WorldOwnership Model/Utility Model/Per-use Service-based modelGartner stated view 2008
The ASG StrategyThe trend to New World is recognisedStrategy formulation in FY2011 Full suite of service offerings completed
Strategic RealignmentStructural change February 2013; New World focusBalance sheet, cost structures and accounting policies
TodayStrong organic growth, profit growthCash flow, Balance Sheet strength, rapid debt reductionBoard Renewal; Remuneration Review3 years of consistent strategic development
The ASG New World Journey5
“Organizations are switching from company-owned hardware and software assets to per-use service-based models" so that the "projected shift to computing ... will result in dramatic growth in IT products in some areas and significant reductions in other areas.”
Gartner Inc. , 2008
6
Evolution of the Business ModelStrategy Foundation
Managed Service pedigree; client relationships; long term contracts
Origins of the New WorldOwnership Model/Utility Model/Per-use Service-based modelGartner stated view 2008
The ASG StrategyThe trend to New World is recognisedStrategy formulation in FY2011 Full suite of service offerings completed
Strategic RealignmentStructural change February 2013; New World focusBalance sheet, cost structures and accounting policies
TodayStrong organic growth, profit growthCash flow, Balance Sheet strength, rapid debt reductionBoard Renewal; Remuneration Review3 years of consistent strategic development
The ASG New World Journey7
"We expect that FY2010 and FY2011 will be seen in retrospect as critically important in the ultimate development of ASG Group as it will exist in five years time."
Chairman’s Address
ASG AGM, November 2010
8
Evolution of the Business ModelStrategy Foundation
Managed Service pedigree; client relationships; long term contracts
Origins of the New WorldOwnership Model/Utility Model/Per-use Service-based modelGartner stated view 2008
The ASG StrategyThe trend to New World is recognisedStrategy formulation in FY2011 Full suite of service offerings completed
Strategic RealignmentStructural change February 2013; New World focusBalance sheet, cost structures and accounting policies
TodayStrong organic growth, profit growthCash flow, Balance Sheet strength, rapid debt reductionBoard Renewal; Remuneration Review3 years of consistent strategic development
The ASG New World Journey9
"Our current enviable position is the result of selection of the correct strategy three years ago and following through with strong, consistent and focused implementation."
Chairman’s Address
ASG AGM, October 2014
10
FY14 Review•Validation of business strategy
ASG revenues insulated due to contracted long-term service contractsNew World – the right strategy and the right investmentOrganic growth$200m in new business for FY14
• Aggressive debt reduction Strategy to strengthen balance sheet achievedSale of Bentley Data Centre in FY15Debt reduction plan ahead of schedule
• Solid growth metricsRevenue Growth – 5.0%Strong EBITDA of $22mRecord Operating Cash of $22m
• Board Renewal
• Remuneration review completed and implemented
• ASG’s New World strategy recognised by global players as leading the way
11
Ian Campbell Chairman Elect
12
Putting us on the right track
• Distinguished career with ASGJoined the Board in July 2003 when ASG listed
• Achievements at ASGDirector since listing
Head of the Audit Committee
Head of Corporate M&A
Chairman since February 2008
Integral to the strategic direction and positioning of ASG through its strategic transformation
13
Looking forward
Observations
The MarketCorporates
Federal Government
State Government – QLD, VIC
ASG’s PositionParallels with past industry inflection points
Early Adopter vs Follower status
Replication of the ASG Business Model
Defendable position
We know how to transform organisations to the New World - without risk
14
ASG’s outlook
• Strong underlying business fundamentalsConsistent EBITDA margins in FY15, increasing in FY16FY15 increase in revenue will be backloaded to H2 due to contract timingRecurring revenue locked in
Offshoring10% by FY16Will increase EBITDA and cash position
• Overheads to remain stable
• ASG’s first mover advantage creating long-term, sustainable opportunitiesEvidence of the ‘right’ strategyTransforming sales from push to pull scenarioASG’s reputation and referenceability major differentiator in key marketsSound Federal Government experience
Despite the intrinsic value of New World IP & projected EBITDA, ASG is undervalued on a comparative multiple basis
15
Geoff Lewis Managing Director/CEO
16
New World strategy delivering tangible resultsSecure long-term contracts provide locked-in revenue
76% of revenue is recurringSecured $200m in significant New World and Traditional contracts
Department of DefenceCloughAMSAAGC
Federal GovernmentMinisterial directives for New World – moved from ‘should’ to ‘must’Thought leadership and proven resultsBreak-through into Tier 1 Agencies
Solid organic pipeline$100m in negotiation advised in FY14 Results presentation – signing completed$250+m in pipeline opportunitiesTransforming existing Managed Services to New World
17
‘New World’ Reality• Fundamental shift to New World – a structural change to the industry
– Cloud services market expected to be $US107 billion by 2017
– Enterprises expect 46% of IT services to be Cloud in 3 years
– 61% of all technology spending funded by business buyers (IDC Cloud Track Survey, September 2013)
• Government and large corporates actively pursuing benefits of New World: 30% - 40% savings
• Traditional Business models not aligned to take advantage of the New World
– Large multi-nationals disaggregating
– Large multi-nationals tied to their existing business models
– Many organisations unwilling/unable to abandon their existing business models• Making tactical acquisitions to shore-up revenue – not to transform their business model
• ASG advantage– Successfully executing on the strategy - not simply ‘talking the talk’
– Driving economies of scale
– Strong referenceability in key markets
– Agility
The Aspiration18
“What has been surprising is how fast the enterprise space is moving. One of the things that we concluded was that
nimbleness and speed is going to be an important part of the future.”
Meg Whitman, CEO HPBloomberg
7 October 2014
19
The Reality - ASG
• New World leverage
– Driving economies of scale– Strong referenceability in key markets
• ASG’s first mover advantage creating long-term, sustainable opportunities
– Evidence of the ‘right’ strategy– Transforming sales from push to pull scenario– ASG’s reputation and referenceability major differentiator in key markets– Sound Federal Government experience– Successfully targeting Tier 1 Agencies
• Global Validation of the ASG Model
– ASG first ANZ partner to win Global and ANZ Oracle Excellence Award – Multi-Nationals sub-contracting to ASG as they cannot react to the changing dynamics
of the industry
Proxy Results
21
Proxy Results
For Against Abstain Chairman’s undirected
votes (Chairman’s discretion)
Undirected votes (Other
Proxy Holders discretion)
Resolution 1 Remuneration Report 64,285,356 2,868,785 493,314 431,801 724,746
Resolution 2 Re-election of a director – Mr Ian Campbell
71,953,342 1,101,451 880,596 440,051 734,746
Resolution 3 Re-election of a director– Mr Grant Pestell
64,976,100 8,077,343 881,946 440,051 734,746
Resolution 4 Issue of options to related party – Mr Geoffrey Lewis
61,885,923 11,940,407 121,180 437,930 724,746
Resolution 5 Issue of options to related Party – Mr Ian Campbell
54,650,177 19,176,153 121,180 437,930 724,746
Resolution 6 Spill Resolution 28,446,906 44,386,115 846,711 695,708 734,746