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1 SAI Global Limited ABN: 67 050 611 642 SAI Global Limited ASX Code: SAI Macquarie Emerging Leaders 7 May 2009 Slide 2 2 Corporate Overview Listed on ASX in December 2003 Approximately 154 million shares on issue Market capitalisation of (approx) $A400 million Board consists of CEO plus five non-executive directors Offices in 25 countries across Asia-Pacific, Europe and North America 1,400 employees, circa 40% offshore Slide 3 3 Our Business & Value Proposition SAI Global provides solutions that help businesses understand and comply with their technical requirements and regulatory obligations in a cost effective manner by providing: Easy and generally on-line access to need-to-know technical business information and associated embedded workflow solutions Products, tools and services that reduce the burden and cost of regulatory and internal compliance Assessment of conformance to various national, international and internal standards thereby providing confidence around processes, products and supply chain Slide 4 4 Our Business & Our Services Publishing (Information Services) Standards, regulatory and technical information, databases and workflow solutions Compliance Alerts and news feeds, governance, risk and compliance (GRC) products and services and online courseware Assurance System and product related conformity assessment services and related training services Slide 5 5 Key Investment Features Both defensive and growth characteristics to the business Defensive: Strong demand drivers High proportion of annuity or non-discretionary revenue streams Leading market position in our businesses in Australia, which underpin performance Business model resilience to economic slowdowns Growth: Increasing exposure to higher growth products, geographic markets and business sectors Market share gains Industry consolidation globally Slide 6 6 Demand Drivers Regulatory environment Constantly changing Punitive remedies Boardroom Heightened awareness of compliance and risk management obligations Brand Protection Brand impact of regulatory failures Need for supply chain confidence System and product conformity Globalisation Increasing globalisation of trade flows Greater demand for SAIs services Sustained growth rates Slide 7 7 Nature of Revenue Streams Annuity style = subscription arrangement or renewable contracts exist with SAI Non-discretionary= must have products and services for customers Discretionary = neither annuity nor non-discretionary revenue 1 1. Based on Espreon revenue net of disbursements Slide 8 8 Geographic and Service mix 1. Based on Espreon revenue net of disbursements Slide 9 9 Consolidated Trends *FY08 EBITDA and EBITDA margin are shown before non-recurring items CAGR >30% CAGR >15% CAGR >25% Slide 10 10 Publishing (Information Services) Profitability currently underpinned by Publishing License Agreement (PLA) with Standards Australia (15+5 years from Dec 03) Non-exclusive licenses with more than 250 international standards bodies Current revenues in Standards distribution estimated to be around 5% of addressable market (USD 830M) Main competitor is IHS (listed on NYSE), but also competes with SDOs in local markets Transitioning from being a publisher (distributor) of third party IP to an information services provider with a focus on work flow solutions Slide 11 11 Publishing (Information Services) Annuity style = subscription arrangement or renewable contracts exist with SAI Non-discretionary= must have products and services for customers Discretionary = neither annuity nor non-discretionary revenue Nature of revenue: 6% 67% 27% 100% Mix Slide 12 12 Publishing (Information Services) Annual organic revenue growth trend currently 4% - 6%, but expected to increase over time EBITDA margins in excess of 40% CAGR >25%CAGR >28% 1. Excludes Espreon 11 Slide 13 13 Publishing (Information Services) Strategy: Continue transformation into embedded, value-adding information services supplier in targeted verticals Focus on operational excellence to optimise distribution Fully develop core tailored product offerings Expand presence in Asia Pacific through resellers and partnerships Continue to gain market share through enhanced associations, permissions and products Collaborate with Compliance division on publishing opportunities presented by deep reach into selected compliance segments Slide 14 14 Compliance Services Growing annuity revenue base Double digit market growth driven by changing regulatory environment Blue chip customer base No dominant global player - many small niche players in GRC solutions Major competitors in the provision of on-line regulatory courseware are LRN, Integrity Interactive and Corpedia World wide addressable market estimated at USD4.1Bn of which content is USD2.2Bn, GRC USD1.1Bn, training and awareness USD200M, consulting USD600M and hotline services USD50M Slide 15 15 Compliance Services Annuity style = subscription arrangement or renewable contracts exist with SAI Non-discretionary= must have products and services for customers Discretionary = neither annuity nor non-discretionary revenue Nature of revenue: Mix 65% 15% 14% 6% 100% Slide 16 16 Compliance Services Medium term annual organic revenue growth of 10% - 15% expected EBITDA margins in excess of 25% achievable CAGR >30%CAGR >40% Slide 17 17 Compliance Services Strategy: Secure and enhance market leadership position in regulatory on-line learning Integrate LMS and GRC technologies enabling a customer- managed, end-to-end compliance solution Focus GRC and content on targeted verticals where SAI can ascend to market leading positions Build a thought leadership and consulting community Make technology a core competency Optimise and fully leverage the organisation s resources Slide 18 18 Assurance Services Market leading positions in Australia, North America and food sector growing global capability Competitive advantage from Five Ticks StandardsMark Supplier and customer driven industry consolidation occurring Strong underlying demand drivers emanating from the desire of business to provide products and services that have integrity, are safe and comply with national, international and internal standards and specifications Global TIC market estimated at USD 80bn, of which the certification portion is approximately USD 6bn Slide 19 19 Assurance Services Annuity style = subscription arrangement or renewable contracts exist with SAI Non-discretionary= must have products and services for customers Discretionary = neither annuity nor non-discretionary revenue Nature of revenue: Mix 81% 100% 8% 11% Slide 20 20 Assurance Services Sustainable annual organic revenue growth of 5% - 7% EBITDA margins in high teens achievable CAGR >15%CAGR >20% Slide 21 21 Assurance Services Strategy: Continue to build geographic capability Presence in top 25 countries (now 19) Use a mix of acquisition, JV and organic start ups Specifically target/ focus on Europe Enable enhanced global account capability Seamless account management model and structure World class end-to-end business processes A single, global, scaleable IT system Drive high growth product development Enhance our Product Lifecycle management capability Develop a cohesive Supply Chain offering Exploit emerging opportunities in food and the environment Slide 22 22 Espreon Espreon is a national provider of property information and conveyancing & lending workflow solutions Customers include major Australian banks (lenders) and top 200 law firms (conveyancers) Espreon is both the largest provider of property information required to execute a property transaction and the largest property settlement agent in the Australian market Revenue is driven by transaction volumes, not transaction values Employs circa 230 staff with offices in all States and major centres Slide 23 23 Lending Workflow Platform Conveyance Workflow Platform Information Services Settlement, Stamping & Registration Services Espreon Business Model Slide 24 24 Espreon Annuity style = subscription arrangement or renewable contracts exist with SAI Non-discretionary= must have products and services for customers Discretionary = neither annuity nor non-discretionary revenue Nature of revenue: Revenue Mix 85% 100% 15% GrossNet 58% 42% 100% Net revenue = Gross revenue less disbursements Slide 25 25 Espreon Rationale for the acquisition: It is consistent with SAIs core strategy to build information services businesses that provide need-to-know information and workflow solutions The combination of Espreons and SAIs property businesses will result in an Australian property services business with a strong market position Espreons and SAIs businesses have complementary strategies with no substantial overlap It is financially compelling - integration of the businesses will generate cost savings and the acquisition will deliver EPS accretion throughout the market cycle Slide 26 26 Espreon SAI Ownership at 62.5%, Vectis at 36.2% Consideration: Cash (new debt)$ 8.8M 8.5M SAI shares, VWAP $2.20$18.8M Incidentals$ 1.2M $28.8M FY10 EPS accretion of circa 5% expected Intention is to delist Espreon as per SAIs Bidders Statement Slide 27 27 Balance Sheet Slide 28 28 Borrowings Maturity Analysis Slide 29 29 Outlook FY09 Whilst the impact of the current economic climate is evident in some of our businesses overall demand for our products and services remains firm The outcome for the year will be a record result for the SAI Group The profit guidance range remains unchanged with the impact of the recent strength of the Australian dollar mitigating to some extent the expected positive contribution from the Espreon acquisition