SMS Management & Technology Level 41 140 William Street Melbourne Victoria 3000 Australia T +61 1300 842 767 F +61 1300 329 767 www.smsmt.com Melbourne Sydney Brisbane Canberra Adelaide Hong Kong Vietnam Singapore 3 May 2012 Manager, Companies Australian Stock Exchange Limited Company Announcements Office Level 4 Stock Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sir Pursuant to Listing Rule 3.1, attached is a presentation to be presented today by the Company s Chief Executive Officer, Mr Tom Stianos, at the Macquarie Australia Conference. Yours faithfully Rick Rostolis Company Secretary SMS Management & Technology Limited ABN 49 009 558 865
SMS Management & Technology Limited Macquarie Australia Conference Tom Stianos, Chief Executive Officer 3 May 2012
First Half FY12 Highlights Revenue $169.5m, up 16.1% on pcp Continued market share gains with more than $200m in new contracts Asian growth has further broadened business base EBITDA $21.8m, up 3.8% on pcp NPAT $15.2m, unchanged on pcp Total staff numbers (FTE) of 1,734 (up 12.7% since 31 December 2010) Earnings per share of 22.3 cents Zero debt with cash balance of $14.9m Interim fully franked dividend of 13.5cps, paid 30 March 2012 1
First Half FY12 Financial Performance $m 1H FY12 1H FY11 Change % Revenue from services 169.5 146.0 16.1 EBITDA 21.8 21.0 3.8 Depreciation (0.6) (0.4) (50.0) EBIT 21.2 20.6 2.9 Net interest income 0.1 0.2 (50.0) Tax (6.1) (5.6) (8.9) NPAT 15.2 15.2 - EBITDA Margin (%) 12.9 14.4 Basic EPS (cents) 22.3 22.7 Diluted EPS (cents) 21.5 22.0 Fully franked interim dividend (cents) 13.5 13.5 Revenue growth: ICT, Resources, Transport, Utilities and Asia FY2011 acquisitions contributed incremental $4.1m Project margins steady but slightly impacted by: Cost to service Asian operations Subdued permanent recruitment market EBITDA growth affected by: Lower utilisation due to excess capacity and project deferrals Investment in Asian expansion Net interest income lower due to working capital requirements 2
First Half FY12 Summary Financial Position $m 1H FY12 1H FY11 Cash 14.9 23.7 Trade receivables and work in progress 63.5 55.7 Debt Nil Nil Net tangible assets (NTA) 48.9 45.3 NTA per share (cents) 72 67 Debtor days 36 35 Lock up days (WIP plus debtor days) 65 65 Cash balance impacted by: Timing of receipts - $5m of overdue receivables at 31 December now collected Payment of $8.2m deferred consideration relating to previous acquisitions Asian expansion continues to require additional working capital FY11 final dividend paid 28 October 2011 - $11.3m 3
First Half FY12 Market and Trading Conditions Solid demand for services in certain industries and markets ICT, Resources, Transport and Utilities Broadened service offering created new revenue opportunities $201m in sales ($173m pcp) during last 6 months up 16.2% Some client caution led to project delays in 2Q Financial Services NSW region suffered from weak market conditions 2011 recruitment overhang led to some excess capacity 457 visa offers made 6 months earlier arrived in 2Q Continued focus on increased utilisation of billable resources to improve operational efficiency 4
3Q Update: Demand Assessment Strong ICT demand continues to be strong Demand from utilities clients increasing with recent wins Transport and Health clients maintained demand levels, watching brief on Transport Resources sector continues to perform well Soft Demand from Financial Services clients in line with 2Q No improvement on softer 2Q activity Permanent recruitment market remains weak (M&T Resources) Improving State Government work slowly increasing in NSW and Victoria Federal Government steady with increased bid activity 5
Key Clients by Industry Segment ( ) prior year 6
3Q Update: Business Performance $301m of contracts sold YTD 31 March ($265m pcp) Utilisation YTD of 88% (88% pcp) but lifted to 90% in March NSW continues gradual improvement Victoria impacted by Financial Services and variable market Staff numbers steady with improved utilisation a key focus On track to deliver $2m of annualised overhead cost savings One-off implementation costs to be expensed FY12 Strong balance sheet with net cash provides flexibility SMS recruitment and retention strategies are working and mitigate against talent shortage 7
People (FTEs) Dec-10 Jun-11 Sep-11 Dec-11 Mar-12 Billable Permanent Consultants 1,000 1,130 1,200 1,155 1,151 M&T Resources* 352 347 376 385 362 1,352 1,477 1,576 1,540 1,513 Non Billable Sales, Admin & Management 187 198 200 194 191 Total 1,539 1,675 1,776 1,734 1,704 Recruitment curtailed in 2Q FY12 Active recruitment in Queensland, ACT, South Australia and Asia Selective recruitment in NSW and Victoria Key focus on improved utilisation * Represents respective 6 month average FTEs 8
Uniquely Positioned to Become a Regional Leader Leveraging our strengths: Hong Kong Culture & People Reputation: 85% of the top 20 in the ASX use SMS services Scale: over 1,700 experienced professionals Financial strength Breadth of capability Specialist practices Business transformation practice that pulls through other services Vietnam Singapore Australia Adelaide Brisbane Canberra Melbourne (Head Office) Sydney Plus project teams in: Perth Kuala Lumpur........ 9
Service Offering Investment in broadened service offering allows SMS to contest larger part of the market Scale and breadth of services together with investment in intellectual capital, differentiates SMS from many local competitors Ability to leverage a broad range of specialist capabilities and deep domain expertise Track record of leveraging traditional strength in Business Transformation to build technical specialist services 10
Demand Hot Spots Resources & Utilities Cloud Resources & Infrastructure Asia Expansion SMS Today Growth Areas Business Analytics Customer Centricity Business Transformation 11
In Summary SMS continues to grow market share: Sales are up ($301m in first 9 months) Revenue is up Staff numbers steady Gradual improvement in utilisation Despite impacts of: Slowdown in Financial Services Market conditions in NSW Weak permanent recruitment market The business continues to invest in: Regional expansion - Hong Kong and Singapore Professional development of staff Forging stronger relationships with technology partners 12