CountPlus Limited (ASX: CUP) Results Presentation For the Financial Year ended 30 June 2018 PRESENTED BY Matthew Rowe, CEO and Managing Director Laurent Toussaint, CFO and Company Secretary 27 August 2018
Disclaimer This document is a presentation of general Forward looking statements Pro forma financial information background information about the activities of CountPlus Limited (CountPlus) current at the This document contains certain forward looking statements and CountPlus uses certain measures to manage and report on its date of the presentation (27 August 2018). comments about future events, including CountPlus’ expectations business that are not recognised under Australian Accounting The information contained in this presentation about the performance of its business. Forward looking statements Standards. These measures are referred to as non-IFRS is for general background information and can generally be identified by the use of forward looking words (International Financial Reporting Standards) financial does not purport to be complete. such as ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, information. CountPlus considers that this non-IFRS financial ‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, information is important to assist in evaluating CountPlus’ It is not intended to be relied upon as advice to ‘target’ and other similar expressions. Indications of, and guidance performance. The information is presented to assist in making investors or potential investors and does not on, future earnings or financial position or performance are also appropriate comparisons with prior periods and to assess the take into account the investment objectives, forward looking statements. underlying operating performance of the business. financial situation or needs of any particular investor. These should be considered, with or Forward looking statements involve inherent risks and For a reconciliation of the non-IFRS financial information without professional advice, when deciding if uncertainties, both general and specific, and there is a risk that contained in this presentation to IFRS-compliant comparative an investment is appropriate. such predictions, forecasts, projections and other forward looking information, refer to the Appendix to this presentation. statements will not be achieved. Forward looking statements are To the maximum extent permitted by law, All dollar values are in Australian dollars (A$) unless provided as a general guide only, and should not be relied on as an CountPlus, its related bodies corporate and otherwise stated. indication or guarantee of future performance. their respective officers, directors and employees, do not warrant the accuracy or Forward looking statements involve known and unknown risks, reliability of this information, and do not accept uncertainty and other factors which can cause CountPlus’ actual any liability to any person, organisation or results to differ materially from the plans, objectives, expectations, entity for any loss or damage suffered as a estimates and intentions expressed in such forward looking result of reliance on this document. statements and many of these factors are outside the control of CountPlus. As such, undue reliance should not be placed on any forward looking statement. Past performance is not necessarily a guide to future performance and no representation or warranty is made by any person as to the likelihood of achievement or reasonableness of promise, representation, warranty or guarantee as to the past, present or the future performance of CountPlus. Results Presentation – FY18 2
CountPlus transformation update Old CountPlus New CountPlus • Number of underperforming and non-core firms in the CountPlus • Transformation well underway and on track – one year into our stable two-year turnaround plan • Scope for further margin improvement • Balance sheet with $19.3M of net interest-bearing debt • Net cash of $9.0M • 100% ownership of firms, entrepreneurs become employees • Building a simpler, more resilient and profitable CountPlus • Making good progress with more focused structure, aligned partnership model, new practice leaders with strong team focus and client first culture • 7 firms have Owner, Driver – Partner model in place • Enhanced, competitive and ethical value proposition • New growth opportunities are emerging – well placed to deliver profitable growth in a dislocating advice sector. Expected changes suit CountPlus Results Presentation – FY18 3
CountPlus key statistics Listed on the ASX since 2010, we are a network of successful professional accounting and advice firms, aligned through our shared values and sense of community. CountPlus seeks to make a decent profit, decently CountPlus footprint Dividends reinstated of 1.0 cent per share Firm EBITA 7 firms in the margin Owner, Driver - up from 12% Partner model in FY17 to 15% in FY18 Net debt reduced from 450 Full time $19.3M in FY16 employees to net cash $9.0M in FY18 Strong cash Equity in flow and net 16 firms across cash to fund 5 states growth Results Presentation – FY18 4
Full year performance highlights – FY18 • Same firm revenue marginally higher ($945,000) and adjusted NPATA Financial Results – FY18 marginally lower ($520,000) in a year of significant change and $’000 reorganisation Revenue Adjusted EBITA Adjusted NPATA • Recognised, diversified financial services brands across Australia with many potential growth engines 74,386 7,843 5,834 • Significant restructure of the group over the past 18 months. EBITA results include restructuring costs of $684,000 at a firm level Adjusted Final dividend Firm EBITA Operating Free per share • New leadership team in 80% of our firms to execute on stated group margin Cash Flow (Fully franked) strategy 15% 6,429 1.0 cent • Strong base for growth in underlying FY18 adjusted profitability metrics Notes: • Significantly improved balance sheet post restructure • Same firm is defined as the current stable of Partner firms noting that seven firms have been exited and sixteen firms remain in the group • NPATA means net profit after tax but before amortisation and this • measure is intended to remove the effect of non-cash charges of Adjusted is defined as reported results adjusted for one-off, non-recurring items. Refer to the appendices for a full reconciliation of these amounts acquired intangibles Results Presentation – FY18 5
Full year operational highlights – FY18 Organic growth Profitability Capital Management • Restructuring of underlying firms • Underlying firm EBITA margin • Net cash position of $9M. Strong substantially complete, positioning increased from 12% in FY17 to balance sheet positioned for growth these firms for sustainable growth 15% in FY18 • Lock up management has • Disposal of non-core and • Adjusted NPAT at $3.8M in a year improved, which has strengthened underperforming businesses of significant change and cash flow position of the group completed reorganisation • Fiscally responsible dividend policy • Deleveraged balance sheet • Group generated $6.4M of cash at implemented. Dividends declared positioned for organic and operating level (excluding vendor out of operating free cash flows. acquisitive growth finance), 82% of adjusted EBITA Target dividend pay-out ratio of 40% to 70% of net profit after tax • Net debt reduced from $19.3m in FY16 to net cash $9.0m in FY18 Results Presentation – FY18 6
Key issues, priorities and contributions Key issues and priorities Accounting priorities Financial Planning priorities and contributions and contributions • Growth of underlying partner • Improving and sustainable • TFS licence conditions lifted by firms profitability of underlying existing ASIC. Ongoing improvement of firms processes and controls • Integration of new leadership in • Organic growth strategies in place partner firms • Successful execution of the new with a growth mindset TFS operating model • Growth by fiscally responsible • Providing strong governance, acquisitions • Opportunities arising from the training opportunities and ethical Royal Commission • Continuation of execution of the leadership new Owner, Driver - Partner (OD-P) • Providing strong governance, • Lock up days reduced to 85 days model with retention of key talent training opportunities and ethical leadership • Strengthening the CountPlus • EBITA margin target in the short network of firms encompassing a term of 20%, in the medium term our new value proposition average firm margin target is 25% • Employment costs to revenue (contribution margin) target of 60% Results Presentation – FY18 7
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