Euroz Conference Presentation Chris Sutherland, Managing Director 16 March 2017
Important notice and disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Programmed Maintenance Services Limited, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects or returns contained in this presentation. Such forecasts, projections, prospects or returns are by their nature subject to significant uncertainties and contingencies. This presentation should be read in conjunction with the Announcements issued to the ASX since the 2016 Annual Report which can be found on the Programmed website at www.programmed.com.au. AS PROGRAMMED FINANCIAL YEAR ENDS IN 15 DAYS TIME, THIS PRESENTATION ONLY PROVIDES EXISTING PUBLIC INFORMATION RELATING TO THE COMPANY’S STRATEGY AND MARKETS AND NO INFORMATION IS PROVIDED RELATING TO THE FY2017 TRADING AND FINANCIAL PERFORMANCE 2
Safety Pause 3
Our Vision To be the leading provider of staffing, maintenance and facility management services, without injury
Our 4 Key Measures to be the “leading provider” are Safety: Total Injuries People: Staff Engagement Customer: Customer Satisfaction Financial: Total Shareholder Returns
Safety … significant continuous improvement over more than 10 years K
Staff Engagement … 2016 survey was completed 6 months following the acquisition of SKILLED … considering the significant change across the organisation, maintaining a high staff engagement score was a great result Engagement Score * Pre Skilled Post Skilled 71 71 70 68 63 62 Median Australian Score - 59 2010 2012 2013 2014 2015 2016
Customer Satisfaction … implementing a standard customer satisfaction measure and response system across the group using NPS (Net Promoter Score)
Shareholder Returns … average 15 cents per share over last 11 years through two cycles: GFC and RESOURCES … in the same period, we have paid a dividend each year and every year Resources boom was coming to an end. Need to plant the seeds for new areas to grow. Growth in Painting programs was unsustainable. Purchased Skilled Group to gain exposure to white collar Need to plant the seeds for new areas to grow. employment, healthcare and industrial maintenance and to Purchased Integrated Group to gain exposure to WA, resources establish clear scale, efficiency and no.1 market position in and stronger cash flow. staffing services. Net Debt at March 2008, $235m from funding of acquisition Net Debt at March 2016, $240m from funding of acquisition Dividends cps Resources expansion GFC Resources contraction Geographic expansion WA expansion Dividends reduced to Dividends reduced to of painting programs (the seeds from the 20.0 repay debt for repay debt for Skilled Integrated acquisition) Integrated acquisition acquisition 18.5 18.0 17.0 17.0 15.0 14.5 13.0 11.5 Foundation set to 9.0 9.0 maintain strong cash flow and grow in 10 areas including Health, Aged Care, Defence, and Infrastructure 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Our Services
The Programmed Difference is our ability to… Recruit and Deploy the right develop Get safety right person with right people on the ground competencies Operational Manage HR in improvements, an increasingly flexibility and high regulated levels of customer environment satisfaction
1H FY17 Revenue by Division / Business Unit 12.9% Property Services 51.3% Staffing 20.7% Facility Management Skilled Workforce 43.2% 48.3% Maintenance 8.3% Industrial Maintenance Professionals 8.1% 0.4% Unallocated 6.4% Marine 12
1H FY17 Revenue by State / Country … even spread of revenue across all regions spreading risk and increasing opportunities 29.0% WA 20.9% WA 37.4% WA 23.8% NSW 28.4% NSW 19.0% NSW 19.7% VIC 24.0% VIC 15.3% VIC 12.4% QLD 16.8% QLD 7.8% QLD 5.4% NZ 0.6% NZ 10.4% NZ 5.1% SA 4.0% SA 6.4% SA 2.5% TAS 4.8% TAS 0.1% TAS 0.4% NT 0.5% NT 0.2% NT 1.7% Other 0.0% Other 3.4% Other 13
1H FY17 Revenue by Sector … we provide services to all industry sectors enabling Programmed to continually adjust to different market conditions and seek growth from the sectors of the economy that are growing at any point in time 35.1% Government & Infrastructure 19.3% Government & Infrastructure 51.9% Government & Infrastructure 14.5% Retail & Commercial 16.5% Retail & Commercial 12.4% Retail & Commercial 13.8% Manufacturing & Industrial 17.9% Manufacturing & Industrial 9.5% Manufacturing & Industrial 12.6% Onshore Mining 19.0% Onshore Mining 5.8% Onshore Mining 7.5% Offshore Oil & Gas 2.0% Offshore Oil & Gas 13.4% Offshore Oil & Gas 5.1% Transport 8.4% Transport 1.6% Transport 11.4% Other 16.9% Other 5.4% Other 14
Integration of Skilled … 1 st Wave – people, structure & culture … 2 nd Wave – business systems … 3 rd Wave – sales growth – plan in place 3 rd WAVE Sales Growth A 2020 WE ARE HERE 15
Sales Growth Plan … we are now ready to commence the third and final phase of our plan – targeting significant sales growth, leveraging the scale and diversity of our business Public Sector Defence New outsourced public sector Significant new expenditures in administration opportunities submarines and other assets arising at all levels of government White Collar Infrastructure White Collar employment growing Growing population requires new Staffing Maintenance Support white collar staffing infrastructure to be built. needs across all of group Aging infrastructure requires customers greater operations and maintenance expenditure. Blue Collar Long term contracts Integration onto single business Skilled Facility Property PPP’s Professionals system now complete Workforce Management Services 63 branches Consolidation of suppliers Partnership pitch to major Property customers Schools, Universities, Retirement Health Training Industrial Villages, Sporting Fields, Resorts Marine Professionals Services Maintenance Demand is growing for a Health and Aged Care complete property maintenance Aging Population service Government Support Programs (consumer directed care) Plan to develop full service models Training Industrial and Mining Offshore Oil & Gas - Health A trusted brand Many new assets built that must Now only 7% of group revenue - Aged Care at Home Reskill existing candidates (initial be maintained for next 50 years Expect FY17 to be bottom of - NDIS target +100,000 workers) Focus on long term contracted earnings cycle - Third Party Trauma Insurance Reskill blue collar workers where O&M opportunities displacement occurring due to automation or globalisation 16
Staffing Market … the Australian staffing market is highly fragmented Estimated Australian staffing market segmentation Australian estimated staffing market share 1 Programmed Staffing revenue segmentation ~>10% 6% $1,200m ~>5% ~<3% 12.6% share ~A$14b ~<3% Programmed n ~<3% 26% ~<3% 68% ~<3% $200m 5.5% share ~70% Programmed blue collar Programmed white Blue collar White collar Other revenue collar revenue … white collar industries are forecast to grow at rates faster then GDP 16.4% 14.8% 8.3% 8.5% 8.5% 7.8% 4.0% 0.6% (5.3%) (14.1%) Mining Construction Transport Health Administration Manufacturing Professional/Technical Information Media & Finance & Insurance Utilities Services Technology White collar industries 1. Source: LMIP, ABS, Market share estimated by Programmed management. 17
Property Services / FM / Infrastructure Market … non residential contracted maintenance is expected to rise by 12% over the next 5 years, $10.0bn driven by the Health and Education sectors. $8.0bn $6.1bn $6.0bn $5.5bn $4.0bn $3.1bn $2.0bn $1.6bn $1.6bn $1.6bn $1.6bn $0.8bn $0.3bn $.0bn Health Govt Buildings Retail Commercial Office Water & wastewater Defence Education Leisure & entertainment Ports In-house O&M Service Market Outsourced O&M Service Market Source: BIS Sharpnel 18
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