DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088...

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DWS Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited Level 4 Stock Exchange centre 20 Bridge Street SYDNEY NSW 2000 18 May 2011 Dear Sir Pursuant to Listing Rule 3.1, attached is a presentation to be presented today by the Company’s Chief Financial Officer, Mr L achlan Armstrong, at both the Deutsche Bank and Goldman Sachs Emerging Companies Conference’s. Yours faithfully Lachlan Armstrong Company Secretary For personal use only

Transcript of DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088...

Page 1: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

DWS Advanced Business Solutions Ltd

ACN 085 656 088

Manager Companies

Company Announcements Office

Australian Stock Exchange Limited

Level 4

Stock Exchange centre

20 Bridge Street

SYDNEY NSW 2000

18 May 2011

Dear Sir

Pursuant to Listing Rule 3.1, attached is a presentation to be presented today by the Company’s Chief Financial Officer, Mr Lachlan Armstrong, at both the Deutsche Bank and Goldman Sachs Emerging Companies Conference’s.

Yours faithfully

Lachlan Armstrong

Company Secretary

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Page 2: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

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Page 3: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

“Partnering for

Success”

Introduction to DWS Advanced Business Solutions Limited (ASX: DWS)

Management Team

DWS Clients

Business Model/Key Differentiators

Financial Results H1 FY2011

Key Client Risk Management Strategy

Four Year Plan – ‘Improve, Extend, Grow’

Outlook

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Page 4: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

DWS is a professional services business providing consultancy solutions across the systems development life cycle (SDLC)

Delivery focussed

New specialist practice lines

Established in 1991

ASX listed (ASX:DWS) – IPO June 2006

Offices in Melbourne, Sydney, Brisbane, Adelaide, Canberra and Geelong (April ‘11)

Approx 530 full time consulting staff nationally

Client focus is predominantly ASX listed companies and both federal and state government agencies

Unique business model which has been key to our continued financial strength

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Page 5: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

Danny Wallis (CEO/MD)

Danny founded DWS in 1991 on the key principals of Honesty,

Ethics and Transparency. Committed to providing the highest

quality consultants and delivering the best, total solution to all

DWS clients, Danny has been the catalyst in building DWS to

the premium position it holds today within the market. Danny

has 20 years of experience in the information technology sector

which has given him the knowledge and understanding to

position DWS as the IT solutions provider of choice for some of

Australia’s most successful blue chip organisations and Federal

and State Government departments.

Lachlan Armstrong (CFO/Company Secretary)

Since joining DWS in 2005 as National Commercial Manager,

Lachlan has played a crucial role in the expansion and success

of DWS. Lachlan acts as an operational conduit between the

state offices, and ensures each branch retains the flexibility and

autonomy to fully maximise opportunities available in their

markets while maintaining the philosophy and direction of the

overall corporate vision. Lachlan is also responsible for DWS’

financial governance and Company Secretarial function.

Dougall McBurnie (Director Strategic Operations)

Dougall joined DWS in January 2011 having been a client of

DWS’ for over ten years. Dougall has held several senior

management positions within large corporate clients including

Healthscope (where he was Chief Information Officer), Coles

Myer (where he was Chief Technology Officer) and Crown

Casino (where he was GM of E-Business). Dougall’s role at

DWS is to focus on the implementation of the Company’s

Improve, Extend, Grow strategy, and also give operational

guidance to the Company’s regional management team.

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Page 7: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

Key Drivers

1. Recruitment

DWS employs full time consulting staff

Dedicated internal recruitment department

Stringent three stage recruitment process which

uses both objective and subjective measures

2. People & Culture

Dedicated team of HR experts & career mgers

Focussed on training and staff development

Fostering a strong culture to increase retention

3. Client Engagement Model

Transparent two tier pricing structure

Eliminates opportunistic pricing & discounting

Dramatically reduces administrative burdenFor

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Page 8: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

There were some headwinds which detracted from performance:

Projection completions

Fed / State elections

Major client Xmas close down

Revenue generation assisted by rate increase in Victorian operations

Weighted average revenue per billable FTE to Dec 2010 $97K (Dec 2009: $99K)

Average consultant utilisation to Dec 2010 was 76% (Dec 2009: 78%)

New Business Analytics & Information Management practice required investment of $275K in Q2

Margins were adversely affected by lower utilisation and increased employment costs

DEC 2010($’000)

DEC 2009($’000)

% Movement

Revenue from continuing operations

48,454 48,122 1%

EBITDA 12,769 13,403 (5%)

Margin 26% 28%

NPAT 8,969 9,254 (3%)

EPS 6.78 cents 7.00 cents (3%)For

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Page 9: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

DEC 2010($’000)

JUNE 2010($’000)

Cash 15,536 13,656

Debtors 17,656 17,742

WIP 2,428 5,156

Total Assets 65,654 66,664

Borrowings NIL NIL

Total Liabilities 8,747 10,453

Net Assets 56,907 56,211

Cash reserves continue to improve on the back of strong net flows from operations

WIP reduced as several large projects concluded during H1

Debtor management program continues to operate effectively

Zero debt position maintained

Continued improvement in our working capital position

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Page 10: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

DEC 2010

$’000

DEC 2009

$’000

Opening cash balance 13,656 12,155

Cash flow from operations

14,792 12,929

Tax Paid (4,828) (5,377)

Capital Asset Purchases (76) (137)

Acquisition Costs N/A (800)

Dividends Paid (8,273) (7,929)

Interest Income & Other

265 147

Closing Cash balance 15,536 10,988

Strong cash flows from operations were assisted by receipt of project completion payments previously held back for project KPI retention agreement

No significant capex plans for H2 other than a minor investment in HR systems upgrade

We will continue to examine acquisition opportunities as they emerge to complement our organic expansion strategy

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Page 11: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

Revenue by Sector Analysis

Dec 2010

Information &

Communications

Technology

27%Utilities

19%

Government

22%

Banking &

Finance

15%

Other

17%

June 2010

Information &

Communications

Technology

33%Utilities

20%

Government

17%

Banking &

Finance

13%Other

17%

Program in place to reduce large client specific risk in ICT sector which is expected to decrease ICT further as a percentageof total revenue, and no one client over 20% of total revenue

Although the Federal and Vic Government elections were disruptive in H1, we continue to win market share in this sector

Banking & Finance and Utilities sectors expected to contribute to revenue growth in H2

Further investment in our sales team will occur in H2

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Page 12: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

Large Client Risk Management

The Melbourne operations largest client had a contract labour layoff over the Christmas

While DWS received a high proportion of exemptions, it did disrupt operations

We also were able to successfully place some staff into other engagements at lower margins

Estimated loss in EBITDA in H1 at $200K

Why

We have implemented a key client risk management program which will control our future exposure to large client specific risk

We expect DWS’ Melbourne business to further reduce its exposure to the ICT sector in favour of increased penetration into Banking & Finance and Utilities sectors

Current projection is to have no one client over 20% of revenue by June 2011.

What

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Page 13: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

IMP

RO

VE

Paul Gardner AM has been appointed to

undertake an internal and external branding

refresh

Appointment of Dougall McBurnie as Director

Strategic Operations (Jan 2011)

Review of our current operations including

HR processes, staff training and incentives

Investment in the development of internal

SMEs

Lower consultant attrition rates by

development of a clearer career path for

consultants

Attraction of industry recognised technical and

solution specialists to underpin our delivery

capability

Help raise the profile of DWS at Executive

and Board levels of existing and potential

clients

EX

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ND

We intend to extend our service lines via the

introduction of 4-5 new specialist practice

areas

We anticipate acquiring to develop/grow

one or more of these special practices

Business Analytics and Information

Management Practice was commenced in

September 2010 and is expected to

contribute to earnings in Q4

These specialist practices will complement

our strong underlying delivery capability (core

business). They will operate Nationally and

will facilitate a ‘Trusted Advisor’ relationship

with key clients

The extension of our service lines will also

see the development of strategic relationships

with key partners such as IBM, Oracle and

Microsoft

GR

OW

Gary Ebeyan (Nov 2010) has been appointed

to assist in the implementation of various

strategic initiatives

We have rolled out an internal initiative

named “1,one,14 – Excellence Together” to

drive staff buy-in

Increased scope to take on larger projects

and consult in specialist areas previously

outside our reach

Quantifiable bench marks for all stakeholders

to assess our success

EXCECUTION PLAN ANTICIPATED RESULTSAREA OF FOCUS

Improve our employee

value proposition in a

competitive market for

high quality staff

Better articulate our

source of competitive

advantage and ‘value add’

to new and existing clients

Broaden our service lines

to become an end-to-end

service provider in our

chosen disciplines

Create a career path

beyond our traditional

business lines for

consultants seeking

specialist focus

Develop an aggressive

growth strategy which

addresses requirements

of our key stakeholders

DWS’ 4 Year “Improve, Extend, Grow” Strategy

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Page 14: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

Outlook

We have experienced softer than expected trading conditions in H2 resulting from the QLD floods, the residual impact of the Telstra Christmas close-down, and the timing of Easter in 2011

We expect FY2011 EBITDA to be between $24.0M - $25.0M

We anticipate a strong FY12 on the back of improving market and economic conditions

We are continuing to add billable staff in Victoria, Queensland, South Australia and in our Business Analytics practice

We have commenced the roll-out of our “Improve, Extend, Grow” program and are seeing positive results

The market for highly skilled consulting staff remains competitive. We have commenced our 457 Visa program and expect that this will assist us in meeting our staffing requirements FY12 and beyond

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Page 15: DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088 Manager Companies Company Announcements Office Australian Stock Exchange Limited

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