Investor Briefing: For personal use only - · PDF fileInvestor Briefing to be presented this...

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Australian Stock Exchange Company Announcements Platform 11 December 2013 UXC Limited ABN 65 067 682 928 MARKET ANNOUNCEMENT Investor Briefing: Building the Future – Enhancing UXC’s Growth Platform UXC Limited hereby releases the attached presentation to be given by the Managing Director, Mr Cris Nicolli, and the Finance Director & Company Secretary, Mr Mark Hubbard, at an Investor Briefing to be presented this morning at UXC’s Melbourne Head Office and tomorrow morning at UXC’s main Sydney Office. For more information please contact: Mr Cris Nicolli Managing Director UXC Limited (613) 9224 5777 Mr Mark Hubbard Finance Director / Company Secretary UXC Limited (613) 9224 5757 Toll free shareholder information line: 1800 092 092 www.uxc.com.au ABOUT UXC LIMITED UXC Limited is an S&P/ASX 300 listed Australian business solutions company, and the largest Australian owned ICT consultancy firm. UXC services medium to large entities in the private and public sectors across Australia and New Zealand. UXC provides a range of unique, unmatched and formidable ICT Solutions in Consulting, Business Applications and Infrastructure that support our customers to plan & design, implement & enhance, and operate & manage their ICT requirements. UXC strives to create simplicity and meaning in a complex world through the power of people and technology, by being the leading Tier 1 Australian IT Services and Solutions Company, delivering value, innovation and responsive business outcomes with excellent people. For personal use only

Transcript of Investor Briefing: For personal use only - · PDF fileInvestor Briefing to be presented this...

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Australian Stock Exchange Company Announcements Platform 11 December 2013

UXC Limited

ABN 65 067 682 928

MARKET ANNOUNCEMENT

Investor Briefing:

Building the Future – Enhancing UXC’s Growth Platform UXC Limited hereby releases the attached presentation to be given by the Managing Director, Mr Cris Nicolli, and the Finance Director & Company Secretary, Mr Mark Hubbard, at an Investor Briefing to be presented this morning at UXC’s Melbourne Head Office and tomorrow morning at UXC’s main Sydney Office.

For more information please contact:

Mr Cris Nicolli Managing Director UXC Limited (613) 9224 5777

Mr Mark Hubbard Finance Director / Company Secretary UXC Limited (613) 9224 5757

Toll free shareholder information line: 1800 092 092 www.uxc.com.au

ABOUT UXC LIMITED

UXC Limited is an S&P/ASX 300 listed Australian business solutions company, and the largest Australian owned ICT consultancy firm. UXC services medium to large entities in the private and public sectors across Australia and New Zealand. UXC provides a range of unique, unmatched and formidable ICT Solutions in Consulting, Business Applications and Infrastructure that support our customers to plan & design, implement & enhance, and operate & manage their ICT requirements. UXC strives to create simplicity and meaning in a complex world through the power of people and technology, by being the leading Tier 1 Australian IT Services and Solutions Company, delivering value, innovation and responsive business outcomes with excellent people.

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Cris Nicolli Managing Director

Mark Hubbard

Finance Director Company Secretary

UXC Limited Investor Briefing Dec. 2013

BUILDING THE Enhancing UXC’s Growth Platform FUTURE:

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The Start of the Journey Vision and competitive position

What we set out to achieve The major steps and Competitive rationale Stabilising the business Growing the business The vision The Strategy to fulfil vision Execution

Operational Transactions Keystone White Labelled or other

The future

Agenda F

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WHAT Being Australasian means more than more than local ownership and contribution to the economy

MAKE US DIFFERENT It’s about building a business Sustainable and Robust Leader in the IT Industry - $1B Build and maintain unique capability Customer centric Professional and respected by clients and the market Committed to delivering great outcomes Confident and humble in our approach The place that people want to work and make a difference Provides a good return to stakeholders Nimble and able to make quick decisions – an antelope F

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Vision & competitive position

Our vision To create simplicity and meaning in a complex world through the power of people and technology, by being the leading Tier 1 Australian IT Services and Solutions Company, delivering value, innovation and responsive business outcomes with excellent people

We offer a range of unique, formidable and unmatched ICT solutions in Consulting, Applications and Infrastructure that support our customers to Plan & Design, Implement & Enhance, and Operate & Manage their ICT requirements – we offer more than point services, we also provide end to end solutions

Our focus To be recognised as the leading Australasian IT service provider and the Number One alternative to the multinationals in the sector through the depth and breadth of our services, customer centricity and market leading capabilities

Competitive position

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Step -1 Building the IT BSG Business Picking the space to invest Acquiring the key businesses Growing client base

Step 1 Developing the new strategy Selling off non core assets Forming the Pure IT business Transparency

Step 2 Simplifying the business Strengthen the Balance Sheet Step 3 Growing the Business Building the annuity revenue stream Large account and project focus Step 4 Building the $1B business Improving margins

Strategy

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Application Implementation - ERP Microsoft Oracle SAP

Infrastructure Scale & Outsourcing

Getronics

Higher value IT consulting Lucid IT

Focus on Australia/ NZ

Key account focus

Invest & grow

Core Hardware products Servers PC

Data Centres

Balance Sheet deals

Systems Integration

Large scale outsourcing

Global especially Asia

Stay away from

Step -1 Reviewed market for competition and market opportunity

Building the Business, Selecting the spaces

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Infrastructure & consulting

LanLink Alcatel Queensland Health

C4 Cisco

Getronics Outsourcing Cisco Maintenance Break fix (sold)

Lucid ITIL Training

Account Focus Key reps (QH)

Applications

Microsoft E One for Great Plains Data 3 for Navision AX investment

Oracle Red Rock BML – Peoplesoft Sequel NZ - Geographic Jigsaw – JDE MEAC and Jihra– JDE Tri Point – PeopleSoft and Annuity Prima Vera — investment

SAP Oxygen Intact SAP B1 Stream – Geographic and functional

Key Acquisition & investments Step -1

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Clear need for 2 separate business models Clear, concise accountability and close or sell non performing businesses Reduce BRANDS and streamline “go to market” and BO overlap

Aimed at driving shareholder value Swift execution

Simplify our business strategy

Increased support for Customers especially service and account management Reduction in costs and restructuring Executives accountable for outcomes

Improve profits

Delivering operational plans

Transparency with financials Shareholder discussions Investment community briefings and communication Board refresh

Amplified governance

Developing the new strategy, FY10 and FY11 Step 1

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Complex undertaking given ‘current state’ environment Execute on strategic pillars to deliver Vision Reduce costs via partial consolidation of back office

Simplify structure

Major accounts teams established Improved “go to” market & service to clients Stronger risk controls on tenders & project management New levels of reporting transparency Board changes and refresh

Professional approach

Simplifying the Business, Disciplined Execution of Strategy FY11 and FY12

Step 2

Costly; needs patience and perseverance – expensive bid costs Major investment in QH Increased need for strong structure, program and risk management Differentiates and captures clients

Invest in tier 1 deals

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Attain leadership in ERP and Managed Infrastructure Build mid enterprise market to provide balance to customer portfolio Grow UXC brand awareness Increase overall market coverage Retain existing and win more major customers Make selected investments and acquisitions Look for market consolidation opportunities

Market leadership

Operational Improvement Earning improvement Balance Sheet Management Working Capital Management

Business management

Simplifying the Business, Disciplined Execution of Strategy FY11 and FY12

Step 2

Large wins in delivery phase City West Water Fosters / TWE Hills Industries Holcim Utilities - Hydro Tasmania State Government – QH and QR

Significant costumers wins

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Building UXC to be a significantly larger Australasian IT leader and be the # 1 alternative to the multi-nationals for large complex SI and managed services contracts Drive earnings improvement in quality and value To further advance our position in the ERP application implementation and SI segment Strong focus on large client retention and new wins To continue to build UXC business in the mid enterprise market to provide balance to our client portfolio mix To retain and increase our market leading position in key technology segments by organic growth and acquisitions Promotion of UXC brand to leverage business Look for market consolidation opportunities

Step 3 Growing the business, Strategy direction, Improving the margins, FY13-14

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New and advanced relationship with Service Now – one of the fastest growing Cloud Solution providers Globally – builds off our core expertise in service management

Further cloud services and solutions opportunities especially within UXC Connect and Applications businesses working with key vendors and partners

Increased Industry alignment within Utilities, Resources and Public Sector for deeper penetration into these markets

Expansion of Dynamics AX into the North American high growth markets

E Commerce and Digital market positioning

Step 3 Growing the business, Strategy direction Improving the margins, FY13-14

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Success for us will come from achieving and exceeding in each of these five areas of our business

Defining and achieving our vision

OUR STRATEGIC PILLARS

1 2

3 4

5 F

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Step 4 Executing and Achieving our Vision

We are building our business and expanding our range and reach of ICT solutions: Organic Growth

Large Customer retention and expansion activities

Risk management on projects especially large complex ones

Key hires to drive next large opportunities

Adding new Geographic expansion – WA, QLD, ASIA

We are planning and/or currently making investments in:

Building on our Applications market leadership

By following core vendor solutions and expanding our capabilities organically and through investments. (Picking key growth areas with Core Vendors)

We will accelerate our growth in the digital, eCommerce sector aligned to ERP systems and account opportunities

Increasing the level of Applications Support

Research into new spaces and opportunities – continue the track record.

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Step 4 Defining and Achieving our Vision

Cloud Applications:

Expanded relationships with ServiceNow, a key cloud based application provider in the ERP and IT management space.

Acquired UXC Keystone

Grow our Cloud practice in support of new vendors as well with our key partnership partners Oracle, SAP, Microsoft and ServiceNow.

eCommerce

Annuity Business:

Increase the provision of managed services in infrastructure and applications;

Expand the range of maintenance and support services provided;

Continue to win new managed services contracts;

Invest in Software as a Service Now will to align with this segment of our business.

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Step 4 Defining and Achieving our Vision

North America:

Strong Canadian practice in the Microsoft Dynamics market;

Developing USA practice in the Microsoft Dynamics Market;

Will make acquisitions in this area to build $100m plus business

Growth prospects in this region exceed those available to us domestically.

Leadership Development:

Investment in tools and training for our people to achieve our objectives;

Provide UXC with key retention benefits whilst enhancing our leadership culture.

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Our Differentiators Unique breadth, depth and size

#1 Oracle in Australia and Asia Pacific Global Leader in Microsoft – AX Global Partner FY11 Top 2 in SAP Leader in ServiceNow, ITSM Leading Business Intelligence practice Strong Integration, Project and Risk Management

Leading enterprise applications capability

1550+ staff

Unified Communications Networking Infrastructure Outsourcing IP Video Surveillance Managed Services

Contact Centre Workspace Virtualisation Cloud Solutions Enterprise Mobility Entertainment & Content

Innovative ICT infrastructure offerings

660+ staff

Unified Communications Networking Infrastructure Outsourcing IP Video Surveillance Managed Services

Contact Centre Workspace Virtualisation Cloud Solutions Enterprise Mobility Entertainment & Content

Dynamic consulting & professional solutions

530+ staff For

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DELIVERING To be the industry recognised leader in IT Transformation by combining industry leading cloud solutions, advisory, organisational change, and process consultancy services

THE EXTRAORDINARY

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Enterprises all over the world are transforming IT by adopting service automation tools and processes, making teams more innovative and efficient

UXC sees this as ERP for the IT environment CIOs can shift their attention from maintenance to service, effectively transforming enterprise IT to increase value

Service automation tools and processes provide IT value by: Consolidating fragmented and redundant service systems

Standardizing operational processes

Creating a single system of record for IT

Innovation is making access to enterprise systems easy and intuitive while freeing up the IT team to focus on projects that matter most

Execution - ITSM Landscape

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Gartner Magic Quadrant

Magic Quadrant for IT service support management tools

Strengths ServiceNow has strong marketing and branding, ServiceNow has easy-to-configure workflows The vendor makes good use of the underlying platform ServiceNow’s social IT management capabilities are ahead of the competition

Cautions (UXC opportunities) ServiceNow must demonstrate scalability by expanding its partner ecosystem and infrastructure to meet global demand The vendor requires partner ecosystem to assist in balancing messaging of IT service management offerings vs platform-as-a-service capabilities

Gartner (August 2012)

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ITSM Market and

The major software authors in the ITSM market, in order of market share1, are:

BMC Software

ServiceNow

Hewlett-Packard

CA Inc

ServiceNow is growing by taking market share in a rapidly expanding market, which in turn is supported by features of the software including: A Cloud based Software-as-a-service platform, modular model Supports ITSM to Enterprise Service Management

Platform includes workflow automation, notification escalation, reporting, 3rd party integration and administration capabilities On demand and Rapid customization Breadth of application suite

Common architecture and Customer support

1 EoY 2013 prediction, ITSM University

ServiceNow was incorporated in June 2004, and currently has a market capitalization of $7.2 billion

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About

ServiceNow Wins Techworld Award for Best SaaS Product

In 2013, ServiceNow announced a number of innovations and new products, including putting application creation into the hands of non-technical citizen developers with App Creator; instant mobility for out-of-the-box ServiceNow applications and customer-created applications; automating cloud provisioning for the entire cloud management lifecycle; HR Service Automation; and data certification for IT governance F

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About

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About

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Profile of

Founded in 2007

Purpose is to provide innovative solutions to organisations seeking extraordinary outcomes in Service Management

Preferred Partner for ServiceNow since 2007

Dedicated Customer Support Centre and Accredited ServiceNow Training Provider, Largest number of Certified Implementation consultants

Over 60+ staff dedicated to selling, implementing, and supporting ServiceNow and complementary solutions

Over 120+ successful implementations (over 80% of all ServiceNow customers in Australasia are Keystone customers)

Keystone Best Practice Build of ServiceNow leveraging over 6 years of implementation experience

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Profile of

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Deal summary

$24-$28m acquisition cost Revenue $27m annualised Annuity at over 30% Range of 4.5 to 5 times PBT 60 Staff 120 clients ASX clients Market leader Management talent Front log of business Historical average growth rate 40%

Leverages UXC Balance Sheet Continues revenue growth Aligns to annuity push Accretive Increases staff capability Focused on larger clients with greater value creation Extends market leadership Leverages UXC Consulting skills Cloud based SaaS model Very strong margin business Leverages UXC back office

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Growing North America

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Strategic Rationale

Tightly aligned to UXC strategy

Opportunity to build a faster growing business and build a “global” brand and business based on MS Dynamics

Australia/New Zealand presents limited high growth opportunities in a market in which we have strong market share

US market is faster growth and UXC has experience and franchise type model to build this with lower risk

Fully backed by Microsoft

Earnings accretive

Future state options are increased

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North America – Vision Build $100m UXC Eclipse Business

FY13 – FY16

No.1 for revenue to Microsoft

FY13 – FY16 BREP Recapture above

FY13 – FY16 Retention above

Revenue Customers People

Phase

96% 85% 1.

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North America – Vision Build $100m UXC Eclipse Business

Revenue Customers People

FY16 – FY18 Growth to

FY16 – FY18 BREP Recapture above

FY16 – FY18 Retention above

97% 88% Phase

2. $100m

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Target Profile Customers/Revenue

300 286

235

48 38 29 10

0

2

4

6

8

10

12

14

16

18

20

0

50

100

150

200

250

300

350

Req Logic Dynamics GP DynamicsNAV

Dynamics AX Dynamics SL DynamicsSCRM

AES

#Customers

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Ideal Revenue Mix

Licenses Services Annuity Total

NAV 3.3 7.3 5.6 16.2

GP 0.5 1.7 5.1 7.3

AX 1.4 5.7 3.1 10.2

CRM 0.3 1.5 0.2 2.0

IP 0.7 0.3 2.1 3.1

Other Services 0.0 10.0 0.0 10.0

6.2 26.5 16.1 48.8

MIX 13% 54% 33% 100% For

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Upside Opportunities

1st Cab off the Rank for Service Agreements

Position to support Global Accounts

Potential For UXC to Hold Global Accounts

Post Acquisition Additional Synergies

Stabilise and Focus key clients in Enterprise

IP

enhancement, Update UI

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Increasing our IP

Standalone Solution, Integrates to NAV, GP, AX

Sold Through a Partner Model

Uses Microsoft .Net Language

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Deal summary

$19-$21m acquisition cost Revenue $48m annualised Annuity at over 33% Range of 4.5 to 5 times PBT 190 Staff 1200 clients Microsoft relationship Management talent Front log of business Leverages UXC Balance Sheet

UXC becomes leader in Global MS business Delivers to USA strategy Continues revenue growth Aligns to annuity push Accretive Increases staff capability Leverages UXC Eclipse franchise model High growth market Cloud based SaaS model Good margin business Leverages UXC Eclipse back office

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Geographic Locations

India

Vietnam

Australia

23 5

5

7

35

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Commerce anywhere Omni Commerce

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Hybris An SAP company

Hybris continues to experience strong growth in its e-commerce business — it grew by an estimated 90% in 2011 and continued its growth in 2012. The company acquired 66 new customers in 2011, completed its acquisition of iCongo, and has built out sales, support and service organizations in North America, Europe, Asia/Pacific and Japan. Hybris offers an e-commerce solution with functionality including merchandising, order management, product information management, support for multiple languages and currencies, multisite and microsite capabilities, analytics and reporting, native support for iOS and Android devices, and social commerce. The business administration tools are available in seven languages.

e Hybris supports B2B and B2C e-commerce models, with approximately 40% of its business coming from customers with predominantly B2B requirements. hybris offers scalable and flexible solutions that meet the needs of large and midsize enterprises, and more than 66% of hybris customers generate more than $100 million in e-commerce revenue.

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Profile

White Labelled provides consulting (time and materials, and fixed price), site / application support and periodic software license sales

White Labelled is capable of implementing, integrating and servicing all leading e-commerce platforms. Today White Labelled solutions are predominantly built in hybris (an SAP company solution), Magento and ATG

White Labelled is a well established ecommerce solutions provider, building digital commerce environments for multi-channel and pure-play retailers. White Labelled’s clients require a fully integrated online commerce solution in order to sell and fulfil customer orders F

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Service offering

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Case studies

Design and development of the Qantas epiQure eCommerce website built in Hybris

Full integration into Qantas Frequent Flyer loyalty and points system

ERP integration for PO and ordering

Site currently in production

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Case studies

Hybris development support

Business Analysis

Project Management

User Experience

User Interface Design

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Case studies

Integration into POS for fulfillment

Buy online, pickup instore

Store based inventory lookup on the web

Custom integration for:

Order Management

Freight Management

Stock on Hand For

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Clients

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Deal summary

$2m plus earn out acquisition cost

Revenue $6m annualised

Annuity 15%

4.0 times PBT

60 Staff

Key large clients

Hybris

Fast Growing market

Front log of business

UXC becomes leading player in e Commerce business

Delivers to new growth areas

Drives new value to clients

Accretive

Increases staff capability

Extends SAP relevance

Provides offshore capability

Leverages UXC Oxygen back office

Good margin business

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Growing the business

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Summary

Market is changing but this is not a time to get distracted – hold the strategy

Good track record of building growth opportunities in selected space. We expect to continue this success.

Achieved significant changes and repositioning

Stabilised and improved business to provide the capacity for next growth initiative. Building our annuity as platform for stability. F

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Summary

New opportunities are emerging - the next chapter of strategic imperative and growth are being pursued

Core business will continue to be the main game plan

Committed to Margin improvements – IP is a focus

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SUCCESS WHAT IT LOOKS LIKE It’s when we can say we are the Australian IT company most admired for 1. Our people keeping it real 2. Solutions technology delivered in a simple way 3. Outcomes building value for our clients 4. Building our business for our Shareholders 5. The promises we keep

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Page 53: Investor Briefing: For personal use only - · PDF fileInvestor Briefing to be presented this morning at UXC’s Melbourne Head Office and ... Forming the Pure IT business . ... Promotion

Cris Nicolli Managing Director

Mark Hubbard

Finance Director Company Secretary

UXC Limited Investor Briefing Dec. 2013

QUESTIONS?

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