Spotless : FY16 Results Investor Presentation

FY16 Results Presentation

Presenters:

Martin Sheppard - Chief Executive Officer and Managing Director Nigel Chadwick - Chief Financial Officer

24 August 2016

Important notice and disclaimer

• This document is a presentation of general background information about the activities of Spotless Group Holdings Limited (Spotless) current at the date of the presentation, (24 August 2016). The information contained in this presentation is of general background and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate. Spotless is not licensed to provide financial product advice in relation to Spotless securities or any other financial products.

• Accordingly, Spotless, its related bodies corporate and any of their respective officers, directors and employees (Spotless Parties), do not warrant the accuracy or reliability of this information, and disclaim any responsibility and liability flowing from the use of this information by any party. To the maximum extent permitted by law, the Spotless Parties do not accept any liability to any person, organisation or entity for any loss or damage suffered as a result of reliance on this document.

  Forward looking statements

• This document contains certain forward looking statements and comments about future events, including Spotless' expectations about the performance of its businesses.

• Forward looking statements can generally be identified by the use of forward looking words such as, 'expect', 'anticipate', 'likely', 'intend', 'should', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target' and other similar expressions within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings or financial position or performance are also forward looking statements.

• Forward looking statements involve inherent risks and uncertainties, both general and specific, and there is a risk that such predictions, forecasts, projections and other forward looking statements will not be achieved. Forward looking statements are provided as a general guide only, and should not be relied on as an indication or guarantee of future performance. Forward looking statements involve known and unknown risks, uncertainty and other factors which can cause Spotless' actual results

  to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward looking statements and many of these factors are outside the control of Spotless. 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 any forward looking statements, forecast financial information or other forecast. Nothing contained in this presentation nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Spotless.

  Pro forma financial information

• Spotless uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These measures are referred to as non-IFRS financial information.

• Spotless considers that this non-IFRS financial information is important to assist in evaluating Spotless' performance. The information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Non-IFRS information has not been subject to audit or review in accordance with Australian Auditing Standards.

• All dollar values are in Australian dollars (A$) unless otherwise stated.

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  HIGHLIGHTS Result Highlights

  • Results in line with guidance

  • Significant growth in underlying revenue and EBITDA of 17% and 6% respectively

  • Reported revenue growth of 10.6% with EBITDA down 1.5% on last year

  • Reported result includes items communicated to the market in December 2015 - the business has absorbed integration and one-off costs during FY16

  • Operating cash flow used to fund acquisitions and working capital requirements of acquired businesses

  • Facility Services business (92% of revenue) maintained underlying EBITDA margin of 10.2%

  • Final dividend of 5.0 cents partly franked (1.5 cents) representing a payout ratio of 71%

    Strategy Reset

  • Short term issues outlined in the December trading update and reflected in this result have been resolved

  • Strategy reset is complete. Strategy focused on extending the breadth of Spotless' offer, unlocking value and repositioning our brand and employee value proposition to enable and facilitate our growth agenda

  • After careful consideration of the potential growth in the Laundries business, and resolution of the acquisition integration issues that impacted performance in FY16, Spotless has determined that the best value for Spotless' shareholders will be achieved by retaining this business

    Outlook

  • We are confident in the strength of the underlying business and the pipeline of opportunities will drive organic growth

  • The pace of the growth will however depend on the success and pace of delivery of the initiatives arising from our strategy reset, in particular our recent investment in business development resources

  • Renewals strong and win rates improving

  • Management capability building

  • Contestable market growing

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