SAI Global Limited : SAI Global Full Year Results 2011/12

Head Office

286 Sussex Street

Sydney NSW 2000 Australia www.saiglobal.com

SAI Global Limited

ABN 67 050 611 642

Sydney, Australia, 15 August 2012. SAI Global Limited (ASX: SAI) today announced a net profit after tax attributable to shareholders of $42.4 million, a decrease of 5.4% over the corresponding period. Underlying1 net profit, which backs out the impact of significant charges, was $44.7 million, a decrease of
7.0% over the corresponding period.
SAI Global has continued to grow revenue in FY12, achieving growth in sales revenue from $427.1 million to $451.7 million, an increase of 5.8%, (6.7% on a constant currency basis) despite the subdued economic environment persisting across the main western economies.
Growth in costs across the Group outstripped the growth in revenue resulting in a marginal reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to $95.6 million, a decrease of
0.2% over FY11's result of $95.8 million. The growth in the cost base across the business is attributable to rationalising legacy IT platforms, developing new products, and responding to new business wins, all
factors which underscore the Board's and Management's confidence that the business will return to profitable growth in FY13 and beyond.
Operating cash inflows were $58.4 million, up from the $54.6 million achieved last year.
The directors have declared a fully franked final dividend of 8.2 cents per share, bringing the total dividends for the year to 15.0 cents, up from 14.3 cents last year. The final dividend will be paid on 21
September 2012. The record date is 27 August 2012.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1. The underlying basis is an unaudited non-IFRS measure that, in the opinion of the Directors, is useful in understanding and appraising the Company's underlying performance. The underlying basis excludes significant charges associated with acquiring and integrating new businesses, and costs associated with any significant restructuring within the business.

Ernst & Young, the Company's auditor, have undertaken procedures to confirm that the information used by the Directors in determining the underlying results is consistent with the Company's financial records.

Chief Executive Officer, Mr Tony Scotton said: "Reporting a reduced profit on higher revenue is disappointing but we must not lose sight of the fact that the business has continued to grow and the reason for the reduced profit lies in higher costs; costs which have been added to build a stronger and more profitable business for the future. With the exception of our Compliance Services business which had a disappointing second-half, our other businesses achieved solid results and, in the case of the property business, won significant new business which will underpin growth in FY13. He added "we also completed the strategically significant acquisition of Compliance 360 which elevated our positioning in the broader governance, risk and compliance (GRC) market and the roll-out of this product globally will drive growth across the Compliance Services division.

The Information Services division currently consists of two businesses being "Standards" and "Property". The Standards business achieved constant currency revenue and EBITDA growth of 0.2% and 2.0%
respectively. The lower than trend growth in revenue reflects the reduced sales of the Pressure Vessel Code which was revised in FY11 and resulted in a revenue "spike" in the corresponding period. Sales of standards within Australia have been hampered by a lack of newly approved standards. Sales in other jurisdictions were impacted by a similar lack on newly approved standards as well as a subdued economic environment. Together these factors contributed to the below trend revenue growth in the standards business.
The Property business achieved revenue and EBITDA growth of 6.6% and 8.0% respectively reflecting the benefits from operational efficiency initiatives and strong growth in the banking workflow business. In July 2011 the Property business was awarded a national settlement services contract with ANZ bank. Later in the year the business was also awarded significant new business with an existing major bank client. Much of the focus over the period, and particularly in the second-half, has been on preparing the business to take on the new work from both banks. Revenue from this new work began to flow in late May 2012 and will continue to build in the period through to December 2012. This will underpin growth for this business and the Information Services division in FY13.
Overall, the division achieved constant currency revenue and EBITDA growth of 4.5% and 3.9% respectively (4.0% and 1.7% respectively at actual exchange rates). The EBITDA margins in both the Standards and Property businesses were broadly consistent with the corresponding period. However, the margin across the division reduced from 25.2% in FY11 to 24.7% in FY12 due to the changing mix between the two businesses.

The Compliance Services division had a mixed year following the transformational acquisition of Integrity
Interactive and strong organic growth of 14.2% achieved in FY11. Constant currency revenue growth of
7.1%, driven by recent acquisitions, was more than offset by the investment in resources across the division which resulted in a reduced EBITDA contribution of $27.8 million ($28.5 million on a constant currency basis), compared with $34.3 million in FY11.
Whilst the division took an important strategic step forward through the acquisition of Compliance 360, organic revenue growth did not meet expectations. After a solid first-half of the year the division was impacted in the second-half, when compared to the same period last year, by lower sales on some discontinued legacy products and longer than expected lead times in converting new business pipelines into firm contracts.

2

The impact of the lower than expected revenue on EBITDA was exacerbated by higher than planned costs focused on rationalising legacy platforms and products which are more manually intensive to support than the Company's new SaaS-based platforms: Learning Content Platform, Global Learning Engine, and GRC Dashboard. We now have a range of streamlined and integrated global platforms to replace legacy, regionally based products. Support costs are expected to reduce once the client base has been consolidated onto the new platforms.
We have already begun the migration of our clients to the Learning Content Platform (LCP), which replaces four legacy learning platforms. The LCP provides superior administrative capabilities which enable our clients to self-administer their compliance programs. The configurable Global Learning Engine (GLE) consolidates and refreshes the core learning courseware products, replacing in excess of
20 legacy courseware formats. The GRC Dashboard provides data analytics and reporting across a client's entire compliance program. Both the GLE and GRC Dashboard have been released and are
expected to have strong uptake in all of our markets. These, together with other new product introductions expected in the first-half of FY13, are expected to deliver revenue and profit growth in
FY13. Pipelines continue to strengthen in response to the new product introductions.
We retain a firm belief that "anti-bribery/anti-corruption" (ABAC) remains an attractive global opportunity and that this product suite should continue to be supported and marketed despite the take-up by potential customers being slower than we initially expected. Pipelines of opportunities continue to grow and we have commenced contract negotiations with a number of significant clients.

The Assurance Services division achieved revenue growth of 8.4% to $168.5 million (9.5% on a constant currency basis, of which 7.0% was organic being at the top end of the medium term trend range of 5% to
7%). This excellent result reflects strong performances across our Asian and global food businesses, supported by solid performances across our more mature Australian, North American and Product
Services businesses.
EBITDA grew by 13.3% to $32.1 million at an expanded margin of 19.1%, up from 18.3% in the corresponding period through improved operational efficiencies at the gross margin line and better leveraging of the overhead base on higher revenues, most significantly in our larger North American and Australian businesses and emerging Asian businesses. We continued to grow our share of the global retail-agri-food market, most significantly in the Americas and Europe, whilst expanding our capabilities in the key related supplier markets.
In May 2012 we announced the acquisition of Global Trust Certification Limited (GTC), a recognised market leader in the provision of inspection and certification services to the global seafood and marine sector.
Expanding our global capability through a harmonised operational approach and business system platform, complimented by strong account management capability continues.

3

A cornerstone of the strategy for our Compliance Services business is to build market leading positions across key product areas. In 2010 we achieved a leadership position in ethics training and awareness through the acquisition of Integrity Interactive. In January 2012 SAI strengthened its suite of compliance solutions through the acquisition of Compliance 360, a recognised leader in the provision of "software as a service" (SaaS) -based governance, risk and compliance (GRC) services to markets in the United States. The acquisition of Compliance 360 is a significant step in achieving a leadership position in the GRC market.
Based in Atlanta, Georgia USA the Compliance 360's three main solutions of Compliance Management, Risk Management, and Finance and Audit Management are components of a fully integrated enterprise GRC platform. Each can be sold as a discrete application. All Compliance 360 applications leverage a single platform with workflow, contract and document management, project management, reporting, and search integration. The solutions include both need-to-know information and value added services that support the specific workflows of professionals in their respective businesses. The demand for these workflow systems are mainly driven by regulatory and compliance rules that require businesses to adhere to government, industry and internal governance policies.
Consideration for the acquisition was USD42.3M plus an adjustment for working capital. The consideration was funded from a combination of existing cash reserves and new borrowings.
We remain focussed on expanding our inspection, certification and training capabilities in the agri-food sector. In May 2012 SAI announced the acquisition of Global Trust Certification Limited (GTC), a recognised market leader in the provision of inspection and certification services to the global seafood and marine sector, providing independent verification of responsible sourcing claims and sustainable practices across the supply chain.
Consideration for the acquisition was €2.9M plus an adjustment for working capital. An additional payment of €1.0M may become payable in FY13 if agreed performance hurdles have been met.

The Board continues to see exciting opportunities across each of the Company's divisions and remains committed to growing the value of the three divisions, all of which continue to play a key part in satisfying the broader compliance and workflow needs of our customers. It is envisaged that this growth will continue to come from a combination of organic growth, strategic acquisitions and partnering.
Developed economies are experiencing a prolonged downturn. Whilst SAI is not immune to weak economic conditions, the resilience of the business model should ensure that the Company continues to perform relatively well in tough times.
The Board expects to report growth in revenue, profit, earnings per share and fully franked dividends in
FY13.

Media & Investor Inquiries

Tony Scotton - Chief Executive Officer, SAI Global Limited +612 8206 6182, 0419 527 592

Geoff Richardson - Chief Financial Officer, SAI Global Limited +612 8206 6805, 0429 314 698

For further information please visit www.saiglobal.com.

4

distributed by