For personal use only

(1)

February 2015

Geoff Lewis

Chief Executive Officer

Dean Langenbach

Chief Operating Officer

Chief Financial Officer

(2)

2

Ian Campbell: Chairman

Geoff Lewis: Managing Director, CEO

Stephen Johnston: Non Executive Director

Grant Pestell: Non Executive Director

Peter Torre: Company Secretary

ASX code:

ASZ

Number of Shares on Issue:

206,720,839

Share Price:

$0.70

Market Capitalisation:

$144.7 million

The ASG Board

The ASG Executive Team

Geoff Lewis: Managing Director, CEO

Dean Langenbach: COO, CFO

Gerald Strautins: Executive - Strategy

(3)

FY15 – Delivering on the New World

•

EBITDA on target at $11.1m

•

Locked in revenue continues to build

•

Forecast stronger EBITDA in H2

•

New contract establishment impacts operating cash

•

Net debt target <$10m by 30 June 2015 on track

•

Results in line with guidance, as presented at 2014 AGM

•

Strong underlying base for realisation of Full Year result

(4)

$

H1FY15

$m

H1FY14

$m

Movement

Revenue

80.1

79.0

1.4%

EBITDA

11.1

#

10.7*

3.8%

NPBT

6.3

5.6

12.5%

NPAT

5.7^

3.8

50%

EBITDA Margins

13.8%

13.5%

0.3%

EPS

2.77c

1.85c

49.7%

H1:FY15 Financial Summary

*Includes write-back provision of $1.1 million #Includes $1.0 million profit on sale of Data Centre

^ $1.2m ATO credit applied to the income tax expense & $0.6m ATO interest incurred

(5)

Operating Cash Flow

•

Milestone delay on contract establishment transition

•

Seasonality of debtors consistent with prior periods

•

Future operating cash flow consistent with EBITDA less interest and tax

68 53 68 48 73 -20 -10 0 10 20 30 40 50 60 70 80 -10.0 10.0 20.0 30.0 40.0

H1 FY13 FY13 H1 FY14 FY14 H1 FY15

D

A

YS

$M

Debtor Days Operating Cash Flow

(6)

Cash Flow

Operating cash

impacted due to

debtor timing

Data Centre

proceeds applied

to long-term debt

Capital investment

consistent with

New World

contracts

H1FY15 $m H1FY14 $m OPENING BALANCE 16.1 (2.0)

Change in working capital (2.6) 3.1

Net Interest (1.4) (1.6)

Income tax (1.9) 0.2

Net Operating Cash (5.9) 1.7

Acquisitions - (0.5)

Capital Investment (2.9) (1.7)

Sale of Leased Asset 10.7 -

Net borrowings and finance leases

(11.0) 5.4

CLOSING BALANCE 7.0 2.9

(7)

Balance Sheet

H1FY15 $m June 2014 $m Current Assets Cash 7.0 16.1 Receivables 34.6 28.0

Data Centre held for sale - 9.7

Other Current Assets 2.1 2.2

Total Current Assets 43.7 56.0

TOTAL ASSETS 169.5 179.8

Current Liabilities

Trade and other payables 29.1 33.1

Borrowings 9.0 8.8

Total Current Liabilities 43.8 50.9

Non-Current Borrowings 19.2 29.0 TOTAL LIABILITIES 70.2 86.3 NET ASSETS 99.2 93.5 Strengthened by operating performance and

Data Centre sale

Continued focus on debt reduction

and liquidity improvement

Net Current Asset improvement (excluding Data

Centre sale)

Bank debt restructured with NAB at reduced rates

(8)

Debt Reduction Focus

•

Remains on track for FY15 Target < $10m Net Debt

• Operating cash turnaround in H2, consistent with prior years

• Capital investment less than 1 x D&A

•

FY16 Target – Surplus cash reserves exceed debt

FY14 Target FY15 H1 Actual FY15 Target FY16 Target -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 FY14 Actual FY14 H1 Actual Net Debt ($m)

(9)

Revenue Breakdown

New World the Key Driver for Growth – 80% of new contracts New World

(10)

Locked in Revenue

$145m or 92% of FY14 Revenue is already locked in for FY15

0 20 40 60 80 100 120 140 160 180 FY15 FY14 FY13 FY12 FY11 122 102 107 116 100 23 20 6 2 15 33 36 25 20 5 3 7 18.3 $M

Managed Service New Managed Service (New World) Non Managed Service New Non Managed Service

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Customer Contract Period Managed Service Commencement

Department of Primary & Environment Industries (DEPI)

3 years May-15

Australian Transport Safety Bureau (ATSB)

4 years Mar-15

AusGroup (AGC) 5 + years Dec-14 Australian Maritime Safety

Authority (AMSA)

5 + 3 years Nov-14

Lockheed Martin (Defence) 8 years Mar-15

New World Contracts will drive H2 Performance

• H1 was a record period for new contract establishment

• Contract ramp up underpinning H2 increase, as contracts move into full Managed Service delivery

• Whilst transition project revenue in H1 was substantial, the Managed Service commencement is expected to make a greater EBITDA contribution in H2

(12)

Traditional IT Services Utility Services

Unique Solutions for few customers Standard Offerings consumed by many customers

High CAPEX, and associated high recurring OPEX costs

OPEX based offerings, with low associated CAPEX

Dedicated Infrastructure and Staff Fully Leveraged Infrastructure & Staff

High Risk for Customer Low Risk for Customer

Labour intensive, project based services Hands-off, automated services

Inflexible pricing models based on fixed capacity supply regardless of business needs

Scalable utility, Per-User pricing models based on business needs

(13)

Change in What the Customer Sees…

•

Efficiency, simplicity, productivity

•

Opex rather than Capex - usage-based costs

•

Approximately 30 – 40% savings, led by outcomes based business

decisions rather than technology

•

Shrinkage of internal IT departments

Customers making value-based business decisions not expense-based

technology decisions

(14)

ASG Market Position

•

Other Companies starting to move now

›

Customers

›

The Big 4

›

Peers

›

Multi-Nationals

•

ASG advantage is that we understand Managed Services

›

Capability & Competency in delivering the complete solution

›

Can take existing services & transform to New World

›

Take the Customer on the journey

o

Low risk & Investment protection for the Client

o

Investment minimisation / maximisation for ASG

›

Locked in long term revenue base enhanced

ASG position moved from “1

st

Mover”

to “1

st

to Get it Right”

(15)

Pipeline

NSW $40m WA $40m VIC $80m ACT $150m QLD $10m

TOTAL

$320m

(16)

Outlook and Guidance

FY15 – H2 EBITDA stronger than H1

• Contribution from new Managed Service entering delivery phase.

• Contract bid costs in H2 lower than H1 by approximately $0.5m

• Minimal Managed Service contract roll off impact

• ‘Old World’ project business expected to remain flat

FY16: Targeting strong EBITDA and EPS growth on FY15

• Full year contribution from new Managed Services signed

• EBITDA margin 14% of revenue - revenue growth off a relatively fixed overhead base and offshore delivery cost base savings

• Contract bid costs expected to be consistent with FY15

• Interest expense substantially lower than FY15 as per debt reduction plan

• Capital investment forecast at lower than 1 x D&A

(17)