spotless group holdings limited · 2018. 12. 15. · • this document is a presentation of general...
TRANSCRIPT
Spotless Group Holdings LimitedFY16 Results Presentation
Presenters:
Martin Sheppard – Chief Executive Officer and Managing DirectorNigel Chadwick – Chief Financial Officer
24 August 2016
IMPORTANT NOTICES
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.
2
HIGHLIGHTS
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
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%
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
3
CONTENTS
PERFORMANCE UPDATE - FY16 RESULTS
STRATEGY RESET
DETAILED FINANCIALS
OUTLOOK
APPENDICES
1
2
3
4
4
5
BUSINESS ACHIEVEMENTS
Delivery of FY16 result in line with guidance reflects the strong operational and financial focus from the new team
Management team capabilities expanded with new appointments. Investment in business development resources important in leveraging the strength of our core
Strategy reset provides a clear vision, purpose and strategy with benefits to flow through in the coming year and beyond
Integration of acquisitions now complete, with full year contribution expected in FY17
Underlying EBITDA margin for Facility Services maintained in line with previous year
Renewal rates strong, reflecting key account management and strength of integrated service offering
1.1
6
Acquisition contribution
2,693 3,139
FY15 FY16
FY16 FINANCIAL SUMMARY1.2
7
Reported result
Underlying result1
(2)
Revenue
17% increase
EBITDA
6% increase
NPAT
(4%) decrease
Note (1): Reported result impacted by a number of one-off items outlined on slide 3.2 Note (2): Normalised for pass-through revenue of $37m in FY16 (FY15 $180m)
Underlying result in line with guidanceStrong growth in underlying sales and EBITDA
Revenue EBITDA NPAT
2,873 3,176 10.6% 316 312 (1.5%) 143 122 (14.4%)
307 326
FY15 FY16
136 131
FY15 FY16
588 Acquisition contribution
34185 8
FY15 FY16 FY15 FY16 FY15 FY16
Underlying Revenue1
Health, Education & Gov.2 Commercial & Leisure Base & Township 2 Laundries & Linen
Strong contribution from commencement of new PPPs
Healthcare remained steady
Revenue increase driven by acquisitions – full year impact of UASG and part year benefit of AE Smith and TGS
Partially offset by lower sales within Sports & Leisure due to lower stadium and event activity
Defence sector delivered strong growth
Partially offset by reduced revenue in the Resources sector
Growth driven by contribution of acquisitions (Aladdin, ILS & Prime Laundry)
Integration issues affected performance of existing business
7% increase 35% increase 10% increase 6% increase
Commentary
Health, Education & Gov. Commercial & Leisure Base & Township Laundries & Linen
1.3
Sector performance was strong and includes benefit from acquisitions
8
PERFORMANCE BY SECTOR
892
1,201
FY15 FY16
547 599
FY15 FY16
278 295
FY15 FY16
Note (1): Includes intersegment revenue of $29m in FY16 (FY15 $28m)Note (2): Excludes pass-through revenue of $37m in FY16 (FY15 $180m)
1,004 1,072
FY15 FY16
Underlying EBITDA and margin1
Health, Education & Gov. Commercial & Leisure Base & Township Laundries & Linen
Strong earnings growth from PPPs
Steady earnings contribution from Education and Government
Growth driven by acquisitions
Partially offset by lower activity within Sports & Leisure and Business & Industry sectors
Margin decline reflects business development costs and lower margin acquisition (AE Smith)
Strong earnings contribution from Defence sector
Partially offset by reduced revenue and margins within Resources
Result adversely affected by acquisition integration related issues which have been resolved
8% increase 3% increase 30% increase (17%) decrease
Commentary
Health, Education & Gov. Commercial & Leisure Base & Township Laundries & Linen
1.4
EBITDA growth across Facility ServicesLaundries impacted by acquisition integration issues
9
PERFORMANCE BY SECTOR
107 116
FY15 FY16
79 81
FY15 FY16
74
96
FY15 FY16
86 71
FY15 FY16
10.6% 10.8% 8.8% 6.7% 13.6% 16.0% 31.0% 24.2%
Note (1): Segment EBITDA and margins exclude unallocated corporate overheads of $39m in FY16 (FY15 $39m)
EBITDA Margin
MARGINS
Underlying Margins1
Facility Services (~92% of revenue)
Laundries (~8% of revenue)
EBITDA EBITA
1.5
EBITDA margin in Facility Services business remains strongMargins in Laundries impacted by acquisition integration issues
Commentary
EBITDA margin declined reflecting acquisition of businesses with lower than Group margin
New contract wins on comparable margins to historical experience
Decrease in EBITA margin reflects impact of acquisitions and higher capex in previous periods impacting depreciation
EBITDA margin adversely impacted by acquisition integration issues
Acquisitions now fully integrated
EBITA margin decline driven by lower EBITDA and higher depreciation as a result of acquisitions and higher rental stock capex to support these acquisitions
10
31.0%
24.2%
16.3%
7.8%
FY15 FY16 FY15 FY16
EBITDA EBITA
10.6% 10.2% 9.8% 9.0%
FY15 FY16 FY15 FY16
Note (1): Segment margins exclude unallocated corporate overheads of $39m in FY16 (FY15 $39m)
FY14A 34% 27%
FY15A 45% 36%1
FY16A 50% 17%2
WIN AND RENEWAL RATES
Win rates
Renewal rates
By number By revenue
FY14A 63% 75%
FY15A 78% 91%
FY16A 83% 83%3
Note(1) Excluding onshore and offshore immigration losses(2) Excludes Rio Tinto new business loss(3) Excludes Rio Tinto renewal loss
1.6
Our win rate across the portfolio remains strong but has been impacted by several large value contract losses
Win rates and renewal rates
Commentary
11
Excluding Rio Tinto & Immigration
34% 27%
44% 20%
50% 12%
63% 75%
78% 91%
83% 73%
By number By revenue
All opportunities
Investment in business development resources across Government, Aged Care and Tertiary Education sectors important to improving win rates. Focus is on fewer but larger opportunities
High return, low capital intensive sectors and services are the priority
Enhancing key account management to focus on renewals by implementing a customer centricity program focused on top 200 existing accounts
BALANCE SHEET POSITION1.7
12
Net debt position
($m) June 2016 Dec 2015 June 2015
Cash (54) (40) (105)
Debt(1)(2) 844 842 669
Net debt 790 802 564
Net debt position is as expected and reflects acquisitions during the year,3 working capital requirements of acquired businesses and incremental laundry stock purchases
Debt covenants
ND / EBITDA Interest cover
Debt facilities maturity profile
Debt headroom of $220m
Weighted average committed debt facility maturity of approximately 2.6 years
Credit metrics comfortably within covenants
195
427
214
FY17 FY18 FY19 FY20 FY21
Drawn amount Committed facilities
Note (1): Debt is net of unamortised borrowing costs of $4m at Jun-16 and $4m at Jun-15 and includes $8m derivatives (FY15: $8m)Note (2): Depreciation of AUD against the NZD between Jun-15 and Jun-16 increased debt by $11mNote (3): Acquisitions include UASG (July 2015) and Prime Laundry (August 2015)
10.3x
8.8x
FY15 FY16
1.8x
2.4x
FY15 FY16
3.0x
3.5x
315
100
188
53
14
15
270 276
Operating cashflow before
interest and tax
Working capital& onerous
contract impacts
Exit ofsupply
contract
Paymentcycles
FY16 underlyingoperatingcash flow
FY15 underlyingoperatingcash flow
OPERATING CASH FLOW
Operating cash flow movements
Operating cash flow utilised to fund acquisitions
Commentary
Investment in working capital and onerous contract impacts relating to recently acquired businesses
One-off impact from large national food and beverage supply contract
Timing of payment cycles
13
A
A B
1.8
C
B
CNon-recurring
SAFETY
Safety initiatives:
Work stream risk profiling to assist in identifying actions and tailoring programs to manage safety risks
Pulse Assessment program to verify level of understanding of safety@spotless systems and processes
Safety Survey to obtain feedback and initiatives on what we can introduce to assist in improving safety culture
Safety@Spotless management system certification against AS4801
Initiatives translating to improved performance for FY16:
41% reduction in lost time injury frequency rate
8% reduction in total recordable injury frequency rate (all injuries)
1.9
Safety of our employees is paramount
14
2 Strategy Reset
Deliver business growth greater than GDP growth by:
growing revenue with existing customers (contract inflators and cross-sell)
winning new customers
winning new business in growing outsourcing markets
entry into new markets / development of new offerings
Drive customer value through long-dated, expandable, multi-service contracts which leverage our scale, geographical footprint and breadth of capabilities
customer benefits from scale include geographic reach, superior operational controls, counterparty financial strength, and superior back office / support service capabilities
customer benefits from breadth include delivery of complex total solutions, adoption of operational risk and lower management overhead
Spotless Group Objectives
2.1 CORPORATE OBJECTIVES
16
The centrepiece of the Spotless strategy involves focus areas that support organic growth
STRATEGY RESET COMPLETE2.2
17
Strategy reset provides a clear vision and purpose
STRATEGY RESET COMPLETE (CONT.)2.3
18
Health, Education and Government
Lower return, low growth sectors
High return sectors
High growth, high return acquisition opportunities
Represents adjusted assets of c.$100m
Growth equal to or less than GDP growth
Growth up to 5 ppt higher than GDP growth
Growth more than 5 ppt higher than GDP growth
Partnerships
Market growth / potential
2.4 UNLOCK VALUE – REVIEW OF CORE
19
Commercial and Leisure Base and Township
FY16 ROIC – EBITA / Adjusted assets (%)1
Spotless has reviewed the performance of each sector and the role it plays in the company portfolio
Strategy reset prioritises these services and markets
Laundries
Note (1): Adjusted assets is calculated as total assets less cash, inter-company loans, goodwill, intangibles and deferred tax
Facility Services
(20)
0
20
40
60
80
Single Service Line Businesses
2-3 Service Line Businesses
Multi-service Partnerships
Contracts are typically single-service, of limited scale and short-dated
Competition is fragmented or operations are capital intensive
Contracts are typically large scale, multi-service and long-term
Strong relationships enable partnerships on innovation
Spotless is willing to take high ‘perceived risks’
Spotless business value hierarchy
Contracts are very long term (e.g. up to 30 years)
Spotless takes full responsibility for an operation / asset and has an obligation to deliver an outcome over the life of the contract
Spotless will drive value by strategically partnering with customers and focusing on multi-service contracts
2.5 UNLOCK VALUE – PARTNER WITH CUSTOMERS
20
AE Smith Business & Industry
PPP
Resources
GovernmentHealth
Single service line
4+ service linesUASG
Leisure, Sport & Entertainment
Education
Defence
Laundries
Name
PPP’s – 16 AND BUILDING2.6
21
Contract Term0% 100%
Total Life (yrs)
Annual Revenue (A$m)
Life of Contract Revenue (A$m)
NSW Schools 1 28 $
Headquarters Joint OperationsCommand 30 $$
Southbank Tafe 34 $$
NSW Schools 2 28 $
Orange Hospital 25 $$$
South Australia Schools 30 $
Royal Children’s Hospital 25 $$
Queen Elizabeth II Carpark 25 $
Wiri Prison 25 $
Sydney Convention Centre 25 $$$
Sunshine Coast University Hospital 25 $$$
New Royal Adelaide Hospital 30 $$$
Bendigo Hospital 25 $$$
Victoria Schools 26 $
Western Australia Schools 30 $$
Australia National University 30 $
Op
erat
ion
alM
ob
ilisi
ng
Key for annual revenue: = A$0 – 10m = A$10 – 30m = A$30+mKey for life of contract revenue: $ = A$0 – 250m $$ = A$250 – 750m $$$ = A$750+m
A “smarter” Spotless leveraging technology to drive growth in new services and markets, and to enhance the customer experience
REPOSITION - BRAND AND INNOVATION2.7
22
Bluetrack – Digital Cleaning Tracker
Automated GuidedVehicles
Nudge Health and Lifestyle Program
Food Ordering App Smart Pipe
Customer Feedback Kiosks
REPOSITION - NEW MANAGEMENT TEAM2.8
23
CEO & Managing Director Martin Sheppard
Investor relations Mergers &
Acquisitions (1)
Geoff Bryant
Risk & Compliance &
LegalPaul Morris
Chief Financial Officer
Nigel Chadwick
Chief Operating Officer
Dana Nelson
Brand, Innovation & Technology
Julian Fogarty
Markets & GrowthAgi Luczak
People, Performance &
CultureCatherine Walsh
Sectors
Government, Education & Transport
Infrastructure, Comms & Utilities (AES and UASG)
Township (Resources &
Defence)PPP’s and Health
Business, Hospitality,
Leisure & SecurityNew Zealand Laundries
Subject Matter Experts / Sales Executive / Business Development
Food & Catering CleaningMaintenance / Construction
PPP / Government /
EducationResources
Facilities Management
Security
New to organisation and role Scope increased
Note (1): Effective 1 October 2016
There has been significant focus on building the capability within the Spotless leadership team
New to role
3 Market position, strategy and outlook3 Detailed Financials
REPORTED P&L RESULTS
Commentary
Revenue growth underpinned by stable performance of existing business and acquisition contribution
Acquired revenue and EBITDA of $588m (FY15 $185m) and $34m (FY15 $8m) respectively
Excluding acquisitions, revenue and EBITDA includes benefit from contract wins and renewals offset by impacts from:
– acquisition integration issues, particularly within Laundries
– loss of pass through revenue contract within Health, Education & Government sector (low margin)
– reduced stadium and event activity in current year
Underlying profit affected by materially increased depreciation (largely due to increases from acquired businesses), mobilisation costs and bid costs
Increase in finance costs reflects higher net debt
Tax rate of 27% reflects effective tax rate of 30% adjusted for deferred tax accounting movements
$m FY16 FY15 Var
Reported Sales Revenue 3,176 2,873 +10.6%
Underlying Revenue 3,139 2,693 +16.6%
Reported EBITDA 312 316 (1.5%)
Underlying EBITDA 326 307 +6.0%
Depreciation (88) (65) +35.4%
Facility Services (34) (19) +78.9%
Laundries (48) (41) +17.1%
Corporate (6) (5) +20.0%
Amortisation (16) (13) +23.0%
Customer contracts (10) (8) +25.0%
Other (SAP amortisation) (6) (5) +20.0%
Net finance costs (40) (34) +17.4%
Income tax expense (46) (61) (25.3%)
Reported NPAT 122 143 (14.4%)
Underlying NPAT 131 136 (4.0%)
3.1
25
REPORTED TO UNDERLYING RECONCILIATION
Commentary
FY16 EBITDA negatively impacted by a number of significant items including:
– Large tender bid costs on two unsuccessful bids ($9m)
– Treatment change on bid costs ($5m)
The items outlined above are considered one-off and have been resolved
FY15 EBITDA was impacted by the positive impact of the $9m re-measurement of property make good provisions ($7.6m) and Long Service Leave ($1.5m) provisions
Acquisition integration issues relating to Laundries and AE Smith outlined to the market in December have been included in both reported and underlying EBITDA
$m FY16 FY15
Reported Sales Revenue 3,176 2,873
Pass-through revenue (37) (180)
Underlying Sales Revenue 3,139 2,693
Reported EBITDA 312 316
One-off items1
Tender write-off 9 -
Small bid costs 5 -
Re-measurement of provisions2 - (9)
Underlying EBITDA 326 307
Reported NPAT 122 143
One-off items1 14 (9)
Income tax (5) 3
Underlying NPAT 131 136
3.2
26
Note (1): Items greater than $5mNote (2): Disclosed on page 58 of the 2015 annual report
CASH FLOW
$m FY16 FY15 Var
Underlying operating cash flow before interest and tax 270 276 (2.2%)
Working capital and onerous contact impacts (53)
Exit of supply contract (14)
Timing of payment cycles (15)
Net interest and tax (46) (29) 58.6%
Operating cash flow 142 247 (42.6%)
Investing cash flows
Acquisition of businesses (103) (99) 3.5%
Facility Services (86) (78) 9.7%
Laundries (17) (21) (19.2%)
Net investment in PPE, IT systemsand capitalised contract costs (142) (151) (5.6%)
Facility Services – PP&E1 (64) (83) (23.0%)
Laundries – PP&E1 (14) (10) 37.3%
Laundries – Rental Stock (46) (41) 13.3%
Corporate – PP&E and IT systems (21) (24) (14.5%)
Other 3 7 (65.8%)
Total investing cash flows (245) (250) (2.0%)
Free cash flow (103) (3) >100%
Underlying operating cash flow lower than previous year after taking into account:
– One-off items
– Working capital funding and onerous contract impacts relating to recently acquired businesses
– Exit of a national food & beverage supply contract which resulted in a one-off $14m net outflow
– Timing of year end payment cycles
Underlying EBITDA conversion was 83% (FY15 90%):
Moving forward there will be a greater focus on free cash flow
Note (1): Includes capitalised contract costs
Commentary
3.3
27
FY16 FY15
Underlying EBITDA 326 307
Underlying operating cash flow before interest and tax 270 276
Underlying EBITDA conversion 83% 90%
BALANCE SHEET3.4
28
Balances impacted by acquisition accounting
Goodwill largely relates to PEP acquisition ($827m), with remainder relating to recent acquisitions
Net working capital movements outlined on the operating cash flow slide (slide 1.8)
$m FY16 FY15 Var
Current assets 533 536 (0.5%)
Non-current assets 1,708 1,519 +12.4%
Goodwill 1,032 911 +13.2%
PP&E and other 676 608 +11.3%
Current liabilities 421 450 (6.4%)
Non-current liabilities 992 794 +25.0%
Net current assets 112 86 +30.4%
Net assets 828 810 +2.1%
Net debt 790 564 +40.2%
Gearing 48.8% 41.0%
Commentary
NET DEBT MOVEMENT3.5
29
Net debt bridge
Net debt as at 30 June 2016 of $790m
– 2.4x Net debt / EBITDA vs. 1.8x at 30 June 2015
Change since FY15 driven by:
– Reinvestment in the business including capital expenditure $142m and acquisition cost of $103m
– Dividends paid (final and interim) of $99m
– Other movements include foreign exchange impact on New Zealand dollar debt and impact of finance leases
Commentary
667
766
564
142 142
103
99 24
790
June 2015net debt
Operatingcash flow
Capex Businessacquisitions
Dividendspaid
Othermovements
June 2016net debt
Reinvestment in the business
Note (1): Operating cash flow includes certain non-recurring items as per slide 1.8
67(1)
4 Outlook
OUTLOOK4.1
We are confident in the strength of the underlying business and that the pipeline of opportunities support re-stimulation of organic growth. The rate of growth will be driven by the success and timing of the strategy reset initiatives, particularly the returns from the recent investment in business development resources.
For FY17 and beyond, growth and attractive returns are expected through:• Improved performance of the Laundries business;• Driving growth from our recently acquired businesses;• Commencement of recently won PPPs, with seven PPPs currently mobilising;• Price escalations in existing contracts;• Greater focus on free cash flow conversion;• New wins in a steadily growing contestable market; and• Conversion of the current pipeline of more than $1.3 billion of opportunities.
There are no significant contract renewals that will materially impact FY17.
31
5 Appendices
SIGNIFICANT CONTRACT WINS AND RENEWALS
Customer Services Quarter won / renewed
Ren
ewal
s
Clipsal 500 Integrated 1Q16
Central Alliance Health NZ Integrated 1Q16
SA Health Integrated 3Q16
Brisbane Domestic Terminal (retail outlets) Cleaning / Food 2Q16
Ergon Energy Asset Inspection 2Q15
NSW Land and Housing Corporation Maintenance 1Q16
QGC Township Management 3Q16
Anglo American Township Management 4Q16
Win
s
Ausco Maintenance 4Q16
Rio Tinto Hail Creek Township management 1Q16
Vic Schools PPP 2Q16
WA Schools PPP 2Q16
Win Australian National University PPP 1QFY17
Greater than 25yr
$130m contract wins and over $480m renewals in FY161
33
5.1
Greater than $30m pa
Note (1): Annual revenue
DIVERSIFIED OFFERING
SERVICE Facility management
Venue management
Accommodation management
Fleet management
Car park management
Concierge & mailroom
Event management
Patient management
Security services
Venue management
Food service solutions
Cleaning & hygiene solutions
Laundry, linen & uniforms
Security services
Asset and building maintenance
Waste management
Grounds & garden care services
Pest control services
Concierge
HVAC services
Refrigeration
BIM (Building Information Modelling)
Prefabrication / Modularisation
Engineering design
Commissioning (NEBB Certified)
Electrical, plumbing, drainage
Asset maintenance
Mechanical & electrical services
Retail fitouts
Building trades services
Painting services
Grounds & gardens
Pest control
Building management systems
Fire & emergency services
Energy & water management
Handyman services
Asset installation & maintenance
Meter installation & replacement
Meter reading
Energy conservation
Pole reinstatement
Asset inspection & monitoring
Street light maintenance & globe replacement
Electrical construction & maintenance
Vegetation management
Stadia, venue & event catering
Dining rooms & cafés
Functions
Corporate hospitality
Retail food & beverage
Venue management
Cafeterias
Canteens, cafés
Retail food & beverage
Resident dining
Aged care
Schools & colleges
Mining camps & defence sites
Hospital patient meals
Functions & boardrooms
Meals on wheels
Venue, event & precinct cleaning
Waste management & recycling
Commercial, retail & industrial cleaning
Waste management & recycling
Hygiene & washroom services
Window cleaning
Concierge & mailroom
Crowd control
Event management
Close circuit television (CCTV)
Alarm systems
Access control
24 hour alarm monitoring
People tracking
Risk management
Mail screening
Duress systems
First aid response
Patrols
Concierge services
Linen supply, laundering & management
Accommodation
Hospitality
Healthcare
Sterilising
Workwear laundering, rental & management
Workwear supply & design
Floor care & washroom
services
SECTORS Business & Industry
Defence
Education
Government
Health
Laundries
Leisure, Sports & Entertainment
PPP
Resources
Utilities
Leisure, Sports & Entertainment
Business & Industry
Defence
Education
Government
Health
Laundries
Leisure, Sports & Entertainment
PPP
Resources
Business & Industry
Defence
Education
Health
Government
Leisure, Sports & Entertainment
Resources
Business & Industry
Defence
Education
Government
Health
Laundries
Leisure, Sports & Entertainment
PPP
Resources
Utilities
Business & Industry
Leisure, Sports & Entertainment
Business & Industry
Defence
Education
Health
Government
Resources
Leisure, Sports & Entertainment
Business & Industry
Defence
Education
Health
Government
Resources
Business & Industry
Education
Government
Health
Leisure, Sports & Entertainment
Resources
Business & Industry
Defence
Education
Government
Health
Laundries
Leisure, Sports & Entertainment
Resources
SERVICE LINE INTEGRATED SERVICES
ENGINERING SERVICES ANDASSET MAINTENANCE
UTILITIESSERVICES
FOOD SOLUTIONS CLEANING SECURITY LAUNDRY
34
5.2
Spotless is the largest, most diversified essential services provider in Australia and New Zealand. The company provides services that are essential to our clients and their customers
LEVERAGE STRONG CORE5.3
35
1. Largest facility services provider in ANZ1,2,3 2. High quality and diverse customer base4
4. Embedded price growth mechanism63. Favourable end market exposure
94.6
5.4
0%
20%
40%
60%
80%
100% 5.4% with no price growth mechanism
94.6% with embedded price growth mechanism
Largest 150 contracts
Largest single contract
Gov’t backed contracts
c.60% revenue= Revenue
contracted5
c.87% revenue
=
c.5% revenue=
Weighted average
contract tenurec.4.8 years=
c.50% revenue=
% of revenue due for renewal in
FY17c.7% =
Facility Mgt.
Catering & Food
Cleaning
Laundry & Linen
Security
35%
37%
19%
9%
Health, Educ.& Gov't
Commercial &Leisure
Base &Township
Laundry &Linen
Only 8% resource exposure
3.2
1.9
1.4 1.0 0.9 0.8 0.8
0.5
Spotless Compass Broad-spectrum
Serco ISS Programmed Skilled Sodexo
Late
st A
ustr
alia
and
NZ
re
venu
e (A
$bn)
FY16 FY15 FY15 2015 2015 FY15 FY15 2015
Note (1): The market is defined by reference to the services Spotless currently provides to the four end-market customer sectors that Spotless currently serves, and includes both Facility Services and Laundries services. It does not include potential revenue from adjacent customer sectors that Spotless does not currently serve but that may be regarded as part of a broader facility services industryNote (2): Estimate of revenue derived from Australian and New Zealand public filings. New Zealand dollar revenues have been converted to Australian dollars using the RBA daily rate of 1.07 as at 12 August 2016
Note (3): On 27 June, Ferrovial Group completed its takeover of BroadspectrumNote (4): Based on top 150 identified contracts by FY17 Forecast revenueNote (5): Revenue that is contracted through FY17 as percentage of FY16 revenue.Note (6): Based on identified contracts greater than $1 million annual revenue