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Spotless Group Holdings LimitedFY16 Results Presentation
Presenters:
Martin Sheppard – Chief Executive Officer and Managing Director
Nigel Chadwick – Chief Financial Officer
24 August 2016
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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.
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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
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CONTENTS
PERFORMANCE UPDATE - FY16 RESULTS
STRATEGY RESET
DETAILED FINANCIALS
OUTLOOK
APPENDICES
1
2
3
4
4
5
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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
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Acquisition
contribution2,693
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 guidance
Strong 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
588Acquisition
contribution34
1858
FY15 FY16 FY15 FY16 FY15 FY16
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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
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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 Services
Laundries 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
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MARGINS
Underlying Margins1
Facility Services (~92% of revenue)
Laundries (~8% of revenue)
EBITDA EBITA
1.5
EBITDA margin in Facility Services business remains strong
Margins 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 $39m)
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FY14A 34% 27%
FY15A 45% 36%1
FY16A 50% 17%2
WIN AND RENEWAL RATES
Win
rates
Renewal
rates
By number By revenue
FY14A 63% 75%
FY15A 78% 91%
FY16A 83% 83%3
Note
(1) Excluding onshore and offshore immigration losses
(2) Excludes Rio Tinto new business loss
(3) Excludes Rio Tinto renewal loss
1.6
Our win rate across the portfolio remains strong but has been
impacted by several large value contract losses
Win rates and renewal rates
Commentary
11
Excluding Rio Tinto & Immigration
34% 27%
44% 20%
50% 12%
63% 75%
78% 91%
83% 73%
By number By revenue
All opportunities
Investment in business development resources across Government, Aged Care and Tertiary Education sectors
important to improving win rates. Focus is on fewer but larger opportunities
High return, low capital intensive sectors and services are the priority
Enhancing key account management to focus on renewals by implementing a customer centricity program focused on
top 200 existing accounts
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BALANCE SHEET POSITION1.7
12
Net debt position
($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 $11m
Note (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
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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
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A
A B
1.8
C
B
CNon-recurring
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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
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2 Strategy Reset
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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
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The centrepiece of the Spotless strategy involves focus areas that support organic growth
STRATEGY RESET COMPLETE2.2
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Strategy reset provides a clear vision and purpose
STRATEGY RESET COMPLETE (CONT.)2.3
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Health, Education and Government
Lower return,
low growth sectors
High return sectors
High growth, high
return acquisition
opportunities
Represents
adjusted assets
of c.$100m
Growth equal to or less
than GDP growth
Growth up to 5 ppt higher
than GDP growth
Growth more than 5 ppt
higher than GDP growth
Partnerships
Market growth / potential
2.4 UNLOCK VALUE – REVIEW OF CORE
19
Commercial and Leisure Base and Township
FY16 ROIC – EBITA / Adjusted assets (%)1
Spotless has reviewed the performance of each sector and the role it plays in the company
portfolio
Strategy reset
prioritises these
services and
markets
Laundries
Note (1): Adjusted assets is calculated as total assets less cash, inter-company loans, goodwill, intangibles and deferred tax
Facility Services
(20)
0
20
40
60
80
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Single Service Line
Businesses
2-3 Service Line
Businesses
Multi-service
Partnerships
Contracts are typically
single-service, of
limited scale and short-
dated
Competition is
fragmented or
operations are capital
intensive
Contracts are typically
large scale, multi-
service and long-term
Strong relationships
enable partnerships on
innovation
Spotless is willing to
take high ‘perceived
risks’
Spotless business value hierarchy
Contracts are very long
term (e.g. up to 30
years)
Spotless takes full
responsibility for an
operation / asset and
has an obligation to
deliver an outcome
over the life of the
contract
Spotless will drive value by strategically partnering with customers and focusing on multi-
service contracts
2.5 UNLOCK VALUE – PARTNER WITH CUSTOMERS
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AE Smith Business & Industry
PPP
Resources
Government
Health
Single
service line
4+ service
linesUASG
Leisure, Sport
& Entertainment
Education
Defence
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Name
PPP’s – 16 AND BUILDING2.6
21
Contract Term
0% 100%
Total Life
(yrs)
Annual Revenue
(A$m)
Life of Contract
Revenue (A$m)
NSW Schools 1 28 $
Headquarters Joint Operations
Command30 $$
Southbank Tafe 34 $$
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 $$$
Sunshine Coast University
Hospital25 $$$
New Royal Adelaide Hospital 30 $$$
Bendigo Hospital 25 $$$
Victoria Schools 26 $
Western Australia Schools 30 $$
Australia National University 30 $
Op
era
tio
nal
Mo
bilis
ing
Key for annual revenue: = A$0 – 10m = A$10 – 30m = A$30+m
Key for life of contract revenue: $ = A$0 – 250m $$ = A$250 – 750m $$$ = A$750+m
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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 Guided
Vehicles
Nudge Health and
Lifestyle Program
Food Ordering AppSmart Pipe
Customer Feedback Kiosks
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REPOSITION - NEW MANAGEMENT TEAM2.8
23
CEO & Managing Director
Martin Sheppard
Investor relations
Mergers &
Acquisitions (1)
Geoff Bryant
Risk &
Compliance &
Legal
Paul Morris
Chief Financial
Officer
Nigel Chadwick
Chief Operating
Officer
Dana Nelson
Brand, Innovation
& Technology
Julian Fogarty
Markets & Growth
Agi Luczak
People,
Performance &
Culture
Catherine Walsh
Sectors
Government,
Education &
Transport
Infrastructure,
Comms & Utilities
(AES and UASG)
Township
(Resources &
Defence)
PPP’s and Health
Business,
Hospitality,
Leisure & Security
New Zealand Laundries
Subject Matter Experts / Sales Executive / Business Development
Food & Catering CleaningMaintenance /
Construction
PPP /
Government /
Education
ResourcesFacilities
ManagementSecurity
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
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3 Market position, strategy and outlook3 Detailed Financials
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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
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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 $5m
Note (2): Disclosed on page 58 of the 2015 annual report
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CASH FLOW
$m FY16 FY15 Var
Underlying operating cash flow
before interest and tax270 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 systems
and 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 tax270 276
Underlying EBITDA
conversion83% 90%
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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
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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)
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4 Outlook
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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.
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5 Appendices
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SIGNIFICANT CONTRACT WINS AND RENEWALS
Customer Services Quarter won / renewed
Ren
ew
als
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
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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
screening
Duress
systems
First aid
response
Patrols
Concierge
services
Linen supply,
laundering &
management
Accommodati
on
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
LINEINTEGRATED SERVICES
ENGINERING SERVICES AND
ASSET MAINTENANCE
UTILITIES
SERVICESFOOD SOLUTIONS CLEANING SECURITY LAUNDRY
34
5.2
For
per
sona
l use
onl
y
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 tenure
c.4.8 years=
c.50%
revenue=
% of revenue due
for renewal in
FY17
c.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
Austr
alia
and N
Z
revenue (
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 industry
Note (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 Broadspectrum
Note (4): Based on top 150 identified contracts by FY17 Forecast revenue
Note (5): Revenue that is contracted through FY17 as percentage of FY16 revenue.
Note (6): Based on identified contracts greater than $1 million annual revenue
For
per
sona
l use
onl
y