Annual General Meeting - 2018
Adam Lamond Managing Director
Slide 1 Veris is a national professional services business offering surveying, professional and advisory and geospatial services
Slide 2 FY2018 Financial Dashboard
Revenue EBITDA1 NPATBA2
$106.8m $11.2m $11.2 $5.3m $5.3m
45%45% 96%96% 92% 92%
Cash Dividend Per Share Net Debt
$106.8m $11.2 $5.3m $5.6m 0.5 cents $8.0m 45% 96% 92%
1. EBITDA is a non-IFRS measure 2. Underlying NPATBA Slide 3 Note: % increase from prior period represents the movement from continuing operations FY18 Results Overview
$m FY18 FY17 Revenue 106.8 73.5 EBITDA 11.2 96% 5.7 Depreciation (3.6) (3.7) Acquisition related costs (1.6) (1.2) Restructuring costs1 (1.8) (0.9) Share-based payments (1.0) (0.3) EBITA 3.2 900% (0.4) Amortisation (4.1) (4.2) EBIT (0.9) 80% (4.6) Net interest expense (1.0) (0.6) Profit before tax (1.9) (5.2) Income tax benefit/(expense) 0.9 3.8 NPAT (1.0) (1.4) Amortisation net of tax 2.8 2.9 NPATBA 1.8 20% 1.5
Note 1: FY18: includes costs associated with the restructuring and integration activities for the surveying business
Note 2: FY17 restated for continuing operations Slide 4 FY18 Balance Sheet
$m FY18 FY17
Cash 5.6 14.6 Elton Purchase Consideration $000 Receivables 30.9 16.0 Net Assets acquired 1,853 Work in progress 10.5 4.6 Brand 293 Other current assets 1.7 1.1 Customer relationships 3,496 Plant and equipment 15.2 11.0 Goodwill 12,251 Intangibles 58.6 40.5 Total Purchase consideration 17,893 Deferred tax asset 6.3 7.6
TOTAL ASSETS 128.8 95.4
Payables 17.5 7.3 LANDdata Purchase Consideration $000 Deferred vendor payments 6.0 2.7 Net Liabilities acquired (880) Loans and borrowings 26.0 11.5 Customer relationships 3,360 Employee benefits 10.6 6.4 Goodwill 2,930 Current tax liabilities 0.5 0.6 Total Purchase consideration 5,410 TOTAL LIABILITIES 60.6 28.5
NET ASSETS 68.2 66.9
NET CASH (DEBT) (8.0) 11.2 Slide 5 Amortisation of Intangibles
Gross Amortisation $m Amortisation After Tax $m
4.5 3.5
4.0 4.2 4.1 3.0 2.9 3.5 3.8 2.9 2.5 2.7 2.7 2.7 3.0 3.2 3.0 2.0 2.2 2.5 2.7 1.9 2.0 1.5 2.1 1.5 1.0 1.0 0.5 0.5
- - FY15 FY16 FY17 FY18 FY19F FY20F FY21F FY15 FY16 FY17 FY18 FY19F FY20F FY21F
Based on acquisitions to 30 June 2018
Slide 6 Cash flow
Borrowings $000
Opening 1 July 2017 3,375 Drawdown Elton 11,000 $m Repayments (750) Closing 30 June 2018 13,625
30
25
20 10.2 11.0 11.2 16.0 15 1.8 1.1 3.8 10 1.2 14.5 4.6 5 5.6 0
Opening EBITDA Working Capex Interest Equip Debt Acquisitions Dividend Debt/HP Closing Cash Capital (net HP) net Disposals drawdown repayments cash other Slide 7 FY2018 Highlights
– Transition to single business complete Strategic – Completed Elton Consulting Group acquisition – Achieved stage one milestone of $100 million revenue with national footprint
– Finalised systems integration of Surveying business by 30 June 2018 Operational – Strong growth potential in Eastern Australian infrastructure markets – Awarded projects on the back of cross selling
– FY2018 Revenue $106.8 million Financial – FY2018 EBITDA $11.2 million – Strong organic revenue growth
Slide 8 Revenue Bridge FY17 to FY18
$m
100 5.1 Revenue from discontinued 5.5 contracting business has been 90 34.4 5.1 replaced by consulting revenue.
80 17.5 Organic Surveying revenue growth of 27% on FY17 revenue was driven 70 from increased Infrastructure projects works in Eastern Australia. 60 107.9 50 106.8 LANDdata acquisition contributed 11 months for revenue in FY18. 40 Elton Consulting contributed three 30 months revenue to the FY18 result. ($1.1m EBITDA) 20 AQURA Technologies has 10 achieved strong revenue growth during FY18. 0 FY17 Discontinued Organic LANDdata AQURA Elton FY18 operations growth Surveying Slide 9 Veris Revenue
Consistent increase in revenue achieved through acquisition, organic growth and cross selling
$120.0
Professional & Advisory Surveying & Geospatial
$100.0
$80.0
$60.0
$40.0
$20.0
$- $m $m $m $m $m $m $m $m 1 2012 2013 2014 2015 2016 2017 2018 2019 Slide 10 1 Increase in revenue is a result of Professional Advisory revenue acquired and organic growth in survey National Revenue by Region FY19 forecast
Survey & Geospatial $100m
Professional and Advisory $25m
Total $125m $20m1 $4m1
$18m1
$14m1
$1m1 $39m1
$27m1
Slide 11 1 1 Estimated annualised figures for FY19, pro-forma for acquisition of Elton $2m Revenue Analysis – strong exposure to east coast infrastructure
Survey Revenue by Location – FY18 Survey Revenue by Industry – FY18
Resources WA 10% 17% NSW/ACT 37% Property 40%
QLD/NT 19%
Infrastructure Vic/SA/Tas 50% 27%
– Approximately 83% of revenue from the east coast, including approximately 37% from NSW
– Expect strong revenue growth in NSW/ACT given organic growth projections and project awards
– Revenue from civil and transport infrastructure approximately 50%; approximately 40% from property and real estate, and 10% from resources Slide 12 National Professional Services Business
Creating a national professional services business, with three pillars of growth
Professional and Advisory Surveying Geospatial
Professional and Advisory Services are Surveying is a profession that involves examining and Geospatial Services relate to products, services and tools engaged to provide expert advice to businesses, recording the features of a piece of land or infrastructure in involved in the collection, integration and management of governments and not-for-profit organisations to order to create maps, plans, detailed descriptions and to geospatial data. Geospatial Services are prominent in many support them to make considered and informed decisions facilitate construction. areas. on policy, strategy, city-making and service delivery.
Market Size $2.0bn $3.0bn $2.0bn Veris annualised revenue $25m 1.25% $95m 3.2% $5m 0.3% Veris target revenue
$50m - $80m 2.5%-4.0% $150m 5.0% $70m - $100m 3.5%-Slide5.0 %13 Addressing the project cycle
Maximising exposure to the project development lifecycle
Realising value from initial concept, through construction and during ongoing maintenance
Slide 14 Q1 Performance
Revenue EBITDA
35,000 2,500
30,000 2,000
25,000 1,500
20,000 1,000
15,000 500
10,000 0
5,000 -500
0 -1,000
$000s $000s Surveying Professional and Advisory Aqura Total Surveying Professional and Advisory AQURA Corporate Total
Slide 15 Margin improvement - FY19
Focus on Surveying Earnings Improvement
A Operational Alignment C Subcontractor Management
– Matching skills base to revenue – Focus on improving margin for subcontracted work – Improved professional staff utilisation through national resource management – Improved utilisation of equipment
B Overhead Synergies D Culture and People
– Realising synergies through shared services model – National operating model
– Greater sharing and utilization of support services across – Establishing tools and channels to support wider the business communication, accountability and collaboration
– Aligning incentives with business targets and performance
Slide 16 Margin improvement - FY19 Continued
Enhancing our Ability to grow
E Systems and Process G Cash Management
– System enhancement projects – Focus on Debtors and WIP conversion to cash – Concerted process improvement on identified areas – Streamlining invoicing – Automation of key processes
F Governance
– Risk and controls – Establishment of Internal Audit function – Commencement of Corporate Social Responsibility Strategy – Undertaking Reconciliation Action Planning
Slide 17 Veris Australia – Surveying NSW
Recent Awards Outlook
‒ WestConnex M4/M5 Link – Tunnels – Early works ‒ The surge in multi billion $ “Road, Rail, Runway” infrastructure continues in NSW – Project runs to 2023. Project budgeted at $10bn ‒ Veris is well positioned to secure further significant projects, ‒ Parramatta Light Rail Stage 1 - Early works including: – Project runs to 2023. Project budgeted at $2.2bn ‒ Westconnex Stage 3B ‒ Parramatta Light Rail ‒ Sydney Metro City & Southwest- corridor upgrade - cpb ‒ Station site upgrades Ongoing projects of note ‒ Central Station redevelopment ‒ Sydney Metro West- 30km new rail corridor Road Infrastructure ‒ Western Sydney Airport construction packages ‒ Northconnex 9km Tunnel M2 to M1 motorways - Lend Lease ‒ Snowy 2.0 ‒ Northern Road upgrades, Western Sydney Airport - Lend Lease ‒ F6 Motorway extension ‒ Westconnex Stage 3A - Project runs to 2023 ‒ Berry to Bomaderry bypass ‒ M4 titling/acquisition - RMS ‒ Albion Park Bypass Rail Engagements ‒ Sydney Light Rail - Acciona ‒ Sydney Metro City & Southwest, Martin Place Station - Lend Lease ‒ Sydenham Junction - cpb ‒ Parramatta Light Rail - Project runs to 2023 ‒ Moorebank Intermodal – Project runs to 2020 Runway ‒ Western Sydney Airport – Project runs to 2026 Slide 18 Veris Australia – Surveying WA
Recent Awards Outlook
‒ Wodgina Airport Pilbara – Crushing Services Int. ‒ Resource Sector continues to improve, with new mine starts and maintenance works since the beginning of 2018. ‒ Gascoyne Rare Earth – Hastings Metals ‒ Property Sector showing signs of improvement – Whilst residential ‒ Northlink 2 Construction – Tracc Civil & BGC land sales have been slow in 2018, large apartment developments ‒ Perth Hub - Far East Consortium continue to be relatively strong. ‒ Cape Lambert Jetty Remediation - Austral ‒ Infrastructure sector remains a competitive market, driven predominantly by government projects including Northlink and ‒ Old Fremantle Museum Re-Development – Landcorp Metronet.
Ongoing projects of note
‒ Gruyere Eastern Goldfields ‒ Ellenbrook ‒ Wodgina Project Pilbara ‒ Alkimos ‒ BHP All Sites Project Pilbara ‒ Whiteman Edge ‒ Perth Airport Survey Contract ‒ Waterbank Re-Development ‒ Elizabeth Quay Lot 9, 10 ‒ Water Corporation Panel Contract Minor Works
Slide 19 Veris Australia – Surveying QLD/NT
Recent Awards Outlook
‒ Cross River Rail - Subsurface utility locating ‒ Government budget shows strong emphasis and funding on: ‒ Eton Range Realignment ‒ Infrastructure – rail/road ‒ APLNG – Gas Project ‒ Energy and water ‒ Bruce Highway upgrade ‒ Education ‒ Gold Coast Airport ‒ Health ‒ Brisbane Airport ‒ Economic outlook for next five years remains steady at 2.75% ‒ Interest in renewal energy projects remains strong Ongoing projects of note
‒ Cross River Rail ‒ Residential Communities – mixed use high-rise developments ‒ Solar Farms ‒ Regional Councils – modelling and visualisation strategy ‒ Regional road work infrastructure ‒ Flagstone – residential greenfield development ‒ Capestone – residential greenfield development
Slide 20 Veris Australia – Surveying VIC/TAS/SA
Recent Awards Outlook
‒ MCG – Reestablishment feature and level survey ‒ Victorian economy remains strong. Continued investment in: ‒ 472-478 Bourke Street – Terrestrial laser scanning works ‒ Education – New and upgraded schools ‒ MAC - Infrastructure scanning services ‒ Healthcare ‒ Solar Farm – Roberts Town ‒ Infrastructure – road and rail ‒ Mars Confectionary – Scanning works ‒ Population growth over 2.0% expected to continue, driving ongoing investment in residential development ‒ Healthscope – Due diligence on 20 healthcare provider sites ‒ 4,000 Lot Residential Subdivision, Beveridge (Melbourne) Ongoing projects of note
‒ Melbourne Metro - cadastral & civil ‒ West Side Place - Far East Consortium ‒ Melbourne Square - OSK Property ‒ Australia 108 ‒ Aurora Melbourne ‒ Cloverton (10,000 lots) - Stockland ‒ Highlands (8,000 lots) - Stockland
‒ Urbnsurf Melbourne Slide 21 Elton Consulting
Recent Awards Outlook
‒ Communications and engagement projects supporting the ‒ Strong, particularly in eastern Australia development of school infrastructure at two schools ‒ End October, proposals/tenders valued at $6.8 million. Win rate ‒ Housing, residential and rural lands strategies for two local for previous quarter 74% councils ‒ Infrastructure ‒ Recreation needs analysis for NSW state government agency ‒ Opportunities in rail, light rail, roads, health infrastructure, ‒ Consultation regarding the redevelopment of a large housing school infrastructure. estate for a NSW state government agency ‒ Urban renewal
Ongoing projects of note ‒ Significant government projects and private sector opportunities
‒ Western Sydney Airport ‒ Short term - Sydney, Melbourne, Adelaide (current projects and future opportunities) ‒ Inland Rail – Melbourne to Brisbane ‒ Medium term – above plus Brisbane, Perth ‒ Tweed Hospital Communications & ‒ Urban renewal in particular provides opportunities for all service ‒ Prince of Wales Hospital redevelopment lines ‒ Sydney Light Rail ‒ Additional opportunities for strategy work in planning and social ‒ Infrastructure NSW sustainability e.g. all Sydney Councils required to review Local Environment Plans ( LEPs) in next two-three years
Slide 22 Aqura Technologies
Recent Awards Outlook
‒ Excellent contract wins YTD. Recent award of $5.6m new ‒ Continued focus to extend geographical position within Australia contracts across its key service lines: with services provided in all regions. ‒ Industrial Wireless ‒ Growth in revenue 40% year-on-year. ‒ Content Access Networks ‒ Unified Communications ‒ Strong demand for Aqura’s capabilities with >70% of FY19 revenue secured by December 18. ‒ Projects utilise all parts of Aqura’s business, providing services to key Tier 1 clients (Rio Tinto, BHP & Bunnings) and include the ‒ On track to continue solid organic EBITDA contribution. provision of turnkey project solutions and managed services to Aqura’s diverse client-base across Australia and New Zealand
Ongoing projects of note
‒ Industrial Wireless ‒ Rio Tinto - BHP ‒ CPM - Northern Star Resources ‒ South 32 ‒ Content Access Networks ‒ BHP ‒ Rio Tinto ‒ CPM ‒ Unified Communications ‒ Bunnings Slide 23 Shared Client Base
Revenue by Business
Cross pollination of business opportunities showing significant early promise: ‒ Elton introduction resulted in Veris being engaged by the Roads and Maritime Services to supply services to support the recently completed M4 Widening road infrastructure, the first stage to the WestConnex project. ‒ Elton appointed to undertake town planning work Survey Professional on subdivision in Western Sydney. Veris were subsequently $100m & Advisory appointed to undertake survey work. $20m ‒ Veris appointed to survey a road corridor in NSW. Veris requested Elton to do the Review of Environmental Factors (REF) ‒ Ongoing joint tender submissions in process
Aqura $18m
Slide 24 Transport ‘mega’ projects fuel the infrastructure ‘wave’ across Australia
Mega projects = over $2 billion
Slide 25 Source: NSW Government – Major Projects 2023 – Roads and Maritime Services BIS Oxford Economics 2018. Based on projects with over $2 billion in construction. Solid shading is roads. Dotted is rail. 2018-19 Australian infrastructure funding levels, ranked by share of budget expenditure
* The Commonwealth Government primarily funds state infrastructure projects. As such it is not formally included in the rankings. We include it in the report to provide a comprehensive view of funding commitments.
** Based on 2017-18 Mid-Year Budget Review
Source: Infrastructure Partnerships Australia calculations, based on 2018- 19 and 2017-18 Budgets
Slide 26 Infrastructure spend across Australia
National infrastructure funding, State infrastructure funding per capita share of total, by jurisdiction (FY18-19 to FY21-22) FY18-19 to FY21-22
Source: Infrastructure Partnerships Australia analysis Source: Infrastructure *Based on 2017-18 Mid-Year budget Revie Partnerships Australia analysis
Slide 27 Top Tier clients across Australia – Increasing National Agreements
Diversified, national client base; adding value through seamless national agreements and service offerings
Slide 28 Summary and Outlook
FY2018 FY2019
– Completion of integration of national surveying business ‒ Focus on Margin ahead of growth in Surveying business
– Revenue synergies and organic growth, benefited from strong ‒ Improved resource utilisation exposure to east coast infrastructure investment ‒ Operational review to improve Surveying EBITDA margin – Elton Consulting Group acquisition that enhanced service offering and market position - Creation of Professional and ‒ Stabilisation period Advisory services pillar. ‒ Back office synergies from integration – Survey revenue of $89 million, annualised circa $100 million ‒ Cross selling opportunities from Professional and Advisory – Completed divestment of OTOC Australia construction business into Surveying and Aqura business ‒ Cash conversion / Reducing lockup days – Supported growth of AQURA Technologies; with a positive EBITDA contribution in FY18 of $900,000 and developed ‒ Growth of Professional and Advisory business additional recurring revenue from managed services, LTE and communications
– Reduce corporate costs by 26%
Slide 29 Corporate Directory
Capital Structure Share Price
1 Share price (ASX: VRS) $0.115 0.35 Ordinary shares 363m 0.3 Market capitalisation $41.7m
Cash (30-June-18) $5.6m 0.25
Debt (30-Jun-18) $13.6m 0.2 Enterprise value $94m 0.15 Dividend per share (FY18) $0.005
Dividend yield 2.0% 0.1
0.05 Board and Management
Derek La Ferla Non-executive Chairman 0
Adam Lamond Managing Director
Tom Lawrence Non-executive Director
Karl Paganin Non-executive Director Substantial Shareholders
Brian Elton Executive Director Directors 18.9%
Brian Mangano Chief Financial Officer Commonwealth Bank 14.9%
Lisa Wynne Company Secretary Paradice 6.5%
1. As at 14 November 2018 Slide 30 Disclaimer
This Document should not be considered as an offer or invitation to subscribe for or purchase any securities in Veris Limited (“Veris” or the “Company”) or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in Veris should be entered into on the basis of this Document.
This Document contains high level information only and does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of Veris and its prospects. Any forecasts and forward looking information contained in this Document are subject to risks and uncertainties and are not a guarantee of future performance. Actual performance will almost certainly differ from those expressed or implied.
Veris makes no representation or warranty, express or implied, as to the accuracy, currency or completeness of the information presented herein. Information contained in this Document may be changed, amended or modified at any time by Veris. Veris is under no obligation to update any information or correct any error or omission which may become apparent after this Document has been issued.
To the extent permitted by law, Veris and its officers, employees, related bodies corporate and agents (‘Associates’) disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Veris and/or its Associates) for any loss or damage suffered by recipients of this Document or other persons arising out of, or in connection with, any use of or reliance on this Document or information contained herein. By accepting this Document, the recipient agrees that it shall not hold Veris or its Associates liable in any such respect for the provision of this Document or any other information provided in relation to this Document.
Recipients of this Document must make their own independent investigations, consideration and evaluation of the information contained herein. Any recipient that proceeds further with its investigations, consideration or evaluation of the information described herein shall make and rely solely upon its own investigations and inquiries and will not in any way rely upon this Document. Recipients of this Document should not act or refrain from acting in reliance on material in this Document.
Slide 31 Thank you
Adam Lamond Managing Director
– Perth Level 12, 3 Hasler Road T 08 9317 0600 Locked Bag 9 F 08 9317 0611 Osborne Park WA 6017 [email protected] Australia veris.com.au
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