CPT GLOBAL LIMITED — Annual Report 2014

Aug 31, 2014

Independent Experience

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CPT Global 2014 Financial Results

Year ending June 30, 2014

Gerry Tuddenham, Chief Executive Officer Elliot Opolion, Chief Financial Officer

© 2013 CPT Global Limited

Disclaimer

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This document has been prepared by CPT Global Limited ( CPT Global ) and comprises written material/slides for a presentation concerning CPT Global.

The presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase, or subscribe for, any securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

Certain statements in this presentation are forward looking statements. You can identify these statements by the fact that they use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” and words of similar import. These forward looking statements speak only as at the date of this presentation. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performance or achievements expressed or implied by such forward looking statements.

No representation, warranty or assurance (express or implied) is given or made by CPT Global that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct, Except for any statutory liability which cannot be excluded, CPT Global and its respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any direct or indirect loss of damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom.

Subject to any continuing obligation under applicable law or any relevant listing rules of the ASX, CPT Global disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change of events, conditions, or circumstances on which any statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of CPT Global since the date of this presentation.

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CPT Global at a Glance

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• Founded in Australia in 1993

• All services target IT cost reduction

• Approximately 200 industry based expert consultants & scalable service centres

• Global operations predominantly in Asia Pacific, Americas and Europe

• Have worked with over 100 blue chip / Fortune 500 clients worldwide

• Multiple winner of the Governor of Victoria Export Award for ICT Services.

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Key Results

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	FY14	FY13	% Movement Prior Year
Revenue	38.4m	35.1m	9%
EBITDA	3.2m	1.0m	220%
NPAT	2.2m	0.3m	568%
EPS(Basic)	5.9c	0.9c	568%
Cash	2.4m	1.2m	100%
Net Tangible Assets	6.3m	5.4m	17%
Fully Franked Dividends (Interim & Final)	4.5c	0.0c	n/a
Dividend Payout Ratio	77%	0	n/a

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Global Operations

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• Value Proposition

• IT cost optimisation

• Services

• Capacity Planning: Cost minimisation via IT capacity optimisation

• Performance: Reducing running costs and maximisation of infrastructure lifetime

• Testing: Ensure systems perform to expectations and targeted benchmarks

• Management of IT: Optimisations of IT costs while ensuring alignment of IT to business strategy

Service Model

• Australia: Provision of expert IT services for large projects on the basis of a daily / solution rate

International

• Provision of expert IT services for large project on the basis of a daily / solution / fixed fee rate

• Provision of cost optimisation services on a success fee basis via a three phase cost reduction approach

• Phase 1 – Exploration of IT environment & assessment of potential savings, performed on a time & materials fixed price basis (approx $100k - $150k revenue

• Phase 2 – Recommendation & implementation of efficiency improvements, with a fee charged based on percentage of client savings (approx $1m - $3m revenue)

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• Phase 3 – Ongoing support ensuring efficiencies are maintained, performed on a time & materials basis (approx $1m + revenue per annum)

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FY14 CPT Global Strategy

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• Aggressively target growth in international business by capitalising on significant business development investments in prior years:

• Increasing risk/reward cost optimisation engagements

• Cross selling testing, capacity planning, production assurance and mid-range cost optimisation services

• Maintaining a solid Australian business as it navigates a tough economic environment.

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The CPT Business Landscape

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International business

• Cost optimisation engagements remain CPT’s “sweet spot”

• Increased testing and production assurance services

• Pipeline growth, predominantly in North America

• Recent expansion into Asia and South America, using Strategic Partners

Australian business

• Election Year

• Two largest clients reducing CPT engagement due to outsourcing/off-shoring and supplier rationalisation

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FY14 Achievements

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International business

• Addition of nine new/re-engaging clients which generated almost $8m revenue and established CPT’s first truly global client

• Increase of risk/reward revenue to $9m (2013 $6m)

• First successful engagement in mainland China

• Strengthened pipeline in European business with five large opportunities nearing commencement (two expected in September/October)

• Expansion of services provided to North American market

• Increased margins due to the increased risk/reward engagements

Australian business

• Addition of eight new clients which generated almost $2m revenue

• Re-emergence of former largest client which previously reduced CPT’s engagement due to unsuccessful off-shoring

• Reallocation of Australian resources to support International business growth

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CPT’s Revenue Mix

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FY13

FY14

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Asia
0% 1%
North
America
19% North
America
32%
Europe
12% Australia
51%
Australia
69%
Europe
16%
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International Risk Reward Revenue $6.0m

International Risk Reward Revenue $9.0m

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Revenue by Region – Australia

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Australian Revenue

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30m
25m
20m
15m
10m
5m
-
FY'10 FY'11 FY'12 FY'13 FY'14
AUD
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• Business is now stabilised as large account reductions have been absorbed

• Single digit growth expected

• Margin contests have been avoided

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Revenue by Region – North America

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North American Revenue

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14m
12m
10m
8m
6m
4m
2m
-
FY'10 FY'11 FY'12 FY'13 FY'14
USD AUD
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• Revenue underpinned by annuity revenue and solid client relationships

• Strong margins achieved

• Management structure enhanced to support continued growth

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Revenue by Region - Europe

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European Revenue

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7m
6m
5m
4m
3m
2m
1m
-
FY'10 FY'11 FY'12 FY'13 FY'14
EUR AUD
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• Business remains lumpy, dependant on timing of project engagements

• Strong margins achieved

• Contract conclusions await project replacements

• Targeting increased annuity revenue and service cross selling

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Foreign Exchange

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• CPT’s business is highly impacted by the strength of the AUD

• In FY 14:

• North American operating result was negatively impacted by approximately $300k revenue / $136k profit

• European operating result was positively impacted by $125k revenue / $45k profit

• Weakening of the AUD by 1c will add:

• In the North American business: an increase of $145k revenue / $55k profit

• In the European business: an increase of $85k revenue / $35k profit

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Balance Sheet

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	FY14 ($m)	FY13 ($M)
Cash	2.4	1.2
Debtors	7.2	6.0
Unbilled Revenue (WIP)	3.1	3.8
Other Current Assets	0.3	0.5
Total Current Assets	13.0	11.5
PP+E	0.0	0.1
Deferred Tax Asset	1.4	1.2
Intangibles	7.5	7.6
Total Non-Current Assets	8.9	8.9
Total Assets	21.9	20.4
Current Liabilities 7.8		7.0
Non-Current Liabilities	0.3	0.4
Total Liabilities	8.1	7.4
Net Assets	13.8	13.0

Strong Balance Sheet

•

• Improved cash position

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Cash Flow

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	FY14 ($m) FY13 ($M)
Receipts	38.5 37.5
Payments	(35.2) (36.1)
Gross Operating Cash Flow	3.3 1.4
EBITDA	3.2 1.0
Ratio of GOC / EBTIDA	1.03:1 1.4:1
Finance Costs	(0.2) (0.1)
Income Tax	(0.4) (0.4)
Net Operating Cash Flow	2.7 0.9
Net Investing Cash Flow	0.0 (0.3)
Net Financing Cash Flow	(1.1) 0.0
Net Cash Movement	1.6 0.6
Opening Cash Position	1.2 1.1
Effect of Foreign Exchange	(0.4) (0.5)
Closing Cash Position	2.4 1.2

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Dividend

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Fully franked interim dividend paid in April 2014 3.0 cents Fully franked final dividend declared, to be paid on October 30, 2014 1.5 cents Total Dividends for FY14 4.5 cents NPAT Payout Percentage 77%

Franking Credits retained after dividend payments > $1.6m

FY14 Final Dividend will be eligible for the purposes of the Company’s Dividend Reinvestment Plan

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FY15 Strategy

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International Business

• Cross sell services beyond the risk/reward cost optimisation services in Europe

• • Improve Europe annuity revenue base to absorb the downtime between large projects

• Increase local international service delivery capability to improve local responsiveness and reduce travel expense

• Establish North American management structure to support growth opportunities

Australian Business

• Expand footprint in existing Tier 1 accounts

• Leverage CPT experience overseas in financial institutions within major Australian banks

• Target cost optimisation opportunities within Australian government

New Markets

• Carefully manage expansion activities

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Outlook

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International Business

• Growth across all regions

• Rate and timing of growth dependant on timing of new project commencements

• Continued strong margins

• Increased risk/reward and annuity revenue

Australian Business

• Single digit percentage growth

• Strategy of preserving margins

• Costs will continue to be tightly controlled

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About CPT Global

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CPT Global is a specialised consultancy with two focus areas. Its Technical Consulting services enhance the control, stability, efficiency and reliability of all technology platforms with core offerings of Capacity Planning, Performance Management and Testing. Its Management Consulting services review and improve the business processes associated with Information Technology, with offerings that include Program and Project Management, IT Governance Reviews, Strategic Sourcing Strategies and Technology Transition Planning.

EUROPE

AUSTRALASIA

AMERICAS

Melbourne

New York

London

Level 1, 4 Riverside Quay Southbank VIC 3006 Telephone +61 3 9684 7900 Facsimile +61 3 9684 7999

410 Park Avenue, 15th Floor, New York NY 10022 Telephone +1 917 210 8668 Facsimile +1 917 210 8182

Parkshot House, 5 Kew Road Richmond, Surrey, TW9 2PR Telephone +44 20 8334 8085 Facsimile +44 20 8334 8541

Sydney

Toronto

Munich

Suite 3, Level 5, 80 Clarence St Sydney, NSW 2000 Telephone +61 2 8234 7400 Facsimile +61 2 8234 7499

100 King Street West, Suite 5600 Toronto, Ontario M5X 1C9 Telephone +1 416 642 2886 Facsimile +1 416 644 8801

Landsberger Str. 302 D-80687 Munich Telephone +49 89 9040 5955 Facsimile +49 89 9040 5965

Canberra

Sao Paulo

Paris

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Level 6, 39 London Circuit Canberra City ACT 2601 Telephone +61 2 6206 9700 Facsimile +61 9684 7999

Singapore

10 Anson Road, #32/15 International Plaza, Singapore 079903 Telephone: +65 6226 2555

Al. Europa 1206 – Santana de Parnaiba - SP – CEP 06543-325 Telephone: +55 11 8454-0869

140 bis rue de Rennes 75006 Paris Telephone +33 1 70 38 23 21 Facsimile +33 1 70 38 23 00

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www.cptglobal.com