IGNITE LIMITED — AGM Information 2013

Oct 30, 2013

Clarius Group Limited and Controlled Entities

AGM Presentation for the Full Year Ended 30 June 2013 ABN 43 002 724 334

Presented by: Kym Quick, Managing Director

www.clarius.com.au

Overview

• Offices in Australia, New Zealand, Singapore and China.

• House of specialist brands with focus on IT, Accounting, Banking and Finance, Corporate Services, Engineering, Records and Information Management, Sales and Marketing.

• Permanent, Contact and Temporary placements.

• 12 Cities, 38 Offices, 290 Employees

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Financial Results

	June 2013	June 2012
Revenue $m	$225.3m	$273.4m
Net profit/(loss) after tax $m (excluding impairment)	$(0.9)m	$2.1m
Impairment of goodwill	$40.9m	$11.5m
De-recognition of tax losses	$0.4m	-
Reported net (loss) after tax	$(42.2)m	$(9.4)m
Earnings per share (cents)	(47.2)	(10.6)
Operating cash flow	$4.4m	$(2.0)m
Gearing ratio	(0.6)%	2.2%
Dividend	nil	1.0 cent

Financial Results

Profit & Loss	June 13	June 12
Total revenue	$225.3m	$273.4m
Gross profit (margin)	$37.5m	$46.3m
Employee benefits expense (excluding restructuring)	$27.0m	$32.3m
Restructuring costs	$0.7m	-
Finance costs	$0.3m	$0.3m
Depreciation and amortisation	$1.0m	$0.6m
Other overheads	$9.4m	$9.3m
NPAT (excluding impairment)	$(0.9)m	$2.1m

Financial Results

Financial Position	June 13	June 12
Cash	$1.0m	$0.9m
Trade Receivables	$48.8m	$60.5m
Intangible Assets	$2.5m	$42.4m
Bank Borrowings	$0.7m	-
Total Equity	$37.0m	$78.8m

Group Revenue and Gross Margin Mix

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Group Revenue
FY 2013
4%
13%
Perm 31%
Recruitment services
83% Managed Services
IT Services Contracting
69%
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Permanent Revenue Mix

FY 2013

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38%
58%
4%
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Australia % New Zealand % Asia %

FY 2012

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12%
4%
84%
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Australia New Zealand Asia

Revenue and Gross Profit Margin

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Salary Expense Management

Impact of China investment on Group Salary FY 2009 to 2013

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45,000
40,000
35,000
30,000
25,000
20,000
2009 2010 2011 2012 2013
Salary and OnCosts (with China Investment)
Salary and OnCosts (without China Investment)
AUD '000
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Focus - Snapshot

• Investment in growth markets delivering results

• Investment in improved infrastructure and systems

• Reduced management overhead

• Cash flow improvement

• The Ignite business diversification

• Continue to consider strategic acquisitions that meet our rigorous criteria

Strategic Focus

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Protect and build our core business in the Asia Pacific Region; Attain Operational Excellence;

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Develop industry leading talent;

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Extend our capability into related lines of business

Strategic Focus

Protect and build our core business in the Asia Pacific Region

Protect and build our core business in the Asia Pacific Region

Evolving to meet the changing needs of our clients

• Major Accounts Restructure 2011/2012

• Additional structural changes for IT;

• Strengthen our specialist database in the IT market and get further leverage across the IT businesses within the group;

• shift in demand from IT labour hire models to “resource on demand” models;

• Outside of IT, we have seen our traditional “temp” market shifting in terms of demand and engagement models.

Protect and build our core business in the Asia Pacific Region

Investment in Growth Markets - China

• Offices now in Beijing, Shanghai , Shanghai Pudong & Suzhou;

• Dominant market presence in Retail Luxury sector and Financial Services;

• Diversification into IT and digital markets in Q1 FY 2014

• Revenue growth has been strong and continues to grow - the focus is now on productivity improvements;

• Currently the region is profitable.

Lloyd Morgan China - Total Revenue (in RMB)

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4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13
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Protect and build our core business in the Asia Pacific Region

Investment in Growth Markets - Asia

2014 and beyond:

• Geographical growth into further cities in the region – Tianjin, Chengdu, Shenzhen;

• Exploration of opportunities in other Asian markets;

• Diversification into aligned services – RPO, BPO, online solutions.

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Protect and build our core business in the Asia Pacific Region

Transformative technology

• Our market is being challenged by disruptive technology and the emergence of online recruitment solutions and “crowd sourcing” portals.

• It is important for us to embrace and evolve with these changes and take advantage of the opportunities that they present.

• Clarius is in collaboration with partner organisations working towards building an online solution that will:

• Enhance candidate attraction, retention and engagement;

• Provide clients with powerful, efficient and timely candidate sourcing solutions;

• Significantly reduce operating costs;

• Combat the threat imposed by online talent sourcing tools (LinkedIn).

• Completion of the business IT transformation roadmap is scheduled for early 2014

Strategic Focus

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Attain Operational Excellence

Attain Operational Excellence

• Back office systems integration project – commenced August 2013.

• This will provide both cost savings and scalability.

• In January 2013, implementation commenced and currently internal payroll along with two brand payrolls are live.

• At the completion of this project in March 2014, we expect the following outcomes:

• Economies of scale moving from a ratio of 1:0.07 Sales Team:PayBill Team to 0:0.03

• Improved accuracy with less manually intensive processes through workflows and interfacing;

• Improved cash flow through faster invoicing of clients;

• Improved compliance through better standard operating practices;

• Improved customer service, with accessible online information.

Attain Operational Excellence

In late FY2013, we will embark on a new transformation project that will enable us to further enhance our strategic position and achieve our business vision through technology:

Dimension One:

Enhanced talent pool utilisation Greater consultant efficiency Reduced IT management

Greater collaboration and information sharing Gain competitive edge through innovative projects Provide global capability in sourcing

Dimension Two:

High speed, automated processing Managing and motivating performance Improved visibility at all levels Link activity to outcomes and targets

Dimension Three:

High level of candidate engagement – we are the strategic platform of choice for candidates throughout their career;

Long term collaborative relationships with our clients

Facilitate collaboration among common interest groups

Build the best talent pool in the industry

Strategic Focus

Develop industry leading talent

Develop industry leading talent - Investment

• We have continued to invest in development of our people and implemented the final program in late 2012 – Advance 360;

• This is an important investment in our future – the ability to develop talent quickly in an improving market will be critical to our success in the coming years;

• Our strategy is built around developing our own people through intensive and advanced L&D programs at every stage of a consultants career.

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Develop industry leading talent - Outcomes

Industry Recognition Internal Recognition

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Strategic Focus

Extend our capability into related lines of business

Extend our capability into related lines of business

• Internal and external payroll

• Business Process Outsourcing

• Learning & Development

• Workplace Health & Safety

• Human Resources

• Outplacement

Labour market outlook – 2014-2016

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Employment Landscape – 2013/2014

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Do you think you will
pursue a new job in the
New Year?
[CATE
GORY
[CATE
NAME
GORY
] …
NAME
] …
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Disclaimer

The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Clarius Group Limited. In particular, they speak only as of the date of these materials, they are based on particular events, conditions or circumstances stated in the materials, they assume the success of Clarius Group Limited’s business strategies , and they are subject to significant regulatory, business, competitive and economic uncertainties and risks.

Clarius Group Limited 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 in events, conditions or circumstances on which any such statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of Clarius Group Limited since the date of these materials.

No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including Clarius Group Limited). In particular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward looking statement will be achieved. Actual future events and conditions may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Given these uncertainties, readers are cautioned to not place undue reliance on such forward looking statements.