Purpose, Vision, Values
and Business Model
“Only a commitment by all the team will
bring SAI Global’s vision alive”
Ross Wraight CEO February 2007
APPLIED INFORMATION SERVICES
2
Welcome
Facilitators:
 Ross Wraight, Chief Executive Officer
 Andrew Jones, Group Director Human Resources
3
What are we to achieve today?
 Roll out SAI Global’s Purpose, Vision, Values and Business Model
to all employees
 Gain an understanding of their impacts on our stakeholders
 To gain your commitment to the Purpose, Vision & Values
 To agree behaviours that align with our Purpose, Vision & Values
and to identify behaviours that do not
4
Agenda
1. Business Model and Strategy
2. Purpose, Vision and Values
3. Next Steps
5
1.1 SAI Global Business Model
Why have a Business Model?
 Our Business Model is the embodiment of our Purpose & Vision
 It shows how the parts of the business fit together
 The Business Model shows how through working together the
value of SAI Global is more than the sum of its parts
 It differentiates us from our competitors
6
1.1 SAI Global Business Model
SAI Global is an applied information services company. It:
 Is your source for global technical and business information
 Provides end-to-end training solutions around critical business
information
 Helps you understand, implement and manage the information
associated with business systems and processes
 Enables you to verify your understanding of information by providing
independent assessment, certification and registration.
7
1.1 SAI Global Business Model
PUBLISHING
COMPLIANCE
Standards
Alerts
Legislation
News feeds
Databases
Monitoring
Distribution
Property
Databases
Search
Other Technical
Provide Information
Awareness and
understanding
Apply Business Solutions
ASSURANCE
Conformity
Assessment
- Product
- Food
- Systems
Audit Effectiveness
Supported by TRAINING and BUSINESS IMPROVEMENT SOLUTIONS
(Professional Services)
8
1.1 SAI Global Business Model
Summary:
 SAI is a top 300 company listed on the ASX with a market
capitalization $574M, January 30, 2007
 2006/7 Est. revenues >A$210 million
 2006/7 Est. EBITDA of >A$42 million
 More than 800 professionals with 353 offshore
 Physical operations in Asia-Pacific, Europe and North America
 Customers across the world
 70% of revenue is annuity type
 Capex is small
9
1.1 SAI Global Business Model
Industry demand drivers:
 Globalization
 Corporate compliance
 Risk management
 Brand reputation protection
 Fraud and corruption control
 Regulation and Industry
standards
Greater
demand for
SAI Global
services
 Improved productivity

Long supply chains
 Customer and consumer
confidence
High growth
rates
10
1.1 SAI Global Business Model
Value proposition for our services:
In essence, SAI Global helps organizations comply with the
requirements that shape the business world, it:
 Provides easy on-line access to millions of items of Standards,
regulatory and technical information
 Takes the burden out of regulatory and internal compliance
 Protects brands and reputations
 Pushes information and training where and when its needed
 Simplifies cross-border and language exchange
 Provides supply chain confidence
 Improves and sustains business
11
1.1 SAI Global Business Model
Business Competitors:
 SAI is the first organization of its type to list on a stock exchange
and has no direct equivalent
 In the international technical publishing space SAI competes with
IHS, Reed Elsevier and Thomson
 There are numerous competitors in regulatory compliance space
but few offer SAI’s end-to-end solutions. Competitors include:
 Complinet and Lexis Nexis for alerts and news feeds
 Paisley and Methodware for monitoring systems
 LRN and Integrity interactive for communication and awareness
 In the certification space SAI competes with organizations such as
SGS, Lloyds Register, BSI & Bureau Veritas
 The training and consulting market is highly fragmented and SAI
has numerous competitors
12
1.1 SAI Global Business Model
Revenue by business
Revenue by region
Asia
BP
Nth America
AS
Australia
CS
Europe
PS
BP=Publishing, CS=Compliance, PS=Professional Services, AS=Assurance
13
1.1 SAI Global Business Model
Financial Performance - Group
A$M
50
A$M
250
EBITDA
Revenue
200
40
150
30
100
20
50
10
0
0
00/01
01/02
02/03
03/04
04/05
05/06
06/07
00/01
01/02
02/03
03/04
04/05
05/06
06/07
14
Financial Outcomes – Half Year 2006/07
– Underlying Business Performance
–Revenue1 up 46.7% to $100.8 million,
–EBITDA up 50.6% to $19.3 million
– AIFRS Reported Results
–NPAT up 38.1% to $8.1 million,
–EPS up 3.6% to 5.7 cents
– Underlying Cash Earnings
–Cash earnings up 35.5% to $12.3 million,
–Cash earnings per share up 1.2% to 8.6 cents
1. Excludes interest income
15
1.2 Publishing
Build a world leading international,
technical publishing, distribution and
information business
 Approximately A$70M revenue, mainly
recurrent revenue
 Delivers a major and stable annuity
earnings engine
 Operations in Australia, Europe and
North America
 Non-exclusive licenses with more than
250 international standards bodies
including BSI (UK), ASTM (USA) and
NFPA
 Exclusive distributor of Irish Standards
and Australian Standards
 Distributor of USA Military Specifications
16
Business Publishing – Half Year 2006/07
6 Months
1H07
$M
1H06
$M
Change
%
Revenue
36.7
22.3
64.2
EBITDA
11.7
6.7
75.3
31.9%
29.9%
6.7
EBITDA margin (%)
A$M
20
A$M
60
EBITDA
Revenue
15
40
10
20
5
0
0
FY01
FY02
FY03
FY04
FY05
FY06
1H07
FY01
FY02
FY03
FY04
FY05
FY06
1H07
17
1.2 Publishing – IP Providers
USA Military Specifications
and many others
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1.2 Publishing
Key Services:
Watching Services
 Standards Watch – More than 140,000 subscribers
 Regulatory News Feeds – Track & monitor Australian law
Search & Database Services
 Standards Online Select – More than 1,000 customers
 Standards Premium Select – More than 300 customers
 Standards Infobase – More than 700,000 Standards
 Metals Infobase – Search 14,000 related Standards & materials &
70,000 grades
 Eurolaw Database – search industry treaties, directives, regulation and
case law
 Logicom – 150 million items covering military parts & logistics
 Webshop – Download a PDF or print-on-demand
19
1.2 Publishing
Outlook:
 Business model produces excellent financial outcomes and is efficient,
transportable and scalable
 Increasing use of electronic delivery services
 Penetration of non-traditional markets through Anstat and ILI
acquisitions
 Growth opportunity in global Standards and database markets
 Aggressive targeting of new business opportunities
 Continued revenue and EBITDA growth
20
1.3 Compliance
A$M
30
Our strategy in this business is to establish a
leading global scale business in the
international compliance management,
training, awareness and solutions market
Revenue
25
20
15
10
5
0
00/01
01/02
02/03
03/04
04/05
05/06
06/07
04/05
05/06
06/07
A$M
7
EBITDA
6
5
4
3
2
1
0
00/01
01/02
02/03
03/04
 Cost effective electronic solutions in
multiple languages and countries
 Presence in key geographic markets with
content capability and range
 Effective pricing and marketing models for
solutions, retail and tools markets
 Solutions underpinned by proprietary
technology
 Fragmented market
 Blue chip client base
21
Compliance Services – Half Year 2006/07
6 Months
1H07
$M
1H06
$M
Change
%
Revenue
10.1
7.3
38.6
EBITDA
1.6
1.5
10.6
16.3%
20.4%
(20.0)
EBITDA margin (%)
A$M
4
A$M
20
EBITDA
Revenue
15
3
10
2
5
1
0
0
FY01
FY02
FY03
FY04
FY05
FY06
1H07
FY01
FY02
FY03
FY04
FY05
FY06
1H07
22
1.3 Compliance
Key subject areas:
 Financial compliance
Anti Money Laundering, Operational Risk, Fraud,
Consumer Protection
 Asset protection
Information Security, Employees, EHS, Privacy &
Data Protection
 Business ethics
Governance, bribery, fraud, conflicts of interest,
antitrust, diversity
 Managing Risk
Process & system management, OHS, IPR,
procurement
SAI provides business solutions underpinned by proprietary
technologies
23
1.3 Compliance – Business Model
Apply Business Solutions
Risk & Compliance Framework
(common to all programs)
Know what
affects you
Create
Policy
Compliance Guidelines &
Update Services
Communicate
& Train
Learning
Content &
Services
Monitor
Activity
Report on
Activity
Audit
Results
Risk & Compliance
Monitoring Toolkit &
Implementation Services
Audit
Services
SAI Change Management & Project Management Services
(recommended through all stages of the process)
24
1.3 Compliance
Why are compliance services important for SAI?
 They are an integral part of the SAI business model
 There is a growing need for cost effective solutions to the
compliance issues that organizations need to deal with increasingly on a global scale
 There are strong demand drivers for services, resulting in high
organic industry growth rates. USA led the way, Europe and
other markets “catching up”
 There is currently a fragmented supply of services which
provides the opportunity for SAI to establish a leading position
in the market
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1.3 Compliance
Why are compliance services important for SAI? (cont.)
 Strong profit outcomes are expected and consequently
compliance assets are increasing in value
 SAI is experiencing strong growth in both headline sales and
recognized revenue for all major compliance product streams
 SAI’s compliance division’s organic growth for the first half ended
31 Dec 06 exceeded 20%
 The flow through to the profit contribution from the compliance
division has been impacted by investment in sales infrastructure
and product development
26
1.3 Compliance
Outlook:





Growing recurring revenue base
Growing regulatory demand for compliance
Consolidation occurring at the technology end
Developing opportunities through SAI Global relationships
Continued revenue and EBITDA growth
27
1.4 Training and Business Improvement Solutions
Our strategy in this business is to
diversify product range and develop
sources of recurring revenue that
drive growth and profitability
improvement
 Continue to develop non-standards
based products
 Development of information based
products
 Business development component of
our value chain
 Few recurring revenue streams
 Standards based product sales
depend on new product releases
28
Professional Services – Half Year 2006/07
6 Months
1H07
$M
1H06
$M
Change
%
Revenue
10.8
10.4
3.1
EBITDA
0.8
0.7
21.0
7.9%
6.7%
17.9
EBITDA margin (%)
A$M
3
A$M
30
EBITDA
Revenue
25
2
20
1
15
10
0
5
(1)
0
FY01
FY02
FY03
FY04
FY05
FY06
1H07
FY01
FY02
FY03
FY04
FY05
FY06
1H07
29
1.4 Training and Business Improvement Solutions
Key Services:


-
Solutions
Public courses
Seminars
Workshops
Instructor-led & in-house training
e-learning
Subject Areas
Six Sigma
Quality
Environment
Workplace safety
Food safety
Information security
Lead auditing
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1.4 Training and Business Improvement
Outlook:
 Significant growth in business
improvement products
 Electronic training model starting to grow
strongly (technology now available through
compliance services)
 Continued revenue and EBITDA growth
31
1.5 Assurance Services
Our strategy in this business is to establish SAI
Global as a leading international assurance
business
A$M
100
Revenue
80
60
40
20
0
00/01
01/02
02/03
03/04
04/05
05/06
06/07
04/05
05/06
06/07
A$M
15
EBITDA
10
5
0
00/01
01/02
02/03
03/04
 Recurrent revenue streams, solid growth and
profit model
 Physical presence in key geographic markets
 Products deliver brand protection, consumer
and customer confidence
 Integrated offering i.e. QMS, EMS, workplace
safety, ISMS
 Consistent international delivery platform with
people capable of delivering
 Competitive advantage from “Five Ticks”
StandardsMark
 Supplier and customer driven industry
consolidation
 Growth in new products such as food safety,
corporate governance and social responsibility
32
Assurance Services – Half Year 2006/07
6 Months
1H07
$M
1H06
$M
Change
%
Revenue
43.2
28.4
52.0
EBITDA
6.1
4.6
30.3
14.0%
16.4%
(14.6)
EBITDA margin (%)
A$M
12
A$M
80
Revenue
EBITDA
60
8
40
4
20
0
0
FY01
FY02
FY03
FY04
FY05
FY06
1H07
FY01
FY02
FY03
FY04
FY05
FY06
1H07
33
1.5 Assurance Services
Proprietary Technologies & Trademarks
 Auditor Management System
 “Five Ticks” StandardsMark
Services
 Management systems registration
 Product certification
 Gap analysis
 Second party audit
 Supply chain compliance
Subject Areas
 Quality
 Environment
 Workplace safety
 Food safety
 Information security
 Product safety
34
1.5 Assurance Services
Outlook:
 Continued development of global audit network
 Supplier and customer driven industry consolidation
 Growth in new products such as food safety, corporate governance
and social responsibility
 Continued revenue and EBITDA growth
35
1.6 Financial Imperatives
 Improve operational efficiency
- Identify and eliminate duplication and wasted time
- Improve processes, become more efficient
- Cost to income ratio must continually decline
 Integrate acquisitions
- Realize cost and revenue synergies quickly
 Establish regional shared service functions
- Europe - advanced
- Nth America - commencing, Midi acquisition being the catalyst
 Improve reporting timetables
- Systematic migration to common accounting platforms
 Global approach to tax, cash, and franking credit management
36
1.7 Financial and Strategic Outlook
 First half financial performance in-line with expectations
 Other than the impact of the acquisitions, full year in line with
plan
 Organic growth of 6-8%
 Strong earnings per share growth expected in FY08 and FY09
 Two to three acquisitions in the next twelve months likely
37
2. Purpose, Vision and Values
How were our Purpose, Vision and Values derived?
 Developed by EXCO at September 2006 meeting
 Presentation to all SAI Global staff during Q1 2007
38
2. Purpose, Vision and Values
Who are SAI Global’s Stakeholders?
 Our customers
 Our shareholders
 Our employees; and
 The community
39
2.1 Purpose
Why have a Purpose?
 An organizational purpose communicates to all our stakeholders what
SAI Global is in business to achieve
 It assists us to remain focused on our core business activities
 To be effective our Vision, Values and Business Model must support
and be aligned with our Purpose
 For an organization’s Purpose to appeal to all Stakeholders, it must
meet the highest moral and ethical standards
40
2.1 Purpose
Our purpose:
 SAI Global, an applied information services company, helps
organizations manage risk, achieve compliance and drive business
improvement.
 It enables organizations to improve, and enhances the confidence of
their stakeholders, by:
- delivering standards, regulatory and technical information;
- adding value to this information through aggregation and
interpretation;
- creating training, communication and monitoring solutions; and
- providing assurance through independent assessment.
42
2.1 Purpose
What are our objectives?
 SAI Global can build stronger and longer lasting relationships with its
customers by communicating explicitly how it improves business
through its applied information services.
 When communicating, these are the messages we want our
customers to hear:
– we help improve business
– we offer a range of services
– we provide direction and tools for businesses to help themselves
– we simplify confusion
– we help businesses overcome obstacles
43
2.2 Vision
Why have a Vision?
 A Vision communicates to all our stakeholders SAI Global’s strategic
intent and how we propose to achieve it
 It creates an easily understood goal that everybody associated with SAI
Global can strive to achieve
 A vision is a picture of what the future could be like. As such it should be
inspirational and stretching
 The Vision supports the Purpose and how we plan to build on it
 To achieve our Vision our Values and Business Model must also support
and align with the Vision
44
2.2 Vision
Our Vision:
 To be the world’s leading applied information services company we need
to:
- achieve international scale;
- deliver our customers outstanding products, processes and services.
 We will do this through:
- the dedication of our people;
- our commitment to excellence in governance;
- driving superior shareholder returns.
45
2.3 Values
Why have Values?
 Organizational Values help define the culture of an organization. They
paint a vivid picture of “How we do things around here”
 They succinctly articulate how SAI Global will treat its people and the
behaviours it expects in return
 They add an extra dimension to decision making by constantly
reminding us “How” things should be achieved in SAI Global
 An organization's values must be in line with its purpose and the
vision that it is trying to achieve
 They are of no value if they are not put into practice across SAI
Global
46
2.3 Values
Our Values:
 SAI Global employees are at the core of its business and it is
committed to:
-
Showing respect
Developing careers
Offering challenging opportunities
Building great teams
Making work fulfilling
 At SAI Global we pride ourselves on the fact that our employees are:
-
Customer focussed
People of integrity
Responsible
Forward thinking and innovative
Focussed on performance
47
2.3 Values – what do and don’t they mean?
SAI Global’s commitment to showing respect…
Does Mean
Does Not Mean
- People are valued for the contribution
- All ideas are implemented
they make
- All requests can be actioned
- Diversity is encouraged and respected
- Under-performance is acceptable
- Opinions or suggestions are welcomed,
listened and responded to
- There is no monopoly on wisdom
- Harassment, discrimination or vilification
in any format is unacceptable
48
2.2 Values – what do and don’t they mean?
SAI Global’s commitment to developing careers…
Does Mean
Does Not Mean
- Professional development and learning
will be encouraged
- High levels of Competence/Skill will be
expected
- Career ambitions can be fulfilled
- For some a career will be a lifetime of
doing the same job well – this is OK too
- SAI Global will organise all learning
activities
- Development outside the needs of SAI
Global is a priority
- Career progression comes easily
49
2.2 Values – what do and don’t they mean?
SAI Global’s commitment to offering challenging opportunities…
Does Mean
Does Not Mean
- Offering opportunities that have meaning
and align with professional development
needs
- Employees will be “stretched” to fulfil
their potential
- Where ever possible we will offer variety
and broaden our people’s experience
- Employees will be “dropped in the deep
end”
- Everyone can pick and choose the
opportunities they want all the time
- Less attractive work will be always be
for somebody else
50
2.2 Values – what do and don’t they mean?
SAI Global’s commitment to building great teams…
Does Mean
Does Not Mean
- We welcome different points of view
within our teams. Focussing on an issue
from all perspectives leads to the best
result
- We appreciate that the essence of good
teamwork is bringing together diverse
skills and capabilities
- Teams that are cross functional and
cross divisional spread best practice
- We believe that the value of a team is
greater than the sum of its parts. Team
players are valued at SAI Global
- Everyone is going to like everyone in
their team
- You are only in one team. You may, from
time to time, be in varying teams
- The value of individuals is not
recognised
51
2.2 Values – what do and don’t they mean?
SAI Global’s commitment to making work fulfilling…
Does Mean
Does Not Mean
- You will be doing work that directly
aligns with SAI Global’s Strategy,
Purpose, Vision & Values
- We will all have targets and Key
Performance Indicators (KPI)
- You will have a say in your career at
SAI Global
- Your performance will be recognised
- We can satisfy everyone’s needs all the
time
- That less stimulating work is always for
somebody else
- That work will never be frustrating
- That fulfilment is achieved without effort
52
2.2 Values – what do and don’t they mean?
SAI Global’s employees are customer focussed…
Does Mean
Does Not Mean
- We recognise that customers are our
life blood
- We are passionate about exceeding
their expectations
- We approach every day knowing that
customers have the choice to buy
elsewhere
- We seek and act on feedback from our
customers
- We are aware that our future depends
on how we serve our customers
- We should put service before profit
- That other stakeholders aren’t important
- We should offer services we are illequipped to deliver, just because a
customer requests it
- We should not be commercially
focussed
- We should trade our integrity to win a
customer
53
2.2 Values – what do and don’t they mean?
SAI Global’s employees are people of integrity…
Does Mean
Does Not Mean
- We demand honesty, integrity and an
ethical approach to everything we do
- We are not frightened to say “I don’t
know”
- We are not frightened to own up to a
mistake
- We value people who follow the “right”
course of action as opposed to the “easy”
course of action
- That commercially focussed decision
making is discouraged
- That we are not profit focussed
- That we do not compete robustly
- That results are unimportant
54
2.2 Values – what do and don’t they mean?
SAI Global’s employees are responsible...
Does Mean
Does Not Mean
- We deliver what we promise
- We own up to and learn from our
mistakes
- We make decisions that are in the long
term interests of SAI Global
- We don’t “pass the buck”
- We make commitments we cannot meet
- We blame others
- We look for excuses
55
2.2 Values – what do and don’t they mean?
SAI Global’s employees are forward thinking and innovative…
Does Mean
Does Not Mean
- We anticipate our customers future
needs
- We know what our competitors are
doing and respond positively
- We question the status-quo
- We constantly seek out new ideas
- We value people who take on new
challenges and offer new ideas
- We should ignore the lessons of the
past
- That we haven’t got it right
- When things go wrong, somebody is
always to blame
- That we can concentrate on the future
and ignore what needs to be done today
56
2.2 Values – what do and don’t they mean?
SAI Global’s employees are focussed on performance…
Does Mean
Does Not Mean
- We value individual and team
performance
- We strive to work smarter
- We maintain work/life balance
- We are committed to achieving or
exceeding our objectives
- We don’t accept failure easily
- We recognise those who go that extra
mile
- We do not tolerate mediocrity
- We are not compassionate
- We encourage short term gain for long
term pain
- We are not quality focussed
- We achieve at the expense of our
colleagues
57
3. Next Steps
Organisational Behaviours Activity:
1. Break into teams and for 30 minutes brainstorm
- “What we currently do that aligns to the Purpose, Vision &
Values and what doesn’t align?”
- Suggest additions or deletions that we should make to what
each element of the values “Does mean” and “Does not
mean”
2. Present your findings to the group
3. As a group discuss how we can change what needs to
change
58
3. Next Steps
So what happens now?
 Systems and processes to be reviewed and where required
alignment made (e.g. Performance Appraisals, Sales strategies,
Acquisition pipeline, Organizational policies)
 Start living the values – be comfortable to raise concerns with
someone if their behaviours do not align to the values
Support the Purpose & Vision – look for opportunities that will
help SAI Global & in turn our stakeholders achieve our Purpose &
Vision
59
3. Next Steps
 Questions?
 Thank you for your efforts to date and for those in the future