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Chairman’s and CEO’s Address to Shareholders 2013

By October 30, 2013December 9th, 20162013, ASX Announcements

Thursday, 30 October 2014 – SYDNEY – Please find below the Chairman’s and CEO’s addresses to the shareholders from this years Annual General Meeting.


    Welcome to the 2013 Annual General Meeting of Infomedia Limited. On behalf of the Directors and Management, I thank you for taking the time from your busy day to come to this event to engage with us and learn more about our Company. It is our pleasure to report to you this morning.

    During the past year, our Company continued to successfully invigorate all aspects of its operation, performance and presence. Sales revenue grew, net profit increased, product and delivery platforms strengthened, customer goodwill advanced, and planning for the future evolved.

    During the year, our teams have continued to build upon the good progress of recent years and delivered all-round good results. Results that we believe are sustainable, furthering financial growth and market leadership.

    In addition to the normal business of the meeting, you will hear from our new CEO, Andrew Pattinson, and other Executives of the Company who will share some insights into the commercial and technical areas of the Company. You will hear about a market research project we performed during the year and how we will use its results to guide Infomedia’s product and market development for the decade to come.

    But first, let me acknowledge our team for the outstanding financial performance they achieved during the year, where Sales Revenue increased by $3M and Net Profit After Tax by $1.6M. This was an increase of 7% and 19% respectively over the previous year.

    The Directors declared a final dividend of 1.55¢ per share, bringing the total dividend for the year to 2.82¢; an increase of 17.5% over the previous year. Chief Financial Officer, Jonathan Pollard, will cover in depth these and more figures, during his report.

    Over the course of the past three years, we have strengthened our products, furthered our client relationships, built an infrastructure that is once again leading edge, and increased goodwill inside as well as outside the Company.

    For the leadership team, these achievements have facilitated further opportunities to look deeper into the future of our markets, considering our place in that future, and initiating actions for greater achievement. Of those matters, I share a few with you here.

    In the Annual Report, you will have learned about the research interviews the Company conducted last year with leading OEM Parts and Service leaders in North America, Europe and Asia. We embarked upon the research to discover three things.

    The first was to construct a composite industry vision of Parts and Service operations in the year 2020. The second was to identify technology trends, commitments, and goals of automakers for their dealers and their vehicle owners. And the third was to deepen our market knowledge, to help set Infomedia’s R & D direction and priorities.

    If I were to distil that future vision into just two words, it would be ‘Big Data’. This concept of Big Data will transform the relationship between vehicle owners and Aftersales dealers. It will be revolutionary. It will transform the way Aftersales departments are organised and operate. It will stem service customer attrition rates and provide higher levels of customer engagement and satisfaction at dealerships.

    The research validated that the Company’s Superservice™ strategy is in step with the future envisioned by the industry leaders. In fact, it is helping to shape that future.

    The results of this research have culminated in a whitepaper entitled ‘Aftersales 2020’, which we will shortly be sharing with Automakers around the world, as part of our thought leadership campaign.

    We have also concluded that the demand for investment to bring about the future defined by industry leaders will be large, and, in the current state of global economic uncertainty, will lead automakers away from in-house I.T. development and third parties toward collaborative cooperation.

    Following me, Andrew Pattinson will speak on the Company’s development posture, which will contribute to this future.

    As I stated at last year’s meeting, the Company has solid fundamentals, is resilient, able, and focused. During the year, the investment community took greater interest in reassessing the Company, and its underlying performance and potential.

    Management took opportunities to reaffirm our business fundamentals with that community, and how to assess them. As clarity into our business grew, so did the market’s appreciation for the Company.

    Many of Infomedia’s investors have long valued its reliable and high dividend returns, and this year shareholders have also benefited from substantial capital appreciation. While I am in no position to predict the future, I can say that the Company is in a strong position to benefit from weakness in the Australian Dollar against the U.S. Dollar and Euro, should that occur.

    I believe this new appreciation of our overall business dynamics has contributed to the increase in our share price and the return of IFM shares into the All Ordinary Index this year.

    The focus of the Leadership Team in recent years has concentrated on the development of a technically superior product line and a strong back-end production and publishing platform. We are satisfied with the achievements on those fronts. Now, with that foundation in place, our focus is on revolutionising the commercial side of the business.

    The Company’s go-to-market model has remained constant for 23 years, and its core tenet of recurring subscriptions will be here for years to come still. However, with the advent of Big Data and the likelihood of cooperation with other I.T. stakeholders, the Company is evolving a broader go-to-market strategy than just direct product marketing by its own sales personnel.

    Our Superservice solution strategy has opened up new opportunities to allow third parties to participate with us in strategic alliances, extending the reach and scope beyond what we could do alone. Karen Blunden, CEO for Infomedia’s subsidiary in the Americas, will speak about some of these commercial changes.

    In 2012, the Directors rekindled the Employee Share Option Scheme. The program that was established in 2000 had become low-profile for a number of years, but now, with the resurgence of the Company, the Directors want to instil an experience of ownership participation with personnel whose commitment and performance represents exemplary merit.

    The first of the newest round of options were granted to personnel primarily at the Senior Management and Team Leader levels of our organisation. Options were granted with vesting occurring over 3 years, and execution hurdles tied to growth of the IFM share price.

    It is the Directors’ intention to progressively extend the grants to further members of the organisation.

    So our Company is healthy, forward-looking, and has an economic business model that is sound, competitive, and sustainable. While business isn’t without its risks, the leadership team at Infomedia is invested to soundly do all it can to grow the Company’s assets and opportunities.

    As the founder and Chairman of the Company, I am proud of our people and the business we have created together. Infomedia has a respected position in its field and I believe our goals are realistic and achievable. I believe that the Company has endured challenges in recent years and came out the other side as a stronger and more mature enterprise.

    These remain exciting times. Our vision for the decade ahead is to see the use of Infomedia’s product lines extend to all automotive dealers around the world. We call that, product ubiquity.

    While our technical and commercial methods continuously improve to keep current with changing times, our objective remains steadfast. That objective is to markedly contribute to our customers’ success. In turn, the value we receive from our customers for that contribution, rewards our personnel who contribute extraordinarily to achieving that goal, and to our shareholders who risk their capital to make all that possible.

    It is the simple honesty of this vision and goal that underpins our strategies and our actions, and gives me confidence in the long-term outlook for our Company.

    Thank you.


    I welcome our shareholders today; it is great to have you with us.

    We have three key topics to communicate today – operational, technical and commercial. I will cover the operational and technical items, whilst Karen Blunden will be covering commercial items in her presentation shortly. My hope is that between Jonathan Pollard, Karen and I, we can leave you with a better insight into your business.

    As I am newly incumbent in the CEO role, I thought I would start by introducing myself. I joined the business in 1988, when we were a software distributor, and in 1994, I joined the Infomedia division and took over the operational management.

    In 2000, Infomedia acquired a competitive EPC business in Melbourne called Datateck Publishing. I assumed the General Managers role within Datateck, and helped integrate the business into the Infomedia family.

    From 2002-2004, I was back in Sydney as the Vice CEO where my role was involved in investor relations and project work on behalf of the CEO’s office.

    In 2004, I moved with my family to the UK to establish our European distributorship. Whilst there we went about establishing Automotive OEM, customer and DMS relationships, and in particular, finding new markets for our new Superservice Menus product.

    Since returning to Sydney in 2009 until my change in role last month, I was leading our product and development teams in the transition from Disc to online and in creation of the new Superservice suite of products.

    Development Strength

    Development has always been a core strength of our Company. The fact that we have such a broad global user base, with a relatively small sales team, speaks to the strength of the product feature sets and intuitive user interfaces we create.

    Our products have always been innovative and class leading. Many of what are considered to be ‘must haves’ in EPC and Service applications were introduced by Infomedia. Items such as VIN based look-up, colour coded interpretation and integration with dealer accounting systems were all introduced by our product teams. We have also set benchmarks when it comes to speed of search results and reduction in publishing times (which leads to data that is more current for our customers). On this front, we continue to push ourselves and our competitors.

    At the start of FY13, we had two key goals for the Development group – complete the transition to online for all of our disc products, and deliver the full suite of Superservice products.

    So how did we do?

    For those of you who have followed our business will know, for the last 3 years we have been working hard on the transition of our applications from Disc to software as a service (SaaS) – or online. I am happy to say that all of our products are now available in an online environment, which is a major milestone. Goal achieved.

    The same applies for the delivery of the Superservice product suite.

    The Superservice suite complements the existing Microcat EPC and SSM products and provides dealers with a comprehensive aftersales customer experience tool kit – think ‘Microsoft Office’ for automotive aftersales. From the service booking, through to customer reception, quoting and end customer surveys, there is a product in the Superservice suite to do the job. Karen will be talking to these products in her presentation and if you missed them on the way in this morning, they are being demonstrated in the foyer at the conclusion of the meeting today. I would also encourage you to visit if you would like some more detail.

    Aside from the product deliveries, I thought you would find the way in which we approach our development insightful.

    In all of the transition work occurring in the last 3 years, we have been prudent in ensuring we have created a solid foundation for our future product growth

    Ensuring our infrastructure is in place, and making sure to standardise the common elements of our applications such as user interface, security and data handling means we can manage more throughput with less requirement for human resource.

    We build our applications with incremental improvements as stepping-stones. We balance our short-term tactical releases with our long term planning objectives. We have a program of continuous training and engineer up-skilling and we keep in mind that it counts for nothing if it does not improve the success of our customers.

    Last year we achieved a long held desire to put automated quality and process tools into production. This required a large investment from the business. However, we have seen this investment pay dividends in our productivity and quality outcomes and we will continue to build on this success. For example, in the last year, the majority of our EPC customers moved to weekly data updates from the traditional monthly cycle. We were able to support this increase from 12 to 52 releases per annum output without any increase to our operational staff.

    Of course the ultimate test success with an application is whether it empowers the user.

    In all of our applications, we start with the user experience. This is an ongoing, iterative approach to the visual appeal, workflow and feature set of the application. The goal in mind is to improve the success of our customers.

    The thing I would like you to take away from today is that the team is planning for a successful future. We are building a platform that will support our business goals out into the future.

    Research and Development

    As I have covered on the previous slide, we will continue our strong investment in technical research and development. Whilst we expect that expenditure will rise during FY14 as a percentage of revenue we believe it may decrease.

    Why is this the case? The Board and leaders of the business feel we are in a good position to benefit from ‘Big Data’ by virtue of our Superservice suite of products to help meet the needs of our automotive customers.

    We also believe that the capital investment required by OE’s to create the future they described in the creation of the white paper will lead them away from in-house development. We also think this will bring about more co-operative collaboration between third party vendors such as ourselves.


    As a result of the acquisition of Different Aspect in 2011, we ended up with two offices in the UK. By coincidence, they were located only a few miles apart in the Cambridge area of the UK. Earlier in 2013, we consolidated our offices into one central location in Cambridge.

    At this time, we also took the opportunity to relocate the European Customer Service Centre to this new location. It had previously been housed at our building here in Frenchs Forest.

    Our IT team have planned and began implementing a new internal network to allow high speed and high volumes of data flow between the four major offices in Sydney, Melbourne, UK and US. This project is due to be completed before the end of calendar year 2013, and will not only improve productivity, but also help meet our rapid disaster recovery objectives and result in an improved business continuity profile.

    In closing, I would like to echo Richard’s comments on the contribution of the Executive team and staff to what has been a very positive year for the business.

    I would also like to thank our shareholders and customers for their continued support of the business and especially all of you who have come out to our meeting this morning.

    Thank you.