1. Making Sense of a topsy-turvy world
Economic Update
Radisson, Sydney
27 August 2015
Making Sense of a topsy-turvy world
2016 & Beyond
Phil Ruthven
Founder & Director
WHERE KNOWLEDGE IS POWER 1

2. Topics Our Business Environment Some Influential Environments
Some Operating Environments
Outlook For Industries
Profitability Patterns
Keys To Success

3. 1. Our Business Environment

4. The Environment for our Business
WORLD
NATIONAL RESOURCES
E C O N O M Y
4 Influential Environments
LABOUR
GOODS
GOVERNMENT
MARKETPLACE
ANZSIC / SIC / NAICS CLASS
OUR INDUSTRY
FINANCE
Our
Business
DEVELOPED
NATURAL
6 Operating Environments
(Cash flow, P&L)
Trainer’s Instruction: Go through slide, notes below:
Everyone in business operates in a company, and each company is able to organize and control many factors influencing its operations.
However, companies are influenced by factors, and some of these are beyond a manager’s direct control.
Successful firms interpret the factors that can be managed, hedge against the risks that can’t be controlled and exploit external trends that open new markets.
The all-encompassing “environment” in which a company operates is in fact ‘the industry’. Managers must understand their industry to be successful (e.g. competitors, barriers to entry, industry life cycle and factors such as regulation and taxation).
The most successful companies emulate (or surpass) world’s best practice benchmarks to ensure a competitive edge in the marketplace – taking advantage of the factors they can control.
Operating Environments: These can be a source of revenue or a cost center. The generation of positive cash flow or profit depends on how a firm relates or reacts to the operating environments.
Influential Environment: These do not directly affect revenue, costs or profits, but impinge on results via the operating environments (e.g. weather, war, world prices, demographics).
SERVICES
© IBISWorld

5. So, how much do you need to know or worry about . . .
The Influential Environments (4)
1. The world environment, growth, regions, nations, demography etc. ?
2. The resources environment, developed/natural (incl. ecological) ?
3. Our community, its changing demography, lifestyles and spending ?
4. The economic environment, the “business weather” conditions ?
The Operating Environments (6)
5. The market, local and global
6. The government environment, laws, taxes, policies, incentives ?
7. The finance market, equity, debt, exchange/interest rates, treasury ?
8. The services market, to outsource none-core activities and functions ?
9. The labour market, for executives, employees and customers ?
10. The purchases market, raw materials, semi-/finished goods, prices ?
The Immediate Environment Your industry, WBP, size, growth & disposition, competitors etc. ?
Your Own Business
Its IP, financials, sales, operations, TQC, productivity, R&D, HR etc. ?

6. 2. Some Influential Environments

7. The World Environment (Global perspective)

8. World GDP Growth Real growth (PPP), 1950-2016 (F)
Purchasing Power Parity (PPP) terms % % %
2.8% (F)
growth
in US$ market terms
* The world decline in 2009 was -2.0% when
measured in $US market price terms
IMF/OECD/Economist//IBISWorld: 12/06/15

9. World’s 30 Largest Economies 2015 (E)
Poland 0.9%
Argentina 0.9%
Thailand 0.8%
Thailands 0.8%
Netherlands 0.8%
S. Africa 0.7%
Pakisthan 0.6%
Egypt 0.6%
Malaysia 0.6%
Colombia 0.6%
Purchasing Power Parity (PPP) terms
Rest of World
(200 nations)
15.0%
th Nations 7.0%
19.0% USA
11th – 20th Nations %
Mexico
16.9% China
France
Russia UK
Brazil
India
2.1%
Germany
Japan
2.5%
2.6%
2.7%
2.9%
3.6%
5.9%
5.2%
Italy 2.1%
S. Korea 1.9%
Canada 1.7%
Spain 1.6%
Indonesia 1.5%
Turkey 1.4%
Australia 1.1% 17th
Iran 1.1%
Saudi Arabia 1.1%
Taiwan 1.1%
World’s 230 nations
US$ 97 trillion
IMF/IBISWorld 05/01/15

10. Economic Growth: 2016(F) 20 Largest Economies (ppp ranking)
World Growth
2016 (F), 2.8%
Economist/IBISWorld 24/08/15

11. Asia Growth 2015 (E) Major Asia Pacific and Indian S-C nations (ppp ranking)
Mega-Regions Growth
Asia %
World (8 regions) %
M.E & Africa %
Americas %
Europe %
Growth % (GDP)
IMF/IBISWorld: 12/07/15

12. The Community Environment (generational differences, incomes, spending and wealth)

13. Our many Generations In 2015
Older Civics
(91+ years)
0.8%
Silents
73-90 years
Gen Zers
(<14 years)
Baby
Boomers
50-72 years
“old fashioneds”
7.2%
17.8%
26.0%
“the thoughtfuls”
Net Generation (Y)
14-33 years
“spoilt generation!”
26.5%
21.7%
Generation X 34—49 years
“free-rangers”
“quiet achievers”
Most powerful
generations
Generational Types
Civics
Adaptives
Idealists
Reactives
Australia
24 million persons (F2015)
IBISWorld 08/05/15

14. Household Income $ 1407 billion ($ 154,600/household)
By Source (% of total basis) Year to March 2015
Non-life insurance receipts( 2.4%)
Transfers (3.0%),
Workers compensation (0.8%),
(imputed and
non-cash)
Dwelling
ownership
6.9%
Other 6.3%
Invest. Income 13.7%
54.3% Wages
Mixed Income 9.5%
Welfare 9.3%
Unincorporated enterprises sole traders, partnerships
(wages & profits combined)
$ 1407 billion ($ 154,600/household)
Source: IBISWorld 07/07/15

15. Australian Household Expenditure Year to March 2015
Depreciation % Dwell/Propty Interest % Consumer Debt Int %
Unincorp. Interest %
Transfers %
H’Hold durables 2.7% Motor vehicles % Other %
Taxes
(& social contributions)
Savings
6.3%
Capital Related
4.7% Durables
14.3%
12.7%
Fin. & Ins. Serv. 7.9%
16.4% Non-durables
Rent %
Health
Hospitality
Other Services
Education
Mobility
6.4%
(& other
dwelling costs)
4.1%
2.9%
Entertainment
(Gambling 3.3%)
2.6%
4.4%
3.5%
Communicns. 1.5% Fares 2.0%
Food % Alc.& Tobacco 2.3% Clothing %
Utilities 1.6%
Veh. Operation 3.1%
Other %
Notes: 1 includes imputed rent
(home ownership)
million in F2015
(ABS)
Reduces to $140,625
without imputed rent
$ 1407 billion
($ per household2)
Source: ABS5206/IBISWorld 08/06/15

16. Australian Households Net Worth1 June 2014
$ 7864 billion
($ 845,600 /household)
Including
Unfunded
superannuation
Super.
& Life
Housing
(owner-occupied)
27.8%
34.6%
Shares 7.9%
Including Securities
& Loans
10.9%
Deposits 9.7%
(& currency)
Housing
(investment)
3.1% Other Prop.
Other 2.2%
Durables 3.8%
Equipt. 2.2%
1 Net worth is after deducting
the following liabilities
Housing mortgage
Other pers. loans
Unincorp. bus. loans
Equipment,
IP, Inventories
H’hold durables,
collectables
Commercial
& Rural
Sources: Reserve Bank Statistical Tables B20;
ABS , 24/11/14

17. House & Flat Prices Across Australia Median F2015(June quarter)
Apartments/Flats
Houses
Average of nation’s 9.6 million
dwellings (incl. non-capitals)
$595,000,000 in June 2015
Price $‘000
Source:: Domain/ IBISWorld 23/07/15

18. Sydney Residential Prices ABS Index to March 2015
Years, ended June
Source: IBISWorld:

19. The Economic Environment (The business weather conditions)

20. Australia’s Economic Growth Annual real GDP growth (%) progressed in quarters to March (and forecast to December 2018)
3.5% pa (52 years)
3.2% pa (since 1987)
Years, ended June
Source: IBISWorld: 07/07/15

21. The Australian Marketplace Year to March 2015
Exports
17%
Consumption Expenditure
62%
Capital Expenditure
21%
Exports of Goods
& Services
Government CapEx 3.7%
16.6%
Household Consumption
46.7%
Dwellings 5.6%
Bus. CapEx %
Consumption1 5.8%
9.0%
Consumption1
Nat.
Govt.
State & Local
Government
1 Mainly on behalf of household
2 Incl. inventory change
Gross National Turnover of Goods & Services
$1.94 trillion (current prices)
Source: ABS/IBISWorld 08/06/15

22. Consumption Expenditure Growth 4 qtr moving average to March 2015
3.7% pa (52 years)
3.0% pa (since 1987)
Recessions do not occur from collapsing consumption expenditure
(mainly households), but from capital expenditure which does go
severely negative every 8.5 years.
Source: ABS B 04/06/15

23. Exports of Goods & Services Growth 4 qtr moving average to March 2015
5.4% pa (52 years)
5.6% pa (since 1987)
Year, ended June
Source: ABS: /06/15

24. Capital Expenditure Growth 4 qtr moving average to March 2015
4.6% pa (52 years)
5.3% pa (since 1987)
Recessions occur when
GFCE falls more than 8%
Years, ended June
Source: ABS B 04/06/15

25. 3. Some Operating Environments (where money is exchanged)

26. The Finance Environment (interest costs, dividends)

27. Indicator Lending Rates Australia F1975 -2015
Credit
Cards
Overdraft
(small business, variable)
Interest Rate (%)
Mortgage
(standard bank)
Year, ended June
Source: IBISWorld/Reserve Bank

28. Indicator Lending Rate Maximum Overdraft Rate 1863-2015
Prima facie’
50 year cycles
IBISWorld 08/07/15

29. Exchange Rate - $US To $A Monthly average, to August 2015
For the $A to rise in value against the $US (after the current collapse) as per the upward tunnel would require much higher inflation in the USA as the aftermath of the extraordinary quantitative easing (QE) of the past 5-6 years and a substantive recovery in mineral prices. Less likely.
If neither occur, the mid-value/average of the $A could be around $US 0.87 over the next decade.
August $US 0.72
Source: Reserve Bank of Australia/IBISWorld forecasts 08/07/15

30. The Government Environment (our taxes on value added, wages and profits)

31. Ethics & Honesty Ranking
Respected OK
Borderline !
Untrustworthy
Dodgy/
dishonest
The pollies and unions
Source: Roy Morgan 2014

32. Government Initiatives: are they being addressed? (Yes/No)
1. Balanced budgets, the first rule of good government No
2. Tax reform that includes GST and shifts taxes to spending Yes/No
3. IR reform that understands work and workers in the New Age No
4. Innovation, IP and productivity; and how to get them No
5. Fully embrace the digital era for international competitiveness No
6. Long range vision, especially our role in the Asia Pacific region Yes/No
7. Reduce subsidies going to yesterday’s industries that won’t survive Yes
8. Privatization of low-productivity government activities Yes/No
9. Rational energy policy that includes carbon, nuclear power No
10. Developing the top part of our continent (especially top ⅓) Yes/No

33. Taxation In The Major Economies % of GDP basis 2014
“Nanny state”
risk?
OECD average
Average
Developed
economies
Developing
economies
Total taxation & other revenue as a share of GDP
Source: IBISWorld 04/05/15

34. The Labour Environment (wages & supplements)

35. Source: ABS 6203-D IBISWorld 27/07/15
Employment By Industry Sectors Australia June Share of Total Employment
Primary
Sector (4%)
Secondary
Sector (18%)
Quinary
Sector (26%)
Personal
& Other
Services
Cult. & Recn.
Services
Agriculture
Mining
Utilities
1.2%
1.9%
4.1%
2.5%
1.9%
Health &
Comm. Services
7.8% Manufacturing
8.8% Construction
Hospitality %
12.6%
3.4% Wholesaling
Education 7.8%
10.4% Retailing
Govt. Admin 6.3%
Adm & Support Serv
5.2% Transport
Professional
& Tech. Services
Finance & Ins.
3.5%
8.7%
3.3%
Tertiary
Sector(19%)
Quaternary
Sector (34%)
Media &
Communications
11.8 million employed
Source: ABS 6203-D IBISWorld 27/07/15

36. Sources: ABS. IBISWorld, 12/07/15
Australia’s New & Lost Jobs By Industry Year to June Share of total basis
3 times more
jobs have been
created than lost
Construction
4.7%
Manufacturing
Arts &
recreation
Services
9.7%
1.9%
2.8% W’Sale
7.3% Transport
& Postal
Health
25.1%
Agriculture
21.3%
Rental &
Real Estate
12.4%
Prof. & Tech
Services
23.6%
Mining
24.9%
Fin. & Ins 9.3%
Housing
(investment)
Retailing 13.5%
Hospitality 13.9%
Education 36%
4.3% Admin/Support
3.5% Pub. Admin
2.4%
2.2%
Utilities Manufacturing
Net new jobs
255,600
New jobs 390,000
Lost jobs 134,400
Sources: ABS. IBISWorld, 12/07/15

37. 4.8% Admin & Support Services
Australia’s New & Lost Jobs By Industry 5 years to June Share of total basis
Personal/
Other Services
3.2%
Utilities
0.3%
The nation created
nearly 8 times more
new jobs than it lost
Mining
5.0%
0.8% Finance &Insur
1.7% Rental/Real Est
Arts & Recreation 3.4%
4.7% Construction
4.2% Retail
2.3% Transport/Postal
Info media/
telcos
8.7%
Health
26.9%
Wholesalng %
19.2%
Prof. & Tech
Services
Agriculture
47.0%
Housing
(investment)
Manufacturing
37.7%
Hospitality 8.1%
4.8% Admin & Support Services
Education 10.5%
4.9% Govt./Safety
Lost jobs 128,200
Net new jobs
870,400
New jobs 998,600
Sources: ABS. IBISWorld, 12/07/15

38. Full Time Adult Wages Growth in nominal wages, % per annum, to June 2014
Source: ABS6302.0

39. 4. Outlook For Industries

40. Australia’s Industry Mix Shares of GDP, in F2013 price terms Year to March 2015
Pers. & Other Serv.
Cult & Rec. Serv.
0.8%
Agriculture
2.3%
Hospitality
Mining
8.6%
Utilities %
Health 6.5%
1.8%
Education 4.6%
6.2% Manufacturing
Ind. Taxes1 6.5%
7.8% Construction
Govt. Adm. 5.3%
2.8%
3.9% W’Saling
Prof. & Tech Serv 6.0%
4.5% Retailing
O’Ship Dwells. 8.4%
8.6%
4.6% Transport
Finance & Insurance
Includes
postal,
warehousing
2.9%
Admin. & Support
Services
Rental, Hiring & Real Estate
Info Media & Communications
Sectors
Primary
Secondary
Tertiary
Quaternary
Quinary
GDP $1587 billion
Note 1: Less subsidies, but ncludes stat. discrepancy (0.2%)
ABS IBISWorld 08/06/15

41. Australian Industries Growth 5 years Growth to March 2015 (IGP @ F2012 prices), % p.a
Percent
Source: IBISWorld 08/06/15

42. Australian Industries Growth Forecast (% pa), 5 years to June (value added basis, constant prices)
If staying on trend
Incl. imports
Percent
Source: IBISWorld 28/01/15

43. Digital Disruption

44. Power the major utility
Australia’s Ages Of Economic Progress Constant F2011 Prices and onwards
Hunting
Age
Agrarian
Age
Industrial
Age
Infotronics
Age
Enlightenment
Age ?
Industrial
Age
Imbedded
intelligence,
GDP $ billion
Transport the
major utility
Power the major utility
(electricity) and telephony
IC&T
Year, ended June
IBISWorld 08/07/15

45. Enabling Utilities In Each Age Of Development
Hunting Age ( )
No pervasive utility (even the wheel was not a pervasive utility)
Agrarian Age ( )
Transport (including the wheel and carts, roads, water transport etc.)
Industrial Age ( )
Mechanical Power (water wheel and steam engines) in Stage 1
Electrical Power (electricity & telephony) in Stage 2
Infotronics Age (1965-late 2040s)
ICT (information and communication technologies) in Stage 1 to 2006
ICT enhanced by high speed broadband plus cognitive computing, learning systems, analytics and more in Stage 2, the Digital Disruption Era, from 2007 to the late 2040s: the newest utility.

46. Digital Disruption
The second stage of the Infotronics Age from 2007 has seen the advent of digital communication protocols: fast broadband, smart hardware such as mobiles, tablets, PCs, TVs, etc and AI. All have led to digital disruption.
It is fast, it can be destructive, but it is facilitatory. And unstoppable.
Some of the new products that have emerged in the new age are like electronic guardian angels, in the form of heart pacemakers, hearing implants, bionic eyes, haptic implants (soon), lifesaving DSC and ABS on cars, CTV security systems and myriads of others here and on the way.
But the application to new products and industries is more far-reaching in terms of the economy and jobs.
The new age is centred on services: functions outsourced from households and businesses; and services outsourced to us from overseas such as tourism, education and health services. All benefit from digital protocols

47. (included in categories,
The Retail Goods Market F2016 (E) Revenue $374 billion (% of total basis)
Food %
Household %
Auto %
Online/direct
shopping c. 6.0%
(included in categories,
excludes M/V et al)
Trailers, /caravans
Motor cycles
Tyres
M/V parts
Motor vehicles
17.2%
Service Stations 9.7%
24.9% Supermarkets
Other Auto %
Other Household 8.2%
Other Food outlets
Meat, Poultry, Fish
Chemists
Dept. Stores
Furn./ Floor
Hardware
5.7%
1.7%
3.3%
2.4%
4.1%
5.2%
4.8%
2.8%
Clothing
Footwear
Household
Appl.
Other 8.5%
Antique/Used Goods
Fabrics.soft goods
Flowers
Garden eqpt
Watches/Jewellers
Personal accessorties
Computers
Housewares
Stationary
Cosmetics
Tobacconists
Duty Free
Convenience 1.1%
Bread & cakes 1.5%
Fruit & veg %
Entertainment 3.5%
Photo eqpt
Sport & Camping
Videos, music
Toys & games
News & bookstores
Marine eqpt
Revenue
$ 374 billion

48. Main Media Advertising Expenditure 1900 - 2020 (F), % of total
Print
Outdoor
Radio
FTA TV
Pay TV
Internet
Cinema
Source: CEASA/IBISWorld estimates 16/06/15

49. 5. Profitability Patterns

50. Profitability of Australia’s Largest Enterprises Number, by profitability range (ROSF after tax (%), 5-Year Average to F2014
Average ROSF for 1241 enterprises
(c. 48% of national revenue) was 8.3%
over the 5-years to Rises to
15.5% if loss-makers removed
Average (8.3%) in this bracket and 761 enterprises (61%) did better than the bond rate
240 enterprises (>19% of the 1241
enterprises) operated at an average
loss over the 5-years to 2014
Number of enterprises
Source: IBISWorld 11/06/15

51. Includes multinational
Australian Profitability By Industry1 Return on Shareholder Funds (after tax) Largest Enterprises3 5 years to F2014
24 companies
65 companies
62 companies
66 companies
17 companies
188 companies
89 companies
37 companies
42 companies
1241 companies
16 companies
169 companies
companies
Simple average
basis
Rises to 15.5% if loss-makers removed
Includes multinational
importers/marketers 25 20 50
Notes: 1 Includes GBE and private enterprises
2 Simple average basis for each industry
3. Top 1241 companies, c. half nation’s
revenue. Excludes companies with
negative shareholder funds or thinly
capitalized (equity < 5% of assets)
45 companies
90 enterprises
74 enterprises
16 enterprises
ROSF Percent
Source: IBISWorld 11/06/15

52. Includes multinational importers/marketers
Australian Profitability Best 100 Companies1 Return on Shareholder Funds (after tax) 5 years to F2014
6 companies
7 companies
7 companies
18 companies
3 companies
15 companies
13 companies
2 companies
17 companies
7 companies
1 company
3 companies
1 company
1 company
Includes multinational importers/marketers
Note: 1 Includes GBE and private enterprises
2 Simple average basis within each industry
ROSF Percent
Source: IBISWorld 11/06/15

53. Note 1 Same industry division Source: IBISWorld 11/06/15
The 100 Best Companies ROSF after tax (%), 5-Year Average to F By Industry Sector
Number ROSF 3
Primary (Agriculture, Mining) %
Secondary (Manufacturing, Construction, Utilities) %
Tertiary (Wholesale, Retail, Transport/Storage/Postal) %
Quaternary (Information and/or finance related) %
Quinary (Hospitality, Health, Recreation and other Services) % %
Note 1 Same industry division Source: IBISWorld 11/06/15

54. 50 Best Performing Australian Enterprises 5 years average ROSF, after tax, (%) to 2014
Revenue ($mill)
1. Finite Group
199.8
238
26. PharmaCare
52.4
236
2. Philip Morris
169.0
3043
27. JB Hi-Fi
52.2
3484
3. Sydney Ports
142.6
112
28. Sunstate Cement
129
4. FedEx Australia
110.8
221
29. WorkPac
52.0
492
5. British American Tobacco
103.6
2072
30. Tamawood 81
6. Hatch
101.8
526
31. DuluxGroup
51.2
1618
7. Hays Recruitment
93.6
1370
32. Dick Smith
51.0
1228
8. Winslow Constructors
91.8
330
33. Garry Crick Auto Group 74
9. Inghams
91.0
2393
34. Monadelphous
50.8
2349
10. Bakers Delight
78.0
35. Kane Constructions
474
11. Cater Care
72.2
182
36. Zara
49.3
141
12. Metro Trains
68.4
1203
37. Apple
49.2
6256
13. Emerald Grain
65.0
1100
38. Coca-Cola South Pacific
48.2
145
14. Lenard's
63.4
628
39. Grant Thornton Australia
47.4
217
15. Lorna Jane
63.0
168
40. Five D
47.2
189
16. OrotonGroup
62.8
125
41. Hyder Consulting Holdings
46.8
104
17. ISGM
62.5
417
42. Boehringer Ingelheim
45.4
356
18. GR Engineering
61.2
119
43. Colliers International
45.0
311
19. Hassell
60.2 84
44. S J Higgins Group
20. Dredging International
59.6
796
45. Jaguar and Land Rover Australia
44.5
682
21. Novo Nordisk Pharm.
59.2
209
46. Morris Corporation
44.0
227
22. Wotif.com
55.0
151
47. GHD Group
43.4
942
23. Revlon Australia
54.6 98
48. Talent International
43.2
316
24. Carsales.com
53.0
49. Interactive
136
25. Platinum Asset Manag.
323
50. Australian Rugby League
43.0
351
Source: IBISWorld 10/06/15

55. Next 50 Best Performing Australian Enterprises 5 years average ROSF, after tax, (%) to 2014
Revenue ($mill)
ROSF (%)
51. Inchcape Australia
42.8
2215
76. Green's Foods
36.7
198
52. Flinders Port
213
77. GRM International
36.5
315
53. Pandora
42.6
166
78. Navitas
36.2
879
54. Imperial Tobacco Australia
42.0
656
79. Omya Australia
100
55. Nick Scali
143
80. Diamond Gas Resources
36.0
367
56. ADP
40.8
126
81. QIC
314
57. Mars
40.6
1392
82. REA Group
35.6
447
58. Yarra Trams
40.4
416
83. McMillan Shakespeare
35.4
348
59. Unisys Australia
183
84. BOC
34.6
1189
60. LifeHealthcare Group
40.0 87
85. Compass Group
34.4
1831
61. Reckon
39.6
101
86. Mitsui Iron Ore Development
1793
62. Brighton Toyota/Lexus
39.4
197
87. Sealink Travel Group
33.8
104
63. Terry Shields Toyota
39.0
159
88. Penfold Motors Group
33.2
368
64. AMA Group 64
89. Procter & Gamble
32.6
470
65. Motor Accident Commiss.
38.8
570
90. Ferrero Aust
32.4
182
66. Metso Minerals
38.6
401
91. Australian Fleet Sales
118
67. Blue Star Group
38.5
279
92. UPS 85
68. Data#3
38.4
834
93. CSL
32.2
5857
69. Fortescue Metals Group
38.2
12616
94. Accenture Australia
1408
70. Mazda Australia
2436
95. ResMed Holdings
32.0
1529
71. Country Road
37.2
856
96. Coopers Brewery
232
72. ACCO Australia Pty Ltd
127
97. Beca
31.8 88
73. Dicker Data
37.0
663
98. J & P Richardson
31.6
120
74. MSS Security
36.8
382
99. SMR Automotive
31.4
137
75. De Costi Seafoods
116
100. Knorr-Bremse
30.8
134
Source: IBISWorld 10/06/15

56. 25 Best Performing Listed Companies
Company
ROSF
5 yr average to 2014 (%)
2010
2011
2012
2013
2014
Div Yield 2015 %
1. Oroton
62.8
80.0
83.5
68.6
59.2
22.4
5.81
2. GR Engineering
61.2
175.1
51.7
31.1
18.3
30.4
9.04
3. Carsales.com
53.0
48.6
53.6
55.8
54.8
50.9
4.77
4. Platinum Asset Man.
52.4
60.7
60.8
51.3
37.5
50.6
4.74
5. JB Hi Fi
52.2
40.5
72.0
56.7
47.7
43.6
4.26
6. Tamawood
52.0
30.5
18.2
92.7
58.3
61.4
6.42
7. Dulux Group
51.2
72.1
67.3
48.9
32.5
35.8
3.62
8. Dick Smith Holdings
51.0 -
89.6
11.9
6.82
9. Monadelphous
50.8
57.7
49.2
55.9
50.7
40.4
10.2
10. Nick Scali
42.0
52.5
45.3
33.0
44.0
35.5
3.89
11. LifeHealthcare
40.0
47.0
4.16
12. Reckon
39.6
33.5
31.8
39.0
37.0
56.4
4.04
13. AMA Group
71.3
62.9
31.2
16.6
12.7
2.67
14. Data#3
38.4
41.8
49.7
42.1
6.18
15. Fortescue Metals
38.2
39.3
41.9
41.4
36.0
5.28
16. Dicker Data
31.9
36.6
44.6
45.9
25.4
4.34
17. Navitas
36.2
62.1
32.4
31.3
31.6
24.4
4.30
18. REA Group
35.6
36.5
34.9
34.7
34.8
36.7
1.68
19. McMillan Shakespeare
35.4
50.3
38.0
32.3
24.6
4.38
20. Sealink Travel
33.8
53.2
27.1
53.3
22.8
13.4
3.01
21. CSL
32.2
25.0
25.8
29.5
40.1
41.3
1.56
22. ResMed Holdings
32.0
29.3
1.50
23. Cochlear
30.2
14.8
37.4
28.5
2.65
24. Technology One
28.10
29.7
30.8
29.6
25. Blackmores
30.0
34.5
25.5
1.96
Source: IBISWorld 17/06/15

57. The All Ordinaries To 2015 (25 August)
Trend
Actual
All Ordinaries Index
IBISWorld/ASX 25/08/15
Year, ended June

58. 6. Keys To Success

59. Note 1 Same industry division Source: IBISWorld 11/06/15
Best Enterprise Characteristics ROSF after tax (%), 5-Year Average to F2014
% ROSF
Focus
Focused (mainly single industry class) %
Theme Conglomerates %
Classic Conglomerates %
Ownership Origin
Local Owned %
Foreign Owned % %
Ownership Type
Public Company %
Proprietary Company %
Government Body % %
Industry Sector
Primary (Agriculture, Mining) %
Secondary (Manufacturing, Construction, Utilities) %
Tertiary (Wholesale, Retail, Transport/Storage/Postal) %
Quaternary (Information and/or finance related) %
Quinary (Hospitality, Health, Recreation and other Services) % %
Note 1 Same industry division Source: IBISWorld 11/06/15

60. What the Best Enterprises Are Doing
1. They stick to one business at a time and do not diversify
2. They aim to dominate1 segment (s) of their industry or market
3. They are forever innovative, valuing the business’ IP.
4. They outsource non-core activities to enable growth.
5. They don’t own “hard” assets.
6. They have good and professional financial management.
7. They plan from the outside-in not the inside-out
8. They anticipate any new industry lifecycle changes.
9. They follow world best practice for their own type of business.
10. They develop strategic alliances.
11. They develop unique organisational cultures.
12. They value leadership first and management second.
Note: 1 Within official legislation, limits or guidelines of “dominance” Source: IBISWorld

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