Energy Action Limited · ASX:EAX
Energy Action — Shareholder Meeting (October 2013)
52 slides from Energy Action's shareholder meeting presentation, Oct 31, 2013
Slide 1: Annual General Meeting
For personal use only Annual General Meeting 31 October 2013 1
Slide 2: Welcome & Introductions
For personal use only WELCOME & INTRODUCTIONS 2
Slide 3: Contents
For personal use only Contents 1. Business Overview 2. Financial & Operational Highlights 3. Financial Results 4. Operational Performance 5. FY14 Outlook 6. Formal Business 3
Slide 4: 1. Business Overview
For personal use only 1. BUSINESS OVERVIEW 4
Slide 5: Australia's Leading Energy Management Company
For personal use only Australia’s Leading Energy Management Company Formed in 2000, listed on ASX in 2011 Australian Energy Exchange Proven track record - year on year double digit Energy Procurement revenue and profit growth and history of paying dividends Created the market for online revers
Slide 6: Where does Energy Action fit into the energy market?
For personal use only Where does Energy Action fit into the energy market? Energy Action can reduce business’s reliance on grid supplied electricity by managing energy price, quantity, source & compliance 6
Slide 7: Corporate Snapshot
For personal use only Corporate Snapshot Capital Structure 12mth Share Price Performance ASX Code EAX Shares on Issue 25.8 million Market Cap (10 Oct 2013) $98million Share Price $2.10- $4.10 (52 week High/Low) Cash at Bank (30 Jun 13) $6.4 million Debt Nil Shareholders 744 Top 20 holding 78% Board
Slide 8: Track record of profitable growth
For personal use only Track record of profitable growth NPAT Margin Employee Costs EBITDA Margin Future Contracted Revenue 8
Slide 9: 2. Financial & Operational Highlights
For personal use only 2. FINANCIAL & OPERATIONAL HIGHLIGHTS
Slide 10: FY13 Financial Highlights
FY13 Financial Highlights For personal use only Revenue up 28% to $22 million Operating NPAT1 of $5.0 million - 26% higher Future revenue4 up 17% since 30 June 2012 to $76.5 million 000’s FY13 FY12 Change Revenue 22,166 17,371 4,795 28% Revenue up 28% to $22.2 million Statutory NPAT 4,376 3,61
Slide 11: FY13 Operational Highlights
FY13 Operational Highlights For personal use only • NPAT growth driven by: 1,390 successful auctions in the 12 month period – up 14% =6.87 million mega watt hours contracted on behalf of corporate customers FY13 excludes 1,006 Ward Consulting sites under contract ($398 million of electricity contr
Slide 12: Developments since June 2013
For personal use only Developments since 30 June 2013.... CEO appointment Activ8 Scott Wooldridge appointed as Energy Action’s new CEO. Highly automated electricity monitoring and Scott commenced 21 October. contract management service. Val Duncan will leave her executive role on 22 November
Slide 13: Developments since June 2013 - Activ8+
For personal use only Developments since 30 June 2013.... Activ8+ (energy efficiency & sustainability) Installation & commissioning of our largest 3 new sales people appointed to promote the energy solar installation – 200KW @ Sirromet efficiency business to the Energy Action customer base Winer
Slide 14: Regulatory & Markets Update
For personal use only Regulatory & Markets Update Uncertainty over future of the carbon tax has impacted the whole market • EAX response was to offer carbon exclusive contracts which have been highly attractive with currently 100% of auctions carbon exclusive. • This has resulted in EAX increasing a
Slide 15: Regulatory & Markets Update
For personal use only Regulatory & Markets Update Introduction of the Direct Action Scheme • Still little detail available on how this scheme will work – public consultation will be taking place in November. • Represents an opportunity for EAX to act as abatement aggregator for small businesses but
Slide 16: 3. FY13 Financial Results
For personal use only 3. FY13 FINANCIAL RESULTS 16
Slide 17: Operating NPAT up 26%
Operating NPAT up 26% For personal use only 000’s FY13 FY12 Change $ $ Revenue & other income 22,166 17,372 28% Revenue ....up 28% Cost of good sold (Activ8+) (977) (314) 211% Staff costs represent 65% of Gross profit 21,189 17,058 total overheads – fell as a % of Employee benefits expense (9,906) (
Slide 18: Revenue up 28% to a record $22m
For personal use only Revenue up 28% to a record $22m • Activ8 revenue (up 19%) - accounts 000’s FY13 FY12 Change for c.60% of total revenue- average $ $ contract lengths are 50 months Revenue Activ8 12,889 10,826 19% • Despite fall in Auction contract Auction – large sites 4,928 4,185 18% lengths r
Slide 19: Profit converts to strong operating cashflow
Profit converts to strong operating cashflow For personal use only 000’s FY13 FY12 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 23,302 18,884 Driven by 28% revenue growth Payments to suppliers and employees (15,795) (13,057) Acquisition costs (491) - Interest received 195 183 Inc
Slide 20: Strong Balance Sheet
For personal use only Strong Balance Sheet 000’s June 13 June-12 $ $ CURRENT ASSETS Cash and cash equivalents 6,444 6,758 Strong cash position – post $2m Trade & other receivables 3,514 2,785 Other assets 981 162 first payment for Ward Consulting TOTAL CURRENT ASSETS 10,939 9,705 and $1.7m commissio
Slide 21: 4. Operational Performance
For personal use only 4. OPERATIONAL PERFORMANCE 21
Slide 22: Activ8 - energy monitoring & contract administration
For personal use only Activ8 - energy monitoring & contract administration • Contract administration: – Retailers are stepping out of customer ACTIV8 CASE STUDY service; • Data continuity: Following updates to network tariffs each – Independence from retailers for customers; year, Energy Action con
Slide 23: Activ8 contributes 60% of total revenue
For personal use only Activ8 contributes 60% of total revenue • EAX’s Activ8 product provides energy reporting services via automated monitoring and contract management FY13 FY12 Variance – highly scalable Average Activ8 contract duration 50.0 49.8 0.4% • Over 8,400 sites under contract, up No. of A
Slide 24: Australian Energy Exchange
For personal use only Australian Energy Exchange • The Australian Energy Exchange (AEX) is FY13 FY12 Variance Energy Action’s online reverse auction No. of successful auctions 1,390 1,225 14% platform. Energy suppliers competitively Average auction contract duration 26.9 32.5 (17%) bid for our custo
Slide 25: Australian Energy Exchange - Carbon Uncertainty
For personal use only Australian Energy Exchange - Carbon Uncertainty Impact of Carbon tax uncertainty – Energy Action’s response • EAX has taken a leading market position and developed an innovative ‘carbon exclusive’ auction platform • In June 80% of auctions were run on a carbon exclusive basis •
Slide 26: Activ8+ - efficiency & sustainability
For personal use only Activ8+ - efficiency & sustainability • Activ8+ provides businesses with energy efficiency and sustainability consultancy $000’s FY13 FY12 Variance services Revenue 2,059 1,006 105% Cost of goods sold (977) (314) • Offers a range of advisory and project Gross profit 1,082 692 5
Slide 27: Ward Consulting
For personal use only Ward Consulting • Energy Action acquired leading energy management business, Ward Consulting Services, in August 2012 • Acquisition has added considerable value to EAX – new revenue streams ($1.5m over 11 months), access to blue-chip customers • Business has been efficiently in
Slide 28: Review of Sales Function
For personal use only Review of Sales Function Detailed and comprehensive sales review completed, aimed at ensuring that the Group’s sales team is structured and incentivised for the next phase of Energy Action’s exciting growth trajectory The new structure is laying the platform for a sales tea
Slide 29: Diversified Customer & Industry Base
For personal use only Diversified Customer & Industry Base Auction Volumes Growing • 4,908 customers at 30 June 2013 • Up from 4,393 at 30 June 2012 29
Slide 30: Market share - significant scope to increase our penetration
Market share – significant scope to For personal use only increase our penetration • Growing trend amongst companies to outsource non-core services such as energy management and sustainability • AEX is an unrivalled service offering and a foundation for ORGANIC growth: Estimated addressable market
Slide 31: 40% of C&I businesses use a broker
40% of C&I businesses use a broker For personal use only • Growing trend amongst companies to outsource non- core services such as energy management, procurement and sustainability • Utility Market Intelligence (UMI) report dated July 2013 (17th in the series) - survey of 598 large commercial and in
Slide 32: Energy Action's Energy Insights Survey
For personal use only Energy Action’s Energy Insights Survey Is your energy contract contestable? Increased understanding of energy consumption and negotiating market contracts 498 respondents Over the past year, awareness of energy contract contestability and annual electricity consumption has i
Slide 33: Energy Action's Energy Insights Survey
For personal use only Energy Action’s Energy Insights Survey Do you deal with an energy broker? Energy management efforts essential to staying competitive Businesses are taking a more aggressive stance toward energy management, with 70 per cent currently dealing with an energy broker or consultant
Slide 34: Case Study - Maitland Council
For personal use only Case Study – Maitland Council Since 2009 Maitland City Council has worked with Energy Action using the AEX to save $55,000 p.a. Impressed with this result the council approached Energy Action to assist with the development of a grant application to secure funding for 38 proje
Slide 35: Case Study - Finley RSC
For personal use only Case Study – Finley RSC • Finley Returned Soldiers Club (RSC) in the Riverina region of NSW has used all of Energy Action’s services since 2008. • The Club is home to 1,600 members, houses two bowling greens, an auditorium, squash courts, bar and gaming area. • Results Energy A
Slide 36: 5. Outlook
For personal use only 5. OUTLOOK 36
Slide 37: Drivers for Growth
For personal use only Drivers for Growth AEX is an unrivalled service offering and a foundation for growth: o Gives EAX access to large potential customer base o Can market complementary services to AEX customers Increased capability and access to clients through acquisition of Ward Consulting S
Slide 38: FY14 outlook
For personal use only FY14 outlook • We reaffirm FY14 operating NPAT growth of 10-15%. • We are resourcing for the large number of 2015 contract renewals to position for market share growth; investment in Activ8+, sales teams and supporting marketing initiatives . • FY14 operating net profit after t
Slide 39: 5. Formal Business
For personal use only 5. FORMAL BUSINESS 39
Slide 40: Procedural Matters
For personal use only Procedural Matters • If there are any Shareholders who are eligible to vote who have not received their yellow voting card, please see a representative from Link Market Services at the registration desk. • Shareholders holding a red card are not eligible to vote but can speak a
Slide 41: General Business
For personal use only General Business • First Item of business: Consideration of the annual report, financial report, Directors report and Auditors report for the financial year ended 30 June 2013. • No questions for Ernst & Young were received. • Mr Schalk Barnard of Ernst & Young is an apology ho
Slide 42: General Business
For personal use only General Business Formal Resolutions: • Resolutions 1, 2 and 4 are proposed as ordinary resolutions and will be approved if passed by more than 50% of votes cast by members entitled to vote on the resolution. • Resolution 3 is proposed as a special resolution and will be approve
Slide 43: Resolution
For personal use only Resolution 1 "That for the purposes of Section 250R(2) of the Corporations Act 2001, and for all other purposes, approval is given for the adoption of the Remuneration Report for the year ended 30 June 2013." Resolution 1 is an ordinary resolution, and will be approved if passe
Slide 44: Resolution - Proxies
For personal use only Resolution 1 - Proxies For: 4,710,837 (97.15%) Open: 37,920 (0.78%) Against: 100,260 (2.07%) Abstain: 57,458 44
Slide 45: Resolution
For personal use only Resolution 2 "That Dr Ronald Watts, who retires and being eligible offers himself for re-election, be re-elected as a Director of Energy Action Limited.“ Resolution 2 is an ordinary resolution, and will be approved if passed by more than 50% of the votes cast by members entitle
Slide 46: Resolution - Proxies
For personal use only Resolution 2 - Proxies For: 12,928,401 (99.02%) Open: 37,920 (0.29%) Against: 89,416 (0.68%) Abstain: 645 46
Slide 47: Resolution
For personal use only Resolution 3 “That pursuant to and in accordance with Listing Rule 7.1A of the ASX Listing Rules and for all other purposes, the Shareholders of the Company approve and authorise the Company to issue by way of placements, up to 10% of the issued capital of the Company (Addition
Slide 48: Resolution - Proxies
For personal use only Resolution 3 - Proxies For: 10,076,371 (77.19%) Open: 37,920 (0.29%) Against: 2,940,133 (22.52%) Abstain: 1,958 48
Slide 49: Resolution
For personal use only Resolution 4 “That, for the purposes of ASX Listing Rule 7.2 (Exception 9b) and for all other purposes, approval is given for the Company to adopt an employee incentive scheme, being the Performance Rights and Options Plan (Plan) and for the issue of securities under that Plan,
Slide 50: Resolution - Proxies
For personal use only Resolution 4 - Proxies For: 12,774,210 (97.84%) Open: 37,920 (0.29%) Against: 243,794 (1.87%) Abstain: 458 50
Slide 51: Further information
For personal use only Further information Val Duncan Managing Director 02 9633 6403 valduncan@energyaction.com.au Nathan Francis Chief Financial Officer & Company Secretary 02 9633 6405 nathanfrancis@energyaction.com.au 51
Slide 52: Disclaimer
For personal use only Disclaimer This presentation has been prepared by Energy Action Limited. This presentation is not intended as an offer or solicitation with respect to the purchase or sale of any security nor does it constitute an offer or solicitation in any jurisdiction in which such an offer