Slide 1: FY20 Full-Year Results Presentation
FY20 Full-Year Results Presentation Leigh Mackender | SERVICE STREAM LIMITED Managing Director August 2020
Slide 2: Company Profile
Company Profile Service Stream Limited (ASX:SSM) is a S&P/ASX200 company providing integrated end-to-end asset life-cycle services across essential infrastructure networks within the Telecommunications and Utilities sectors TELECOMMUNICATIONS UTILITIES Life-cycle infrastructure management Property v
Slide 3: Performance Highlights
Performance Highlights Demand for essential network services remains resilient, despite COVID-19, attesting to the strength of the Group’s business model and strategy Record revenue and earnings achieved, with EBITDA from Operations of $108.1m Further improvement to Group EBITDA margins Return
Slide 4: Group Strategy
Group Strategy Continuing to grow and diversify the Group’s recurring revenue base across known markets Service Stream’s strategy of diversifying Group revenues across essential infrastructure markets continues to position the business positively: – expansive client base of leading network owners
Slide 5: COVID-19
COVID-19 Positive exposure to essential network infrastructure has limited the impact of COVID-19 to Group earnings Exposure to essential infrastructure networks has provided a solid revenue base and sustained resilience through the COVID-19 pandemic The Group’s balance sheet, cashflow and liqui
Slide 6: Business Units Update
Business Units Update FINANCIAL PERFORMANCE
Slide 7: Financial Highlights
Financial Highlights Revenue: Record Group Revenue, up 9.0% on $852.2m in FY19 $929.1m Revenue split $544.2m (58.6%) from Telecommunications and $384.1m (41.4%) 9.0% v FY19 from Utilities EBITDA from Operations: Record EBITDA from Operations, up 15.9% on $93.3m in FY19 $108.1m Before incurri
Slide 8: Key Financial Measures
Key Financial Measures Continuing to deliver strong and consistent results across key profit measures Group Revenue ($m) $1,000 929.1 852.2 $750 632.9 501.8 $500 438.9 Change $m FY20 FY19 $250 (%) $0 Profitability: FY16 FY17 FY18 FY19 FY20 Revenue 929.1 852.2 9.0% EBITDA from Operations 108.1 93.3 1
Slide 9: Segment Results
Segment Results Expansion of utility related revenues bolstering the Group’s resilience Revenue by Segment $m FY20 FY19 Change (%) FY20 FY19 Telecommunications 544.2 589.4 (7.7%) Utilities 384.1 264.3 45.3% 69% 59% 41% Eliminations, interest & other revenue 0.9 (1.5) 31% Total Revenue 929.1 852.2 9.
Slide 10: Cashflow Results
Cashflow Results Solid operating cashflows, and 6th consecutive year of profit-to-cash conversion in excess of 80% Maintaining solid OCFBIT conversion rate of 81.9%, with 2H20 at 108.0% Reported EBITDA to OCFBIT conversion 300% No factoring adopted across receivables, and sub-contractors & suppl
Slide 11: Capital Management
Capital Management Working capital light operations, and Group maintaining stable dividends to shareholders Dividends Declared (cps) 10.00 9.00 9.00 Final dividend of 5.0 cps, maintaining full year at 9.0 cps, reflecting payout ratio 8.00 7.50 of 74.2% based on Statutory EPS 6.00 4.50 4.00 2.50
Slide 12: Operational Performance
OPERATIONAL PERFORMANCE 12
Slide 13: Safety Performance
Safety Performance Maintaining our focus on the safety of our people, our customers and the community Continued to deliver industry leading safety performance, demonstrating a strong safety culture throughout the organisation Superior safety performance continues to be a key differentiator for t
Slide 14: Telecommunications
TELECOMMUNICATIONS 14
Slide 15: Telecommunications
Telecommunications Telecommunication network engineering, design & construction, maintenance and operations Telecommunications Revenue ($m) $700 Revenue down $45.2m on pcp, due to successful conclusion of $600 589.4 544.2 535.2 nbn D&C operations, and minor COVID-19 related impacts during $500 412
Slide 16: Telecommunications
Telecommunications Telecommunication network engineering, design & construction, maintenance and operations Strong demand for nbn customer activations in FY20, coupled with retained market share assisting to reduce COVID-19 related impacts in H2 Maintenance work volumes continue to increase as t
Slide 17: Utilities
UTILITIES 17
Slide 18: Utilities
Utilities Utility network engineering, design & construction, maintenance and operations Utilities Revenue ($m) $500 384.1 Revenue up $119.8m (+45.3%) on pcp, due to the full-year $400 inclusion of Comdain Infrastructure, with some minor COVID $300 264.3 impacts in 2H20: $200 94.6 106.7 82.0 $100
Slide 19: Utilities
Utilities Utility network engineering, design & construction, maintenance and operations Strong demand for utility projects, despite some delays in 2H20 due to COVID restrictions and associated client-initiated delays Successfully renewed / secured in excess of $200m in annual contracted utility
Slide 20: Group Outlook
GROUP OUTLOOK 20
Slide 21: FY21 Outlook
FY21 Outlook Service Stream expects continued demand for its services across critical infrastructure networks throughout the Utilities and Telecommunications industries. Earnings are expected to remain resilient, supported by the Group’s long- term contracts, but dependent on: – Continued work v
Slide 22: Historical Financial Performance Data
HISTORICAL FINANCIAL PERFORMANCE DATA 22
Slide 23: Appendix 1: Profit & Loss
Appendix 1 PROFIT & LOSS $ million 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 FY16 FY17 FY18 FY19 FY20 Telecommunications 1 $180.10 $179.69 $194.59 $217.83 $244.44 $290.74 $298.07 $291.32 $297.90 $246.28 $359.78 $412.41 $535.18 $589.39 $544.17 Utilities 1 $38.19 $43.76 $48.58 $46.04 $54.67 $5
Slide 24: Appendix 2: Reconciliation of Statutory to Adjusted Profitability Measures
Appendix 2 RECONCILIATION OF STATUTORY TO ADJUSTED PROFITABILITY MEASURES $ million 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 FY16 FY17 FY18 FY19 FY20 Reported EBITDA $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $51.51 $56.43 $49.16 $35.82 $48.35 $67.30 $89.54 $105.59 add-back adjustment
Slide 25: Appendix 3: Segment Results
Appendix 3 SEGMENT RESULTS $ million TELECOMMUNICATIONS 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 FY16 FY17 FY18 FY19 FY20 nbn Activation & Assurance $61.63 $57.81 $66.80 $79.54 $109.94 $108.11 $124.37 $151.69 $176.95 $156.69 $119.45 $146.33 $218.05 $276.06 $333.63 nbn Minor Projects $5.88 $
Slide 26: Appendix 4: Cash Flow
Appendix 4 CASH FLOW $ million 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 FY16 FY17 FY18 FY19 FY20 Reported EBITDA $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $51.51 $56.43 $49.16 $35.82 $48.35 $67.30 $89.54 $105.59 +/- non-cash items & change in w/capital $15.03 $12.83 $3.25 $5.26 $25.0
Slide 27: Appendix 5: Capital Expenditure
Appendix 5 CAPITAL EXPENDITURE $ million 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 FY16 FY17 FY18 FY19 FY20 Leasehold Improvements $0.25 $0.65 $0.22 $0.11 $0.08 $0.20 $0.45 $0.10 $0.22 $0.15 $0.90 $0.33 $0.28 $0.55 $0.37 Motor Vehicles $0.11 $0.03 $0.10 $0.00 $0.00 $0.00 $0.00 $0.04 $0.00 $0
Slide 28: Disclaimer
Disclaimer Important information for Investors This presentation has been prepared by Service Stream Limited (SSM). Whilst the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accuracy or r
Slide 29: Service Stream Limited
SERVICE STREAM LIMITED ABN: 46 072 369 870 Level 4, 357 Collins Street, Melbourne VIC 3000 www.servicestream.com.au