Hipages Group Holdings Ltd. · ASX:HPG
Hipages — H1 FY21 Earnings Presentation
40 slides from Hipages's earnings presentation, Feb 23, 2021
Slide 1: hipages Group H1 FY21 Result
hipages Group H1 FY21 Result 23 February 2021
Slide 2: Australia's largest online tradie platform and SaaS provider
Australia’s largest online tradie platform and SaaS provider connecting tradies with residential and commercial consumers to simplify property improvement1 H1 FY21 Financial Results | February 2021 1. Software-as-a- Service (SaaS) 2
Slide 3: Agenda
Agenda 1. H1 FY21 Result Overview 2. About hipages 3. H1 FY21 Financial Summary 4. Strategy 5. FY21 Outlook H1 FY21 Financial Results | February 2021 3
Slide 4: H1 FY21 Overview
ROBY SHARON-ZIPSER H1 FY21 Overview Chief Executive Officer & Co-Founder H1 FY21 Financial Results | February 2021 4
Slide 5: H1 FY21 Overview
H1 FY21 Overview REVENUE PROFITABILITY KEY DRIVERS $4.6m 87% 28.8k Gross Subscription MRR1 Up 31% Margin3 (H1 FY20: 77%) tradies Up 12% $25.3m $6.9m 0.8m Recurring EBITDA4 H1 FY20: ($0.1m) Job revenue2 Up 26% EBITDA to OCF Conversion of 98% volumes Up 14% $1,483 $1.5m 64% Total Tradie Jobs from Up 3
Slide 6: H1 FY21 Business Highlights
H1 FY21 Business Highlights Strong H1 FY21 performance across all key metrics with no adverse impact from COVID-19 Subscription-only model and enhanced subscription product offering drive MRR growth Structural shift to online and flexible work arrangements contribute to buoyant home improvement mark
Slide 7: Delivering sustainable profit growth
Delivering sustainable profit growth1 $53.9m • Revenue growth and cost efficiencies drive positive $46.9m operating leverage as $42.3m hipages becomes profitable and margins expand $26.9m • H1 FY21 revenue tracking ahead of FY21 Prospectus $9.9m forecast; total revenue $6.1m $6.9m growth of 15% and
Slide 8: About hipages
ROBY SHARON-ZIPSER About hipages Chief Executive Officer & Co-Founder H1 FY21 Financial Results | February 2021 8
Slide 9: Consumer experience – Selecting a tradie
Consumer experience – Selecting a tradie Connected with View profile and Communicate Select the best up to 3 tradies recommendations directly with tradie tradie for the job TIMELY RESPONSE I received immediate responses from 3 painters who all attended to the quotation process in a timely and profes
Slide 10: Tradie Experience – Message centre & payments
Tradie Experience – Message centre & payments Streamlined Message Payment Request for communication centre functionality feedback with customer Hipages is a great service. Would highly recommend. Has helped me enormously grow my business. THANK YOU hipages team. Hipages has provided me with over $15
Slide 11: Proprietary algorithm matches consumers & tradies
Proprietary algorithm matches consumers & tradies Distance to Recent tradie Customer Tradie the job activity tier tenure Optimised to provide up to 3 contacts in the first invitationbatch H1 FY21 Financial Results | February 2021 11
Slide 12: Australia's largest online tradie platform
Australia’s largest online tradie platform 3.3m unique Large andgrowing GMV 1 ~$1.9bn users have addressable market posted jobs Flywheel effect of Subscription-only Strong brand double-sided product with 94% awareness of 56% marketplace recurring revenue 1. Gross Merchandise Value (GMV) in 2020 esti
Slide 13: Macro trends driving addressable market growth
Macro trends driving addressable market growth Growing addressable Growth in tradie Highest ROI from lead market ad spend sourcing2 • 9.9m Australian • $976m spent by tradies on • 12% of tradie ad spend on households1 advertising4 lead sourcing • 257k trades businesses, • 8.8% pa projected growth •
Slide 14: Subscription-only model drives ARPU growth of 31%
Subscription-only model drives ARPU growth of 31% Pre November 2019 Post November 2019 • Transactional product – small annual listing fee and • Moved to a subscription-only product offering for new tradies tradie would pay each time they claimed a job lead • New version of subscription package with
Slide 15: Scalable platform connecting tradies and consumers
Scalable platform connecting tradies and consumers Subscription tradies Users Subscription tradies increased from 58% in 3.3m unique users posted a job to hipages platform as at H1 FY21 H1FY19 to 84% of customer base in H1FY20 12% 17% 3.3m 2.8m 29.9k 2.4m 28.8k 25.6k 24.0k H1 FY19 H1 FY20 H1 FY21 FY
Slide 16: Expanding job channels via key partnerships
Expanding job channels via key partnerships • Effective way to source new jobs, attract tradies and expand the hipages ecosystem • Broadens customer base beyond 2019 2018 homeowner category • Contracted partnerships across retail, real estate and government sectors • Continue to explore further part
Slide 17: Building brand awareness, less reliance on paid channels
Building brand awareness, less reliance on paid channels • Jobs from unpaid channels up 33% on pcp • Brand awareness increased to 56% from 27% in July 2018 • Platinum sponsor of The Block • Sponsorship of Better Homes & Gardens starting in March 2021 • In Jan 2021, launched brand campaign targeting
Slide 18: H1 FY21 Financial Summary
H1 FY21 MELISSA FAHEY Financial Summary Chief Finance & Operations Officer H1 FY21 Financial Results | February 2021 18
Slide 19: H1 FY21 Financial Highlights
H1 FY21 Financial Highlights Positive EBITDA Strong revenue growth Positive operating leverage and NPAT • MRR1 up 31% underpinning • Gross margin3 of 87% • Pro forma EBITDA4 of $6.9m and Pro recurring revenue growth of 26% on forma Operating Cash flow of a pro forma basis • Opex reduction net of rei
Slide 20: H1 FY21 Result Summary
H1 FY21 Result Summary Strong performance across all key metrics PRO FORMA FINANCIAL AND OPERATING METRICS H1 FY21 H1 FY20 Var (%) FY21f Var (%)4 • 31% growth in MRR @ Dec 2020 driving recurring Financial Summary revenue growth of 26% Total revenue ($m)1 26.9 22.8 18% 53.9 15% • Total revenue growth
Slide 21: Business model transformation driving revenue growth
Business model transformation driving revenue growth Operating revenue up 19% as drive growth in higher value subscription tradies Total Operating Revenue1 Total Tradies $52.5m $2.0m H1 FY21 subscription tradies +12% on pcp 19% 41.7k 37.9k 36.1k $26.2m 34.4k $22.0m $0.9m $50.5m 17.7k 12.3k 6.2k 5.6k
Slide 22: TTM Subscription revenue bridge
TTM2 Subscription revenue bridge • H1 FY21 subscription revenue growth driven by; o new subscribers coming onto the platform o net ascensions as tradies moved to higher tier subscription products o offset by churn and retention initiatives • Total monthly churn 3.5%1, below FY 21 prospectus forecast
Slide 23: Lifetime Transaction Value / Customer Acquisition Costs
Lifetime Transaction Value / Customer Acquisition Costs1 Continued improvement in LTV / CAC on a normalised basis in H1 FY21 • LTV vs CAC ratio increasing as a result 8.4 of improved unit economics 7.3 • H1 FY 21 LTV / CAC of 7.3 is deflated due 5.8 to December being a seasonal low 4.8 month for Tra
Slide 24: Strong growth in MRR
Strong growth in MRR1 Acceleration in MRR as more tradies subscribe and ascend to higher price points 31% $5.0m • MRR 1 of $4.6m @ December 2020, up 31% vs pcp underpins strong recurring revenue $4.6m growth • Driven by growth in subscription tradies, jobs and APRU $3.5m • Flywheel effect of double-
Slide 25: Subscription tradie base continues to expand
Subscription tradie base continues to expand Improvement in subscription product offering drives tradie engagement at higher price points 12% 29.9k 28.8k • Total subscription tradies up 12% to 28.8K in H1 FY 21 on pcp 25.6k 24.0k • FY21 prospectus forecast growth of 7% to 30k • Marketing initiatives
Slide 26: Subscription model drives growth in Total Tradie ARPU
Subscription model drives growth in Total Tradie ARPU1 Unlocking value as tradies opt for higher tier packages 31% $1,483 • Total Tradie ARPU 1 of $1,483 up 31% on pcp $1,449 • Driven by • Move to subscription only product • New and improve features • New subscribers joining at higher price $1,130 p
Slide 27: Building consumer trust and brand awareness
Building consumer trust and brand awareness 14% increase in job volumes with strong growth in jobs from repeat consumers1 and unpaid channels 64% of jobs from repeat consumers 79% of jobs from unpaid channels 773.6k 773.6k 677.8k 677.8k 21% 580.4k 580.4k 33% 64% 57% 35% 57% 79% 67% 65% 43% 43% 36% H
Slide 28: Pro Forma Operating Expenses
Pro Forma Operating Expenses Opex continues to fall as % revenue highlighting positive operating leverage • Expenses as % of revenue were 75% of revenue in H1 Expenses as a % of revenue1 FY19 FY20 H1 FY21 FY21F FY21; largest declines in marketing and operations and Operations and administration 39%
Slide 29: H1 FY21 Pro Forma Financial Summary
H1 FY21 Pro Forma Financial Summary Positive operating leverage as business scales H1FY21 H1FY20 $ Var % Var Recurring 25,288 19,993 5,295 26% Transactional 924 2,026 (1,101) (54%) Operating Revenue1 26,212 22,019 4,194 19% • Strong revenue growth continued into H1 FY21; Other 1 730 750 (20) (3%) re
Slide 30: H1 FY21 Cash Flow
H1 FY21 Cash Flow Pro forma1 Statutory Statutory $’000s H1FY21 H1FY21 H1FY20 $ Var Receipts from customers (inclusive of GST) 29,528 29,528 25,722 3,806 • Strong H1 FY 21 Pro Forma operating Payments to suppliers and employees (inclusive of GST) (22,970) (22,970) (24,333) 1,363 cashflow (“OCF”) of $
Slide 31: H1 FY21 Statutory Balance Sheet
H1 FY21 Statutory Balance Sheet $’000s 31 Dec 20 30 June 20 $ Var Cash and cash equivalents 29,211 8,822 20,389 Funds on deposit Trade and other receivables 2,271 1,173 2,271 1,426 0 (253) • Strong H1 FY 21 total equity position of Other assets 1,705 1,086 619 $34.9m, an increase of $35.5m driven by
Slide 32: Profit Reconciliation
Profit Reconciliation $’000s Reported EBITDA (from continuing operations) 1,407 • Pro forma EBITDA of $6.9m after: Transaction costs related to IPO 4,780 Non-recurring remuneration 565 • Removal of IPO transaction costs in relation to the secondary raise ($4.8m) Net loss on conversion of convertible
Slide 33: Strategy
ROBY SHARON-ZIPSER Strategy Chief Executive Officer & Co-Founder H1 FY21 Financial Results | February 2021 33
Slide 34: Long-term focus on expanding the ecosystem
Long-term focus on expanding the ecosystem ● Value-addservices ○ Fintech ○ Insurance services ○ Procurement & Delivery ● Deepen E2Eengagement ● Channelexpansion ○ Field Service Software (SAAS) ○ Insurance claims (repairs) ○ End-To-Endexperience ○ Commercial & facility ● Efficiencydrive (Product Visi
Slide 35: H1 FY21 Progress against Strategy
H1 FY21 Progress against Strategy Evolving business model Brand Authority Partnerships Subscription migration ahead of Further investment to reinforce NSW Department of Education expectations position as brand leader rollout on track Continued evolution to SaaS Reinvest SEM savings in tradie Partner
Slide 36: Strategic Focus – winning the Tradie Economy
Strategic Focus – winning the Tradie Economy Private & Confidential 36
Slide 37: FY21 Outlook
ROBY SHARON-ZIPSER FY21 Outlook Chief Executive Officer & Co-Founder H1 FY21 Financial Results | February 2021 37
Slide 38: FY21 Outlook
FY21 Outlook Strong start to H2 with January revenue up 18% on pcp, ahead of expectations with no adverse impact from COVID-19 Expect H2 FY21 revenue growth to be similar to H1 FY21 on pcp In H2, reinvest cost savings in brand marketing, tradie acquisition, technology and product development to acce
Slide 39: Q&A
Q&A H1 FY21 Financial Results | February 2021 39
Slide 40: Disclaimer
Disclaimer IMPORTANT NOTICE The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN67 644 430 839(“hipages” or the Company") and is general background information about hipages’ activities current as at the date of this presentation. The information is gi
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