Energy Action Limited · ASX:EAX
Energy Action — H1 FY2019 Earnings Presentation
29 slides from Energy Action's earnings presentation, Feb 27, 2019
Slide 1: Group Financial Results Half Year FY19
For personal use only GROUP FINANCIAL RESULTS HALF YEAR FY19 | 27 FEBRUARY 2019 JOHN HUGGART TRACY BUCCIARELLI Chief Executive Officer Chief Financial Officer Energy Action Limited Energy Action Limited
Slide 2: Results Agenda
HALF YEAR FY19 For personal use only RESULTS AGENDA 1. RESULTS HIGHLIGHTS & BUSINESS UPDATE John Huggart 2. GROUP FINANCIALS Tracy Bucciarelli 3. OPER ATIONAL PERFORMANCE John Huggart 4. FY19 PRIORITIES John Huggart
Slide 3: FY19 Half Year Results Highlights
FY19 HALF YEAR RESULTS HIGHLIGHTS 3 For personal use only Statutory profit of -$9.93 million $10.8M of significant items ($10.6M non cash items) Operating profit of $0.89 million Down 63% vs 1H FY18 Operating EBITDA of $1.76 million Margin 111% was at operating 12.97%conversion EBITDA down 11.6 pts
Slide 4: Operating Review
OPERATING REVIEW For personal use only H1 FY18 has been a difficult period with a decline in revenue and Operating EBITDA. The main causes for this decline are : • Sustained poor performance of the Project & Advisory Services division (PAS) in achieving commercially acceptable margins on project man
Slide 5: Where to From Here?
WHERE TO FROM HERE? For personal use only • The business remains profitable and continues to generate operating cash of $1.94M in the first half FY19. • The core strength and relevance of Energy Action remains, with a large customer base facing rising energy costs, regulatory uncertainty and an incr
Slide 6: Corporate Highlights
CORPORATE HIGHLIGHTS 6 For personal use only An increase in embedded network Winning a multi year contract to supply Delivering a comprehensive multi-year tenancies under management of 629 retail billing services to CS Energy with a energy strategy for Western Sydney (46% growth) successful go-live
Slide 7: Group Financial Results
For personal use only GROUP FINANCIAL RESULTS
Slide 8: Operating NPAT of $0.89M
OPERATING NPAT OF $0.89M 8 STATUTORY LOSS $9.93M, OPER ATING PROFIT DOWN 63% For personal use only Restatedᶺ 1H FY19 1H FY18 P&L % Variance 6 Months 6 Months^ to Dec 18 to Dec 17 Revenue 13,545,008 17,993,978 (25%) Decline in revenues Lower COGS with some improvement in margin COGS 1,812,374 2,526,5
Slide 9: Operating Profit Drivers
OPERATING PROFIT DRIVERS Lower OPEX excl D&A Improved by 10% vs 9 1H FY18 For personal use only 25% REDUCTION IN REVENUE Lower due to OFFSET WITH SAVING IN Accelerated D&A COGS AND OPEX RESULTING IN 63% LOWER NPAT Procurement -$3.2M Lower net debt PAS -$796K resulting in savings CMER -$429K Other -$
Slide 10: Revenue and Other Income for the Half Year
REVENUE AND OTHER INCOME FOR THE HALF YEAR 10 DECLINED BY 25% For personal use only LOWER REVENUES IN PROCUREMENT,CMER AND PAS 1H FY19 1H FY18 Variance % Variance Procurement 3,755,656 6,978,374 (3,222,718) (46%) Contract Mgmt & Energy Reporting 7,356,122 7,785,552 (429,430) (6%) Projects & Advisory
Slide 11: Significant Items
SIGNIFICANT ITEMS For personal use only The Group incurred significant items totaling $10,815,771. Of this amount $10,615,407 were non- cash items. These after tax significant items were: • Impairment of goodwill of $9,944,796 related to previous acquisitions • Accelerated amortization of customer r
Slide 12: Strong Operating Cashflow
12 For personal use only Operation Cash Flow 1H FY19 1H FY18 Operating EBITDA 1,756,232 4,413,504 STRONG OPERATING Share based payments Trade debtors (128,200) (10,013) 9,152 724,659 CASHFLOW Other debtors Work in Progress 114,584 191,807 92,011 (575,474) Revenue not Invoiced 538,720 (1,734,243) OPE
Slide 13: Debt Structure and Key Financial Ratios
DEBT STRUCTURE AND 13 KEY FINANCIAL RATIOS For personal use only NET DEBT REDUCED $2.26M (31%) FROM DEC 17 TO $4.96M • EAX currently has a 5 year, $12 million multi-option facility agreement expiring October 2019. EAX has accepted a firm offer from the bank for an extension of its current facility f
Slide 14: Operational Performance
For personal use only OPERATIONAL PERFORMANCE
Slide 15: Procurement
1H FY19 1H FY18 Variance 15 No. of successful AEX For personal use only 501 854 (41%) Auctions1 Average AEX contract 26.4mth 26.5mth - duration TWhs procured via Auction2 0.53 0.98 PROCUREMENT Average $/MWh $80.97 $95.77 (46%) (15%) Total Auction Bid Value3 $95m $208m (54%) TOTAL REVENUE DECLINE 46%
Slide 16: Contract Management & Environmental Reporting
16 For personal use only CONTRACT MANAGEMENT & ENVIRONMENTAL REPORTING CMER REVENUE DECLINED 5.5% SITES UNDER MANAGEMENT DOWN 6% • Over 7,500 sites are under management. • CMER revenue declined 5.5% with sites under management in the core Metrics service declining by circa 450 sites in 1H FY19. • Ov
Slide 17: Embedded Network & Microgrids
17 For personal use only EMBEDDED NETWORK & MICROGRIDS 46% GROWTH IN SITES ADDED • Embedded Networks had +629 sites added during the period (46% growth) • Sector results improved to positive profit position • Portfolio diversified across retail, airports and commercial buildings. • Sustained growth
Slide 18: Projects & Advisory Services
18 For personal use only PROJECTS & ADVISORY SERVICES • Master energy strategy developed for Western Sydney Airport • Rooftop Solar PPA Program tendered on behalf • PAS revenues declined 25% across the full range of services. of a major real estate trust • Delivery slower than expectations exacerbat
Slide 19: Operational Savings
OPERATIONAL SAVINGS For personal use only Operating overheads totalled $10.5 million for the period, compared to $11.8 million in the pcp, a decrease of $1.3 million, reflecting a continued focus on cost management, in particular: • The number of employees in the PAS business reduced by 11 FTE • The
Slide 20: 2H FY19 Priorities
For personal use only 2H FY19 PRIORITIES
Slide 21: Energy Action Value for Clients
ENERGY ACTION VALUE FOR CLIENTS 21 For personal use only WE HAVE THE POWER TO HELP BUSINESS SAVE ON ENERGY COSTS, REDUCE EMISSIONS, AND INCREASE THE VALUE OF THEIR ASSETS Over 6% Over $3.9M Over 7.9% of savings achieved through Auction of savings identified through Bill of energy bills identified wi
Slide 22: Our Top Priorities for 2H FY19
OUR TOP PRIORITIES FOR 2H FY19 22 For personal use only BUSINESS STR ATEGY & PROSPECTS FOR FUTURE FINANCIAL YEARS KEY PRIORITIES Following the finalisation of the Strategic Review in Dec 18 and the appointment of John Huggart as CEO, the key priorities for the 2H FY19 have been established: • Sales
Slide 23: Getting in Touch
GETTING IN TOUCH 23 23 For personal use only JOHN HUGGART CONTACT US Chief Executive Officer (02) 9633 6476 john.huggart@energyaction.com.au @EnergyActionAUS TRACY BUCCIARELLI www.linkedin.com/company/energy-action Chief Financial Officer (02) 9633 6401 tracy.bucciarelli@energyaction.com.au info@ene
Slide 24: Disclaimer
DISCLAIMER 24 For personal use only This presentation has been prepared by Energy Action Limited ABN: 90 137 363 636. 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
Slide 25: Appendix
For personal use only APPENDIX
Slide 26: Balance Sheet as at Dec 2018
Balance Sheet As at - Dec 2018 Restated 31 Dec 18 30 Jun 18 % Variance BALANCE SHEET CURRENT ASSETS Ca s h a nd ca s h equi va l ents Tra de a nd other recei va bl es 1,026,933 3,848,599 1,171,288 3,838,586 (12%) 0% 26 For personal use only Current Ta x As s et 23,921 56,738 (58%) Other As s ets 452
Slide 27: Statutory to Operating Profit Reconciliation
STATUTORY TO OPERATING PROFIT 27 RECONCILIATION For personal use only Operating profit after tax EBITDA $ 1H FY19 1H FY18 Variance 1H FY19 1H FY18 Variance Statutory results after tax / Operating (9,930,600) 2,409,496 (512%) (8,557,578) 4,413,504 (294%) EBITDA Add back Significant Items after tax :
Slide 28: 1H FY19 Accounting Standard Change
1H FY19 ACCOUNTING STANDARD CHANGE 28 For personal use only 1H FY18 AASB 15 AASB 9 Sales 1H FY18 Consolidated Statement of 6 Months Adjustment Adjustment Commission 6 Months Comprehensive Income to Dec 17 Expenses to Dec 17 (As reported) (Restated) Energy Action has adopted the following Australian
Slide 29: Full Retrospective Impact of Accounting Standard Change
FULL RETROSPECTIVE IMPACT OF 29 ACCOUNTING STANDARD CHANGE For personal use only 1H FY18 2H FY18 FY18 FY17 Total Impact as at 1 July 2018 is increase to retained 6 Months 6 Months Full Year Full Year Total Total Impact to Group's Retained Earnings earnings of $4.068M as a result of adjustments as be