Macquarie Technology Group Limited · ASX:MAQ
Macquarie Technology — Macquarie Telecom — H1 FY2006 Earnings Presentation
20 slides from Macquarie Technology's earnings presentation, February 2006
Slide 1: Half Year Results 2006
Half Year Results 2006 Macquarie Telecom delivering for business and government
Slide 2: Agenda
Agenda 1. Half Year in Review and Strategy 2. 2006 Guidance 3. Revenue Summary 4. Australian Data Business 5. Australian Voice Business 6. Mobiles Business 7. Singapore Business 8. Financials 9. Regulatory Developments delivering for business and government
Slide 3: Half Year in Review
Half Year in Review Macquarie is executing on its strategy Investments in Metro Access Network, Hosting and Security and Data IP expertise Total service revenues up 9.4% on pcp EBITDA profit of $2.0 million in line with expectations and guidance Cash position of $21.1 million Net cash outflow of $2.
Slide 4: Convergence Strategy
Macquarie Telecom – Convergence Strategy security accountable service voice mobile data convergence hosting
Slide 5: Metro Access Network
Metro Access Network Capital investment program to establish an IP based Metro Access Network Metro Access Network will deliver increased speed and scalability for voice, data and internet applications The network will provide reduced support costs and enhance management and diagnostic capability Th
Slide 6: Full Year Guidance
Full Year Guidance EBITDA for second half of FY2006 expected to be up to twice that reported for the first half of FY2006. Earnings back on a growth path delivering for business and government
Slide 7: Revenue Summary
Revenue Summary Total service revenue grows 9.4% to $124.6 million on pcp Voice revenue grows 1.9% on pcp Data business revenue grows 14.0% to $32.5 million on pcp Mobile revenue grows 97.3% to $9.8 million on pcp Singapore revenue grows 7.2% to $5.8 million on pcp Revenue growth confirms strategic
Slide 8: Australian Data Business
Australian Data Business Strong revenue growth up 14.0% on pcp to $32.5 million All growth is organic, momentum in IP products Data 26.1% of total revenue in first half of year Data services revenue % of Data services revenue total revenue $m 34 32 75.5% 75.0% 73.6% 73.9% 30 28 32.5 30.8 26 28.5 24.
Slide 9: Australian Data Business EBITDA
Australian Data Business EBITDA Data EBITDA profit of $0.4 million improved from loss of $0.9 million for pcp Data profitability continues to be impacted by: - Investments in IP based products and service - Investment in enhancing depth and level of IP expertise Investments crucial to meet customers
Slide 10: Australian Voice Business Revenue
Australian Voice Business Revenue • Voice service revenue of $76.5 million up 1.9% on pcp $m $32.6 $34.1 Access $35.8 $39.4 and Other $22.3 Local & $21.9 $20.7 $21.0 Fixed to Mobile $21.3 $19.0 $16.6 $16.1 Long Distance 2H04 1H05 2H05 1H06 Voice revenue grows in the face of in intense competition, a
Slide 11: Australian Voice Business EBITDA
Australian Voice Business EBITDA • Voice EBITDA of $4.5 million up 11.3% on pcp • Defending voice profitability in the face of industry wide price pressure • ACCC decision on FTM access needs to be fully implemented to level competitive playing field Voice Carrier Cost $m Voice EBITDA Voice Carrier
Slide 12: Macquarie Corporate Mobile
Macquarie Corporate Mobile Revenues grow to $9.8 million up 97.3% on pcp Competitive necessity for bundled solutions Integrated mobile billing and reporting EBITDA breakeven Mobile penetration into customer base continues delivering for business and government
Slide 13: Singapore Business
Singapore Business Revenue up 7.2% on pcp to AUD$5.8 million Revenue growth despite aggressive price reductions Revenue up 10.0% on pcp in local currency Singapore revenue in AUD SGD 8 7 6 5 4 3 2 1 0 2H04 1H05 2H05 1H06 Singapore adds a regional dimension to Macquarie’s business model delivering fo
Slide 14: Financials
Financials Half on Half ($ millions except customer numbers) 1H04 2H04 1H05 2H05 1H06 Revenue from services 115.8 111.1 113.9 116.6 124.6 Carrier Costs 81.2 75.2 78.8 79.4 84.9 Personnel Costs 20.8 22.5 24.7 25.0 27.0 Other Operating Costs 10.1 9.1 11.3 10.7 10.7 Total Costs 112.2 106.7 114.8 115.1
Slide 15: Gross Profit
Gross Profit $millions 33.8% 33.0% 45 32.8% 31.7% 30.4% 40 28.8% Gross Profit 35 GP% 24.5% 30 19.1% 19.4% 25 12.8% 15.9% 12.8% 20 11.0% 15 10 5 0 1H00 2H00 1H01 2H01 1H02 2H02 1H03 2H03 1H04 2H04 1H05 2H05 1H06 Gross profit improves delivering for business and government
Slide 16: EBITDA
EBITDA 10 8 6 4 2 $ millions 0 (2) (4) (6) (8) (10) (12) 00 00 01 01 02 02 03 03 04 04 05 05 06 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H EBITDA within guidance delivering for business and government
Slide 17: Laying the foundations for the future
Laying the foundations for the future Healthy cash position of $21.1 million at 31 December 2005 Operating cash flow was $2.6 million impacted by increased investment in operating activities Net cash outflow of $2.0 million due to capital investments of $9.2 million – Metro Access Network, Hosting,
Slide 18: Regulatory priorities in 2006
Regulatory priorities in 2006 Mobile Terminating Access Disputes – Disputes with both Optus and Vodafone are with the ACCC for “final” determination. – Interim pricing confirmed by the ACCC in line with previously published ACCC pricing principles. Unbundled Local Loop (ULL) Access Pricing – Rates f
Slide 19: Summary
Summary Macquarie Telecom continues to lay the foundations to deliver future growth and profitability Executing on strategy – revenue improving in all lines of business Defending voice revenues and profitability Defined road-map for growth: “Bundled” capability delivering results Executing on strate
Slide 20: Half Year Results 2006
Half Year Results 2006 Macquarie Telecom delivering for business and government