Slide 1: FY23 First-Half Results Presentation
Service Stream FY23 First-Half Results Presentation For the six months ended 31 December 2022
Slide 2: Acknowledgement of Country
Acknowledgement of Country Service Stream acknowledges the Traditional Owners of the land on which we meet today, the Wurundjeri People of the Kulin nation and we pay our respects to Elders past and present 2
Slide 3: Group highlights
Group highlights Strategically repositioned to deliver consistent and reliable growth • Strong underlying first-half financial performance Financial ‒ Total Revenue $993.6m, tracking towards $2bn in FY23 $993m+ ‒ Underlying EBITDA from Operations of $55.0m, excluding the Queensland onerous 1H23 re
Slide 4: Strategically repositioned the Business
Strategically repositioned the Business Integration of Lendlease Strong forward order Expanded capabilities Services 100% completed book of ~$6bn+ WIH and service offerings Low capital-intensive Robust balance sheet Strong cash-flow operations and conservative gearing conversion >80% work contracted
Slide 5: Financial headlines
Financial headlines Total Revenue1 Underlying EBITDA Adjusted NPAT Underlying Operating Interim Dividend from Operations2 Cashflow (OCFBIT) $993.6m $55.0m $17.1m $38.5m 0.5cps +75.5% vs pcp +40.1% vs pcp +4.8% vs pcp -58.3% vs pcp • Incremental 4 months of • EBITDA margin 5.5% • NPAT-A excludes • OC
Slide 6: Delivering on Lendlease Services acquisition
Delivering on Lendlease Services acquisition Strategic objectives Milestones & achievements Diversify Group revenue • 100% of client contracts were successfully transitioned, streams enhancing Group’s annuity-style revenues • Successful exit of all Transitional Services Agreement Expand capabiliti
Slide 7: Diversified Group portfolio
Diversified Group portfolio Supporting Australia's essential network infrastructure across growing markets Telecommunications Utilities Transport Total Revenue Total Revenue Total Revenue $458.2m $408.8m $126.3m +95.7% vs pcp +47.4% vs pcp +129.7% vs pcp EBITDA EBITDA (underlying) EBITDA $41.4m $12.
Slide 8: Diversified portfolio
Diversified portfolio Lower risk, annuity-style operations and maintenance work portfolio • Revenue diversification significantly enhanced following Lendlease Services integration • 85% of work mix is annuity-style Operations & Maintenance (O&M) or Minor Capital Works (MCW) • 80% of work held Govern
Slide 9: Navigating a challenging market environment
Navigating a challenging market environment Commercial Inflationary pressures Labour Market • >85% of Telecommunication works • Rising labour, fuel and material costs • Constrained labour market not significantly subject to annual price review c pressures impacting margins, most notably impacting op
Slide 10: Industry leading safety performance
Industry leading safety performance Achievements Group Performance • LTIFR continues to demonstrate the delivery of Lost Time Injury industry leading safety performance Frequency Rate 0.87 • Significant reductions achieved across all major 0.61 safety lag indicators 1H22 1H23 • Successfully implemen
Slide 11: Sustainability
Sustainability Sustainability Pathways Accomplishments Health & Safety • Continued to deliver industry leading safety performance and drive improvements across our safe work culture • Released the Group’s inaugural Innovative Reconciliation Action People Plan (RAP) • Significantly expanded support f
Slide 12: Investing in our People: Case studies
Investing in our People: Case studies Environment Social Community Volunteers helping social enterprise, Innovate Reconciliation Action Plan Christmas Boxes for families in need Muru Mittigar (RAP) launched Our Telco Senior Leadership Team Our Westlink Services volunteered to Our vision for reconcil
Slide 13: Segment performance
5 Segment performance sera
Slide 14: Utilities
Utilities Highlights • Total Revenue of $408.8m up $131.4m (~47%) reflecting inclusion of LLS • Utility future operations de-risked to reduce on-going exposure to operations large, fixed price D&C projects in current operating environment • Underlying EBITDA of $12.5m down 23%, excluding additional
Slide 15: Telecommunications
Telecommunications Highlights • Standout performance driven by strong revenue growth across • Division has a significant baseline of contracted work with ~85% of both fixed line and wireless operations NTM revenue secured ‒ Underlying revenue growth of ~20% across combined • Sector outlook is buoyan
Slide 16: Transport
Transport Highlights • Total Revenue of $126.3m up $71m (~130%) reflecting entire half-year • Secured major lighting upgrade project with Transurban; contribution of LLS operations successfully mobilised in late-December • EBITDA of $8.1m up ~107% with margins steady at 6.4%, inline with • Additiona
Slide 17: De-Risking Group's exposure
De-Risking Group’s exposure QLD D&C Utility project update • Successfully completed design activities for all packages of work • Group’s FY23 first-half results reflect an increase to the onerous contract provision of $20m to support completion by late 2023 • Project moving into lower-risk final con
Slide 18: Financial performance
5 Financial performance seneesveam
Slide 19: Profit and Loss
Profit and Loss Comparison of results for the period ended 31 December 22 $m 1H23 1H22 $ Total Revenue +75.5%: Revenue 955.4 560.4 395.0 EBITDA 32.7 30.4 2.2 • Growth driven by additional 4 months of Lendlease Services revenue Depreciation & amortisation (23.2) (14.6) (8.6) • Underlying growth of 7.
Slide 20: Cashflow
Cashflow Comparison of results for the period ended 31 December 22 $m 1H23 1H22 Change $ Key highlights: EBITDA from Operations 55.0 39.3 15.7 +/- non-cash items & change in working capital (15.2) 53.0 (68.2) • H1 OCFBIT conversion of 70% in line with expectations: Adjustments for joint ventures (1.
Slide 21: Balance sheet & capital management
Balance sheet & capital management Comparison of results for the period ended 31 December $m Dec-22 Jun-22 LLS acquisition: Cash and cash equivalents 104.5 68.7 Trade and other receivables 90.5 105.0 • Acquisition accounting finalised Inventories 17.9 14.7 • Final Completion adjustment $12.9m (paid
Slide 22: Group outlook
Group outlook 22
Slide 23: Future growth
Future growth Group’s expanded addressable market now exceeds $50b+ in annual maintenance related expenditure Core addressable markets + Additional investments • Increased technology adoption & digital transition • Unprecedented levels of investment from Government • Ageing infrastructure and privat
Slide 24: Outlook
Outlook Group outlook • Strong underlying performance across Group portfolio, particularly Telecommunication operations • Significant works completed to support strategic repositioning of Group ‒ Integration of Lendlease Services completed ahead of schedule ‒ $17m+ synergy target met, with further o
Slide 25: Appendices
Appendices
Slide 26: Reconciliation of statutory to adjusted profitability measures
1. Reconciliation of statutory to adjusted profitability measures Reconciliation of Underlying EBITDA from Operations to NPAT $m 1H23 1H22 $ Underlying EBITDA from Operations 55.0 39.3 15.7 Onerous contract provision for QLD Utility project (20.1) - (20.1) EBITDA from Operations 34.9 39.3 (4.4) Join
Slide 27: Other information
2. Other information Amortisation of customer contracts & relationship Balance 31 Dec 22 $m FY23 FY24 FY25 FY26 FY27 Comdain Infrastructure 8.0 8.0 6.9 5.7 5.7 44.4 Lendlease Services (provisionally accounted) 7.6 7.6 7.6 7.6 7.6 87.7 Total amortisation 15.7 15.7 14.5 13.3 13.3 132.1 Breakdown of No
Slide 28: Disclaimer
Disclaimer This Presentation contains summary information about the current activities of Service Stream Holdings Limited (Service Stream). It should be read in conjunction with the Service Stream’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange