Catapult Sports Ltd. · ASX:CAT
Catapult Sports — H1 FY2019 Earnings Presentation
27 slides from Catapult Sports's earnings presentation, Feb 21, 2019
Slide 1: 1H FY19 Results
1H FY19 RESULTS 21 FEBRUARY 2019 Dr. Adir Shiffman, Executive Chairman Mark Hall, Chief Financial Officer 1H F19 RESULTS 1
Slide 2: Key Messages
KEY MESSAGES Subscription software is at the heart of our business Most of the core elite revenue and growth is associated with subscription software The first half was strong delivering continued high subscription growth, high margins and low churn 1H F19 RESULTS 2
Slide 3: We exist to build and improve the performance of athletes and teams
WE EXIST TO BUILD AND IMPROVE THE PERFORMANCE OF ATHLETES AND TEAMS. 1H F19 RESULTS 3
Slide 4: Company Strategy
COMPANY STRATEGY 1 2 OWN THE PERFORMANCE TECHNOLOGY STACK FOR ELITE TEAM SPORT WEARABLE VIDEO ATHLETE TECHNOLOGY ANALYSIS MANAGEMENT 2 (LEVERAGE TEAM INTO CONSUMER TO) BUILD A SUCCESSFUL CONSUMER BUSINESS 1H F19 RESULTS 4
Slide 5: High Subscription Growth, High Margins, Low Churn
HIGH SUBSCRIPTION GROWTH, HIGH MARGINS, LOW CHURN GROUP HIGH GROWTH INVESTING IN RESULTS CORE FUTURE GROWTH • ARR $57.4m (+25%) driven by • Growth from EW +38% and EV +22% • $5.3m invested in R&D Elite wearable ARR +32% • Core* business is EBITDA • Next generation EW product, • Revenue +32% to $43m;
Slide 6: Core Business Growing, Profitable and on Track for FY19 Guidance
CORE BUSINESS GROWING, PROFITABLE AND ON TRACK FOR FY19 GUIDANCE Underlying EBITDA $m 14 FY19 guidance range is 12 $11m to $13m 10 • Implied minimum second half based on FY19 guidance range 8 is $7.4m • Implied maximum second half based on FY19 guidance range 6 is $9.4m • FY18 2H18 was $7.9m 4 2 0 F
Slide 7: More Than 2,500 Teams Now Working With Catapult
CORE BUSINESS MORE THAN 2,500 TEAMS NOW WORKING WITH CATAPULT RECENT MAJOR WINS INCLUDE AMONG HUNDREDS OF OTHER NEW TEAMS WHO HAVE RECENTLY JOINED CATAPULT 1H F19 RESULTS 7
Slide 8: EW Subscription ARPU and Subscription Unit Growth
CORE BUSINESS EW SUBSCRIPTION ARPU AND SUBSCRIPTION UNIT GROWTH EW ARPU ($) PER MONTH PER DEVICE 18.3K ELITE WEARABLES SUBSCRIPTION UNITS 120 115 18,293 17,098 110 105 Note 1H19 reflects 6 months growth. All other points are 12 100 months growth. 95 90 1,837 85 80 Jun 17 Dec 17 Jun 18 Dec 18 FY14 FY
Slide 9: Positive Subscription Revenue and Churn
CORE BUSINESS POSITIVE SUBSCRIPTION REVENUE AND CHURN ARR IS GROWING STRONGLY +25% EW CHURN % 9 $m 60 6 40 3 20 0 0 Dec 17 Dec 18 Dec 17 Jun 18 Dec 18 Video +18% Wearables +32% 1H F19 RESULTS 9
Slide 10: Product Innovation in Elite Continues
PRODUCT INNOVATION IN ELITE CONTINUES VECTOR PLAYERTEK+ Developed over five years in conjunction with some of the Playertek+ offers a lower cost elite device that world’s leading performance practitioners, Catapult Vector allows sub-elite teams to transition to a more elite delivers new levels of ac
Slide 11: Prosumer - Key Messages
PROSUMER - KEY MESSAGES Unit sales growth of 2.1x This sales growth was below forecast milestones – as a result cash costs for FY19 will be ~$3 million lower than anticipated Catapult believes in the long-term potential of the Prosumer business and is committed to driving sustainable growth at
Slide 12: PLAYR Driving Growth in Prosumer Volumes
PLAYR DRIVING GROWTH IN PROSUMER VOLUMES 1H F19 RESULTS 12
Slide 13: Profit and Loss Statement
PROFIT AND LOSS STATEMENT 1H19 1H18 % change $m $m YoY Reported Reported • Revenue growth driven by strong result in elite Capital revenue 11.6 8.2 41% wearables (includes Playertek + ) (up 38%) Subscription revenue 30.9 23.7 30% Other revenue 0.5 0.5 - • Higher capital revenue contribution impacted
Slide 14: Revenue Growth
REVENUE GROWTH UNDERPINNED BY GROWTH IN RECURRING REVENUE $43.0m 1.4 Subs. 0.7 3.0 30.4 0.5 1.3 $32.4m 3.7 Subs. 23.7 73% of elite revenue growth and 63% of total revenue growth driven by growth in elite products recurring revenue Other Other 12.6 8.7 1H18 Subscription Capital Other Subscription Har
Slide 15: Operating Expenses
OPERATING EXPENSES EXPENSE GROWTH BELOW REVENUE GROWTH OPEX +8% SCALED FOR GROWTH Headcount by region (STAFF NUMBERS) $m 35 349 30 311 288 25 20 15 125 10 5 0 1H18 1H19 FY16 FY17 FY18 1H19 Labour Non-labour Americas APAC EMEA 1H F19 RESULTS 15
Slide 16: Segments
SEGMENTS POSITIVE EBITDA CONTRIBUTION FROM ELITE WEARABLES AND ELITE VIDEO • Core underlying EBITDA* $3.6m entirely attributable to H1FY19 1H19 ($m) Wearables Elite Video New Products Corporate Costs Total (increase of $3.5m H1FY18) Revenue – external customers 19.6 20.7 2.7 - 43.0 • New products re
Slide 17: Cash Flow
CASH FLOW $55.5m $0.2m • Group cash receipts from customers up 22% to $55.5m • Group negative free cash flow -$1.6m; $31.7m core underlying free cash flow $4.0m $27.1m -$50.4m -$6.9M -$3.0m Net operating cash flow +$5.3m Free cash flow -$1.6m CASH RECEIPTS OTHER PAYMENTS TO INVESTMENT FINANCING & CA
Slide 18: Stronger Balance Sheet Provides Platform for Growth
STRONGER BALANCE SHEET PROVIDES PLATFORM FOR GROWTH 31-Dec-18 30-Jun-18 Assets $m $m Cash and cash equivalents 27.1 31.7 Trade and other receivables 21.4 31.1 Inventory 5.8 3.8 • Trade and other receivables balance down 31% PP&E 8.7 8.7 from FY18. Goodwill 59.2 56.7 • Goodwill and other intangibles
Slide 19: 1H F19 Results
1H F19 RESULTS 19
Slide 20: Profitable Core: EBITDA Reconciliation
PROFITABLE CORE: EBITDA RECONCILIATION $9.7m $0.7m $3.6m $0.7m -$7.5m -$0.7m -$0.7m -$3.6m ELITE CORP. COSTS EMPLOYEE NEW PRODUCT CORE NEW NEW GROUP WEARABLE & SHARE PLAN SHARE OF UNDERLYING PRODUCTS PRODUCTS UNDERLYING VIDEO EBITDA COSTS CORP. COSTS EBITDA EBITDA SHARE OF EBITDA CORP COSTS 1H F19 R
Slide 21: Cashflow Positive Core
CASHFLOW POSITIVE CORE $1.8m $4.0m -$0.5m $0.7m $3.6m -$1.6m H1FY19 GROUP FCF NEW NEW PRODUCT NEW OTHER FY19 CORE FCF PRODUCTS SHARE OF BUSINESS WORKING EBITDA CORP. COSTS CAPEX CAPITAL 1H F19 RESULTS 21
Slide 22: 1H F19 Results
1H F19 RESULTS 22
Slide 23: CEO Recruitment Process
CEO RECRUITMENT PROCESS Joe Powell resigned as CEO on 7 February 2019, providing 6 months’ notice The Board has delegated a sub-committee to appoint a new CEO The Company has commenced a global executive search for a new CEO 1H F19 RESULTS 23
Slide 24: Large and Growing Addressable Market
LARGE AND GROWING ADDRESSABLE MARKET UNDERPENETRATED MARKET GROWING ADDRESSABLE MARKET c. 10,000 teams1 $450m-$550m2 Plus, we think an additional 10,000 teams will push up into this market over time AMS Wearables Industry growth ~40% CAGR through to 20223 1 Based on bottom-up management Video analys
Slide 25: Reaffirming FY19 Guidance
REAFFIRMING FY19 GUIDANCE Measure FY18 base FY19 Guidance Comment Elite Core Revenue** $73.4m Between $86m and $88m Implies growth between 17% and 20% Underlying Core EBITDA*** $8.0m Between $11m and $13m Implies growth between 37% and 63% Annualised recurring revenue (ARR) $53.4m Growth above 20% A
Slide 26: Play Smart
26 PLAY SMART 1H F19 RESULTS
Slide 27: Disclaimer - Forward-looking statements
27 Disclaimer - Forward-looking statements Any forward-looking statements, opinions and estimates provided in this announcement rely on various contingencies and assumptions. Various factors and risks, both known and unknown, many of which are outside the control of Catapult, may impact upon the per