Slide 1: FY22 Full Year Results Presentation
Service Stream FY22 Full Year Results Presentation 23 August 2022
Slide 2: Agenda
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix 2
Slide 3: Key messages
Key messages A transformational year amidst a challenging operating environment ⚫ A transformational year for the group, headlined by the successful acquisition and integration of Lendlease Services ⚫ Delivery of solid financial performance across the Group: Telecommunications ● EBITDA from Operatio
Slide 4: Financial headlines
Financial headlines Total Revenue1 EBITDA from Adjusted Operating Cashflow Final Dividend Operations2 NPAT (OCFBIT) $1,564m $91.1m $31.4m $98.7m 1cps +94.5% vs pcp +13.7% vs pcp -19.4% vs pcp +24.3% vs pcp ● Lendlease Services (LLS) ● EBITDA margin 5.8% ● Includes $2.1m ● Exceptional EBITDA to ● Str
Slide 5: Group revenue profile
Group revenue profile Improved diversification across expanded market segments ⚫ Revenue diversification continuing to improve following Lendlease Services acquisition ⚫ Improved balance of work across expanded market segments ⚫ Majority of work mix is annuity style Operations & Maintenance / Minor
Slide 6: Work in hand
Work in hand Group holds an improved forward order book of $6bn+ and growing ⚫ Order book increased to $6bn+, excluding multi-year extension options* $6bn+ Work in Extreme weather conditions and elevated inflationary Hand ⚫ Equates to evident pressures 3.2x FY22 pro forma across revenue the industry
Slide 7: Managing inflationary pressures
Managing inflationary pressures ALTERNATIVE - FOR CONSIDERATION Group is well positioned to manage cost escalation pressures if we wanted to call out / highlight some specific detail across each Division ⚫ ~87% of revenue subject to annual price reviews or priced ‘on application’ catering to market
Slide 8: Group Safety
Group Safety Maintaining our focus on driving continual improvement Total Recordable Injury Frequency Rate 2.94 ⚫ Inclusion of LLS metrics a factor in the decline of Group performance, as expected 2.32 2.07 due to operational dynamics 1.53 FY19 FY20 FY21 FY22 ⚫ Acquisition delivering increased indus
Slide 9: Sustainability initiatives
Sustainability initiatives Driving measured improvements across the Group's Sustainability Pathways Health & Safety Environment People Governance Community ● Continued proactive ● Adoption of Science ● Enhanced Employee ● Alignment of our ● Finalising Group’s reviews on managing Based Targets Value
Slide 10: Agenda
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix 1010
Slide 11: Integration Program
Integration Program Delivering on our commitments and keeping to plan Diversified revenue across additional quality blue-chip ✓ Successful exit of all TSA modules by 30 June 22 client base Extreme weather conditions and elevated inflationary ● Finance, pressures Peopleacross evident & Culture, Share
Slide 12: Timeline & synergy realisation
Timeline & synergy Integration realisation update Delivered ~$10m run-rate synergies, ahead of original target Delivery timeframe (18-24 months) Transaction Restructure Integration Complete Exit TSA Complete begins 2021 2022 2023 Nov-22 Jan-22 Jun-22 Nov-22 Nov-23 ✓ Delivered ~$10m run-rate Original
Slide 13: Group transformation
Group transformation Transforming Service Stream into a diverse, multi-network essential service provider ● Improved revenue diversification following Lendlease Services acquisition ● Significantly reduced Group concentration risk across any single market / customer ● Growth across annuity style O&M
Slide 14: Segment Performance
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix
Slide 15: Utilities
Utilities Increasing our long-term O&M (services) revenues across water, electricity and industrial client base Highlights Major Clients Total Revenue ($m) ● Sydney Water 697.0 ● Revenue growth of 69% with addition of LLS operations, and increased water infrastructure projects ● South East Water 413
Slide 16: Telecommunications
Telecommunications Expanded client base and depth of services across long-term agreements Highlights Major Clients Total Revenue ($m) ● nbn 640.0 ● Revenue growth of 63% driven by inclusion of LLS and strong work volumes 392.4 ● Optus ● Telstra ● EBITDA margin reduction reflective of rebased legacy
Slide 17: Transport
Transport Providing long-term operational support and maintenance services to public and private road asset owners Highlights Major Clients Total Revenue ($m) ● Main Roads Western Australia 220.1 ⚫ Operations impacted by prolonged wet weather delaying road maintenance and improvement activities acro
Slide 18: Financial Performance
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix 18
Slide 19: Profit and Loss
Profit and Loss Comparison of results for the year ended 30 June 22 $m FY22 FY21 $ Revenue 1,516.5 804.2 712.4 Total Revenue +94.5%: EBITDA 64.6 75.2 (10.5) • Lendlease Services (LLS) revenue $727m • Legacy SSM revenue $827m, up 2.8% Depreciation & amortisation (39.3) (20.4) (18.9) Amortisation of c
Slide 20: Cashflow
Cashflow Comparison of results for the year ended 30 June 22 $m FY22 FY21 Change $ EBITDA from Operations 91.1 80.1 11.0 Key highlights: +/- non-cash items & change in working capital 7.6 (0.7) 8.3 • Exceptional OCFBIT cash conversion of 108% OCFBIT 98.7 79.4 19.3 • Continuing focus on release of wo
Slide 21: Balance sheet & capital management
Balance sheet & capital management Comparison of results for the year ended 30 June LLS $m Jun-22 Jun-21 LLS acquisition: Provisional Cash and cash equivalents 68.7 50.6 3.0 • Continued provisional accounting of LLS acquisition adopted at June-22 (final Completion payment pending) Trade and other re
Slide 22: Group Outlook
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix
Slide 23: Key messages
Key messages ● Solid financial performance, demonstrated business resilience ● Strong cashflow conversion, robust balance sheet and improved work in hand ● Extreme weather and solitary utility project impacted Group’s operations during H2, although much of the impact was successfully offset ● Approx
Slide 24: Outlook
Outlook ● Long term sector fundamentals remain attractive across all the Group’s industry sectors: ● Significant opportunities associated with infrastructure investment across Telco, Utilities and Transport markets ● Resilient end markets underpinned by the essential nature of our work ● Group expec
Slide 25: Appendix
1 Result Highlights 2 LLS Acquisition 3 Segment Performance 4 Financial Performance 5 Group Outlook 6 Appendix
Slide 26: Reconciliation of statutory to adjusted profitability measures
1. Reconciliation of statutory to adjusted profitability measures $m FY22 FY21 Reconciliation of Revenue to Total Revenue Revenue 1,516.5 804.2 Share of sales of revenue from joint ventures 47.2 - Total Revenue (including joint ventures) 1,563.8 804.2 Reconciliation of EBITDA from Operations to EBIT
Slide 27: Other information
2. Other information Amortisation of customer contracts & relationship Balance $m FY22 FY23 FY24 FY25 FY26 30 June 22 Comdain Infrastructure (8.0) (8.0) (8.0) (6.9) (5.7) (48.4) Lendlease Services (provisionally accounted) (5.4) (8.1) (8.1) (8.1) (8.1) (97.3) Total amortisation (13.4) (16.1) (16.1)
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
Slide 29: About
About Service Stream Limited is a public company listed on the Australian Securities Exchange (Code: SSM). The Service Stream Group is a provider of essential network services to the telecommunications, utility and transport sectors. Service Stream operates across all states and territories, has a w