Service Stream Limited · ASX:SSM

Service Stream — FY2017 Earnings Presentation

24 slides from Service Stream's earnings presentation, Aug 16, 2017

1. Slide 1: FY17 Results Presentation

   Service Stream Limited FY17 Results Presentation For personal use only Leigh Mackender Managing Director 16 August 2017

2. Slide 2: Contents

   Contents For personal use only 1 Company Profile 2 Performance Highlights 3 Financial Performance 4 Operational Performance 5 Group Strategy & Outlook 2

3. Slide 3: Company Profile

   Company Profile Service Stream Limited (ASX: SSM) is a S&P/ASX 300 company providing design, construction, installation and maintenance services across essential infrastructure networks within the For personal use only Telecommunication and Utility sectors People Revenue NPAT Earnings per Dividends

4. Slide 4: Performance Highlights

   Performance Highlights For personal use only  EBITDA of $48.4m … up 35% on FY16  Group NPAT of $28.4m … up 42% on FY16 Financial  Solid cash generation leading to Net Cash of $49.9m at year-end  Increased final dividend of 3.0 cents per share (fully-franked) declared  Continued improvement acro

5. Slide 5: Financial Performance

   Business Units Update For personal use only FINANCIAL PERFORMANCE

6. Slide 6: Highlights

   Highlights $501.8m For personal use only  Revenue up 14% with growth in all three operating segments Revenue up from $438.9m in FY16  2H17 is the eighth consecutive half-year delivering EBITDA, EBIT, NPAT & EPS growth $48.4m EBITDA up from $35.8m in FY16  EBITDA margin of 9.6% for the year driven

7. Slide 7: Key Financial Measures

   Key Financial Measures Group Revenue $350 ($m) $300 For personal use only 261.0 240.8 $250 221.9 215.0 213.8 217.1 197.4 Key financial measures $200 174.6 $150 $ million FY17 FY16 Change $100 $50 Profitability: $0 Revenue 501.8 438.9 62.9 14% 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 EBITDA 48.4 35.8

8. Slide 8: Segment Results

   Segment Results Group EBITDA $35 ($m) $30 For personal use only 27.3 $25 21.1 Segment results 20.1 $20 14.7 15.7 $15 $ million FY17 FY16 Change 10.7 9.0 $10 7.5 Fixed Communications 215.6 182.0 33.6 $5 Network Construction 196.8 177.8 19.0 Energy & Water 94.6 82.0 12.7 $0 1H14 2H14 1H15 2H15 1H16 2H

9. Slide 9: Cashflow Results

   Cashflow Results EBITDA to OCFBIT conversion % 300% 241% For personal use only 250% 219% 196% 200% Cashflow results 164% 150% 134% 115% 119% 100% $ million FY17 FY16 Change 50% EBITDA 48.4 35.8 12.5 16% 0% +/- non-cash items & change in working capital 8.5 27.9 (19.3) 1H14 2H14 1H15 2H15 1H16 2H16 1

10. Slide 10: Capital Management

    Capital Management For personal use only  The Group’s balance sheet continues to strengthen with Net Cash of Net Cash / (Net Debt) ($m) $60 $49.9 million at 30-Jun-17 after acquisition of TechSafe during the $50 44.1 49.9 41.1 37.7 $40 year $30 $20 14.8 $10  Effective capital management therefore

11. Slide 11: Operational Performance

    For personal use only OPERATIONAL PERFORMANCE

12. Slide 12: Safety Performance

    Safety Performance For personal use only Industry-leading safety remains a key focus for the business:  Group-wide safety initiatives implemented across higher-risk field operations in FY17  Over 34 million property visits completed during the year  Delivered further improvement across all major

13. Slide 13: Fixed Communications

    Fixed Communications Network operations, maintenance and minor works For personal use only Fixed Communications $150 Revenue ($m)  18.5% year-on-year increase in revenue driven by ramp- $125 114.6 up of nbn activation and assurance activities under the $100 93.2 102.1 97.2 101.0 84.8 OMMA & FSD con

14. Slide 14: Network Construction

    Network Construction Network engineering, design and construction For personal use only Network Construction $150 Revenue ($m)  10.7% year-on-year increase in revenue driven by ramp-up $125 of nbn construction activity under the MIMA contract: $41 94.9 103.3 $100 93.5 million in FY17 up from $9 mil

15. Slide 15: Energy & Water

    Energy & Water Utility asset installation, inspection and maintenance For personal use only Energy & Water $75 Revenue ($m)  15.5% year-on-year increase in revenue driven by ramp-up of activity in metering services: $50 48.6 46.0 43.8 40.9 36.3 38.2 - Service Stream completed 106,000 electricity sm

16. Slide 16: Group Strategy & Outlook

    For personal use only GROUP STRATEGY & OUTLOOK

17. Slide 17: Acquisition of TechSafe

    Acquisition of TechSafe Australia’s largest independent electrical inspection, compliance and auditing specialist For personal use only  Service Stream’s acquisition of TechSafe was completed on 28 April 2017  TechSafe expands the Group’s service offerings and improves the diversity and quality of

18. Slide 18: Group Strategy

    Group Strategy Continuing to deliver against our strategic plan during FY18 with a focus on the fundamentals which support our business and deliver continued growth For personal use only  Superior service delivery and execution SERVICE DELIVERY  Maintain strong balance sheet and continue to minimi

19. Slide 19: FY18 Outlook

    FY18 Outlook  We expect FY18 to deliver further growth in Group revenue and For personal use only profitability: – Fixed Communications expected to grow as the number of customer activations completed under the nbn OMMA contract increases – Network Construction expected to be relatively flat with i

20. Slide 20: Business Units Update: Historical Financial Performance Data

    Business Units Update For personal use only Historical Financial Performance Data: Group & New Operating Segments

21. Slide 21: Profit & Loss

    PROFIT & LOSS $ million 1H15 2H15 1H16 2H16 1H17 2H17 FY15 FY16 FY17 For personal use only Fixed Communications $93.16 $102.12 $97.19 $84.79 $100.96 $114.64 $195.29 $181.99 $215.59 Network Construction $63.65 $75.74 $82.90 $94.89 $93.53 $103.30 $139.38 $177.80 $196.82 Energy & Water $40.93 $36.34 $3

22. Slide 22: Segment Results

    SEGMENT RESULTS $ million 1H15 2H15 1H16 2H16 1H17 2H17 FY15 FY16 FY17 For personal use only Fixed Communications nbn Activation & Assurance $43.27 $54.32 $61.63 $57.81 $66.81 $79.53 $97.60 $119.45 $146.33 nbn Minor Projects $2.50 $4.92 $5.88 $6.86 $6.75 $6.59 $7.42 $12.74 $13.34 Other customers $47

23. Slide 23: Shareholders' Perspective

    SHAREHOLDERS' PERSPECTIVE $ million 1H15 2H15 1H16 2H16 1H17 2H17 FY15 FY16 FY17 For personal use only Average number of shares on issue 386.39 386.39 386.39 382.77 363.85 365.19 386.39 384.59 364.51 NPAT $4.05 $7.68 $8.81 $11.17 $13.03 $15.34 $11.72 $19.98 $28.37 Earnings per share (cents) 1.05 1.9

24. Slide 24: Cash Flow

    CASH FLOW $ million 1H15 2H15 1H16 2H16 1H17 2H17 FY15 FY16 FY17 For personal use only EBITDA $10.66 $14.73 $15.68 $20.14 $21.09 $27.26 $25.39 $35.82 $48.35 +/- non-cash items & change in w/capital ($8.97) $17.53 $15.03 $12.83 $3.25 $5.26 $8.57 $27.86 $8.51 OCFBIT $1.69 $32.27 $30.71 $32.97 $24.34 $

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