Hipages Group Holdings Ltd. · ASX:HPG
Hipages — FY2021 Earnings Presentation
38 slides from Hipages's earnings presentation, Aug 26, 2021
Slide 1: FY21 Result
For personal use only FY21 Result 26 August 2021
Slide 2: Australia's largest online tradie marketplace and SaaS provider
For personal use only Australia’s largest online tradie marketplace and SaaS1 provider, creating effortless solutions that help tradies streamline and grow their business and delight their customers. 1. Software-as-a-Service (SaaS)
Slide 3: Agenda
For personal use only Agenda 1. FY21 overview & opportunity 2. Strategy 3. Financial & operational update 4. FY22 outlook
Slide 4: FY21 overview & opportunity
For personal use only FY21 overview & opportunity ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder
Slide 5: FY21 business highlights
FY21 business highlights For personal use only Strong performance in all key metrics as hipages achieves upgraded guidance for revenue, EBITDA and NPAT Awarded #2 Best Place to Work in Australia in the WRK+ 2021 Best Places to Work study Product enhancements and transition to subscription-only model
Slide 6: FY21 overview
FY21 overview For personal use only Revenue Profitability Key drivers $5.2m 85% 31.2k MRR1 Up 27% Gross margin3 Subscription tradies Up 12% (FY20: 79%) $52.7m $1,536 Recurring revenue2 Up 25% $11.7m Total Tradie ARPU6 Up 29% EBITDA4 Up 91% EBITDA margin 21% $55.8m 1.53m Total revenue Up 19% $1.2m Jo
Slide 7: Australia's largest online tradie platform
Australia’s largest online tradie platform For personal use only Evolving to Large and SaaS model and Subscription-only growing expanding product with 94% addressable into ancillary recurring revenue market opportunities Over 31k Strong brand 3.5m users have subscription awareness of 55% posted jobs
Slide 8: Large addressable market with small market share
Large addressable market with small market share For personal use only Total Addressable Market Tradie advertising spend # Trade Businesses hipages GMV1 $2.6bn, $110bn2 hipages share $1bn2 hipages tradies 34.5k 257k3 2.1% take rate 5% ~2.4% of TAM ~13% of TAM Lead sourcing highest ROI 2 Large opport
Slide 9: Strategy
For personal use only Strategy ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder
Slide 10: Why we do what we do
Why we do what we do For personal use only Purpose Vision Transforming the trade To be the most trusted industry, building better partner in the trade lives for everyone industry To win the tradie economy FY21 FINANCIAL RESULTS | AUGUST 2021 10
Slide 11: Overall strategic opportunity
Overall strategic opportunity For personal use only FY21 FINANCIAL RESULTS | AUGUST 2021 11
Slide 12: Value of the total addressable market
Value of the total addressable market For personal use only FY21 FINANCIAL RESULTS | AUGUST 2021 12
Slide 13: Trade business spend
Trade business spend For personal use only FY21 FINANCIAL RESULTS | AUGUST 2021 13
Slide 14: Strategy Execution
Strategy Execution FY20-21 FY22-23 FY24+ For personal use only Marketing effectiveness Subscription product Operational excellence Grow core Tradiecore will optimise experience for tradies and consumers category Enhance product features Medium to large Tradies On-demand booking and fixed-price servi
Slide 15: For personal use only
https://www.youtube.com/watch?v=j06K-p1TPGE For personal use only FY21 FINANCIAL RESULTS | AUGUST 2021 15
Slide 16: FY21 financial & operational update
For personal use only FY21 financial & operational update MELISSA FAHEY Chief Finance & Operations Officer
Slide 17: Delivering sustainable growth
Delivering sustainable growth For personal use only MRR Total Revenue EBITDA Operating cash flow $12.7m $9.2m ($3.1m) FY19 FY20 FY21 ($0.5m) FY21 FINANCIAL RESULTS | AUGUST 2021 1. Pro Forma Revenue, EBITDA and Operating Cash Flow. Pro Forma EBITDA is before significant items. 17
Slide 18: FY21 financial highlights
FY21 financial highlights For personal use only Revenue Operating Leverage Profitability MRR1 up 27% drives recurring Gross margin2 of 85% Pro forma EBITDA3 of $11.7m revenue growth of 25% and Pro Forma OCF of $12.7m Marketing efficiencies drive Opex as 29% Total Tradie ARPU growth a % of revenue do
Slide 19: FY21 result summary
FY21 result summary Strong performance across all key metrics For personal use only Pro forma financial and operating metrics FY21 FY20 Var (%) FY21F Upgrade Var (%)4 ● Achieved upgraded FY21 revenue, EBITDA2 and NPAT guidance Financial Summary ● 27% growth in MRR @ June 2021 driving Total revenue (
Slide 20: Strong growth in MRR
Strong growth in MRR1 Acceleration in MRR as more tradies subscribe and ascend to higher price points For personal use only MRR1 27% ● MRR 1 of $5.2m @ June 2021, up 27% vs pcp, underpins strong recurring revenue growth ● Driven by growth in subscription tradies, jobs and APRU ● Flywheel effect of d
Slide 21: Subscription-only model drives ARPU growth of 29%
Subscription-only model drives ARPU growth of 29% Pre November 2019 Post November 2019 For personal use only • Transactional product – small annual listing fee and • Moved to a subscription-only product offering for new tradies tradie would pay each time they claimed a job lead • New version of subs
Slide 22: Subscription model drives growth in Total Tradie ARPU
Subscription model drives growth in Total Tradie ARPU1 Business model transition and platform enhancements deliver higher value tradies For personal use only Total Tradie ARPU 29% ● Total Tradie ARPU 1 of $1,536 up 29% on pcp ● Outperformed FY21 Upgrade ● Driven by: ○ Move to subscription-only produ
Slide 23: Subscription tradie base continues to expand
Subscription tradie base continues to expand Brand awareness drives increased subscriptions For personal use only Total subscription tradies 12% ● Total subscription tradies up 12% in FY21 to 31.2k ● In line with FY21 Upgrade ● Successful brand campaign targeting tradie customers resulted in increas
Slide 24: Lifetime Transaction Value / Customer Acquisition Costs
Lifetime Transaction Value / Customer Acquisition Costs1 Significant improvement in unit economics For personal use only Annualised LTV/CAC ● LTV vs CAC ratio increasing as a result of improved unit economics ● ~60% increase in ARPU and ~40% reduction in CAC from FY19-FY21 ● FY21 outperformed Prospe
Slide 25: Flywheel effect driven by growth on both sides of marketplace
Flywheel effect driven by growth on both sides of marketplace For personal use only Subscription tradies Users Subscription tradies increased from 77% to 90% 3.5m unique users posted a job to hipages platform to end FY21 of customer base 15% 12% 3.5m 3.1m 2.6m FY19 FY20 FY21 6–12-month contracts, au
Slide 26: FY21 subscription revenue bridge
FY21 subscription revenue bridge New tradies and ascensions drive subscription revenue higher For personal use only • FY21 subscription revenue growth driven by: o Strong demand from new subscribers joining the platform o Net ascensions as tradies moved to higher tier subscription products • Total m
Slide 27: Pro Forma Operating Expenses
Pro Forma Operating Expenses Marketing efficiency drives increased operating leverage For personal use only Expenses as a % revenue1 FY19 FY20 FY21 FY21F • Expenses as % of revenue were 79% of revenue in FY21 after Prospectus reinvestment in growth in H2. Operations and administration 39% 34% 35% 35
Slide 28: Effective investment driving increased brand awareness
Effective investment driving increased brand awareness For personal use only • Consumer brand awareness remains strong at 55% • Market leader for top-of-mind awareness at 20% vs. nearest competitor at 12% • Successful brand campaign across radio and digital increased tradie customer brand awareness
Slide 29: Building consumer trust and brand awareness
Building consumer trust and brand awareness 14% increase in job volume, strong growth in jobs from repeat consumers and unpaid channels1 For personal use only 64% of jobs from repeat consumers 77% of jobs from unpaid channels 3.5m unique users posted a job to hipages platform as at FY21 22% increase
Slide 30: FY21 Pro Forma Financial Summary
FY21 Pro Forma Financial Summary For personal use only $m FY21 FY20 $ Var % Var ● Strong revenue growth in FY21 Recurring 52.7 42.2 10.5 25% Transactional 1.7 3.4 (1.7) (50%) ● Recurring revenue growth of 25%, total Operating Revenue 54.4 45.6 8.8 19% revenue up 19% on pcp Other 1.4 1.3 0.0 3% ● 94%
Slide 31: FY21 Cash Flow
FY21 Cash Flow For personal use only Pro forma Statutory Statutory $’000s FY211 FY21 FY202 $ Var ● Strong FY21 Pro Forma operating cash flow Receipts from customers (inclusive of GST) 60,346 60,346 52,168 8,178 (OCF) of $12.7m with Pro Forma EBITDA to OCF Payments to suppliers and employees (inclusi
Slide 32: FY21 Statutory Balance Sheet
FY21 Statutory Balance Sheet For personal use only $’000s 30 Jun 21 30 Jun 20 $ Var Cash and cash equivalents 30,303 8,822 21,481 ● Strong FY21 total equity position of Funds on deposit 2,271 2,271 - $35.7m, an increase of $36.4m driven by: Trade and other receivables 1,461 1,426 35 Other assets 1,9
Slide 33: Profit Reconciliation
Profit Reconciliation For personal use only $’000s Reported EBITDA (from continuing operations) 5,603 ● Pro forma EBITDA of $11.7m after: Transaction costs related to IPO 4,784 Non-recurring remuneration 1,166 ○ Removal of IPO transaction costs in Net loss on conversion of convertible notes 467 rela
Slide 34: FY22 outlook
For personal use only FY22 outlook ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder
Slide 35: Managing COVID-19
Managing COVID-19 Victoria marketplace activity 2020 Near-term volatility, long-term opportunity National Victoria For personal use only lockdown lockdown Restrictions • Supporting our tradie customers: Restrictions lifted lifted • Short-term discounts and lead credit extension • Temporary contract
Slide 36: FY22 outlook
FY22 outlook For personal use only Continue to successfully navigate the impacts of COVID-19 and support our tradie customers Migrate remainder of transactional tradies onto subscription product by end FY22 Evolution to SaaS model continues, with Tradiecore to offer expanded functionality Expand int
Slide 37: Q&A
For personal use only Q&A FY21 FINANCIAL RESULTS | AUGUST 2021 37
Slide 38: Disclaimer
Disclaimer Important notice For personal use only The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN67 644 430 839(“hipages” or the Company") and is general background information about hipages’ activities current as at the date of this presentation.
hipages Group Holdings — FY2021 Earnings Presentation on 6ix