Superloop Ltd. · ASX:SLC
Superloop — Investor Day (May 2023)
45 slides from Superloop's investor day presentation, May 9, 2023
Slide 1: Superloop Limited (ASX:SLC)
Superloop Limited (ASX:SLC) Tuesday, 9 May 2023
Slide 2: Disclaimer
Disclaimer No reliance No offer to acquire Superloop shares To the maximum extent permitted by law, the information contained in this presentation is given The information in this presentation is not an offer or recommendation to purchase or subscribe for without any liability whatsoever being accep
Slide 3: Leadership Team
Paul Tyler Luke Oxenham Tina Ooi Nick Pachos CEO & Managing Director Chief Financial Officer General Counsel & Company Secretary Chief Commercial Officer Ex Nokia, NBN, Telstra Ex Genworth, Macquarie, Deutsche Bank Ex ME Bank, Jemena & Alinta Ex TPG Telecom, AAPT Leadership Team Todays Presenters Da
Slide 4: Agenda
Agenda 1 2 3 4 5 The Turnaround System & Network Segment Outlook Financial The Future Journey Transformation Consumer, Business Insights “Double Down” & Wholesale 15 minutes 30 minutes 45 minutes 20 minutes 10 minutes 15 mins 4 SLC Investor Day 2023
Slide 5: The Turnaround Journey
The Turnaround Journey Paul Tyler CEO and Managing Director Turnaround Systems & Network Transformation Segment Outlook Financial Insights The Future “Double Down”
Slide 6: Our Purpose
Our Purpose Enable better internet through competition 1 2 3 Lead challengers to Leveraging our secure Deliver superior by to 30% market share Infra-on-Demand platform capital returns 6 SLC Investor Day 2023
Slide 7: The Superloop Journey
The Superloop Future Where to next? Journey… 2023 Today 2021 ‘3-in-3’ Turnaround PRE 2020 Pan-Asia Fibre ‘loops’ 7 SLC Investor Day 2023
Slide 8: Our '3 in 3' strategy was set early CY21: Grow 3x in 3 years
Our ‘3 in 3’ strategy was set early CY21: Grow 3x in 3 years Revenue EBITDA Customers $323m1 $34.4m1 >367k2 $107.6m in FY203 $13.5m in FY203 30k in FY203 300% 300% 1000% 1. FY23 Average Analyst Consensus 2. Customers as at end of March 2023 3. Superloop 2020 Annual Report 8 SLC Investor Day 2023
Slide 9: Reflections on the '3 in 3' strategy
Reflections on the ‘3 in 3’ strategy COMPONENTS OF 3 YEAR STRATEGY TO BE 3X MORE VALUABLE KEY ACHIEVEMENTS ● Restructured business around the three segments ● Built and scaled the go to market in each segment Target 3 x large segments ● Identified and executed M&A in each segment 1 (Consumer, Busine
Slide 10: Customer Growth
Customer Total Customers (‘000)2,3 367 Growth 241 295 241 187 163 • 25% net customer growth over 89 73 the past financial quarter 54 35 37 24 • NBN market share up to 2.3%, FY22 1H FY23 Q3 FY23 sharing lead position for fastest Wholesale Business Consumer Total services growing NBN Retail Service Pr
Slide 11: Where are we now? Key Metrics
Where are we now? Key Metrics Turnaround Complete 30% YoY Revenue Growth1 Clear and Financial Platform simple strategy Understood internally stability Restructured and significantly for growth Investments made in network, +ve and externally reinforced balanced sheet systems and processes Cash Genera
Slide 12: Superloop now positioned for the next wave of growth
Superloop now positioned for the next wave of growth Ammunition for 3 in 3 strategy Healthy financials Dramatically further organic and complete and Growing and simplified business inorganic growth delivered generating cash opportunities 12 SLC Investor Day 2023
Slide 13: System & Network Transformation
System & Network Transformation Nick Pachos Chief Commercial Officer Daisey Stampfer Group Executive Strategy & Transformation Turnaround Systems & Network Transformation Segment Outlook Financial Insights The Future “Double Down”
Slide 14: Our Tier 1 high availability network fabric connects
Our Tier 1 high availability network fabric connects: TO MARSEILLE TOKYO SAN JOSE LOS ANGELES HONG KONG On-Net data centres / buildings 560 in Australia / worldwide > 4 Tbps Indigo capacity available for sale SINGAPORE 100 Gbps Nightly transit and peering growth in 4 to 1Tbps years > 100,000 Network
Slide 15: Enterprise Architecture
Enterprise Architecture Unique combination of fibre + automation at a scalable, low-cost operating model Go to CONSUMER BUSINESS WHOLESALE Market Software - The SLC Difference Automation Automation to enable new and simplified Automated Sales/ Automated portals and APIs Capacity ways to consuming in
Slide 16: Superloop has made step changes in operating efficiency
Superloop has made step changes in operating efficiency Significant Made further Shortlisted for investment in and Created a low the 2023 Australian investment in our consolidation of cost operating Financial Review’s Infra-on-Demand systems, processes model Digital Transformation platform and workf
Slide 17: Well progressed in Digital Transformation
Well progressed in Digital Transformation; consolidating and implementing best of breed systems Sales Order Provisioning Billing & Invoicing Support Sales Order Provisioning Billing & Invoicing Support Consumer 2 systems Consumer – EIDA & Genesys CRM Business 4 systems Salesforce Business – EIDA, Q2
Slide 18: Our Infra-on-Demand automation has enabled growth through creating new markets
Our Infra-on-Demand automation has enabled growth through creating new markets Broadband as a Supply of Piecemeal backhaul service to our Broadband to any to wholesale internal segments mainstream brand challenger Telcos & other Telco's (not just Telco) PRE FY2020 TODAY 18 SLC Investor Day 2023
Slide 19: Single investment delivering returns in multiple areas
Single investment delivering returns in multiple areas White-label Onboard RSP Customer 50k MyRepublic customer can to sell in our acquisition in subscribers be in market in FTTP footprint minutes migrated 4 weeks in weeks in 3 weeks When churning Infra on Demand enabled • Proof of Concept can • Onb
Slide 20: Segment Outlook
Segment Outlook Turnaround Systems & Network Transformation Segment Outlook Financial Insights The Future “Double Down”
Slide 21: Consumer
Consumer Mehul Dave Group Executive Consumer 21 SLC Investor Day 2023
Slide 22: Market conditions continue to favour challengers & high-speed services
Market conditions continue to favour challengers & high-speed services Challenger Collective Market Share (%)1 NBN FTTP footprint2 Superloop 4.0 M 80% vision of 62% 15% 30% 3.0 M 44% 60% 10% 2.0 M 26% 40% 7.50% 1.0 M 20% 0.0 M 0% Jun 22 Jun 23 Jun 24 2020 2021 2022 nbn FTTN/C ▪ NBN FTTN/C premises p
Slide 23: Award winning portfolio and clear competitive advantage
Award winning portfolio and clear competitive advantage Brand Infra on Favourable Cost to Strategy Demand Economics Serve Two complementary Delivering industry Our model handles Reducing cost brands leading innovation input cost rises to serve • Exetel: Award winning1 ‘Price led’ • Enables Superloop
Slide 24: Our Consumer segment ambition: 500k broadband subscribers
Our Consumer segment ambition: 500k broadband subscribers Maintain 500k 25% Gross Margin 3% to 5% 250k market share 192k ambition 155k 41k Dec 20 Dec 21 Dec 22 Mar 23 Jun 26 Increase brand Intuitive customer Data/Analytics/ Increasing multi awareness experience AI/ML product holding 24 SLC Investor
Slide 25: Business
Business Dean Tognella Group Executive Business 25 SLC Investor Day 2023
Slide 26: Market opportunity of $9B TAM
Market opportunity of $9B TAM Several 1.2m1 Medium & Large hundred Rapidly growing Addressable thousand Corporate Rapidly growing market Businesses lots market Small Business Connectivity Managed WiFi Build to Rent Experts + Security • Market leader in Managed WiFi • Growing sector with 16k3 lots •
Slide 27: Business Segment has been rebuilt, growing and margins expanding
Business Segment has been rebuilt Total Market Size $9B1,2 Growing and margins expanding Segment 44.3% 40% GM SMB 38.0% 36.1% 32.4% target Products 30.1% unchanged • Internet (NBN TC-4) • Mobile Exetel • VoIP acquisition 17.4 • Static IP 14.5 • Priority Support 10.8 MEDIUM Products 5.1 44.8 48.1 • I
Slide 28: Our Business Segment ambition
Our Business Segment ambition Build on #1 position Significantly Recognition as in Purpose Build scale small and the secure Student Accommodation mid-market business connectivity experts through expanding to other verticals 28 SLC Investor Day 2023
Slide 29: Wholesale
Wholesale Adrian Luciano Group Executive Wholesale 29 SLC Investor Day 2023
Slide 30: Wholesale market – expanding addressable market
Wholesale market – expanding addressable market New opportunity Network Aggregation unlocked through / new access Infra-on-Demand platform Layer 3 Services Traditional Wholesale services & revenue Whitelabel FTTP Traditional Wholesale services & revenue 30 SLC Investor Day 2023
Slide 31: Traditional and expanded Wholesale portfolio of products
Traditional and expanded Wholesale portfolio of products NBN Access Backhaul / Aggregation / Virtual NBN Enterprise Ethernet Network aggregation for Wholesale Subscriber aggregation – layer 2 Internet Access & IP Transit Including DDoS protection Our software and Subscriber aggregation – layer 3 aut
Slide 32: Our Wholesale ambition
Our Wholesale ambition Expand addressable Be the leading Establish ourselves market through enabler of as clear #3 Increase utilisation continued portfolio white-label position in of Fibre Assets development broadband New Developments & innovation 32 SLC Investor Day 2023
Slide 33: Financial Insights
Financial Insights Luke Oxenham Chief Financial Officer Turnaround Systems & Network Transformation Segment Outlook Financial Insights The Future “Double Down”
Slide 34: Disciplined capital allocation and investment criteria underpinning growth aspirations
Disciplined capital allocation and investment criteria underpinning growth aspirations Return on Operational Strategic Shareholder Price Invested Capital Impact Alignment Value/Accretion IRR analysis Cost Leadership – – Alignment EV/EBITDA multiple EBITDA ROIC as a multiple Digital Transformation –
Slide 35: Disciplined M&A has underpinned Superloop 2022+
Disciplined M&A has underpinned Superloop 2022+ 6.2x1 2.0x1 Contributed EV/EBITA EBITA Scale Acquisition Scale Acquisition ✓ EBITDA Accretive ✓ 50,000 Customers ✓ Leveraging Infrastructure on Demand ✓ >100,000 Customers ✓ Realised >$6M in synergies compared Migrated in 3 weeks ✓ Network synergies re
Slide 36: Driving Operating Leverage during growth
Driving Operating Leverage during growth 600 Revenue FY19 – FY26 (A$m)1 Operating Leverage (%)1 500 CAGR 40 20 ~13-15% 400 ~323.0 30 24.1 15 300 260.6 49.3 20 10 200 9.6 81.2 110.7 10 5 100 46.5 130.2 95.1 89.0 29.3 34.8 0 0 0 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY22 FY23 FY24 FY25 FY26 FY27 Con
Slide 37: Capital and Liquidity
Capital and Leverage Ratio (times) Liquidity 5.0 4.0 3.0 2.0 1.0 • Strengthening of Balance Sheet post the 0.0 disposal of Singapore and Hong Kong -1.0 -2.0 assets -3.0 • Leverage Ratio estimated at 0.5x as at 31 -4.0 March 2023, driven by both: -5.0 30 Jun 21* 30 Sep 21 31 Dec 21 31 Mar 22 30 Jun 2
Slide 38: Adjusting for Non-Cash Items (NPATA)
Adjusting for Non-Cash Items (NPATA) Value of Intangible Assets has increased significantly as a consequence of recent acquisitions Income Statement Extract (A$M) 1H FY22 1H FY23 NPATA Statutory EBITDA 3.2 10.0 Uniti Agreement – October 2022 Positive in Depreciation & Amortisation Exetel Acquisition
Slide 39: Positive Free Cash Flow
Positive Free Cash Flow Cash Flow Potential based on Analyst Consensus for 2HFY23 and FY24 Based on Analyst Consensus Forecasts ACTUAL 1H FY23 CASHFLOW POTENIAL 2H FY23 CASHFLOW POTENIAL FY24 CASHFLOW Conversion 80-90% Conversion 80-90% Underlying EBITDA 12.6 Underlying 22.0 Underlying 50.0 EBITDA1
Slide 40: Medium Term Financial Ambition
Medium Term Financial Ambition Profitability Operating Leverage Cashflow Low to mid teens Revenue CAGR Digital Transformation Operating Cash vs. EBITDA 80-90% – – – EBITDA Margin mid to high teens Ongoing focus on cost leadership 2HFY23 Free Cash Flow Positive – – – FY24 Positive NPATA Continued red
Slide 41: FY23 Guidance Affirmed
FY23 Guidance Affirmed On track to meet Underlying EBITDA guidance range of $33M-$36M 41 SLC Investor Day 2023
Slide 42: The Future "Double Down"
The Future “Double Down” Turnaround Systems & Network Transformation Segment Outlook Financial Insights The Future “Double Down”
Slide 43: New 3 year ambition - 'Double Down'
New 3 year ambition - ‘Double Down’ WHERE HAVE WE COME FROM? Maintain diversification 2020 Mid 2021 2022 & 2023 across the three Recognised need for renewal Planned the recovery through the 3-in-3 strategy We delivered the 3-in-3 strategy segments. Maximising synergy and utilisation (Infra-on-Demand
Slide 44: The Future: 'Double Down' our next three-year ambition
The Future: 'Double Down' During 3 year plan our next three-year ambition Hold to SHORT TERM MEDIUM TERM LONG TERM $20m1 Capex PA Free cash positive1 NPAT positive Double FY23 revenue Gearing held – NPATA positive – Operating leverage – Maintain GM balance ~2x (capex held1 and Opex as across three s
Slide 45: Questions?
Questions? 45 SLC Investor Day 2023