X2m Connect Limited · ASX:X2M
X2m Connect — H1 FY2024 Earnings Presentation
38 slides from X2m Connect's earnings presentation, Feb 28, 2024
Slide 1: X2M empowering utilities with data – FY24 1H Update
For personal use only X2M empowering utilities with data FY24 – 1H Update
Slide 2: Disclaimer
Disclaimer This Presentation (“Presentation”) has been prepared by X2M Connect Limited (Company). You must read and accept the conditions in this notice before considering the information set out in or referred to in this Presentation. If you do not agree, accept or understand the terms on which thi
Slide 3: X2M delivers rich data for automation and artificial intelligence
For personal use only X2M delivers rich data for automation and artificial intelligence
Slide 4: Vision by X2M – digitising utilities for automation and AI
“Vision by X2M” – digitising utilities for automation and AI For personal use only Machine Monitoring and Public Safety Billing AI & big data Learning control of & Social Platforms & applications & Asset resources and Applications CRM Management renewables “Vision by X2M”– One platform, any device,
Slide 5: Data powers AI and automation
Data powers AI and automation “ Artificial Intelligence could help repair Australia’s lagging Innovation record, unleash For personal use only waves of productivity gains and lift the output of workers…” new Productivity Commissioner Danielle Wood says “…AI could improve productivity…I’m optimistic
Slide 6: X2M adopted in APAC for proven AI and automation enablement
X2M Adopted in APAC for it’s proven AI and automation enablement For personal use only Water Bottled gas Smart Renewable Energy and digitisation & logistics communities in energy Water automation in management in Australia generation and management in South Korea Japan BESS - Taiwan Greater China X2
Slide 7: Utilities our target market
Utilities our target market Essential community service with long dated arrangements For personal use only Data hungry, blue-chip customers Very large consumer bases and very large addressable markets Delivers repeat orders to fit with replacement cycles Significant growth potential within existing
Slide 8: X2M's revenue model
X2M’s revenue model Upfront revenue Initial platform installation charge plus platform customization fees For personal use only Per new device connection fee or Per new device fee for X2M hardware Recurring revenue Monthly SaaS fee for data delivered Monthly maintenance fee for support 1H24 RESULTS
Slide 9: 1H Results
For personal use only 1H Results
Slide 10: FY24 strategic priorities
FY24 strategic priorities Capitalise on incumbency in established markets for scale and share For personal use only Drive deeper into existing customer base. Increase penetration into $500m existing addressable market Focus on margins, cashflow and profitability. Discontinue low margin hardware sale
Slide 11: Top line numbers – focus on positive cashflow
Top line numbers – focus on positive cashflow Revenues down on record 1H23 and exit of low margin hardware sales For personal use only Gross margin and gross profit up significantly Opex down on pcp1 Cash burn and EBITDA losses down materially Recurring revenues up significantly 1. Opex excludes $0.
Slide 12: 1H24 outcomes – key financial metrics on target
1H24 outcomes – key financial metrics on target Improved margins, reduced costs and significantly declining cash burn are highlights of the 1H24 results c.f. the pcp For personal use only Operating Adjusted Revenues Gross Opex1 cash burn EBITDA loss $7.5m margin $4.6m $0.4m $1.8m down down 17% $2.8m
Slide 13: 1H24 P&L at a glance – margins up, costs down
1H24 P&L at a glance – margins up, costs down ($’m) 1H24 1H23 Change For personal use only Revenue 7.5 9.0 -17% Cost of Sales (4.7) (6.8) -31% “ Gross Profit 2.8 2.2 26% Adjusted Other income 0.2 0.4 -50% EBITDA has Overheads (4.6) (4.7) -3% improved by 17% as we Cost of capital raising (0.2) - - dr
Slide 14: Business KPIs to drive future performance
For personal use only Business KPI’s to drive future performance
Slide 15: 1H24 outcomes – business KPIs
1H24 outcomes – business KPIs Drivers of future value For personal use only Enterprise and Annualised government recurring revenues customers $1.7m 73 up 26% up 55% Average NIC selling price $160 per unit1 up 8% on pcp and 53% over four years SaaS and maintenance Connected devices revenues 520,417 u
Slide 16: Operating cash burn a key financial metric
Operating cash burn a key financial metric 1H24 delivered cash burn from operating activities of $0.4 million compared with $1.0 million in 1H23. The improved performance was driven by better gross margins and For personal use only very tight control of costs. Chart below shows the improvements over
Slide 17: Hardware pricing evolution
Hardware pricing evolution Margins in South Korea have improved over time as selling prices increase Average NIC sale price1 For personal use only +53% over 4 years $160 $149 South Korean Network $116 Interface Card Sales $105 Pricing has increased significantly since 2021 2021 2022 2023 2024 Price
Slide 18: Recurring revenue pricing evolution
Recurring revenue pricing evolution Data frequency and additional services are a driver of increased per unit recurring revenue (A$) For personal use only South Korea residential South Korea residential $0.20 per device per month $0.58 per device per month Hourly readings plus alerts Hourly readings
Slide 19: Momentum continues with repeat orders
Momentum continues with repeat orders 6 months to connect 6 months next ~100k to connect devices For personal use only next ~100k devices “ 520,417 Annualised Recurring 6 months to connect 472,882 Revenue increased next ~100k devices from $1.1m in December 428,801 2022 to $1.7m in “ 6 months to conn
Slide 20: 1H year on year financial trends
1H Year on Year financial trends Revenue ($M) Gross profit ($M) 1H24 revenue of $7.5m, 1H24 gross profit of $2.8m, down 17% on the pcp up 26% on the pcp For personal use only 9.0 2.8 7.5 -17% 2.2 +26% 4.6 0.9 1H22 1H23 1H24 1H22 1H23 1H24 Net cash burn from operating activities Adjusted EBITDA 1H24
Slide 21: 1H year on year business metric trends
1H Year on Year business metric trends Enterprise and government customers SaaS and maintenance revenues 1H24 Enterprise and government customers 1H24 SaaS and maintenance revenues For personal use only of 73, up 26% on pcp of $0.9m, up 53% on pcp 73 0.9 58 +26% 0.7 +53% 0.6 42 1H22 1H23 1H24 1H22 1
Slide 22: The Market Opportunity – Current Markets
For personal use only THE MARKET OPPORTUNITY CURRENT MARKETS
Slide 23: X2M's addressable market is large
X2M’s Addressable market is large Australia Addressable market in current For personal use only 26m people geographies: 250 million people. 104m 9m households households Beijing, China 22m people Addressable market across existing 9m households customers: >10m households1 . Revenue potential >$500m
Slide 24: The potential market is large in target countries
The potential market is large in target countries The total addressable market leaves much space for future conversion For personal use only South Korea Taiwan Gas TAM of existing TAM of existing customers: A$481m customers: A$110m Cumulative Cumulative contracted: A$26.1m contracted: A$1.1m Japan B
Slide 25: Growing penetration of customer base – South Korea example
X2M is growing penetration of its customer base – South Korea example Share of TAM increasing as X2M gets embedded into customer eco systems generating follow up orders SOUTH KOREA MARKET – SEP 2021 SOUTH KOREA MARKET – DEC 2023 For personal use only TAM of all Cumulative Cumulative TAM of all house
Slide 26: South Korea operation records first profitable half year
South Korea operation records first profitable half year South Korea Gross profit ($M) 1H24 gross profit of $2.4m, up 45% on the pcp For personal use only 2.4 1.6 +45% 0.7 1H22 1H23 1H24 South Korea Adjusted EBITDA 1H24 Adjusted EBITDA of $0.3m, an improvement of 193% on pcp 0.3 1H22 1H23 1H24 -0.3
Slide 27: Market Opportunity – New Markets: GreenRock, Dicode
For personal use only MARKET OPPORTUNITY New Markets GreenRock Dicode
Slide 28: GreenRock
For personal use only GreenRock
Slide 29: Strategic partnership with GreenRock Energy Co.
X2M entered into a strategic partnership with GreenRock Energy Co. GreenRock a leading Taiwanese energy generation, storage and trading co. For personal use only o Takes a 11% stake in X2M and gets a Board seat o Partnership to develop renewable energy generation and Battery Energy Storage Systems (
Slide 30: BESS market in Australia
BESS market in Australia Australia leads the global market for BESS with announced pipeline exceeding 40GW2 For personal use only AEMO outlined that 61GW of storage capacity is required by 2050 which is 17 times the current capacity1 This indicates that the BESS market for Australia could be equival
Slide 31: BESS market in Taiwan reflects global trends
Battery Energy Storage Systems (BESS) market in Taiwan reflects global trends Taiwan has set a target of 20% (vs 8.3% now) renewable energy (Wind+Solar) generation by 2025 For personal use only Taiwan BESS Total Addressable Market1 2023: NT$10b (A$500m) 2026: NT$20b (A$1b) 2030: NT$ 200b (A$10b) EMS
Slide 32: GreenRock focus – large scale renewable energy infrastructure
GreenRock focus – large scale renewable energy infrastructure 900mw under management. 300MW under development For personal use only Energy sector – Renewable generation and storage Battery Energy Energy Data Business storage Distribution Trading Management Analytics X2M’s “EMS” Platform Energy gener
Slide 33: Dicode
For personal use only Dicode
Slide 34: Middle East – Dicode to be X2M's channel partner
Middle East – Dicode to be X2M’s channel partner X2M executes Services Agreement to develop the ME market For personal use only About Middle East Gas Industry – Dubai, Abu Dhabi & other emirates • Dicode is a Dubai based company aiming to provide Meter as a Service to gas Billing CRM Public Installa
Slide 35: Middle East market
Middle East market There is an immediate opportunity in gas and likely upcoming opportunities in electricity and water monitoring For personal use only The UAE Government has mandated piped gas be fitted to all new buildings creating a transition away from bottled gas. Smart gas meter usage in the U
Slide 36: Summary – X2M delivering
Summary – X2M delivering 1H24 results show the path to positive cashflow and other improved business and financial outcomes For personal use only Attractive business model with sticky customers Opex, cash burn, margins, EBITDA all heading in the right direction Existing markets represent a large TAM
Slide 37: The team to deliver: board and senior management
The team to deliver: board and senior management Hon. Alan Stockdale AO Keith Jelley Non-Executive Chair COO • Currently Emeritus Counsel of Medical Research • 9 years in the X2M business Commercialisation Fund and Chairman Knosys Limited • 40 years of development and operations experience For perso
Slide 38: Thank you
For personal use only Thank you