Hipages Group Holdings Ltd. · ASX:HPG
Hipages — FY2022 Earnings Presentation
37 slides from Hipages's earnings presentation, Aug 25, 2022
Slide 1: FY22 Results
{pages FY22 Results 25 August 2022
Slide 2: Australia and New Zealand's largest online tradie marketplace
Australia and New Zealand’s largest online tradie marketplace and SaaS1 provider, creating effortless solutions that help tradies streamline and grow their business and delight their customers. FY22 FINANCIAL RESULTS | AUGUST 2022 1. 1. Software-as-a-Service (SaaS) 2
Slide 3: Our Story
Our Story 2019 Major sponsor of the Block 2019 Move to Subscription Only 2020 Partnership with Department of Education 2020 Acquisition of Call of Service Purpose: 2020 Transforming We IPO’d now listed the -trade on the Australian Securities Exchange 12 Nov industry, 2020 2020 building better lives
Slide 4: Vision: To be the most trusted partner in the trade industry
Vision: To be the most trusted partner in the trade industry FY22 FINANCIAL RESULTS | AUGUST 2022 4
Slide 5: Agenda
Agenda 1. FY22 overview 2. Financial & operational update 3. Strategy update 4. FY23 outlook FY22 FINANCIAL RESULTS | AUGUST 2022 5
Slide 6: FY22 overview
FY22 overview ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder FY22 FINANCIAL RESULTS | AUGUST 2022 6
Slide 7: FY22 highlights
FY22 highlights Business model delivers Significant strategic progress Continued investment in resilience and growth with transition to subscription people and technology model complete Effective investment drives Efficient operating model Maintained strong balance strong brand awareness delivers st
Slide 8: Significant macro headwinds impacted marketplace activity in FY22
Significant macro headwinds impacted marketplace activity in FY22 • Government-mandated COVID lockdowns and restrictions on construction meant tradies were unable to work for extended periods • Omicron outbreak and extreme weather further delayed the industry’s recovery • Record consumer demand from
Slide 9: FY22 financial & operational update
FY22 financial & operational update MELISSA FAHEY Chief Finance & Operations Officer H1 FY22 FY22 FINANCIAL FINANCIAL RESULTS RESULTS | AUGUST | FEBRUARY 2022 2021
Slide 10: Delivering sustainable growth
Delivering sustainable growth MRR Total Revenue EBITDA Operating cash flow FY22 FINANCIAL RESULTS | AUGUST 2022 1. Pro Forma Revenue, EBITDA and Operating Cash Flow. Pro Forma EBITDA is before significant items. 10
Slide 11: FY22 financial highlights
FY22 financial highlights Revenue Profitability Key drivers $5.5m 85% 34.6k MRR1 Gross margin3 Subscription tradies Up 11% Up 5% (FY21: 85%) $1,789 $58.2m $10.7m hipages ARPU6 Up 16% Recurring revenue2 Up 11% EBITDA4 (Up 11% to $1,707 for hipages Group) EBITDA margin 17% $61.9m 1.63m $(0.9)m Job vol
Slide 12: Business model drives strong ARPU growth
Business model drives strong ARPU growth Total Tradie ARPU +11% ● ARPU grew by 16% to $1,789 for hipages in Australia, or 11% overall to $1,707 hipages ARPU ex-BC $1,789 ● Driven by: (+16%) ○ Completed transition to subscription- only product in Australia ○ New tradies joining at higher price points
Slide 13: Subscription tradie base continues to grow
Subscription tradie base continues to grow Total subscription tradies ● Total subscription tradies up 11% to 34.6k, with +11% a slight growth in hipages Australia in a challenging market ● Retention impacted by industry lockdowns and restrictions followed by unprecedented demand to fulfill backlog o
Slide 14: Lifetime Transaction Value / Customer Acquisition Costs
Lifetime Transaction Value / Customer Acquisition Costs1 COVID impacts customer lifetime and CAC, offsetting double-digit ARPU growth Annualised LTV/CAC ● COVID disruptions and marketplace imbalance reduced average customer lifetime and drove a 12% increase in CAC per tradie, despite ARPU continuing
Slide 15: Pro Forma Operating Expenses
Pro Forma Operating Expenses Increased investment in brand to drive growth Expenses as % of revenue were 83% of revenue in FY22 after increased Expenses as % revenue1 FY19 FY20 FY21 FY22 investment in growth Sales 13% 11% 9% 10% Marketing • Continued brand investment across both sides of the marketp
Slide 16: Effective investment drives record brand awareness
Effective investment drives record brand awareness • Successful platinum sponsorship of The Block, regularly the highest rating nightly entertainment program, with additional integration with Channel Nine’s Space Invaders program • Highest ever consumer brand awareness of 60%1 • Market leading top-o
Slide 17: Building consumer trust and brand awareness
Building consumer trust and brand awareness 68% of jobs from repeat consumers 78% of jobs from unpaid channels 4m unique users posted a job to hipages in FY221 1.53m 1.63m 1.63m 1.53m 1.37m 1.37m 1.11m 1.11m 13% increase in jobs from repeat consumers2 8% increase in jobs from unpaid channels2 1. Lif
Slide 18: Strategy update
Strategy update ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY22 FY22 FINANCIAL FINANCIAL RESULTS RESULTS | AUGUST | FEBRUARY 2022 2021
Slide 19: Total Addressable Market
Total Tradie Addressable business Market spend $136b $97b1 FY22 FINANCIAL RESULTS | AUGUST 2022 1. Tradie business spend in Australia only 19
Slide 20: hipages 3.0 - the next evolution of our strategy
hipages 3.0 - the next evolution of our strategy Consumer journeys Delight consumers with tailored journeys to meet their needs Marketplace growth Accelerate new tradie MRR growth by reimagining how tradies discover & join hipages CORE Continuous tradie nurturing Drive platform engagement via contin
Slide 21: Capturing consumer intent
Capturing consumer intent Bespoke consumer journeys to drive higher ARPU and lower churn FY22 FINANCIAL RESULTS | AUGUST 2022 21
Slide 22: Enhancing the product to drive user adoption
Enhancing the product to drive user adoption New features delivered ● hipages lead integration ● CRM (click to call, text and email) ● Job scheduling ● Self-service options ● Personalised documents and job attachments Strong user engagement ● Now live on iOS and Android ● Six-month free trial for al
Slide 23: Builderscrack (New Zealand) update
Strong financial performance • Strong EBITDA growth and cash flow Emerging category leader • Market-leading top-of-mind awareness among New Zealand homeowners Investing for growth • Growing the team with key hires in marketing and sales to accelerate growth New pricing model and product functionalit
Slide 24: FY23 outlook
FY23 outlook ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder FY22 FINANCIAL RESULTS | AUGUST 2022
Slide 25: FY23 outlook Marketplace activity
FY23 outlook Marketplace activity • Exited Q4 with good momentum, with registrations improving and credit notes1 normalising as marketplace balance returns • Rising inflation and interest rates expected to further balance marketplace, driving growth due to countercyclicality of business model • H1 r
Slide 26: Q&A
Q&A FY22 FINANCIAL RESULTS | AUGUST 2022
Slide 27: Appendix
Appendix FY22 FINANCIAL RESULTS | AUGUST 2022
Slide 28: FY22 result summary
FY22 result summary Continued growth in key metrics FY22 FY21 pcp (%)6 LFL %7 Financial Metrics ● Resilient business model and transition to Total revenue ($m) 61.9 55.8 11% 8% subscription model drove growth in key metrics Recurring revenue ($m) 58.2 52.7 11% 10% ● Total Revenue grew in line with R
Slide 29: FY22 Pro Forma Financial Summary
FY22 Pro Forma Financial Summary ● Double-digit revenue growth in challenging year for the trades industry ● Continued investment for growth, with: ○ Increased brand marketing and advertising on both sides of the marketplace ○ Increased product development and technology team and architecture invest
Slide 30: FY22 Cash Flow
FY22 Cash Flow ● Positive operating cash flow of $12.6m with EBITDA to OCF conversion of 125% ● Cash outflow from investing activities ($28.7m) included: ○ Payments in relation to the acquisition of Builderscrack ($8.6m) ○ Minority investment in Bricks and Agent ($6.8m) ○ Continued investment in tec
Slide 31: FY22 Statutory Balance Sheet
FY22 Statutory Balance Sheet ● Strong balance sheet maintained at the end of FY22 with $13.2m cash and funds on deposit ● FY22 total equity position of $37.1m, an increase of $1.4m driven by: ○ Increase in total assets of $10.5m primarily due to investment in Bricks + Agent $6.3m ○ Increase in intan
Slide 32: Profit Reconciliation
Profit Reconciliation FY22 FINANCIAL RESULTS | AUGUST 2022 32
Slide 33: hipages packages
hipages packages Package features • Transition to subscription model now complete • Subscription product has 6 or 12 month contract terms, paid monthly with automatic 12-month renewal • New product features to introduce more product flexibility and value for customers and optimise retention Starter
Slide 34: Large addressable market with small market share
Large addressable market with small market share 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 opportunity to increase our
Slide 35: Value of the total ANZ addressable market
Value of the total ANZ addressable market Residential Residential & Commercial Commercial Residential Commercial Residential Community & Homeowner Property Retail Insurance Property New Builds Government Management Management Charity Maintenance Homes Rental properties Stores Local, state Repairs Cl
Slide 36: Australia trade business spend
Australia trade business spend FY22 FINANCIAL RESULTS | AUGUST 2022 36
Slide 37: Disclaimer
Disclaimer Important notice 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. The information is gi
hipages Group Holdings — FY2022 Earnings Presentation on 6ix