Intelligent Monitoring Group Limited · ASX:IMB
Intelligent Monitoring — H1 2024 Earnings Presentation
28 slides from Intelligent Monitoring's earnings presentation, Feb 29, 2024
Slide 1: 1H 2024 Results Presentation
Sydney 1H 2024 Results Presentation February 2024 August 2021 ASX:IMB
Slide 2: Disclaimer
DISCLAIMER This investor presentation has been prepared by Intelligent Monitoring Group Limited (ACN 060 774 227) (IMG or the Company). It contains general information about the Company and its subsidiaries (Group) and the Group’s business as at the date of this presentation, the recent acquisition
Slide 3: What is the opportunity?
WHAT IS THE OPPORTUNITY? 9.1% of Australian Households experienced some form of household crime in 2021-2022. This is over 900,000 houses. But only 5% of houses have a monitored security solution. In the US 23% of houses are professionally monitored… this is going to change…. 3
Slide 4: What is IMG?
WHAT IS IMG? Consolidated business is largest player in security monitoring services in Australasia >180,000 >$6.5m >64% One of Australia’s largest security Combined recurring Revenue is subscription based with diversified “sticky” monitoring providers focused on both monthly revenue (RMR) customer
Slide 5: 1H 2024 Results Overview
1H 2024 RESULTS OVERVIEW First 5 months of ADT business, and business improvement program First period with ADT ownership • With ADT for 5 months – IMG delivered an EBITDA of $14.2m – on track to meet or beat its EBITDA guidance for FY24. • Balance sheet now reset, acquisition and refinance costs pa
Slide 6: P&L Overview
P&L OVERVIEW Significant change in financial P&L Summary scale for IMG 1H23 1H24 Forecast (5 mths Change Pre ADT FY24 ADT) ▪ EBITDA rises due to the inclusion of 5 months of ADT trading. Revenue (5 Months ADT) $m 11.6 55.7 44.1 147.6 ▪ ADT contributed $11.7m EBITDA for 5 Gross Profit (5 Months ADT)
Slide 7: EBITDA Overview
EBITDA OVERVIEW Reconciliation to Statutory accounts EBITDA Reconciliation 1H24 1H23 (5 mths ADT) Reported EBITDA $m 1.4 7.3 Per Statutory accounts Impairment of receivable $m 0.2 0.7 Impairment of acquired receivable on review Impairment of assets $m 0.4 Impairment of acquired assets on review Vari
Slide 8: EBITDA Overview
EBITDA OVERVIEW Break down of acquisition, integration and refinancing costs Reconciliation of Non-recurring costs 1H24 (5 mths ADT) Various costs relating to the acquisition of ADT, the divestiture of AIS, and the refinancing of the balance Business acquisition and integration and refinancing costs
Slide 9: Balance Sheet
BALANCE SHEET Reset and stable balance sheet Balance Sheet Summary IMG IMG (June 2023) (Dec 2023) ▪ Cash position $8.9m. Gross Debt: $75.8. Net Debt $66.9m Cash $m 5.3 8.9 ▪ Net Debt : EBITDA 2.4x (on actual 1H Receivables $m 3.8 19.0 annualised) or 2.2x on FY24 EBITDA guidance (ADT full period equi
Slide 10: Cashflow Overview
CASHFLOW OVERVIEW Pick up in free cashflow masked by the ADT Cashflow Summary deal and restructuring costs and short-term working capital impacts IMG 1H23 IMG 1H24 Underlying EBITDA (ADT 5 $m 1.7 14.2 months) ▪ The business generates strong operating cashflow Nonrecurring costs* $m -0.4 -3.8 ▪ This
Slide 11: Capex Overview
CAPEX OVERVIEW Capex of $7.8m relating to prior committed systems, medical alarm products, and 3G to 4G upgrades Cashflow Summary ADT AU ADT NZ ($0.94) ADT Medical August $,000 1038.2 465.7 326.4 September $,000 1,343.4 435.3 290.6 October $,000 987.9 375.5 373.1 November $,000 616.2 87.9 376.7 Dece
Slide 12: Financial Overview
FINANCIAL OVERVIEW Financials Significant change in financial scale for IMG 1H23 1H2024*** On guidance Prior to ADT** ▪ EBITDA rises due to the inclusion of 5 Market Cap (fully diluted) $m 16.6 102.6 102.6 months of ADT trading. ▪ ADT contributed $11.7m EBITDA for 5 Net Debt $m 28.9 66.9 66.9 months
Slide 13: Focused Corporate Strategy
FOCUSED CORPORATE STRATEGY IMPROVE GROWTH 3 TRAJECTORY 2 REDUCE DEBT IMG will implement two 1 DRIVE CASHFLOW key, capital light, growth IMG will focus cashflow strategies to revitalise (and utilise its tax losses*) ADT/IMG’s growth to drive Net Debt from 2.2x prospects. IMG will focus on improving t
Slide 14: Strong Outlook for Security Services
STRONG OUTLOOK FOR SECURITY SERVICES In 2022 – household crime rates increased, for the first time in a decade. > 194,100 had a 9.1% (903,700) of break in plus The chances of households Another > being broken into experienced 193,300 increase after the household crimes* experienced an first experien
Slide 15: Clear Operating Strategy
CLEAR OPERATING STRATEGY SHIFT OF EMPHASIS FOR RE-COMMENCEMENT OF FOCUS ON COST BASE AND RESIDENTIAL COMMERCIAL SIMPLIFICATION OF INSTALLATIONS INSTALLATIONS BUSINESS • Currently, the ADT business • Immediate cost synergies • In late 2020, ADT exited largely resells wired security have been identifi
Slide 16: IMG Has Identified Three Significant Growth Areas
IMG HAS IDENTIFIED THREE SIGNIFICANT GROWTH AREAS ADT Today ~$145m Revenue Key Assumptions ADT Care DIY potential $350m annual DIY penetration is revenue potential 40% of Foxtel subscriber base, ADT with ADT attracting Commercial 50% of the market ADT Commercial $120m annual Prior peak of ADT revenu
Slide 17: Significant Growth Area #1 – Residential: Do It Yourself
SIGNIFICANT GROWTH AREA #1 – RESIDENTIAL: DO IT YOURSELF Professionally Monitored Security Penetration of Homes and Businesses (North America versus Australasia) ➢ Australian penetration of monitored alarms has essentially grown at the rate of physical housing formation ➢ The US experience has been
Slide 18: Do-It-Yourself Security Has Arrived
DO-IT-YOURSELF SECURITY HAS ARRIVED FROM THIS TO THIS RRP = $2,729 RRP = $1,499 • Faster • Better platform Install time = up to 2 months Signup to Shipping = 3 to 4 days • Nearly 100% Kit includes Security Panel, 1 Kit includes Security Panel, 2 Motion better value Motion sensor, 1 Door/Window senso
Slide 19: Addressable Market Opportunity Is Large
ADDRESSABLE MARKET OPPORTUNITY IS LARGE Australian Households ➢ Household crime in Australia has begun = 10,400,000 to trend up since the end of COVID with 9.1% of households experiencing crime, from 8.8% in 2021. ➢ Only 520,000 houses in Australia have “back to base” monitored security, with approx
Slide 20: Significant Growth Opportunity #2 – Commercial: Bringing ADT Back
SIGNIFICANT GROWTH OPPORTUNITY #2 – COMMERCIAL: BRINGING ADT BACK • IMG has rebooted the commercial installation and service business of ADT which is expected to contribute significantly to monitoring and group revenue from FY24 onwards. • ADT on acquisition had c. 4,000 large commercial customers.
Slide 21: Significant Growth Opportunity #3 – ADT Care
SIGNIFICANT GROWTH OPPORTUNITY #3 – ADT CARE (NEW GROWTH AREA) • IMG has created a standalone division inside 191,000 ADT Australia – “ADT Care” 176,000 Australians using Australians in Residential Home Care • It will run separately from the ADT security Care monitoring centre (on Patriot) and focus
Slide 22: Investment Thesis
INVESTMENT THESIS: Industry leader with strong balance sheet and focused deleveraging strategy Drive equity value and Deleverage Strong cashflow multiple balance sheet (+17.9m* in expansion (2.2x to <1.5x in FY24) (Target 10x 18 months) multiple business) * Expected free cashflow before transaction
Slide 23: Summary: Company Transformed During 2023
SUMMARY: COMPANY TRANSFORMED DURING 2023 Largest security monitoring company in Australasia Customers EBITDA Market Cap Net Debt ND:EBITDA EV:EBITDA 1H 2023 (Pre ADT) ~70,000 $5.3m Proforma $16.6m (SP = $28.9m (1–year >5.0x 8.6x annualised $0.127cps) left) ~180,000 Target $29.8m Now (+25,000 fire FY
Slide 24: Significant Progress in the First Five Months of ADT
SIGNIFICANT PROGRESS IN THE FIRST FIVE MONTHS OF ADT IMG is executing in a focused fashion Looking to ADT acquisition Focusing on accelerate being bedded delivering growth through down expectations 2HCY2024 24
Slide 25: Contact Us
CONTACT US Rod North Bourse Communications Pty Ltd Investor Relations Service Mobile: 0408 670 706 Email: rod@boursecommunications.com.au Dennison Hambling Email: dhambling@theimg.com.au 25
Slide 26: Intelligent & Monitoring
INTELLIGENT & MONITORING 6 26
Slide 27: IMG Timeline
IMG TIMELINE Dennison Hambling and Peter Kennan have led the wholesale turnaround of IMG’s performance Jun’ 2019 Mar’ 2020 Dec’ 2020 Aug’ 2021 Jul’ 2022 Negative Earnings and Cost-Cutting Improved Improved Growth Acquisitions lack of integration Committee Performance Performance FY19 EBITDA of ($6m)
Slide 28: Experienced Board and Executive Team
EXPERIENCED BOARD AND EXECUTIVE TEAM DENNISON HAMBLING PETER KENNAN ROB HILTON Jason Elks Managing Director Non-Executive Chairman Non-Executive Director Non-Executive Director Joined Jan 2020, Joined 2022 Joined Dec 2022 Joined Jan 2020, Chairman Effective July 2021 Executive Director August 2021 F
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