Slide 1: FY23 Full-Year Results Presentation
Service Stream FY23 Full-Year Results Presentation 22 August 2023
Slide 2: Acknowledgment of Country
Acknowledgment of Country Service Stream acknowledges the traditional custodians of the country throughout Australia and their continuing connections to land, water and communities. We pay our respects to their elders past, 2 present and emerging.
Slide 3: Service Stream's strategy delivering results
Service Stream’s strategy delivering results Integration of Lendlease Services complete 1 Improving financial performance and strengthened 2 balance sheet Expanded service offerings and capabilities, supporting 3 recent organic contract wins Diversified Group portfolio\ across expanded and growing 4
Slide 4: Performance Highlights
Performance Highlights FINANCIAL PERFORMANCE Total Revenue Underlying EBITDA $ 2,150 38% on pcp $ 114.1 25% on pcp million million NPATA Cashflow Conversion 36.8 81.1% \ $ 17.2% on pcp million OCFBIT Net Debt FY23 Total Dividends $ 35.7 56% on pcp 1.5 cps 50% on pcp million Fully franked 4
Slide 5: Performance Highlights
Performance Highlights OPERATIONAL & STRATEGIC PERFORMANCE New Works Secured Contracts Re-Secured $ 700m+ 100% Over respective initial Expiring term contracts terms successfully re-secured Queensland Utility Project Utility Operations On Track \ Improved Prior contract provision remains adequate Fin
Slide 6: Diversified Group Portfolio
Diversified Group Portfolio Supporting Australia's essential network infrastructure across growing markets Telecommunications Te le c om m u n ic a t ion s Utilities U t ilit ie s Tr a n s p or t Total Revenue Total Revenue Total Revenue $970.4m $888.4m $292.2m 51.6% vs pcp 27.5% vs pcp 32.8%
Slide 7: Utilities
Utilities Highlights • Segment is well positioned coming into FY24 with a diversified revenue • Improving performance in the context of challenging market and operating base and ~85% of NTM revenue secured conditions during FY23 ‒ New 5-year agreement with AGL to provide Loy Yang A Station • Revenue
Slide 8: De-Risking Utilities Exposure
De-Risking Utilities Exposure Queensland Utility Project • Provision taken at half-year remains sufficient • Major construction activities remain on track for delivery in CY23 • Project net cash outflow during FY23 ~$25m • Neutral cash flow impact over remaining project period expected Strategic Rep
Slide 9: Telecommunications
Telecommunications Highlights • Strong segment performance throughout FY23 • Momentum across nbn upgrade project and wireless programs maintained throughout H2 • Revenue of $970.4m up $330.4m (51%) reflecting inclusion of LLS operations and strong organic growth • Core O&M programs performing consis
Slide 10: Transport
Transport Highlights • Revenue of $292.2m, up $72.2m (32%) including full-year contribution of • Core ITS (intelligent traffic systems) capability acquired emerging as an LLS operations. area of significant opportunity ‒ Strong growth achieved in 2nd year of Connect Sydney (JV) operations • Positive
Slide 11: FY23 Group Revenue Profile
FY23 Group Revenue Profile Group revenue dominated by lower-risk schedule of rates commercial models Operating Segment Market 11% 21% • High portion of work secured under schedule of rates or cost-plus 41% 45% commercial models, reflecting lower-risk appetite $2.1b 8% $2.1b 34% 2% 5% 14% 6% • Signif
Slide 12: Diversified Portfolio of WIH
Diversified Portfolio of WIH Stable and high-quality client base of government entities and large industrial asset owners Work In Hand Contract Escalation • Majority of work held with government entities, or blue-chip industrial • >95% of WIH under term contracts have in-built review mechanisms clie
Slide 13: Expanding the Group's portfolio
Expanding the Group’s portfolio Leveraging the Group’s expanded capabilities to secure new growth opportunities UTILITIES TELECOMMUNICATIONS UTILITIES AGL NBN Intellihub Loy Yang Station Main Maintenance N2P – Evolution Agreement Smart Meter Installation $170m over 5 years $410m over 2 years $120m o
Slide 14: Sustainability: Our Pillars Framework
Sustainability: Our 5 Pillars Framework Delivering sustainable legacies for our stakeholders and future generations Safety The wellbeing of our workforce, clients and communities we operate across is our first priority Accomplishments Safety Safety People Improving how we attract, retain and 46% red
Slide 15: Sustainability: Safety Performance
Sustainability: Safety Performance Service Stream’s primary and most important sustainability priority Group Performance Total Recordable Injury Frequency Rate Achievements 2.94 2.33 • Significant reductions achieved across all major safety lag indicators : FY22 FY23 ‒ 21% reduction in Recordable In
Slide 16: Sustainability: Success Stories
Sustainability: Success Stories Delivering sustainable legacies for our stakeholders and future generations Environment People Community Aboriginal planting program prospers Women Leading Program Community Day – Marooochydore, QLD Service Stream’s Women Leading Program is a dynamic Service Stream’s
Slide 17: Group Financial Performance
Group Financial Performance 17
Slide 18: Financial headlines
Financial headlines Total Revenue1 Underlying EBITDA Adjusted NPAT Underlying Operating Total FY23 Dividends from Operations2 Cashflow (OCFBIT) $2,151m $114.1m $36.8m $92.4m 1.5cps +37.5% vs pcp +25.2% vs pcp +17.2% vs pcp -6.3% vs pcp • Record $2bn revenue • Solid Group result in the • Statutory NP
Slide 19: Profit and Loss
Profit and Loss Comparison of results for the period ended 30 June 2023 $m FY23 FY22 $ FY23 results include an incremental 4 months LLS contribution Revenue 2,052.8 1,516.5 536.2 EBITDA 86.9 64.6 22.3 • EBITDA from Operations: Depreciation & amortisation (52.6) (39.3) (13.3) o Strong result in a cha
Slide 20: Cashflow
Cashflow Comparison of results for the period ended 30 June 2023 $m FY23 FY22 Change $ • 81% OCFBIT conversion has exceeded expectations: EBITDA from Operations (Underlying) 114.1 91.1 23.0 o Strong cash culture mitigating expected revenue growth +/- non-cash items & change in working capital (16.8)
Slide 21: Balance sheet & capital management
Balance sheet & capital management Comparison of results for the period ended 30 June $m Jun-23 Jun-22 Cash and cash equivalents 84.3 68.7 Balance sheet Trade and other receivables 186.1 105.0 • NWC increase of $14m reflective of revenue growth: Inventories 16.4 14.7 o Underlying net working capital
Slide 22: Group Strategy & Outlook
Group Strategy & Outlook 22
Slide 23: Our Strategic Pillars
Our Strategic Pillars Supporting the delivery of improved, consistent and incremental value to our Stakeholders Our Vision Our Purpose To be Australia’s Leading Essential Network Services To partner with our valued clients and keep communities connected to Provider the essential infrastructure that
Slide 24: Future growth
Future growth Group’s expanded addressable market now exceeds $50b+ in annual maintenance related expenditure Strong Industry Growth Core markets • Increased technology adoption & digital transition • Ageing infrastructure Unprecedented levels of investment from Government and private asset owners /
Slide 25: Group Outlook
Group Outlook Market Conditions • Long life-cycle of infrastructure investment decisions expected to provide continued growth opportunities despite the current economic environment • Labour market is improving but remains constrained across isolated resource and select geographies Group Outlook • Op
Slide 26: FY24 Priorities
FY24 Priorities 1 Continued delivery of strong safety performance Investing in our Group strategy to support improved and consistent 2 results for our Stakeholders DELIVERY | OPTIMISATION | GROWTH \ 3 Improved financial performance across utility operations 4 Investing in growth opportunities across
Slide 27: Appendices
Appendices 27
Slide 28: Reconciliation of statutory to adjusted profitability measures
1. Reconciliation of statutory to adjusted profitability measures Reconciliation of Underlying EBITDA from Operations to NPAT FY23 FY22 $ $m Underlying EBITDA from Operations 114.1 91.1 23.0 Onerous contract provision for QLD Utility project (20.1) - (20.1) EBITDA from Operations 94.0 91.1 2.8 Joint
Slide 29: Other information
2. Other information Amortisation of customer contracts and relationships Balance $m FY23 FY24 FY25 FY26 FY27 30 Jun 23 Comdain Infrastructure 8.0 8.0 5.7 5.7 5.7 40.4 Lendlease Services 7.6 7.6 7.6 7.6 7.6 83.9 Total amortisation 15.4 15.7 13.3 13.3 13.3 124.3 Breakdown of Non-operational costs $m
Slide 30: Disclaimer
Disclaimer This Presentation contains summary information about the current activities of Service Stream Holdings Limited (Service Stream). It should be read in conjunction with the Service Stream’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange