Energy Action Limited · ASX:EAX
Energy Action — FY2019 Earnings Presentation
28 slides from Energy Action's earnings presentation, Aug 28, 2019
Slide 1: Group Financial Results Full Year FY19
GROUP FINANCIAL RESULTS FULL YEAR FY19 | 28 AUGUST 2019 JOHN HUGGART TRACY BUCCIARELLI Chief Executive Officer Chief Financial Officer Energy Action Limited Energy Action Limited Melbourne Cricket Ground
Slide 2: Full Year FY19 Results Agenda
FULL YEAR FY19 RESULTS AGENDA 1. RESULTS HIGHLIGHTS John Huggart 2. GROUP FINANCIAL RESULTS Tracy Bucciarelli 3. OPER ATIONAL PERFORMANCE John Huggart 4. FY20 PRIORITIES John Huggart Eric Geronimo and John Blazevski, Energy Consultants
Slide 3: FY19 Full Year Results Highlights
FY19 FULL YEAR RESULTS HIGHLIGHTS 3 Operating profit of $1.01 million Down 69% vs FY18 Operating EBITDA of $2.54 million EBITDA Margin at 10.2% down 10.8 pts Operating cash flow $3.9 million Operating EBITDAEBITDA 111% operating conversion to cashto conversion > cash 100% Statutory profit of -$12.09
Slide 4: Group Financial Results
“Our vision for a premium ‘A’ grade energy efficient site at One Canberra, is made easier through the OptEEmise service which provides practical solutions that have secured savings for our site.” Anthony De Salis, Property Operations Manager, Willemsen Group GROUP FINANCIAL RESULTS One Canberra, Wil
Slide 5: Operating NPAT of $1.01M
OPERATING NPAT OF $1.01M 5 STATUTORY LOSS $12.09M, OPER ATING PROFIT DOWN 69% FY18 P&L FY19 % Variance (Restated) Revenue 24,801,100 ^ 31,767,320 (22%) Decline in revenues COGS 3,410,880 4,482,181 24% Gross Margin 21,390,220 27,285,140 (22%) Lower Lower COGS COGS with with some some improvement impr
Slide 6: Operating Profit Drivers
OPERATING PROFIT DRIVERS Lower OPEX excl D&A 6 Improved by 9% 22% REDUCTION IN REVENUE OFFSET 4,000,000 Lower due to 672,317 3,260,674 Accelerated D&A WITH SAVING IN COGS 3,000,000 2,588,357 AND OPEX RESULTING IN 69% LOWER NPAT 2,000,000 1,194,164 1,005,334 1,000,000 0 620,440 55,479 1,769,498 -1,00
Slide 7: Strong Operating Cashflow
STRONG OPERATING CASHFLOW 7 OPERATING CASHFLOW BEFORE INTEREST & TAX $3.9 MILLION FY18 Operating Cashflow FY19 • Continued positive cash (Restated) management with healthy EBITDA Operating EBITDA 2,538,633 6,664,056 to cash conversion Share Based Payments (147,392) 55,458 Trade Debtors 342,702 2,153
Slide 8: Debt Structure and Key Financial Ratios
DEBT STRUCTURE AND 8 KEY FINANCIAL RATIOS $4.9 MILLION OF AVAIL ABLE HEADROOM UNDER EXISTING DEBT FACILITIES • Prudent financial management of cash and debt • EAX has a 2 year, $9.55 million market rate loan agreement expiring September 2021. Substantially the same terms and conditions as previous F
Slide 9: Operational Performance
“Excellent execution of the reverse auction – an innovative, flexible and fast procurement process and we felt well OPERATIONAL supported by our Account Manager.” Peter Wearne, General Manager – Facilities PERFORMANCE Melbourne Cricket Club Melbourne Cricket Ground
Slide 10: Back to Basics
BACK TO BASICS 10 Following the completion of the Strategic Review and CEO appointment in 2H FY19, the company focused on five key priorities to stabilise the company and focus on delivering its strong market position in core energy procurement and monitoring services and streamline the delivery of
Slide 11: Declining Revenue of 22% with Different Drivers and Progress by Segment
DECLINING REVENUE OF 22% WITH DIFFERENT DRIVERS AND PROGRESS BY SEGMENT 11 FY19 FY18 Variance % Variance Procurement 6,419,299 9,872,786 (3,453,488) (35%) “BACK TO BASICS” STRATEGY ARRESTED SALES Monitoring 14,165,024 15,256,838 (1,091,814) (7%) PERFORMANCE AND LAID Advisory Services 4,216,777 6,637
Slide 12: Investment in Digital Client Platforms
INVESTMENT IN DIGITAL CLIENT 12 PLATFORMS Transformation of the core Customer and Contract Management platform • Enhanced operational efficiencies - IT architecture to deliver core products and services, leveraging significant levels of automation and data validation • Speed to market for new servic
Slide 13: Corporate Highlights
CORPORATE HIGHLIGHTS 13 Winning a multi year An increase in Embedded Expansion of the Business contract to supply retail Delivering a comprehensive Network tenancies under Processing Offshore team to billing services to CS multi-year energy strategy management of 999 17 Full Time Equivalent Energy w
Slide 14: Operational Savings
OPERATIONAL SAVINGS Operating overheads totalled $19.8 million for the period, compared to $22.2 million in the pcp, a decrease of $2.4M, (12%), reflecting a continued focus on cost management, in particular: • Employment costs were $1.6 million lower than pcp primarily as a result of : • A flatteni
Slide 15: FY20 Priorities
FY20 PRIORITIES “ In response to growing energy market complexity, the proportion of C&I customers engaging consultants and other intermediaries is increasing. Amongst those C&I customers using a consultant or broker for energy procurement and reporting, Energy Action has the highest customer share”
Slide 16: Our Top Priorities for FY20
OUR TOP PRIORITIES FOR FY20 16 BUSINESS STR ATEGY & PROSPECTS FOR FUTURE FINANCIAL YEARS “Priority to leverage the value and efficiencies from systems investment, and improving focus on core business, with a plan to increase the future contracted revenue.” “Key Priorities: Foundations for Growth” Sa
Slide 17: Getting in Touch
GETTING IN TOUCH 17 17 John Huggart Chief Executive Officer CONTACT US (02) 9633 6476 john.huggart@energyaction.com.au Tracy Bucciarelli Chief Financial Officer (02) 9633 6401 tracy.bucciarelli@energyaction.com.au www.linkedin.com/company/energy-action info@energyaction.com.au www.energyaction.com.a
Slide 18: Disclaimer
DISCLAIMER 18 This presentation has been prepared by Energy Action LimitedABN: 90 137 363 636. This presentation is not intended as an offer or solicitation with respect to the purchase or sale of any security nor does it constitute an offer or solicitation in any jurisdiction in which such an offer
Slide 19: Appendix
APPENDIX Tracy Bucciarelli CFO, Eric Geronimo and John Blazevski, Energy Consultants
Slide 20: Our Expertise
TO HELP OUR CLIENTS UNDERSTAND, AND 20 Our Expertise TAKE CONTROL OF, THEIR ENERGY NEEDS A national team with knowledge and capability to offer better WE HELP BUSINESSES TO MAKE A GOOD DECISION TO SAVE ON ENERGY ways of buying, using and COSTS, REDUCE EMISSIONS AND INCREASE THE VALUE OF THEIR ASSETS
Slide 21: Procurement
21 FY19 FY18 Variance PROCUREMENT No. of successful AEX 854 1,311 -34.9% Auctions1 Average AEX contract 25.9mth 26.1mth -0.2 mths TOTAL REVENUE DECLINE 35% duration TWhs procured via Auction2 0.81 1.48 -45.3% PRIMARILY DRIVEN BY LOWER Average $/MWh $77.53 $88.85 -12.7% VOLUME OF AUCTIONS Total Aucti
Slide 22: Monitoring
22 Sites Under Management 12,000 MONITORING 10,000 8,000 MONITORING REVENUE DECLINED 7% 6,000 SITES UNDER MANAGEMENT UP 11.5% 4,000 2,000 • 10,600 sites are under management. 0 Jul 18 Aug 18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 • Monitoring revenue declined 7% with s
Slide 23: Advisory Services
23 ADVISORY SERVICES • Advisory revenues declined 36% across the full range of services, with operating performance impacted by high staff turnover and the repositioning of the PAS division. • Appointed new partners to deliver non-core work • The majority of projects in discontinued activity is comp
Slide 24: Balance Sheet
BALANCE SHEET AS AT - June 2019 30 Jun 2019 30 Jun 2018 (Restated) % Variance BALANCE SHEET Current Assets Cash and cash equivalents Debtors 1,608,515 3,495,883 1,171,288 3,838,586 37% -9% 24 Income tax Receivable 74,638 56,738 32% Other Assets 271,200 522,884 -48% Work in Progress 851,649 865,241 -
Slide 25: Statutory to Operating Profit Reconciliation
STATUTORY TO OPERATING PROFIT 25 RECONCILIATION Operating profit after tax EBITDA $ FY18 FY18 FY19 Variance FY19 Variance (Restated) (Restated) Statutory results (12,092,885) 3,260,674 (471%) (10,028,320) 6,664,056 (250%) Add back Significant Items after tax : Tax rate change Strategic review 265,08
Slide 26: Significant Items
SIGNIFICANT ITEMS The Group incurred significant items totaling $13,098,219. Of this amount $12,170,575 (93%) were non-cash items. These significant items net of tax effect were: • Costs associated with the strategic review of $265,086 • Costs associated with an organisational restructure of $657,22
Slide 27: FY18 Accounting Standard Change
FY18 ACCOUNTING STANDARD CHANGE 27 Consolidated Statement Sales FY18 AASB 15 AASB 9 FY18 of Comprehensive Commission (As Reported) Adjustment Adjustment (Restated) Income Expenses Energy Action has adopted the following Australian Total Revenue 31,173,824 593,496 - 0 31,767,320 Accounting Standards,
Slide 28: Full Retrospective Impact of Accounting Standard Change
FULL RETROSPECTIVE IMPACT OF 28 ACCOUNTING STANDARD CHANGE FY18 FY17 Total Impact as at 1 July 2018 is increase to retained Full Year Full Year Total Total Impact to Group's Retained Earnings earnings of $4.068M as a result of adjustments as below: Jun 18 Jun 17 Impact • Revenue adjustment with Auct