Ventia Services Group Limited · ASX:VNT
Ventia Services — FY2023 Earnings Presentation
28 slides from Ventia Services's earnings presentation, Feb 21, 2024
Slide 1: FY23 Results Presentation
21 February 2024 FY23 Results Presentation Dean Banks: Chief Executive Officer Stuart Hooper: Chief Financial Officer Pictured: Ventia firefighter from our defence team at RAAF Edinburgh (SA).
Slide 2: Acknowledgement of Country and Mihi
HY23 RESULTS PRESENTATION Acknowledgement of Country and Mihi Ventia would like to respectfully acknowledge the Traditional Custodians of country throughout Australia and their connection to land, sea and community. We pay our respect to them, their cultures and to their Elders past and present. He
Slide 3: Safety is our licence to operate
FY23 RESULTS PRESENTATION v Safety is our licence to operate Pictured: Members of the Infrastructure Services Water team at a waste water facility (NSW). TRIFR improvement of 11.3% on FY22 SIFR improvement of 62.1% on FY22 5 0.5 • TRIFR and SIFR improvement driven by strong leadership and management
Slide 4: Strong FY23 result provides confidence for 2024
FY23 RESULTS PRESENTATION Strong FY23 result provides confidence for 2024 Delivering on Realising Delivering for expectations sustainable growth shareholders Delivered NPATA growth1 of Total dividend declared Earnings growth has 12.5% continued to outpace market2 17.72¢ Renewal rate Solid performanc
Slide 5: FY23 financial results above guidance
FY23 RESULTS PRESENTATION FY23 financial results Delivered NPATA growth of 12.5% above guidance FY23 statutory financials as at 31 December 2023 Total Revenue EBITDA $5,676.4m $465.2m ▲ Increase of 9.8% on FY22 ▲ Increase of 10.8%1 on FY22 EBITDA Margin NPATA 8.2% $202.1m ▲ Increase of 0.1pp1 on FY2
Slide 6: Long-term, high-quality Work in Hand of $18.1b
FY23 RESULTS PRESENTATION Long-term, high-quality Work in Hand of $18.1b Pictured: Telecommunications field technician performing utility pole work (VIC). Work in Hand ($b) up 8% on FY21 Work in Hand profile ($b) • Strong revenue secured for FY24 • Key government contracts forecast for decision $19.
Slide 7: Securing key contract opportunities
FY23 RESULTS PRESENTATION Securing key contract opportunities Renewal rate 87% and total win rate 66% Defence and Social Infrastructure Telecommunications Defence Maintenance Contract (renewal) N2P – Node to Premises (new work) Joint Logistics Command nbn – two contracts $393M OVER 5 YEARS $280M + $
Slide 8: Substantial progress in 2023 against ESG targets
FY23 RESULTS PRESENTATION Substantial progress in 2023 against ESG targets Focus Targets Status Tracking Committed to the Science Based Targets initiative (SBTi) - 42% Targets set and submitted for validation absolute reduction in scope 1 and 2 by 2030 and net zero by 2050 100% renewable energy by 2
Slide 9: Redefining Service Excellence is our strategy in action
FY23 RESULTS PRESENTATION Redefining Service Excellence is our strategy in action Client focus Innovation Sustainability Cross Selling +48% increase in cross-sell First to market with Social Value Science-Based Targets submitted revenue compared to FY22 calculation – $4.3b SKAO is a good example of
Slide 10: Financial Results
Financial Results Pictured: Members of our transport incident response team, Sydney (NSW). 10
Slide 11: Consistent track record of financial performance
FY23 RESULTS PRESENTATION Consistent track record of financial performance Total Revenue ($m) EBITDA and Margin ($m/%) NPATA ($m) Up 22% since FY21 Up 25% since FY21 465.2 Up 38% since FY21 6,000 250 13% 419.8 450 12% 5,500 200 400 379.9 11% 5,000 10% 150 350 9% 4,500 5,676.4 8% 100 202.1 5,167.5 30
Slide 12: Performance demonstrates the benefit of a diversified portfolio
FY23 RESULTS PRESENTATION Performance demonstrates the benefit of a diversified portfolio Defence & Infrastructure Social Infrastructure Services Telecommunications Transport Revenue Revenue Revenue Revenue $2.4b ▲ 2.4% $1.3b ▲ 7.8% $1.4b ▲ 21.3% $636.8m ▲ 22.7% EBITDA EBITDA EBITDA EBITDA $160.4m ▲
Slide 13: Financial performance illustrates reliable growth profile
FY23 RESULTS PRESENTATION Financial performance illustrates reliable growth profile Statutory FY23 result, no pro-forma adjustments $ millions FY22 FY23 Delta Total revenue 5,167.5 5,676.4 9.8% EBITDA (4,756.7) Contract revenue escalations have offset cost increases during Total expense (5,214.8) 9.
Slide 14: Delivering sustainable returns to investors
FY23 RESULTS PRESENTATION Delivering sustainable returns to investors Final 2H23 dividend grew 13.6% compared to 2H22 Dividends paid and declared (cps) Declared Final dividend for FY23 Total dividend for FY23, 9 per share declared representing growth of 12.5% Paid 8 Final 2H23 Dividend Growth 9.41¢*
Slide 15: Robust financial flexibility and liquidity
FY23 RESULTS PRESENTATION Robust financial flexibility and liquidity Leverage Ratio1 continues Interest Cover Ratio2 more 31 December 2023 metrics ($m) to improve as EBITDA grows than 2x covenant Cash on hand 338.7 Undrawn revolver 400.0 14 Total liquidity 738.7 12.4 3 Headroom 12 Term loan 750.0 12
Slide 16: Clear capital allocation framework
FY23 RESULTS PRESENTATION Clear capital allocation framework 1. Investment in organic growth opportunities Significant opportunity across all sectors 2. Sustainable dividends Track record of paying out 75% of NPATA in line with target 3. Strategic acquisitions Adding capability, scale or access to n
Slide 17: Outlook
Outlook Pictured: Member of Ventia’s water team at a waste water facility in Sydney (NSW). 17
Slide 18: What makes Ventia different – our value proposition
FY23 RESULTS PRESENTATION What makes Ventia different – our value proposition Ventia is a leading provider of essential services Our Strategy Our People Our Process Our Market • Redefining Service Excellence • People are at the heart of our • Robust risk and governance • Operating in a resilient and
Slide 19: Expanding energy transition credentials
FY23 RESULTS PRESENTATION Expanding energy transition credentials Long-term maintenance contracts Energy transition services New adjacent market opportunity Mercury’s Hydro and Geothermal assets West Wyalong solar farm EV charging • Ventia undertakes High Voltage minor capital • Operations and maint
Slide 20: End market trends support growing demand for essential services
FY23 RESULTS PRESENTATION End market trends support growing demand for essential services Defence and Social Infrastructure Telecommunications • Australian Defence spending now up to • Connectivity is more important than ever, 2% GDP1, growing presence of leading to greater investment in new fibre i
Slide 21: Strong FY23 result provides confidence for 2024
FY23 RESULTS PRESENTATION Strong FY23 result provides confidence for 2024 1. Delivering on expectations Solid financial performance with growth in Revenue (9.8%), EBITDA (10.8%) and NPATA (12.5%) 2. Realising sustainable growth Resilient and diversified business and strong renewal rate (87%), suppor
Slide 22: Disclaimer
FY23 RESULTS PRESENTATION Disclaimer This presentation is in summary form and is not necessarily complete. It should be read together with the Company’s Full Year Report 2023 lodged with the ASX on 21 February 2024. This presentation contains information that is based on projected and/or estimated e
Slide 23: Q&A
ventiaW Q&A
Slide 24: Market growth supported by industry tailwinds
FY23 RESULTS PRESENTATION Market growth supported by industry tailwinds Outsourced Maintenance Services addressable market size Australia & New Zealand (AU$b)1 FY22 – FY26 CAGR: 6.6% Market drivers 87.8 82.4 77.5 11.8 Size and growth of the asset base 73.5 68.0 8.2 9.2 Population growth 7.4 37.8 27.
Slide 25: Ventia’s long-term investment proposition
FY23 RESULTS PRESENTATION Ventia’s long-term investment proposition Revenue targeted to grow Diligent focus on faster than market cash backed profits 7-10% 80-95% Average revenue growth Cash flow conversion High conversion of Growing shareholder profits into dividends dividend 75% Annual distributio
Slide 26: Contract profile mitigates risk
FY23 RESULTS PRESENTATION Contract profile mitigates risk FY23 revenue by contract profile ($5.7b) 8% Schedule of Diversified portfolio 19% Rates 400+ sites and 40% of our people working in regional and rural areas Cost Average contract tenure Reimbursable 5.6 years (7.4 years with extension options
Slide 27: PPA provisions continue to reduce in line with expectations
FY23 RESULTS PRESENTATION PPA provisions continue to reduce in line with expectations and robust risk management Unfavourable contracts ($m) Onerous contracts ($m) PPA Provision commentary 120 70 • Provisions continue to roll off as expected, with no increases to onerous or unfavourable 60 • PPA uti
Slide 28: Thank you
ventiaW Thank you