Hipages Group Holdings Ltd. · ASX:HPG
Hipages — H1 FY24 Earnings Presentation
36 slides from Hipages's earnings presentation, Feb 22, 2024
Slide 1: FY24 H1 financial results
hipages Group (ASX: HPG) FY24 H1 financial results 22 February 2024
Slide 2: Australia and New Zealand's largest online tradie marketplace and SaaS platform
Australia and New Zealand's largest online tradie marketplace and SaaS platform, helping tradies build better businesses. hipages Group | 2
Slide 3: Vision and Purpose
Vision To be the most trusted partner in the trade industry Purpose Transforming the trade industry, building better lives for everyone hipages Group | 3
Slide 4: Agenda
Agenda 1 FY24 H1 highlights 3 Strategic evolution 2 Financial & operational performance 4 Full year targets hipages Group | 4
Slide 5: FY24 H1 highlights
FY24 H1 highlights ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 5
Slide 6: FY24 H1 highlights
FY24 H1 highlights Continued marketplace momentum and disciplined execution driving operating leverage and underpinning strong results: ✓ Proactive marketplace management driving Recurring Revenue +15%, MRR +17% and ARPU +11% vs. pcp ✓ Significant free cash flow improvement +$3.2m vs. pcp signals th
Slide 7: Financial & operational performance
Financial & operational performance JACO JONKER CFO & COO hipages Group | 7
Slide 8: H1 FY24 Group financial highlights
H1 FY24 Group financial highlights Revenue Profitability Key drivers $6.6m MRR 8.4m EBITDA 1 35.4k Subscription tradies Up 17% Up 45% Up 4% EBITDA margin 22% (up 4ppt) $35.2m Recurring revenue $0.3m NPAT 1 $2,075 ARPU 94% of Total revenue FY23 H1: $(1.4)m Up 11% Up 11% to $2,195 for hipages Australi
Slide 9: Delivering sustainable growth
Delivering sustainable growth MRR Total revenue EBITDA Operating cash flow $6.6m $37.4m $8.4m $9.0m $5.6m $32.6m $6.9m $5.3m $30.1m $6.7m $26.9m $5.8m $6.0m $4.6m $22.7m $4.2m $4.2m $3.5m -$0.1m -$1.4m H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY2
Slide 10: Continued marketplace optimisation delivering 17% MRR growth
Continued marketplace optimisation delivering 17% MRR growth hipages Group MRR MRR growth driven by: • Further optimisation of lead pricing based on 6.6 7,000 ,000 100% 6.3 90% supply/demand dynamics in the marketplace 5.5 5.6 • Continuous improvement of our account 6,000 ,000 5.2 5.3 80% management
Slide 11: Delivering Group operating leverage
Delivering Group operating leverage Group operating expenses1 as % of total revenue Sales 101% • Sales employment costs up 14% vs. pcp to fuel new business growth and enhance account 12% Short-term cost cutting 86% management services for tradies, converting more amid COVID pandemic 82% 4% 78% ascen
Slide 12: Strategic Tech investment, stabilised & reducing as a % of revenue
Strategic Tech investment, stabilised & reducing as a % of revenue Group investment in Technology development* (in $m) Investment to date 27% • Capitalisation approach based on detailed activity- Total Tech development 24% 24% based tracking by project (maintenance vs. as a % of Revenue development)
Slide 13: hipages Australian operations
hipages Australian operations hipages Group | 13
Slide 14: Marketplace delivering high value for both consumers and tradies
Marketplace delivering high value for both consumers and tradies High connection1 volume reflecting tradies’ Consumers getting exceptional outcomes with record strong engagement with the platform high % of jobs connected with tradies hipages (Australia) hipages (Australia) +3% 1 1,400 ,000 1 1,350 ,
Slide 15: ARPU growth reflecting enhanced value proposition for tradies
ARPU growth reflecting enhanced value proposition for tradies Strong ARPU growth continues for hipages (Australia) hipages (Australia) ARPU ($) Key initiatives fueling ARPU growth: • Dynamic job lead pricing driving increased +11% credit usage by tradies, leading to 2,500 ascensions to higher price
Slide 16: Competition for jobs supporting growth in tradie subscriptions
Competition for jobs supporting growth in tradie subscriptions hipages (Australia) subscription tradies steady growth vs. pcp +3% vs. pcp 33,00 0 29% 32.3 31.8 • H1 FY24 at record high level vs. previous H1 periods 32,00 0 24% 31.2 31.3 30.9 30.8 31,00 0 19% • Usual seasonality pattern results in sl
Slide 17: Continued brand investment to extend market leadership
Continued brand investment to extend market leadership Australia’s preferred platform amongst homeowners #1 spontaneous brand recall of 25% #1 preferred platform vs direct competitors 73% of jobs are posted by returning customers We are becoming indispensable for tradies Awareness 66% 15% YoY increa
Slide 18: hipages New Zealand operations
hipages New Zealand operations hipages Group | 18
Slide 19: hipages NZ evolution towards higher value subscription model
hipages NZ evolution towards higher value subscription model hipages New Zealand (Builderscrack) enhanced tradie mix • ARPU up 38% since acquisition in Nov 2021 $971 ARPU (in A$) Introducing the Subscription model… • Hybrid subscription model launched in Q4 FY23: $786 maintaining the existing commis
Slide 20: Strategic evolution
Strategic evolution ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 20
Slide 21: Strategic evolution from marketplace to platform FY23-FY26+ roadmap
Strategic evolution from marketplace to platform FY23-FY26+ roadmap Marketplace Tradie platform Consumer platform optimisation evolution evolution End-to-end SaaS solution for tradies Lead pricing optimisation Consumer products & services Expand range of products Drive uptake of existing services Fi
Slide 22: Evolving into a platform will fuel both tradie retention and ARPU
Evolving into a platform will fuel both tradie retention and ARPU Shift to the subscription model in FY22 resulted in Evolution into a platform will further extend tradie ARPU growth while improving retention lifetime value hipages (Australia) Average customer lifetime 59% 58% Retention rate1 56% 1.
Slide 23: Creating an end-to-end platform to win the whole tradie ecosystem
Creating an end-to-end platform to win the whole tradie ecosystem Lead Accept Call, Text, Schedule Send Approved Schedule Send Tradie Accounting Repeat Invites Lead SMS, Email Site Visit Quote Hire to Start Invoice Paid integration Job Future services Procurement Insurance Finance hipages Group | 23
Slide 24: Tech investment balanced across marketplace & tradie platform
Tech investment balanced across marketplace & tradie platform Group Technology investment* split by strategic priority H1 initiatives and product delivery highlights: Integrating features into the single tradie platform: 100% 100% 100% 100% Partner leads Consumer Lead (Ikea, DoE, Lead settings Credi
Slide 25: Milestones for hipages Tradiecore
Milestones for hipages Tradiecore 2 Apps (hipages business app + Tradiecore) Single tradie platform Q2 Q2 Q4 FY24 FY24 FY25 OCT DEC FY24 hipages tradies can claim Introduce tiered bundled LAUNCH Single Tradie their leads in Tradiecore Single bundled package for package Platform App for all new new t
Slide 26: FY24 targets
FY24 targets ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 26
Slide 27: On track to deliver positive free cash flow target in FY24
On track to deliver positive free cash flow target in FY24 Free cash flow1 excluding M&A activities ($m) • H1 FCF improvement vs. pcp driven by strong revenue and disciplined operating and investing expenditure • Large brand activation The Block paid in Q2 • On track to deliver positive free cash fl
Slide 28: Operating leverage underpins margin expansion
Operating leverage underpins margin expansion Near and medium-term targets FY24 H1 FY24 target Medium-term target1 Revenue growth 15% Low teens % Mid-teens % EBITDA margin2 22% ~20% >25% Free cash flow ($0.1m) Positive Positive Key drivers • H2 trading conditions continue to support our value propos
Slide 29: Questions & Answers
Questions & Answers hipages Group | 29
Slide 30: Appendices – Financial Summary
Appendices – Financial Summary hipages Group | 30
Slide 31: H1 FY24 Pro forma financial summary
H1 FY24 Pro forma financial summary $'000 H1 FY24 H1 FY23 $ Var % Var ● Recurring revenue 94% of total revenue Recurring 35,169 30,601 4,568 15% Transactional 1,747 1,472 275 19% Operating Revenue1 36,916 32,073 4,843 15% ● Gross margin2 of 90% (H1 HY23: 89%) Other 494 548 (54) (10%) Total Revenue 3
Slide 32: H1 FY24 Cash flow
H1 FY24 Cash flow H1 FY24 H1 FY23 ● Positive operating cash flow of $9.0m reflecting strong $'000s Statutory Statutory $ Var Receipts from customers (inclusive of GST) 39,965 34,567 5,398 business momentum Payments to suppliers and employees (inclusive of GST) (31,168) (28,508) (2,660) Interest rece
Slide 33: H1 FY24 Statutory balance sheet
H1 FY24 Statutory balance sheet $'000s 31-Dec-23 30-Jun-23 $ Var Cash and cash equivalents 17,918 8,540 9,378 ● Strong balance sheet maintained at end H1 FY24 Funds on deposit 1,150 2,187 (1,037) with $19.1m cash and funds on deposit Trade and other receivables 1,399 1,655 (256) Other assets 1,260 1
Slide 34: Profit reconciliation
Profit reconciliation H1 FY24 H1 FY23 $'000 $'000 Reported EBITDA (from continuing operations) 8,720 5,639 Write back of deferred consideration related to acquisition of New Zealand subsidiary (369) - (Builderscrack) Non-recurring remuneration - 130 Pro forma EBITDA before significant items 8,351 5,
Slide 35: Glossary and definitions
Glossary and definitions Annual Revenue Per User (ARPU) The annual operating revenue divided by the average of the opening and closing number of total hipages tradies and paying Builderscrack tradies for the period. For H1 FY24, hipages Group ARPU of $2,075 is the blended result of hipages' ARPU of
Slide 36: 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
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