Hipages Group Holdings Ltd. · ASX:HPG
Hipages — Investor Presentation (August 2024)
38 slides from Hipages's investor presentation, Aug 22, 2024
Slide 1: FY24 Financial Results
FY24 Financial Results 22 August 2024
Slide 2: hipages Group is ANZ's #1 platform connecting homeowners and tradies
hipages Group is ANZ’s #1 platform to connect homeowners and tradies, building better lives for everyone.
Slide 3: Our Vision
Our Vision To be the most trusted partner in the trade industry.
Slide 4: Agenda
Agenda 1. FY24 results overview 2. Financial & operational update 3. Strategy update 4. FY25 outlook
Slide 5: FY24 Results Overview
FY24 Results Overview R O B Y S H A R O N - Z I P S ER CEO & Co-Founder hipages Group | 5
Slide 6: Exceptional FY24 results delivering on targets
Exceptional FY24 results delivering on targets • Record marketplace activity fuelling top-line growth: +15% +11% Recurring Revenue ARPU • Positive Free Cash Flow : FCF: $2.1m Up +$4.9m vs. pcp • Strong balance sheet liquidity and no debt $21.3m cash balance Incl. funds on deposit hipages tradiecore
Slide 7: FY24 Performance
FY24 Performance JACO JONKER CFO & COO hipages Group | 7
Slide 8: FY24 Group Financial Highlights
FY24 Group Financial Highlights Revenue $6.4m $72.1m $75.8m MRR excl. GST Recurring revenue Total revenue Up 13% Up 15% Up 13% Profitability $16.4m $0.1m $2.1m EBITDA1 NPAT1 Free Cash Flow EBITDA Margin 22% (up 4ppt) FY23: ($2.3m) FY23: ($2.8m) Key drivers 36.7k $2,079 2.7m Subscription tradies ARPU
Slide 9: Delivering sustainable growth
Delivering sustainable growth MRR excl. GST Total Revenue EBITDA Operating Cash Flow $75.8m $16.4m $6.4m $19.3m $67.0m $5.7m $61.9m $5.2m $15.7m $55.8m $12.3m $4.8m $11.7m $46.9m $10.7m $12.7m $12.6m $3.7m $9.2m $6.1m FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY
Slide 10: Further double-digit MRR growth reflecting proactive marketplace management
Further double-digit MRR growth reflecting proactive marketplace management hipages Group MRR (excl. GST) 7,000 ,000 50.0% MRR growth driven by: NSW COVID Post-COVID 6.4 lockdowns home improvement 6.0 45.0% • Strong Sales execution, with new tradies 5.7 boom contracted at higher price points than ex
Slide 11: Group operating leverage
Group operating leverage Group operating expenses1 as % of total revenue Sales Short-term cost cutting amid COVID pandemic • Sales employment costs +16% vs. pcp due 87% 83% 82% to the filling of long-term vacancies to fuel: 80% 78% 11% - new business growth 10% 12% 3% 9% - existing customer yield in
Slide 12: Technology spend stabilised as % of revenue
Technology spend stabilised as % of revenue Group spend in Technology development1 (in $m) Technology spend to date 27% 25% Total Technology spend • Capitalisation approach based on detailed 24% as a % of Revenue activity-based tracking by project (maintenance vs. development) and 18.8 18.1 amortise
Slide 13: Australian Operations
Australian Operations
Slide 14: High level of marketplace activity delivering value for homeowners and tradies
High level of marketplace activity delivering value for homeowners and tradies Connection1 volume growth (off a record pcp) Homeowners getting exceptional outcome reflecting tradies’ strong engagement with the platform with record high % of jobs connected with tradies hipages Australia hipages Austr
Slide 15: ARPU growth reflecting enhanced value proposition for tradies
ARPU growth reflecting enhanced value proposition for tradies hipages Australia ARPU ($) Key initiatives fueling ARPU growth: NSW COVID Post-COVID +11% 2,500 lockdowns home improvement • Dynamic job lead pricing driving increased boom credit usage by tradies, resulting in more of $2,199 $1,985 them
Slide 16: Tradie subscription growth while passing price increases
Tradie subscription growth while passing price increases hipages Australia subscription tradie number (‘000) +2% 33,50 0 50% 33.1 • HY on HY volatility reflects normal seasonal 33,00 0 40% 32,50 0 32.3 pattern, with December a yearly low due to 30% the summer holidays 32,00 0 31.8 31,50 0 31.3 20% •
Slide 17: Strong marketing efficiency, expanding reach and brand awareness
Strong Marketing efficiency, expanding our reach and brand awareness while reducing our Marketing spend as % of Revenue Media & PR presence amplified to boost job volumes in subdued economic environment • New TV sponsorship Dream Homes (Channel 7) complementing our 6-year strong partnership with The
Slide 18: New Zealand Operations
New Zealand Operations
Slide 19: NZ ARPU growth driven by transition to full subscription model
NZ ARPU growth driven by transition to full subscription model by end of FY25 hipages New Zealand (Builderscrack) tradie mix +21% FY24 Revenue up 28% vs. pcp fueled by yield: vs. pcp $964 ARPU (in A$) FY23-24 tradie mix reflects our progressive shift to a full subscription model in NZ $794 • Current
Slide 20: Strategic evolution
Strategic evolution R O B Y S H A R O N - Z I P S ER CEO & Co-Founder hipages Group | 20
Slide 21: hipages focused on the largest Homeowner segment in the tradie economy
hipages focused on the largest Homeowner segment in the tradie economy Australian trades market size ($B) AUSTRALIA TRADES SERVICES VERTICALS $141.8 B • The Residential segment is large (79% of the AUS Trades market) and projected to grow +7% p.a. over the next 3 years, in line with the L4Y CAGR Tot
Slide 22: Significant growth potential, only capturing ~1/5th of the SAM to date
Significant growth potential, only capturing ~1/5th of the SAM to date hipages estimated Australian market size Total Addressable Market Tradie businesses playing in the (Trade Businesses) 11% ‘Total Residential’ segment 301k hipages penetration rate Tradie businesses playing in Serviceable the ‘Hom
Slide 23: Job Management solutions also have material growth potential
Job Management solutions also have material growth potential Australian residential trades businesses – job management operations Only 14% of tradies use a specialised job management software • Penetration rate even lower for sole traders, Offline 28% 28% with only 8% using a specialised solution •
Slide 24: Evolution of our 3+ year roadmap post tradiecore go-live
Evolution of our 3+ year roadmap post hipages tradiecore go-live FY24-FY27+ roadmap evolution Tradie Platform Homeowner Platform ● Maintain marketplace balance ● Source most relevant and needed job leads ● Optimise value exchange ● Strengthen & Build Partnerships ● Develop expanded product features
Slide 25: Successful launch of end-to-end platform to win the whole tradie ecosystem
Successful launch of 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 G
Slide 26: Product Evolution
Product Evolution hipages tradiecore Desktop version to be launched in FY25 H1 Single app for tradies to find jobs and Omni-channel experience (syncing with phone app) for users and manage their business end-to-end larger businesses managing their operations from larger screens hipages Group | 26
Slide 27: hipages tradiecore launched in Q4, with additional functionalities in FY25
hipages tradiecore launched in Q4, with additional functionalities in FY25 H2 H1 H2 FY24 FY25 FY25 2 Apps Single Tradie Platform Launched single tradie Desktop user Team Management platform (hipages enablement capability tradiecore) Introduce new package for Introduce tiered Multi-user capability hi
Slide 28: Product Vision
Product Vision Watch video Watch video hipages Group | 28
Slide 29: FY25 Targets
FY25 Targets R O B Y S H A R O N - Z I P S ER CEO & Co-Founder hipages Group | 29
Slide 30: Operating leverage underpins margin expansion
Operating leverage underpins margin expansion FY25 targets • Revenue growth : Continued strong growth1 • EBITDA margin2 Further expansion • Free Cash Flow ~$4m - $6m 1. Assuming no material deterioration in macroeconomic conditions impacting the Group's key markets under the existing strategy hipage
Slide 31: Questions & Answers
Questions & Answers hipages Group | 31
Slide 32: Appendices Financial Summary
Appendices Financial Summary
Slide 33: FY24 Financial Summary
FY24 Financial Summary ● Recurring revenue 95% of total revenue ● 89% gross margin ● Continued investment for growth, with: ○ Increased investment in the sales team to support revenue growth ○ Increased investment in product development & technology team (mostly capitalised) ○ Increased marketing in
Slide 34: FY24 Cash Flow
FY24 Cash Flow ● Positive operating cash flow of $19.3m as the business benefits from margin expansion and strong business momentum ● Net Cash outflow from investing activities of $5.2m comprising: o Proceeds of $8.4m received from the disposal of hipages’ stake in PropTech Labs o Continued investme
Slide 35: FY24 Statutory Balance Sheet
FY24 Statutory Balance Sheet ● Enhanced balance sheet liquidity with $21.3m cash and funds on deposit ● Total equity position of $38.8m, increasing by $4.6m since June 2023. Key movements included: o Increased net cash and funds on deposit balance of $10.5m o Disposal of hipages' stake in PropTech L
Slide 36: Profit reconciliation
Profit reconciliation hipages Group | 36
Slide 37: 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 Australia and hipages NZ (Builderscrack) tradies for the period. For FY24, hipages Group ARPU of $2,079 is the blended result of hipages' ARP
Slide 38: Disclaimer
Disclaimer Important notice The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN 67 644 430 839 (“hipages” or the Company") and is general background information about hipages’ activities current as at the date of this presentation. The information is
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