Service Stream Limited · ASX:SSM
Service Stream — FY2021 Earnings Presentation
29 slides from Service Stream's earnings presentation, Aug 26, 2021
Slide 1: FY21 Full-Year Results Presentation
FY21 Full-Year Results Presentation 26 August 2021
Slide 2: Key Messages
Key Messages ► Transformational acquisition of Lendlease Services announced will provide a strong platform for future growth, enhancing the Group’s capabilities and addressable markets ► Group met guidance within a challenging year marked by a reduction in telecommunications works and an unpredictab
Slide 3: FY21 Group Highlights
FY21 Group Highlights EBITDA from Operations of $80.1m, in line with guidance provided Strong cash flow generation, conversion of 99.0% and net cash position retained Balance sheet in robust position to support Lendlease Services transaction Financial Delivered HSE performance improvements a
Slide 4: Financial Headlines
Financial Headlines Revenue EBITDA from Operations Adjusted NPAT (NPAT-A) Net Cash Dividend $804.2m $80.1m $38.9m $15.6m 2.5 cps 13.4% v FY20 25.9% v FY20 33.8% v FY20 -$3.9m v FY20 FY21 interim dividend only Group Revenue down by EBITDA from Operations, NPAT-A down from $58.8m Strong EBITDA
Slide 5: COVID-19
COVID-19 Positive exposure to essential network infrastructure and pro-active management of evolving issues enabling continuation of operations Exposure to essential infrastructure networks has provided a steady revenue base and sustained resilience through the COVID-19 pandemic Comprehensive CO
Slide 6: Safety Performance
Safety Performance Maintaining our focus on the safety of our people, our customers and the community Safety is a core value at Service Stream; we continue to deliver industry leading safety performance: ‒ TRIFR recorded annual reduction of 26% over FY21 ‒ MTIFR improved by 50% on prior year, and
Slide 7: Segment Performance
SEGMENT PERFORMANCE
Slide 8: Utilities
Utilities Revenue ($m) Utility network engineering, design & construction, maintenance and operations 600 384.1 411.5 400 FY21 Revenue of $411.5m was $27.5m (+7.1%) above pcp: 200 - Comdain Infrastructure revenue was $319.8m (+11.0%). Project delivery during H2 was negatively impacted by severe we
Slide 9: Telecommunications
Telecommunications Revenue ($m) Telecommunication network engineering, design & construction, maintenance and operations 600 544.2 392.4 400 Revenue for FY21 was $392.4m, 27.9% below pcp due to the conclusion of the nbn D&C program in FY20 and reduction in annual activation volumes 200 - Activatio
Slide 10: Financial Performance
FINANCIAL PERFORMANCE
Slide 11: Profit and loss
Profit and loss Comparison of results for the 12 months to 30 June 2021 $m FY21 FY20 Change Revenue -13.4%: Telco segment reduction of -$151.8m due to lower nbn volumes Revenue 804.2 929.1 (124.9) Utilities segment up +$27.5m led by Comdain revenue growth of 11.0%, offset by lower EBITDA 75.2 10
Slide 12: Cashflow
Cashflow Comparison of results for the 12 months to 30 June 2021 Key highlights: $ million FY21 FY20 Change Reported EBITDA 75.2 105.6 (30.4) Strong OCFBIT conversion rate of 99.0% +/- non-cash items & change in working capital (0.7) (19.1) 18.4 Working capital remains highly efficient at < 2% r
Slide 13: Balance sheet & capital management
Balance sheet & capital management Comparison of results at 30 June Balance sheet $m FY21 FY20 Change Net assets in line with prior year Cash and cash equivalents 50.6 79.5 (28.9) Some movement in composition of net working capital, but net balance of $13.1m also in line Trade and other receivab
Slide 14: Acquisition of Lendlease Services
ACQUISITION OF LENDLEASE SERVICES
Slide 15: Executive Summary
Executive Summary Refer to the presentation lodged with the ASX on 21 July 2021 for full details of the Acquisition Service Stream has entered into a binding agreement to acquire Lendlease Services Acquisition of Lendlease Acquisition enterprise value of $310m and an expected equity purchase pri
Slide 16: Lendlease Services Overview
Lendlease Services Overview Leading provider of Operation & Maintenance (O&M) and specialist Design & Construction (D&C) services across Telecommunications, Utilities and Transportation sectors VIC Specialised O&M and D&C FY2021 Forecast Solid order book > 2,200 employees and Long standing contractu
Slide 17: Lendlease Services Operating Divisions
Lendlease Services Operating Divisions Operates across Telecommunications (Telco), Utilities (Utilities) and Transportation Infrastructure (Transport) Telecommunications Utilities Transport Infrastructure Telco (fixed / w ireless) Electricity Water Industrial Roads Design, construction, operations D
Slide 18: Strategic Rationale
Strategic Rationale Consistent with Service Stream’s strategy, the acquisition of Lendlease Services will diversify revenues, enhance current capabilities and expand the Combined Group’s addressable markets Diversifies Service Stream's operations, creating a multi-network essential service provider
Slide 19: Business Combination
Business Combination Service Stream (standalone) Lendlease Services Combined Group Telecommunications Telecommunications Telecommunications Business Units Utilities Utilities Utilities Transport Services Transport Services Revenue FY21F ($m) $804.2 $792.7 $1,596.9 EBITDA from Operations1 $80.1 $44.9
Slide 20: Compelling Acquisition Synergies
Compelling Acquisition Synergies Following a detailed assessment and completion of due diligence, the business expects to realise significant cost synergies Synergy Identification The acquisition of Lendlease Services is expected to generate cost synergies across the Combined Group of ~$17 million
Slide 21: Group Outlook
GROUP OUTLOOK 21
Slide 22: Service Stream Going Forward
Service Stream Going Forward Post-acquisition, Service Stream will reflect a leading Australian essential networks services business operating across the Telco, Utilities and Transport sectors, underpinned by a core earnings base and positioned for significant and sustainable long-term growth Vision
Slide 23: Group Outlook
Group Outlook Strong industry sector fundamentals, enhanced by significant private and public investment in infrastructure assets is expected to drive sustained demand and growth for maintenance services into the longer term Acquisition of Lendlease Services will provide a step change to the Gro
Slide 24: Historical Financial Performance Data
HISTORICAL FINANCIAL PERFORMANCE DATA 24
Slide 25: Appendix 1: Profit & Loss
Appendix 1 PROFIT & LOSS $ mi l l i on 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 FY17 FY18 FY19 FY20 FY21 1 Utilities $48.6 $46.0 $54.7 $52.1 $51.3 $213.0 $199.2 $184.9 $199.6 $211.9 $94.6 $106.7 $264.3 $384.1 $411.5 Telecommunications 1 $194.6 $217.8 $244.4 $290.7 $298.1 $291.3 $297.9 $246.
Slide 26: Appendix 2: Reconciliation of Statutory to Adjusted Profitability Measures
Appendix 2 RECONCILIATION OF STATUTORY TO ADJUSTED PROFITABILITY MEASURES $ mi l l i on 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 FY17 FY18 FY19 FY20 FY21 Reported EBITDA $21.1 $27.3 $32.1 $35.2 $38.0 $51.5 $56.4 $49.2 $39.1 $36.0 $48.4 $67.3 $89.5 $105.6 $75.2 add-back adjustments: - Restru
Slide 27: Appendix 3: Segment Results
Appendix 3 SEGMENT RESULTS $ mi l l i on 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 FY17 FY18 FY19 FY20 FY21 UTILITIES Metering and Technical Services 1 $48.6 $46.0 $54.7 $52.1 $51.3 $52.7 $51.9 $44.1 $44.8 $46.9 $94.6 $106.7 $104.1 $96.0 $91.8 Comdain $0.0 $0.0 $0.0 $0.0 $0.0 $160.2 $147.3 $
Slide 28: Disclaimer
Disclaimer Important information for Investors This presentation has been prepared by Service Stream Limited (SSM). Whilst the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accuracy or r
Slide 29: Service Stream Limited
SERVICE STREAM LIMITED ABN: 46 072 369 870 Level 4, 357 Collins Street, Melbourne VIC 3000 www.servicestream.com.au