Slide 1: FY19 First Half Results Presentation
Service Stream Limited FY19 First Half Results Presentation Leigh Mackender Managing Director 6 February 2019
Slide 2: Contents
Contents 1 Company Profile 2 Performance Highlights 3 Financial Performance 4 Operational Performance 5 Group Strategy & FY19 Outlook 6 Historical Financial Performance Data 2
Slide 3: Company Profile
Company Profile Service Stream Limited (ASX:SSM) is an ASX-listed company providing design, construction, installation and maintenance services across essential infrastructure networks within the Telecommunication and Utility sectors Telecommunication network Telecommunication network Utility networ
Slide 4: Performance Highlights
Performance Highlights ▪ 1H19 EBITDA from Operations of $38.6m … up 21% on 1H18 ▪ 1H19 NPATA of $25.1m … up 22% on 1H18 Financial ▪ 1H19 Adjusted EPS of 6.97 cps … up 24% on 1H18, ▪ Net Cash of $69.5m at 31-Dec-18 underpinning acquisition funding capacity ▪ Interim dividend increased to 3.50 cents p
Slide 5: Financial Performance
FINANCIAL PERFORMANCE ie . we -— =a
Slide 6: Financial Highlights
Financial Highlights ▪ Revenue up 18% on 1H18 with significant growth in each of Fixed $348.0m ▪ Communications & Network Construction Revenue growth delivered once again across all three operating Revenue up from $294.1m segments ▪ 1H19 is the 11th consecutive half-year delivering growth in all key
Slide 7: Key Financial Measures
Key Financial Measures 11th consecutive half-year delivering growth in key profit measures Group Revenue ($m) 348.0 $350 338.8 294.1 $300 261.0 Key financial measures $250 217.1 221.9 240.8 213.8 197.4 $200 FY19 FY18 $ million Change 1st half 1st half $150 $100 Profitability: Revenue 348.0 294.1 53.
Slide 8: Segment Results
Segment Results Revenue & profit growth in all segments Group EBITDA from Operations ($m) 38.6 $40 34.2 $35 32.1 Segment results $30 27.8 $25 FY19 FY18 FY18 20.1 21.1 $ million Change $20 1st Half 1st Half 2nd Half 15.7 14.7 Fixed Communications 168.5 145.7 22.8 $15 10.7 Network Construction 128.4 9
Slide 9: Cashflow Results
Cashflow Results Working capital reverting to normal levels as previously forecasted EBITDA to OCFBIT conversion 300% 250% Cashflow results 219% 196% 200% 178% 164% FY19 FY18 $ million Change 150% 1st Half 1st Half 115% 119% 121% Reported EBITDA 38.0 32.1 6.0 100% 69% +/- non-cash items & change in
Slide 10: Capital Management
Capital Management Refinance completed & interim dividend increased Net Cash / (Net Debt) ($m) $100 ▪ The Group’s balance sheet remained strong with Net Cash of $69.5m at 73.0 $75 69.5 63.6 31-Dec-18 underpinning its ability to subsequently complete the 49.9 $50 41.1 44.1 Comdain Infrastructure acqu
Slide 11: Operational Performance
OPERATIONAL PERFORMANCE
Slide 12: Safety Performance
Safety Performance Maintaining our focus on the safety of our people, our customers and the community ▪ Maintaining a strong safety culture as operations across the business continue to grow and expand ▪ Continue working through a range of new initiatives to drive improvement across key performance
Slide 13: Fixed Communications
Fixed Communications Telecommunication network operations, maintenance and minor works Fixed Communications $200 Revenue ($m) 168.5 $175 155.6 ▪ Revenue up 16% on 1H18 with EBITDA margin steady in-line $150 145.7 with recent half-year outcomes $125 97.2 101.0 114.6 $100 84.8 $75 ▪ nbn activations: I
Slide 14: Network Construction
Network Construction Telecommunication network engineering, design and construction Network Construction $150 Revenue ($m) 135.1 128.4 $125 103.2 ▪ Revenue up 30% on 1H18 with EBITDA margin marginally lower 94.9 98.7 $100 93.6 82.9 $75 $50 ▪ Revenue of $70.1m from nbn design & construction operation
Slide 15: Energy & Water
Energy & Water Utility asset design, construction, installation, inspection and maintenance Energy & Water $75 Revenue ($m) 56.3 54.7 52.1 ▪ Revenue up 3% on 1H18 with slightly improved EBITDA $50 43.8 48.6 46.0 38.2 margin $25 ▪ Better-than-expected contribution from new field service contracts due
Slide 16: Group Strategy & Outlook
GROUP STRATEGY & OUTLOOK s! 7
Slide 17: Group Strategic Pillars
Group Strategic Pillars We continue to focus on five fundamentals which drive operational effectiveness, continual improvement and support future growth. Particular focus and success in delivering on a number of target areas during the first-half. CLIENT OPTIMISE OUR OUR DELIVER SERVICE DELIVERY REL
Slide 18: Transaction Overview
Transaction Overview Service Stream completed the acquisition of Comdain Infrastructure on 2-Jan-19 Comdain Infrastructure is a Victorian-based market leading provider of integrated asset lifecycle services to Overview Australia’s utility asset owners and operators Provider of engineering, des
Slide 19: Transaction Overview … continued
Transaction Overview … continued The acquisition is strategically attractive… ▪ Consistent with Service Stream’s strategy of diversifying and increasing annuity-style revenues ▪ Comdain Infrastructure operates across well-known utility markets and shares a familiar client base Strategic Rationale
Slide 20: FY19 Outlook
FY19 Outlook ▪ We expect: – the second-half of FY19 to generate EBITDA from Operations from the core business at least in-line with the first-half – Comdain Infrastructure to deliver revenue of $320 million and EBITDA of $22 million for the full-year … with approximately 50% thereof contributing to
Slide 21: Historical Financial Performance Data
HISTORICAL FINANCIAL PERFORMANCE DATA
Slide 22: Appendix 1: Profit & Loss
APPENDIX 1 PROFIT & LOSS $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 FY15 FY16 FY17 FY18 Fixed Communications $93.16 $102.12 $97.19 $84.79 $100.96 $114.64 $145.70 $155.61 $168.51 $195.29 $181.99 $215.59 $301.30 Network Construction $63.65 $75.74 $82.90 $94.89 $93.63 $103.19 $98.74 $135.14
Slide 23: Appendix 2: Reconciliation of Statutory to Adjusted Profitability Measures
APPENDIX 2 RECONCILIATION OF STATUTORY TO ADJUSTED PROFITABILITY MEASURES $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 FY15 FY16 FY17 FY18 Reported EBITDA $10.66 $14.73 $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $25.39 $35.82 $48.35 $67.30 add-back adjustments: - Acquisition costs (T
Slide 24: Appendix 3: Cash Flow Net Cash / (Debt)
APPENDIX 3 CASH FLOW $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 FY15 FY16 FY17 FY18 Reported EBITDA $10.66 $14.73 $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $25.39 $35.82 $48.35 $67.30 +/- non-cash items & change in w/capital ($8.97) $17.53 $15.03 $12.83 $3.25 $5.26 $25.05 $7.57 ($
Slide 25: Appendix 4: Segment Results
APPENDIX 4 SEGMENT RESULTS $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 FY15 FY16 FY17 FY18 Fixed Communications nbn Activation & Assurance $43.27 $54.32 $61.63 $57.81 $66.80 $79.54 $109.94 $108.11 $124.37 $97.60 $119.45 $146.33 $218.05 nbn Minor Projects $2.50 $4.92 $5.88 $6.86 $6.76 $6.5
Slide 26: 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 27: Service Stream
servicestream ESSENTIAL NETWORK SERVICES