Hansen Technologies Limited · ASX:HSN
Hansen Technologies — H1 2024 Earnings Presentation
35 slides from Hansen Technologies's earnings presentation, Feb 21, 2024
Slide 1: First Half 2024 Results Presentation
FIRST HALF 2024 RESULTS PRESENTATION 21st February 2024 Confidential & Proprietary Information © HANSEN
Slide 2: Important Notice
This presentation has been prepared by Hansen Technologies Limited (Hansen) IMPORTANT NOTICE Information contained in this presentation: • Is intended to be general background information only, Definitions: • 1H22 = six months ended 31 December 2021 and is not intended that it be relied upon as advi
Slide 3: Agenda
AGENDA • powercloud • Key Themes & Results Highlights • Results Details • Cash and Capital Management • R&D, Product and AI Update • M&A • FY24 Guidance • Q&A • Financial Statements © HANSEN 3
Slide 4: powercloud
POWERCLOUD Andrew Hansen – Managing Director © HANSEN
Slide 5: A New Chapter for Hansen and powercloud
A NEW CHAPTER FOR HANSEN AND POWERCLOUD Sitting within Hansen’s core business of billing and customer management, the acquisition of powercloud joins powercloud’s applications to Hansen’s existing suite of market leading products The acquisition significantly expands Hansen’s scale and scope in the
Slide 6: About powercloud
ABOUT POWERCLOUD powercloud Founded in 2012, powercloud is a leading provider of mission-critical billing and customer management software products serving tier 1 and 2 utility companies and regional municipalities has a strong across Germany position as With a team of over 300 employees, powercloud
Slide 7: Transaction Overview
TRANSACTION OVERVIEW With Hansen’s wealth of experience in the sector, the acquisition delivers substantial opportunities to accelerate and optimise powercloud’s product development based on Hansen’s existing product portfolio, as well as opportunities for Hansen to leverage powercloud’s high-qualit
Slide 8: Strategic Rationale
STRATEGIC RATIONALE powercloud has developed and sells high-quality, modern and flexible software that is currently utilised by most of the largest energy suppliers and regional municipalities in Germany powercloud’s products sit strongly within Hansen’s core business of billing and customer managem
Slide 9: powercloud Trading & Impact
POWERCLOUD TRADING & IMPACT • powercloud was purchased for a compelling price but requires working capital / investment to return to profitability • We expect powercloud to deliver FY24 revenue of approximately $16-18m (from 1 February 2024) • powercloud’s profitability has been impacted by rapid sc
Slide 10: Embedding 'Hansenisation'
EMBEDDING ‘HANSENISATION’ • We aim to introduce the Hansen ethos into powercloud as soon as possible • powercloud will benefit from Hansen’s global resource pool and investment Business As Usual Integration committee will start Common systems and global powercloud will ultimately operate as working
Slide 11: Delivering Better Outcomes Together
DELIVERING BETTER OUTCOMES TOGETHER TWO MARKET COMPLIMENTARY BUSINESS LEADING COMPANIES PRODUCTS / SERVICES CONTINUITY 11 © HANSEN
Slide 12: Key Themes & Results Highlights
KEY THEMES & RESULTS HIGHLIGHTS Andrew Hansen – Managing Director © HANSEN
Slide 13: 1H24 Key Themes
1H24 KEY THEMES Strong 1H24 Revenue Growth Long Term Sustainable Cash Flow We delivered revenue growth of 12.5% vs 1H23 As a predictable, stable business, we are and 8.2% excluding license fees generating consistent revenue growth and strong profit Supporting Digital Transformation M&A Continued our
Slide 14: 1H24 Financial Summary
1H24 FINANCIAL SUMMARY Revenue Underlying EBITDA1 Underlying NPATA2 $167.7m $52.1m $27.0m Up 15.8% vs 1H23 Up 12.5% vs 1H23 1H24 EBITDA Margin 31.1% Up 12.5% vs 1H23 Adjusted EPSa3 Net Cash4 Dividend 13.3¢ $8.0m 5.0¢ Up 11.8% vs 1H23 Positive for the first time since 2017 Flat on 1H23 Notes: Amounts
Slide 15: Results Details
RESULTS DETAILS Richard English - Chief Financial Officer © HANSEN
Slide 16: Key Financial Metrics
KEY FINANCIAL METRICS Revenue ($M) Underlying EBITDA1 ($M) Underlying NPATA2 ($M) 21.0 21.0 31.8 31.6 167.7 29.6 29.0 162.7 27.0 26.4 25.2 54.5 54.3 157.1 52.3 52.1 24.0 48.0 46.9 46.0 45.0 149.1 148.9 147.6 37.7 144.5 144.3 17.9 142.2 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23 1H24 1H20 2H20 1H21 2H21
Slide 17: Key Financial Metrics
KEY FINANCIAL METRICS EPSa1 (Cents) Net Cash2 ($M) DPS3 (Cents) 8.0 (41.5) 9.2 (0.4) 2.0 2.0 (66.6) (95.8) (28.5) (28.7) (116.5) (153.1) 15.9 15.6 14.9 14.9 13.3 13.1 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 12.6 11.9 9.0 3.0 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23 1H24 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H2
Slide 18: Financial Overview
FINANCIAL OVERVIEW Support and Maintenance Revenue ($M) Licence Revenue ($M) • Highly predictable and repeatable revenue source • Largely predictable revenues 18.7 18.0 23.0 22.5 15.2 14.2 15.3 • Up 11.7% vs 1H23 • CAGR 1H20 – 1H24 of 9.2% 17.9 15.5 16.9 • Strong and sustainable growth • Impacted by
Slide 19: Financial Overview
FINANCIAL OVERVIEW Revenue by Vertical ($M) Revenue Breakdown ($M) • The move to renewables and self-generated energy increases demand for our Type 1H23 1H24 Movement 72.5 73.9 85.4 97.7 products and services 75.2 76.8 75.2 79.3 108.9 • Increased convergence Support and Maintenance 69.8 78.0 11.7% 7
Slide 20: Cash & Capital Management
CASH & CAPITAL MANAGEMENT Richard English - Chief Financial Officer © HANSEN
Slide 21: Cash Flow
CASH FLOW We're a growing and cash-generative business committed to reinvesting for growth and returning funds to our shareholders • Since the beginning of 1H20 we have returned approximately $240m to our banks and shareholders • We generated Operating Cash Flow of $30.4m and Free Cash Flow of $18.3
Slide 22: Capital and Market Performance
CAPITAL AND MARKET PERFORMANCE Borrowings ($M) EPS Growth up 22.2% (CAGR) since 1H20 We have used our stable free cash flow to 80% deliver consistent returns to shareholders over the same period 185.8 180.4 158.4 142.8 Borrowing Levels 117.5 108.7 Down $149m since 2H19 87.9 65.1 54.3 36.9 Since the
Slide 23: R&D, Product & AI Update
R&D, PRODUCT & AI UPDATE Graeme Taylor - Chief Executive Officer © HANSEN
Slide 24: Research & Development
Capitalised R&D ($M) RESEARCH & DEVELOPMENT * Excludes $21m Telefonica revenue • The anticipated R&D activities for 1H24 have been somewhat delayed while we focused our efforts on activities to support significant customer driven activities including the implementation of upgrades and new logo wins
Slide 25: Product Update
The rapid change in the industries we serve is presenting significant opportunities for Hansen to enhance our support offering to our existing and new customers PRODUCT Our products are market leading globally UPDATE We have delivered a successful Alignment to the TM Forum cross-over of our Configur
Slide 26: AI Update
AI UPDATE Our current approach to AI integration is delivering benefits in several ways Decision Making Monitoring Assists in the analysis of Flags potential data complex data-driven risks and breaches decision making. Removes quickly and efficiently bias and human error Efficiency Coding Some codin
Slide 27: M&A Update
M&A UPDATE Andrew Hansen – Managing Director © HANSEN
Slide 28: We continue to remain vigilant and evaluate
We are seeing several M&A opportunities come to the market • Hansen has a well-established track record of value accretion through a disciplined and focused aggregation approach • Economic factors are favourable for acquisitions We continue to Some identified targets still have not transacted and we
Slide 29: FY24 Guidance
FY24 GUIDANCE Andrew Hansen – Managing Director © HANSEN
Slide 30: FY24 Guidance
FY24 GUIDANCE Hansen powercloud Combined group REVENUE GROWTH REVENUE REVENUE GROWTH 5-7% ~$16-18m 11-13% On track to deliver original From 1st February 2024 Strong existing Hansen growth + guidance inorganic revenue UNDERLYING EBITDA UNDERLYING EBITDA UNDERLYING EBITDA +30% ~($7-8m) +26% Margins ex
Slide 31: Q&A
Q&A © HANSEN 31
Slide 32: Financial Statements
FINANCIAL STATEMENTS © HANSEN
Slide 33: Statement of Comprehensive Income and Reconciliation of Underlying EBITDA and NPATA
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME RECONCILIATION OF UNDERLYING EBITDA AND NPATA FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Dec-23 Dec-22 1 Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) - Reconciliation $'000 $'000 Operatin
Slide 34: Statement of Financial Position and Statement of Cash Flows
CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 31 DECEMBER 2023 FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Dec-23 Jun-23 Dec-23 Dec-22 $'000 $'000 $'000 $'000 Current assets Cash flows from operating activities Cash and cash equivalents 45,110 54,279 Receipts f
Slide 35: Hansen
© HANSEN