Aussie Broadband Ltd. · ASX:ABB
Aussie Broadband — H1 FY2024 Earnings Presentation
39 slides from Aussie Broadband's earnings presentation, Feb 23, 2024
Slide 1: 1H FY24 Results Presentation
For personal use only 1H FY24 Results Presentation 23 February 2024 1
Slide 2: We acknowledge
We acknowledge For personal use only Aussie Broadband acknowledges Aboriginal and Torres Strait Islanders as the First Australians, and their role as the original communicators, connectors, and carers of the land and waters across Australia. We pay our respects to Elders past and present. We commit
Slide 3: Important notice and disclaimer
Important notice and disclaimer This presentation is for information purposes only and it is not financial product or Investors should also be aware that certain financial data included in this presentation For personal use only investment advice. The presentation is not intended to be comprehensive
Slide 4: The game worth playing
For personal use only The game worth playing 4
Slide 5: Delivering our FY24 Growth Strategy
Delivering our FY24 Growth Strategy Continue to build scale and monetise SAU changes In 1H FY24, Aussie Broadband: For personal use only Grew NBN market share1 to 8.3% from 7.0% at 1H FY23, while providing exceptional customer service Implemented marketing-driven growth strategies to capitalise on t
Slide 6: The numbers that matter
The numbers that matter For personal use only Double digit top line and EBITDA growth vs. pcp3 $445.9m $154.3m $46.3m $40.7m Revenue Gross Margin EBITDA1 Op Cash Flow Up 17.7% Up 16.7% Up 12.7% Up 57.8% 8.3% 765.8k NBN Market Share2 Broadband Connections Up 1.3 ppt Up 130.3k 1. EBITDA before non-rec
Slide 7: Financial Performance
For personal use only Financial Performance 7
Slide 8: 1H FY24 Revenue Drivers
1H FY24 Revenue Drivers Continued revenue growth momentum For personal use only Revenue continues trend of growth half- on-half in majority of segments Residential and wholesale segments revenue growth exceeding expectations 8
Slide 9: 1H FY24 vs 1H FY23 EBITDA Drivers
1H FY24 vs 1H FY23 EBITDA Drivers Revenue growth driving EBITDA with higher marketing spend in 2Q FY24 For personal use only New customer acquisition remains strong from investment in marketing Impact of new customers in 2Q FY24 to be realised in the second half 9
Slide 10: Cashflow and Borrowings
Cashflow and Borrowings Strong cash generation in 1H FY24 For personal use only Operating Cashflow $40.7m – up $14.9m Strong operating cashflows with a strong cash position Cash Conversion Ratio 94.5% – up 19.5 ppt of $117.2m Cash and Cash Equivalents $117.2m – up $42.1m Net Cash $72.8m – up $154m I
Slide 11: 1H FY24 Capex
1H FY24 Capex Decreased lifecycle replacement Summary 1H FY23 1H FY24 Change For personal use only Performance FY24 Capex Summary ($m) 30.0 Recurring 5.4 4.6 (14.8%) Disciplined and /Upgrade 2.7 25.0 refreshed view of the Fibre 8.3 6.4 (22.9%) 6.9 replacement and Growth 17.5 5.2 (70.3%) 20.0 upgrade
Slide 12: Segment Performance
For personal use only Segment Performance 12
Slide 13: Residential Segment
Residential Segment Strong momentum in revenue and connection growth in 1H FY24 Summary 1H FY23 1H FY24 Change For personal use only Performance ($m) Residential Broadband Connections Revenue 246.1 283.9 15.4% Connection growth COGS (170.7) (198.1) 16.5% 550,000 exceeded Gross Margin 75.4 85.8 13.8%
Slide 14: Business Segment
Business Segment Accelerating growth in both revenue and connections Summary 1H FY23 1H FY24 Change For personal use only Performance ($m) Business Broadband Connections Revenue 43.2 48.0 11.1% 55,000 Stable customer COGS (23.0) (26.4) 14.8% base with Gross Margin 20.2 21.7 7.4% 50,000 consistently
Slide 15: Enterprise & Government Segment
Enterprise & Government Segment Improvement in margin through shift in mix Summary 1H FY23 1H FY24 Change 1H FY24 new customer highlights For personal use only Performance ($m) Recurring 35.8 38.4 7.3% Revenue An average of $111k Non-Recurring 6.4 3.4 (46.9%) new MRR being Revenue signed each month
Slide 16: Wholesale Segment
Wholesale Segment Growth continues across wholesale voice and white label broadband Summary 1H FY23 1H FY24 Change Wholesale Broadband Connections For personal use only Performance ($m) 150,000 Revenue 47.4 72.3 52.5% 130,000 COGS (32.4) (47.5) 46.6% 110,000 30,767 Strong voice margin Gross Margin 1
Slide 17: Updates
For personal use only Updates 17
Slide 18: Symbio transaction update
Symbio transaction update For personal use only • Symbio’s shareholders voted in favour of the scheme on 7 February 2024 • The effective date of the scheme was 19 February 2024 with implementation to occur the following week, on 28 February 2024 • Aussie Broadband’s Executive Director, Michael Omero
Slide 19: Increased scale (pro forma FY23 actuals)
Increased scale (pro forma FY23 actuals) Delivering on our goal to be a leading provider of communications and technology services in Australia For personal use only FY23 Revenue ($m) Combined pro forma FY23 revenue, ~$1bn exclusive of any synergies 999 +27% 788 Pro forma FY23 business 49% revenue c
Slide 20: Diversification benefits
Diversification benefits Providing more products to our business customers Pro forma For personal use only 11% 10% Residential 7% Residential Revenue Revenue Business 13% Business = CPaaS and TaaS + 30% 51% Wholesale UCaaS Wholesale 11% 65% E&G E&G 9% 93% $788m $211m $999m 16% 9% 14% Gross Margin Gr
Slide 21: Organisation structure changes
Organisation structure changes For personal use only Organisation structure changes Board changes Phillip Britt Sue Klose To remain Managing Director reporting to the Board New Director appointment Two new CEOs appointed, reporting to Phil: Existing executive team members reporting into respective C
Slide 22: FY24 Guidance
For personal use only FY24 Guidance 22
Slide 23: Positive outlook: Upgraded FY24 guidance
Positive outlook Upgraded FY24 guidance ABB standalone FY24 guidance For personal use only • Upgraded guidance to the top-end of the previous range, with EBITDA before non-recurring items of $105m – $110m (previously $100m – $110m), which includes ongoing higher investment in marketing • Updated cap
Slide 24: Appendices
For personal use only Appendices 24
Slide 25: Profit & Loss
Profit & Loss 1H FY23 1H FY24 Change % $m $m Revenue 379.0 445.9 17.7% For personal use only Network and hardware expenses (246.8) (291.6) 18.2% Gross Profit 132.2 154.3 16.7% 14% improvement in Gross Margin % 34.9% 34.6% (0.3 ppt) profit after tax Employee expenses (60.2) (72.9) 21.1% Marketing exp
Slide 26: Balance sheet
Balance sheet Jun-23 Dec-23 Change For personal use only $m $m Cash and cash equivalents 75.1 117.2 56.1% Trade and other receivables 43.4 53.6 23.5% Net assets increased by 50.8% Plant and equipment 91.8 99.8 8.7% Right-of-use assets 56.5 48.7 13.8% Intangibles 398.1 389.5 (2.2%) Repayment of core
Slide 27: Cashflow
Cashflow 1H FY23 1H FY24 Change $m $m For personal use only Receipts from customers 414.5 484.4 16.9% Payments to suppliers and employees (381.7) (440.6) 15.4% Strong cash flow Net Interest Payments (3.6) (4.3) 19.4% conversion Tax payments (1.4) - (100%) Operating cash flows 25.8 40.7 57.8% Payment
Slide 28: 2Q FY24 connections update
2Q FY24 connections update Strong start to the financial year For personal use only • First half saw connections grow • The second quarter saw • Strongest organic growth by 74,634 (inclusive of 8,700 from broadband connections quarter in the past 2 years the Uniti acquisition) grow by more than 34,0
Slide 29: Thank you
For personal use only Thank you Aussie Broadband Limited Investors contact: investors@team.aussiebroadband.com.au Authorised for release by the Aussie Broadband Board
Slide 30: Aussie Broadband – 1H FY24 Results Script
Aussie Broadband – 1H FY24 Results Script Slide 1 – Phil – 1H FY24 Results Presentation Good morning and welcome to Aussie Broadband’s first half FY24 results call. My name is Phillip Britt and I am the Managing Director of Aussie Broadband. With me today is our CFO, Brian Maher. As you will see, Au
Slide 31: Script: Delivering our FY24 Growth Strategy
Slide 5 – Phil – Delivering our FY24 Growth Strategy Moving to slide 5 of the deck. As the Aussie team focused on delivering the FY24 strategy in the first half, we continued to build scale, growing our NBN market share to 8.3%. Underpinning this growth is our exceptional team and their ability to ‘
Slide 32: For personal use only
Overall, gross margins increased to $154 million, up 17% on the prior corresponding period. Across the Residential and Business segments margins were impacted by unfavourable mobile data charges. Residential margins were also influenced by a period of intense promotional activity around the SAU chan
Slide 33: Script: 1H FY24 Revenue Drivers
Slide 8 – Brian – 1H FY24 Revenue Drivers Turning to slide 8, we provide a breakdown by business segment of the revenue growth between the first half of FY23 and the first half of FY24. The chart illustrates the strong growth we achieved across the majority of segments. While Residential and Wholesa
Slide 34: For personal use only
There is a 20 percentage point increase in our cash conversion ratio, which at the end of the half was close to 95% but this was attributable to timing issues called out in last year’s equivalent result. At 31 December we had net cash of $73 million after using some of the funds raised in the Placem
Slide 35: For personal use only
With the SAU changes coming into effect from 1 December 2023, we expect margins to return to growth in the second half of the financial year as they benefit from a full half impact. In the first half, we strategically realigned all our segments, including residential, for the SAU changes and reprice
Slide 36: For personal use only
Pleasingly, Gross Margin as a percentage of revenue rose, up 1.7 percentage points to 52.7%, principally due to changes to the revenue mix. Meanwhile, Aussie experienced increasing momentum in recurring revenue with new customers in the first half of FY24. The strong pipeline of new accounts that we
Slide 37: For personal use only
Today we were very pleased to announce that Michael Omeros has agreed to lead the Symbio business as CEO. As you all know, Michael was co-founder and CEO of Over the Wire and has extensive Wholesale Voice experience. Current CEO and co-founder, Rene Sugo, will remain with the business as it transiti
Slide 38: Script: Organisation Structure Changes
Slide 21 - Phil – Organisation Structure Changes Turning then to slide 21, I just wanted to update you on some organisational changes we are announcing today. In terms of the management team, we believe the changes we have announced today will underpin the Company’s next phase of growth following th
Slide 39: For personal use only
We have also adjusted our capex guidance for FY24, down to a range of $40 million to $45 million – previously $47 million to $52 million – based on the reduced capex spend in the first half of FY24. Although only limited information on Symbio has been provided to Aussie at this time, we anticipate t