Hipages Group Holdings Ltd. · ASX:HPG
Hipages — FY2023 Earnings Presentation
36 slides from Hipages's earnings presentation, Aug 24, 2023
Slide 1: FY23 financial results
hipages Group (ASX: HPG) FY23 financial results 24 August 2023
Slide 2: Australia and New Zealand's largest online tradie marketplace and SaaS platform
Australia and New Zealand's largest online tradie marketplace and SaaS platform, helping tradies build better businesses. hipages Group | 2
Slide 3: Vision
Vision To be the most trusted partner in the trade industry hipages Group | 3
Slide 4: Purpose
Purpose Transforming the trade industry, building better lives for everyone hipages Group | 4
Slide 5: Agenda
Agenda 1 FY23 highlights 3 Strategic evolution 2 Financial & operational performance 4 FY24 targets hipages Group | 5
Slide 6: FY23 highlights
FY23 highlights ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 6
Slide 7: FY23 highlights
FY23 highlights ✓ Strong business momentum accelerated in H2 ✓ Record tradie demand drives MRR +15% and ARPU +10% vs. pcp ✓ Free cash flow positive in H2 with robust balance sheet and no debt ✓ Strategic evolution from marketplace to platform continues ✓ Trading momentum supporting positive free cas
Slide 8: Financial & operational performance
Financial & operational performance JACO JONKER CFO & COO hipages Group | 8
Slide 9: FY23 financial highlights
FY23 financial highlights Revenue Profitability Key drivers $6.3m MRR 88% Gross margin 35.7k Subscription tradies Up 15% Up 3pp Up 3% $62.9m Recurring revenue 12.3m EBITDA 1 $1,872 ARPU 94% of Total revenue Up 14% Up 10% EBITDA margin 18% (up 1pp) Up 11% to $1,985 for hipages Australia $67.0m Total
Slide 10: Delivering sustainable growth
Delivering sustainable growth MRR Total Revenue EBITDA Operating cash flow $6.3m $67.0m $12.3m $15.7m $11.7m $61.9m $5.5m $10.7m $5.2m $55.8m $12.7m $12.6m $46.9m $4.1m $9.2m $6.1m FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Pro Forma Revenue, EBITDA and operating
Slide 11: Strong marketplace momentum driving MRR acceleration
Strong marketplace momentum driving MRR acceleration MRR growth rate back to pre-COVID levels1 MRR growth driven by: NSW COVID Post-COVID 7 lockdowns home improvement 30% • Record tradie demand boom 6.3 • Subscription price increases 5.5 5.6 6 5.3 • Lead price optimisation 25% 5.2 5 4.6 20% 4 13% 13
Slide 12: ARPU growth driven by enhanced value exchange
ARPU growth driven by enhanced value exchange Strong ARPU growth continues for hipages (Australia) Pricing optimisation driving higher average yields1 hipages (Australia) ARPU ($) hipages (Australia) customer mix +11% 2,500 Premium 2,000 $199 to >$499 p/m 1,500 Standard 1,000 $1,985 $99 to $199 p/m
Slide 13: Record marketplace activity driving revenue growth
Record marketplace activity driving revenue growth Strong tradie activity resulting in more jobs connected1 More connections2 driving faster lead credit usage 1 1,400 ,000 1 1 1,350 ,000 +8% 84% 1 1,300 ,000 78% 75% 1 73% 74% 1,250 ,000 1,376 1 71% 1,275 1,276 1,200 ,000 1 1,267 1 1,150 ,000 1,221 1
Slide 14: Competition for jobs creating strong tradie demand
Competition for jobs creating strong tradie demand hipages (Australia) subscription tradies return to growth 33,00 0 30% 32.3 25% 32,00 0 31.2 31.3 • Record tradie registrations in H2 30.9 20% 30.8 • ~25% of registrations are returning customers 31,00 0 15% 30,00 0 • Opportunity to monetise non-subs
Slide 15: Brand investment driving outcomes on both sides of marketplace
Brand investment driving outcomes on both sides of marketplace More tradies are choosing hipages Registrations 41% YoY Record tradie brand awareness of 68% ( 1ppt) Strong increase in tradie consideration ( 4ppts) and preference ( 6ppts) Consumer brand growing stronger Record home-owner brand awarene
Slide 16: Marketplace balance shows strong unit economics
Marketplace balance shows strong unit economics hipages (Australia) LTV/CAC ratio1 10 9 8 • Marketplace activity and yield optimisation boosting customer lifetime value 7 6 • Record tradie demand driving acquisition efficiencies 5 9.4 9.1 4 7.8 8.1 • Group LTV/CAC back to pre-COVID levels 3 3.8 2 1
Slide 17: Costs stabilised with enhanced operating leverage to emerge
Costs stabilised with enhanced operating leverage to emerge Group operating expenses1 as % of total revenue Marketing • Marketing efficiencies drives 7ppt improvement 83% 82% 80% 10% 12% Operations and administration 9% 4% 4% • Cost savings offset by increased subscription and 5% license costs 32% 3
Slide 18: Portfolio performance
Portfolio performance Transition to subscription model underway Strong growth driving significantly higher valuation • Builderscrack operates a commission model with revenue driven by • Bricks + Agent re-branded to PropTech Labs following the job volume and value acquisitions of Maintenance Manager
Slide 19: Strategic evolution
Strategic evolution ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 19
Slide 20: Strategic evolution from marketplace to platform
Strategic evolution from marketplace to platform FY23-FY26+ roadmap Marketplace Tradie platform Consumer platform optimisation evolution evolution End-to-end SaaS solution for tradies Lead pricing optimisation Consumer products & services Expand range of products Drive uptake of existing services Fi
Slide 21: Improving retention while increasing ARPU
Improving retention while increasing ARPU We increased retention while doubling ARPU Platform strategy will further extend lifetime value Average customer lifetime 59% Retention Rate1 56% 1.8x 2.0x $1,985 ARPU $976 Pre-subscription model FY23 hipages Use multiples (FY19)2 overall tradie base service
Slide 22: Tradie Advisory Board
Tradie Advisory Board Ensuring the voice of the customer is at the heart of our product and strategy • Tradie Advisory Board - the first of its kind in Australia • Provides a dynamic voice of the customer to validate strategy and inform our product roadmap, feature development and user experience "I
Slide 23: Creating an end-to-end platform to win the whole tradie ecosystem
Creating an end-to-end platform to win the whole tradie ecosystem Profile Lead Accept Call, Text, Scheduling Send Approved Send Tradie Sync to Repeat ROI Creation Invites Lead SMS, Email Quote Hire Invoice Paid accounting Job Dashboard Future services Procurement Insurance Finance Data hipages Group
Slide 24: Combining hipages and Tradiecore into a single application
Combining hipages and Tradiecore into a single application + hipages Group | 24
Slide 25: Creating an end-to-end platform to win the whole tradie ecosystem
Creating an end-to-end platform to win the whole tradie ecosystem + Profile Lead invites Jobs Scheduling Quote and Invoice Sync to accounting hipages Group | 25
Slide 26: Improved Tradie Profiles
Improved Tradie Profiles hipages Group | 26
Slide 27: FY24 targets
FY24 targets ROBY SHARON-ZIPSER CEO & Co-Founder hipages Group | 27
Slide 28: Targeting positive free cash flow in FY24
Targeting positive free cash flow in FY24 Free cash flow1 excluding M&A activities ($m) • Free cash flow1 positive in H2 FY23 • Targeting positive free cash flow in FY24 • Timing of payment for The Block (Q2) will skew H1 free cash flow slightly negative in FY24 0.5 • Phasing The Block spend over 12
Slide 29: Operating leverage underpins margin expansion
Operating leverage underpins margin expansion Near and medium-term targets FY23 FY24 target Medium-term target2 Revenue growth 8% Low teens % Mid-teens % EBITDA margin3 18% ~20% >25% Free cash flow H2 positive Positive free cash flow Key drivers • Product and pricing evolution • Operating leverage •
Slide 30: Appendix
Appendix hipages Group | 30
Slide 31: FY23 Pro forma financial summary
FY23 Pro forma financial summary $'000 FY23 FY22 $ Var % Var Recurring 62,931 58,238 4,693 8% ● Recurring revenue now 94% of total revenue Transactional 2,962 2,419 543 22% Operating Revenue1 65,893 60,657 5,236 9% Other 1,114 1,202 (88) (7%) ● Gross margin3 of 88% (FY22: 85%) Total Revenue2 67,007
Slide 32: FY23 Cash flow
FY23 Cash flow FY23 FY22 $'000s Statutory Statutory $ Var Receipts from customers (inclusive of GST) 71,870 65,203 6,667 ● Positive operating cash flow of $15.7m reflecting Payments to suppliers and employees (inclusive of GST) (56,058) (52,512) (3,546) Interest received 146 45 101 strong business m
Slide 33: FY23 Statutory balance sheet
FY23 Statutory balance sheet $'000s 30-Jun-23 30-Jun-22 $ Var ● Strong balance sheet maintained at end FY23 Cash and cash equivalents 8,540 10,907 (2,367) Funds on deposit 2,187 2,271 (84) with $10.7m cash and funds on deposit Trade and other receivables 1,655 1,861 (206) Other assets 1,728 1,864 (1
Slide 34: Profit reconciliation
Profit reconciliation FY23 FY22 $'000 $'000 Reported EBITDA (from continuing operations) 9,424 10,085 Goodwill impairment of New Zealand subsidiary 3,100 - Write back of deferred consideration related to acquisition of New Zealand subsidiary (369) - Non-recurring remuneration 130 646 Pro forma EBITD
Slide 35: 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 tradies and paying Builderscrack tradies for the period. For FY23, hipages Group ARPU of $1,872 is the blended result of hipages' ARPU of $1,
Slide 36: Disclaimer
Disclaimer Important notice The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN67 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 gi
hipages Group Holdings — FY2023 Earnings Presentation on 6ix