Macquarie Technology Group Limited · ASX:MAQ
Macquarie Technology — Macquarie Corporate Telecommunications Holdings — H1 2004 Earnings Presentation
23 slides from Macquarie Technology's earnings presentation, December 2003
Slide 1: Macquarie Corporate Telecommunications Holdings Limited First Half Results 2004
Australia Singapore Corporate Government Voice Data Online Mobile Macquarie Corporate Telecommunications Holdings Limited First Half Results 2004 Next generation integrated IT and telecommunications carrier
Slide 2: Agenda
Agenda 1. Year in Review and Strategy 2. Full Year Guidance 3. Financial Highlights 4. Australian Voice Business 5. Australian Data Business 6. Singapore Business 7. Mobiles Business 8. Financials 9. Regulatory Developments Adding value through strategically integrated solutions and exceptional serv
Slide 3: Year in Review
Year in Review Macquarie is executing on its strategy • EBITDA profit of $3.7 million, up $3.0 million on pcp • Total service revenues down by 1.9% on pcp • Revenue mix improving Macquarie is in a strong financial position • Strong cash position of $33.3 million • Generated a positive net cash flow
Slide 4: Macquarie's Strategy Today
Macquarie’s Strategy Today •
Slide 5: Year in Review
Year in Review Macquarie positioned for growth • Continue improving the revenue with cross-selling • Create customer stickiness with integrated Macquarie solutions • Move customers along the Macquarie value chain The Macquarie difference • Full kit bag of telecoms services to satisfy unmet customer
Slide 6: Full Year Guidance
Full Year Guidance • 2nd Half 2004 EBITDA between $3.7 - $5.0 million • Full Year 2004 EBITDA between $7.4 - $8.7 million Continued strengthening of business fundamentals in FY2004 Becoming less a supplier and more a strategic partner
Slide 7: Financial Highlights
Financial Highlights 5.4% 35 H103 8% 30 H203 25 H104 20 15 32% 74% 10 5 0 E B I T D A ($ m ) O p e r a ti n g C a sh D a ta S e r v i c e s G r o ss P r o fi t (%) F l o w ($ m ) R e v e n u e ($ m ) Positive trends…...
Slide 8: Australian Voice - Revenue
Australian Voice - Revenue • Voice service revenue of $85.3 million $96.8 $93.9 $ millions $88.4 $85.3 $ 3 7 .7 $ 3 6 .5 Access $ 3 6 .6 $ 3 5 .8 and Other $ 3 1 .0 $ 3 0 .4 Local & $ 2 7 .7 $ 2 6 .2 Fixed to Mobile $ 2 8 .1 $ 2 6 .9 $ 2 4 .1 $ 2 3 .3 Long Distance 2H 02 1H 03 2H 03 1H 04 Voice reve
Slide 9: Australian Voice - EBITDA
Australian Voice - EBITDA • Voice EBITDA of $7.5 million up 29% on pcp • Defending voice profitability through carrier cost reductions • Actively negotiating arrangements with carriers Voice EBITDA growth Voice Carrier Cost V oice Carrier costs $m $m V oice Carrier cost as % V oice Revenue 8 85% 7 8
Slide 10: Australian Data Business
Australian Data Business • Revenue up 28% on pcp to $23.9 million • Data now more than 20% of total revenue • EBITDA profit of $0.7 million ($2.6 million loss 1H03) • Data hosting generating revenue momentum Data services revenue %of Data services revenue total revenue $m 30 25 20 88.1% 84.2% 81.0%
Slide 11: Data Hosting - Intellicentre
Data Hosting - Intellicentre • Intellicentre Gateway certified • Endorsement of procedural, physical and electronic security • Important for growth of government business • One of the most advanced data hosting facilities in Australia Complements other Endorsements • BS7799 • SunTone • EMC Proven •
Slide 12: Singapore Business
Singapore Business Singapore revenue in AUD SGD $m 6 • Revenue in AUD down 5% .5 on pcp to $5.3 million • Revenue growth adversely 4 affected by – 3 (i) Price reductions 2 (ii) SGD depreciation • against AUD 1 • Profitability impacted by price 0 erosion 1H02 2H02 1H03 2H03 1H04 Singapore adds a regi
Slide 13: Macquarie Corporate Mobile
Macquarie Corporate Mobile • Revenues of $1.3 million • An important pillar and competitive necessity in Macquarie’s comprehensive service offering • Integrated mobile billing and real time reporting • 1H04 start up losses of $1.3 million • Start up losses to continue for 2H04 with full year impact
Slide 14: Financials
Financials Half on Half ($ millions except customer numbers) 2H02 1H03 2H03 1H04 Revenue from services 114.7 118.1 116.4 115.8 Carrier Costs 92.9 89.8 83.4 81.2 Personnel Costs 16.6 19.5 20.2 20.8 Other Operating Costs 10.2 8.1 10.7 10.1 Total Costs 119.7 117.4 114.3 112.2 EBITDA (5.0) 0.7 2.1 3.7 D
Slide 15: Gross Profit
Gross Profit $millions 40 Gross Profit 30.4% GP% 28.8% 35 24.5% 30 25 19.1% 19.4% 15.9% 20 12.8% 12.8% 15 11.0% 10 5 0 1H00 2H00 1H01 2H01 1H02 2H02 1H03 2H03 1H04 Gross profit benefits from improved revenue mix and strategic buying initiatives
Slide 16: EBITDA
EBITDA 10 8 6 4 2 $ millions 0 (2) (4) (6) (8) (10) (12) 1H00 2H00 1H01 2H01 1H02* 2H02 1H03 2H03 1H04 Macquarie’s EBITDA continues to grow *Excludes $7.1 million settlement of arbitration case on local call pricing in 1H02. *Excludes $10 million non-cash provision against carrying value of data hos
Slide 17: Contribution by Business
Contribution by Business Revenue by Business ($millions) Mobiles 1.3 (1%) Singapore 5.3 (5%) Data 23.9 (21%) Voice 85.3 (73%) Total 115.8 (100%) Data contribution to revenue increases prominence in 1H04
Slide 18: Contribution by Business
Contribution by Business EBITDA ($millions) 1H04 C o r p O ffic e ( 2 .7 ) M o b ile s ( 1 .3 ) S in g a p o r e ( 0 .4 ) D a ta 0 .7 V o ic e 7 .5 T o ta l 3 .7 EBIT ($millions) 1H04 C orp O ffice (2.7) D ata (1.8) M obiles (1.4) S ingapore (0.8) V oice 6.0 Total (0.7) Core Voice and Data businesse
Slide 19: Strong Balance Sheet
Strong Balance Sheet • Improved cash position of $33.3 million • Positive net cash flow of $3.4 million • Positive operating cash flow of $7.4 million • Capex of $4.0 million representing less than 4% of service revenue • Capex has normalised from previous years low levels and is expected to be in t
Slide 20: Operating Cashflow
Working Capital $ millions 80 8 70 7 WIP & Debtors - Gross 6 Operating Cashflow 60 5 50 4 40 3 30 2 1 20 0 10 -1 0 -2 1H02 2H02 1H03 1H03 2H04 WIP & Debtors - Gross Operating Cashflow Successful management of working capital to maximise cashflows
Slide 21: Regulatory Developments
Regulatory Developments • High mobile network termination rates flow through to Fixed to Mobile pricing • Model price and terms of conditions increases level of certainty • Accounting separation of Telstra improves transparency and provides some competition safeguards Challenging the boundaries
Slide 22: Summary
Summary • Macquarie is executing its strategy • Macquarie is in a strong financial position • Macquarie positioned for growth
Slide 23: Macquarie Corporate Telecommunications Holdings Limited First Half Results 2004
Australia Singapore Corporate Government Voice Data Online Mobile Macquarie Corporate Telecommunications Holdings Limited First Half Results 2004 Next generation integrated IT and telecommunications carrier
Macquarie Corporate Telecommunications Holdings — H1 2004 Earnings Presentation on 6ix