Slide 1: FY19 Full-Year Results Presentation
SERVICE STREAM LIMITED FY19 Full-Year Results Presentation Leigh Mackender Managing Director 20 August 2019
Slide 2: Contents
Contents 1 Company Profile 2 Performance Highlights 3 Financial Performance 4 Operational Performance 5 Group Strategy & FY20 Outlook 6 Historical Financial Performance Data 2
Slide 3: Company Profile
Company Profile Service Stream Limited (ASX:SSM) is a S&P/ASX200 company providing integrated end-to-end asset life-cycle services across essential infrastructure networks within the Telecommunications and Utilities sectors TELECOMMUNICATIONS UTILITIES Telecommunication network engineering, design &
Slide 4: Performance Highlights
Performance Highlights ▪ 2H19 is the 12th consecutive half-year of growth across key profitability measures ▪ Better-than-expected EBITDA to OCFBIT conversion % delivered in 2H19 Financial ▪ Net Cash position retained despite outlay to acquire Comdain Infrastructure ▪ Increased final dividend to 5.5
Slide 5: Financial Performance
FINANCIAL PERFORMANCE 5
Slide 6: Financial Highlights
Financial Highlights Revenue: ▪ Revenue up 35% on $632.9m in FY18 $852.2m ▪ Includes $160.2m in 2H19 from Comdain Infrastructure ▪ EBITDA from Operations up 41% on $66.3m in FY18 EBITDA from Operations: $93.3m ▪ ▪ Includes $11.1m in 2H19 from Comdain Infrastructure Before Comdain Infrastructure tran
Slide 7: Key Financial Measures
Key Financial Measures 2H19 is the 12th consecutive half-year of growth in key profit measures Group Revenue ($m ) $1,000 852.2 Key financial measures $750 632.9 $ million FY19 FY18 Change 501.8 $500 438.9 411.3 Profitability: $250 Revenue 852.2 632.9 219.2 35% EBITDA from Operations 93.3 66.3 27.0
Slide 8: Segment Results
Segment Results Includes earnings from Comdain Infrastructure in 2H19 Group EBITDA from Operations $100 ($m ) 93.3 Segment results $80 66.3 $ million FY19 FY18 Change $60 48.9 Telecommunications 587.8 535.2 52.6 $40 35.8 Utilities 273.4 106.7 166.7 25.4 Eliminations, interest & other revenue (9.1) (
Slide 9: Cashflow Results
Cashflow Results A better-than-expected EBITDA to OCFBIT conversion Group OCFBIT $120 $m 99.9 Cashflow results $100 79.7 $80 63.7 $ million FY19 FY18 Change 56.9 $60 Reported EBITDA 89.5 67.3 22.2 $40 34.0 +/- non-cash items & change in working capital (9.8) 32.6 (42.5) $20 1 OCFBIT 79.7 99.9 (20.2)
Slide 10: Capital Management
Capital Management Net Cash despite outlay to acquire Comdain Infrastructure Net Cash ($m ) $100 73.0 ▪ Three-year refinance concluded during the year providing $190m of $75 multi-option banking facilities through to September 2021 $50 41.1 49.9 $25 ▪ The Group has maintained a (albeit reduced) Net
Slide 11: Operational Performance
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Slide 12: Safety Performance
Safety Performance Maintaining our focus on the safety of our people, our customers and the community ▪ Business continues to deliver industry leading HSE performance as operations grow and expand ▪ Improvements delivered during FY19 in both TRIFR and MTIFR ▪ Targeted campaigns continue to be an ong
Slide 13: Telecommunications
TELECOMMUNICATIONS
Slide 14: Telecommunications
Telecommunications Telecommunication network engineering, design & construction, maintenance and operations Telecommunications $700 Revenue ($m ) ▪ Revenue up $52.6m or 10% on prior year, in line with $600 535.2 587.8 expectation: $500 412.4 $400 359.8 334.7 $300 $200 - Fixed Communications revenue
Slide 15: Telecommunications
Telecommunications Telecommunication network engineering, design & construction, maintenance and operations ▪ Continued demand for nbn customer activations, with strong bias to 2H19, representing a 27% increase on 1H19 volumes ▪ Maintenance work continues to increase as nbn network footprint expands
Slide 16: Utilities
UTILITIES 16
Slide 17: Utilities
Utilities Utility network engineering, design & construction, maintenance and operations Utilities $300 Revenue ($m ) 273.4 $250 $200 ▪ Revenue up $166.7m or 156% on prior year primarily due to $150 inclusion of Comdain Infrastructure in 2H19: 106.7 94.6 $100 77.3 82.0 $50 - Metering Services revenu
Slide 18: Utilities
Utilities Utility network engineering, design & construction, maintenance and operations ▪ Strong demand observed for both Design & Construction (D&C) and Operations and Maintenance (O&M) services ▪ Metering Services renewed all 13 x field service agreements that either came to market or reached the
Slide 19: Group Strategy & Outlook
GROUP STRATEGY & OUTLOOK 19
Slide 20: Comdain Infrastructure Integration
Comdain Infrastructure Integration Integrating Comdain Infrastructure into the wider business under an accelerated program ▪ The integration program is ahead of schedule: - Key governance related functions (incl. banking, insurance, payroll, delegated authorities, IT security, bid review) were compl
Slide 21: FY20 Outlook
FY20 Outlook ▪ The Group expects continued growth in FY20, subject to a continuation of prevailing market conditions. ▪ FY20 will be characterised by a full-year contribution from Comdain Infrastructure, partly offset by reduced earnings from cessation of nbn D&C operations. ▪ Group earnings from FY
Slide 22: Historical Financial Performance Data
HISTORICAL FINANCIAL PERFORMANCE DATA 22
Slide 23: Appendix 1: Profit & Loss
Appendix 1 PROFIT & LOSS $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 FY15 FY16 FY17 FY18 FY19 Telecommunications $156.81 $177.86 $180.10 $179.69 $194.59 $217.83 $244.44 $290.74 $296.95 $290.87 $334.67 $359.78 $412.41 $535.18 $587.82 Utilities $40.93 $36.34 $38.19 $43.76 $48.58 $46.04
Slide 24: 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 2H19 FY15 FY16 FY17 FY18 FY19 Reported EBITDA $10.66 $14.73 $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $51.51 $25.39 $35.82 $48.35 $67.30 $89.54 add-back adjustments
Slide 25: Appendix 3: Segment Results
Appendix 3 SEGMENT RESULTS $ million TELECOMMUNICATIONS 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 FY15 FY16 FY17 FY18 FY19 nbn Activation & Assurance $43.27 $54.32 $61.63 $57.81 $66.80 $79.54 $109.94 $108.11 $124.37 $151.69 $97.60 $119.45 $146.33 $218.05 $276.06 nbn Minor Projects $2.50 $4.9
Slide 26: Appendix 4: Cash Flow
Appendix 4 CASH FLOW $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 FY15 FY16 FY17 FY18 FY19 Reported EBITDA $10.66 $14.73 $15.68 $20.14 $21.09 $27.26 $32.05 $35.25 $38.03 $51.51 $25.39 $35.82 $48.35 $67.30 $89.54 +/- non-cash items & change in w/capital ($8.97) $17.53 $15.03 $12.83 $3.
Slide 27: Appendix 5: Capital Expenditure
Appendix 5 CAPITAL EXPENDITURE $ million 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 FY15 FY16 FY17 FY18 FY19 Leasehold Improvements $0.30 $0.06 $0.25 $0.65 $0.22 $0.11 $0.08 $0.20 $0.45 $0.10 $0.36 $0.90 $0.33 $0.28 $0.55 Motor Vehicles $0.10 $0.32 $0.11 $0.03 $0.10 $0.00 $0.00 $0.00 $0.00 $0
Slide 28: Group Financial Results – by half-year (1 of 2)
Group Financial Results – by half-year (1 of 2) Group Revenue Group EBITDA from Operations Group EBITDA from Operations % ($m ) ($m ) $600 $60 12.0% 11.1% 10.8% 54.6 10.6% 10.9% 504.2 10.1% $500 $50 10.0% 9.1% 8.8% 38.6 $400 $40 8.0% 338.8 348.0 34.2 6.9% 7.2% 32.1 294.1 $300 261.0 $30 27.8 5.4% 6.0
Slide 29: Group Financial Results – by half-year (2 of 2)
Group Financial Results – by half-year (2 of 2) Group Reported EBITDA Group Reported EBIT Group Reported EBITDA % ($m ) ($m ) $50 $60 12.0% 10.9% 10.9% 51.5 10.4% 10.4% 10.2% 39.2 $50 10.0% 9.1% 8.8% $40 34.1 38.0 29.5 $40 8.0% 32.1 35.2 6.9% 7.2% $30 28.4 $30 27.3 5.4% 22.2 6.0% 18.6 20.1 21.1 $20
Slide 30: Segment Financial Results – by half-year
Segment Financial Results – by half-year Telecommunications Telecommunications Telecommunications $400 Revenue ($m) $50 EBITDA ($m ) 16.0% EBITDA % 13.9% $45 14.0% $350 40.3 $40 12.2% 12.1% 12.0% 296.9 290.9 35.5 11.3% 11.2% $300 290.7 12.0% $35 32.7 10.3% 244.4 29.7 $250 217.8 $30 10.0% 8.7% 8.9% 2
Slide 31: 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 32: Service Stream Limited
Service Stream Limited ABN: 46 072 369 870 Level 4, 357 Collins Street Melbourne, Victoria 3000 WWW.SERVICESTREAM.COM.AU