X2m Connect Limited · ASX:X2M
X2m Connect — H1 FY2023 Earnings Presentation
31 slides from X2m Connect's earnings presentation, Feb 28, 2023
Slide 1: Delivering on our promise: FY23 first half results
Delivering on our promise For personal use only FY23 first half results 28 February 2023 ASX Code: X2M
Slide 2: Disclaimer
Disclaimer This Presentation (“Presentation”) has been prepared by X2M Connect Limited (Company). You must read and accept the conditions in this notice before considering the information set out in or referred to in this Presentation. If you do not agree, accept or understand the terms on which thi
Slide 3: 1H23 Performance at a glance
1H23 Performance at a glance For personal use only Revenue: $9.0m, Gross margin: $2.2m, Adjusted EBITDA loss: $2.1m, up 96% on the pcp up 135% on the pcp 30% improvement on the pcp Annual Recurring Revenues: Enterprise/government Connected devices:361,345 SaaS and maintenance customers: 58, up 38% o
Slide 4: Key take outs from 1H23 results announcement
Key take outs from 1H23 results announcement For personal use only Top line revenue and customer acquisition performance delivers the sixth consecutive quarter of strong growth Gross margin growth of 135%, from revenue growth of 96%, with opex growth controlled to 14%, resulting in an improvement to
Slide 5: FY23 first half results
For personal use only FY23 first half results
Slide 6: 1H23 financial results
1H23 financial results For personal use only ($ million) 1H23 1H22 Change Revenue 9.0 4.6 96% A highly scalable business Cost of Sales (6.8) (3.7) 86% with modest cost growth Gross Profit 2.2 0.9 135% • Revenue up 96% Other income 0.4 0.2 110% • Gross profit up 135% Overheads1 (4.9) (4.3) 14% • Over
Slide 7: Strong growth in revenue and gross profit
Strong growth in revenue and gross profit For personal use only Revenue growth of 96% and gross profit growth of 135% mainly attributable to better margin performance in South Korea and China. Revenue and Gross Profit ($ million) 25% 9.0 20% 4.6 2.2 0.9 1H22 1H23 Revenue GP GP (%) Page 7
Slide 8: 1H operating cash burn improved on the pcp
1H operating cash burn improved on the pcp 1H23 cash burn of $0.97m is an improvement from $3.26m in 1H22 For personal use only X2M reported a positive operating cash flow for 2Q23 (Appendix 4C). In part this reflected seasonal factors that traditionally deliver a stronger Q2. Quarterly Operating Ca
Slide 9: Driving the path to profitability
Driving the path to profitability For personal use only Significant growth in revenue and gross margin with controlled overhead growth are driving a reduction in losses Adjusted EBITDA loss: $2.1m, 30% improvement on the pcp Overheads: $4.9m, up 14% on the pcp Gross margin: $2.2m, up 135% on the pcp
Slide 10: Connected devices accelerating: feeds into future SaaS revenues
Connected devices accelerating: feeds into future SaaS revenues 3 months Driver of future SaaS revenues to connect For personal use only ~69k devices 3 months to connect Annualised Recurring 3 months next ~50k devices Revenue increased from to connect next ~50k 361,345 $0.7m in Dec 2021 to devices $
Slide 11: X2M Story – consistency of performance
X2M Story – consistency of performance For personal use only Revenue ($ millions) Connected devices Connected devices totaled 361,345 at 1H23 revenue of $9.0m, up 96% on the pcp 9.0 31 December 2022, up 100% on the pcp 361,345 +96% +100% 4.6 181,102 3.2 89,952 1H21 1H22 1H23 1H21 1H22 1H23 Enterpris
Slide 12: Country related commentary
Country related commentary All markets have made good progress For personal use only South Korea China and Taiwan • 33 Municipalities now connected to platform – 49% • Signed a two-year Gas AMR deal with Far EasTone for of total addressable market gas companies - Great Tainan & ShinPing. • Device nu
Slide 13: The Investment Thesis – Micro and Macro trends stack up
For personal use only The Investment Thesis – Micro and Macro trends stack up
Slide 14: X2M a compelling investment proposition
X2M a compelling investment proposition For personal use only Significant and growing addressable market Existing customer base provides an immediate addressable market to harvest within utility digitisation and energy management in APAC Attractive business model Comprising upfront fees and recurrin
Slide 15: Macro trends - IoT markets are growing well
Macro trends - IoT markets are growing well For personal use only World IoT market1 • The enterprise IoT market grew 21.5% to $201 billion in 2022, according to the January 2023 update of IoT Analytics’ Global IoT Enterprise Spending Dashboard. • APAC is expected to outgrow other parts of the world
Slide 16: Contracted customers deliver large addressable markets
Contracted customers deliver large addressable markets Total addressable market is huge. The X2M existing customer base represents a substantial opportunity For personal use only South Korea market Japan market Cumulative Estimated TAM of TAM of all TAM of all existing customers: contracted2: househ
Slide 17: South Korea best articulates strategy outcomes
South Korea best articulates strategy outcomes Total addressable market and penetration increasing as X2M gets embedded into customer eco systems For personal use only South Korea market – Sep 2021 South Korea market – Dec 2022 Cumulative Cumulative TAM of all TAM of all contracted2: contracted2: ho
Slide 18: Validated strategic business model - increasing share of TAM
Validated strategic business model - increasing share of TAM The X2M strategy of securing customers and pursuing conversion of each customer’s available market is working and reflects the stickiness of the X2M business model For personal use only 0% FY17 FY23 Gochang TAM ~25,000 households 100% 0% F
Slide 19: High percentage of repeat customers
High percentage of repeat customers The X2M land and expand strategy of securing customers and pursuing repeat orders from those customers is working and reflects the stickiness of the X2M business model For personal use only Customer Stickiness 48% 52% Landed customers Expanded customers More than
Slide 20: What we do – digitising utilities in APAC
For personal use only What we do – digitising utilities in APAC. A market ready to be tapped
Slide 21: Water digitisation - South Korea – from analog to digital
Water digitisation - South Korea – from analog to digital Currently servicing 33 municipalities for water monitoring and control in South Korea For personal use only Capturing new government municipalities and repeat orders from existing customers through provision of improved: • Billing and process
Slide 22: Gas monitoring - Japan driven by the value of data generated
Gas monitoring - Japan driven by the value of data generated From reactive to proactive, driven by data collection and analysis For personal use only Growth in the Japanese market driven by licensing to customers monitoring gas bottles: • centralised platform acting as point of coordination to remot
Slide 23: Smart communities - Australia
Smart communities - Australia Smart community with large number of smart homes plus community Consumer enjoys a resources all working cohesively For personal use only sustainable, eco-friendly, environment and community Significantly reduced energy consumption Significantly increased use of renewabl
Slide 24: X2M's key differentiators = sustainability
X2M’s key differentiators = sustainability For personal use only • Leading edge patented platform • making dumb devices smart • distributed intelligence autonomously monitors and controls devices • IoT platform provides visibility, control, aggregation, predictive and pre-emptive device management W
Slide 25: Announcements reflect momentum
For personal use only Announcements reflect momentum
Slide 26: Summary of contract announcements since September listing
Summary of contract announcements since September listing • K Water $1.49 million tender won For personal use only Q2 FY22 • K Water $2.6 million tender won • China contract $0.7 million • Gochang extension – $1.03 million Q3 FY22 • China contracts $1.0 million • South Korea $0.85 million tender win
Slide 27: Government initiatives
For personal use only Government initiatives
Slide 28: Government initiatives
Government initiatives For personal use only Initiatives are designed to increase adoption in the future Japan – the ministry of Economy, Trade and Industry announced JPY 13.8b (approximately $AUD 150m) subsidy programme would be launched for strengthening and modernising delivery of LP Gas includin
Slide 29: Outlook
For personal use only Outlook
Slide 30: X2M outlook
X2M outlook Continue land and expand strategy. Revenue growth through acquisition For personal use only of new customers and repeat orders from existing customers expected Revenue, customer numbers and connected devices expected to deliver strong growth in FY23 on FY22 SaaS and other recurring reven
Slide 31: Get in touch
For personal use only X2M CONNECT GET IN Shareholder Enquiries Automic Pty Ltd TOUCH hello@automic.com.au +61 (2) 9698 5414 Media and Investor Enquiries Mohan Jesudason, CEO investor.relations@x2mconnect.com 1 800 926 926 (1 800 X2M X2M)