Energy One Limited · ASX:EOL
Energy One — Investor Presentation (October 2018)
40 slides from Energy One's investor presentation, Oct 16, 2018
Slide 1: Investor Update cover letter
16 October 2018 Energy One Limited (ASX : EOL) For personal use only Investor Update Attached is our annual investor update. We will not be holding a formal investor presentation at this time, however you are invited to attend our AGM on 22 October 2018, 10.30am level 13, 77 Pacific Highway, North S
Slide 2: Investor Update for FY18
Energy One Limited (ASX:EOL) Investor Update for FY18 For personal use only 1
Slide 3: Disclaimer
Disclaimer For personal use only This document has been prepared by Energy One Limited (EOL) and comprises written materials and slides for a presentation concerning EOL. This presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, se
Slide 4: Contents
Contents For personal use only Operational review 4 Financial review 12 Company outlook 24 Appendices 38 3
Slide 5: Operational review
For personal use only Operational review 4
Slide 6: FY18 - Another strong year with more growth anticipated
FY18 - Another strong year with For personal use only more growth anticipated • Successfully executing our growth strategy: Diversification Acquisitions Geographic expansion • Off-shore marketing results in first overseas sale • Debt facility repaid • Increased dividend 5
Slide 7: We're successfully executing our long term strategy
We’re successfully executing our long term strategy For personal use only Diversification Grow customer base Grow by acquisition ✓ ✓ ✓ Multiple new products Marketing in UK/EU Two acquisitions in 2 developed / acquired during FY18 resulted years, continue to look in FY17 & FY18 in first off-shore sa
Slide 8: Acquisitions successfully integrated
Acquisitions successfully integrated For personal use only Energy One made two successful acquisitions, pypIT and Creative Analytics • Expanded our range of wholesale energy product/service offerings • No customers lost • Operational integration completed during FY18 7
Slide 9: Revenue diversification continues to improve
Revenue diversification continues to improve… For personal use only 8
Slide 10: And recurring revenue is also increasing
And recurring revenue is also increasing For personal use only 9
Slide 11: New opportunity with existing customers migrating to the cloud
New opportunity with existing customers migrating to the cloud For personal use only SaaS (Software as a Service) cost is bundled in a monthly amount Energy One is providing private cloud hosting to customers Depends on service levels provided but cloud hosting can add $100k-$200k p.a. for a m
Slide 12: Robotic Process Automation (RPA)
Robotic Process Automation (RPA) For personal use only • The new IT trend. Involves using software ‘robots’ to undertake multi-step manual processes with user-friendly interfaces • Similar to older business process automation but aimed at smaller, desktop users • EnergyFlow already offers a solution
Slide 13: Financial review
For personal use only Financial review 12
Slide 14: Financial results summary
Financial results summary For personal use only 30 June 17 30 June 18 Change Revenue $6,117,698 $9,926,946 62% Recurring Revenue $2,978,355 $7,438,903 150% Underlying EBITDA $1,414,847 $2,500,205 77% NPBT $749,967 $1,718,412 129% NPAT $307,326 $1,040,343 239% NTA / share (cents) 9.83 14.86 51% Cash
Slide 15: Fifth consecutive year of profit while investing for growth
Fifth consecutive year of profit while For personal use only investing for growth Maintained investment of ~$1M or 16% or revenue in the research and development of new products Continued investment ($136k) in exploration of the UK and European markets Invested $4.5M in two strategic and synergistic
Slide 16: A focus on costs whilst improving revenue has increased NPAT
A focus on costs whilst improving revenue has increased NPAT For personal use only 15
Slide 17: EOL repaid its debt facility
EOL repaid its debt facility For personal use only • The $1.75M debt facility was used to finance an acquisition • Gearing ratio was less than 20% • The strong free cash flow being generated by the business enabled early repayment • At the end of FY18 Energy One was debt free • Cash and equivalents
Slide 18: Profit & loss statement
Profit & loss statement $’000 2015 2016 2017 2018 Revenue 4,768 4,583 5,429 9,299 For personal use only Other revenue 782 584 688 628 R&D grant & interest Direct project costs (33) (43) (59) (257) Employee benefits expense (3,003) (2,674) (3,065) (4,964) Increased in line with revenue Rental expense
Slide 19: EBITDA margin remained stable during strong revenue growth
Pleasingly EBITDA margin remained stable during strong revenue growth For personal use only 18
Slide 20: Balance sheet
Balance sheet $’000 2015 2016 2017 2018 For personal use only Cash and cash equivalents 1,983 2,228 363 728 Trade and other receivables 2,319 2,056 2,867 1,829 Total Current Assets 4,344 4,108 3,457 2,733 Plant and equipment 64 502 429 524 Software development - 2,373 4,662 5,065 Stated separately f
Slide 21: There has been positive balance sheet growth
There has been positive balance sheet growth For personal use only 20
Slide 22: Cash flows
Cash flows $’000 2015 2016 2017 2018 For personal use only Receipts from customers 4,920 5,072 5,528 11,399 Government grants 709 836 751 815 Research & Development Payments to suppliers and employees (4,260) (4,723) (5,480) (8,981) Interest 51 46 27 9 Cash provided by operating activities 1,420 1,2
Slide 23: A record $3.2 million in cash was generated from operations
A record $3.2 million in cash was generated from operations For personal use only Source cash s of of cash Uses 22
Slide 24: We've introduced a dividend policy
We’ve introduced a dividend policy For personal use only Directors declared a dividend of 2.0 cents per share for FY18 The dividend reinvestment pan (DRP) will issue shares at $1.05 The DRP is underwritten to avoid cash leakage from the business and to provide incremental improvements in liquidity o
Slide 25: Company Outlook
For personal use only Company Outlook 24
Slide 26: Our first UK customer went live
Our first UK customer went live For personal use only The UK division of a multinational energy company is using EnergyFlow to manage bespoke Power Purchase Agreements. Project is being led & delivered by Dunstan Thomas with our support. 25
Slide 27: Continuing to invest in off-shore marketing
Continuing to invest in off-shore For personal use only marketing To capitalise on opportunities off-shore our investment will continue, including: • Technical resources to adapt product(s) for those markets • Direct sales and marketing costs • Corporate costs for transacting in those markets, legal
Slide 28: EOL's software dispatches almost half the physical electricity in the NEM
For personal use only EOL’s software now dispatches almost half the physical electricity in the NEM and manages more than a third of the financial derivatives 27
Slide 29: Our software schedules transport of 40% of domestic gas
And our software is responsible for scheduling the transport of 40% of For personal use only the domestic gas in Australia 28
Slide 30: Leading market position in gas and electricity trading software
This gives Energy One a leading For personal use only market position in both gas and electricity trading software and strategically positions us for future market developments 29
Slide 31: And future market developments look positive
And future market developments For personal use only look positive Future market developments that EOL is well placed to service: • Capacity trading in the gas market (2018) • Potential move to 5-minute electricity settlements (2020) • Batteries, solar, demand-side management and other disruptive te
Slide 32: Regulator changing the way Australian gas markets operate
Regulator changing the way Australian gas markets operate For personal use only • The Australian Energy Regulator is implementing a capacity trading market ~2019 • Gas pipelines will need to publish data related to their spare pipeline capacity • AEMO will arrange an auction of this spare capacity •
Slide 33: pypIT is being enhanced for the changes
For personal use only pypIT is being enhanced for the changes • EOL’s pypIT software serves 40% of the gas transmission market and will play an important role in facilitating the data transfer for capacity trading and (consequent) scheduling of the traded capacity. • Changes to pypIT are commencing
Slide 34: Electricity market reform will also provide additional opportunities
Electricity market reform will also provide additional For personal use only opportunities • The Australian Energy Market Commission has announced that, from 2021, electricity market settlement periods will change from 30-minute intervals to 5-minute intervals • This reform is intended to encourage
Slide 35: Energy One well positioned to address the new 5-minute market
Energy One well positioned to address the new 5-minute market For personal use only • EOL understands the market and its proposed changes better than our (overseas) competitors • Our software systems are currently being adapted to address the new standards and the first example will go-live in mid-2
Slide 36: Investing for growth
Investing for growth For personal use only 1) Domestic sales: Continue to develop new products. New projects pending and in development. 2) Explore new markets: EnergyFlow offers great flexibility and has strong potential in overseas energy markets so we will continue investing in market development
Slide 37: Energy One well placed for growth in FY19
Energy One well placed for growth in FY19 For personal use only Solid financial performance for the year past Strong market position & good products Opportunities for domestic sales in FY19 Overseas opportunities to expand reach Further investment in product development Marketing domesti
Slide 38: Contact details
For personal use only Mr Shaun Ankers - CEO and Managing Director Email: enquiries@energyone.com.au Level 13, 77 Pacific Highway North Sydney NSW 2060 37
Slide 39: Appendix
Appendix Additional information For personal use only 38 38
Slide 40: Sales pipeline update
Sales pipeline update • Trading system projects represent a large investment for customers requiring For personal use only significant planning, development and resourcing (this increases customer retention). • Sales cycle can be 1-5 years especially for ‘large’ projects (e.g. ~$1m, over 12- 18 mont