Energy Action Limited · ASX:EAX
Energy Action — H1 FY2018 Earnings Presentation
29 slides from Energy Action's earnings presentation, Feb 16, 2018
Slide 1: Financial Results Half Year FY18
For personal use only Financial Results Half Year FY18 Ivan Slavich Michael Fahey Chief Executive Officer Chief Operating Officer & Chief Financial Officer Energy Action Limited Energy Action Limited
Slide 2: Half Year FY18 Results Agenda
Half Year FY18 Results Agenda For personal use only Energy Action 1. Results Highlights Ivan Slavich 2. Group Financials Michael Fahey 3. Operational Performance Ivan Slavich 4. Balance of Year Priorities Ivan Slavich
Slide 3: FY18 Half Year Results Highlights
FY18 Half Year Results Highlights Revenue, Profits and Operating Cash Flows growing strongly For personal use only > Revenue of $16.3 million, up 4% vs 1H FY17 – Growth driven by Procurement +38% and PAS +8% > Operating NPAT of $1.02m, up 27% vs 1H FY17 – Revenue growth combined with strong cost man
Slide 4: Key Operational Achievements
Key Operational Achievements Focus on sales and marketing effectiveness and operational improvements For personal use only Improved sales process execution, resulting in an uplift in procurement orders The strategy to focus on regional work has led to increased sales activity in areas such as th
Slide 5: Key Operational Achievements (cont'd)
Key Operational Achievements (cont’d) Focus on sales and marketing effectiveness and operational improvements For personal use only Continued work with Government agencies on policy work and management of higher energy prices, including appointment to the Industry Energy Support Stream panel in Vi
Slide 6: Energy Action Price Index (EAPI)
Energy Action Price Index (EAPI) Prices have stabilised at an elevated level For personal use only > Dramatic price increases across the NEM have abated but without sign of any meaningful decline as yet. > C&I customers experiencing massive price shocks upon termination of contracts signed in 2014 a
Slide 7: Impact of energy market volatility and higher prices
Impact of energy market volatility and higher prices Heightened awareness driving client demand For personal use only As energy costs and consumption continue to be discussed at executive and board level – Energy Action increasingly well placed to support management of price risk and supply Impl
Slide 8: Group Financial Results
For personal use only Group Financial Results 8
Slide 9: Financial Highlights
Financial Highlights Solid improvement in Revenues, NPAT and Operating Cash Flows For personal use only Positives Challenges • Solid revenue growth, especially in • Decline in Contract Management & Procurement Environmental Reporting (CMER) revenues and sites under • Significant improvement in sales
Slide 10: Operating NPAT of $1.0M
Operating NPAT OF $1.0M Revenue growth of 4% translating to NPAT growth of 27% For personal use only P&L 1H FY18 1H FY17 % Variance Growth in Procurement and PAS Revenue 16,259,736 15,596,663 4% offset by lower CMER revenues COGS 2,537,412 2,530,044 -0% Gross Margin 13,722,324 13,066,619 5% Opex - e
Slide 11: Operating Profit drivers
Operating Profit drivers Profitable top line growth translating to NPAT For personal use only 11
Slide 12: Strong Operating Cash Flow
Strong Operating Cash Flow EBITDA to Operating Cash Flow conversion of 88% underpins results For personal use only Operation Cash Flow 1H FY18 1H FY17 Operating EBITDA 2,403,865 2,125,093 Share based payments 9,152 (186,376) Trade debtors 724,659 (1,344,644) Other debtors (483,463) 289,997 Trade cre
Slide 13: Growth lead by increased procurement revenues
Growth lead by increased procurement revenues Higher energy prices and increased auction volumes driving growth For personal use only 1H FY18 1H FY17 % Variance Procurement 5,244,131 3,791,045 38% Contract Mgmt & Energy Reporting 7,785,552 8,613,536 -10% Projects & Advisory Services 3,228,647 2,979,
Slide 14: Debt structure and key financial ratios
Debt structure and key financial ratios Available facilities of $4.8 million For personal use only EAX has a 5 year, $12 million multi-option facility agreement expiring October 2019 • Funds can be provided under the facility as loans, bank guarantees or as letters of credit. As at 31 December 2017,
Slide 15: Operational Performance
For personal use only Operational Performance 15
Slide 16: Energy Procurement
Energy Procurement Higher auction volumes and increased contract prices For personal use only • Energy Action provides a complete 1H FY18 1H FY17 Variance range of procurement options across four distinct market No of Auctions1 854 704 21% Average contract duration 26.53mth 18.98mth 7.6 mth segments
Slide 17: Contract Management & Environmental Reporting
Contract Management & Environmental Reporting For personal use only Over $4.3 million of potential bill validation and network tariff review savings to clients generated in H1FY18; Over $1.5 million in a single billing error discovered for a client in August 2017; FY18 focus on improving clien
Slide 18: Contract Management & Environmental Reporting
Contract Management & Environmental Reporting Bureau losses and new client acquisitions For personal use only • Higher margin, comprehensive • Lower margin, reporting service service offering • 3rd party software • EAX software • Loss of two large multi-site clients Q417 and Q1 18 • Elec C&I sites •
Slide 19: Key Operational Challenge
Key Operational Challenge Contract Management and Reporting Services For personal use only EAX provides contract management and reporting services utilising both in-house developed (Metrics) and third party software for more complex clients; The number of sites under management continues to decl
Slide 20: Projects & Advisory Services
Projects & Advisory Services Project Highlights For personal use only > 747 Collins Street, Melbourne achieved 6 Star NABERS rating (using the EAX OptEEmise offering) and achieved several awards including: – Winner, Association of Energy Engineers (USA) Oceania Region Energy Project of the Year – Wi
Slide 21: Projects & Advisory Services
Projects & Advisory Services Focus on higher margin consulting revenues grew 19% For personal use only • Lower margin supply and install projects now largely being delivered by partner organisations, which generate a fee for Energy Action • Focus on higher margin consulting project revenues 21
Slide 22: Balance of Year Priorities
For personal use only Balance of Year Priorities 22
Slide 23: Our top priorities for the balance of FY18
Our top priorities for the balance of FY18 Continued focus on improving customer service and sales & marketing effectiveness For personal use only Gain market penetration via improved sales & marketing execution; Continue to develop a fully integrated client management process covering all EAX s
Slide 24: Connect with us
For personal use only Connect with us Twitter: @EnergyActionAUS LinkedIn: www.linkedin.com/company/energy-action Email: info@energyaction.com.au Web: www.energyaction.com.au Ivan Slavich Chief Executive Officer National number: 1300 553 551 02 9633 6476 Ivan.slavich@energyaction.com.au Michael Fahey
Slide 25: Disclaimer
Disclaimer This presentation has been prepared by Energy Action Limited ABN: 90 137 363 636. For personal use only This presentation is not intended as an offer or solicitation with respect to the purchase or sale of any security nor does it constitute an offer or solicitation in any jurisdiction in
Slide 26: Appendix
For personal use only Appendix 26
Slide 27: Balance Sheet as at Dec-2017
Balance Sheet Balance Sheet As at - Dec-2017 31/12/2017 31/12/2016 Current Assets Cash and cash equivalents 810,711 2,105,780 Debtors 5,267,754 5,992,413 For personal use only Income tax Receivable 204,707 877 Other Assets 2,926,903 2,221,521 Total Current Assets 9,210,075 10,320,591 Non Current Ass
Slide 28: Statutory to Operating Profit reconciliation
Statutory to Operating Profit reconciliation For personal use only NPAT EBITDA $ 1H FY18 1H FY17 Variance 1H FY18 1H FY17 Variance Statutory net Profit after tax / EBITDA 1,021,688 294,037 247% 2,403,866 1,567,282 53% Add back Significant Items after tax : Deferred consideration on acquisitions* - 3
Slide 29: Energy Action Executive Team
Energy Action Executive Team For personal use only Ivan Slavich Chief Executive Officer Stephen Dwayhe Michael Fahey General Manager – Energy Market Solutions Chief Operating Officer & CFO Stephen Flannigan Paul Bannister General Manager – Business Services Innovation & Sustainability Director Caoim