Hipages Group Holdings Ltd. · ASX:HPG
Hipages — H1 FY23 Earnings Presentation
33 slides from Hipages's earnings presentation, Feb 23, 2023
Slide 1: H1 FY23 Results
H1 FY23 Results 23 February 2023
Slide 2: Australia and New Zealand's largest online tradie marketplace and SaaS provider
Australia and New Zealand’s largest online tradie marketplace and SaaS1 provider, creating effortless solutions that help tradies streamline and grow their business and delight their customers. H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023 1. 1. Software-as-a-Service (SaaS) 2
Slide 3: Agenda
Agenda 1. H1 FY23 overview 2. Financial & operational update 3. Strategy update 4. FY23 outlook FY22 H1 FY23 FINANCIAL FINANCIAL RESULTS RESULTS | AUGUST | FEBRUARY 2022 2023 3
Slide 4: H1 FY23 overview
H1 FY23 overview ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023 4
Slide 5: H1 FY23 highlights
H1 FY23 highlights • Growth in revenue and ARPU continues, with lead indicators showing countercyclicality of hipages model • Margin expansion due to prudent expense management and emerging operating leverage • Strategic evolution from marketplace to platform progressing well • Comfortably capitalis
Slide 6: Countercyclical model in action
Countercyclical model in action Marketplace balance returning as key lead indicators turn green Tradies need us more when work is scarce Reduced Marketplace returning to balance Economic • Consumer confidence continues to soften1 discretionary • Job volumes normalising activity spend on the • Tradie
Slide 7: Financial & operational update
Financial & operational update JACO JONKER Chief Finance & Operations Officer H1H1 FY22 FY23 FINANCIAL FINANCIAL RESULTS RESULTS | FEBRUARY | FEBRUARY 2021 2023
Slide 8: H1 FY23 financial highlights
H1 FY23 financial highlights Revenue Profitability Key drivers $5.6m 89% 34.2k MRR1 Up 5% Gross margin3 Subscription tradies (H1 FY22: 87%) $30.6m $5.8m $1,863 Recurring revenue2 Up 6% EBITDA4 ARPU5 Up 11% (Up 12% to $1,978 for hipages Australia) EBITDA margin 18% $32.6m Total revenue Up 8% $(1.5)m
Slide 9: Strong ARPU growth continues as tradie numbers stabilise
Strong ARPU growth continues as tradie numbers stabilise Total Tradie ARPU1 Total subscription tradies • ARPU grew by 11% to $1,8631 • Total subscription tradies flat in H1, expected to improve as softening • New tradies join at higher price points driving new business yields up consumer demand driv
Slide 10: Pro Forma Operating Expenses
Pro Forma Operating Expenses Prudently managing our expenses Expenses as % revenue1 Total operating expenses 101% 101% • Total opex ratio reduced to 82% of revenue in HY23 as we adapted to the market conditions, while continuing to invest for growth 86% 82% Marketing 75% • Continued brand investment
Slide 11: Brand investment drives significant marketing efficiency
Brand investment drives significant marketing efficiency Impact of hipages growing brand awareness in Australia1 Consumer brand • Record consumer brand awareness of 66%1 • Market leading top-of-mind awareness2 15ppts ahead of nearest competitor Tradie brand • Record tradie brand awareness 64% (+5ppt
Slide 12: Building consumer trust and brand awareness
Building consumer trust and brand awareness Jobs from repeat customers and unpaid channels continued to improve 72% of jobs from repeat consumers 81% of jobs from unpaid channels 4.2m unique users have posted a job on hipages2 Contribution from repeat consumers increased by 5ppts1 Contribution from
Slide 13: Delivering sustainable growth
Delivering sustainable growth MRR Total Revenue EBITDA1 Operating cash flow2 1. Pro forma EBITDA, excluding one-off IPO related significant items . H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023 2. Pro forma operating cash flow, excluding one-off IPO related significant items. 13
Slide 14: Strategy update
Strategy update ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 15: Strategic evolution from marketplace to platform
Strategic evolution from marketplace to platform FY23-FY26+ roadmap evolution Marketplace optimisation Tradie platform evolution Consumer platform evolution Lead pricing optimisation Drive tradie uptake of existing services End-to-end SaaS1 solution for tradies to (Tradiecore, payments, partner job
Slide 16: Creating an end-to-end platform to win whole tradie ecosystem
Creating an end-to-end platform to win whole tradie ecosystem Lead Accept Call, Text, Schedule Send Approved Schedule Send Tradie Repeat Invites Lead SMS, Email Site Visit Quote Hire to Start Invoice Paid Job (live in H2) Procurement Insurance Finance Future services H1 FY23 FINANCIAL RESULTS | FEBR
Slide 17: The future of hipages
The future of hipages H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023 17
Slide 18: Evolution to platform already paying dividends
Evolution to platform already paying dividends Driving enhanced customer retention through increased engagement Customer churn % by # of services (FY22) • Significant improvement in retention when tradie customers purchase more than one service • Customer retention four times higher when using both
Slide 19: Enhanced functionality for a seamless customer experience
Enhanced functionality for a seamless customer experience H1 achievements Up next in H2 • Now approaching 1,000 users actively engaged regularly • GTM for Accounting integration using app • Payments feature go-live • Accounting Integration completed for Xero, MYOB and • Additional functionality for
Slide 20: New pricing model and product functionality
New pricing model and product functionality • Transition to subscription model continues to progress well, leveraging learnings from hipages experience • Introduced new subscription packages to enhance retention and drive ARPU growth • Improving the user experiences for tradies and consumers H1 FY23
Slide 21: Bricks + Agent now #1 in ANZ
Bricks + Agent now #1 in ANZ • Bricks + Agent acquired its largest Australian competitor, Maintenance Manager • Now #1 in $21 billion ANZ property management market • Now more than 800k users on platform • Integrations with Palace and Console complete • New partnerships including McGrath Network, ac
Slide 22: FY23 outlook
FY23 outlook ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023
Slide 23: Trading update
Trading update Marketplace balance is returning and key lead indicators are green Qualified tradie registrations per week Marketplace balance driving increased activity ● Job volumes normalising ● Quotes per job at multi-year highs ● Zero-quote jobs ~50% lower than pcp Translating to strong new busi
Slide 24: FY23 outlook
FY23 outlook • Lead indicators expected to continue to improve and benefit key metrics in H2 • Churn expected to normalise in H2, with improvement vs. pcp already evident in January • Due to the impact of marketplace imbalance in the first half, high single-digit revenue growth is expected in H2, wi
Slide 25: Targeting positive net cash flow by end FY24
Targeting positive net cash flow by end FY24 1 Accelerating revenue growth in FY24 ● Growth in total subscription tradies as marketplace returns to balance ● Driving revenue growth through dynamic lead pricing ● Migrating tradies to higher subscription price tiers 2 Prudent expense management ● Stab
Slide 26: Q&A
Q&A H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023
Slide 27: Appendix
Appendix H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023
Slide 28: H1 FY23 result summary
H1 FY23 result summary Growth in revenue and EBITDA, with key metrics stabilising H1 FY23 H1 FY22 pcp (%)5 Financial Metrics ● Resilient subscription model supporting growth in key metrics Total revenue ($m) 32.6 30.1 8% Recurring revenue ($m) 30.6 28.8 6% ● Total revenue growth marginally higher th
Slide 29: H1 FY23 Pro Forma Financial Summary
H1 FY23 Pro Forma Financial Summary ● Total revenue growth rate of 8% expected to be maintained in H2, with acceleration in Q4 ● Continued growth investment, with increased product development and technology team and architecture investment (mostly capitalised) ● Pro forma operating expenses up 4% a
Slide 30: H1 FY23 Cash Flow
H1 FY23 Cash Flow ● Positive operating cash flow of $6.0m, up 44% vs. pcp with Pro Forma EBITDA to OCF conversion of 104% ● Cash outflow from investing activities ($8.6m) mainly driven by: ○ Continued investment in technology ($7.7m), driven by a larger Product & Development team to enable accelerat
Slide 31: H1 FY23 Statutory Balance Sheet
H1 FY23 Statutory Balance Sheet ● Strong balance sheet maintained ● Cash and funds on deposit of $9.7m at the end of HY23 ● hipages continues to invest in its technology platform as it progresses with its evolution from online marketplace to a SaaS platform provider H1 FY23 FINANCIAL RESULTS | FEBRU
Slide 32: Profit Reconciliation
Profit Reconciliation H1 FY23 FINANCIAL RESULTS | FEBRUARY 2023 32
Slide 33: Disclaimer
Disclaimer Important notice The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN67 644 430 839(“hipages” or the Company") and is general background information about hipages’ activities current as at the date of this presentation. The information is gi
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