Hipages Group Holdings Ltd. · ASX:HPG
Hipages — H1 2022 Earnings Presentation
38 slides from Hipages's earnings presentation, Feb 24, 2022
Slide 1: H1 FY22 Result
H1 FY22 Result 24 February 2022
Slide 2: Australia's largest online tradie marketplace and SaaS provider
Australia’s largest online tradie marketplace and SaaS1 provider, creating effortless solutions that help tradies streamline and grow their business and delight their customers. H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 1. 1. Software-as-a-Service (SaaS)
Slide 3: Agenda
Agenda 1. H1 FY22 overview 2. Strategy 3. Financial & operational update 4. FY22 outlook H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 4: H1 FY22 overview
H1 FY22 overview ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 5: H1 FY22 business highlights
H1 FY22 business highlights Strengthened ANZ market First major inorganic New Tradiecore leadership position investments functionality Supported tradie customers Business model Tradie demand through lockdowns and delivers resilience strengthening restrictions and growth H1 FY22 FINANCIAL RESULTS | F
Slide 6: H1 FY22 hipages Group overview
H1 FY22 hipages Group overview Revenue Margins Profitability ➔ MRR1 up 15% drives ➔ Strong Gross margin3 of 87% ➔ Pro forma EBITDA4 of $4.2m recurring revenue growth of 14%, or 17% excl. customer ➔ EBITDA margin of 14% in line ➔ Pro Forma OCF of $4.2m support initiatives with expectations following
Slide 7: Strategy
Strategy ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 8: Overall strategic opportunity
Overall strategic opportunity Total Addressable Total Market Addressable AUS = $110.3b Market NZ = $25.6b1 AUS = $97.1b H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 1. All values in AUD 8
Slide 9: Overall strategic opportunity
Overall strategic opportunity Total Addressable Total Market Addressable AUS = $110.3b Market NZ = $25.6b1 AUS = $97.1b H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 1. All values in AUD 9
Slide 10: Value of the total ANZ addressable market
Value of the total ANZ addressable market Residential Residential & Commercial Commercial Residential Commercial Residential Community & Homeowner Property Retail Insurance Property New Builds Government Management Management Charity Maintenance Homes Rental properties Stores Local, state Repairs Cl
Slide 11: Australia trade business spend
Australia trade business spend H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 11
Slide 12: Strategy execution
Strategy execution FY20-21 FY22-23 FY24+ Marketing effectiveness Subscription product Operational excellence Grow core Tradiecore will optimise experience for tradies and consumers category Medium to large tradies Flexible products to optimise retention hipages 3.0 – next stage of product evolution
Slide 13: https://bit.ly/3BTcwsQ
https://bit.ly/3BTcwsQ 13
Slide 14: Exclusive partnership with leading property management groups
Exclusive partnership with leading property management groups Completed integration with Reapit Tenants Tradies to commence UK operations Added new platform features including invoice automation Meriton joined platform – Australia’s largest apartment builder Owners Agents H1 FY22 FINANCIAL RESULTS |
Slide 15: 100% acquisition of Builderscrack for A$11.8m in cash and equity
100% acquisition of Builderscrack for A$11.8m in cash and equity Value accretive transaction, with positive operating cash flow and working capital Provides access to NZ$26b TAM and creates trans-Tasman market leader Ability to leverage hipages Group’s strategic and operational experience Opportunit
Slide 16: Rollout progress
Rollout progress ● Over 50 new registrations every day ● Six-month free trial for all hipages customers Features already delivered ● hipages lead integration ● CRM (click to call, text and email) ● Scheduling Up next ● Android launch in early March ● Personalised documents and job attachments H1 FY2
Slide 17: Payments solution designed with
Payments solution designed with H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 17
Slide 18: H1 FY22 financial & operational update
H1 FY22 financial & operational update MELISSA FAHEY Chief Finance & Operations Officer H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 19: Delivering sustainable growth
Delivering sustainable growth MRR Reported revenue EBITDA Operating cash flow HY21 EBITDA HY22 increased elevated due to investment to reduced Opex in capture long-term response to opportunity COVID-19 H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 1. Pro Forma Revenue, EBITDA and Operating Cashflow. Pro
Slide 20: H1 FY22 financial highlights
H1 FY22 financial highlights Revenue Profitability Key drivers $5.3m 87% 34.3k MRR1 Up 15% Gross margin3 Subscription tradies Up 19% (HY21: 87%) $28.8m $1,771 Recurring revenue2 Up 14% $4.2m hipages ARPU6 Up 19% (Up 17% ex-customer support) EBITDA4 EBITDA margin 14% (Up 13% to $1,672 for hipages Gro
Slide 21: Business model drives strong ARPU growth
Business model drives strong ARPU growth What we have done What we are doing • In Nov 19 commenced transition from a transactional product to a • 90% of tradies now on subscription product subscription-only product for new tradies • New subscribers continuing to join platform at record price points
Slide 22: Business model drives growth in Total Tradie ARPU
Business model drives growth in Total Tradie ARPU1 Total Tradie ARPU ● ARPU grew by 19% to $1,771 for hipages in Australia, or 13% overall to $1,672 ● Driven by: ○ Move to subscription-only product ○ New tradies joining at higher price points ○ Existing subscribers ascending to higher price tiers ○
Slide 23: Subscription tradie base continues to expand
Subscription tradie base continues to expand Ongoing subscriber growth Total subscription tradies ● Total subscription tradies up 19% to 34.3k, or 19% 7% excluding 3.3k tradies acquired from Builderscrack ● Retention impacted by industry lockdowns and 34.3k restrictions followed by unprecedented dem
Slide 24: Lifetime Transaction Value / Customer Acquisition Costs
Lifetime Transaction Value / Customer Acquisition Costs1 COVID impacts customer lifetime, while other unit economics continue to improve Annualised LTV/CAC ● LTV/CAC ratio reduced in HY22 due to a shorter average customer lifetime following higher COVID-related churn ● Meanwhile, all other LTV/CAC r
Slide 25: Flywheel effect driven by growth on both sides of marketplace
Flywheel effect driven by growth on both sides of marketplace Subscription tradies Users Subscription tradies now 90% of customer base 3.8m unique users posted a job to hipages platform in H1 FY22 with transition to complete by end FY22 H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 25
Slide 26: Pro Forma Operating Expenses
Pro Forma Operating Expenses Increased investment in brand to drive growth Expenses as a % revenue1 HY19 HY20 HY21 HY22 • Expenses as % of revenue were 86% of revenue in HY22 after increased investment in growth Operations and administration 39% 38% 34% 35% Technology Development 3% 4% 3% 4% Marketi
Slide 27: Effective investment drives increased brand awareness
Effective investment drives increased brand awareness • Successful platinum sponsorship of The Block, regularly the highest rating nightly entertainment program • Consumer brand awareness at highest ever level of 58%1 • Market leading top-of-mind consumer awareness of 27%2 now 16pts ahead of the nea
Slide 28: Building consumer trust and brand awareness
Building consumer trust and brand awareness 4% increase in job volume, with continued strong growth in jobs from repeat consumers 67% of jobs from repeat consumers 78% of jobs from unpaid channels 3.8m unique users posted a job to hipages platform as at H1 FY22 804.5k 773.6k 804.5k 773.6k 677.8k 677
Slide 29: FY22 outlook
FY22 outlook ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021
Slide 30: FY22 outlook
FY22 outlook Marketplace activity • Market recovery delayed by Omicron outbreak with further moderate impact to FY22 revenue expected due to extended customer retention initiatives • Growth in key metrics to slow in Q3 before accelerating in Q4, subject to market conditions • Strong rebound in deman
Slide 31: Q&A
Q&A H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 31
Slide 32: Appendix
Appendix H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 32
Slide 33: H1 FY22 result summary
H1 FY22 result summary Continued growth in key metrics HY22 HY21 pcp (%)6 LFL %7 Financial Metrics ● MRR increased by 15% to $5.3m resulting in Total revenue ($m) 30.1 26.9 12% 11% recurring revenue growth of 14%, or 17% excluding COVID related customer support Recurring revenue ($m) 28.8 25.3 14% 1
Slide 34: H1 FY22 Pro Forma Financial Summary
H1 FY22 Pro Forma Financial Summary ● Strong revenue growth continued into H1 FY22; recurring revenue growth of 14%, total revenue up 12% on pcp ● Continued investment for growth, with: ○ Increased Brand marketing and advertising targeting both sides of the marketplace, driving strong brand awarenes
Slide 35: H1 FY22 Cash Flow
H1 FY22 Cash Flow ● Strong H1FY22 Pro Forma operating cash flow (OCF) of $4.2m with Pro Forma EBITDA to OCF conversion of 101% ● Net cash outflow of $17.2m mainly due to: ○ Payments for a 100% interest in Builderscrack of $7.8m ○ Payments for a 25% interest in Bricks + Agent of $6.8m ○ Positive Stat
Slide 36: H1 FY22 Statutory Balance Sheet
H1 FY22 Statutory Balance Sheet ● Strong H1 FY22 total equity position of $36.8m, an increase of $1.1m driven by: ○ Increase in total assets of $13.3m primarily due to increase in investments in Bricks + Agent $6.7m, increase in intangibles (goodwill, brands, customer relationships and capitalised d
Slide 37: Profit Reconciliation
Profit Reconciliation H1 FY22 FINANCIAL RESULTS | FEBRUARY 2021 37
Slide 38: 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
hipages Group Holdings — H1 2022 Earnings Presentation on 6ix