Dreamscape Networks Limited (DN8)

Transcription

1 A record result across all key metrics Dreamscape Networks Limited (DN8) Dreamscape Networks Limited First half FY17 Results Presentation 23 February 2017

2 Our Vision Providing simple, innovative and affordable online solutions that change lives

3 FY17 First half snapshot Strong growth in financials 1 Total Bookings up 9% to $25.6m growth across all Pillars ABPU up 9% to $144 Adjusted EBITDA 2 up 58% to $5.2m Net Profit After Tax 3 up 220% to $1.6m Cash flow from operating activities up 37% to $6.3m A record result across all key metrics reaffirms FY17 Prospectus forecasts Delivering to plan Growing across all key Bookings drivers Entered new high-growth markets Targeted marketing to SMBs progressing strongly Evaluating potential acquisitions of new businesses / products Developing / refreshing existing products 1. H1 FY17 compared to H1 FY16 2. Reconciliation of Statutory to Adjusted EBITDA on slide Before forgiveness of advances to related parties pursuant to the Share Sale Agreement (see Appendix 4D and Half Year Financial report disclosure) 3 ASX: DN8 H1 FY17 results February 2017

4 H1 FY17 > H1 FY16 across all P&L metrics ($m) H1 FY16 H1 FY17 Bookings % 25.6 Revenue % 22.5 Adjusted Gross Profit % 14.4 Adjusted EBITDA % ASX: DN8 H1 FY17 results February 2017

5 Total Bookings up 9% to $25.6m $25.6m $23.5m $2.6m $9.1m $2.9m $10.6m Total Bookings a lead indicator of growth Total Bookings represent cash receipts in advance Subscriptions of 1 to 10 years with the norm at 2 years $11.8m 1H16a $12.1m 1H17a Bookings growth driven by higher margin pillars Hosting pillar Bookings up 16% to $10.6m primarily from web and Hosting products Growth continues through strong renewal and retention Expecting additional growth from rolling-out new products and improving infrastructure Domains Hosting Solutions 5 ASX: DN8 H1 FY17 results February 2017

6 Domain Bookings up 3% to $12.1m 1H16 vs 1H17 Evolving from a domain provider to online solutions provider $11.8m $12.1m Growth in line with Australian industry Bookings growth supported by improved technical support and customer care Focused on Global expansion strategy Domains growth from focusing on new, emerging markets across five major Englishspeaking Asian countries Targeted marketing towards the 63% of Australian SMBs without an online presence 1H16a 1H17a 6 ASX: DN8 H1 FY17 results February 2017

7 Hosting Bookings up 16% to $10.6m 1H16 vs 1H17 Focus on becoming a renowned Hosting provider $10.6m Bookings increase showing early signs of success in strategy towards Hosting $9.1m Improved EBIDTA contribution leveraging our highest margin pillar Continued focus on Hosting strategy Effective marketing campaigns targeted to attract new Hosting customers Utilising Sales and Hosting transfer teams to drive growth within existing customer database 1H16a 1H16a 1H17a 1H17a 7 ASX: DN8 H1 FY17 results February 2017

8 Solutions Bookings up 12% to $2.9m $2.6m 1H16 vs 1H17 $2.9m Growth reflects transition to an online Solutions provider Leveraging cross-sell and up-sell opportunities within customer base Dedicated and personalised business development specialists to partner with customers to deliver customised solutions New products and bundling to drive increased engagement Prioritised introduction of new products and services Expanding Solutions offering to enter new product markets Targeted bundling of product suite to cater towards customer needs 1H16a 1H17a 8 ASX: DN8 H1 FY17 results February 2017

9 Earnings Adjusted Gross Profit $12.3 $14.4 Shift towards high-margin products Evolution towards operating as a renowned online Solutions provider Increased Bookings in high-margin Hosting and Solutions pillar by 16% and 12%, respectively 1H16a 1H17a Adjusted EBITDA $3.3m $5.2m Continued execution of growth strategies Focus on leveraging the higher margin pillars Expansion of product offering to increase engagement and enter new product markets Best in World Customer Care to drive renewals and retention 1H16a 1H17a 9 ASX: DN8 H1 FY17 results February 2017

10 Strong balance sheet with $17.5m cash and no debt ($m) 30 Jun Dec 2016 Change Overview Cash % Increase from net proceeds of capital raising and positive cash flows generated from operations Due from related parties % Forgiven in accordance with share sale agreement Others % Prepaid marketing costs in 1H 2016 for brand relaunch Current Assets % Non-current assets % Total Assets % Current liabilities % Non-current liabilities % Includes $17.7m of income in advance ($17m for FY16) Consistent with increase in Bookings for products with longer terms Total liabilities % Equity (7.3) (8.2) 14% 10 ASX: DN8 H1 FY17 results February 2017

11 Operating cash flow up 36% to $6.3m ($m) H1 FY16 H1 FY17 Overview Cash flow from operating activities As a result of improvements in Bookings Capital expenditures (0.5) (0.9) Gain from accident settlement (0.4) - One-off income recorded in 1H 2016 Cash Generated from Operations ASX: DN8 H1 FY17 results February 2017

12 Delivering on strategy International Expansion Focus on higher growth markets, in particular English speaking Asian countries Singapore, Hong Kong, Indonesia, Malaysia and Philippines Marketing Strategic marketing strategies aimed at new emerging markets as well as underserved SMB segment Acquisitions Acquisitions of complementary businesses and products Customer Care Maintain high levels of customer care (at least 90% positive feedback rate) to increase retention, renewals and word of mouth referrals Sales Team Further training and development of the new in-house sales team for up-selling, cross-selling and new product marketing Product Development Accelerate development of new and refreshed products 12 ASX: DN8 H1 FY17 results February 2017

13 Presence Presence Presence Presence Opportunity Targeted Global Expansion Strategy Asia United Kingdom 390m Population 63%* Internet Usage Domain Growth 18%* Existing Members 25k Market Size (Domains) India 2.2m Market Size (Domains) Members 10.5m 106k Places us on the global map Gateway to EU (7 of top 10 domain markets) Targeted localised marketing & sales Potential acquisitions Increase market share Market Size (Domains) Targeting 5 English speaking markets Low competition High growth Truly emerging markets Targeted localised marketing & sales Potential acquisitions Australia 3m Members 6 th Largest Domain Provider Market Size (Domains) Members 670k 68k 110k New Zealand Members 1.2m 63% SMB without web presence Utilise sales/service team to grow customers, improve retention and increase ARPU Improved product offering Targeted Hosting & Solutions strategy Low competition Utilise ATL Marketing Increase brand equity, improve market share and retention Improved product offering 13 ASX: DN8 H1 FY17 results February 2017 * Averaged across the chosen markets

14 In summary Well positioned to deliver strong growth H1 FY17 delivered against plan Successful IPO Strong growth in Bookings, earnings and cash flows Cash of $17.5m and no debt Operational initiatives delivering against strategy Sustainable long term growth strategy Expanding in high growth English speaking Asian markets Improving engagement, ABPU and lifetime value Successfully delivering new products and services Successfully integrated acquisitions, with full year benefits to flow All backed by Best in World Customer Care and deliver FY17 Prospectus forecast s 14 ASX: DN8 H1 FY17 results February 2017

15 15 ASX: DN8 H1 FY17 results February 2017 Questions?

16 16 ASX: DN8 H1 FY17 results February 2017 Appendices

17 H1 FY17: Reconciliation of statutory to adjusted EBITDA ($m) H1 FY16 H1 FY17 Notes Statutory EBITDA* Adjustments to calculate Adjusted EBITDA 1. Change in deferred revenue (Nett) Equity based compensation expense Due to adoption of accrual accounting in accordance with accounting standards Share options issued to management following the completion of the IPO Adjusted EBITDA *Before forgiveness of advances to related parties pursuant to the Share Sale Agreement (see Appendix 4D and Half Year Financial report disclosure) 17 ASX: DN8 H1 FY17 results February 2017

18 Terminology & calculations Item Average Customer Life Average Bookings Per User (ABPU) Description Lifetime of members in years. 1 divided by churned rate, divided by 12. Churned members within month divided by total active start of month. A member is logged as churned when they no longer have a product or domain set to Registered, Pending Setup, Renewal Due, Pending fraud and Further Info. Total Bookings within previous 12 months divided by unique Active Members who had a product and made a payment within that same period. Renewal Rate Due for renewal status divided by domains/products renewed. Cost Per Acquisition Marketing costs divided by new active members. Active Members Active Members are members who have a domain, product or service that s current and has been paid for. Total Members Adjusted EBITDA Cash Generated from Operations Bookings IFRS Members with cleansed and verified contact details within our database. A measure of our performance aligning our Bookings and operating expenditures. It is used as a focus of management to evaluate the profitability of our business. Cash generated from operations is a measure of our performance calculated as Adjusted EBITDA less capital expenditures and acquisitions of intangibles. Total Bookings represents cash receipts from the sale of products to customers in a given period before effecting adjustments for net refunds granted within the period. This provides valuable insight into the sales of our products and the performance of our business since we typically collect payment at the time of sale. International Financial Reporting Standards are a set of accounting standards developed by the International Accounting Standards Board. Lifetime value Average lifetime of members multiplied by ABPU. Indicates potential Bookings of average member. ATL Above the Line Marketing that is delivered in a mass media format such as TV, Radio, Billboards and Newspaper 18 ASX: DN8 H1 FY17 results February 2017

19 Disclaimer This presentation was not prepared for and should not be relied upon to provide all necessary information for investment decisions. Some of the information contained in this presentation contains forward-looking statements which may not directly or exclusively relate to historical facts. Although great care & diligence has been taken to ensure the accuracy of this presentation, Dreamscape Networks Limited gives no warranties in relation to the statements and information contained herein and disclaims all liability arising from persons acting on the information and statements in this presentation. Due to the dynamics and changing risk profiles of investment markets, Dreamscape Networks Limited reserves the right to change its opinion at any time. All investors are strongly advised to consult professional financial advisors whose role it is to provide professional financial advice, taking into account an individual investor s investment objectives, financial situations and particular needs. 19 ASX: DN8 H1 FY17 results February 2017