23 Nov

2021 AGM presentation to shareholders

C O M M S G R O U P | 1 2021 AGM 23 NOVEMBER 2021 T hi s do cument has been appro v ed by the Bo ard o f Di recto rs COMMS GROUP LIMITED (ASX: CCG) C O M M S G R O U P | 2 Chairman’s Address 3 CEO & Managing Director Update 4 Formal Resolutions & Shareholder Voting 13 Agenda C O M M S G R O U P | 3 Chairman Mr John Mackay C O M M S G R O U P | 4 CEO & Managing Director’s Address Mr Peter McGrath C O M M S G R O U P | 5 Our Business Today • Leading provider of cloud communications and unified communications as a service ( UCaaS ) solutions to businesses. • Our Goal is to enhance business agility through innovative cloud communications solutions. • Leader in Microsoft Teams calling for global business with an extensive international network including the most extensive. APAC coverage C O M M S G R O U P | 5 • Extend our services in the corporate mid market sector with a full ICT service offering • Become a key UCaaS provider throughout the APAC region and globally, servicing the wholesale and enterprise (MNC) sectors • Grow to scale organically and via acquisitions to over $100m revenue with commensurate increase in profitability • Expand interstate to become a national domestic provider Our Strategic Imperatives We service our customers via two key divisions Domestically to the SME/Corporate sector (Up to 1,000 employees) Specialist UCaaS provider to Wholesale, Enterprise and Global MNCs (+1,000 employees) C O M M S G R O U P | 6 FY21 Highlights Next Telecom, Binary Networks and Switched On Australia, reinforcing our SME business and increasing scale of the overall business Three key acquisitions Becoming Comms Group Comms Group became the new name for the Group from Nov 2020 With carrier license obtained we opened our Singapore office, targeting wholesale and MNCs in the Asia Pacific region Singapore Expansion Successful Integrations Good progress with synergies and integration of acquired businesses Expanded network Expanded out international network to cover additional countries allowing the business to offer UCaaS services to over 100 countries Increasing scale Significant increase in overall scale with business turnover increasing by over 100% C O M M S G R O U P | 7 FY21 Key Results Sum mary 1 Underlying EBITDA excludes net interest, tax, non - cash share LTIP costs, depreciation, amortisation and business, integration & restructuring costs. FY21 Revenue Up 30% to $25.2m FY21 EBITDA 1 Up 20% to $3.2m FY 21 Gross Profit Up 23% to $11.4m INCREASED SCALE AND CONTINUED PROFIT GROWTH C O M M S G R O U P | 8 ü Revenue of $11.4m & underlying EBITDA 1 of $1.2m for 4 months to end of October 2021 (unaudited financials) ü FY22 revenue expected in the range of $36m to $38m and underlying EBITDA 1,2 expected to be in the range of $4.5m to $5m Business Update 1 Underlying EBITDA excludes net interest, tax, non - cash share LTIP costs, depreciation, amortisation and business, integration & restructuring costs. 2 Which includes 10 months from Switched On acquisition ü Strong new sales performance in Q1 with new sales of $134k MRR (monthly recurring revenue) ü One of the highest quarterly new sales levels to date for the business ü Continued customer wins with additional mid market and Enterprise accounts ü Key international wholesale accounts added including Vodafone Fiji ü Additional staff hires resulting in some opex increases in order to support growth initiatives ü Key hires in sales & customer support ü Further systems development work undertaken ü All three recent acquisitions are performing either in line with, or ahead of expectations ü Strong level of synergy extraction year to date FINANCIALS TRACKING WELL HIGH LEVEL OF SYNERGIES STRONG NEW SALES INVESTING FOR FURTHER GROWTH KEY CUSTOMER WINS Comms Group started the year strongly and is well - positioned to deliver further growth in FY22 C O M M S G R O U P | 9 Longer - term 4 Pillar Growth Strategy • UCaaS services including MS Teams calling • Contact centre, call recording, call analytics for MS Teams • Extensive voice, data, SD - WAN and security offerings • Fibre & NBN access services • SIP services • CTS • UCaaS services including MS Teams calling both domestically and internationally • UCaaS services including MS Teams calling • Value add UCaaS applications (e.g. call recording and analytics) • SD - WAN offerings to multi - site global customers STRATEGIC ACQUISITIONS Corporate mid market providers Expand coverage domestically and internationally • SME and Corporate service providers • UCaaS providers • Data and Managed IT providers • Expanding national & potentially global coverage Domestic SME & Corporate Wholesale Domestic & Global Enterprise MNCs Domestic & Global C O M M S G R O U P | 1 0 Comms Group Outlook Significant prospect list of key new sales deals. Working on closing further business with major enterprise and wholesale international customers. Strong pipeline of near term accretive acquisition opportunities being pursued. In advanced discussions with a commercial lender for a debt facility to support strategic growth initiatives including M&A. Cash position of ~$2m at 19 Nov 2021 with zero debt. FY22 revenue expected in the range of $36m to $38m. FY22 underlying EBITDA 1 expected to be in the range $4.5m to $5m which includes 10 months from Switched On acquisition. C O M M S G R O U P | 1 0 “We are singularly focussed on continuing our growth journey and enhancing business agility through innovative cloud communications solutions.” 1 Underlying EBITDA excludes net interest, tax, non - cash share LTIP costs, depreciation, amortisation and business, integration & restructuring costs. C O M M S G R O U P | 1 1 Appendix - Some Definitions Cloud Communications The provision of key communications services from cloud servers based in data centres and over high speed internet connection s. Cloud PBX, Cloud Phone, Hosted PABX A cloud PBX functions the same as an in office PABX but is hosted in a cloud server accessed via the internet. This is becom ing the preferred option for providers and customers today. Comms Group operates a global Cloud Phone network. Corporate mid - market For Comms Group, this is larger organisations with typically 500+ employees and monthly spend (MRR) of typically > $5,000. CTS Call Termination Services – provision of a service by wholesale service providers to terminate voice calls in different markets or countries and on to different networks such as mobile and fixed voice networks. Data Service A broadband service that delivers voice, video and data over a private network or the Internet. NBN and fibre optic services ar e the most common forms of data services in the SME and corporate mid - market. Comms Group operates a domestic Layer 2 (data) and Layer 3 (i nternet) network with key Points of Presence (PoPs) in Sydney, Melbourne & Brisbane and aggregates a range of layer 2 wholesale access se rvices. Enterprise For Comms Group, this is organisations with typically > 1,000 employees and operating multi - nationally as an MNC. Fibre (optic) Use of fibre optic networks to carry digital signals (data) via light transmission at very high speeds, transforming the telc o a nd cloud services market globally. ICT Information Communication Technology is an umbrella term that covers the wide range of IT services and Communications service s p rovided to businesses. MNC Multi national corporate whereby the corporation has offices, facilities and assets in multiple countries. MRR Monthly recurring revenue is the monthly recurring annuity style revenue received from customers. NBN Australia’s national broadband network, which is a wholesale open access data network, replacing older copper and cable broad ban d with optic fibre networks, high speed switches and other technologies. PABX A typically in - house telephone switching system that interconnects telephone extensions to each other as well as the outside tel ephone network known as the public switched telephone network (PSTN). SD - WAN A software - defined wide - area network (SD - WAN) uses software - defined network technology, such as communicating over the Internet with encryption between an organisation's locations. Allow companies to build higher - performance WANs using lower - cost and commercial ly available Internet access. SD - WAN is replacing traditional data networks such as MPLS. SIP Session Initiation Protocol - being the standard IP telephony signalling protocol used to manage voice calls over the internet. SME For Comms Group, this is small to medium enterprise typically up to 500 employees. UCaaS, Unified Communications A communications delivery model based on the cloud, providing key communications services including telephony (voice), video, me ssaging, chat, collaboration, document storage supporting teamwork, agility, mobility and work from anywhere. Comms Group is a leadin g p rovider of MS Teams calling with a global network and offering. C O M M S G R O U P | 1 2 Disclaimer The material in this presentation is a summary of Comms Group Ltd’s (CCG) activities and results, and is current at the date of preparation, 23 November 2021. Further details are provided in the Company’s full and half year accounts and results announcements released to the ASX. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation (“forward - looking statements”). Such forward - looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of CCG and its Directors) which may cause the actual results or performance of CCG to be materially different from any future results or performance expressed or implied by such forward - looking statements. Undue reliance should not be placed on forward - looking statements and except as required by law or regulation, CCG assumes no obligation to update these forward - looking statements. To the maximum extent permitted by law, CCG and its related corporations, Directors, officers, employees and agents disclaim any obligations or undertaking to release any updates or revisions to the information in this presentation to reflect any change in expectation or assumptions and disclaim all responsibility and liability for these forward - looking statements (including without limitation, liability for fault or negligence.) This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Due care and consideration should be undertaken when considering and analysing CCG’s financial performance. All references to dollars are to Australian Dollars unless otherwise stated. To the maximum extent permitted by law, neither CCG nor its related corporations, Directors, officers, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. Certain financial data included in this presentation may be “non - IFRS financial information” under Regulatory Guide 230 Disclosing non - IFRS financial information published by ASIC. [The non - IFRS financial information in this presentation may include underlying profit after tax]. CCG believes this non - IFRS financial information, where included, provides useful information to users in measuring the financial performance and conditions of CCG. The non - IFRS financial information measures do not have standardised meanings prescribed by International Financial Reporting Standards and, therefore, may not be comparable to similarly titled measures presented by other entities, nor should they be considered as an alternative to other financial measures determined in accordance with International Financial Reporting Standards. Undue reliance should not be placed on any non - IFRS financial information. This presentation is not and should not be considered as an offer or an invitation to acquire shares in CCG or any other financial product and does not and will not form any part of any contract for the acquisition of shares. This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of CCG is available on our website https://commsgroup.limited C O M M S G R O U P | 1 3 Formal Resolutions & Shareholder Voting
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