Report Overview

Vocus: building their identity as an infrastructure business

On 22^nd August, Vocus announced its FY19 earnings.

While Vocus delivered on its FY19 guidance, the outlook for the next 2-3 years remains subdued as Vocus faces an uphill battle to turnaround its business.

Competitive intensity will continue to remain high across the consumer and enterprise segments. Therefore, how Vocus develops its infrastructure business will remain crucial.

On 22nd August 2019 Vocus announced its FY19 results which were in line with previous
management guidance for FY19. Key highlights from the earnings announcement include:

• Results in line with guidance across all key metrics
• Group revenues remained flat (+0.4% YoY) driven by growth in Networks and New
  Zealand business offset by continuing weakness in Retail
• EBITDA was down 2% YoY due to lower margins in the Networks business as a result of
  wholesale NBN impact
• Net profits were down 17% YoY driven by higher depreciation and amortisation and
  higher financing costs
• Allocated infrastructure, corporate and operations costs to the retail business. In addition,
  Vocus is planning to establish internal charges for Vocus retail’s use of internal network
  assets.

Contents

Our take

Vocus FY19 earnings update

• Enterprise, Wholesale and Government (Vocus Networks)
• Consumer (Vocus Retail)
• New Zealand
• FY20 Outlook
• Our Take

List of charts/tables

Figure 1. FY19 Vocus key financials (A$mn)

Figure 2. Vocus Networks key financials (A$mn)

Figure 3. Consumer financials and SIOs (A$mn and ‘000 where applicable)

Figure 4. New Zealand financials and SIOs (NZ$mn)