Bigblu Broadband plc | Bigblu Broadband Annual Report and Accounts 2020 Bigblu Broadband plc Annual Report and Accounts for the year ended 30 November 2020 A Company Registered in England & Wales No. 09223439 30567-BBB-AR2020.indd 5 28-Apr-21 9:45:57 PM 30567 28 April 2021 9:45 pm V4 Heading Bigblu connects consumers, businesses and governments to super-fast and ultra-fast broadband via satellite, fixed wireless, 5G and fibre. Financial highlights - Continuing Group* TOTAL REVENUE (£m) TOTAL ADJUSTED EBITDA (£m) £27.2m £6.2m 2020 27.2 2020 6.2 2019 26.8 2019 4.8 2018 24.8 2018 4.4 2017 20.0 2017 2.0 2016 6.2 2016 0.1 NET CASH / (DEBT) (£m) BASIC EPS (p) £7.4m 16.8p 2020 7.4 2020 16.8 2019 (14.2) 2019 (13.9) 2018 (11.9) 2018 (25.8) 2017 (13.1) 2017 (1.3) 2016 (10.2) 2016 (1.6) Read the Bigblu Broadband plc snapshot on page 2 * This summary of financial highlights does not form part of the audited financial statements. C 30567-BBB-AR2020.indd 3 28-Apr-21 9:46:04 PM 30567 28 April 2021 9:45 pm V4 Business Strategic Our Financial Company Overview Report Governance Statements Information Contents BUSINESS OVERVIEW Company Overview 01 STRATEGIC REPORT Chairman’s Statement 04 Company Overview Chief Executive Report 08 Financial Review 12 Bigblu Broadband plc (AIM: BBB), is a leading Principal Risks and provider of alternative super-fast and ultra-fast Uncertainties 24 broadband solutions throughout Australasia, Section 172 (1) Statement 28 the Nordics and England. BBB delivers a portfolio OUR GOVERNANCE of super-fast wireless broadband products for Directors’ Report 30 consumers and businesses who are typically Board of Directors 34 unserved or underserved by fibre. Statement of Directors’ Responsibilities 38 The Group has a significant target market in all the Corporate Governance Statement 39 territories in which we operate, with c.12m customers Nomination Committee Report 47 having speeds of under 4 Mb. Audit and Risk Committee High levels of recurring revenue, increasing economies of scale and significant Report 48 government stimulation for alternative broadband solutions in all the countries in Annual Statement of the which we operate provide a solid foundation for strong organic growth as demand Remuneration Committee for alternative super-fast broadband services increases. Chairman 52 Acquisitive and organic growth enabled BBB to grow rapidly since inception in FINANCIAL STATEMENTS 2008 during which time the Group completed 21 acquisitions across nine different countries. In July 2020, BBB announced the conditional sale of its UK and European Independent Auditor’s Report 58 Satellite business to Eutelsat and completion was on 30 September 2020, offering Consolidated Statement of an excellent return for shareholders whilst providing a key asset for Eutelsat to solidify Comprehensive Income 64 its position in the European Satellite market. With the remaining businesses, BBB is Consolidated Statement extremely well positioned to continue growing as its business units continue to focus of Financial Position 65 on customers that are trapped in the ‘digital divide’ with limited broadband options Company Statement of in its target markets. Financial Position 66 BBB continues to provide customers with a full suite of ongoing services, including Consolidated Statement hardware supply, installation, pre- and post-sale support, whilst offering appropriate of Cash Flows 67 tariffs depending on the requirements of each end user in each territory. BBB’s range of solutions includes satellite, next generation fixed wireless and 4G/5G delivering Company Statement between 30 Mbps and 150 Mbps for consumers, and up to 1 Gbps for businesses. of Cash Flows 68 Importantly, as the core technologies evolve, and more affordable capacity is made Consolidated Statement of available, BBB continues to offer ever-increasing speeds and higher data throughputs Changes in Equity 69 to satisfy the market. Demand for ‘video-on-demand’, as well as streaming, covering Company Statement of both video and audio material, will only increase. Our alternative broadband offerings Changes in Equity 70 present a customer experience that is similar to that offered by wired broadband and Notes to the Financial the connection can be shared in the normal way with PCs, tablets and smart phones Statements 71 via a normal wired or wireless router. COMPANY INFORMATION Company Information 99 Bigblu Broadband plc | Annual Report and Accounts 2020 01 30567-BBB-AR2020.indd 1 28-Apr-21 9:46:08 PM 30567 28 April 2021 9:45 pm V4 Company Snapshot Overview The Group utilises a number of Key Performance Indicators (‘KPIs’) to measure performance against our strategy. A description of these KPIs and performance against them for continuing operations is set out below: CUSTOMER NUMBERS Australasia CUSTOMER REVENUE ADJUSTED EBITDA NUMBERS (‘000) (£m) (£m) 11% 17% 72% 46.7 £16.6m £2.8m Strong organic customer net Increase in revenue of 11% was EBITDA improved by 22% growth of 8.6k over the course a result of the continued organic following continued cost of the year with launch of growth in customer numbers efficiencies across the business. Skymuster Plus. and an improved product mix. REVENUE Nordics 2% CUSTOMER REVENUE ADJUSTED EBITDA 14% NUMBERS (‘000) (£m) (£m) 23% 61% 11.2 £6.3m £2.9m Reduced by 1.7k (13%) due Reduced 26% due to the loss Adjusted EBITDA reduced by 3% in the main to churned Fixed of these customers, and lower in the year due to strict overhead Wireless customers where Fibre grant income than the prior year. cost controls implemented had encroached legacy towers. during the year, following the lost fixed wireless customers. ADJUSTED EBITDA (15%) 45% United Kingdom 24% CUSTOMER REVENUE ADJUSTED EBITDA 46% NUMBERS (‘000) (£m) (£m) 7.0 £3.7m £1.5m Down 11% on prior year with Reduced by 9% mainly reflecting Reduced by 6% in the year UK Nordics focus on ITT wins. a previous BDUK grant (FY19: as we managed to control Australasia PLC £0.8m) that was fully amortised in costs tightly despite the the prior year. reduced revenue and increased investment prior to winning the ITTs 02 30567-BBB-AR2020.indd 2 28-Apr-21 9:46:08 PM 30567 28 April 2021 9:45 pm V4 Business Strategic Our Financial Company Overview Report Governance Statements Information Australasia Nordics United Kingdom Australian business to retain SkyMesh Brand. Quickline to retain Quickline Brand. KEY: Operational Hub Bigblu Broadband plc | Annual Report and Accounts 2020 03 30567-BBB-AR2020.indd 3 28-Apr-21 9:46:09 PM Job30567 number 28 28April April 2021 2021 9:45 9:45 pm pm V4V0 Chairman’s Statement We started the year with the BBB’s remaining operations consist of announcement of a £30m revolving its Australian operations (SkyMesh Pty credit facility with Santander Bank UK Limited), its Nordics business (Bigblu plc. This was used, in the main, to repay Norge AS), and its majority interest in the two tranches of loan notes totalling Quickline (together, the “Continuing £12m issued in 2016 by Business Group”). Growth Fund (“BGF”) (the “Loan Notes”), Over the past five years, the Group the Group’s £10m revolving credit facility has successfully executed its strategy with HSBC plc (the “HSBC Facility”) of becoming a leading provider of last and to provide additional working mile rural broadband solutions in certain capital to support the Group. BBB also European territories through a combined announced that HSBC would continue offering of both satellite and fixed to provide a £4m revolving credit facility wireless products. The Board considered and operational banking support to the that the success of the Group’s Group’s UK fixed wireless subsidiary expansion of its satellite offering across Quickline Holdings Limited (“Quickline”). Europe made its business attractive The Santander facility is a three-year to operators considering their position loan agreement with an option to in the satellite broadband market in extend for up to a further two years. Europe, including the UK. Interest terms are on a ratchet to LIBOR The Board believed that the disposal according to the Group’s net leverage provided the Group with the opportunity ratio. This replaced, in its entirety, the to crystalise an attractive return on BGF Loan Notes which bore interest at invested capital with respect to the a fixed coupon, and the HSBC Facility Sale Companies with the maximum which had an interest charge at a margin consideration payable by Eutelsat relative to LIBOR. As a result, there was to BBB for the Sale Companies 2020 has been an a significant reduction in the Group’s representing a premium of approximately eventful but positive annual cost of debt and net interest 50 per cent over the aggregate year for Bigblu payments. consideration paid during the Group’s We thank Santander, BGF and HSBC for buy and build strategy. This was used Broadband plc (BBB). their continued support to the Group. to reduce debt substantially and also We then entered a worldwide pandemic to provide additional financial flexibility and as Chairman, despite the enormous to support the further progress of the 64.9k challenges on a global scale, I’m pleased Continuing Group. At the same time, CUSTOMERS, WITH NET at the way we transitioned teams we agreed a revised smaller Santander GROWTH UP 6K, OR 10.2% across the countries to home working facility of £12m whilst maintaining the within 48 hours, a true testament HSBC facility to support Quickline. RECURRING REVENUE to the investment made in systems The highlights of the deal were a and infrastructure, and the way that maximum aggregate consideration 94% the Executive team marshalled this of £39.3m receivable, being £37.8m incredible challenge.