Thank you for standing by, and welcome to the Hansen Technologies Limited annual general meeting. All participants are in listen-only mode. I would like to hand the conference over to Mr. David Trude, Chairperson. Please go ahead.
Good morning, ladies and gentlemen. My name is David Trude, and as Chairperson, I welcome you to the 25th annual general meeting of Hansen Technologies Limited. This is the fifth year our AGM is being held virtually, and we are very pleased to have everyone participating online through our virtual meeting platform provided by our share register, Link Market Services Limited. If we experience any technical difficulties today, a short recess or adjournment may be required, depending on the number of shareholders being affected. If this occurs, I shall advise you accordingly. Voting on resolutions is open and shall remain open until five minutes until after the end of the meeting. If anyone has questions throughout today's presentation, please submit them, and we will answer them at the end of the AGM. Now for the formalities of the meeting.
Notice of the meeting was duly given, and the meeting has been properly convened. We will turn to resolutions later in the meeting. Please note that only shareholders, proxy holders, or shareholder company representatives may vote. I note that there is a quorum present, and I declare the meeting open. I would like to introduce my colleagues joining me at this AGM: Andrew Hansen, CEO and Managing Director, who is joining us by phone, Bruce Adams, the Deputy Chairman, David Osborne, David Howell, Don Rankin, Lisa Pendlebury, and Rebecca Wilson. I would also like to introduce our Company Secretary, Julia Chand, as well as representatives from our auditors, RSM Australia Partners. Today's meeting will comprise three components. I will begin with some high-level commentary on Hansen's financial year '24 performance.
Our CEO and Managing Director, Andrew Hansen, who is overseas at the time and will be on the telephone, will then go into greater detail presenting the year's highlights and the company outlook for financial year 2025. Once we have completed the presentations, we will move on to consider the formal business set out in the notice of meeting. Voting on the resolutions will be conducted by way of poll. Shareholders attending the meeting online will be able to cast their vote using the electronic voting card received when online registration is validated. As previously advised, voting on resolutions is open and will remain so until five minutes after the end of the meeting. Please refer to the virtual meeting online portal guide and use the help line specified.
Shareholders participating online through the virtual meeting website that wish to ask a question, please click on the Ask Question button, type your question, and click Submit. Shareholders participating via the phone line, if you wish to ask a question, please press star one on your keypad. I encourage shareholders who have questions about the resolutions to submit their questions via the online platform now or as soon as possible. Shareholders' questions that are specific to a resolution will be responded to as the applicable resolution is introduced. To start with, and before I provide a recap of Hansen's financial year 2024 results, recognizing the historical growth and strong prospects of the future, the business reorganized during financial year 2024 into two vertical streams.
This evolution brings an industry focus and alignment of resources into two verticals, showing targeted sales and marketing efforts to more effectively identify growth opportunities under David Castree and Scott Weir. Niv Fernando is also welcome back to lead strategy, M&A, corporate marketing, and HR functions. The two verticals align existing teams into logical ownership with a focus on tight margin control, and this structure allows for growth through M&A within the vertical, supports the potential bolt-on of a third vertical, and creates a more robust success and planning capability through multiple organizational layers. Andrew will be providing an update on the PowerCloud business later in the presentation. Moving to page six. Financial year 2024 has been a great year for the Hansen core business, supplemented by the recent PowerCloud acquisition.
Ongoing revenue is up 7.3% from financial year 2023, excluding PowerCloud, and 13.2% at a group level. Energy and utilities revenue was up 14.7%, and no one customer contributes more than 8% of total 2024 revenue. We are well diversified by region, vertical, and company. Our cash EBITDA, excluding PowerCloud, which is underlying EBITDA less capitalized R&D, has been increasing steadily since financial year 2019 and is up 10.8% on a CAGR basis, reflecting the strong, stable, and cash-generative nature of our business. We have had 11 strategic wins in 12 months. During the year, we had major energy and utilities wins across Europe, including SSE, Fortum, EDP, Ohm Energie, Vattenfall, Varberg Energi, with Syn ergy, Powerco, New Mexico Gas Company, and the City of Bern in the Americas.
From an innovative standpoint, we capitalize only a small portion of our overall R&D. In addition to the 400 hours of innovation shown on this slide, we deliver a significant amount of build innovation activities across many of our products. The PowerCloud integration is on track, and a key customer, EWE, is extending their partnership for at least another five years. We have established a new leadership team, reviewed capacity, and made structural changes, and the business is being restored to profitability throughout the course of financial year 2025. Finally, to help us achieve our sustainability goals, we have taken a step forward at Hansen by developing and integrating a comprehensive global sustainability strategy into the core of our operations, with some key sustainability achievements also completed in financial year 2024.
On page seven, you can see the core Hansen numbers, as well as the PowerCloud acquisition completed in February 2024. Andrew will discuss our PowerCloud integration efforts in more detail later, but you can see from the first five months of ownership, and while we turn PowerCloud around, there has been an anticipated impact to the overall group margins. I'm very proud to say that cash EBITDA, which is underlying EBITDA less capitalized R&D in the core Hansen business, has increased 11.1% on last year, now up to AUD 87.1 million. Aligned with our guidance prior to our acquisition of PowerCloud, our core business underlying EBITDA margin for 2024 was 30%. Before I hand over to Andrew, I'd like to acknowledge my fellow director, David Osborne. David has decided to retire and will not be seeking reelection.
David has played a significant role in Hansen and has had a long-standing association with the company and was a board member for some years prior to the company's listing on the ASX. The executive team, the board, and I would like to thank David for his dedication and support over the years and wish him well for the future. Thank you, David. Over to you, Andrew.
Thank you, David, and thank you for your introduction. As David stated, I'm currently in Europe at the moment, and I actually have our CFO, Richard English, on standby should any technical issue take place. But before I go too far, I'd probably also like to thank David Osborne, someone I've actually worked with for some 35 years plus. It's an amazing history of the man. His experience and dedication have been a great asset for our company, and I'd like to thank David's support. And me personally, over the years, he's certainly helped Hansen evolve into the global business we are today and leaving us in a fantastic position. So, David, thank you so much for your support and direction over the years. Turning to page nine, all about Hansen.
Most of you would know a fair bit about Hansen, but as we know, we've been listed on the ASX since 2000. I think we can take the ground that our shareholders know who we are and understand the strength, stability, and predictability of our company, along with our M&A strategy. We do have market-leading technologies that provide mission-critical support for our customers across the globe, and we're at the forefront helping these two main industries we serve through a rapid digital transition they are currently navigating. We're proud to support these industries and balancing customer success with our own long-term profitability. Turning to page ten, the track record through M&A. Most of you would be aware that Hansen's business has both grown organically and inorganically.
We have done a lot of successful acquisitions over the time, and we have an extremely strong balance sheet and well-positioned to purchase and integrate future acquisitions. In fact, since 2008, we've acquired and successfully integrated eight businesses and have achieved a 14.7% operating revenue CAGR and a 14.3% EBITDA CAGR since then, which I think is absolutely outstanding. We do take a very careful approach to M&A and have a defined playbook to both acquire and integrate businesses, which has proven so strong for our business. Ultimately, we are a business that spends the money like it's our own, and we don't do a deal unless it makes complete commercial sense. Turning to page 11, which is Meet the Team. For those who followed Hansen, most of these names are known to you with such a strong executive base.
But we have made some changes over the last 12 months, which has introduced the two verticals in both the energy and the communications sectors, and that brings industry focus, and as we've explained before, the energy market primarily deals with localized and regionalized applications where the communications are single products across the globe. We've now got David Castree and Scott Weir looking after those two verticals, two long-serving Hansen executives, and Darren Mead, another long-term executive, heads our IT but continues to oversee our global delivery standards across the whole business and also works very closely on M&A support when required. Welcome back, Niv Fernando, a name synonymous with our organization to lead strategy and M&A, so welcome back, Niv, and I've resumed the role after we've done that restructuring back to global managing director and CEO.
The new structure realigns existing teams into logical ownership, building upon the margin control that exists at Hansen for many years. This structure also was to build upon M&A, but also to potential bolt-ons, could it be a third vertical or additional acquisitions within them. So we think this all lays out for robust succession planning. Turning to page 12, both verticals across the globe. Both these sectors are very dynamic and in exciting transformation phases, and we talk often about this. There are significant tailwinds as it's driving our increase in our pipeline. Of particular note, last year, our energy vertical was up by 15%. The communications industry is essentially led by technology and technologists, and we anticipate a stronger performance in financial 25 and beyond, really yielding from the significant investment in R&D we've been making across our product sets. Moving to page 13, sustainability.
This is an issue which is of great importance to our customers, the number of tenders we now respond to and our customers who now have to report, certainly through Europe, so this has been a great, at sometimes cost to the organization, but eye-opening to the organization as well, and I thank our whole team for what we've actually done, but these sustainable metrics are becoming mandatory and an integral part of helping our own customers achieve their sustainability efforts. We are planning a journey to net zero, and in fact, for a third year in a row, Australia's operations have now been certified as carbon neutral. We have developed and recently published our global sustainability strategy. I encourage those who have some time to actually read it, but it does set the foundations for the forthcoming mandatory climate-related financial disclosure standards that we will soon be facing.
So please take some time because a lot of work and effort has gone into that whole document. Just turning now to the update on page 15, I suppose PowerCloud is really where the current strategy aligns. There's no doubt it's part of our thesis, and it has been really a focus of us actually providing an overall strategy into the DACH region because of the size of that to us. We have been with PowerCloud nurturing those existing customer relationships and prospects. Yes, we have made some changes with the applications and concentrated now around the CIS product they call to make sure that we're aligning all our R&D because that's what our customers are looking for, and certainly deepening collaboration with Hansen because bringing our businesses together in that region is utmost important to us and part of our strategy.
And just to say up front, PowerCloud is on track and will be EBITDA positive in the coming months. The business has played out exactly the way we thought. To that point, probably the acceleration of profitability is now reflected in our guidance of probably being there a little bit quicker than what we had actually planned. Moving to page 16, this has never been done lightly, and this has not been something which is in the normal Hansen playbook, but we have a chapter on it, which is actually the restructuring and rationalization of staff. We knew upon buying the business that turning the business's focus back to the DACH region and not the global region, it was the reason we were able to buy the business the way we did. We have had to restructure the business down from 390.
The company at its height was over 500, now down to 140 staff and now supported through other Hansen people around the globe. We have been listening carefully to our customers to deliver mutually beneficial outcomes. The R&D efforts are now aligning the product direction with what our customers are looking for, and we're getting fantastic feedback. I've been lucky enough to be involved with some very large customers over here who are certainly embracing what Hansen's maturity is bringing to the table. We have reduced the cost base by AUD 27 million, which is quite significant. But I must remind everyone, the rationale of acquiring this business remains. There's a significant potential upside in the German marketplace as it transforms over the medium term. As I've pointed out before, this is an industry moving to smart meters by 2030.
There's over 1,000 retailers in the marketplace which will all need to actually update their systems to allow for the market changes. Moving to guidance on page 17, we're certainly happy to state the PowerCloud turnaround is nearing completion and the business is profitable in the coming months. The group's guidance revenues remain unchanged, and we are expecting some headwinds, but they're moderating, so it's still early into the year. We do see the second half was always going to be significantly stronger during the timing of the PowerCloud turnaround and the timing of license fees and upgrade revenues. From a group EBITDA perspective, we remain confident of delivering between $92 million-$101 million of EBITDA. Like revenue, we expect that EBITDA will be heavily backed up, certainly on the back of PowerCloud.
It's pleasing to see PowerCloud's return to profitability is certainly earlier than what we originally anticipated. From an overall cash standpoint, again, improving our guidance off the back of these changes via PowerCloud. Note we have excluded some one-off restructuring costs of approximately AUD 7 million from guidance. Due to the natural hedge, we don't see FX's headwinds materially impacting our bottom line because the natural hedge in our business where our revenues and our costs are similarly aligned in a currency point of view. Continuing on our outlook on page 18, we are certainly confident, encouraged by our progress, and I number one have to thank all of the Hansen team members and PowerCloud team members for their contribution to our business over this coming period. The PowerCloud business is on track, and the turnaround is completed within nine months.
We have a number of significant new opportunities in both verticals that aim to close over the next 12 months. The new vertical structure announced in June is successfully embedded and driving clear outcomes to our business. Our balance sheet is in excellent shape, and the M&A pipeline remains robust. We're ready and willing to transact on the right acquisition, but as always, it will be the right acquisition. There's a lot of opportunities out there, but we will take our time to thoroughly review them. We remain highly confident in our company's ability to deliver the growth in the medium term. More importantly, we're expecting the industry tailwinds in the businesses we'll possess beyond financial year 25. Thank you for that, everyone. David, I will hand it back now to you for you to continue the formal part of the meeting. Thank you, David.
Thank you, Andrew.
Ladies and gentlemen, we now come to the formal part of the meeting, matters requiring resolution, which are outlined in the notice of meeting. The resolutions for consideration today may only be voted on by shareholders, proxy holders, and shareholder company representatives. Shareholders online through the virtual meeting website can ask questions via text on each matter being put to shareholders. Those joining via phone are also able to ask questions verbally. I wish to start by tabling the 2024 annual report containing the director's report, the financial statements, director's declaration, and independent auditor's report. Copies of the 2024 annual report were either distributed by post or made available online to shareholders. So for the purposes of today's meeting, I intend to assume shareholders have had sufficient opportunity to review and consider the contents of the annual report.
As previously commented, representatives of our company's auditors, RSM Australia Partners, are present and available to answer questions. Are there any comments or questions regarding the various reports and financial statements contained within the 2024 annual report? Julia.
No, there are none.
Moving to the resolutions, votes can be submitted throughout the meeting and for five minutes after the close of the meeting, and I intend to vote the open votes given to me as chairman of the meeting in favor of all resolutions. The results will be announced to the ASX at the conclusion of the meeting. I would now like to deal with the formal resolutions contained in the notice of meeting. The first resolution relates to the adoption of the remuneration report.
At this time, I wish to advise that all directors and executives named in the remuneration report, as well as any person or party associated with any of them, are excluded from voting on this resolution in respect of shares they own or control. The resolution for consideration as a non-binding resolution is as follows. In accordance with the requirements of the Corporations Act, adopt the remuneration report for the year ended the 30th of June 2024 as it appears in the director's report within the annual report 2024. Are there any questions regarding the remuneration report via the online platform? Julia.
Yes, thank you, Chairman. I have a question from Mike Broby from the Australian Shareholders Association. He notes that they applaud the improvements and disclosure in the report, in particular the STI target achievement and the use of the absolute TSR hurdle for the LTI.
In the non-financial measures, culture is used. How do you measure this? And if you conduct an employee engagement survey, will you publish your results against global benchmarks, please?
David, I'll pass to head of our Remuneration Committee.
So Julia, the first part of the question was around culture and how do we measure it? Thank you for the question. Culture is a very difficult item to measure, but we do that through our employee survey. We also do that as a measure of how we experience working and understanding our vast employee base through direct conversations and so on. So it's not an exact science, but we feel that the culture that we have in Hansen is a very, very strong one.
It's based on a founder-led approach, and it's always served us very well historically, and we have no reason to think it won't in the future. Julia, the second part of the question, please.
The second part of the question is, will you publish the results of the global benchmarks?
So when we talk to global benchmarks, I'm not quite sure I understand what we're getting at there. We certainly can give highlights of the employee surveys, but how we measure that against international benchmarks, I'm not entirely sure. Any other questions, Julia?
No further questions on this resolution. Thank you, Chairman.
Thank you. So if there are no more questions via the online platform, I will now ask the moderator if there are any questions via the phone.
No questions on the phones.
You can see on the screen the proxy position for the resolution prior to today's meeting.
Thank you. I will now move to the remaining resolutions, each of which is an ordinary resolution requiring a 50% vote in favor to be successful. We shall now consider resolution two, that Ms. Rebecca Wilson, a director appointed by the board effective from the 28th of March 2024 until this annual general meeting of the company in accordance with the company's constitution, being eligible and having signified her candidature for office, be and hereby elected a director of the company. Are there any questions regarding this resolution via the online platform, Julia?
There are no questions on this resolution. Thank you, Chairman.
If there are no more questions via the online platform, I now ask the moderator if there are any questions via the phone.
No phone questions, Chair.
You can see from the screen the proxy position of the resolution prior to today's meeting. Well done, Rebecca.
Moving to resolution three, that for the purposes of Listing Rule 10.14 and for other purposes, shareholders approve the grant of 115,151 performance rights to Mr. Andrew Hansen under the Hansen Technologies Incentive Performance Rights Plan on the terms and conditions set out in the explanatory notes. Are there any questions regarding this resolution three via the online platform, Julia?
There are no questions. Thank you, Chairman.
If there are no more questions via the online platform, I would now ask the moderator if there are any questions via the phone.
No phone questions, Chair.
Thank you. You can see on the screen the proxy position for the resolutions prior to today's meeting. There was a conditional resolution four, which would only be put to shareholders of at least 25% of votes validly cast on resolution one or against that resolution.
As resolution one received less than 25% votes validly cast against that resolution, or it would appear so at this present time, contingent resolution four will not be considered. Ladies and gentlemen, that concludes the meeting. On behalf of the board, I would like to thank you for your support, and I now declare the meeting closed. We do have some other questions, I think.
Yes, we do. Thank you, David. Again, these are from Mike Broby of the Australian Shareholders Association. His first question is in relation to the fact that the meeting is virtual only, and he has asked, "Can the chairman explain why the meeting is virtual only when the now normal practice is a hybrid meeting where shareholders can properly interact with board and senior executives?
This is something we have talked about at the board for the last five years, obviously, while we've been having virtual meetings. Virtual meetings are cost-efficient and better participation from interstate and international investors. So over 60% of our Australian shareholding is outside Melbourne or Victoria, and we believe that a virtual meeting gives better access to shareholders across the board. But we will certainly take it on notice again prior to the 2025 AGM.
Thank you, David. I have a further question from Mike Broby. He notes that half of the current directors who are males have been appointed for between 13 and 24 years, and the chairman has been appointed for 13. He states that this is in a board and KMP underrepresented by women.
Despite mention of the Board Skills Matrix in the governance report, we could not find a copy to examine what succession plans are in place for the chairman and other long-serving directors, and will you publish a detailed board matrix using an external-graded approach in the next annual report?
Our Skills Matrix is on our website, so shareholders are available to see that as it stands. In terms of the age of directors, we take that on notice, and it's something we do discuss at board meetings, and we will look into the next financial year for some changes in that way, and that certainly for myself as Chairman of the Board as well. Albeit, the ASX has taken that off in terms of the number of years that are required or should be served by board members and chairpersons.
Sorry, Julia, what was the other one part of that?
I think you've answered this because you talked about he was asking about succession plans and would we publish the board matrix. So I think you have answered both parts of the question.
Thank you. Okay, Julia. Any other questions?
Yes, we have a final question from Robert O'Donohue. He is asking, he's stated that there is a lot of hype about Kraken Software, which is owned by Octopus Energy. Does Hansen see this as a serious competitor? And if so, what does Hansen do to compete with them?
Andrew, can I pass that across to you?
Yeah, looking forward to the answering that one. Robert, thanks for your question about Kraken. Certainly a lot of noise. Look, Kraken is good software, and like Hansen, I'm sure they'd say the same about our applications.
They're certainly a relatively new player, Kraken, which has been born out of the Octopus Energy business. What can I say, so this market is tens of thousands of potential opportunities around the world. As a new player, they certainly have taken some space. Probably the space they've grabbed is areas probably where Oracle and SAP had actually been rather than directly against Hansen. But we certainly take it serious because they push us further. The slight difference between the two companies are actually owned by an energy retailer, and you can actually go to their own financials to see. This company, Hansen, makes a fantastic profit. We make profits, and that's part of our plan the whole way through. As far as the technology point of view, look, there'll be more to come from Hansen at the moment.
Now, I think most people would understand in the last 18 months, two years, this has all been born since even Kraken released their software. AI and machine learning is demonstrably changing some of our products and the way how quick we get our products to market at the moment now. I think that people like Kraken can only help our business because the more people who see great outcomes from Hansen and great outcomes from Kraken gives us lots more opportunities for actually picking up new business going forward. So we certainly do take them serious. They are a serious competitor to Hansen, but they're always going to be a competitor to Hansen, which actually has a mixed owner because they're actually owned by a retailer.
And you'll see a lot of the deals they're doing, equity positions like Origin and people in Japan have actually taken equity positions where we remain a totally independent vendor going forward. So I hope that answers a little bit to it. There's technology. Yes, they're good, but it's a massive big market which we're both addressing. Thank you, David.
Andrew. Thanks, Julia. Any other questions?
No further questions. Thank you, Chairman.
Any other questions from the phone moderator?
No phone questions, Chair.
Thank you very much. Sorry, on behalf of the board, I'd like to thank you for your support, and I now declare the meeting closed. The results of the poll will be announced to the ASX later today. Thank you for your attendance and participation in this meeting.