Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2023 Earnings Presentation
31 slides from Mcmillan Shakespeare's earnings presentation, Feb 22, 2023
Slide 1: ASX cover announcement: Interim Results Investor Presentation
For personal use only 22 February 2023 Manager Company Announcements ASX Limited 20 Bridge Street SYDNEY NSW 2000 By E-lodgement McMillan Shakespeare Limited (MMS) Interim Results Investor Presentation This release contains an announcement to the Australian Securities Exchange Limited (ASX) regardin
Slide 2: MMS 1HFY23 Results Presentation
For personal use only MMS 1HFY23 Results Presentation 22 February 2023 Presenters Rob De Luca CEO & Managing Director Ashley Conn CFO & Company Secretary MMS
Slide 3: Disclaimer and important notice
Disclaimer and important notice For personal use only This presentation has been prepared by McMillan Shakespeare Limited ABN 74 107 233 983 (“MMS”). It contains summary information about MMS and its subsidiaries and their activities current as at the date of this presentation. The presentation cont
Slide 4: 1HFY23 Overview
For personal use only MMS 1HFY23 Overview 1
Slide 5: 1HFY23 Business highlights
1HFY23 Overview 1HFY23 Business highlights MMS: Making Matters Simple For personal use only Trusted partner #1 #2 #2 with strong market Novated leasing provider Salary packaging provider NDIS Plan management provider positions Customer focus Up 9.4% Up 6.1% Up 27.6% and new client wins 386,124 29,01
Slide 6: 1HFY23 Financial performance and dividend
1HFY23 Overview 1HFY23 Financial performance and dividend For personal use only 1HFY23 % Normalised EBITDA 1,2 ($m) 67.2 5.7% → Normalised UNPATA 1,3 ($m) 40.4 0.3% → Excluding the UK, where exit options are being Statutory NPAT ($m) 35.5 18.1% considered, Normalised → UNPATA increased 8.5% Normalis
Slide 7: Our business platform
1HFY23 Overview Our business platform Trusted partner with strong market positions For personal use only MMS Trusted partner, providing solutions High customer Strong market Favourable financial in making complex matters simple satisfaction position characteristics Group Remuneration Asset Managemen
Slide 8: Key macro thematics
1HFY23 Overview Key macro thematics Well positioned to capture opportunities shaping our business For personal use only Increased Number of NDIS participants Decarbonisation Increasing demand government spending projected to increase, policy settings and targets for outsourcing with commitment of $5
Slide 9: MMS clear strategy to deliver sustainable growth
1HFY23 Overview MMS clear strategy to deliver sustainable growth Making Matters Simple For personal use only Our Purpose To make a difference to people’s lives Our Vision To be the trusted partner, providing solutions in making complex matters simple Managing Navigating Claims and Leveraging Managem
Slide 10: Financial performance
For personal use only Financial performance MMS 7
Slide 11: UNPATA bridge
Financial performance UNPATA bridge For personal use only Normalised Revenue1 Normalised EBITDA1,3 Normalised UNPATA1,2,4 Normalised EPS1 $314.8m $67.2m $40.4m 54.2 cps up 1.0% up 5.7% up 0.3% up 4.1% AMS $(2.3)m GRS PSS AM - ANZ AM - UK RFS Corporate $2.2m $0.3m $0.5m $(2.8)m $(0.0)m $0.0m 2.2 0.3
Slide 12: Balance sheet
Financial performance Balance sheet Net cash position (excl. fleet funded debt) after share buy-back For personal use only 31 December 2022 30 June 2022 $m AMS Other Group Group Net debt to EBITDA1 Cash at bank 38.6 74.9 113.5 160.8 1.1x vs 0.8x pcp Other current assets 34.2 21.6 55.9 43.7 Group gea
Slide 13: Cash flow
Financial performance Cash flow High cash conversion and returning surplus cash to shareholders For personal use only Cash conversion remains high. $90.3m of off-market share buy-back completed. Includes timing benefit of instant asset Interim dividend reflects 100% payout ratio of write off and wor
Slide 14: Segment Performance
For personal use only Segment Performance MMS 11
Slide 15: GRS: Highlights
Segment performance GRS: Highlights Strong customer growth with the transition of recent client wins For personal use only and benefits of rising interest rates $100.5m $110.4m Growth underpinned by new clients and increased penetration Normalised Revenue1 Salary packages ’000 ⬆ 6.1% Novated leases
Slide 16: GRS: Novated leases
Segment performance GRS: Novated leases Increased activity levels and higher carryover to benefit future periods For personal use only Activity levels remain strong, leads up Sales increased 11% and carryover 13% and orders up 9%, with an increasing increased 7% (from 30 June 2022), now importance o
Slide 17: GRS: OnBoard Finance (Warehouse)
Segment performance GRS: OnBoard Finance (Warehouse) $23m of leases funded through OnBoard Finance with 20% volume target to be achieved by end of 2HFY23 For personal use only Strategic and financial benefits Update Revenue – Secures and diversifies our funding – Funded $22.6m of leases to sources 3
Slide 18: AMS: Highlights
Segment performance AMS: Highlights Growth in Net Amount Financed (NAF) and benefits from elevated remarketing yields, moderated by the UK For personal use only $191.4m $179.7m Net amount financed AM-ANZ Remarketing 88% 91% $1,155m 9.4% yields stabilised at Revenue → Net amount financed $m elevated
Slide 19: GRS & AMS: Australian auto update
Segment performance GRS & AMS: Australian auto update Signs of vehicle supply stabilising and new EV Bill provides opportunity for growth For personal use only New car sales returned to pre-pandemic levels, Treasury Laws Amendment (Electric Car Discount) with greater skew towards private buyers than
Slide 20: PSS: Highlights
Segment performance PSS: Highlights Strong customer growth while investing in delivering a scalable For personal use only platform for future growth $19.5m $23.4m Customers and market share growth with no annual fee increase, a shift towards plan extensions Revenue over renewals and longer duration
Slide 21: Outlook
For personal use only MMS Outlook 18
Slide 22: Outlook and priorities
Outlook Outlook and priorities Focus on strategy execution For personal use only 2HFY23 outlook Strategy execution Similar market conditions to 1HFY23 – Carryover ~$27m of revenue for future periods Our strategic priorities – Ongoing elevated novated & remarketing yields – 1HFY23 vehicle supply dyna
Slide 23: Appendix
For personal use only MMS Appendix 20
Slide 24: Reconciliation between NPAT and Normalised UNPATA
Appendix Reconciliation between NPAT and Normalised UNPATA For personal use only $m 1HFY23 1HFY22 Variance Statutory NPAT 35.5 30.1 18.1% Amortisation of intangible assets acquired on business combination 0.9 1.0 (4.5%) Acquisition and disposal related expenses 0.4 1.2 (68.7%) Capital structure cost
Slide 25: Return on capital employed (ROCE) calculation
Appendix Return on capital employed (ROCE) calculation For personal use only Return on Capital Employed (ROCE) $m 1HFY23 1HFY22 Normalised EBIT Statutory equity 185.3 277.1 Last 12 months Normalised EBIT is before the pre-tax impact of acquisition and Impairments1 - 6.9 divestment related activities
Slide 26: Funding overview
Appendix Funding overview For personal use only – Established 5-year bullet loan facilities totalling up to $60m with WBC and NAB to replenish working capital buffers, fully drawn in October 2022 – Operating lease uncommitted P&A facilities of $255.1m drawn to $97.9m Local Currency Australian Dollar
Slide 27: Segment cash flow
Appendix Segment cash flow For personal use only 1HFY23 1HFY22 Group Plan and Asset Remuneration Support Management Unallocated / MMS MMS $m Services Services Services parent co. Group Total Group Total NPAT 19.8 2.8 14.0 (1.0) 35.5 30.1 Non-fleet depn/amort, reserves and other non-cash items 7.0 0.
Slide 28: Segment financials
Appendix Segment financials For personal use only GRS AMS PSS Corporate MMS $m 1HFY23 1HFY22 % 1HFY23 1HFY22 % 1HFY23 1HFY22 % 1HFY23 1HFY22 % 1HFY23 1HFY22 % Normalised Revenue 1 110.4 100.5 9.9% 179.7 191.4 (6.2%) 23.4 19.5 19.9% 1.2 0.2 >100% 314.8 311.6 1.0% Employee benefits expense 51.8 45.8 1
Slide 29: AMS financials
Appendix AMS financials For personal use only AM-ANZ AM-UK RFS AMS $m 1HFY23 1HFY22 % 1HFY23 1HFY22 % 1HFY23 1HFY22 % 1HFY23 1HFY22 % Revenue 107.5 92.4 16.3% 52.8 74.1 (28.7%) 19.4 25.0 (22.2%) 179.7 191.4 (6.2%) Leasing and vehicle management 54.3 43.1 26.0% 43.8 59.3 (26.0%) - - >100% 98.2 102.4
Slide 30: Calendar
Appendix Calendar For personal use only Interim FY23 Results Release Wednesday, 22 February 2023 Ex-dividend Thursday, 09 March 2023 Record date Friday, 10 March 2023 Payment date Friday, 24 March 2023 Investor Day1 May 2023 Final1 Results Release Wednesday, 23 August 2023 Ex-dividend Thursday, 07 S
Slide 31: MMS
For personal use only MMS
McMillan Shakespeare — H1 FY2023 Earnings Presentation on 6ix