Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Investor Presentation (February 2020)
27 slides from Smartgroup's investor presentation, Feb 19, 2020
Slide 1: 2019 Full Year Results Investor Presentation (ASX Announcement)
ASX Announcement 2019 Full Year Results Investor Presentation Release date: 19 February 2020 In accordance with the ASX Listing Rules, Smartgroup Corporation Limited (ASX: SIQ) encloses for release to the market its 2019 full year results investor presentation. For further information, contact: Tim
Slide 2: Investor Presentation: Full year CY 2019 Results
Investor Presentation Full year CY 2019 Results 19 February 2020 Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer
Slide 3: Smartgroup has delivered another year of growth despite some industry headwinds
Smartgroup has delivered another year of growth despite some industry headwinds 1. Positive financial performance • Revenue of $249.8m up 3% vs CY 2018 • NPATA1 of $81.0m up 4% vs CY 2018 2. Success in servicing clients • Organic growth of c.24,700 salary packages and c.3,500 novated leases • Net gr
Slide 4: Smartgroup delivered steady performance across all financial and operational metrics
Smartgroup delivered steady performance across all financial and operational metrics... $m CY 2019 CY 20182 Change % Revenue 249.8 241.8 3% EBITDA1 118.2 115.0 3% NPATA 81.0 77.8 4% Shares on issue (millions) 131.7 130.9 1% NPATA per share (cps) 61.5 59.4 4% As at As at 31 December 2019 30 December
Slide 5: ...and increasing revenue, earnings and dividends
...and increasing revenue, earnings and dividends Revenue H1 H2 EBITDA1 H1 H2 300.0 140.0 241.8 249.8 115.0 118.2 250.0 120.0 205.4 100.0 93.6 200.0 124.0 59.4 119.2 58.4 147.1 80.0 $m $m 150.0 107.9 63.3 49.0 94.4 60.0 100.0 84.7 37.4 75.3 40.0 37.7 48.4 24.1 39.3 122.6 125.8 19.6 56.6 58.8 50.0 97
Slide 6: Smartgroup continued to see organic growth across salary packaging and novated leasing
Smartgroup continued to see organic growth across salary packaging and novated leasing… Salary packaging customers • Organic growth of 10,000 packages 400,000 10,000 and 1,750 leases in H2 2019 18,000 2,500 14,700 500 350,000 358,500 343,000 348,000 ( 12,200 ) 300,000 325,000 • Victorian health cont
Slide 7: ...and also across fleet management and payroll services
…and also across fleet management and payroll services Fleet vehicles under management Employees paid by Smartsalary Payroll Solutions1 30,000 platform since acquisition 4,000 25,000 1,100 2,600 3,800 24,000 3,500 22,900 2,800 20,000 3,000 Fleet vehicles Employees paid 17,500 2,500 • At December 201
Slide 8: Smartgroup has a diversified employer client base
Smartgroup has a diversified employer client base that represents attractive sectors within the Australian workforce Salary packaging client 5% Revenue profile by and customer profile 2% client contract 19% 31% Dec 20151 Dec 20151 Only 1 client used 2 or 132,500 52% c.150 more service offerings pack
Slide 9: Novated leasing volumes have continued to grow despite downturn in private new vehicle sales
Smartgroup’s novated leasing volumes have continued to grow, despite the downturn in private new vehicle sales Private new vehicle 120% sales1 relative to 115% Q1 CY 2018 Baseline relative to Q1 2018 110% 105% 100% 95% 90% 85% 80% 75% 70% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 20
Slide 10: We continue to focus on increasing adoption of digital channels and automation
We continue to focus on increasing adoption of digital channels and automation Progressive uptake of online channels from Smartgroup now has 49 robots, increased customer adoption and migration of equivalent to 55 digital FTEs packages and leases onto core platforms1 100% 60 60 % of total transactio
Slide 11: The staffing profile reflects the successful integration of acquired businesses
The staffing profile reflects the successful integration of acquired businesses and the focus on our customers and technology 10% 15% 10% 6% 9% 4% 53% 365 FTE 58% 436 FTE 50% 689 FTE 31% 23% 31% NOVEMBER 2015 ACQUISITIONS SINCE IPO1 DECEMBER 2019 Packages 132,500 157,500 358,500 Novated leases under
Slide 12: Recognised as one of Australia's most customer-centric companies
Smartgroup continued to be recognised as one of Australia’s most customer-centric companies, as well as an inclusive and diverse employer Smartsalary Smartgroup capabilities triangle 2015 – 2019 Maintained highest ever CSIA accreditation score 2019 National Service Champion 2017 National Service Cha
Slide 13: Delivering multiple services through core, new and partner service offerings
Smartgroup continued to see success in delivering multiple services through core, new and partner service offerings 200 clients now use two or more service offerings Number of clients using two or more services has grown c.30% over the last 2 years Number of Smartgroup services used by individual cl
Slide 14: Integration of acquired businesses and consolidation of salary packaging service delivery continues
Integration of acquired businesses and consolidation of salary packaging service delivery continues Acquisition Integration Rebatable1 PBI2 Government Corporate completion date completion date NA Continuing brands May 2017 December 2015 July 2016 Expected August 2016 2020 Retiring/retired brands Oct
Slide 15: Financial results Full year CY 2019
Financial results Full year CY 2019 Tim Looi Chief Financial Officer Page 13
Slide 16: In CY 2019 Smartgroup delivered continued growth across all financial metrics
In CY 2019 Smartgroup delivered continued growth across all financial metrics... CY 2019 CY 2018 $m adjusted1 adjusted2 Change % Revenue 249.8 241.8 3% EBITDA3 118.2 115.0 3% NPAT 62.5 59.8 5% NPATA 81.0 77.8 4% 1. A reconciliation of the statutory accounts to adjusted earnings is attached in the Ap
Slide 17: ...and generated after-tax operating cashflow of 110% of NPATA
…and generated after-tax operating cashflow of 110% of NPATA1 Adjusted Adjusted $m CY 20192 CY 20182 Receipts from customers (inclusive of GST) 283.0 270.1 Payments to suppliers and employees (inclusive of GST) (161.4) (156.1) Interest receipts from operations 2.2 2.6 Interest paid (1.6) (3.8) Inter
Slide 18: Smartgroup's balance sheet is well capitalised
Smartgroup’s balance sheet is well capitalised Notes $m Note 31 Dec 2019 statutory 31 Dec 2018 statutory 1. Restricted cash and customer salary packaging Cash 39.6 39.2 liabilities represent funds held in common salary Restricted cash* 1 65.8 42.3 packaging accounts on behalf of clients. Trade and o
Slide 19: Regulatory review of add-on insurances
Regulatory review of add-on insurances • There are two ongoing regulatory reviews from the Australian Securities and Investments Commission (ASIC) and the Australian Department of Treasury (Treasury) which have the potential to impact the future contribution Smartgroup receives from add-on insurance
Slide 20: Senior Management update
Senior Management update • As announced in November 2019, Deven Billimoria to retire as Managing Director and CEO (effective 28 February 2020). • Tim Looi to commence as Managing Director and CEO (from 29 February 2020). • Recently appointed executives add experience and capability to the Executive
Slide 21: Closing remarks
Closing remarks… Deven Billimoria Managing Director and CEO Page 19
Slide 22: In summary
In summary 1. Smartgroup has delivered another year of positive financial and operational results despite some industry headwinds. 2. Success in servicing clients and expanding service offering. 3. Continued progress with automation and the consolidation of service delivery. 4. Strong cashflow gener
Slide 23: ...building on our track record since company inception
...building on our track record since company inception Revenue EBITDA 280 130 260 120 118.2 249.8 240 110 220 100 200 90 180 80 160 70 140 $m $m 60 120 50 100 40 80 60 30 40 20 20 10 0 0 20061 20061 2002 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2002 2003 2004
Slide 24: Questions?
Questions? Page 22
Slide 25: Appendix – reconciliation of earnings to statutory financial statements
Appendix – reconciliation of earnings to statutory financial statements Add back: 2019 Reclass: Onerous lease Add back: statutory Equity share of Add back: costs (acquired acceleration of 2019 $m results investments M&A costs properties) LTIP expense Reported Revenue 249.8 – – – – 249.8 Operating EB
Slide 26: Appendix – reconciliation of the movement in net tangible assets
Appendix – reconciliation of the movement in net tangible assets $m # of shares (m) NTA (cps) Net tangible assets – Dec 2018 (45.6) 130.9 (34.83) Net cash from operating activities 89.0 Increase in borrowings (6.9) Ordinary dividends paid (55.8) Special dividend paid (26.3) Other tangible asset/liab
Slide 27: Important notice and disclaimer
Important notice and disclaimer Disclaimer This presentation has been prepared by Smartgroup Corporation Ltd (ACN 126 266 831) (“Smartgroup”) and is general background information about Smartgroup’s activities current as at the date of this presentation. The information is given in summary form and