Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Investor Presentation (February 2024)
27 slides from Smartgroup's investor presentation, Feb 21, 2024
Slide 1: 2023 Full Year Results
Smart Group Smartgroup. CY 2023 Investor Presentation 2023 Full Year Results Scott Wharton Anthony Dijanosic Managing Director and CEO Chief Financial Officer
Slide 2: Acknowledgement of Country
Smart Group Acknowledgement of Country Artist Statement I would like to acknowledge the Traditional Owners of the land on which Co-existing with Mother Earth from the first days of I am speaking with you today, the Gadigal People of the Eora Nation. understanding of kinship and the importance of car
Slide 3: Contents
Smart Contents 01 — 2023 Highlights 02 — Strategic Priorities 03 — 2023 Financials 04 — Summary and Outlook
Slide 4: 2023 Highlights
Smart Group Smartgroup. CY 2023 Investor Presentation 01 — 2023 Highlights
Slide 5: 2023 Performance Highlights
Smart Group 2023 Performance Highlights Solid financial performance Strong customer growth Increased demand for novated leasing High cash flow conversion • Revenue of $251.6m, up +12% • 396,000 active customers at December, • +26% growth in leasing settlements3 v • Strong operating cash flow v pcp +
Slide 6: 2023 ESG Highlights
Smart Group 2023 ESG Highlights S&P Global Dow Jones WGEA Inclusive Emissions Ranked 87th percentile Included for the first time Employer of Choice ‘Inclusive Employer’ Total carbon worldwide in S&P in the global Dow Jones for Gender Equality recognition by Diversity emissions Global CSA Sustainabil
Slide 7: Growth across all key product lines
Smart Group Growth across all key product lines Salary packages Novated leases Fleet managed under management vehicles H1 H2 H1 H2 CY New CY organic HY organic CY CY organic HY organic CY CY organic large CY 2022 growth1 2023 growth1 2023 2022 growth1 2023 growth1 2023 2022 growth1 client win 2023 •
Slide 8: New EV order growth across all client segments
Smart Group New EV order EV1% of new car orders (i.e. excl. used cars and refinances) growth across all 60% client segments 50% 40% 30% • EV proportion of new car lease orders and settlements grew across all client segments 20% • EV availability is generally good, though varies by 10% make/model 0%
Slide 9: Strong leasing demand and yield improvement
Smart Group Strong leasing Strong customer demand • Customer enquiry levels remain strong demand and yield Electric Car Discount Policy2 is contributing to demand uplift • EV quote to vehicle order conversion broadly in line with non-EVs improvement • Focus on customer education regarding new policy
Slide 10: Vehicle delivery timeframes stabilising but remain elevated
Smart Group Vehicle delivery Average Vehicle Order to delivery timeframes (for Smartgroup top 30 makes/models by volume) timeframes stabilising 90 but remain elevated 80 70 60 50 Days • Delivery timeframes remain elevated but continue 40 to stabilise, with significant variation across makes and mode
Slide 11: Car leasing portal
Smart Group Car leasing portal Roll-out progressing to plan • Significant engagement outside of business hours • Uplift in quotes and order levels seen across go- live tranches • Rolled out to over a third of all clients (from 204 at 30 June), representing c.54% of historic customer quote volume • A
Slide 12: Strategic Priorities
Smart Group Smartgroup. CY 2023 Investor Presentation 02 — Strategic Priorities Building a smarter future
Slide 13: Our context
Smart Group Our context Salary packaging comparison table1 Without salary packaging With salary packaging Annual salary before tax $65,000 $65,000 Pre-tax expenses - $18,550 Taxable income $65,000 $46,450 PAYG tax $11,592 $5,563 Medicare levy $1,300 $929 Annual salary after tax $52,108 $39,958 Post-
Slide 14: Our ambition
Smart Group Our ambition Draft Smarter Benefits for a Smarter Tomorrow Simplifying benefits and adding value to our clients and customers, while enabling businesses to attract and retain great teams as we build a more sustainable Australia. 14 Smartgroup. CY 2023 Investor Presentation
Slide 15: Our strategic priorities and focus
Smart Group Our strategic priorities and focus Our strategic priorities Customer-focussed, digital and • Digitise operations and enable self-service to delight clients and customers efficient salary packaging offering • Simplify and consolidate the core technologies and drive scale benefits includin
Slide 16: 2023 Financials
Smart Group Smartgroup. CY 2023 Investor Presentation 03 — 2023 Financials Full Year CY2023
Slide 17: Strong revenue drives earnings growth
Smart Group $m CY 20231 CY 2022 Change % Strong revenue drives Revenue Product costs (cost of sales) 251.6 (9.6) 224.7 (7.6) 12% 26% earnings growth Net revenue Staff costs 242.0 (103.8) 217.1 (87.1) 11% 19% Other overhead (37.9) (36.6) 4% Total overheads (141.7) (123.7) 15% Operating EBITDA 100.3 9
Slide 18: High cash conversion at 103% of NPATA
Smart Group High cash conversion $m CY 20231 CY 2022 Change % at 103% of NPATA Receipts from customers (inc GST) 292.4 277.6 5% Payments to suppliers and employees (inc GST) (198.7) (178.7) 11% Interest received from operations 5.9 1.8 228% Interest paid (3.6) (1.5) 140% Interest paid on lease liabi
Slide 19: Strong and flexible balance sheet with 0.3x leverage
Smart Group Strong and flexible $m 31 Dec 2023 31 Dec 2022 balance sheet with Cash 32.8 26.7 Other current assets 65.2 58.9 0.3x leverage Current assets 98.0 85.6 Non-current assets 319.5 320.2 Total assets 417.5 405.8 Current liabilities 104.6 102.1 Borrowings 64.7 53.8 Other non-current liabilitie
Slide 20: Capital allocation – maximising shareholder value
Capital allocation – maximising shareholder value Digital and technology simplification Allocate capital for medium Investments Customer experience improvements and long-term growth Operating Potential acquisitions or partnerships cash flow Deliver sustainable Dividend policy 60-70% of NPATA Return
Slide 21: Summary and Outlook
Smart Group Smartgroup. CY 2023 Investor Presentation 04 — Summary and Outlook
Slide 22: CY2023 Summary
Smart Group CY2023 Summary Revenue Customers NL volume Ordinary dividends Priorities $251.6m +17,000 26% 16 cps Strategic priorities determined +12% new salary packages, Growth in leasing both from existing clients settlements2 v pcp final ordinary and from client wins NPATA1 Leases Special dividend
Slide 23: Outlook
Smart Group Outlook • Continued solid leasing demand – January 2024 orders and settlements up on pcp • Divestment of payroll business – sale agreement executed 9 February 2024 • SA Government contract commences 1 July 2024, with upfront investments and additional resourcing ahead of contract start •
Slide 24: Appendix
Smart Group Smartgroup. CY 2023 Investor Presentation 05 — Appendix
Slide 25: Reconciliation of earnings to statutory financial statements
Smart Group Reconciliation Add back: Add back: CEO CY 2023 Non-IFRS Restructuring transition CY 2023 $m statutory measures costs costs adjusted of earnings Net revenue Operating EBITDA 242.0 98.7 - 0.8 0.8 242.0 100.3 to statutory Joint venture contribution Segment note EBITDA 0.3 99.0 - - - 0.8 0.8
Slide 26: Balance sheet
Smart Group $m 31 Dec 2023 statutory 31 Dec 2022 statutory Cash 32.8 Balance 26.7 Restricted cash 38.1 36.0 Trade and other current assets 27.1 22.9 sheet Current assets 98.0 85.6 Property and equipment 2.1 1.9 Right-of-use assets – Smartgroup funded vehicles 12.2 6.5 Right-of-use assets – other 4.4
Slide 27: Investor contact
Smart Group Smartgroup. CY 2023 Investor Presentation Investor contact Aline van Deventer ir@smartgroup.com.au 1300 665 855