Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2019 Earnings Presentation
37 slides from Mcmillan Shakespeare's earnings presentation, Feb 20, 2019
Slide 1: FY19 Half Year Results Presentation
McMillan For personal use only Shakespeare Limited FY19 Half Year Results Presentation Presenters Mike Salisbury, CEO Mark Blackburn, CFO
Slide 2: Overview
For personal use only Overview Overview 1
Slide 3: Key Financial Metrics
Overview Key Financial Metrics For personal use only 1H UNPATA Performance ($m) Revenue up 1.2% to $273.1 million EBITDA down 3.8% to 44.3 42.6 $65.3 million 41.8 42.1 UNPATA1 down 3.9% to 31.3 29.7 $42.6 million 24.9 Underlying EPS down 4.1% to 20.5 19.3 51.5 cents/share 11.2 Fully franked dividend
Slide 4: Group UNPATA Bridge
Overview Group UNPATA Bridge For personal use only Corporate GRS $0.4m AM $(1.4m) RFS $(0.8m) $0.1m 46 0.6 (0.8) 0.1 (0.6) 0.6 44 (0.9) 0.2 (0.9) (0.1) 0.1 42 40 38 44.3 36 42.6 34 32 30 1H18 Core GRS Plan Beyond Core AM: 1H18 early Core AM: Core RFS Increased MoneyNow Corporate / 1H19 UNPATA Partne
Slide 5: Segment Scorecard
Overview Segment Scorecard For personal use only Segment Stated strategy 1H19 impact Group > Continue organic growth – Solid growth across key revenue drivers, novated units up 7.0% and salary packages Remuneration > Margin improvement via up 3.8% compared to pcp Services technology advancements – A
Slide 6: Continued growth in customers and assets
Overview Continued growth in customers and assets Organic volume growth driving future profitability For personal use only 339,100 65,300 44,795 $537m Salary packages Novated leases Assets managed Assets written 3.8% 7.0% (Units) down value1 12.5 % 2.0% $1,464m $395m 1,290 54.3 Net amount financed 3
Slide 7: Strategic growth priorities - Beyond 2020
Overview Strategic growth priorities - Beyond 2020 For personal use only Financial Operational achievements Front ended the Beyond 2020 expenditure to bring forward Introduced robotic process automation productivity and conversion rate improvements Introduced digital vehicle purchasing (dealer porta
Slide 8: Strategic growth priorities – Maxxia UK
Overview Strategic growth priorities – Maxxia UK For personal use only UK market conditions UK GDP (%) Brexit uncertainty dominates UK economic debate, 3.5 with business investment confidence being impacted 3.0 3.1 Vehicle registrations are down 7.5% for 1H19 2.5 compared to 1H18 2.0 2.3 1.9 The cen
Slide 9: Strategic growth priorities – Plan Partners
Overview Strategic growth priorities – Plan Partners For personal use only Plan Partners provides intermediary services, funding and payment administration to National Disability Insurance Scheme (NDIS) participants Increasing awareness and recognition of the value of plan management services and pr
Slide 10: Eclipx (ECX) proposed merger
Overview Eclipx (ECX) proposed merger For personal use only Merger announcement > Creates a leading Australian and New Zealand salary packaging and fleet management company (8 November 2018) > Leverages existing operational and financial strength > Highly complementary and synergistic businesses wit
Slide 11: Financial Performance
For personal use only Financial performance Financial Performance 10
Slide 12: Results Summary
Financial performance Results Summary For personal use only $m 1H19 1H18 Variance Revenue1 273.1 269.7 1.2% EBITDA 65.3 67.9 (3.8%) EBITDA margin (%) 23.9% 25.2% NPBT 50.8 51.3 (1.2%) NPAT (MMS share) 34.5 34.9 (1.2%) Underlying NPATA 42.6 44.3 (3.9%) Basic earnings per share (cents) 41.8 42.3 (1.2%
Slide 13: Balance Sheet
Financial performance Balance Sheet Strong balance sheet For personal use only 31 December 18 30 June 18 $m AM Other Group Group Net debt to EBITDA1 Cash at bank Other current assets 40.3 24.3 72.6 38.0 112.9 62.3 99.7 59.4 2.0x Total fleet funded assets 490.6 0.0 490.6 483.7 Group gearing2 Group 41
Slide 14: Funds Flow
Financial performance Funds Flow Group cash flow impacted by timing issues affecting AM working capital For personal use only 1H19 1H18 Group Retail Remuneration Asset Financial Unallocated / MMS MMS $m Services Management Services parent co. Group Total Group Total NPAT 29.7 5.3 2.7 (3.3) 34.4 34.9
Slide 15: Funds Flow Bridge
Financial performance Funds Flow Bridge FCF1 impacted by a number of one-off items, expect FCF to revert to normal levels For personal use only $m One-off items 40 35 35.8 (2.2) (7.7) 30 25 (3.3) 4.0 (0.5) 26.1 20 15 10 5 0 1H18 FCF Capex Working Capital Working Capital Non-operating Other 1H19 FCF
Slide 16: Performance Ratios
Financial performance Performance Ratios For personal use only 10 year historical performance 1H19 1H18 1H17 1H16 1H15 1H14 1H13 1H12 1H11 1H10 CAGR Revenue $m 273.1 269.7 251.2 244.3 182.5 162.5 161.5 143.5 136.7 43.6 22.6% EBITDA $m 65.3 67.9 66.6 65.2 47.4 32.6 44.7 38.9 35.4 17.0 16.2% EBITDA ma
Slide 17: Segment performance
For personal use only Segment performance Segment performance 16
Slide 18: Segment Review
Segment performance Segment Review For personal use only Group Remuneration Services Asset Management Retail Financial Services Unallocated Total $m 1H19 1H18 % 1H19 1H18 % 1H19 1H18 % 1H19 1H18 % 1H19 1H18 % Revenue 106.0 99.6 6.4% 124.2 120.4 3.2% 42.3 48.9 (13.5%) 0.6 0.7 (15.7%) 273.1 269.7 1.2%
Slide 19: Group Remuneration Services (GRS)
Segment performance Group Remuneration Services (GRS) Continued outperformance with strong novated leasing volume growth For personal use only $m 1H19 1H18 Variance Revenue 106.0 99.6 6.4% Commentary Employee expenses 43.5 42.3 2.8% Solid revenue growth underpinned by a 3.8% increase in salary Prope
Slide 20: GRS Operating metrics
Segment performance GRS Operating metrics For personal use only Salary packages (000’s)1 Novated vehicles (000’s)2 5 year CAGR: 6.4% 339.1 326.8 297.1 5 year CAGR: 8.3% 276.0 65.3 259.6 61.0 249.2 56.9 53.4 48.1 43.9 1H14 1H15 1H16 1H17 1H18 1H19 1H14 1H15 1H16 1H17 1H18 1H19 Net new clients: 7,000
Slide 21: GRS technology investments drive innovation and productivity
Segment performance GRS Technology investments drive new levels of innovation and productivity For personal use only On-line claims take-up rate (%) Productivity index1 Customer satisfaction index3 90 200 250 Target 80 70 60 150 200 50 NPS Benchmark 40 2 30 100 150 20 10 0 50 100 Dec Dec Dec Dec Dec
Slide 22: Asset Management (AM) – Australia & New Zealand
Segment performance Asset Management (AM) – Australia & New Zealand Disciplined and focused strategy with reducing capital intensity For personal use only $m 1H19 1H18 Variance Revenue 93.3 91.5 2.0% Commentary Fleet depreciation 34.3 36.6 (6.3%) Assets managed has declined 1.9% compared to pcp Leas
Slide 23: AM – Australia & New Zealand Operating metrics
Segment performance AM – Australia & New Zealand Operating metrics For personal use only Fleet assets written down value ($m)1 1H19 1H19 WDV breakdown Revenue breakdown 315 312 321 346 376 56 10% 23 4 24% 9% $376.6m 36% $93.3m 48% 18% 28% 315 312 317 323 320 16% 10% 1H15 1H16 1H17 1H18 1H19 ■ Mining
Slide 24: AM – United Kingdom
Segment performance AM – United Kingdom Current economic conditions and broker expansion resulted in softer 1st half result For personal use only $m 1H19 1H18 Variance Revenue3 30.9 28.9 6.9% Commentary Lease and vehicle mgmt. expenses 15.1 14.2 6.3% Experienced softer than expected start to FY19 Em
Slide 25: AM – United Kingdom Operating metrics
Segment performance AM – United Kingdom Operating metrics For personal use only Assets written down value ($m) 1H19 WDV breakdown 180.4 ■ Finance 160.0 4% 6% 137.7 ■ Manufacturing 125.9 9% ■ Industry 43% $160.0m ■ Wholesale 11% ■ 1H19 impacted ■ Services 38.6 by asset portfolio ■ Other 18% sales of
Slide 26: Retail Financial Services (RFS)
Segment performance Retail Financial Services (RFS) Business well positioned for a sustainable future For personal use only $m 1H19 1H18 Variance Revenue 42.3 48.9 (13.5%) Commentary Brokerage commissions 19.2 21.8 (11.9%) Result impacted by first full trading period post closure of Money Employee e
Slide 27: RFS Operating metrics
Segment performance RFS Operating metrics For personal use only Net amount financed ($m) Revenue breakdown ($m) UNPATA breakdown ($m) 555.9 534.7 533.2 55.9 48.9 42.3 6.2 4.6 3.8 11.7 74.4 30.3 52.8 521.5 481.5 481.9 24.9 2.3 18.0 1.2 0.4 3.9 3.6 25.6 3.4 24.0 24.3 1H17 1H18 1H19 1H17 1H18 1H19 1H17
Slide 28: Summary
For personal use only Summary Summary 27
Slide 29: Summary
Summary Summary For personal use only Consistent execution of strategic growth priorities driving solid growth in customers and assets Outperformance in novated leasing - deep expertise and capability driving ongoing growth UNPATA decline on pcp driven by: > Accelerated investment in Beyond 2020 > R
Slide 30: Appendix
For personal use only Appendix Appendix 29
Slide 31: Key continuing initiatives for building long term shareholder value
Appendix Key continuing initiatives for building long term shareholder value For personal use only Broadening the suite of high quality products and industry leading service to drive organic growth Investing in technology resulting in an improved customer experience and lower operating cost Capturin
Slide 32: Complementary diversification across the MMS Group
Appendix Complementary diversification across the MMS Group For personal use only Group Remuneration Services Asset Management Retail Financial Services Brands Primary service – Salary packaging – Vehicle fleet leasing and mgt – Vehicle finance, insurance – Novated leases – Vehicle finance, insuranc
Slide 33: Funding Overview
Appendix Funding Overview For personal use only Extended UK facilities beyond 12 months at same terms and pricing consistent with upper investment grade benchmarks Increased capital-efficient off balance sheet funding of lease portfolio by 39% in 1H19 Local Currency Australian Dollars ($m) Amount Am
Slide 34: Risks and sensitivities
Appendix Risks and sensitivities For personal use only Regulation of consumer insurance products Regulation of consumer lending products Ongoing potential risk of consumer action Acquisition and integration risk Second hand car prices (remarketing earnings) New and used car sales Interest rates (ear
Slide 35: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA For personal use only $m 1H19 1H18 Variance NPAT 34.5 34.9 (1.2%) 1. Amortisation of intangibles from acquisitions after tax 1.8 1.9 (5.3%) 2. Deferred consideration after tax 2.7 (6.5) >100% 3. Asset impairment in relation to warranty and insurance bu
Slide 36: Disclaimer and important notice
Appendix 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 presenta
Slide 37: For personal use only
For personal use only
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