Slide 1: AGM presentation materials, including 1H 2020 earnings guidance
ASX Announcement AGM presentation materials, including 1H 2020 earnings guidance 10 June 2020 Please find attached the following documents to be presented at the 2020 Annual General Meeting (AGM) of Smartgroup Corporation Limited (ASX: SIQ) to be held at 11.00am this morning (Sydney time) via online
Slide 2: 2020 Annual General Meeting – Chairman and CEO Script
SMARTGROUP CORPORATION LIMITED 2020 ANNUAL GENERAL MEETING – CHAIRMAN AND CEO SCRIPT 11.00 AM, WEDNESDAY 10 JUNE 2020 1. CHAIRMAN’S ADDRESS 2019 results 2019 delivered another year of earnings growth for Smartgroup, with revenues up 3 per cent to $249.8 million and after-tax profits, represented by
Slide 3: Chairman's address: 2020 and conclusion
2020 Smartgroup delivered solid performance in the first quarter of 2020 with overall financial performance in line with the prior corresponding period. However, like many other businesses throughout Australia, the Company has seen impacts from the COVID-19 Pandemic through the latter part of March,
Slide 4: Managing Director's Address
2. MANAGING DIRECTOR’S ADDRESS In 2019, Smartgroup delivered another year of growth despite a more challenging industry backdrop. First, we delivered another year of positive financial results. Revenue and NPATA were up on the prior year by 3% and 4%, respectively. Second, we continued to have succe
Slide 5: Fleet management footprint and client base
pleased to say that the balance of our major Victorian Health clients have now been re-signed to multi-year agreements. Our fleet management footprint also continued to grow. Our Payroll solutions business, while representing just a small proportion of our group, performed well in 2019 with employee
Slide 6: Regulatory reviews and 2020 business update
As both of these reviews continue to be on-going, we are not in a position to speculate about the outcome. However, we have disclosed the annual revenue that we generated from the sale of add-on insurances expected to be covered by the reviews. The $17m of revenue is the residual revenue after the i
Slide 7: Customer segments and novated leasing
I would like to remind shareholders that we operate in stable and attractive customer segments. Employees in Government, health, education and the Public Benevolent Institution segments comprise 96% of our customer base. For the year to date, our salary packaging performance has remained resilient a
Slide 8: Q1 positive, Q2 impacted by COVID-19
We have had positive performance in Q1, but Q2 has been impacted by COVID-19 through lower novated leasing settlements. As mentioned earlier, while we are encouraged by the improvement in novated enquiries in recent weeks, overall volumes remain below historical levels and this upward trend is based
Slide 9: Smartgroup Corporation 2020 Annual General Meeting
Smartgroup Corporation 2020 Annual General Meeting 10 June 2020
Slide 10: 2019 overview
2019 overview
Slide 11: Smartgroup delivered another year of growth in 2019 despite some industry headwinds
2019 overview Smartgroup delivered another year of growth in 2019 despite some industry headwinds 1. Positive financial performance • Revenue of $249.8m up 3% vs CY 2018 • NPATA1 of $81.0m up 4% vs CY2018 2. Success in servicing clients • Organic growth of c.24,700 salary packages and c.3,500 novate
Slide 12: Smartgroup delivered steady performance across all financial and operational metrics
2019 overview 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 201
Slide 13: ...and increasing revenue, earnings and dividends
2019 overview ...and increasing revenue, earnings and dividends 1. Adjusted to reflect one-off impact on adoption of AASB 16 Leases from January 2018. Impact is to increase 2018 EBITDA by $1.6m in each of H1 and H2; and reduce 2018 NPATA by $0.1m in each of H1 and H2. Page 5
Slide 14: Organic growth across salary packaging and novated leasing
2019 overview 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
Slide 15: ...and also across fleet management and payroll services
2019 overview …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 • A
Slide 16: Diversified employer client base in attractive sectors
2019 overview 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
Slide 17: Staffing profile reflects successful integration of acquired businesses
2019 overview 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 Novate
Slide 18: Recognised as one of Australia's most customer-centric companies
2019 overview Smartgroup is recognised as one of Australia’s most customer- centric companies, as well as an inclusive and diverse employer Smartsalary 2015 –2019 Maintained highest ever Smartgroup capabilities triangle CSIA accreditation score 2019 National ServiceChampion 2017 National Service Cha
Slide 19: Regulatory review of add-on insurances
2019 overview 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 ad
Slide 20: 2020 update
2020 update
Slide 21: COVID-19 response and our people
2020 update COVID-19 response and our people Smartgroup has actively responded to the COVID-19 environment • The group moved to a working from home environment for 100% of all staff in late March • We introduced a number of changes to customer engagement, including webinars to replace face-to-face v
Slide 22: Salary packaging has remained resilient with client renewals progressing well
2020 update Salary packaging has remained resilient with client renewals progressing well and customer access improving as restrictions ease Smartgroup has a diverse customer base with a significant proportion providing essential services to the community throughout COVID-19 Salary packaging perform
Slide 23: Novated leasing volumes performed above market in 1Q20
2020 update Novated leasing volumes performed above market in 1Q20 with impacts seen in 2Q20 aligned to broader market conditions Novated leasing revenue performance for 1Q20 was broadly in line with CY19 despite the 12% decline in Australian private new vehicle sales Impacts of COVID-19 were seen i
Slide 24: 1H20 NPATA currently expected to be c.$32m
2020 update 1H20 NPATA currently expected to be c.$32m 1. Group financial performance for 1Q2020 was in line with pcp with April and May results reflecting the impact of COVID-19 • 1Q20 revenue +1.4% vs. pcp, 1Q20 EBITDA +0.2% vs. pcp • April/May combined revenue (25.0%) vs. pcp, EBITDA (37.4%) vs.
Slide 25: Conclusion
Conclusion
Slide 26: In summary
In summary 1. Smartgroup delivered another year of growth in 2019 despite some industry headwinds. Clients in Long term 2. Our focus in response to COVID-19 has been on attractive client segments relationships safeguarding the well-being of our employees and continuing to provide a high level of ser
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