Slide 1: Investor Presentation: Half year 2021 results
INVESTOR PRESENTATION Half year 2021 results 20 August 2021 Tim Looi – Managing Director and CEO Anthony Dijanosic – Chief Financial Officer
Slide 2: H1 2021 Overview
H1 2021 OVERVIEW Tim Looi Managing Director and CEO Smartgroup Investor H1 2021 Presentation 1
Slide 3: H1 2021 performance demonstrates good momentum
H1 2021 performance demonstrates good momentum Financial results continue to improve • Revenue of $109.4m up 4% vs H2 2020, and down just under 2% vs pcp1 • NPATA2 of $33.5m up 1% vs H2 2020, and up 5% vs H1 2020 Successful renewal outcomes and operating performance • Renewal or extension of all
Slide 4: EBITDA margin remains strong at 45%
EBITDA margin remains strong at 45% Revenue EBITDA1 NPATA1 Dividend (fully franked)2 1. Adjusted to reflect one-off impact on adoption of AASB 16 Leases from January 2018. Impact is Smartgroup Investor H1 2021 to increase 2018 EBITDA by $1.6m in each of H1 and H2 and reduce 2018 NPATA by $0.1m in Pr
Slide 5: Smartgroup has renewed or extended all key client contracts for 2021
Smartgroup has renewed or extended all key client contracts for 2021 Top 20 clients by number Relationship length of contract terms of Top 20 clients Renewed or extended all top 20 contracts falling due in CY 2021 (8 in total) Renewed Department of Defence for a term of 5 years inclusive of extensio
Slide 6: Novated leases and fleet vehicles under management remained stable
Novated leases and fleet vehicles under management remained stable Novated leases under management Vehicle supply constraints saw a small reduction in novated leases under management, due to delays in new lease order settlements New lease vehicle order volumes have increased to pre- COVID levels Fle
Slide 7: Continued settlement growth and good rebound in vehicle orders
Continued settlement growth and good rebound in vehicle orders (via digital channels) H1 2021 v H1 2020 v H2 2020 Settlement volume +2% +4% New lease digital leads +18% +27% New lease vehicle orders +21% +19% • New novated lease orders increased to pre-COVID levels. Settlement volume is impacted by
Slide 8: New lease vehicle orders have increased to pre-COVID levels
New lease vehicle orders have increased to pre-COVID levels, with order to settlement conversion > 99% • Vehicle orders at pre-COVID levels in Q2 2021. Vehicle order to settlement conversion is >99% • Vehicle supply constraints are expected to continue for the remainder of 2021 Smartgroup Investor H
Slide 9: Financial Performance Half Year
FINANCIAL PERFORMANCE HALF YEAR CY2021 Anthony Dijanosic Chief Financial Officer Smartgroup Investor H1 2021 Presentation 8
Slide 10: Good underlying operational momentum underpinning revenue and EBITDA growth
Good underlying operational momentum underpinning revenue and EBITDA growth H1 2021 H1 2020 Change H2 2020 Change Revenue growth being adjusted1 adjusted % adjusted % driven by increasing novated settlement Revenue 109.4 111.4 (2%) 104.9 4% volumes and higher Product costs (2.7) (3.2) (17%) (2.8) (4
Slide 11: Cash flow generation remained strong at 107% of NPATA
Cash flow generation remained strong at 107% of NPATA $m H1 20211 H1 20201 adjusted adjusted Receipts from customers (inclusive of GST) 123.1 136.8 Strong operating cash flow conversion at 107% of Payments to suppliers and employees (inclusive of GST) (76.2) (86.9) NPATA underpins 70% Interest recei
Slide 12: Small net debt position following payment of special dividend in March
Small net debt position following payment of special dividend in March $m 30 Jun 2021 31 Dec 2020 statutory statutory Cash 21.4 27.4 Other current assets 82.1 66.6 Cash reduction due to Current assets 103.5 94.0 payment of $19.2m special dividends in Non-current assets 303.8 314.4 March, in addition
Slide 13: Key Priorities and Outlook
KEY PRIORITIES AND OUTLOOK Tim Looi Managing Director and CEO Smartgroup Investor H1 2021 Presentation 12
Slide 14: Smart Future program
Smart Future program Driving earnings and dividend growth 13
Slide 15: Client base has a large number of employees
Client base has a large number of employees Significant organic growth opportunities from existing clients Addressable market Addressable market c.1.2-1.5m1 employees within c.0.9-1.2m2 total cars owned by existing client base those employees Equals 60,000 employees Equals 60,000 cars (potential (po
Slide 16: Smart Future program: Targeting EBITDA uplift of $15-20 million
Smart Future program: Targeting EBITDA uplift of $15-20 million The full implementation of the program is expected to result in significant operational and financial benefits Smart Future outcomes Targeting $15-20 million annualised EBITDA uplift from those strategic initiatives, in Increased cl
Slide 17: Significant progress has been made in building the technology foundations
Significant progress has been made in building the technology foundations of the business Re-design websites c.20% increase in calculator Released new leasing calculator and calculators traffic and leads Supporting c.60 robotic Invest further in In-sourced robotics capability processes and 50+ ‘Digi
Slide 18: Streamlined operations: client and customer transitions progressing well
Streamlined operations: client and customer transitions progressing well Transitioned To be % to-date transitioned completion Businesses transitioned 7 1 88% Employer clients c.1,800 c.500 78% Employee customers c.90,000 c.31,500 74% Salary packaging cards c.149,000 - 100% Systems 8 3 73% • The busi
Slide 19: Summary of results and outlook
Summary of results and outlook Results Success in client wins and renewals • New health sector client onboarded in April 2021 with c.8,500 packages • Renewed or extended 100% of expiring key client contracts falling due in CY 2021 H1 2021 operational performance continued to improve • H1 2021 no
Slide 20: Questions?
QUESTIONS? Smartgroup Investor H1 2021 Presentation 19
Slide 21: Reconciliation of earnings to statutory financial statements
Reconciliation of earnings to statutory financial statements H1 2021 Add back: statutory Non-IFRS Smartequity H1 2021 $m results measure revaluation adjusted Revenue 109.4 - - 109.4 Operating EBITDA 49.4 - - 49.4 Joint venture contribution 0.1 - - 0.1 Segment note EBITDA 49.5 - - 49.5 Depreciation e
Slide 22: 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