Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 2013 Earnings Presentation
25 slides from Mcmillan Shakespeare's earnings presentation, Feb 19, 2013
Slide 1: MMS Group 1HFY13 Results Presentation
MMS Group 1HFY13 Results Presentation For personal use only 19 February 2013
Slide 2: Half year presentation contents
Page 2 MMS Group 1HFY13 Results Presentation For personal use only Half year presentation contents Page 1. Key points 3 2. Financial highlights 5 3. Segment performance 9 4. Gearing, cash flow and funding 18 5. Outlook 21 6. Sensitivities 22 7. The UK Opportunity 23
Slide 3: 1HFY13 key points
Page 3 MMS Group 1HFY13 Results Presentation For personal use only 1HFY13 key points Integrated business performing strongly. Ongoing strong profitable growth in Group Remuneration Services segment. Operating margins improved. Assets under finance and management growth continues. Integrated model co
Slide 4: 1HFY13 key points (cont'd)
Page 4 MMS Group 1HFY13 Results Presentation For personal use only 1HFY13 key points (cont’d) Business remains resilient in the face of ongoing economic turmoil. Leading indicators appear strong. We have entered into a joint venture company with an experienced local management team to launch our Max
Slide 5: Financial highlights
Page 5 MMS Group 1HFY13 Results Presentation For personal use only Financial highlights Consolidated NPAT of $29.7m (19.4% growth on PCP, ex interest on the float, 25.6%). Group Remuneration Services NPAT of $22.0m (19.0% growth on PCP, ex interest on the float 28.0%). Asset Management NPAT of $7.3m
Slide 6: Consolidated financial performance
Page 6 MMS Group 1HFY13 Results Presentation For personal use only Consolidated financial performance 1HFY13 1HFY12 % 1HFY13 1HFY12 % 1HFY13 1HFY12 $000 $000 Increase $000 $000 Increase $000 $000 Group Group Remuneration Remuneration Asset Asset Services Services Management Management Total Total Re
Slide 7: Earnings per share
Page 7 MMS Group 1HFY13 Results Presentation For personal use only Earnings per share 45.00 40.00 35.00 Basic EPS 7-year CAGR of 26% 30.00 cents 25.00 20.00 15.00 10.00 5.00 0.00 1H FY06 1H FY07 1H FY08 1H FY09 1H FY10 1H FY11 1H FY12 1H FY13 Basic EPS Cash EPS Cash EPS after CAPEX but excludes the
Slide 8: NPAT performance
Page 8 MMS Group 1HFY13 Results Presentation For personal use only NPAT performance 35 NPAT 7 year CAGR 28% 30 29.7 25 24.9 20 20.5 $m 15 10 11.2 9.5 7.9 5 6.1 5.3 0 1H FY06 1H FY07 1H FY08 1H FY09 1H FY10 1H FY11 1H FY12 1H FY13 NPAT
Slide 9: Definition of segments
Page 9 MMS Group 1HFY13 Results Presentation For personal use only Definition of segments Group Remuneration Services segment definition: The segment provides administrative services in respect of salary packaging and facilitates the settlement of motor vehicle novated leases for customers, but does
Slide 10: Group Remuneration Services financial performance
Page 10 MMS Group 1HFY13 Results Presentation For personal use only Group Remuneration Services financial performance 80.0 100.0% 75.8 90.0% 70.0 Revenue 7-year CAGR 19% EBIT 7-year CAGR 25% 80.0% 1HFY06-1HFY13 64.4 60.0 70.0% 50.0 53.6 60.0% $m 40.0 43.6 50.0% 37.7 40.0% 30.0 31.5 31.4 26.3 26.3 30
Slide 11: Group Remuneration Services financial performance (cont)
Page 11 MMS Group 1HFY13 Results Presentation For personal use only Group Remuneration Services financial performance (cont) 1HFY13 1HFY12 % $000 $000 Inc Comment Segment revenue 75,757 64,413 18% (ex float interest 21%) Expenses Employee expenses 29,456 24,946 18% % increase below ex float revenue
Slide 12: Competitive strengths and performance indices
Page 12 MMS Group 1HFY13 Results Presentation For personal use only Competitive strengths and performance indices Group Remuneration Services Productivity Index (7/08 = 100) MMS Customer Satisfaction Index [Rolling 3 month Revenue (ex Float Interest) / FTE] December 2008 = 100 160 250 155 150 145 20
Slide 13: Group Remuneration Services commentary
Page 13 MMS Group 1HFY13 Results Presentation For personal use only Group Remuneration Services commentary Business maintaining good momentum on the back of improving participation, strong sales and distribution capability and significant new business wins. Good increases in both unit sales and aver
Slide 14: Asset Management financial performance
Page 14 MMS Group 1HFY13 Results Presentation For personal use only Asset Management financial performance 1HFY13 1HFY12 % Comments $000 $000 Inc Segment revenue 84,396 78,593 7% New contract wins roll on Expenses Depreciation of motor vehicle fleet 35,984 32,693 10% Interest on fleet financing 5,46
Slide 15: Asset Management segment commentary
Page 15 MMS Group 1HFY13 Results Presentation For personal use only Asset Management segment commentary First half performance exceeded expectations. Business building solid momentum. Assets under finance - growth continues ($41m or 16% since June 30). New contract wins driven by unique value propos
Slide 16: Fleet assets WDV
Page 16 MMS Group 1HFY13 Results Presentation For personal use only Fleet assets WDV 380 330 280 303 262 230 239 ($m) 213 214 215 220 180 130 80 30 -20 Acquisition 1 April 30-Jun-10 31-Dec-10 30-Jun-11 31-Dec-11 30-Jun-12 31-Dec-12 2010 Fleet receiveables and WDV assets
Slide 17: Asset Management key balance sheet numbers
Page 17 MMS Group 1HFY13 Results Presentation For personal use only Asset Management key balance sheet numbers 31-Dec-12 30-Jun-12 Movement $000 $000 $000 Operating lease assets 282,516 244,023 38,493 Motor vehicle inventories 3,131 1,980 1,151 Finance leases & CHP 17,380 15,561 1,819 Total funded f
Slide 18: Gearing
Page 18 MMS Group 1HFY13 Results Presentation For personal use only Gearing MMS & Group Remuneration Asset Group Balance Group Balance Services Management at at 31-Dec-12 31-Dec-12 31-Dec-12 30-Jun-12 $000 $000 $000 $000 Net debt -52,798 187,673 134,875 101,580 Book value of equity 81,450 98,401 179
Slide 19: 1HFY13 cash flow
Page 19 MMS Group 1HFY13 Results Presentation For personal use only 1HFY13 cash flow Group Remuneration Asset Unallocated / MMS Group Services Management parent co. Total $000 $000 $000 $000 Segment NPAT 21,990 7,290 467 29,747 Non-fleet depn/amort, reserves and fleet prov movements 2,884 762 - 3,64
Slide 20: Funding
Page 20 MMS Group 1HFY13 Results Presentation For personal use only Funding • In FY12 the Asset Management facility limit was extended to August 2015 and increased to $270m with the ability to increase further. • No parent company debt remaining. • Cash as at 31 December 2012 is $54.1m.
Slide 21: Outlook
Page 21 MMS Group 1HFY13 Results Presentation For personal use only Outlook Ongoing organic profitable growth through: o New business and cross-sell from our stronger integrated value proposition, competitive cost of funds and flexible financing facilities. o Increasing participation rates within ex
Slide 22: Sensitivities
Page 22 MMS Group 1HFY13 Results Presentation For personal use only Sensitivities Interest rates (earnings on float). Second hand car prices (remarketing earnings). New car sales (novated lease participation). Key contract tenders – NSW Government tender announcement expected in 2HFY13 (Maxxia curre
Slide 23: The UK Opportunity
Page 23 MMS Group 1HFY13 Results Presentation For personal use only The UK Opportunity Maxxia (UK) is a 50/50 joint venture company between Visper Asset Finance Limited (VAF) and MMS with an opportunity to move to 100% after five years. The VAF management team formerly worked for GMAC, through the M
Slide 24: The UK Opportunity (cont'd)
Page 24 MMS Group 1HFY13 Results Presentation For personal use only The UK Opportunity (cont’d) The total committed investment for MMS over five years is UK £1.5m plus the cost of a senior MMS Executive to act as Managing Director of UK business (VAF will provide the CEO). The joint venture applies
Slide 25: The UK Opportunity (cont'd)
Page 25 MMS Group 1HFY13 Results Presentation For personal use only The UK Opportunity (cont’d) In summary, this opportunity provides MMS with a low cost, low risk “look” at the UK market, backed by a UK management team with over 150 years of experience in one of the UK’s leading asset management co