McMillan Shakespeare Limited · ASX:MMS
McMillan Shakespeare — H1 FY2022 Earnings Presentation
41 slides from McMillan Shakespeare's earnings presentation, Feb 23, 2022
Slide 1: FY22 Half Year Results Presentation
Overview Focusing on our strengths FY22 Half Year Results Presentation 23 February 2022 Presenters Mike Salisbury CEO & Managing Director Ashley Conn CFO & Company Secretary McMillanShakespeareGroup i
Slide 2: Overview
Overview 1
Slide 3: 1H22 Highlights
Overview 1H22 Highlights Strong operating performance 1H22 UNPATA $40.0m1 up 12.8% on pcp (excl. JobKeeper) - Driven by strong customer growth, elevated vehicle yields and uplift from UK restructure, with increasing carryover to benefit future periods. Plan Partners reporting in its own segment from
Slide 4: Making a Difference to People's Lives
Overview “Making a Difference to People’s Lives” To build on our successful culture we have a new Purpose, Vision and Values Purpose: Making a difference to people’s lives To be the trusted partner, supporting customers’ Vision: financial wellbeing and lifestyle goals Values: McMillanShakespeareGrou
Slide 5: Introduction to our new segments
Overview Introduction to our new segments Group Remuneration Plan & Support Asset Management Services (“AMS”) Services (“GRS”) Services1 (“PSS”) AM Australia & NZ AM United Kingdom Aggregation Brands Primary service – Salary packaging – Plan management – Vehicle fleet leasing – Vehicle fleet leasing
Slide 6: Group UNPATA bridge
Overview Group UNPATA bridge Revenue EBITDA UNPATA2 Underlying EPS $311.6m $59.5m $40.0m 51.7 cps up 25.8% up 3.2% 1 up 12.8% 3 up 12.9%3 AMS $7.1m AM - ANZ AM - UK GRS PSS RFS $0.4m $3.1m $4.6m 50 (7.3) 4.6 0.6 (0.2) (9.9) 40 (3.7) 3.1 0.1 30 20 42.7 35.4 40.0 30.1 30.1 10 0 1H21 JobKeeper 1H21 UNP
Slide 7: Key operating metrics
Overview Key operating metrics Strong operating performance across portfolio 363,975 71,720 ~$19m $348m Salary packages Novated leases Novated carryover revenue4 Assets managed – WDV 1 Up 1.8% Orders up 4%2 Up 154%2 Down (4.2%) $1,428m 22,729 1,322 56 Net amount financed Plan & Support Services Aver
Slide 8: Auto sector influences
Overview Auto sector influences Constrained supply continues and is expected to remain at least through CY22 1H22 observations Outperformed new car sales (up 1.5%) – Customer demand remains strong with novated lease activity levels up 4% (novated lease orders up 4% vs pcp) Australian new car sales (
Slide 9: Strategic sustainability initiatives progressing well
Overview Strategic sustainability initiatives progressing well Sustainability strategy rollout underway, focusing on creating shared value for MMS and our stakeholders MMS sustainability strategy FY22 strategy rollout Status Progress Pathway to net zero carbon emissions1, and 100% renewable electric
Slide 10: Financial performance
Financial performance 9
Slide 11: Financial performance
Financial performance Financial performance Strong operating performance $m 1H21 1H22 (excl. JobKeeper) 1H21 Variance4 Revenue 311.6 247.6 247.6 25.8% EBITDA 59.5 57.6 68.1 3.2% EBITDA margin (%) 19.1% 23.3% 27.5% NPBT 42.6 35.8 46.3 19.0% NPAT 30.1 18.2 25.5 65.7% UNPATA 40.0 35.4 42.7 12.8% Underl
Slide 12: Balance sheet
Financial performance Balance sheet Strong net cash position (excl. fleet funded debt) creating capacity for growth 31 December 2021 30 June 2021 $m AM Other Group Group Net debt to EBITDA1 Cash at bank 24.9 106.1 131.0 158.0 0.8x vs 0.8x pcp Other current assets 38.3 24.2 62.4 50.9 Group gearing 2
Slide 13: Cash flow statement
Financial performance Cash flow statement Strong cash conversion at 95% of UNPATA 1H22 1H21 Group Plan and Asset Remuneration Support Management Unallocated / MMS MMS $m Services Services Services parent co. Group Total Group Total NPAT 20.3 2.1 9.1 (1.4) 30.1 25.5 Non-fleet depn/amort, reserves and
Slide 14: Warehouse update
Financial performance Warehouse update Warehouse ready to launch, awaiting final ASIC approval Diversification of funding sources, improving value for our customers and creating an annuity income stream with a higher per transaction NPV Implementation update Cumulative NIM comparison P&A vs Securiti
Slide 15: Segment performance
Segment performance 14
Slide 16: GRS: Highlights
Segment performance GRS: Highlights Strong demand will benefit future periods 99.8 99.8 100.5 Commentary Revenue – Return to growth in Salary Packaging through both participation growth (100% retention of Tier 1 clients (2) during the period) $100.5m and new business wins – Successfully executed sup
Slide 17: GRS: Operating metrics
Segment performance GRS: Operating metrics Accelerating growth with improved participation, new business wins and increased pipeline Salary packages1 Novated leases2 Salary packages by industry segment 363,975 71,720 6,587 (1,655) → → 3% 13% 358.0 361.0 364.1 357.4 364.0 71.6 71.8 72.3 73.4 71.7 26%
Slide 18: GRS: Novated leasing
Segment performance GRS: Novated leasing Customer demand remains robust, yield increased, with carry over to benefit future periods Order levels continue to grow, however, Carryover has increased to over 7 times historical levels vehicle supply constraints have resulted to ~$19m1, which will benefit
Slide 19: Introducing Plan and Support Services (PSS)
Segment performance Introducing Plan and Support Services (PSS) The trusted partner making a difference to people’s lives Plan Partners and Plan Tracker provide NDIS Plan Management and Support Co-ordination services Plan Management NDIS participants expected to grow to 859,3001 Support participants
Slide 20: PSS: Highlights
Segment performance PSS: Highlights Improving market share and investments in period to support future growth 11.9 19.5 Commentary Revenue – Strong organic customer acquisition driving revenue growth, supplemented by Plan Tracker (acquired 1 July 2021) $19.5m – Significant investments made in period
Slide 21: PSS: Operating metrics
Segment performance PSS: Operating metrics Increasing market share through organic growth and acquisitions Customers Unique service Support FTEs ‘000 providers co-ordination hours ‘000 ‘000 +69% +29% +19% 3.7 8.0 13.5 22.7 6 15 29 38 5 16 22 26 41 72 106 210 1H19 1H20 1H21 1H22 1H19 1H20 1H21 1H22 1
Slide 22: AM ANZ: Highlights
Segment performance AM ANZ: Highlights Supply constraints delivering improved remarketing profits 75.9 75.9 92.4 Commentary Revenue – Limited supply of new vehicles and increase in demand for used vehicles resulted in increased remarketing profits $92.4m – Increase in customer extensions increasing
Slide 23: AM ANZ: Operating metrics
Segment performance AM ANZ: Operating metrics WDV growth constrained as a result of market conditions Written down value Remarketing profits remain elevated and sales remain subdued – expect to continue through FY22 $311m Remarketing units - indexed to 1H20 Remarketing profit - indexed to 1H20 377 3
Slide 24: AM UK: Highlights
Segment performance AM UK: Highlights Restructured and delivering improved remarketing profits 30.0 74.1 Commentary Revenue – Limited supply of new vehicles driving an increase in demand for used vehicles $74.1m – Off balance sheet finance originations up 2%1 to $397m – One off tax credit in 1H22 re
Slide 25: AM UK: Operating metrics
Segment performance AM UK: Operating metrics Off balance NAF growth and auto supply dynamic driving elevated remarketing profits Consolidated asset brokerage business. Restricted vehicle supply driving elevated Delivering improved off balance sheet NAF remarketing profits and lower units Remarketing
Slide 26: RFS: Highlights
Segment performance RFS: Highlights Growth in Aggregation and Warranty business divested 29.9 29.9 25.0 Commentary Revenue – Aggregation net amount financed up 30% on pcp – Average NAF per deal improvement 11% on pcp $25.0m – Australian new car sales up 1.5% on pcp – Competitive price pressure ongoi
Slide 27: RFS: Operating metrics
Segment performance RFS: Operating metrics Improvements in Aggregation performance Net amount financed ($m)1 Revenue breakdown ($m)2 UNPATA breakdown ($m)3 ■ Aggregation ■ Retail 15.4 12.8 6.3 14.9 12.6 0.3 514.4 427.8 453.7 554.2 588.4 22.9 17.1 17.3 19.5 18.6 2.7 1.4 1.7 2.1 2.2 1H20 2H20 1H21 2H2
Slide 28: Summary and outlook
Summary and outlook 27
Slide 29: Summary and outlook
Summary and outlook Summary and outlook Summary of 1H22 Outlook – Strong operating performance – Customer growth in GRS through significant – Profitability impacted by supply constraints, recent new business wins increasing carryover, now over 7 times pre-COVD – Continued customer and market share g
Slide 30: Appendix
Appendix 29
Slide 31: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA $m 1H22 1H21 Variance NPAT 30.1 25.5 18.1% 1. Amortisation of intangibles from acquisitions 1.0 0.8 15.7% 2. Due diligence, acquisition and disposal costs 1.2 0.0 >100% 3. Warranty divestment loss on disposal and loan finance charge 1.3 0.0 >100% 4. Ac
Slide 32: Funding overview
Appendix Funding overview – Right sized the debt facilities for Asset Financing United Kingdom > Revolving facilities reduced from £15m to £5m > Cancellation of £6m working capital facility – Early redemption of corporate debt in Australia – Diversity of on and off balance sheet funding of operating
Slide 33: Segment review
Appendix Segment review Group Remuneration Services Asset Management Services Plan & Support Services Unallocated Total 1H21 1H21 1H21 (excl. (excl. (excl. $m 1H22 JobKeeper) 1H21 Variance1 1H22 JobKeeper) 1H21 Variance1 1H22 1H21 Variance 1H22 1H21 Variance 1H22 JobKeeper) 1H21 Variance1 Revenue 10
Slide 34: New segments FY and halves - GRS
Appendix New segments FY and halves - GRS 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance4 1H21 2H21 FY21 1H21 2H21 Revenue 100.5 99.8 99.8 0.6% 99.8 102.7 202.6 49.3% 50.7% Employee expenses 1 46.1 43.0 34.0 7.1% 34.0 43.1 77.2 44.1% 55.9% Property & other expen
Slide 35: New segments FY and halves – AM-ANZ
Appendix New segments FY and halves – AM-ANZ 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance4 1H21 2H21 FY21 1H21 2H21 Revenue 92.4 75.9 75.9 21.8% 75.9 77.7 153.5 49.4% 50.6% Fleet depreciation 23.2 23.5 23.5 (1.1%) 23.5 22.8 46.3 50.7% 49.3% Lease and vehicle m
Slide 36: New segments FY and halves – AM-UK
Appendix New segments FY and halves – AM-UK 1st Half comparison FY21 Half Yearly Split 1H22 1H21 Variance 1H21 2H21 FY21 1H21 2H21 Revenue 74.1 30.0 >100% 30.0 72.7 102.8 29.2% 70.8% Lease and vehicle management expenses 59.3 17.9 >100% 17.9 61.6 79.5 22.5% 77.5% Employee expenses 5.5 6.5 (14.7%) 6.
Slide 37: New segments FY and halves – RFS
Appendix New segments FY and halves – RFS 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance3 1H21 2H21 FY21 1H21 2H21 Revenue 25.0 29.9 29.9 (16.5%) 29.9 29.3 59.2 50.5% 49.5% Brokerage commissions 12.8 13.3 13.3 (3.7%) 13.3 14.2 27.5 48.3% 51.7% Employee expenses
Slide 38: New segments FY and halves – PSS
Appendix New segments FY and halves – PSS 1st Half comparison FY21 Half Yearly Split 1H22 1H21 Variance 1H21 2H21 FY21 1H21 2H21 Revenue 19.5 11.9 63.6% 11.9 14.3 26.2 45.5% 54.5% Employee expenses1 11.6 5.1 >100% 5.1 7.8 12.9 39.4% 60.6% Property & other expenses1 4.0 2.4 72.2% 2.4 2.5 4.8 48.9% 51
Slide 39: Dividend dates
Appendix Dividend dates FY22 Interim Results Release Wednesday, 23 February 2022 Ex-dividend Thursday, 10 March 2022 Record date Friday, 11 March 2022 Payment date Friday, 25 March 2022 Final Results Release Wednesday, 24 August 2022 Ex-dividend Thursday, 8 September 2022 Record date Friday, 9 Septe
Slide 40: Disclaimer and important notice
Appendix Disclaimer and important notice 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 presentation contains selecte
Slide 41: MoNiillanShakespeareGroup
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