Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2018 Earnings Presentation
35 slides from Mcmillan Shakespeare's earnings presentation, Feb 21, 2018
Slide 1: MMS Group FY18 Half Year Presentation
For personal use only MMS Group FY18 Half Year Presentation Presenters Mike Salisbury, CEO Mark Blackburn, CFO McMillanShakespeareGroup
Slide 2: Overview
For personal use only Overview Overview 1
Slide 3: Key Financial Metrics
Overview Key Financial Metrics For personal use only UNPATA Performance ($m) Revenue up 4.4% to $262.3 million 41.8 42.1 44.3 105.1 EBITDA up 2.0% to $67.9 million 29.7 31.3 83.4 89.7 76.6 UNPATA up 5.2% to 1 24.9 64.0 $44.3 million 20.5 19.3 Underlying EPS up 6.1% to 41.3 11.2 9.5 53.7 cents/share
Slide 4: 1H18 Scorecard
Overview 1H18 Scorecard For personal use only Segment Stated strategy 1H18 impact Group > Continue organic growth – Organic growth remains strong with salary packages increasing 10.0%, Remuneration > Margin improvement via novated leasing increasing 7.2% compared to pcp Services technology advanceme
Slide 5: Strong organic growth in customers and assets
Overview Strong organic growth in customers and assets For personal use only 326,800 61,000 39,760 $526m Salary packages Novated leases Assets managed Assets managed 10.0% 7.2% (Units) (WDV) 1 2.6 % 14.7% $1,350m $390m 1,230 47.3 Net amount financed Average salary Employees GRS Net Promoter Score 19
Slide 6: Strategic growth priorities
Overview Strategic growth priorities For personal use only Initiatives to drive growth, returns and profitability Strategic Initiative: Drive novated leasing sales growth and a reduction in operating costs via productivity improvements – Beyond 2020 will transform the way we provide our service, now
Slide 7: Strategic growth priorities: novated sales and operations productivity
Overview Strategic growth priorities For personal use only Initiative: Maintain novated sales growth Current Position Scope of work Target – 61,000 novated leases – Improve customer communications – Increase sales conversion ratio by 33% – 5 year novated lease CAGR of – Revolutionise the sales activ
Slide 8: Strategic growth priorities: UK and NDIS
Overview Strategic growth priorities For personal use only Initiative: Continue growth phase, improve capital returns Current position Target Established UK business of scale generating The leading provider of a portable employee lease net amount financed of circa $750m per annum The aggregator of c
Slide 9: Financial performance
For personal use only Financial performance Financial performance 8
Slide 10: Results Summary
Financial performance Results Summary Performance driven by organic growth and strategic investments For personal use only $m 1H18 1H17 Variance Revenue 262.3 251.3 4.4% EBITDA 67.9 66.6 2.0% EBITDA margin (%) 25.9% 26.5% NPBT 51.3 59.1 (13.2%) NPAT 34.9 40.4 (13.6%) Underlying NPATA 44.3 42.1 5.2%
Slide 11: Balance Sheet
Financial performance Balance Sheet Conservative capital position to fund growth and shareholder returns For personal use only 31 December 17 30 June 17 $m AM Other Group Group Net debt (excludes fleet funded debt)1 Cash at bank Other current assets 13.2 (3.0) 34.6 58.9 47.8 55.9 59.4 54.7 $1.2 mill
Slide 12: Funding Overview
Financial performance Funding Overview Diversified funding model with extended maturity dates For personal use only Competitive finance rates and long term duration driven by MMS scale and quality of customer base Renegotiated the current component of the Asset Financing facilities in each jurisdict
Slide 13: Funds flow
Financial performance Funds flow GRS continuing strong free cash flows For personal use only 1H18 1H17 Group Retail Remuneration Asset Financial Unallocated / MMS MMS $m Services Management Services parent co. Group Total Group Total NPAT 29.4 16.6 (10.5) (0.5) 34.9 40.4 Non-fleet depn/amort, reserv
Slide 14: Performance ratios
Financial performance Performance ratios For personal use only 10 year historical performance 1H18 1H17 1H16 1H15 1H14 1H13 1H12 1H11 1H10 1H09 CAGR Revenue $m 262.3 251.3 244.3 182.5 162.5 161.5 143.5 136.7 43.6 37.7 24.0% EBITDA $m 67.9 66.6 65.2 47.4 32.6 44.7 38.9 35.4 17.0 13.6 19.5% EBITDA mar
Slide 15: Segment performance
For personal use only Segment performance Segment performance 14
Slide 16: Segment Review
Segment performance Segment Review For personal use only Group Remuneration Services1 Asset Management Retail Financial Services Unallocated Total $m 1H18 1H17 % 1H18 1H17 % 1H18 1H17 % 1H18 1H17 % 1H18 1H17 % Revenue 99.6 90.5 10.1% 113.0 104.0 8.7% 48.9 55.9 (12.5%) 0.7 0.8 (12.5%) 262.3 251.3 4.4
Slide 17: Group Remuneration Services (GRS)
Segment performance Group Remuneration Services (GRS) Strong performance, well positioned for growth For personal use only $m 1H18 1H17 Variance Revenue 98.9 90.5 9.3% Commentary Employee expenses 40.1 34.3 16.9% Business performing well, continue high client retention rate Property & other expenses
Slide 18: GRS: Continuing organic growth in customer and asset bases
Segment performance GRS Continuing organic growth in customer and asset bases For personal use only Salary packages (000’s)1 Novated vehicles (000’s)2 5 year CAGR: 6.0% 326.8 297.1 5 year CAGR: 8.8% 276.0 259.6 61.0 243.8 249.2 56.9 53.4 48.1 43.9 40.1 1H13 1H14 1H15 1H16 1H17 1H18 1H13 1H14 1H15 1H
Slide 19: 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 200 300 80 250 180 60 200 160 150 40 140 100 20 120 50 0 100 0 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Slide 20: Asset Management (AM) – Australia & New Zealand
Segment performance Asset Management (AM) – Australia & New Zealand Disciplined approach generating improved profitability and margins For personal use only $m 1H18 1H17 Variance Revenue 91.5 90.2 1.4% Commentary Fleet depreciation 36.6 38.3 (4.4%) Stable customer base driving overall asset value Le
Slide 21: AM – Australia & New Zealand Operating metrics
Segment performance AM – Australia & New Zealand Operating metrics For personal use only Fleet assets written down value ($m) 1H18 1H18 WDV breakdown Revenue breakdown 22.7 4.4 322.6 314.9 316.8 323.1 311.9 15% 14% 296.9 13% 19% $335.1m 32% $91.5m 52% 12% 28% 16% 1H13 1H14 1H15 1H16 1H17 1H18 ■ Mini
Slide 22: AM – United Kingdom
Segment performance AM – United Kingdom Platform established, building scale and profitability For personal use only $m 1H18 1H17 Variance Revenue 21.5 13.8 55.8% Commentary Lease and vehicle mgmt. expenses 6.8 4.2 61.9% Strong NAF growth in all brokerage businesses Employee expenses 6.5 3.9 66.7% S
Slide 23: AM – United Kingdom Operating metrics
Segment performance AM – United Kingdom Operating metrics For personal use only Assets written down value ($m) 1H18 WDV breakdown 180.4 ■ Services 6% 137.7 11% ■ Industry 125.9 37% ■ Wholesale and trade 13% $180.4m ■ Finance ■ Manufacturing 38.6 16% 18% ■ Other 10.0 1H14 1H15 1H16 1H17 1H18 Net amou
Slide 24: Retail Financial Services (RFS)
Segment performance Retail Financial Services (RFS) Strong distribution footprint, adaptable to changing markets For personal use only $m 1H18 1H17 Variance Revenue 48.9 55.9 (12.5%) Commentary Employee expenses 21.8 24.1 (9.5%) Segment continues to operate with market and regulatory Brokerage commi
Slide 25: RFS Operating metrics
Segment performance RFS Operating metrics For personal use only Revenue breakdown ($m) UNPATA breakdown ($m) 30.3 24.9 2.3 1.2 3.9 25.6 3.4 24.1 1H18 1H17 1H18 1H17 ■ Aggregation ■ Aggregation ■ Retail ■ Retail 24
Slide 26: Summary
For personal use only Summary Summary 25
Slide 27: Summary
Summary Summary For personal use only Solid 1H18 performance - ongoing organic growth and strategic investments FY18 guidance affirmed - on track to achieve UNPATA of approximately $93.6 million Key initiatives to drive growth, returns and profitability – Novated leases: Volumes to grow strongly thr
Slide 28: Appendix
For personal use only Appendix Appendix 27
Slide 29: Key continuing initiatives for building long term shareholder value
Appendix Key continuing initiatives for building long term shareholder value For personal use only 28
Slide 30: 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 31: GRS Employee expense movement
Appendix Group Remuneration Services (GRS) Employee expense movement For personal use only Staff wages (excluding IT staff wages) Increase of $3.8m, compared to pcp, primarily driven by additional FTE’s of $2.8m and an increase in wage costs of $1.0m 40.1 – FTE’s low in 1H17 due to reduced marketing
Slide 32: Risks and sensitivities
Appendix Risks and sensitivities For personal use only Regulation of consumer insurance products1 Regulation of consumer lending products2 Ongoing potential risk of consumer action Acquisition and integration risk Second hand car prices (remarketing earnings) New and used car sales Interest rates (e
Slide 33: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA For personal use only $m 1H18 1H17 Variance NPAT 34.9 40.4 (13.6%) Amortisation of intangibles from acquisitions after tax 1.7 1.2 Deferred consideration after tax (6.3) 0.0 Asset impairment in relation to warranty and insurance business after tax 14.0
Slide 34: 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 35: For personal use only
For personal use only McMillanShakespeareGroup
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