Slide 1: 2020 Half Year Results Investor Presentation
ASX Announcement 2020 Half Year Results Investor Presentation Release date: 19 August 2020 In accordance with the ASX Listing Rules, Smartgroup Corporation Limited (ASX: SIQ) encloses for release to the market its 2020 half year results investor presentation. For further information, contact: Nigel
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Slide 3: Investor Presentation H1 2020 Results
Investor Presentation H1 2020 Results 19 August 2020 Tim Looi – Managing Director and CEO Nigel Underwood – Chief Financial Officer
Slide 4: H1 2020 NPATA in line with guidance
H1 2020 NPATA in line with guidance 1. Financial results in line with guidance • H1 2020 revenue of $111.4m • H1 2020 EBITDA1 of $48.4m • H1 2020 NPATA2 of $32.1m vs. guidance of c.$32m 2. Resilient performance against COVID-19 backdrop • More than 90% of 2020 client renewals already completed (base
Slide 5: Financial results in line with guidance with COVID-19 impacting result versus prior year
Financial results in line with guidance with COVID-19 impacting result versus prior year $m H1 2020 H1 2019 Change % Revenue 111.4 125.8 (11%) EBITDA1 48.4 58.8 (18%) NPATA2 32.1 40.5 (21%) Shares on issue (millions) 132.9 131.9 1% NPATA per share (cps) 24.1 30.7 (21%) As at 30 June 2020 As at 30 Ju
Slide 6: COVID-19 response and our people
COVID-19 response and our people We continue to actively respond to the COVID-19 environment • The group moved to a working from home environment for 100% of all employees in late March • Changes were made to customer engagement, including webinars to replace face-to-face visits • A cost containment
Slide 7: Salary packaging has been resilient with most 2020 client renewals completed
Salary packaging has been resilient with most 2020 client renewals completed Salary package numbers remained resilient throughout H1 2020, down c.1% vs December 2019 We are well progressed on the renewal or extension of contracts due in 2020, with more than 90% of 2020 renewals already successfully
Slide 8: Diversified employer client base across attractive sectors of the Australian workforce
We continue to have a diversified employer client base that represent 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 132,500 c.150 Only 1 client used 2 or 52% more service offerings
Slide 9: Novated lease car park similar to December 2019 despite COVID-19
Overall novated lease car park ended H1 2020 at similar levels to December 2019 despite COVID-19 impacts June 2020 car park c.1% lower than December 2019 • H1 2020 impacts mainly seen in Q2 2020 as lease settlement volumes declined • Acquisition of c.500 vehicle lease portfolio Novated lease vehicle
Slide 10: Novated leasing volumes performed above market in Q1 2020
Novated leasing volumes performed above market in Q1 2020 with Q2 2020 COVID period slightly lower than market Novated leasing revenue performance for Q1 2020 broadly in line with Q1 2019 despite the 12% decline in Australian private new vehicle sales Impacts of COVID-19 seen in Q2 2020 with a reduc
Slide 11: Selectus transition completed in H1 2020
Selectus transition completed in H1 2020, further simplifying the platform footprint Acquisition Integration Rebatable1 PBI2 Government Corporate completion date completion date NA Continuing brands May 2017 December 2015 July 2016 August 2016 Q2 CY 2020 Retiring/retired brands October 2017 Q2 CY 20
Slide 12: Other updates
Other updates Funding • Overall credit approval rates were in line with H2 2019 levels • Successfully executed a multi-year contract with our largest provider on similar terms • Added two new funding providers to broaden our funding panel Regulatory and add on insurance update • Announcement by the
Slide 13: Financial results H1 2020
Financial results H1 2020 Nigel Underwood Chief Financial Officer Page 10
Slide 14: H1 2020 NPATA of $32.1m reflects the impact of COVID-19
H1 2020 NPATA of $32.1m, a 26% decrease from the prior year, reflects the impact of COVID-19 H1 2020 $m Q1 2020 Q2 2020 adjusted1 H1 2019 Change % Revenue 62.1 49.3 111.4 125.8 (11%) Product costs (2.0) (1.2) (3.2) (4.0) (20%) Overhead (31.7) (28.1) (59.8) (62.1) (4%) EBITDA2 28.4 20.0 48.4 58.8 (18
Slide 15: After-tax operating cashflow remains strong at 112% of NPATA
After-tax operating cashflow remains strong at 112% of NPATA Adjusted Adjusted $m H1 20201 H1 20191 Receipts from customers (inclusive of GST) 136.8 142.3 Payments to suppliers and employees (inclusive of GST) (86.9) (83.1) Interest receipts from operations 0.6 1.4 Interest paid (0.9) (0.8) Interest
Slide 16: Well capitalised balance sheet with net debt reduced to $12m
The balance sheet is well capitalised with net debt reduced to $12m $m Note 30 June 2020 statutory 31 Dec 2019 statutory Notes Cash 1 86.5 39.6 Restricted cash* 56.5 65.4 1. $38.0m additional debt drawn in H1 2020. 2 Trade and other current assets 21.6 28.3 2. Restricted cash and customer salary Cur
Slide 17: Closing remarks
Closing remarks… Tim Looi Managing Director and CEO Page 14
Slide 18: Summary and trading update
Summary and trading update 1. Financial results in line with guidance • Half year NPATA of $32.1m vs. guidance of c.$32m • Fully franked H1 2020 dividend of 17.0 cps, representing 70% payout 2. Resilient performance against COVID-19 backdrop • More than 90% of top 20 client renewals complete • Total
Slide 19: Questions?
Questions ? Page 16
Slide 20: Appendix: Reconciliation of earnings to statutory financial statements
Appendix: Reconciliation of earnings to statutory financial statements Add back: H1 2020 Non-IFRS Reclass: Add back: Impairment of Statutory Adjustment Equity share of Acceleration of joint venture H1 2020 $m results measures investments LTIP expense investment Adjusted Revenue 111.4 – – – – 111.4 O
Slide 21: 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