Slide 1: Eclipx Group 1H22 results presentation
Eclipx Group 1H22 results presentation 5 May 2022
Slide 2: Legal disclaimer
Legal disclaimer This Presentation contains summary information about Eclipx Group Limited (Eclipx) and its subsidiaries and their Such forward‐looking statements are based on numerous assumptions regarding Eclipx’s present and future business activities current as at the date shown on the front pag
Slide 3: 1H22 results agenda
1H22 results agenda 1 Performance highlights 2 Financial result 3 Defensive service based operating model 4 Outlook 3 3
Slide 4: 1. Performance highlights
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Slide 5: 1H22 performance highlights
1H22 performance highlights 31 March 2022 1H22A 1H21A Var +/(-) (A$m unless specified) Income statement 1 2 POSITIVE 58% JAWS NOI pre EOL & provisions1 79.4 72.6 9% INCREASE IN NPATA EOL 51.4 32.1 60% 26% NOI GROWTH & 2% OPEX REDUCTION Provisions2 2.8 1.2 125% NOI 133.6 105.9 26% 3 4 Up to $40m OPEX
Slide 6: Outperformance on every line item
Outperformance on every line item NPATA up 58% compared to 1H21 Refer to slide 14 Mainly driven by release $1.8m $62.1m of COVID overlay $0.3m $0.6m $13.6m $0.6m $0.1m Lower corporate debt $1.1m $4.8m $39.3m EOL strength due to inflated average profit per unit Net margin expansion combined 1H22 : $8
Slide 7: Balance sheet restored & continued shareholder value creation via capital returns
Balance sheet restored & continued shareholder value creation via capital returns Net cash (debt) Buy-back 2 Corporate net debt reduced from $256m to net cash of Up to $40m on-market share buy-back program for 1H22 $6.8m within three years $96m in total announced since May 2021 Mar-19 Sep-19 Mar-20
Slide 8: Strategic Pathways—approach to opportunities
Strategic Pathways—approach to opportunities Strategic priorities 1. Grow underpenetrated markets (Corporate, Small Fleets1 & Novated First “end-to-end” novated leasing Novated) ~880 – 900k eligible employees ECX TAM2 experience with STP credit 2. Expand internal talent pool to drive leading outcome
Slide 9: Strategic Pathways
Strategic Pathways Seeing early signs of growth in our most profitable target markets Fleet Australia1 Fleet NZ1 Novated CORPORATE: STRONG NBW GROWTH & CONTINUED DELIVERY OF VALUE-ADD DIGITAL FEATURES PENETRATION OF EXISTING NOVATED EMPLOYEE FOCUS SMALL FLEETS: GROWTH IN DISTRIBUTION PARTNERSHIPS AN
Slide 10: Environmental, Social and Governance (ESG)
Environmental, WGEA certified as an Employer of Choice for Ranked equal #1 in the ASX300 for female Board First domestic Fleet Management Organisation with Climate Social and Gender Equality representation by the AICD Active Status1 Governance (ESG) One of the first ASX Longstanding funding companie
Slide 11: 2. Financial result
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Slide 12: New business writings
New business writings Strong NBW growth despite continuing new vehicle supply constraints and impacts from Omicron Fleet AU & NZ—NBW (ex Panel) Comments • Combined Fleet NBW growth of 35% in 1H22 on pcp or 24% hoh • NBW surpassing pre-COVID levels1 • Order pipeline at historic highs (2.5x pre-Covid
Slide 13: Assets and vehicles under management
Assets and vehicles under management AUMOF has returned to marginal growth during the half supported by stronger NBW Assets under management or financed (AUMOF; $bn) Comments Financed (Interest Earning Assets) P&A • AUMOF flat on pcp and up 1% hoh 2.1 2.1 2.1 2.0 • Reversal of AUMOF decline occurred
Slide 14: Income statement
Income statement NPATA of $62.1m, represents growth of 58% on pcp $ million 1H22 1H21 PCP (%) Comments Net operating income pre EOL and provisions 79.4 72.6 9% End of lease income 51.4 32.1 60% EBITDA growth of 43% driven by strong NOI growth of 26% Fleet and credit provisions 2.8 1.2 125% and cost
Slide 15: Group balance sheet
Group balance sheet Balance sheet strength delivered through discipline and supported by the temporarily elevated cash generation relating to EOL income and the cash tax shield in Australia $ million 31 Mar 22 30 Sept 21 Prior period (%) Assets Comments Cash and cash equivalents 81.8 76.4 7% • Stron
Slide 16: Cash generation
Cash generation Strong organic cash generation supported by elevated EOL and cash tax shield enabling repayment of corporate debt and return of capital via buy-back Cash flow Organic cash generation and cash conversion $ million $ million 1H22 1H22 Operating cash flow Net cash flow 7.7 Customer rece
Slide 17: 3. Defensive service based operating model
3. Defensive service based operating model 17
Slide 18: Simple Group business model
Simple Group business model Eclipx is a services based business with best-in-class funding capability, enhancing the profitability and increasing the defensiveness of earnings relative to third-party funded peers 1 VEHICLE FINANCE 2 FLEET + VEHICLE SERVICES 3 VEHICLE DISPOSAL (c.40% of NOI pre EOL 1
Slide 19: Earnings stability through time
Earnings stability through time The Group’s earnings are predictable given the contracted nature of annuity income and low portfolio risk Enhancement of earnings profile ex. EOL & provisions Annuity-like income NOI pre-EOL and provisions Opex EBITDA pre-EOL and provisions 8 - 12% $90m Upfront income
Slide 20: Illustrative P&L implications of normalised vehicle supply
Illustrative P&L implications of normalised vehicle supply Average AUMOF & NOI pre EOL & provisions margin NOI pre EOL & provisions sensitivity based on average AUMOF & margin 8.15% Illustrative average AUMOF 7.71% 6.93% 6.89% $1.9bn1 $2.0bn $2.1bn Illustrative NOI pre EOL & provisions provisions ma
Slide 21: Managing interest rate risk
Managing interest rate risk The Group hedges its exposure to rate risk at lease origination in both rising and falling rate environments Interest rate exposure Comments Warehouse ABS P&A ✓ Well established program of diversified funding that is strongly supported by a large number of financial insti
Slide 22: FY22 expectation analysis reaffirmed
FY22 expectation analysis reaffirmed FY22 1H22A (expectation) Cash item Comments • Stable as slight AUMOF growth is expected to be offset by the gradual unwinding of COVID NOI pre EOL & provisions $79.4m ✓ related tailwinds on the management fee and maintenance lines • Prices in used vehicle market
Slide 23: 4. Outlook
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Slide 24: 2H22 outlook
2H22 outlook Operating environment Group well positioned Strong demand across all segments ✓ Zero net debt (net cash +$6.8 million) Supply issues unlikely to normalise prior to the end of CY22 ✓ Up to $40 million buy-back (65% payout ratio) Strategic Pathways ✓ 19% NBW growth despite supply constrai
Slide 25: Questions
Questions eclipy
Slide 26: Appendix
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Slide 27: A. Business unit performance & other financial information
A. Business unit performance & other financial information 27
Slide 28: Business unit performance
Business unit performance Half-year ended March 2022 ($m, unless stated) Fleet AU Novated Fleet NZ Group NOI before EOL & Impairments 48.8 9.2 21.4 79.4 End of lease 38.9 0.8 11.7 51.4 Impairments 1.8 (0.0) 1.0 2.8 NOI 89.5 9.9 34.2 133.6 Operating expenses (26.3) (6.2) (6.1) (38.6) EBITDA 63.2 3.8
Slide 29: B. End of lease income
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Slide 30: End of lease income up 60% on pcp
End of lease income up 60% on pcp End of lease income remains elevated, up 60% on pcp, driven by continued strength in the used vehicle market. As new vehicle supply is restored, EOL income expected to normalise Disposed vehicles and end of lease income per vehicle Comments • Elevated used car price
Slide 31: C. Portfolio & credit risk
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Slide 32: Portfolio credit risk remains low
Portfolio credit risk remains low The Group remains well placed to face any further macro uncertainty given the quality of the portfolio Comments Provisioning (% of operating leases, finance leases & trade receivables on balance sheet) • 74% of the exposure of the top 20 customers is investment grad
Slide 33: END
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