Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Investor Presentation (February 2021)
24 slides from Smartgroup's investor presentation, Feb 24, 2021
Slide 1: Investor Presentation Full year CY 2020 results
INVESTOR PRESENTATION Full year CY 2020 results 24 February 2021 Tim Looi – Managing Director and CEO Anthony Dijanosic – Interim Chief Financial Officer
Slide 2: 2020 Overview
2020 OVERVIEW Tim Looi Managing Director and CEO Smartgroup Investor 2020 Presentation 1
Slide 3: Delivering good performance in challenging times
Delivering good performance in challenging times Financial results in line with guidance • Revenue of $216.3m down 13% vs CY2019 • NPATA1 of $65.2m vs guidance of c.$65m, down 20% vs CY2019 Steady operational performance in a challenging environment • 100% renewal or extension of the top 20 clie
Slide 4: Cost discipline supports strong EBITDA margin of 44%
Cost discipline supports strong EBITDA margin of 44% Revenue EBITDA1 NPATA1 Dividend (fully In addition to the franked)2 $12.0m 2020 special dividend, a $7.3m special dividend was declared in relation to profits earned by group companies in 20202 1. Adjusted to reflect one-off impact on adoption of
Slide 5: Salary packaging customer numbers remained stable
Salary packaging customer numbers remained stable Salary packaging customers Net organic growth of 1,500 packages Onboarded new health client in late 2020 with c.3,500 packages and added to novated leasing H1 2020 panel for 4 government acquisition – novated lease departments portfolio acquisition S
Slide 6: Strong long-term relationships with key clients
Smartgroup has strong long-term relationships with key clients, with most having undergone multiple renewal cycles Top 20 clients by number Relationship length of contract terms of Top 20 clients Renewed or extended all top 20 contracts that fell due in 2020 (8 in total) Similar level of contract re
Slide 7: Novated leases and fleet vehicles under management remained stable
Novated leases and fleet vehicles under management remained stable Novated leases under management Fleet vehicles under management Smartgroup Investor 2020 Presentation 6
Slide 8: Novated lease volumes were impacted by the economic disruption
Novated lease volumes were impacted by the economic disruption CY 2019 H1 2020 H2 2020 CY 2020 Novated volume (vs pcp) 4% (15%) (13%) (14%) Novated yield (vs pcp) (3%) (2%) (10%) (6%) New leases (% of novated volume) 78% 74% 74% 74% • Novated leasing volumes at -14% vs pcp - in line with the broader
Slide 9: Well-placed to implement regulatory changes for add-on insurances
Well-placed to implement regulatory changes resulting from the review of add-on insurances Increased certainty regarding the regulatory changes Smartgroup has commenced the work for that will apply to the sale of add-on insurance: compliance with the Deferred Sales Model to ensure that the neces
Slide 10: Simplification of the business remains a focus
Simplification of the business remains a focus with continued consolidation of acquired brands Acquisition Integration Rebatable1 PBI2 Government Corporate completion date completion date Continuing brands NA Selectus consolidation May 2017 completed 6 months ahead of schedule July 2016 Advantage co
Slide 11: Supporting our people, our customers and our communities
Continuing to play our part in supporting our people, our customers and our communities In 2020, Smartgroup joined a Smartsalary once again The Smartgroup Foundation select group of Australian received the highest-ever audit continued into its second year, companies recognised as an score from
Slide 12: Financial Performance Full Year CY2020
FINANCIAL PERFORMANCE FULL YEAR CY2020 Anthony Dijanosic Interim Chief Financial Officer Smartgroup Investor 2020 Presentation 11
Slide 13: Good performance in a challenging environment
Good performance in a challenging environment H1 2020 H2 2020 CY 2020 CY 2019 Change adjusted1 adjusted1 adjusted1 adjusted1 % Revenue 111.4 104.9 216.3 249.8 (13%) Revenue reduced with novated leasing volumes Product costs (3.2) (2.8) (6.0) (8.1) (26%) impacted by COVID. Staff costs2 (42.4) (37.5)
Slide 14: Cash flow generation remained strong at 115% of NPATA
Cash flow generation remained strong at 115% of NPATA CY 20201 CY 20191 $m adjusted adjusted Receipts from customers (inclusive of GST) 254.6 283.0 Payments to suppliers and employees (inclusive of GST) (151.4) (161.4) Interest received from operations 0.9 2.2 Interest paid (1.7) (1.6) Interest paid
Slide 15: Significant amount of debt paid down; net cash position
Significant amount of debt paid down; Smartgroup in a net cash position $m 31 Dec 2020 31 Dec 2019 statutory statutory Cash 27.4 39.6 Other current assets and Current liabilities Other current assets 66.6 93.7 movements are largely from a reduction in Current assets 94.0 133.3 funds held on behalf o
Slide 16: Key Priorities and Outlook
KEY PRIORITIES AND OUTLOOK Tim Looi Managing Director and CEO Smartgroup Investor 2020 Presentation 15
Slide 17: We continue to improve our business
We continue to improve our business Experience Digital Simplification Customer journey Consolidation of Simplified organisation mapping back end and digital structure IT platforms Experience training Rollout of group wide across front lines Insource intelligent values automation Rollout of NPS capab
Slide 18: Summary and outlook
Summary and outlook CY2020 a good year in the context of COVID-19 • Successful in renewing or extending 100% of expiring key client contracts • Restructure of operational workforce achieved c.$4m of annual cost savings • Consolidation of acquired businesses continued Capital light business model
Slide 19: Questions?
QUESTIONS? Smartgroup Investor 2020 Presentation 18
Slide 20: Reconciliation of earnings to statutory financial statements
Reconciliation of earnings to statutory financial statements Add back: Reclass: Add back: Impairment 2020 Non-IFRS Equity share Acceleration of joint statutory Adjustment of of LTIP venture 2020 $m results measures investments expense investment adjusted Revenue 216.3 – – – – 216.3 Operating EBITDA
Slide 21: Net debt movement
Net debt movement CY2020 movements in net debt $m 2020 2019 Net corporate cash (debt)1 2.5 (21.0) EBITDA 95.4 118.2 Net corporate debt / EBITDA N/A (0.2) 1. Excludes capitalised borrowing costs of $0.2m (2019 $0.3m) and vehicle borrowings of Smartgroup Investor 2020 nil (2019 $1.1m). Presentation 20
Slide 22: Reconciliation of the movement in net tangible assets
Reconciliation of the movement in net tangible assets $m # of shares (m) NTA (cps) Net tangible assets – Dec 2019 (55.1) 131.7 (41.9) Net cash from operating activities 74.8 Decrease in borrowings (35.7) Dividends paid (50.9) Other tangible asset/liability movements 26.1 Net tangible assets – Dec 20
Slide 23: Balance sheet
Balance sheet $m Note 31 Dec 2020 31 Dec 2019 statutory statutory Cash 1 27.4 39.6 Notes Restricted cash 2 48.1 65.4 1. Cash reduced due to Trade and other current assets 18.5 28.3 paydown of debt. Current assets 94.0 133.3 2. Restricted cash and Property and equipment 1.7 1.4 customer salary packag
Slide 24: 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