Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — MMS Group — Goldman Sachs Emerging Companies Conference 2012
29 slides from Mcmillan Shakespeare's conference presentation, May 15, 2012
Slide 1: Goldman Sachs Emerging Companies Conference May 2012
MMS Group For personal use only Goldman Sachs Emerging Companies Conference May 2012
Slide 2: Company overview
Page 2 Goldman Sachs Emerging Companies Conference For personal use only Company overview Provider of salary packaging administration and integrated fleet management services with unique competitive strengths. Group has two segments: - The Group Remuneration Services- provides administrative service
Slide 3: Normalised NPAT
Page 3 Goldman Sachs Emerging Companies Conference For personal use only Normalised(1) NPAT 50 45 43.5 40 NPAT 6-year CAGR of 42.4% 35 ($m) 30 27.9 24.9 25 20.5 20 17.4 15 13.2 11.3 10 5.2 5 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 1HY12 Note 1: Normalised NPAT excludes the profit recognised on acquisit
Slide 4: Normalised earnings per share (EPS)
Page 4 Goldman Sachs Emerging Companies Conference For personal use only Normalised(1) earning per share (EPS) 70 64.0 60 50 EPS 6 year CAGR of 41.6% (cents) 40 41.2 36.3 30 30.4 25.8 20 19.8 17.1 10 8.0 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 1HY12 Basic EPS Note 1: Normalised EPS excludes the profit
Slide 5: Dividends per share
Page 5 Goldman Sachs Emerging Companies Conference For personal use only Dividends per share 50 45 40 Dividends paid since float $1.46 cents vs IPO 38.0 35 issued shares of $0.50 cents each. 30 (cents) Dividends per share 25 6 year CAGR of 46.1% 24.0 20 22.0 19.0 15 16.5 10 12.5 9.5 5 3.9 0 FY05 FY0
Slide 6: Normalised return on equity (ROE)
Page 6 Goldman Sachs Emerging Companies Conference For personal use only Normalised return on equity (ROE) 50% 45% 43% 43% 40% 39% 39% 40% 39% 35% 36% 30% % 25% 24% 20% 15% 10% 5% 0% FY05 FY06 FY07 FY08 FY09 FY10 FY11 1HY12 Normalised ROE
Slide 7: Financial highlights 1H FY12
Page 7 Goldman Sachs Emerging Companies Conference For personal use only Financial highlights 1H FY12 Consolidated NPAT of $25m (21.4% growth on PCP). Group Remuneration Services NPAT of $18.5m (23% growth on PCP). Asset Management NPAT of $7m (5.1% growth on PCP). Basic EPS of 36.3 cents per share
Slide 8: Integrated model - unique market position
Page 8 Goldman Sachs Emerging Companies Conference For personal use only Integrated model - unique market position Core Skills Core Skills Operating Lessors/ Fleet Proactive sales culture Managing vehicle value Salary Packagers Retail sales and marketing chain: procurement, Managers Budgeting/ BPO p
Slide 9: Unique business model underpinned by key competitive strengths
Page 9 Goldman Sachs Emerging Companies Conference For personal use only Unique business model underpinned by key competitive strengths World class service levels (as independently measured by net promoter methodology). Low delivered cost (expense ratio reduced from 73% in 2008 to 57.5%). Industry l
Slide 10: Competitive strengths and performance indices
Page 10 Goldman Sachs Emerging Companies Conference For personal use only Competitive strengths and performance indices Group Remuneration Services Productivity Index (7/08 = 100) MMS Customer Satisfaction Index [Rolling 3 month Revenue (ex SP Interest) / FTE] December 2008 = 100 145 250 140 135 200
Slide 11: Revenue model
Page 11 Goldman Sachs Emerging Companies Conference For personal use only Revenue model Remuneration Services Salary packaging administration fees: - annuity income stream; paid directly and regularly from employees’ salary. Interest income on float. Facilitation and procurement fees for assisting w
Slide 12: Tax benefits for charities and public health from salary packaging
Page 12 Goldman Sachs Emerging Companies Conference For personal use only Tax benefits for charities and public health from salary packaging Yearly benefit schedule Yearly benefit schedule PBI $16,050 Health $9,095 Benefit Benefit 7,000 4,500 6,000 4,000 3,500 5,000 3,000 4,000 $ 2,500 $ 3,000 2,000
Slide 13: Tax benefits from novated leasing
Page 13 Goldman Sachs Emerging Companies Conference For personal use only Tax benefits from novated leasing Cost of motor vehicle - $33,600 Statutory fraction for 15,000-24,999km - 20% Benefit $6,000 $5,000 $4,000 $3,000 20%(15-24,999km) $2,000 $1,000 $0 Salary Assumptions: No business use, ECM appl
Slide 14: Business update
Page 14 Goldman Sachs Emerging Companies Conference For personal use only Business update Leading indicators show no sign of impact from global economic uncertainty. MMS appointed sole provider to South Australian Government (previously panel of three). Low/medium but rising barriers to entry – larg
Slide 15: Key opportunities for growth
Page 15 Goldman Sachs Emerging Companies Conference For personal use only Key opportunities for growth Relatively small exposure to private sector. Operating lease capability (acquired April 2010) is opening up private sector opportunities for salary packaging administration and novated leases. NSW
Slide 16: Potential sensitivities
Page 16 Goldman Sachs Emerging Companies Conference For personal use only Potential sensitivities New car sales. Second hand car values. Interest rates. Uncertain global economy.
Slide 17: Managing residual value risk
Page 17 Goldman Sachs Emerging Companies Conference For personal use only Managing residual value risk Residual Values are set for term and kilometres by a Residual Value Committee. Proactive contract re-writes are undertaken to mark-to-market residual values where vehicle usage varies to that at in
Slide 18: Appendices: Case study public hospital
Page 18 Appendices: Case study public hospital Goldman Sachs Emerging Companies Conference For personal use only NIM Mgt fees Card fees Equipment finance and management Admin fee Meal entertainment Exempt – Cap $17k NIM Mgt fees Commission In life services Admin fee RV Mgt fee Commission In life ser
Slide 19: Balance sheet summary
Page 19 Goldman Sachs Emerging Companies Conference For personal use only Balance sheet summary MMS & Group Remuneration Asset Group Balance Group Services (1) Management at Balance at 31-Dec-11 31-Dec-11 31-Dec-11 30-Jun-11 $000 $000 $000 $000 Net debt -11,406 123,766 112,360 114,966 Book value of
Slide 20: 1HFY12 cash flow
Page 20 Goldman Sachs Emerging Companies Conference For personal use only 1HFY12 cash flow Group Remuneration Asset Unallocated / MMS Group Services Management parent co. Total $000 $000 $000 $000 Segment NPAT 18,479 6,944 (505) 24,918 Non-fleet depn/amort and fleet prov movements 2,829 788 - 3,617
Slide 21: Sources of revenue
Page 21 Goldman Sachs Emerging Companies Conference For personal use only Sources of revenue Salary Packaging (including Novated Lease Novated Lease Operating Leases Management Services motor vehicles) Management Distribution Fees Recurring income. Portion of Recurring income. MMS can procure and IL
Slide 22: Market opportunity
Page 22 Goldman Sachs Emerging Companies Conference For personal use only Market opportunity Full FBT Rebatable FBT $17,000 Exempt $30,000 Exempt Types of Employers Government departments. Independent schools. Public hospitals. Public benevolent institutions. Private companies. Sporting clubs. Priva
Slide 23: Market opportunity (cont'd)
Page 23 Goldman Sachs Emerging Companies Conference For personal use only Market opportunity (cont’d) Australian Fleet Lessors Association (AFLA) - Total Portfolio at March 2012 By Type of Facility (units/%) ILA is a tier 2 industry player. 38,354- 7% - Operating ILA share of novated leases as % of
Slide 24: What is salary packaging?
Page 24 Goldman Sachs Emerging Companies Conference For personal use only What is salary packaging? Australia’s taxation system allows tax concessions for certain employee benefits and for certain industry sectors which makes salary packaging attractive. Eligible employees increase their disposable
Slide 25: What is a novated lease?
Page 25 Goldman Sachs Emerging Companies Conference For personal use only What is a novated lease? Enables employees to finance and operate a personal vehicle using their pre-tax income. A three way agreement between financier, employee and employer. Employee enters into a lease directly with the fi
Slide 26: Why is the novated lease market growing?
Page 26 Goldman Sachs Emerging Companies Conference For personal use only Why is the novated lease market growing? Relatively young <20 year old. Around 21% of the funded vehicle market. Despite market perceptions, average income earners are becoming high users. Dec 98 – March 2012 600% overall grow
Slide 27: What is asset management
Page 27 Goldman Sachs Emerging Companies Conference For personal use only What is asset management Financing and management services associated with motor vehicles, commercial vehicles and equipment. A financier can provide funding but this ignores the management of the asset during its life. Fleet
Slide 28: The asset life cycle
Page 28 Goldman Sachs Emerging Companies Conference For personal use only The asset life cycle In-Life Procurement Finance Disposal Services Purchase the Owned, Operating Fuel, insurance, Sale of the asset – vehicle / asset lease, finance maintenance, tyres, auction, dealers, – preferred lease, CHP,
Slide 29: Growth opportunities
Page 29 Goldman Sachs Emerging Companies Conference For personal use only Growth opportunities Salary Packaging Synergies Asset Management Increase salary Cross-sell salary Grow the loan book over packages through higher packaging and novated time with operating and penetration rate and new leases t
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