Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 2022 Earnings Presentation
42 slides from Mcmillan Shakespeare's earnings presentation, Feb 23, 2022
Slide 1: ASX cover letter: 2022 Interim Results Investor Presentation
For personal use only 23 February 2022 Manager Company Announcements ASX Limited Level 4 20 Bridge Street SYDNEY NSW 2000 By E-lodgement McMillan Shakespeare Limited (“the Company”) 2022 Interim Results Investor Presentation This release contains an announcement to the Australian Securities Exchange
Slide 2: FY22 Half Year Results Presentation
Overview Focusing on our strengths FY22 Half Year Results Presentation For personal use only 23 February 2022 Presenters Mike Salisbury CEO & Managing Director Ashley Conn CFO & Company Secretary McMillanShakespeareGroup i
Slide 3: Overview
For personal use only Overview 1
Slide 4: 1H22 Highlights
Overview 1H22 Highlights Strong operating performance For personal use only 1H22 UNPATA $40.0m1 up 12.8% on pcp (excl. JobKeeper) - Driven by strong customer growth, elevated vehicle yields and uplift from UK restructure, with increasing carryover to benefit future periods. Plan Partners reporting i
Slide 5: Making a Difference to People's Lives
Overview “Making a Difference to People’s Lives” To build on our successful culture we have a new Purpose, Vision and Values For personal use only Purpose: Making a difference to people’s lives To be the trusted partner, supporting customers’ Vision: financial wellbeing and lifestyle goals Values: M
Slide 6: Introduction to our new segments
Overview Introduction to our new segments For personal use only Group Remuneration Plan & Support Asset Management Services (“AMS”) Services (“GRS”) Services1 (“PSS”) AM Australia & NZ AM United Kingdom Aggregation Brands Primary service – Salary packaging – Plan management – Vehicle fleet leasing –
Slide 7: Group UNPATA bridge
Overview Group UNPATA bridge For personal use only Revenue EBITDA UNPATA2 Underlying EPS $311.6m $59.5m $40.0m 51.7 cps up 25.8% up 3.2% 1 up 12.8% 3 up 12.9%3 AMS $7.1m AM - ANZ AM - UK GRS PSS RFS $0.4m $3.1m $4.6m 50 (7.3) 4.6 0.6 (0.2) (9.9) 40 (3.7) 3.1 0.1 30 20 42.7 35.4 40.0 30.1 30.1 10 0 1
Slide 8: Key operating metrics
Overview Key operating metrics Strong operating performance across portfolio For personal use only 363,975 71,720 ~$19m $348m Salary packages Novated leases Novated carryover revenue4 Assets managed – WDV 1 Up 1.8% Orders up 4%2 Up 154%2 Down (4.2%) $1,428m 22,729 1,322 56 Net amount financed Plan &
Slide 9: Auto sector influences
Overview Auto sector influences Constrained supply continues and is expected to remain at least through CY22 For personal use only 1H22 observations Outperformed new car sales (up 1.5%) – Customer demand remains strong with novated lease activity levels up 4% (novated lease orders up 4% vs pcp) Aust
Slide 10: Strategic sustainability initiatives progressing well
Overview Strategic sustainability initiatives progressing well Sustainability strategy rollout underway, focusing on creating shared value for For personal use only MMS and our stakeholders MMS sustainability strategy FY22 strategy rollout Status Progress Pathway to net zero carbon emissions1, and 1
Slide 11: Financial performance
For personal use only Financial performance 9
Slide 12: Financial performance
Financial performance Financial performance Strong operating performance For personal use only $m 1H21 1H22 (excl. JobKeeper) 1H21 Variance4 Revenue 311.6 247.6 247.6 25.8% EBITDA 59.5 57.6 68.1 3.2% EBITDA margin (%) 19.1% 23.3% 27.5% NPBT 42.6 35.8 46.3 19.0% NPAT 30.1 18.2 25.5 65.7% UNPATA 40.0
Slide 13: Balance sheet
Financial performance Balance sheet Strong net cash position (excl. fleet funded debt) creating capacity for growth For personal use only 31 December 2021 30 June 2021 $m AM Other Group Group Net debt to EBITDA1 Cash at bank 24.9 106.1 131.0 158.0 0.8x vs 0.8x pcp Other current assets 38.3 24.2 62.4
Slide 14: Cash flow statement
Financial performance Cash flow statement Strong cash conversion at 95% of UNPATA For personal use only 1H22 1H21 Group Plan and Asset Remuneration Support Management Unallocated / MMS MMS $m Services Services Services parent co. Group Total Group Total NPAT 20.3 2.1 9.1 (1.4) 30.1 25.5 Non-fleet de
Slide 15: Warehouse update
Financial performance Warehouse update Warehouse ready to launch, awaiting final ASIC approval For personal use only Diversification of funding sources, improving value for our customers and creating an annuity income stream with a higher per transaction NPV Implementation update Cumulative NIM comp
Slide 16: Segment performance
For personal use only Segment performance 14
Slide 17: GRS: Highlights
Segment performance GRS: Highlights Strong demand will benefit future periods For personal use only 99.8 99.8 100.5 Commentary Revenue – Return to growth in Salary Packaging through both participation growth (100% retention of Tier 1 clients (2) during the period) $100.5m and new business wins – Suc
Slide 18: GRS: Operating metrics
Segment performance GRS: Operating metrics Accelerating growth with improved participation, new business wins and increased pipeline For personal use only Salary packages1 Novated leases2 Salary packages by industry segment 363,975 71,720 6,587 (1,655) → → 3% 13% 358.0 361.0 364.1 357.4 364.0 71.6 7
Slide 19: GRS: Novated leasing
Segment performance GRS: Novated leasing Customer demand remains robust, yield increased, with carry over to benefit future periods For personal use only Order levels continue to grow, however, Carryover has increased to over 7 times historical levels vehicle supply constraints have resulted to ~$19
Slide 20: Introducing Plan and Support Services (PSS)
Segment performance Introducing Plan and Support Services (PSS) The trusted partner making a difference to people’s lives For personal use only Plan Partners and Plan Tracker provide NDIS Plan Management and Support Co-ordination services Plan Management NDIS participants expected to grow to 859,300
Slide 21: PSS: Highlights
Segment performance PSS: Highlights Improving market share and investments in period to support future growth For personal use only 11.9 19.5 Commentary Revenue – Strong organic customer acquisition driving revenue growth, supplemented by Plan Tracker (acquired 1 July 2021) $19.5m – Significant inve
Slide 22: PSS: Operating metrics
Segment performance PSS: Operating metrics Increasing market share through organic growth and acquisitions For personal use only Customers Unique service Support FTEs ‘000 providers co-ordination hours ‘000 ‘000 +69% +29% +19% 3.7 8.0 13.5 22.7 6 15 29 38 5 16 22 26 41 72 106 210 1H19 1H20 1H21 1H22
Slide 23: AM ANZ: Highlights
Segment performance AM ANZ: Highlights Supply constraints delivering improved remarketing profits For personal use only 75.9 75.9 92.4 Commentary Revenue – Limited supply of new vehicles and increase in demand for used vehicles resulted in increased remarketing profits $92.4m – Increase in customer
Slide 24: AM ANZ: Operating metrics
Segment performance AM ANZ: Operating metrics WDV growth constrained as a result of market conditions For personal use only Written down value Remarketing profits remain elevated and sales remain subdued – expect to continue through FY22 $311m Remarketing units - indexed to 1H20 Remarketing profit -
Slide 25: AM UK: Highlights
Segment performance AM UK: Highlights Restructured and delivering improved remarketing profits For personal use only 30.0 74.1 Commentary Revenue – Limited supply of new vehicles driving an increase in demand for used vehicles $74.1m – Off balance sheet finance originations up 2%1 to $397m – One off
Slide 26: AM UK: Operating metrics
Segment performance AM UK: Operating metrics Off balance NAF growth and auto supply dynamic driving elevated remarketing profits For personal use only Consolidated asset brokerage business. Restricted vehicle supply driving elevated Delivering improved off balance sheet NAF remarketing profits and l
Slide 27: RFS: Highlights
Segment performance RFS: Highlights Growth in Aggregation and Warranty business divested For personal use only 29.9 29.9 25.0 Commentary Revenue – Aggregation net amount financed up 30% on pcp – Average NAF per deal improvement 11% on pcp $25.0m – Australian new car sales up 1.5% on pcp – Competitiv
Slide 28: RFS: Operating metrics
Segment performance RFS: Operating metrics Improvements in Aggregation performance For personal use only Net amount financed ($m)1 Revenue breakdown ($m)2 UNPATA breakdown ($m)3 ■ Aggregation ■ Retail 15.4 12.8 6.3 14.9 12.6 0.3 514.4 427.8 453.7 554.2 588.4 22.9 17.1 17.3 19.5 18.6 2.7 1.4 1.7 2.1
Slide 29: Summary and outlook
For personal use only Summary and outlook 27
Slide 30: Summary and outlook
Summary and outlook Summary and outlook For personal use only Summary of 1H22 Outlook – Strong operating performance – Customer growth in GRS through significant – Profitability impacted by supply constraints, recent new business wins increasing carryover, now over 7 times pre-COVD – Continued custo
Slide 31: Appendix
For personal use only Appendix 29
Slide 32: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA For personal use only $m 1H22 1H21 Variance NPAT 30.1 25.5 18.1% 1. Amortisation of intangibles from acquisitions 1.0 0.8 15.7% 2. Due diligence, acquisition and disposal costs 1.2 0.0 >100% 3. Warranty divestment loss on disposal and loan finance char
Slide 33: Funding overview
Appendix Funding overview For personal use only – Right sized the debt facilities for Asset Financing United Kingdom > Revolving facilities reduced from £15m to £5m > Cancellation of £6m working capital facility – Early redemption of corporate debt in Australia – Diversity of on and off balance shee
Slide 34: Segment review
Appendix Segment review For personal use only Group Remuneration Services Asset Management Services Plan & Support Services Unallocated Total 1H21 1H21 1H21 (excl. (excl. (excl. $m 1H22 JobKeeper) 1H21 Variance1 1H22 JobKeeper) 1H21 Variance1 1H22 1H21 Variance 1H22 1H21 Variance 1H22 JobKeeper) 1H2
Slide 35: New segments FY and halves - GRS
Appendix New segments FY and halves - GRS For personal use only 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance4 1H21 2H21 FY21 1H21 2H21 Revenue 100.5 99.8 99.8 0.6% 99.8 102.7 202.6 49.3% 50.7% Employee expenses 1 46.1 43.0 34.0 7.1% 34.0 43.1 77.2 44.1% 55.9%
Slide 36: New segments FY and halves – AM-ANZ
Appendix New segments FY and halves – AM-ANZ For personal use only 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance4 1H21 2H21 FY21 1H21 2H21 Revenue 92.4 75.9 75.9 21.8% 75.9 77.7 153.5 49.4% 50.6% Fleet depreciation 23.2 23.5 23.5 (1.1%) 23.5 22.8 46.3 50.7% 49.
Slide 37: New segments FY and halves – AM-UK
Appendix New segments FY and halves – AM-UK For personal use only 1st Half comparison FY21 Half Yearly Split 1H22 1H21 Variance 1H21 2H21 FY21 1H21 2H21 Revenue 74.1 30.0 >100% 30.0 72.7 102.8 29.2% 70.8% Lease and vehicle management expenses 59.3 17.9 >100% 17.9 61.6 79.5 22.5% 77.5% Employee expen
Slide 38: New segments FY and halves – RFS
Appendix New segments FY and halves – RFS For personal use only 1st Half comparison FY21 Half Yearly Split 1H21 (excl. 1H22 JobKeeper) 1H21 Variance3 1H21 2H21 FY21 1H21 2H21 Revenue 25.0 29.9 29.9 (16.5%) 29.9 29.3 59.2 50.5% 49.5% Brokerage commissions 12.8 13.3 13.3 (3.7%) 13.3 14.2 27.5 48.3% 51
Slide 39: New segments FY and halves – PSS
Appendix New segments FY and halves – PSS For personal use only 1st Half comparison FY21 Half Yearly Split 1H22 1H21 Variance 1H21 2H21 FY21 1H21 2H21 Revenue 19.5 11.9 63.6% 11.9 14.3 26.2 45.5% 54.5% Employee expenses1 11.6 5.1 >100% 5.1 7.8 12.9 39.4% 60.6% Property & other expenses1 4.0 2.4 72.2
Slide 40: Dividend dates
Appendix Dividend dates For personal use only FY22 Interim Results Release Wednesday, 23 February 2022 Ex-dividend Thursday, 10 March 2022 Record date Friday, 11 March 2022 Payment date Friday, 25 March 2022 Final Results Release Wednesday, 24 August 2022 Ex-dividend Thursday, 8 September 2022 Recor
Slide 41: 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 present
Slide 42: For personal use only
For personal use only