Fleetpartners Group Limited · ASX:FPR
Fleetpartners — FY2022 Earnings Presentation
44 slides from Fleetpartners's earnings presentation, Nov 7, 2022
Slide 1: Eclipx Group FY22 results presentation
Eclipx Group FY22 results presentation 7 November 2022 Julian Russell | Damien Berrell
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 activities, current as at the date shown on the front page of thi
Slide 3: FY22 results agenda
FY22 results agenda 1 Performance highlights 2 Financial result 3 Defensive service based operating model 4 Accelerate 5 Outlook 3
Slide 4: 1. Performance highlights
PaRY eclipx OrieetPartners @fleetplus | Feetchoice
Slide 5: Outperformance on every key line item
Outperformance on every key line item NPATA up 29% compared to FY21 NPATA bridge Refer to slide 16 $2.9m $110.8m $1.9m $1.1m $15.7m $0.2m $3.2m ($0.4m) $86.1m Lower corporate debt EOL strength due to inflated Net margin expansion average profit per unit combined with higher FY21: $6,558 maintenance
Slide 6: FY22 performance highlights
FY22 performance highlights 30 September 2022 FY22A FY21A Var +/(-) 1 2 13% NOI GROWTH OPEX IN LINE (A$m unless specified) 4% NOI PRE EOL AND HELD FLAT FOR A THIRD YEAR Income statement PROVISIONS IN A ROW NOI pre EOL and provisions1 157.4 151.5 4% EOL 92.3 69.2 33% 3 FUNDING 4 37% CASH Provisions2
Slide 7: 73% CAGR in cash earnings per share (EPS) since FY19
73% CAGR in cash earnings per share (EPS) since FY19 Excluding the benefits from elevated EOL, Cash EPS has grown at a CAGR of 44% over the last four years Cash EPS growth Cash EPS growth • Represents NPATA over average number of shares on issue in the relevant period • Drivers include: • Strong und
Slide 8: Strategic Pathways
1. Strategic Pathways 2. Accelerate Strategic Pathways EPS drivers Novated 3. Buy-back 4. Acquisitions Foundations in place…primed for growth Increased penetration of client base CORPORATE AU & NZ SMALL FLEETS NOVATED Predictable, high returns profile High growth and returns opportunity Cross-sell p
Slide 9: Strategic Pathways
1. Strategic Pathways 2. Accelerate Strategic Pathways EPS drivers 3. Buy-back 4. Acquisitions Seeing early signs of growth in our most profitable target markets Fleet Australia1 Fleet NZ1 Novated CORPORATE: Strong NBW growth and continued delivery of value-add digital features FOCUS Penetration of
Slide 10: Accelerate – $6m annualised opex reduction by mid-FY25
1. Strategic Pathways 2. Accelerate Accelerate – $6m annualised opex reduction by mid-FY25 EPS drivers 3. Buy-back 4. Acquisitions 2019 - 2020 2020 onwards 2022 - 2025 SIMPLIFICATION STRATEGIC PATHWAYS ACCELERATE ✓ Return to core fleet business via non-core ✓ Foundations in place and primed for grow
Slide 11: Capital management – 13% of share capital returned/cancelled
1. Strategic Pathways 2. Accelerate EPS Capital management – 13% of share capital returned/cancelled 3. Buy-back drivers 4. Acquisitions Implied FY22 buy-back yield of 13.4%1 Buy-back Balance sheet position • Organic capital generation and net cash (debt) of $26.5m 6% of SOI illustratively to Capita
Slide 12: Environmental, social and governance (ESG)
Environmental, social and governance (ESG) WGEA Ranked One of the certified equal #1 first as an Employer of Choice in the ASX300 for female ASX companies to for Gender Equality Board representation by introduce compassionate the AICD leave for miscarriage Longstanding First First and funding domest
Slide 13: 2. Financial result
eclipX Qrcetrartners @fleetplus A Feetchoice 13
Slide 14: New business writings
New business writings Strong NBW growth despite continuing new vehicle supply constraints Fleet AU & NZ – NBW (ex Panel) Comments • Fleet NBW growth of 24% in FY22 • NBW surpassing pre-COVID-19 levels of FY19 • Order pipeline remains at historic highs (2.6x pre-COVID-19 levels1) • Strong commercial
Slide 15: Assets and vehicles under management
Assets and vehicles under management The return to AUMOF growth continued in 2H22 supported by strong NBW Assets under management or finance (AUMOF; $bn) Comments • AUMOF up 3% pcp (ex-FCNT and at constant currency) Financed (Interest Earning Assets) P&A • Fleet AU and Fleet NZ saw solid AUMOF growt
Slide 16: Income statement
Income statement NPATA of $110.8m represents growth of 29% on pcp $ million FY22 FY21 PCP (%) Comments Net operating income pre EOL and provisions 157.4 151.5 4% EBITDA growth of 20% driven by NOI growth of 13% and End of lease income 92.3 69.2 33% strong cost discipline. NPATA grew by 29% on pcp Fl
Slide 17: Group balance sheet
Group balance sheet Further strengthening of the balance sheet through disciplined capital management and supported by the temporarily elevated cash generation relating to EOL income and the cash tax shield in Australia $ million 30 Sep 2022 30 Sep 2021 Prior period (%) Comments Assets • Continuatio
Slide 18: 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 FY22 $ million FY22 Operating cash flow Net cash flow 17.2 Customer rec
Slide 19: 3. Defensive service based operating model
3. Defensive service based operating model 19
Slide 20: Eclipx has a simple and predictable business model deriving c.60% of income from service
Eclipx has a simple and predictable business model deriving c.60% of income from service revenue A services based business with best-in-class funding capability, enhancing profitability and further increasing annuity-like earnings 1 VEHICLE FINANCE 2 FLEET + VEHICLE SERVICES 3 VEHICLE DISPOSAL (c.40
Slide 21: Defensive earnings and growth through time
Defensive earnings and growth through time The Group’s earnings are predictable given the contracted or annuity nature of c.90%1 of income and low portfolio credit risk Enhancement of earnings profile excluding EOL and provisions 2 NOI pre EOL and provisions Opex3 EBITDA pre EOL and provisions3 $180
Slide 22: Funding and managing interest rate risk
Funding and managing interest rate risk The interest rate environment is expected to be broadly neutral to positive for ECX earnings Interest rate exposure Funding commentary • Eclipx typically holds ~$230m-$250m of cash Warehouse ABS P&A Corporate debt • Increasing AU & NZ central bank (cash) rates
Slide 23: Portfolio credit quality remains high
Portfolio credit quality remains high The Group remains well placed to face any macro uncertainty given the quality of the portfolio Arrears 90+ days past due 1 Portfolio exposure 1.8% 0.51% Other industries Building construction 0.36% 98.2% Comments • Portfolio quality continues to be strong with 0
Slide 24: Illustrative P&L implications of normalised vehicle supply
Illustrative P&L implications of normalised vehicle supply Average AUMOF & NOI pre EOL and provisions margin NOI pre EOL and provisions sensitivity based on average AUMOF & margin 8.23% 7.75% Illustrative average AUMOF 7.02% 6.83% $1.9bn1 $2.0bn $2.1bn Illustrative NOI pre EOL and provisions 1 NOI p
Slide 25: End of lease income
End of lease income End of lease income remains elevated, up 33% on pcp, but has peaked and is slowly trending downwards Vehicles sold & end of lease income per vehicle 1 Comments • Elevated used car prices given new vehicle supply EOL charges per vehicle ($) Profit per vehicle ($) constraints and h
Slide 26: Illustration of normalised FY22 NOI after adjusting for COVID-19 impacts
Illustration of normalised FY22 NOI after adjusting for COVID-19 impacts COVID-19 has had four temporary impacts on NOI in FY22: NBW/AUMOF (constrained supply), NOI pre EOL and provisions yield (positive), EOL (positive) and provisions (positive) – chart below reflects an illustrative normalised FY2
Slide 27: FY23 expectation analysis
FY23 expectation analysis FY22A FY23 Cash item Comments (expectation) • Slight growth as the gradual unwinding of COVID-19 related tailwinds on the management fee and NOI pre EOL and provisions $157.4m ✓ maintenance lines is counteracted by av. AUMOF growth and higher cash rates being forecast • Pri
Slide 28: 4. Accelerate
eclipX Qrcetrartners @fleetplus A Feetchoice 28
Slide 29: Eclipx strategic journey
Eclipx strategic journey Since May 2019, management has successfully delivered the Simplification Plan and Strategic Pathways foundations An extension of Eclipx’s strategic journey is the Accelerate program ACHIEVED TO DATE EXTENSION OF STRATEGIC JOURNEY Simplication Plan Accelerate ✓ Stable, defens
Slide 30: Accelerate
Accelerate Accelerate will maximise profitability of the growth expected from Strategic Pathways 1 2 3 4 CORE DELIVERABLES ONE GO-TO-MARKET SIMPLIFIED TECHNOLOGY STANDARDISED OPERATIONAL ENHANCED WORKFORCE Completed by BRAND STACK PROCESSES ENGAGEMENT Sep-24 TARGETED Consolidate from 4 Move from 2 R
Slide 31: Accelerate – key milestones
Accelerate – key milestones FY23 FY24 FY25 COMPLETED WAVE 1 1. FleetPlus NZ transition into FleetPartners 2. Group rebrand to FleetPartners 3. New website & marketing collateral 4. Procurement portal launched 5. Standardise Novated front-end processes WAVE 2 6. Standardise Corporate front-end proces
Slide 32: 5. Outlook
CLIX A rcetrartners Brtoorpius [| retcroie 32
Slide 33: Group outlook
1. Strategic Pathways 2. Accelerate Group outlook EPS drivers 3. Buy-back 4. Acquisitions Operating environment Group well positioned • Business confidence and orders remains strong ✓ Predictable annuity-like earnings • Strong demand across all segments ✓ Strong balance sheet • Supply remains uncert
Slide 34: Questions
Questions eclipy
Slide 35: Appendix
CLIX A rcetrartners Brtoorpius [| retcroie 35
Slide 36: A. Business unit performance
A. Business unit performance 36
Slide 37: Business unit performance
Business unit performance Half-year ended September 2022 Half-year ended March 2022 ($m, unless stated) Fleet AU Novated Fleet NZ Group ($m, unless stated) Fleet AU Novated Fleet NZ Group NOI pre EOL and provisions 48.1 10.8 19.1 78.0 NOI pre EOL and provisions 48.8 9.2 21.4 79.4 End of lease income
Slide 38: B. Accelerate opex sensitivity
B. Accelerate opex sensitivity 38
Slide 39: Illustrative Accelerate run rate savings
Illustrative Accelerate run rate savings Illustrative Accelerate run rate savings Today Av. AUMOF $1.9bn $2.0bn $2.1bn $2.2bn $2.3bn Pre-Accelerate opex $82.5m $84.5m $87.0m $89.6m $92.3m Post-Accelerate opex $76.5m $77.9m $79.8m $81.8m $83.8m Opex savings $6.0m $6.6m $7.2m $7.8m $8.4m 39
Slide 40: C. NPATA sensitivity analysis
C. NPATA sensitivity analysis 40
Slide 41: Illustration of normalised FY22 NOI after adjusting for COVID-19 impacts
Illustration of normalised FY22 NOI after adjusting for COVID-19 impacts COVID-19 has had four temporary impacts on NOI in FY22: NBW/AUMOF (constrained supply), NOI pre EOL and provisions yield (positive), EOL (positive) and provisions (positive) – table below reflects an illustrative normalised FY2
Slide 42: D. Funding supporting analysis
D. Funding supporting analysis 42
Slide 43: Funding and liquidity
Funding and liquidity Executed warehouse extensions and NZ ABS, providing significant capacity to support growth plans Comments AU & NZ warehouse capacity ✓ Unique and most diversified funding structures with access to private warehouses, ABS public capital markets, and principal and agency funding
Slide 44: END
END eclipy