Slide 1: Full Year CY 2018 Results
Investor Presentation Full Year CY 2018 Results Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer 18 February 2019 PAGE 0
Slide 2: Smartgroup has achieved continued growth in 2018
Smartgroup has achieved continued growth in 2018 ... Continued strong financial performance 1 - Revenue of $241.8m up 18% vs CY 2017 - NPATA(1) of $78.0m up 22% vs CY 2017 Continued client growth - Organic growth of c.18,000 packages and c.2,750 leases 2 - Over 300 new employer client wins across bu
Slide 3: Growth across all financial and improved operational metrics
...with growth across all financial and improved operational metrics... Change % $m CY 2017 CY 2018 (CY18 v CY17) Revenue 205.4 241.8 18% EBITDA(1) 93.6 111.8 19% NPATA 64.1 78.0 22% Shares on issue (millions) 123.2 130.9 6% NPATA per share (cps) 52.0 59.6 15% As at As at December December 2017 2018
Slide 4: Increasing revenue, earnings and dividends
...and increasing revenue, earnings and dividends. Revenue EBITDA 300.0 120.0 111.8 241.8 93.6 250.0 100.0 205.4 80.0 56.8 200.0 119.2 63.3 147.1 49.0 $m $m 150.0 107.9 60.0 94.4 37.4 37.7 100.0 75.3 84.7 40.0 24.1 48.4 19.6 55.0 39.3 122.6 20.0 44.6 50.0 97.5 12.3 62.4 25.6 36.0 46.0 11.8 17.8 - -
Slide 5: Smartgroup continues to grow salary packages and novated leases
Smartgroup continues to grow salary packages and novated leases… (1) 1. CY 2015 package figure includes the acquisition of Advantage with c.50,000 packages, and a major client win of c.7,400 packages. CY 2016 and CY 2017 organic growth figures include major client wins of c.6,500 and c.8,500 package
Slide 6: Continues to grow its fleet management footprint
… and also continues to grow its fleet management footprint, both organically and through acquisition… (1) No fleet acquisitions in period 2014 - 2017 • Fleet West staffing, operations, technology and branding now integrated into Smartfleet. 1. Fleet West acquisition was completed in January 2018 PA
Slide 7: Delivering further EBITDA growth in 2018
... delivering further EBITDA growth in 2018… (1) (1) (2) (2) (2) 1. CY 2016 acquisitions – Smartequity, Autopia and Selectus. 2. CY 2017 acquisitions – AccessPay, Aspire, RACV Salary Solutions and Fleet West (completed 4 Jan 2018). PAGE 6
Slide 8: From a growing and diversified client base
... from a growing and diversified client base. December 2015(1) Acquisitions since IPO(2) December 2018 2% 4% 5% 5% 11% 19% 5% 6% 132,500 52% 11% 154,500 343,000 73% 13% 40% packages packages packages 22% 32% PBI non-hospitals(3) PBI Hospitals(4) Government Education (5) Corporate 1. December 2015
Slide 9: Novated leasing volumes have continued to grow despite downturn in new vehicle sales
Smartgroup’s novated leasing volumes have continued to grow despite the downturn in private new vehicle sales • Smartgroup has increased its novated leasing volumes despite private new vehicle sales falling over the course of 2017 and 2018. • Lift in SIQ NL settlement volumes relative to new private
Slide 10: Building on early successes in delivering multiple services
Smartgroup is building on early successes in delivering multiple services, principally to our PBI clients. Common clients across the group 164 clients use two or more service offerings, growth of 10% from June 2018 Number of Smartgroup services used by individual clients Smartgroup service 2 service
Slide 11: Customer service excellence and operational efficiency through digital and automation
TheIncrease focus operational efficiency on customer service excellence through increasing levels of customer adoption of digital channels and automation in core systems continues. Online processing uptake of high-volume Smartsalary(1) transactions Progressive implementation of Robotic Process Autom
Slide 12: Staffing level reflects focus on operational efficiencies and investments
The staffing level reflects the continued focus on operational efficiencies and investments in IT, sales and marketing November 2015 Acquisitions(1) since IPO December 2018 10% 9% 6% 15% 8% 4% 365 FTE 413 FTE 695 FTE 21% 53% 31% 60% 50% 33% Corporate IT Sales and marketing Operations November 2015 A
Slide 13: Recent developments as we head into CY 2019
A number of recent developments are being experienced, or are expected as we head into CY 2019... Banking Royal Commission – Final Report • The recommendations that impact Smartgroup (i.e., Deferred sales model for add-on insurance, Cap on commissions) are consistent with previous recommendations ma
Slide 14: Financial results Full year CY 2018
Financial results Full year CY 2018 Tim Looi Chief Financial Officer Tim PAGE 13
Slide 15: Another year of record revenue and earnings
In CY 2018, Smartgroup delivered another year of record revenue and earnings. $m CY 2018 CY 2017 reported reported Change % Revenue 241.8 205.4 18% EBITDA(2) 111.8 93.6 19% NPAT 60.0 48.4 NPATA(3) 78.0 64.1 22% 1. A reconciliation of the statutory accounts to adjusted earnings is attached in the App
Slide 16: After-tax operating cash flow at 100% of NPATA
After-tax operating cash flow(1) at 100% of NPATA, with continued low recurring capex. Adjusted(2) $m CY 2018 CY 2017 Receipts from customers (inclusive of GST) 270.1 212.2 Payments to suppliers and employees (inclusive of GST) (159.5) (117.8) Interest receipts from operations 2.6 1.8 Interest paid
Slide 17: Conservatively geared balance sheet
Smartgroup maintains a conservatively geared balance sheet … 31 Dec 2018 31 Dec 2017 $m statutory statutory Cash 39.2 30.9 1. Restricted cash and customer salary packaging liabilities Restricted cash (1) 42.3 67.6 represent funds held in common salary packaging Trade and other current assets (3) 35.
Slide 18: Net debt / EBITDA at 0.1x at 31 December 2018
…. with net debt / EBITDA at 0.1x at 31 December 2018. Net +$26.8m of cash generated from operations (1) (2) 2018 2017 (2) (1) Net debt 14.6 111.1 EBITDA 111.8 93.6 Net debt / EBITDA 0.1x 1.2x 1. Excludes capitalised borrowing costs of $1.1m. 2. Excludes capitalised borrowing costs of $0.7m and $9.4
Slide 19: In summary
In summary… Deven Billimoria Managing Director and CEO PAGE 18
Slide 20: CY 2018 marks another year of growth
CY 2018 marks another year of growth... • Growth across all key financial and improved operational metrics • Continue to build on early successes delivering multiple service offerings to clients • Ongoing integration of acquired businesses, with clients progressively transitioning to core systems, w
Slide 21: Building on our track record since company inception
...building on our track record since company inception. Revenue EBITDA 1. 2006 represents 18 months of results due to the change of year end from 30 Jun to 31 Dec. PAGE 20
Slide 22: Questions?
Questions? PAGE 21
Slide 23: Appendix – reconciliation of earnings to statutory financial statements
Appendix – reconciliation of earnings to statutory financial statements Add back: Add back: Reclass: Reclass: Deduct: 2018 Onerous Impact of Equity share Corporate Add back: Historical 2018 statutory lease costs AASB 16 of interest M&A costs GST Reported results (acquired Leases investments revenue
Slide 24: Appendix – reconciliation of operating cashflows to statutory financial statements
Appendix – reconciliation of operating cashflows to statutory financial statements Adjust: 2018 Impact of statutory AASB 16 Adjust: 2018 $m results adoption M&A Costs reported Receipts from customers (inclusive of 270.1 - - 270.1 GST) Payments to suppliers and employees (156.1) (3.4) - (159.5) (incl
Slide 25: 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