Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2016 Earnings Presentation
30 slides from Mcmillan Shakespeare's earnings presentation, Feb 23, 2016
Slide 1: MMS Group FY16 Half Year Presentation
For personal use only MMS Group FY16 Half Year Presentation Presenters Mike Salisbury, CEO Mark Blackburn, CFO McMillanShakespeareGroup
Slide 2: Overview and performance
For personal use only Overview and performance Overview and performance 1
Slide 3: MMS maintains growth trajectory
Overview and performance MMS maintains growth trajectory For personal use only NPAT performance ($m) Revenue2 up 34.4% to $243.5 million 45 41.8 40 38.9 35 EBITDA up 38.9% to 30 29.7 31.3 31.1 $65.8 million 10 year CAGR: 22.0% 25 24.9 NPAT up 25.1% to 20 20.5 19.3 $38.9 million 15 Underlying NPATA3
Slide 4: Underlying EPS up 22%
Overview and performance Underlying EPS up 22% For personal use only EPS and Underlying EPS2 (cents) EPS up 14.4% to 50 47.1 cents/share 50.6 47.1 41.4 40 39.9 41.2 10 year CAGR: 19.3% 36.3 Underlying EPS up 22.2% to 30 30.2 50.6 cents/share 25.8 20 Dividend payout ratio of 10 11.8 14.1 16.6 61.6% o
Slide 5: Complementary diversification across the MMS Group
Overview and performance Complementary diversification across the MMS Group For personal use only Group Remuneration Services Asset Management Retail Financial Services Brands Primary service – Salary packaging – Vehicle fleet leasing and – Vehicle finance, insurance – Novated leases management and
Slide 6: 1H16 Highlights
Overview and performance 1H16 Highlights For personal use only Strong performance from the GRS business with revenue increasing 10% and segment NPAT increasing 15% driven by organic growth, new business wins and continued focus on cost control – New business, highlighted by two recent salary packagi
Slide 7: Technology driving improved cost to serve
Overview and performance Technology driving improved cost to serve For personal use only Successful launch of the mobile claims App On-line claims take-up rate (%) in August 2015 driving improved customer 80 satisfaction and improved cost to serve 70 Launch of the online claims Launch of the mobile
Slide 8: Consolidated financial performance
Overview and performance Consolidated financial performance For personal use only $m 1H16 1H15 Variance Revenue 243.5 181.2 34.4% 1H16 Underlying NPATA Expenses 177.7 133.8 32.8% EBITDA 65.8 47.4 38.9% D&A of PPE and software 4.4 3.7 17.8% Amortisation of intangibles (acquisitions) 1.6 0.2 >100.0% 1
Slide 9: Segment performance and outlook
For personal use only Segment performance and outlook Segment performance and outlook 8
Slide 10: Group Remuneration Services Financial Performance
Segment performance and outlook Group Remuneration Services Financial Performance For personal use only $m 1H16 1H15 Variance Revenue 91.4 82.8 10.4% Commentary Employee expenses 36.8 34.6 6.4% Revenue growth of 10.4% on pcp with Property & other expenses 12.3 12.0 2.5% key revenue drivers (number o
Slide 11: Group Remuneration Services Operating Metrics
Segment performance and outlook Group Remuneration Services Operating Metrics For personal use only Salary packages (000)1 Novated vehicles (000)2 4 year CAGR: 5.1% 4 year CAGR: 12.5% 276.0 259.6 53.4 243.8 249.2 48.1 226.0 43.9 40.1 33.4 1H12 1H13 1H14 1H15 1H16 1H12 1H13 1H14 1H15 1H16 1H16 Sector
Slide 12: Asset Management – Australia / New Zealand Financial Performance
Segment performance and outlook Asset Management – Australia / New Zealand Financial Performance For personal use only $m 1H16 1H15 Variance Revenue 87.0 90.9 (4.3)% Commentary Fleet depreciation 39.4 40.2 (2.0)% Assets managed unit growth of Lease and vehicle 25.0 27.7 (9.7)% 4.9% vs pcp management
Slide 13: Asset Management – Australia / New Zealand Operating Metrics
Segment performance and outlook Asset Management – Australia / New Zealand Operating Metrics For personal use only Fixed assets written down value ($m) 1H16 Revenue breakdown 322.6 314.9 311.9 296.9 27% $87.0m 59% 14% 1H13 1H14 1H15 1H16 Growth flat in half and impacted by above ■ Principal and inte
Slide 14: Asset Management – United Kingdom Financial Performance
Segment performance and outlook Asset Management – United Kingdom Financial Performance For personal use only $m 1H16 1H15 Variance Revenue 10.4 7.5 39.4% Commentary Lease and vehicle 1.5 2.6 (42.3)% New business wins continue across management expenses the UK portfolio Employee and other expenses 7
Slide 15: Asset Management – United Kingdom Operating Metrics
Segment performance and outlook Asset Management – United Kingdom Operating Metrics For personal use only Fixed assets written down value ($m) 1H16 Revenue breakdown 125.9 21% 31% 27% 38.6 $10.4m 10.0 1H14 1H15 1H16 47% An additional $27.4m was moved ■ Principal and interest off balance sheet in 1H1
Slide 16: Retail Financial Services Financial Performance
Segment performance and outlook Retail Financial Services Financial Performance For personal use only Proforma at $m 1H163 acquisition4 Variance Revenue 54.6 50.6 7.9% Commentary Employee and other expenses 43.4 41.2 5.3% Continued focus on organic growth EBITDA 11.2 9.4 19.1% via distribution chann
Slide 17: Retail Financial Services Operating Metrics
Segment performance and outlook Retail Financial Services Operating Metrics For personal use only Net amount financed ($m) 1H16 Revenue breakdown 259.6 450.7 31% $54.6m 61% 379.2 8% Proforma at 1H162 acquisition1 ■ Finance ■ Insurance ■ Warranty 1. 1H15 represents the six months of the Presidian run
Slide 18: Integration report card
Segment performance and outlook Integration report card For personal use only Integration Report Card PROCESS % Complete Renegotiation of finance terms 100% Warranty cross-sell into GRS / UFS 50% Consolidation of back office functions and property 75% Roll-out of consumer finance into GRS 25% RFS cu
Slide 19: Other financial metrics
For personal use only Other financial metrics Other financial metrics 18
Slide 20: Balance Sheet
Other financial metrics Balance Sheet For personal use only $m 31 Dec 15 30 Jun 15 Cash at bank 67.2 85.7 Other current assets 50.7 55.4 Cash less corporate debt Total funded fleet assets 437.8 425.5 (excluding fleet funded debt) Goodwill / intangibles Other non-current assets 261.3 10.7 194.7 16.0
Slide 21: Funding Overview
Other financial metrics Funding Overview For personal use only Renegotiation with banks at an advanced stage which we expect will incorporate all the big four Australian banks in the club facility Borrowings at 31 December 2015 Facility (000) Drawn (000) Undrawn (000) Duration Asset Financing Austra
Slide 22: Cashflow
Other financial metrics Cashflow For personal use only 1H16 1H15 $m Group Asset Retail Unallocated / MMS MMS Remuneration Management Financial parent co. Group Total Group Total Services Services Segment NPAT 28.3 6.7 6.2 (2.3) 38.9 31.1 Non-fleet depn/amort, reserves and other non-cash items 3.3 4.
Slide 23: Risk
For personal use only Risk Risk 22
Slide 24: Risk
Risk Risk For personal use only Interest rates (earnings on float) Second hand car prices (remarketing earnings) New and used car sales Government policy development Loss of major customers General economic conditions and consumer confidence Acquisition and integration risk 23
Slide 25: Growth strategy and summary
For personal use only Growth strategy and summary Growth strategy and summary 24
Slide 26: Near term opportunities
Growth strategy and summary Near term opportunities For personal use only Group Remuneration Asset Retail Services Management Financial Services Continue to drive new Initiate principal and agency Further synergy realisation business and retain existing (P&A) funding arrangements from acquired busin
Slide 27: Medium term growth strategies
Growth strategy and summary Medium term growth strategies For personal use only Group Remuneration Asset Retail Services Management Financial Services Target organic growth via Leverage multiple funding Organic growth in existing existing clients and new options across Australia/NZ business business
Slide 28: Summary
Growth strategy and summary Summary For personal use only Solid 1H16 results with EBITDA up 39%, Underlying NPATA up 34%, Underlying EPS up 22% and free cash flow up 54% Clear strategies for further growth and profitability – GRS: Ongoing growth in packages from increasing penetration, NSW Health wi
Slide 29: Disclaimer and important notice
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 presentation cont
Slide 30: For personal use only
For personal use only McMillanShakespeareGroup
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