Slide 1: Investor Presentation Full year CY14 Results
For personal use only Investor Presentation Full year CY14 Results Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer 26 February 2015 STRICTLY CONFIDENTIAL PAGE 0
Slide 2: Important notice and disclaimer
Important notice and disclaimer (“Important Notice”) For personal use only 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. Th
Slide 3: Overview of 2014 performance
For personal use only Overview of 2014 performance Deven Billimoria Managing Director and CEO PAGE 2
Slide 4: Smartgroup has delivered another year of strong performance
Smartgroup has delivered another year of strong performance... For personal use only 1 Revenues of $72.8m and NPATA of $17.4m - Exceeding Prospectus revenues ($69.6m) and NPATA ($16.5m) by c5% 2 Packages of 118,656, in line with Prospectus forecast of 118,457 - Growth of 13,489 packages from the pri
Slide 5: Results exceeding prospectus forecast
…with results exceeding prospectus forecast For personal use only Proforma 2014 Prospectus 2014 Change % $m $m Revenue 72.8 69.6 5% EBITA 23.7 22.6 5% NPATA 17.4 16.5 5% As at Prospectus as at December 2014 December 2014 Packages 118,656 118,457 Novated leases under management 32,119 n/a Staff 343 3
Slide 6: Smartsalary maintains its strong client track record
Smartsalary maintains its strong client track record For personal use only Outsourced salary packaging Outsourced salary packaging public tender outcomes client outcomes 2014 70 • 9 small to medium sized public tenders submitted in 2014, with a few outcomes still Number of tender outcomes 60 30% out
Slide 7: Novated leases under management continue to grow
Our novated leases under management continue to grow… For personal use only Novated Leases Under Management 35,000 30,000 25,000 Total active leases 20,000 15,000 10,000 5,000 0 2010 2011 2012 2013 2014 PAGE 6
Slide 8: Self-service online forms and salary packaging cards uptake
…and self-service online forms and salary packaging cards uptake continue to contribute to service efficiencies For personal use only Self-service online forms usage % 50% Package growth and service/admin efficiency 40% 140 140,000 30% 123 Packages per FTE (rebased to 100) 121 117 120 120,000 20% 10
Slide 9: High staff engagement and customer service levels
Smartsalary maintains its high staff engagement and customer service levels For personal use only Aon Hewitt Employee Customer Service Institute Net Promoter Score Engagement Score of Australia (CSIA) Score High engagement zone PAGE 8
Slide 10: Our success is attributed to our people focus
We attribute our success to our people focus, which is at the foundation of our strategy For personal use only Smartgroup’s core capabilities Smartsalary awards 2011, 2012, 2013, 2014 NSW State Award for Service Excellence in the Medium Business category 2012 National Award for Service Excellenc
Slide 11: Financial results CY2014
For personal use only Financial results CY2014 Tim Looi Chief Financial Officer Tim PAGE 10
Slide 12: Double digit growth on key financial metrics
Smartgroup has achieved double digit growth on key financial metrics for the full year... For personal use only Proforma 2014 2013 Change % $m $m Revenue 72.8 62.0 17% EBITA before corporate costs 24.8 21.4 15% EBITA 23.7 21.4 11% NPATA 17.4 13.2 32%* As at As at Change % December 2014 December 2013
Slide 13: Package increases from major new client wins and organic growth
…with package increases arising from major new client wins and organic growth For personal use only Package growth in 2014 120,000 3,642 118,656 3,750 115,000 3,214 110,000 2,883 105,167 105,000 100,000 2013 Northern NSW St Vincent's St Vincent's Organic uptake 2014 LHD Transition Sydney Melbourne a
Slide 14: EBITA before corporate costs increased 15% to $24.8m
EBITA before corporate costs increased 15% to $24.8m from growth in packaging and fleet For personal use only EBITA growth in 2014 35.0 33.0 2.7 6.0 31.0 8.1 29.0 27.0 0.8 $ millions 0.6 24.8 1.1 25.0 23.7 23.0 21.4 21.0 19.0 17.0 15.0 2013 EBITA Packaging Fleet revenue Employee Administration Other
Slide 15: Cashflow from operations conversion is strong
Cashflow from operations conversion is strong with recurring capital expenditure remaining low For personal use only Summary of cashflows from operations $ millions Proforma 2014 2013 Change % Receipts from customers (inclusive of GST) 76.6 65.7 17% Payments to suppliers and employees (inclusive of
Slide 16: Balance sheet is conservative with net cash of c$6m
The balance sheet is conservative with net cash of c$6m at year end For personal use only Statutory Statutory $ millions 2014 2013 Movement Assets Cash and cash equivalents 27.8 16.9 10.9 Other current assets 11.1 9.0 2.1 1. Cash at year end at $28m Total current assets 38.9 25.9 13.0 Intangible ass
Slide 17: Summary
Summary For personal use only 1. Record result in 2014 • Full year results 5% ahead of prospectus forecast • Fully franked dividend at 6.1 cents per share, representing a 70% payout ratio for H2 CY2014 2. Balance sheet conservative with net cash of $6m 3. Business trends tracking well • Packages and
Slide 18: Appendices
For personal use only Appendices PAGE 17
Slide 19: Smartgroup today
Smartgroup today For personal use only • Outsourced salary packaging provider to the largest employers in the country with over 118,000 Employee Customers under management • Diverse customer base across health, charities, state and federal government departments and corporates • Specialist software
Slide 20: Market for outsourced salary packaging comprises c.550,000 employees
The market for outsourced salary packaging currently comprises c.550,000 employees For personal use only Employees by category Salary packaging benefits by employer Employer Types of employer Typical benefits subject to salary packaging category Australian Workforce Government departments ~12.3 mill
Slide 21: Reconciliation of 2014 earnings
Reconciliation of 2014 earnings Statutory to proforma For personal use only Statutory Adjustments Proforma $ millions 2014 IPO Costs Proforma 2014 Revenue from rendering of services and commissions 72.8 - - 72.8 Expenses Employee benefits expense (33.5) - - (33.5) Administration and corporate expens
Slide 22: Reconciliation of 2014 cashflows
Reconciliation of 2014 cashflows Statutory to proforma For personal use only Statutory Adjustments Proforma $ millions 2014 IPO Costs Capital structure Proforma 2014 Receipts from customers (inclusive of GST) 76.6 - - - 76.6 Payments to suppliers and employees (inclusive of GST) (47.9) - - - (47.9)