Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Macquarie Australia Investor Conference 2015
21 slides from Smartgroup's conference presentation, May 6, 2015
Slide 1: Smartgroup Corporation – Macquarie Australia Investor Conference
For personal use only Smartgroup Corporation Macquarie Australia Investor Conference Dave Adler – Chief Commercial Officer Tim Looi – Chief Financial Officer 07 May 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: Snapshot of Smartgroup
Snapshot of Smartgroup Smartgroup is the second largest player in the Australian outsourced salary packaging market For personal use only ASX code Market Cap NPATA $199m SIQ $17.4m* Net Cash Share price H2 14 dividend 6.1cps fully $6m* 6/5/15 : $1.92 franked** * Audited for the full year ended 31 De
Slide 4: Competitor landscape
Competitor landscape SIQ employs an ‘asset light’ business model For personal use only Competitor product offering – Key areas of focus asset light Finance/operating Salary packaging Fleet managed Novated leasing Vehicle services lease administration Smartgroup(1) McMillan Shakespeare Limited SG Fle
Slide 5: Customer profile
Customer profile 75% of our top 20 customers have a relationship with us in excess of 5 years and 97% of our revenues are derived from public hospitals and government For personal use only Profile of Smartgroup’s top 20 employer clients Length of relationship1,2 Revenue by FBT status3 Full FBT - Cor
Slide 6: Public tender record
Public tender record We have won 43% of all public tenders for outsourced salary packaging since 2007 For personal use only Outsourced salary packaging public tender outcomes(1) 80 70 Number of tender outcomes 60 30% Won - New Client 50 Retained - Existing Client 13% 40 30 Unsuccessful - Prospective
Slide 7: Employee customer growth
Employee customer growth In addition to tender wins, strong growth comes from organic uptake from existing clients For personal use only Package growth (number of outsourced salary packages)(1,2) Source: Management 1. Greenfield represents clients not previously salary packaging, Transitions represe
Slide 8: Smartgroup's core capabilities
Smartgroup’s core capabilities We attribute our success to our people focus, which is at the foundation of our strategy For personal use only Smartsalary awards 2011, 2012, 2013, 2014 NSW State Award for Service Excellence in the Medium Business category 2012 National Award for Service Excellenc
Slide 9: Financials
For personal use only Financials PAGE 8
Slide 10: Recent salary package growth
Recent salary package growth Smartgroup's employees under management has grown by c30,000 since 2012 For personal use only Smartgroup Salary Packages (CY2011 – CY2015 YTD) 130,000 2,224 4,392 4,696 121,184 Number of salary packages 120,000 9,847 118,656 110,000 3,642 9,000 105,167 100,000 4,823 3,53
Slide 11: Revenues and earnings
Revenues and earnings Revenues have increased over 50% since 2011 with EBITA margins >30% For personal use only Revenue ($m) EBITA ($m) 80 30 72.8 70 24.7 62.0 (1) 25 58.5 22.7 (1) 60 21.3 20 50 47.0 15.1 40 15 30 10 20 5 10 - - 2011 2012 2013 2014 2011 2012 2013 2014 1. Includes the impact of Rudd
Slide 12: Key financial metrics
Key financial metrics We have had double digit growth from the prior year on our financial metrics For personal use only CY2014 CY2013 Change % $m $m Revenue 72.8 62.0 17% EBITA before corporate costs 24.8 21.4 16% NPATA 17.4 13.2 32%* Maiden dividend (H2 2014) 6.1 cps N/A N/A Franking 100% N/A N/A
Slide 13: Balance sheet and cashflow
Balance sheet and cashflow We have a conservative financial profile with strong after tax, after capex cashflows For personal use only CY2014 CY2013 $m $m Net Assets 65.9 29.9 Cash and cash equivalents 27.8 16.9 Borrowings (21.9) (55.9) Net cash/(debt) 5.9 (39.0) Cashflow from operations 24.1 15.2 C
Slide 14: Revenue and earnings since inception
Revenue and earnings since inception We have a strong historical track record in growing the business For personal use only Revenue ($m) EBITDA ($m) 80 30 70 25 60 20 50 15 40 30 10 (1) (1) 20 5 10 - - (5) 1. Smartgroup changed its financial year end from 30 June to 31 December in 2006 hence the 200
Slide 15: Smartgroup highlights
Smartgroup highlights For personal use only Strong financial metrics 1 - - Business tracking well with H1 2015 NPATA guidance at $11.5m, 35% higher than pcp Conservative balance sheet with net cash of $6m and strong after tax, after capex cashflows 2 Leading player with established scale and capabil
Slide 16: Appendices
For personal use only Appendices PAGE 15
Slide 17: Outsourced salary packaging market
Outsourced salary packaging market For personal use only Management estimates that there are approximately 550,000 people that salary package via an outsourced administrator Employees by category Salary packaging benefits by employer Employer Types of employer Typical benefits subject to salary pack
Slide 18: Regulatory history – salary packaging administration
Regulatory history – salary packaging administration For personal use only Overview of Public Benevolent Institutes regulatory history Henry Tax Review completed. Feb 2012 – Not-for-profit Recommends the repeal of FBT Tax Concession Working Group (Working Group) Feb 2014 – Working concessions over 1
Slide 19: Regulatory history – novated leasing
Regulatory history – novated leasing For personal use only Overview of novated leasing regulatory history 19 Mar 14 - The Federal Coalition Government announced that the Henry Tax Review 16 Jul 2013 - The Federal proposed FBT changes is completed. Labor Government among 55 announced- Fringe Benefits
Slide 20: 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 21: 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)
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