Slide 1: Investor Presentation: Full Year CY 2017 Results
For personal use only Investor Presentation Full Year CY 2017 Results Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer 22 February 2018 PAGE 0
Slide 2: Smartgroup has had another successful year
Smartgroup has had another successful year... For personal use only Continued strong financial performance 1 - Revenue of $205.4m up 40% vs CY 2016 - NPATA(1) of $64.1m up 46% vs CY 2016 Continued client growth and diversification 2 - Organic growth of c.24,500 packages and c.2,900 leases - Expanded
Slide 3: Growth across all financial and operational metrics
...with growth across all financial and operational metrics... For personal use only Change % CY 2017 Change % $m CY 2016 CY 2017 (CY17 v CY16) proforma(2) (CY17PF v CY16) Revenue 147.1 205.4 40% 226.8 54% EBITDA(1) 63.3 93.6 48% 100.6 59% NPATA 44.0 64.1 46% 68.5 56% Shares on issue (millions) 121.
Slide 4: Increasing shareholder returns
...and increasing shareholder returns. For personal use only (2) Revenue(1) EBITDA 120.0 50.0 45.0 49.0 100.0 107.9 44.6 40.0 97.5 35.0 37.7 80.0 84.7 30.0 $m $m 60.0 25.0 62.4 25.6 20.0 40.0 46.0 48.4 19.6 15.0 17.8 39.3 36.0 10.0 11.8 12.3 20.0 5.0 - - H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 20
Slide 5: Growing salary packages and novated leases organically and through acquisition
Smartgroup continues to grow salary packages and novated leases both organically and through acquisition … For personal use only (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
Slide 6: Delivering strong EBITDA growth
... delivering strong EBITDA growth. For personal use only (2) (3) (1) (2) (2) (2) (3) (3) 1. CY 2015 acquisition – Advantage. Proforma is arrived at by including the pre-acquisition financial performance. 2. CY 2016 acquisitions – Smartequity, Autopia and Selectus. 3. CY 2017 acquisitions – AccessP
Slide 7: Growing and diversifying its client base
Smartgroup continues to grow and diversify its client base… For personal use only Given the growth in Smartgroup’s client base, the top 5 clients account for 29% of revenue vs 51% in 2013(1). Smartgroup’s employer clients now total c.3,900 vs c.200 in 2013. Notes: Total revenue CY13: $62.4m, PF17: $
Slide 8: Expand its client footprint
... expand its client footprint … For personal use only (1) (1) Total packages (2) Total packages c. 105,000 c. 325,000 (2) 1. ‘Education’ includes public and private not-for-profit educational institutions. 2. ‘Hospitals’ includes public and private not-for-profit hospitals. PAGE 7
Slide 9: ...and extend its service offering
...and extend its service offering. For personal use only PAGE 8
Slide 10: Increase operational efficiency
Increase operational efficiency Digital channels at flagship Smartsalary brand continue to see increasing levels of customer adoption. For personal use only Online processing uptake of high-volume Smartsalary(1) transactions 1. At Dec 2017, Smartsalary represented c.50% of total SIQ packages and c.6
Slide 11: Recognised as one of Australia's most innovative, customer-centric companies
Smartgroup continues to be recognised as one of Australia’s most innovativeOur and strategy customer-centric companies… For personal use only Smartgroup capabilities triangle PAGE 10
Slide 12: Smartsalary achieved highest audit score for customer service award
… and Smartsalary achieved the highest audit score awarded in the history of the Customer Service Institute of Australia, for the Award year. third consecutive winning customer service For personal use only PAGE 11
Slide 13: Financial results: Full year CY 2017
For personal use only Financial results Full year CY 2017 Tim Looi Chief Financial Officer Tim PAGE 12
Slide 14: Another year of record revenue and earnings
In CY 2017, Smartgroup delivered another year of record revenue and earnings. For personal use only Adjusted for M&A costs and $m CY 2017 non-operating CY 2017 CY 2016 statutory items(1) adjusted adjusted Change % Revenue(2) 205.4 - 205.4 147.1 40% EBITDA(3) 86.7 6.9 93.6 63.3 48% NPAT 41.3 7.1 48.4
Slide 15: After-tax operating cash flow at 99% of NPATA
After-tax operating cash flow(1) at 99% of NPATA, with continued low recurring capex. For personal use only $m CY 2017 CY 2016 Receipts from customers (inclusive of GST) 212.2 154.4 Payments to suppliers and employees (inclusive of GST)(2) (117.8) (94.2) Interest receipts from operations 1.8 1.6 Int
Slide 16: Intangibles increased due to acquisitions funded by cash reserves
Smartgroup’s intangibles increased due to acquisitions, which were primarily funded by cash reserves. For personal use only 31 Dec 2017 31 Dec 2016 $m statutory statutory Cash 30.9 80.0 Restricted cash (1) 67.6 39.5 Trade and other current assets 26.7 22.9 1. Restricted cash and customer salary pack
Slide 17: Net debt / EBITDA expanded slightly to c.1.2x
Due to consideration paid in respect of acquisitive activities, Net debt / EBITDA has expanded slightly to c.1.2x. For personal use only CY 2017 movements in net debt 100 50 Net -$67.2m of cash used for acquisitions Net Debt $m 0 63.7 (0.4) 3.4 (50) (43.9) (38.6) (72.0)(1) (100) Net +$28.1m of cash
Slide 18: In summary
For personal use only In summary… Deven Billimoria Managing Director and CEO PAGE 17
Slide 19: CY 2017 marks another successful year
CY 2017 marks another successful year... For personal use only • Growth across all key financial and operational metrics • Acquisitions performing well with integrations on track • Net debt to EBITDA of c.1.2x • Final dividend of 18.5 cps bringing full year dividends to 35.0 cps PAGE 18
Slide 20: Building on our track record since company inception
...building on our track record since company inception. For personal use only Revenue EBITDA 1. 2006 represents 18 months of results due to the change of year end from 30 Jun to 31 Dec. PAGE 19
Slide 21: Questions?
For personal use only Questions? PAGE 20
Slide 22: Appendix – reconciliation of earnings to statutory financial statements
Appendix – reconciliation of earnings to statutory financial statements. For personal use only Reclasify: Reclass CY 2017 equity share Add back: Add back: net Add Back: GST corporate CY 2017 Add: proforma CY 2017 statutory of M&A costs fair value loss (1) adjustment (2) interest adjusted adjustment
Slide 23: Important notice and disclaimer
Important notice and disclaimer 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. The information is give