Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Investor Presentation (February 2023)
26 slides from Smartgroup's investor presentation, Feb 23, 2023
Slide 1: CY 2022 full year results
CY 2022 full year results Tim Looi – Managing Director and Chief Executive Officer Anthony Dijanosic – Chief Financial Officer Sarah Haas – Chief Operating Officer 23 February 2023
Slide 2: 2022 Overview
1. 2022 | Overview
Slide 3: Steady operational performance
Steady operational performance NPATA at top end Strong leasing Significant uptick in Progress on Smart Strong cash flow of guidance range demand Electric Vehicle (EV) Future program conversion and 2022 of $60-61m demand dividends at 100% of NPATA Revenue of $224.7m Strong 14% growth in c.270% increa
Slide 4: 2022 packages, novated leases and fleet managed vehicles
2022 packages, novated leases and fleet managed vehicles Salary packages Novated leases under management Fleet managed vehicles CY DET Vic not New client CY organic CY CY DET Vic not New client CY portfolio CY CY CY organic CY 2021 renewed win growth 2022 2021 renewed win run-off 2022 2021 growth 20
Slide 5: Positive novated lease lead momentum, with a significant increase in lease enquiries
Positive novated lease lead momentum, with a significant increase in lease enquiries at the start of the sales process H1 2022 H2 2022 v CY Strong lead performance v pcp v pcp 2021 ▸ Customer interest remains strong, driven by significant growth in digital and inbound leads – both EV and non-EV Digi
Slide 6: Vehicle supply challenges continued throughout 2022
Vehicle supply challenges continued throughout 2022 ▸ Delivery timeframes have extended further in Average vehicle order to delivery 2022 (though stabilised in H2), leading to timeframes for Smartgroup top 30 further growth in the Vehicle Order pipe makes/models by volume1 100 ▸ Delays are resulting
Slide 7: New vehicle orders continue to exceed settlements, leading to growth in open order pipe
New vehicle orders continue to exceed settlements1, leading to further growth in the open order pipe 10% Customers delaying buying decisions 0% ▸ Credit approval to vehicle order timeframe extended by c.20% -10% -20% Car supply continues to impact settlements -30% ▸ Excess VO pipe2 now at c.$15m, up
Slide 8: Creating diverse and inclusive teams; investing in our customers and communities
Creating diverse and inclusive teams; investing in our customers and our communities Employer of Choice for Endorsed our first Continued recognition for high Fourth year of grants, Gender Equality 2021-2023. Sustainability Strategy with service standards donating almost $250,000 40/40/20 gen
Slide 9: Smart Future
3. Smart Future Customer Sign In cal par iro —— What is salary & marisaiary Salary pe p agin
Slide 10: Smart Future
Smart Future Delivered to-date… Highlights… ▸ Customer sales incentive scheme restructure ▸ Leasing calculator website visit to lead conversion rate uplift worth c.$4m per annum in revenue2 ▸ Digital experience platform ▸ Initial booking system data indicates >15% uplift ▸ API and data platforms in
Slide 11: Electric Vehicles
2. Electric Vehicles 11
Slide 12: EV % of total quotes
EV % of total quotes 16% Federal Government Policy generating strong 12% increase in EV demand 8% 4% ▸ Federal Government Electric Car Discount Policy abolishes FBT on new EVs provided 0% through novated leases1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 ▸ c.270% increase in qualifying EV quotes for Q4 2022
Slide 13: Early EV case studies
Early EV case studies EV % of client quotes 35% Large Corporate client 30% ▸ c.29% of Q4 2022 quotes are for 25% EVs versus less than 5% in 2021 20% and early 2022 15% 10% ▸ EV uplift drove overall Q4 2022 quote 5% levels 79% above pcp 0% Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Large Governm
Slide 14: New EVs due in Australia in 2023; EV supply expected to improve
New EVs1 due in Australia in 2023; EV supply is expected to improve through the year, with more models at accessible price points Q1 Q2 Q3 Q4 ▸ BYD Seal ▸ Fiat 500e2 ▸ Peugeot e-208 ▸ GWM Ora Next Cat ▸ BYD EA1/Dolphin2 ▸ GWM Ora Good Cat2 ▸ Toyota bZ4x ▸ Hyundai Kona Electric ▸ Cupra Born ▸ MG42 ▸
Slide 15: Financial Performance
4. Financial Performance Full Year CY2022 15 15
Slide 16: Strong 42% EBITDA margin despite cost inflation and vehicle supply impacting revenue
Strong 42% EBITDA margin despite cost inflation and vehicle supply impacting revenue CY 20221 CY 20211 Change % Improved novated lease yield offset lower Revenue 224.7 221.8 1% settlements as a result of vehicle supply challenges, resulting in modest revenue growth Product costs (7.6) (6.0) 27% Staf
Slide 17: High cash conversion at 117% of NPATA
High cash conversion at 117% of NPATA CY 2022 CY 2021 Cash flow includes $7.9m in relation to future $m adjusted1 adjusted1 performance fees received upfront from one Receipts from customers (inclusive of GST) 277.6 252.5 novated funder, on transition to other funders. Excluding this payment in adva
Slide 18: Conservative balance sheet despite payment of $40m of special dividends
Conservative balance sheet despite payment of $40m of special dividends 31 Dec 2022 31 Dec 2021 Decrease in Cash and increase in Borrowings $m statutory statutory following payment of $39.7m special dividend in March 2022, resulting in a small net debt Cash 26.7 32.5 position at the end of 2022 Othe
Slide 19: Capital light business model generates strong cash flows, with fully franked dividends
Capital light business model generates strong cash flows, with regular capital management via fully franked dividends Cash flow conversion (% NPATA)1 Dividend (fully franked)2 ▸ Cash flow conversion remains 120 138% 140% strong and consistent 120% 117% 115% 113% 100 120% ▸ Track record of attractive
Slide 20: Summary and Outlook
5. Summary and Outlook 20
Slide 21: Steady operational performance for 2022 and a positive start for 2023
Steady operational performance for 2022 and a positive start for 2023 NPATA at top end Leasing demand EVs a significant Progress on Smart CEO to retire of guidance range remains strong opportunity Future program of $60-61m Revenue impacted by Strong lead volume Strong initial interest New Smartsalar
Slide 22: Appendix
6 ppendix ~ — — — % = smart « <n!
Slide 23: Reconciliation of earnings to statutory financial statements
Reconciliation of earnings to statutory financial statements CY 2022 Non-IFRS Add back: Merger & CY 2022 $m statutory measures Acquisition costs adjusted Revenue 224.7 – – 224.7 Operating EBITDA 93.3 – 0.1 93.4 Joint venture contribution 0.3 – – 0.3 Segment note EBITDA 93.6 – 0.1 93.7 Depreciation e
Slide 24: Reconciliation of movement in net tangible assets
Reconciliation of movement in net tangible assets $m # of shares (m) NTA (cps) Net tangible assets – Dec 2021 (35.8) 133.5 (26.8) Net cash from operating activities 71.3 Increase in borrowings (25.0) Dividends paid (87.7) Other tangible asset/liability movements 7.1 Net tangible assets – Dec 2022 (7
Slide 25: Balance sheet
Balance sheet $m Note 31 Dec 2022 statutory 31 Dec 2021 statutory Cash 1 26.7 32.5 Restricted cash 2 36.0 41.2 Trade and other current assets 22.9 27.5 Current assets 85.6 101.2 Property and equipment 1.9 1.6 Right-of-use assets – Smartgroup funded vehicles 6.5 2.8 Right-of-use assets – other 6.6 5.
Slide 26: Slide 26