Slide 1: H1 CY 2019 Results
Investor Presentation H1 CY 2019 Results 19 August 2019 Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer
Slide 2: Smartgroup has delivered another half year of growth, despite slowdown in private new vehicle sales
Smartgroup has delivered another half year of growth, despite slowdown in private new vehicle sales… 1. Positive financial performance • Revenue of $125.8m up 3% vs pcp • NPATA1 of $40.5m up 5% vs pcp 2. Success in servicing clients • Net growth of c.5,000 salary packages and c.1,000 novated leases
Slide 3: ...with steady performance across all financial and operational metrics
...with steady performance across all financial and operational metrics... $m H1 2019 H1 20182 Change % Revenue 125.8 122.6 3% EBITDA1 58.8 56.6 4% NPATA 40.5 38.4 5% Shares on issue (millions) 131.9 131.0 1% NPATA per share (cps) 30.7 29.3 5% As at As at 30 June 2019 30 June 2018 Change % Packages
Slide 4: ...and increasing revenue, earnings and dividends
.8 .8 41.5 35.035.0 35.0 41.5 41.5 41.5 41.5 41.5 41.5 adjusted for Selectus deferred share adjusted adjusted consideration adjusted for for for Selectus Selectus Selectusto deferred be deferred deferredissued share sharepreconsideration share dividend consideration record to be consideration to tod
Slide 5: Smartgroup continues to see organic growth across salary packaging and novated leasing
Smartgroup continues to see organic growth across salary packaging and novated leasing… Salary packaging customers1 2 Novated lease carpark 1 CY 2017 organic growth includes major client win of c.8,500 packages. CY 2018 and H1 2019 organic growth includes no major client wins. 2 The contract end dat
Slide 6: ...from a diversified employer client base that represents stable, growing sectors
...from a diversified employer client base that represents stable, growing sectors within the Australian workforce. Employer client’s % of Smartgroup December 20151 Acquisitions since IPO2 June 2019 number of packages employer client base 2% 4% 5,000+ 0.2 5% 6% 19% 5% 11% 6% 4,000 – 4,999 0.1 13% 13
Slide 7: Smartgroup's novated leasing volumes have continued to grow, despite the 9% pcp downturn
Smartgroup’s novated leasing volumes have continued to grow, despite the 9% pcp downturn in private new vehicle sales Private new vehicle sales1 relative to Q1 2018 SIQ total settlements SIQ new vehicle settlements Private new vehicle sales • Smartgroup has increased its new and total novated leasin
Slide 8: We continue to focus on increasing adoption of digital channels and automation
We continue to focus on increasing adoption of digital channels and automation Progressive uptake of online channels from Progressive implementation of Robotic increased customer adoption and migration of Process Automation (RPA) to enhance packages and leases onto core platforms1 customer service a
Slide 9: Smartgroup continues to see success in delivering multiple services
Smartgroup continues to see success in delivering multiple services, through core and differentiated partner offerings… 180 clients use two or more service offerings, growth of c.20% over the last 12 months Number of Smartgroup services used by individual clients Smartgroup service 2 services 3 serv
Slide 10: ...and we continue to expand and differentiate our service offering by forming new partnerships
…and we continue to expand and differentiate our service offering by forming new partnerships… Nature of offering/partnership Status Novated lease lead referral from HR Information System Launched Salary packaging cards Launched Mortgage health check Launched New initiative, Online mortgage health c
Slide 11: ...building on our journey since IPO
…building on our journey since IPO. Smartgroup Corporation Commenced offering lists on the ASX workforce management services 2014 2015 Commenced offering share plan administration 2016 Commenced offering PBI fleet solutions 2017 2018 2019 Acquisitions Partnerships Page 10
Slide 12: Integration of acquired businesses and consolidation of salary packaging service delivery continues
Integration of acquired businesses and consolidation of salary packaging service delivery continues Acquisition completion date Rebatable1 PBI2 Government Corporate N/A May 2017 December 2015 July 2016 August 2016 3 October 2017 Continuing client 3 August 2017 service model 4 April 2019 Clients now
Slide 13: Financial results H1 2019
Financial results H1 2019 Tim Looi Chief Financial Officer Page 12
Slide 14: H1 2019 NPATA of $40.5m, a 5% increase from the prior year
H1 2019 NPATA of $40.5m, a 5% increase from the prior year... H1 2019 H1 2018 $m adjusted1 adjusted2 Change % Revenue 125.8 122.6 3% EBITDA3 58.8 56.6 4% NPAT 31.4 29.3 NPATA 40.5 38.4 5% 1 A reconciliation of the statutory accounts to adjusted earnings is attached in the Appendix. 2 EBITDA, NPAT an
Slide 15: ...with cashflow from operations at 103% of NPATA
…with cashflow from operations at 103% of NPATA1 Adjusted Adjusted $m H1 20192 H1 20182 Receipts from customers (inclusive of GST) 142.3 135.0 Payments to suppliers and employees (inclusive of GST) (83.1) (77.2) Interest receipts from operations 1.4 1.3 Interest paid (0.8) (2.2) Interest paid on lea
Slide 16: Smartgroup's balance sheet is well capitalised
Smartgroup’s balance sheet is well capitalised Notes $m Note 30 June 2019 statutory 31 Dec 2018 statutory 1. Restricted cash and customer salary packaging Cash 28.2 39.2 liabilities represent funds held in common salary Restricted cash* 1 51.5 42.3 packaging accounts on behalf of clients. Trade and
Slide 17: Closing remarks
Closing remarks… Deven Billimoria Managing Director and CEO Page 16
Slide 18: Smartgroup in the community
Smartgroup in the community In H1 2019 we established Smartgroup Foundation, with grants to commence in H2 2019: • Initial grants up to $25,000 • Grants aligned with Smartgroup employees’ causes of choice Through our ‘Purple Meets Green’ program, Greenfleet has planted 2,000,000 trees on behalf of o
Slide 19: In summary
In summary 1. Smartgroup has delivered another half year of positive financial and operational results, despite the slowdown in private new vehicle sales 2. Success in servicing existing clients and expanding service offering 3. Continued progress with the integration of acquired businesses 4. Stron
Slide 20: Questions?
Questions? Page 19
Slide 21: Appendix – reconciliation of earnings to statutory financial statements
Appendix – reconciliation of earnings to statutory financial statements Add back: Reclass: Reclass: 2019 H1 Onerous Equity share Corporate Add back: 2019 statutory lease costs of interest M&A costs Reported results (acquired investments revenue $m properties) Revenue 126.0 - (0.2) - - 125.8 Operatin
Slide 22: Important notice and disclaimer
Important notice and disclaimer 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 given in summary form and