Slide 1: Annual General Meeting
For personal use only Annual General Meeting Deven Billimoria Managing Director and CEO 3rd May 2017 PAGE 0
Slide 2: Acquisition of AccessPay
1. Acquisition of AccessPay . . . For personal use only About AccessPay • Specialist salary packaging provider to PBI employer clients • Established in 2001, based in Adelaide and c.80 FTE • Administers c.40,000 salary packages and c.600 novated leases across c.500 employer client organisations • Fo
Slide 3: Enables Smartgroup to build scale and expand its PBI footprint
. . . enables Smartgroup to continue to build scale and expand its PBI footprint . . . For personal use only Smartgroup’s outsourced salary packaging and leasing offerings(1) PBI Government Corporate Rebatable Completed December 2015 Completed May 2017 Completed July 2016 Completed August 2016 1. Di
Slide 4: Expected to contribute meaningfully to Smartgroup in CY2018
. . . and is expected to contribute meaningfully to Smartgroup in CY2018. For personal use only Expected contribution to Smartgroup • Advantage and AccessPay have similar client bases with similar service delivery, and there exists opportunity to leverage best practice across both • c.$2m one-off IT
Slide 5: 2016 was yet another successful year for Smartgroup
2. 2016 was yet another successful year for Smartgroup . . . For personal use only Continued strong financial performance 1 - Revenue of $144.4m up 57% vs CY 2015 - NPATA(1) of $44.0m up 68% vs CY 2015 Continued client growth 2 - Significant client renewals and wins across all SIQ businesses - Organ
Slide 6: Growth across all financial and operational metrics
. . . with growth across all financial and operational metrics . . . For personal use only CY 2016 $m CY 2015 CY 2016 Change % pro-forma(2) Revenue 91.8 144.4 57% 168.7 EBITDA(1) 37.6 64.3 71% 75.3 NPATA 26.2 44.0 68% 50.7 Shares on issue (millions) 103.7 121.5 17% 121.5 NPATA per share (cps) 25.3 3
Slide 7: Continuing our track record since IPO
. . . and continuing our track record since IPO. For personal use only (2) Shares on issue (1) H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 (million shares) n/a 101.5 103.7 103.7 107.3 121.5 1. Represents shares on issue (SOI) at the end of the period. 2. H1 CY 2016 dividend payment of $11.9m was
Slide 8: Growth in salary packages and novated leases organically and through acquisition
Smartgroup has grown salary packages and novated leases both organically and through acquisition . . . For personal use only PAGE 7
Slide 9: Strong EBITDA growth in 2016
. . . resulting in strong EBITDA growth in 2016 . . . For personal use only PAGE 8
Slide 10: A more diversified client base
. . . with a more diversified client base . . . For personal use only Given 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.1,400 vs c.200 in 2013. Client concentration by revenue Client concentration by re
Slide 11: Continued focus on driving efficiencies
Smartgroup has continued to focus on driving efficiencies . . . For personal use only Smartsalary’s increased uptake of online claims has contributed to an improvement in operational efficiency of 40% since 2011 Total claims and percentage submitted Package growth and operational efficiency(2,3) onl
Slide 12: Recognised as one of Australia's most innovative and customer-centric companies
. . . and to be recognised as one of Australia’s most innovative and customer-centric companies. For personal use only Smartgroup capabilities triangle PAGE 11
Slide 13: Highest customer service score awarded in CSIA history
For the second consecutive year, Smartsalary achieved the highest customer service score awarded in CSIA history. For personal use only (1) 1. The 2015 Smartsalary CSIA customer service score of 8.44 was the highest score ever awarded by CSIA, until surpassed by Smartsalary in 2016. PAGE 12
Slide 14: Recently appointed SIQ Group Executives
Recently appointed SIQ Group Executives add experience and capability to the Executive Management Team. For personal use only Prior experience Tony was the National Health Adviser for KPMG Australia. Tony was also the Director- Dr Tony O’Connell General of Queensland Health, National Director of H
Slide 15: Closing remarks
Closing remarks For personal use only CY 2016 marks another successful year • Growth across all key financial and operational metrics • Successful acquisitions of Selectus and Autopia with synergies realised earlier than expected • Cash flows greater than 100% of NPATA • Net debt to pro-forma EBITDA
Slide 16: Building on our track record since inception
. . . building on our track record since inception. For personal use only Smartgroup revenues Smartgroup EBITDA 1. 2006 represents 18 months of results from the change of year end from June to December. PAGE 15
Slide 17: Appendices
For personal use only Appendices PAGE 16
Slide 18: Another year of record revenue and earnings
In CY 2016, Smartgroup delivered another year of record revenue and earnings. For personal use only Adjusted for equity share & CY 2016 acquisition CY 2016 CY 2015 $m statutory items(1) adjusted adjusted(2) Change % Revenue 144.4 - 144.4 91.8 57% EBITDA(3) 63.3 1.0 64.3 37.6 71% NPAT 32.7 0.1 32.8 2
Slide 19: After-tax operating cash flow remained strong at 103% of NPATA
After-tax operating cash flow(1) remained strong at 103% of NPATA, with continued low recurring capex. For personal use only $m CY 2016 CY 2015 Receipts from customers (inclusive of GST) 154.4 96.8 Payments to suppliers and employees (inclusive of GST)(2) (94.2) (64.9) Interest receipts from operati
Slide 20: Intangibles impacted by acquisitions funded by debt and equity raise
Smartgroup’s intangibles were impacted by acquisitions, which were funded by a debt and an equity raise . . . For personal use only 31 Dec 2016 31 Dec 2015 $m statutory statutory Cash 80.0 19.4 (1) Restricted cash 39.5 0.7 1. Restricted cash and customer salary packaging liabilities Trade and other
Slide 21: Net debt position at year end of c.$72m
. . . with Smartgroup’s net debt position at year end at c. $72m, representing a debt / pro-forma EBITDA of c.1.0x. For personal use only Net -$63.3m of cash used for acquisitions (1) (2) Net +$24.9m of cash generated from operations (1) (2) Net debt ($m) 33.6 72.0 72.0 (2) EBITDA ($m) 49.3 75.3 64.
Slide 22: Reconciliation of earnings to statutory financial statements
Reconciliation of earnings to statutory financial statements. For personal use only CY 2016 Reclassify: Add back: Less: Add: statutory equity share acquisition fair value CY 2016 pro-forma CY 2016 financials investments costs gain adjusted adjustment(1) pro-forma Revenue 144.4 - - - 144.4 24.3 168.7
Slide 23: 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