Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2020 Earnings Presentation
36 slides from Mcmillan Shakespeare's earnings presentation, Feb 19, 2020
Slide 1: FY20 Half Year Results Presentation
For personal use only FY20 Half Year McMillan Results Presentation Shakespeare 19 February 2020 Limited Presenters Mike Salisbury, CEO Mark Blackburn, CFO
Slide 2: Overview
Overview Key Financial Metrics S For personal use only Overview
Slide 3: Result reflective of challenging market conditions
Overview Result reflective of challenging market conditions For personal use only Financial performance > 1H20 UNPATA of $37.8m > FY20 UNPATA guidance of $83m-$87m unchanged. Risks remain around lender appetite and new car sales GRS maintains margins > Strong new business performance > Beyond 2020 d
Slide 4: Group UNPATA bridge
Overview Group UNPATA bridge For personal use only Revenue EBITDA UNPATA1,2 Underlying EPS Fully franked dividend $270.4m $57.2m $37.8m 46.8 cps 34.0 cents/share (1.0%) (11.8%) (10.3%) (9.1%) unchanged AM - A&NZ Corporate GRS $1.4m AM - UK $(2.3m) RFS $(1.6m) ($0.3m) $(1.6m) 1.3 (1.6) 0.1 (1.3) (1.0
Slide 5: Continued growth in customers and assets
Overview Continued growth in customers and assets Lead indicator for future profitability For personal use only 358,000 71,600 43,543 $514m Salary packages Novated leases Asset pool Assets managed 5.6% 9.7% (Units) (WDV )1 (2.8%) (4.3%) $1,435m $417m 1,358 53.5 Net amount financed Plan Partners clie
Slide 6: Scorecard
Overview Scorecard FY20 UNPATA guidance unchanged For personal use only 1H Positives 1H Negatives – Increase in Salary Packages of 5.6% versus pcp – Float increased $34m, however interest rate decreases resulted – Increase in Novated Leases of 9.7% versus pcp in reduced revenue and UNPATA (by $1.2m
Slide 7: GRS growth and Australian new car sales
Overview Key Financial GRS growth and Metrics Australian new car sales S For personal use only Australian New Car Sales MMS Novated Leasing Sales (000’s) Rolling 12 month avg (Indexed to June 2017) 3.8% 1.7% (7.1%) (7.2%) 600 4% 120 120 580 1.3% 2% 110 560 0% 80 540 (2%) 100 60 520 (4%) 40 90 500 (6
Slide 8: Beyond 2020: Driving productivity gains
Overview Beyond 2020 Driving productivity gains For personal use only Core technology platform upgrade Novated leasing uplift and operational efficiencies Delay in program shifts planned expenditure into FY21 Digital app – lead generation Reprioritisation of spend to support warehouse funding option
Slide 9: Plan Partners: Strong operating growth
Overview Plan Partners Strong operating growth For personal use only Plan Partners remains focused on providing intermediary services Plan management type and month of entry1 via expertise in the disability sector and funds and payment administration to National Disability Insurance Scheme participa
Slide 10: UK strategic review update
Overview UK strategic review update For personal use only Rationale for Strategic Review Current status Established a project team Business and consumer confidence Appointed external advisors Given a lowering of business and consumer confidence Commenced strategic review assessing political, and inc
Slide 11: Warehouse funding option
Overview Warehouse funding option Continue to diversify funding sources For personal use only > Strategy – Commence establishing a revolving warehouse as an additional source of funding for novated leases during FY21 > Rationale – Provide a cost and capital efficient source of funding for ongoing bu
Slide 12: Financial performance
For personal use only Financial performance
Slide 13: Results summary
Financial performance Results summary For personal use only $m 1H20 1H193 Variance Revenue 270.4 273.1 (1.0%) EBITDA 57.2 64.9 (11.8%) EBITDA margin (%) 21.2% 23.8% NPBT 47.4 50.3 (5.8%) NPAT (after minority interest) 33.9 34.0 (0.5%) UNPATA 37.8 42.1 (10.3%) Basic earnings per share (cents) 42.1 41
Slide 14: Balance sheet
Financial performance Balance sheet For personal use only 31 December 196 30 June 19 $m AM Other Group Group Net debt to EBITDA1 Cash at bank Other current assets 14.7 30.5 36.2 36.4 50.9 66.9 137.8 70.0 2.7x vs 2.0x pcp Total fleet funded assets 440.7 0.0 440.7 431.1 Group gearing2 Group 51% vs 41%
Slide 15: Funds flow
Financial performance Funds flow For personal use only 1H20 1H191 Group Retail Remuneration Asset Financial Unallocated / MMS MMS $m Services Management Services parent co. Group Total Group Total NPAT 31.1 5.7 (1.9) (1.0) 33.9 34.0 Non-fleet depn/amort, reserves and other non-cash items 5.9 2.7 1.7
Slide 16: Segment performance
For personal use only Segment performance
Slide 17: Segment Review
Segment performance Segment Review For personal use only Group Remuneration Services Asset Management Retail Financial Services Unallocated Total $m 1H20 1H19 % 1H20 1H19 % 1H20 1H19 % 1H20 1H19 % 1H20 1H19 % Revenue 108.8 106.0 2.6% 123.1 124.2 (0.9%) 38.3 42.3 (9.6%) 0.2 0.6 (64.5%) 270.4 273.1 (1
Slide 18: Group Remuneration Services (GRS)
Segment performance Group Remuneration Services (GRS) For personal use only $m 1H20 1H19 Variance Revenue 108.8 106.0 2.6% Commentary Employee expenses 47.2 43.5 8.5% Property & other expenses 11.9 16.2 (26.5%) 5.6% increase in salary packages and 9.7% increase in novated fleet units against a backd
Slide 19: GRS operating metrics
Segment performance GRS operating metrics For personal use only Salary packages (000’s)1 Novated vehicles (000’s)2 5 year CAGR: 6.6% 5 year CAGR: 8.3% 358.0 71.6 339.1 326.8 65.3 297.1 61.0 276.0 56.8 259.6 53.4 48.1 1H15 1H16 1H17 1H18 1H19 1H20 1H15 1H16 1H17 1H18 1H19 1H20 New clients: 12,900 pac
Slide 20: GRS technology investments drive innovation and productivity
Segment performance GRS Technology investments drive new levels of innovation and productivity For personal use only On-line claims take-up rate (%) Productivity index1 Customer satisfaction index3 200 250 90 Target 80 70 150 200 60 50 NPS Benchmark 40 2 30 100 150 20 10 0 50 100 Dec June Dec June D
Slide 21: Asset Management (AM) – Australia & New Zealand
Segment performance Asset Management (AM) – Australia & New Zealand For personal use only $m 1H20 1H19 Variance Revenue 91.0 93.3 (2.5%) Commentary Fleet depreciation 30.5 34.3 (10.9%) Market continues to be highly competitive with Asset WDV Lease and vehicle management expenses 38.2 34.8 9.6% remai
Slide 22: AM – Australia & New Zealand operating metrics
Segment performance AM – Australia & New Zealand operating metrics For personal use only Fleet assets written down value ($m) 1H20 1H20 WDV breakdown Revenue breakdown 312 321 346 376 377 7% 56 75 26% 9% 4 23 $377.2m 42% $91.0m 43% 28% 20% 312 317 306 323 325 320 302 10% 16% 1H16 1H17 1H18 1H19 1H20
Slide 23: AM – United Kingdom
Segment performance AM – United Kingdom For personal use only $m 1H20 1H19 Variance Revenue 32.2 30.9 4.1% Commentary Lease and vehicle management expenses 17.2 15.1 14.1% Constrained economic conditions including uncertainty associated Employee expenses 8.8 7.8 12.6% with UK general election and Br
Slide 24: AM – United Kingdom operating metrics
Segment performance AM – United Kingdom operating metrics For personal use only Assets written down value ($m) 1H20 WDV on balance sheet breakdown 65.5 ■ Services 11% 57.0 ■ Industry 16% 33% ■ Finance 180.4 160.0 125.9 137.4 136.4 $136.4m ■ Manufacturing 7% ■ Wholesale & retail trade 38.6 ■ Portfoli
Slide 25: Retail Financial Services (RFS)
Segment performance Retail Financial Services (RFS) For personal use only $m 1H20 1H19 Variance Revenue 38.3 42.3 (9.6%) Commentary Brokerage commissions 17.8 19.2 (7.1%) Aggregation business continues to acquire new broker relationships Employee expenses 8.0 9.0 (11.5%) Net claims 6.9 6.3 > Maintai
Slide 26: RFS operating metrics
Segment performance RFS operating metrics For personal use only Net amount financed ($m) Revenue breakdown ($m) UNPATA breakdown ($m) 12.1 39.2 0.3 52.8 0.1 2.9 1.2 0.3 1.6 24.9 21.2 17.4 15.3 15.4 481.9 487.1 521.5 496.5 514.4 24.0 22.4 24.8 23.2 22.9 3.4 2.7 3.6 3.5 2.7 1H18 2H18 1H19 2H19 1H20 1H
Slide 27: Summary
For personal use only Summary
Slide 28: Summary
Summary Summary For personal use only 1H20 UNPATA $37.8m Consistent profitable growth with margins maintained in core GRS business > Organic growth of 5.6% in salary packaging and 9.6% in novated leasing > Ongoing efficiencies from Beyond 2020 investment > Positive momentum in Plan Partners > Challe
Slide 29: Appendix
For personal use only Appendix
Slide 30: Complementary diversification across the MMS Group
Appendix Complementary diversification across the MMS Group For personal use only Group Remuneration Services Asset Management Retail Financial Services Brands Primary service – Salary packaging – Vehicle fleet leasing and management – Vehicle finance, insurance – Novated leases – Vehicle finance, i
Slide 31: Funding overview
Appendix Funding overview For personal use only Highly competitive Club debt facilities priced at upper investment grade based on common terms Diversity of on and off balance sheet funding from Australia’s major banks All facilities are in the process of being extended beyond 12 months Local Currenc
Slide 32: Risks and sensitivities
Appendix Risks and sensitivities For personal use only Regulation of consumer insurance products Regulation of consumer lending products Lenders risk appetite (availability of credit) Ongoing potential risk of consumer action Acquisition and integration risk Second hand car prices (remarketing earni
Slide 33: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA For personal use only $m 1H20 1H19 Variance NPAT 33.9 34.0 (0.1%) 1. Amortisation of intangibles from acquisitions 1.7 1.8 (3.2%) 2. Deferred consideration (1.4) 2.7 (153.1%) 3. Acquisition related costs 0.1 3.6 100.0% 4. Share buy back costs 0.3 0.0 1
Slide 34: AASB16 Lease Accounting
Appendix AASB16 Lease Accounting For personal use only AASB 1H20 1H20 1H19 Variance 1H20 (excl AASB16) Revenue 270.4 - 270.4 273.1 (1.0%) Expenses 213.7 3.0 216.2 208.2 3.8% EBITDA 57.2 (3.0) 54.2 64.9 (16.5%) EBITDA margin (%) 21.2% - 20.0% 23.8% (15.7%) D&A of PPE and software 8.3 (2.6) 5.7 4.9 17
Slide 35: Disclaimer and important notice
Appendix Disclaimer and important notice For personal use only This presentation has been prepared by McMillan Shakespeare Limited ABN 74 107 233 983 (“MMS”). It contains summary information about MMS and its subsidiaries and their activities current as at the date of this presentation. The presenta
Slide 36: For personal use only
For personal use only McMillan Shakespeare Limited
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