Slide 1: Investor Presentation Full year CY15 Results
For personal use only Investor Presentation Full year CY15 Results Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer 25 February 2016 STRICTLY CONFIDENTIAL PAGE 0
Slide 2: Overview of 2015 performance
For personal use only Overview of 2015 performance Deven Billimoria Managing Director and CEO PAGE 1
Slide 3: Smartgroup has had another successful year
Smartgroup has had another successful year… For personal use only Revenues of $91.8m and NPATA of $26.2m1 1 - Up 25% and 51% respectively vs CY14 Major client renewals and new client wins 2 - - Department of Defence contract renewed on exclusive basis for up to 6 years Net new client packages increa
Slide 4: Growth across all financial and operational metrics
. . . with growth across all financial and operational metrics For personal use only 2015 2014 Statutory Proforma Change % $m $m Revenue1 91.8 73.4 25% EBITA2 35.4 24.2 46% NPATA3 25.4 17.4 46% Addback: Advantage transaction costs 0.8 0.0 N/A (tax effected) NPATA3 26.2 17.4 51% Smartgroup ex Advanta
Slide 5: Our novated lease car park continues to grow
Our novated lease ‘car park’ continues to grow . . . For personal use only Novated leases under management 40,000 35,000 30,000 Total active leases 25,000 20,000 15,000 10,000 5,000 0 2012 2013 2014 2015 Smartsalary Advantage PAGE 4
Slide 6: We continue to drive efficiencies
. . . and we continue to drive efficiencies . . . For personal use only Self-service online forms usage % 50% 40% 30% Package growth and service/admin efficiency 20% 140 128 160,000 123 Packages per FTE (rebased to 100) 117 121 120 140,000 10% 100 120,000 100 0% Packages 100,000 2011 2012 2013 2014
Slide 7: Maintaining high customer service levels
… while also maintaining Smartsalary’s high customer service levels For personal use only 2015 Achievements • NSW State Award Winner for Service Excellence in the Medium Business category • National Award Highly Commended for Service Excellence in the Medium Business category CSIA has advised that S
Slide 8: Three recently completed acquisitions
We recently completed three acquisitions: Health-e Workforce Solutions, Advantage Salary Packaging, and selected assets of Trinity Management Group (now trading as Smartequity) … For personal use only PAGE 7
Slide 9: Integration of acquired businesses progressing well
… and the integration of all three recently acquired businesses progressing well For personal use only • Completed acquisition for $60.8m in December 2015 • Completed acquisition of 50% share for $6m in December 2015 • Acquisition represented an implied EV/CY15 EBITDA multiple of 5.9x • Services lea
Slide 10: Financial results Full year CY2015
For personal use only Financial results Full year CY2015 Tim Looi Chief Financial Officer Tim PAGE 9
Slide 11: CY15 delivered record revenue and earnings
CY15 delivered record revenue and earnings; with growth across all key financial metrics For personal use only Add back: 2015 Advantage 2015 2014 Statutory acquisition Adjusted Proforma4 ($m) cost 3 ($m) ($ m) ($m) Change Revenue 91.8 - 91.8 73.4 25% EBITA1 35.4 1.2 36.6 24.2 51% NPAT 20.2 0.8 21.0
Slide 12: Strong package growth in CY15
New health clients, strong organic uptake and the acquisition of Advantage contributed to strong package growth in CY15 For personal use only Package growth in 2015 200,000 50,000 182,500 180,000 160,000 Number of active packages 140,000 6,400 7,400 120,000 118,700 - 105,200 100,000 - 91,400 - 80,00
Slide 13: Operating cash flows remain greater than 100% NPATA
Operating cash flows remain greater than 100% NPATA, with low recurring capex For personal use only 31 December 2015 31 December 2014 Statutory ($m) Proforma ($m)1 Change Receipts from customers (inclusive of GST) 96.8 76.6 26% Payments to suppliers and employees (inclusive of (64.9) (47.9) 35% GST)
Slide 14: Pro-forma NPATA including full year acquisitions
Including the full year contributions of the acquisitions, 2015 pro-forma NPATA is c$33m For personal use only Add: Acquisitions 2015 2015 historical Pro-forma for Adjusted results1 acquisitions ($ m) ($ m) ($ m) Change Revenue 91.8 16.7 108.5 18% EBITA2 36.6 11.7 48.3 32% NPAT 21.0 6.4 27.4 30% Add
Slide 15: Conservatively geared with net debt / EBITDA below 1.0
We remain conservatively geared with net debt / LTM EBITDA1 less than 1.0 For personal use only • Net debt / LTM EBITDA below 1.0 x Movement in net cash Net debt to EBITDA ratio 40.0 1 30.0 0.8 (0.5) 20.0 Net debt / EBITDA(1) 0.6 (14.4) 10.0 (6.0) $ millions 0.4 27.9 0.7 0.0 5.9 18.9 (48.0) 0.2 -10.
Slide 16: Efficient working capital business model
Smartgroup continues to run an efficient working capital business model For personal use only Existing Plus: Plus: Health-e Statutory Statutory Smartgroup Advantage Workforce 2015 2014 Movement ASSETS Cash and cash equivalents 17.9 1.6 - 19.5 27.8 (8.3) Other current assets 12.9 0.6 - 13.5 11.1 2.4
Slide 17: Consistent half on half performance since listing
Since listing in July 2014, we have had consistent half on half performance … For personal use only H1 2014* H2 2014* H1 2015 H2 20151 ($ m) ($ m) ($ m) ($ m) Revenue 34.8 38.0 44.8 47.0 EBITA2 11.5 12.2 17.5 19.1 NPATA3 8.5 8.9 12.5 13.7 EBITA margins 33.0% 32.1% 39.1% 40.6% NPATA margins 24.4% 23.
Slide 18: Building on our track record since inception
… building on our track record since inception For personal use only Group revenues Group EBITDA 100 40 90 35 80 30 70 Revenue $m EBITDA $m 60 25 50 20 40 15 30 (1) (1) 10 20 10 5 - 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2002 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 19: In summary
For personal use only In summary… Deven Billimoria Managing Director and CEO PAGE 18
Slide 20: In summary
In summary For personal use only • Growth across all key financial and operational metrics • Net debt to EBITDA1 less than 1.0x • Cash flows greater than 100% of NPATA • 2H CY15 dividend of 8.7 cps, fully franked, up 43% on pcp 1– Comprising the 2015 SIQ EBITDA plus proforma, unaudited full year EBI
Slide 21: Questions?
For personal use only Questions? PAGE 20
Slide 22: 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