Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Shareholder Meeting (May 2023)
44 slides from Smartgroup's shareholder meeting presentation, May 10, 2023
Slide 1: 2023 AGM presentation materials
ASX Announcement Release date: 10 May 2023 2023 AGM presentation materials Attached are the following documents to be presented at the 2023 Annual General Meeting (AGM) of Smartgroup Corporation Limited (ASX: SIQ) to be held at 11.00am this morning at Wesley For personal use only Conference Centre,
Slide 2: Chairman's Address: Introduction and 2022 results
SMARTGROUP CORPORATION LIMITED 2023 ANNUAL GENERAL MEETING – CHAIRMAN’S SCRIPT 11.00 AM, WEDNESDAY 10 MAY 2023 1. CHAIRMAN’S ADDRESS Introduction and 2022 results For personal use only Smartgroup’s 2022 financial result was again adversely impacted by the ongoing challenges of a significantly delaye
Slide 3: For personal use only
We were pleased to secure a number of new large and medium-sized organisations as clients throughout 2022. We renewed or extended the majority of the top 20 contracts that fell due in 2022, with one notable loss. We have continued this progress in 2023, and Tim will provide a further update on the b
Slide 4: Shareholder returns and CEO transition
range of initiatives supporting the uptake of electric vehicles and the transition to a low emissions future for Australia. Shareholder returns Since listing in 2014, Smartgroup has delivered good returns for shareholders both in capital appreciation as well as fully franked dividends, with approxim
Slide 5: Conclusion and CEO presentation
Conclusion In conclusion, I would like to thank Tim, the entire management team and all of our employees for their hard work and strong focus throughout 2022. I would also like to thank our loyal clients, suppliers and shareholders for their ongoing support and to take this opportunity to thank my f
Slide 6: For personal use only
More recently, we have seen government legislation supporting the adoption of electric vehicles through novated leasing. The transition to electric vehicles is at an early stage and Smartgroup should be a beneficiary as electric vehicles increase in popularity. One of Smartgroup’s key strengths is t
Slide 7: 2022 performance and operational update
As mentioned by Michael, we also committed to our first formal Sustainability Strategy last year, including a range of initiatives and targets. We have made a commitment to reach Net Zero carbon emissions in our direct operations by 2030 and have rolled out a range of initiatives to play our part in
Slide 8: Summary of 2022
The summary of 2022 is as follows: First, we delivered NPATA of $61.2m. Revenue was at $224.7 million dollars which was 1 percent higher than the prior corresponding period. Meanwhile, EBITDA and NPATA were lower than pcp, which reflected the continued car supply constraints and higher operating cos
Slide 9: For personal use only
I am pleased to report that in Quarter 1 2023, we are seeing a continuation of strong leasing leads. Total leasing leads, compared to the prior corresponding period, are up 31% with the digital channel growing by 42%. Leasing quotes, new lease orders, settlement volumes and yields are all showing go
Slide 10: For personal use only
The current average delivery timeframe for our top makes and models is much longer than 2021 and pre-COVID. The lengthy, and also changing delivery schedules, have caused additional work in our sales pipeline management in the form of credit re-approvals and administrative work. Given the continued
Slide 11: For personal use only
by engaged team members, to continue to be the trusted partner for our clients and, in turn, grow and build scale within our business. If we are able to do this, it will deliver more customers to us at a lower cost of acquisition as well as deliver a better experience and service, lowering the cost
Slide 12: For personal use only
A single and integrated appointment booking system was rolled out to our Customer Education workforce in the second half of 2022. The appointment system segregates customers into different journeys based upon their individual requirements. As you can see on the chart, this tool has assisted our educ
Slide 13: Electric vehicle demand
and new customers as they start their journey into an Electric Vehicle and we are well prepared to ensure that their transition is seamless, simple and cost effective. While it has only been several months since the legislation was passed, we have already seen strong demand coming from all segments
Slide 14: Update and outlook
are seeing more and differing manufacturers announcing their interest to supply electric vehicles. This will be an exciting space for Smartgroup over the coming years. Update and outlook We are pleased with our progress into Q1 2023. Our salary packages and novated lease vehicle numbers are stable a
Slide 15: For personal use only
We have minimal capitalised IT costs and as per usual, strong cashflow conversion with a low net debt position. The business is well positioned to take advantage of improvements in car supply, progress from the investment in digital capabilities as well as the opportunities in electric vehicles. Tha
Slide 16: For personal use only
business. On behalf of Smartgroup, we are excited about the long-term outlook and the opportunities arising over the next twelve months. For personal use only 15
Slide 17: Annual General Meeting 2023
For personal use only Annual General Meeting 2023
Slide 18: Chairman's Address
For personal use only Chairman’s Address Michael Carapiet
Slide 19: Smartgroup Board of Directors
Smartgroup Board of Directors For personal use only Gavin Michael Anne Deborah Bell Carapiet McDonald Homewood Non-Executive Chairman and Non-Executive Non-Executive Director Non-Executive Director Director Director 4 Carolyn Tim Ian John Colley Looi Watt AC Prendiville Non-Executive Managing Direct
Slide 20: 2022 highlights - Steady operational performance
2022 highlights - Steady operational performance For personal use only • NPATA of $61.2 million • Revenue of $224.7 million • EBITDA of $93.4 million • Operating cash flow generation at 117% of NPATA • Novated leasing leads and vehicle order pipeline continued to grow • Introduction of the Federal G
Slide 21: c.650% Total Shareholder Returns since IPO
We have delivered c.650% Total Shareholder Returns since IPO, including franking value For personal use only Since listing in 2014, Smartgroup has paid ~$448m in fully franked dividends (~$192m franking value) ~$160M SIQ Market Cap | 2 July 2014 ~$940m SIQ Market Cap | 5 May 2023 1,200% Performance
Slide 22: CEO transition
CEO transition For personal use only • Scott Wharton to commence on 17 July 2023 • Tim Looi for remain for a transition period 7
Slide 23: MD and CEO's Address
For personal use only MD and CEO’s Address Tim Looi
Slide 24: Our investment proposition
Our investment proposition – capital light business model, strong cash flows and dividends For personal use only 378,000 58,000 25,900 ~740 Salary Packaging Novated Fleet Vehicles Full Time customers Leases Managed Equivalents Premium established player with scale Diversified customer base opera
Slide 25: Smartgroup operates in attractive market segments
Smartgroup operates in attractive market segments For personal use only Corporate Our employer clients and employee customers Education 3% 7% • Not-for-Profit – charities, disability and aged care providers • Hospital – Government public and private 20% 378,000 Not-for-Profit 46% • Government – loca
Slide 26: We invest in our customers and communities
We invest in our customers and communities and are committed to a smarter, more sustainable tomorrow For personal use only Employer of Choice for Endorsed our first Continued recognition for high Fourth year of grants, Gender Equality 2021-2023. Sustainability Strategy with service standards
Slide 27: 2022 recap and 2023 operational update
For personal use only 2022 recap and 2023 operational update
Slide 28: Steady operational performance for 2022 calendar year
Steady operational performance for 2022 calendar year For personal use only NPATA Strong leasing Significant uptick in Progress on Smart Strong cash flow of $61.2m demand Electric Vehicle (EV) Future program conversion and 2022 demand dividends at 100% of NPATA Revenue of $224.7m Strong 14% growth i
Slide 29: Strong level of leasing enquiries and orders has continued into 2023
Strong level of leasing enquiries and orders has continued into 2023 For personal use only Mar 2023 YTD v. pcp1 Strong customer interest has continued into 2023 ▸ Customer enquiry levels remain strong Digital leasing leads +42% ▸ Additional open leads represent potential revenue of $3-4m3 Total leas
Slide 30: Vehicle supply more stable but challenges remain
Vehicle supply more stable For personal use only but challenges remain ▸ Delivery timeframes extended further in 2022, Average vehicle order to delivery timeframes though appears to be stabilising, leading to for Smartgroup top 30 makes/models by further growth in the Vehicle Order pipeline in volum
Slide 31: New vehicle orders continue to exceed settlements
New vehicle orders continue to exceed settlements1, leading to further growth in the open order pipe in Q1 2023 For personal use only 10% Customers delaying buying decisions 0% ▸ Credit approval to vehicle order timeframe extended by c.20% in 2022 -10% -20% Car supply continues to impact settlements
Slide 32: Smart Future
For personal use only Smart Future
Slide 33: Smart Future 'scorecard' – meaningful progress made
Smart Future ‘scorecard’ – meaningful progress made For personal use only Foundations Leasing calculators Smartsalary website Integrated appointment Car Leasing Portal and salary packaging booking system 24/7 quoting calculator Customer sales Strong, sustained visit Meaningful increase Incre
Slide 34: Online novated leasing calculators generate strong lead growth
Smartleasing 200% Online novated leasing New website For personal use only calculator go-live 150% calculators continue to 100% generate strong lead growth 50% 0% ▸ Smartleasing live Q1 2021 (c.90% of group Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 novated leases) -50% Baseline 2020 2021 2022 2023 - Signi
Slide 35: Smartsalary website and packaging calculator
Education content engagement Smartsalary website and For personal use only packaging calculator ▸ New website including self-education content went live in July 2022; Smartsalary Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 packaging calculator education tool live User sessions Uni
Slide 36: Integrated appointment booking system
Integrated appointment For personal use only booking system Smartsalary customer education team enrolments1 14,000 Transition to new, 450 ▸ Single system rolled out across all single system 400 12,000 350 Smartgroup brands in Q3 and Q4 2022 10,000 300 8,000 250 ▸ Incentive structure updated at start
Slide 37: Car Leasing Portal – 24/7 quoting
Pilot client group proportion of 2022 new lease quotes Car Leasing Portal – For personal use only 9% 24/7 quoting ▸ Pilot commenced in February 2023 to c.100 clients (pilot clients accounted for c.9% of total 2022 new lease quotes) ▸ Quote volume from pilot clients increased 23% v pcp Average monthl
Slide 38: Electric Vehicles
For personal use only Electric Vehicles
Slide 39: Federal Government policy generating strong increase in EV demand
EV % of total quotes 25% Federal Government For personal use only 20% policy generating strong 15% increase in EV demand 10% 5% ▸ Federal Government Electric Car Discount 0% Policy abolishes FBT on new EVs provided Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2021 2022 2023 through novated leases1 EV quotes by segmen
Slide 40: New EVs due in Australia in 2023
New EVs1 due in Australia in 2023; EV and PHEV supply is expected to improve through the year, with more models at accessible price points For personal use only Q1 Q2 Q3 Q4 ▸ Fiat 500e ▸ GWM Ora Funky Cat2 ▸ Peugeot e-208 ▸ Subaru Solterra ▸ Hyundai Ioniq 6 ▸ Renault e-tech Megane ▸ Peugeot e-2008 ▸
Slide 41: Update to March 2023 and Outlook
For personal use only Update to March 2023 and Outlook
Slide 42: Positive trading momentum with increased revenue offsetting cost inflation
Positive trading momentum with increased revenue offsetting cost inflation For personal use only Continued client success Stable salary packages with several new client wins Novated lease vehicles under management stable Fleet vehicles under management expected to grow in H2 by c.2,000 vehicle
Slide 43: Important notice and disclaimer
Important notice and disclaimer Disclaimer For personal use only 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 give
Slide 44: For personal use only
For personal use only