Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2017 Earnings Presentation
37 slides from Mcmillan Shakespeare's earnings presentation, Feb 22, 2017
Slide 1: MMS Group FY17 Half Year Presentation
For personal use only MMS Group FY17 Half Year Presentation Presenters Mike Salisbury, CEO Mark Blackburn, CFO McMillanShakespeareGroup
Slide 2: Overview
For personal use only Overview Overview 2
Slide 3: Key initiatives for building long term shareholder value
Overview Key initiatives for building long term shareholder value For personal use only Broad suite of high quality products and industry leading service to drive organic growth Investment in technology resulting in productivity gains and margin growth Synergy benefits from a fully integrated busine
Slide 4: Business overview
Business overview Overview Operational Driving full value Highlights from our integrated model For personal use only Segment Stated strategy 1H17 impact Group > Continue organic growth > Salary packages up 7.6%, novated leasing units up 6.6% Remuneration > Margin improvement via technology > Margin
Slide 5: Key Financial Metrics
Overview Key Financial Metrics Solid 1H17 performance despite interruptions For personal use only Segment Revenue up 2.9% to 1H17 UNPATA breakdown $250.4 million Segment EBITDA up 1.8% to 15% $66.4 million 19% 66% UNPATA up 0.8% to $42.1 million Underlying EPS unchanged at ■ Group Remuneration Servi
Slide 6: Key Operating Metrics
Overview Key Operating Metrics Continued growth in customers and assets For personal use only 297,100 56,900 38,400 $460m Salary packages Novated leases Assets managed Asset managed – WDV Increase of 7.6% Increase of 6.6% Decrease of 1.8% Increase of 4.8% $1,130m 39,300 1,180 53 Net amount financed
Slide 7: MMS Key Topics
Business overview Overview Operational MMS Key Topics Highlights Well placed for growth For personal use only Key Topic MMS View Queensland Government contract > Strong performance for the first two months of the new Queensland Government contract > Rational competition from panel participants > Pri
Slide 8: Financial performance
For personal use only Financial performance Financial performance 8
Slide 9: Results Summary
Financial performance Results Summary For personal use only $m 1H17 1H16 Variance Segment revenue 250.4 243.5 2.9% Segment EBITDA 66.4 65.2 1.8% EBITDA margin (%) 26.5% 26.8% Segment NPBT 60.4 59.2 2.0% NPAT 40.4 38.9 3.8% Underlying NPATA 42.1 41.8 0.8% Basic earnings per share (cents) 48.6 47.1 3.
Slide 10: Balance Sheet
Financial performance Operational Balance Sheet Highlights Strong balance sheet to fund growth and shareholder returns For personal use only Dec 16 Jun 16 $m AM Other Group Group Cash at bank 6.9 50.6 57.5 95.6 Net cash positive1 Other current assets Total fleet funded assets 457.1 3.5 51.4 - 54.9 4
Slide 11: Funding Overview
Financial performance Funding Overview Significant funding capacity to drive growth For personal use only Initiated capital-light funding model for Asset Management in Australia, with the introduction of Principal and Agency (P&A) funding arrangements post 30 June 2016 Post 31 December 2016, MMS ent
Slide 12: Cashflow
Business performance Financial overview Cashflow Capital light, cash generative business model For personal use only 1H17 1H16 Group Retail Remuneration Asset Financial Unallocated / MMS MMS $m Services Management Services parent co. Group Total Group Total Segment NPAT 28.2 7.9 5.3 (1.0) 40.4 38.9
Slide 13: Cashflow Bridge
Financial performance Cashflow Bridge FCF impacted by the timing of a number of one-off items, expect FCF to revert to normal levels For personal use only (5.4) (7.2) (3.0) (2.3) (1.8) 53.9 34.2 1H16 FCF1 VAT on sale Delay in receipt Catch-up lower Funding of GST Other items 1H17 FCF1 of UK portfoli
Slide 14: Performance Ratios
Financial performance Performance Ratios Consistent delivery of earnings growth over a 10 year period For personal use only Ten year historical performance 1H08 1H09 1H10 1H111 1H12 1H13 1H142 1H15 1H16 1H17 CAGR Segment Revenue $m 31.5 37.7 43.7 136.3 143.0 160.2 161.5 181.2 243.5 250.4 25.9% Segme
Slide 15: Segment performance
Business overview Segment performance Operational Highlights For personal use only Segment performance > Significant growth and profitability within Group Remuneration Services (GRS) – Operating revenues increased 12%, EBITDA by 25% and NPAT margins remain strong > Selective approach to growth in As
Slide 16: Segment Review
Segment performance Operational Segment Review Highlights Solid operating result For personal use only Group Remuneration Services Asset Management1 Retail Financial Services Total $m 1H17 1H16 % 1H17 1H16 % 1H17 1H16 % 1H17 1H16 % Segment Revenue 90.5 91.4 (1.0%) 104.0 97.4 6.8% 55.9 54.6 2.3% 250.
Slide 17: Group Remuneration Services (GRS)
Segment performance Group Remuneration Services (GRS) Momentum building after interruption For personal use only $m 1H17 1H16 Variance Commentary GRS delivered a consistent headline result with Revenue 90.5 91.4 (1.0%) a reduction in revenue of 1% compared to pcp, Employee expenses 34.3 36.8 (7.0%)
Slide 18: GRS: Continuing organic growth in customer and asset bases
Segment performance GRS Continuing organic growth in customer and asset bases For personal use only Salary packages (000)1 Novated vehicles (000)2 5 year CAGR : 11.2% 5 year CAGR : 5.6% 56.9 53.4 297.1 48.1 276.0 249.2 259.6 43.9 243.8 40.1 226.0 33.4 1H12 1H13 1H14 1H15 1H16 1H17 1H12 1H13 1H14 1H1
Slide 19: GRS: People and technology drive productivity and satisfaction
Segment performance GRS Combined approach of people & technology drives productivity & customer satisfaction For personal use only On-line claims take-up rate (%) Productivity index1 Customer satisfaction index3 80 180 300 Launch of the 250 60 mobile claims 160 App 200 Launch of the online claims 40
Slide 20: New salary packaging card program to commence April 2017
Segment performance GRS New salary packaging card program to commence April 2017 For personal use only Partnering with Emerchants Limited to provide customers the latest in salary packaging technology 20
Slide 21: Asset Management – Australia / New Zealand
Segment performance Asset Management (AM) – Australia / New Zealand Disciplined approach generating improved returns For personal use only $m 1H17 1H16 Variance Commentary Revenue 90.2 87.0 3.6% New contract wins in first half of calendar Fleet depreciation 38.3 39.4 (2.8%) 2016 including NSW Govern
Slide 22: AM – Australia / New Zealand: Diversified model with strong controls
Segment performance AM – Australia / New Zealand Diversified model with strong controls For personal use only Fleet assets written down value ($m)1 1H17 1H17 WDV breakdown Revenue breakdown 4.4 9% 14% 35% 21% 15% 322.6 314.9 311.9 316.8 $316.8m $90.2m 60% 296.9 14% 5% 27% ■ Mining and construction ■
Slide 23: AM – United Kingdom
Segment performance AM – United Kingdom Improved profit performance and margin expansion For personal use only $m 1H17 1H16 Variance Commentary Revenue 13.8 10.4 32.9% Broker aggregation strategy progressing and Lease and vehicle expenses 4.2 0.6 >100.0% enhanced through acquisitions of EVC and Cape
Slide 24: AM – United Kingdom: Strong growth in net amount financed
Segment performance AM – United Kingdom Strong growth in net amount financed - positive lead indicator For personal use only Assets written down value ($m)1 1H17 WDV breakdown ■ Services 7% 11% ■ Transportation and communication 36% 10% ■ Finance $137.7m 125.9 137.7 ■ Manufacturing 13% ■ Wholesale a
Slide 25: Retail Financial Services (RFS)
Segment performance Retail Financial Services (RFS) Leveraging scale and technology to drive performance For personal use only $m 1H17 1H161,2 Variance Revenue 55.9 54.6 2.3% Commentary Net claims and brokerage 28.7 25.5 12.7% Net amount financed grew by circa $100m commissions or 22% compared to pc
Slide 26: RFS: Growth in net amount financed
Segment performance RFS Growth in net amount financed For personal use only Net amount financed ($m) 1H17 Revenue 1H17 Gross Margin breakdown breakdown ($m) 29.2 27.2 9% 9.5 9.4 28% $55.9m 63% 551.0 450.7 379.2 19.7 17.8 Proforma at 1H162 1H17 1H16 1H17 acquisition1 ■ Finance ■ Warranty ■ Finance ■
Slide 27: Summary
For personal use only Summary Summary 27
Slide 28: Summary
Summary Summary Results demonstrate MMS' strength, building momentum For personal use only Solid operating metrics with revenue of $250.4m (+2.9%) and UNPATA of $42.1m (+0.8%) – GRS: Appointed to Queensland Government novated leasing panel. Key revenue drivers increasing, improving margins, record n
Slide 29: Appendix
For personal use only Appendix Appendix 29
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 – Used vehicle retai
Slide 31: European Vehicle Contracts Limited acquisition
Appendix European Vehicle Contracts Limited acquisition For personal use only MMS acquired EVC on 1 December 2016 Provides product and channel diversification EVC (trading as Eurodrive) is a UK leader in the point of sale (POS) provision of Provides a foothold into the B2C market (through motor vehi
Slide 32: Capex Asset Finance Limited acquisition
Appendix Capex Asset Finance Limited acquisition For personal use only Acquired on 6 January 2017 Provides geographic diversification Capex provides an extensive portfolio of finance solutions to business The acquisition of Capex continues MMS’s stated customers in the asset finance and vehicle fina
Slide 33: Risks and sensitivities
Appendix Risks and sensitivities For personal use only Regulation of consumer insurance products1 Regulation of consumer lending products2 Acquisition and integration risk Second hand car prices (remarketing earnings) New and used car sales Interest rates (earnings on float) Loss or repricing of maj
Slide 34: Integrated model drives sustainable performance
Appendix Integrated model drives sustainable performance For personal use only Integrated Leverage Profitable growth and enhanced shareholder service and strong customer returns will be delivered by leveraging core delivery model relationships Group Remuneration Services strengths across the enlarge
Slide 35: Reconciliation between NPAT and UNPATA
Appendix Reconciliation between NPAT and UNPATA For personal use only $m 1H17 1H16 Variance NPAT 40.4 38.9 3.8% Acquisition transaction costs after tax 0.5 1.7 (72.1%) Amortisation of intangibles from acquisitions after-tax 1.2 1.2 5.0% EBITDA 42.1 41.8 0.8% 35
Slide 36: 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 37: For personal use only
For personal use only McMillanShakespeareGroup
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