Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — Investor Presentation (February 2022)
27 slides from Smartgroup's investor presentation, Feb 18, 2022
Slide 1: Investor Presentation Full year CY 2021 results
INVESTOR PRESENTATION Full year CY 2021 results 18 February 2022 Tim Looi – Managing Director and CEO Anthony Dijanosic – Chief Financial Officer
Slide 2: 2021 Overview
2021 OVERVIEW Tim Looi Managing Director and CEO Smartgroup Investor 2021 Presentation 1
Slide 3: Pleasing CY 2021 results reflect continued momentum
Pleasing CY 2021 results reflect continued momentum Strong improvement in profit • Revenue of $221.8m up 3% vs CY 2020 • Operating EBITDA of $103.0m up 8% vs CY 2020 • NPATA1 of $69.5m up 7% vs CY 2020 Successful renewal outcomes with improved operating performance • Renewal or extension of all
Slide 4: Improvement in all financial metrics, with total dividends of 72cps for the year
Improvement in all financial metrics, with total dividends of 72cps for the year Revenue EBITDA1 NPATA1 Dividend (fully franked)2 1. Adjusted to reflect one-off impact on adoption of AASB 16 Leases from January 2018. Impact is Smartgroup Investor 2021 to increase 2018 EBITDA by $1.6m in each of H1 a
Slide 5: Smartgroup has renewed or extended all key client contracts for 2021
Smartgroup has renewed or extended all key client contracts for 2021 Renewed and/or extended 100% of key contracts due in 2021 Client number 1, Department of Defence, renewed for a term of 5 years1 and Client number 2 renewed for a term of 7 years1 via tender processes. Smartgroup remains the exclus
Slide 6: Strong growth in package numbers from both existing and new clients
Strong growth in package numbers from both existing and new clients Net organic growth of 17,000, with significant increases in health and not for profit customers Onboarded new health client in April 2021 with c.8,500 packages Package growth achieved despite restricted on-site client activity Smart
Slide 7: New vehicle orders grew 14% with order pipeline growth of 2%
New vehicle orders grew 14% with order pipeline growth of 152%. Lower cost digital leads improved 12% H1 2021 v pcp H2 2021 v pcp CY 2021 v pcp Total leasing leads -3% +6% +1% New lease digital leads +18% +6% +12% New lease vehicle orders +17% +11% +14% Settlement volume +2% +5% +4% Open new lease v
Slide 8: New lease vehicle orders increased to pre-COVID levels prior to 2021 lockdowns
New lease vehicle orders increased to pre-COVID levels prior to 2021 lockdowns. ‘Excess’ pipeline orders represent $12m of future revenue • Vehicle orders at pre-COVID levels in Q2 2021, with Q3 and Q4 2021 orders impacted by lockdowns in NSW, Victoria and ACT • Open vehicle orders at c.4x pre-COVID
Slide 9: Continuing to play our part in supporting our people, customers and communities
Continuing to play our part in supporting our people, our customers and our communities Smartgroup was recognised for Smartgroup once again saw The Smartgroup Foundation the third year in a row as an award-winning customer service continued to support causes that Inclusive Employer by Diversit
Slide 10: Smart Future
SMART FUTURE Tim Looi Managing Director and CEO Smartgroup Investor 2021 Presentation 9
Slide 11: Smart Future
Smart Future Our program to drive organic growth Net Promoter Score Lead to order conversion Leases per consultant Engagement 2021 Up 8 points1 Up 2 percentage points2 Up c.50%3 Up 7 percentage points 1. Combined sales and service NPS across all brands. 2. Lead to vehicle order conversion increase r
Slide 12: Smart Future will deliver great digital experiences to our customers
Smart Future will deliver great digital experiences to our customers New digital capabilities will drive simplification, growth and efficiency Customer experience Re-design client and Re-design websites Leverage common customer portals and apps and calculators CRM across group Streamline operations
Slide 13: Increased focus on digital engagement and improved experiences have led to growth in digital novated leads
Increased focus on digital engagement and improved experiences have led to growth in digital novated leads and better lead conversion Novated leasing leads have Novated leads by channel and conversion rates reduced from 2019 with restricted on-site access Increased focus on digital engagement throug
Slide 14: New Smartleasing vehicle calculator has improved customer engagement by 80%
New Smartleasing vehicle calculator has improved customer engagement by 80% leading to a 60% increase in leads c.40% increase in calculator Smartleasing vehicle calculator traffic, engagement and leads traffic and c.60% increase in calculator leasing leads1 c.80% increase in the time customers spend
Slide 15: Improvements in revenue and transactions per consultant and customer satisfaction
Improvements in revenue and transactions per consultant and customer satisfaction from customer experience training and simplified journeys New customer journeys and Increase in revenue and transactions per sales consultant1 training progressively implemented in H1 2021 Changes to incentive schemes
Slide 16: Financial Performance Full Year
FINANCIAL PERFORMANCE FULL YEAR CY2021 Anthony Dijanosic Chief Financial Officer Smartgroup Investor 2021 Presentation 15
Slide 17: Operational momentum underpins revenue and EBITDA growth
Operational momentum underpins revenue and EBITDA growth CY 2021 CY 2020 Change $m adjusted1 adjusted % Revenue growth driven by Revenue 221.8 216.3 3% increasing novated Product costs (6.0) (6.0) 0% settlement volumes and higher recurring revenues Staff costs2 (80.8) (79.9) 1% EBITDA margin at 46%
Slide 18: Cash flow generation remained strong at 113% of NPATA
Cash flow generation remained strong at 113% of NPATA $m CY 20211 CY 20201 adjusted adjusted Receipts from customers (inclusive of GST) 252.5 254.6 Strong operating cash flow conversion at 113% of Payments to suppliers and employees (inclusive of GST) (151.3) (151.4) NPATA underpins 70% Interest rec
Slide 19: Conservative balance sheet profile is maintained
Conservative balance sheet profile is maintained 31 Dec 2021 31 Dec 2020 $m statutory statutory Cash 32.5 27.4 Cash position remains Other current assets 68.7 66.6 strong with net cash at Current assets 101.2 94.0 $3.6m Non-current assets 307.1 314.4 Small net current liability Total assets 408.3 40
Slide 20: Summary and Outlook
SUMMARY AND OUTLOOK Tim Looi Managing Director and CEO Smartgroup Investor 2021 Presentation 19
Slide 21: Summary of results and update
Summary of results and update Results Success in client wins and renewals Significant growth in new novated lease orders with order pipeline at c.$12m of future revenues1 Smart Future program delivering strong early benefits Strong cash flow generation and fully franked final ordinary and sp
Slide 22: Questions?
QUESTIONS? Smartgroup Investor 2021 Presentation 21
Slide 23: Appendix: Reconciliation of earnings to statutory financial statements
Appendix: Reconciliation of earnings to statutory financial statements Add back: CY 2021 Merger & Add back: statutory Non-IFRS Acquisition Sale of CY 2021 $m results measure costs Smartequity adjusted Revenue 221.8 - - - 221.8 Operating EBITDA 100.7 - 2.1 0.2 103.0 Joint venture contribution 0.3 - -
Slide 24: Appendix: Reconciliation of operating cash flow to statutory financial statements
Appendix: Reconciliation of operating cash flow to statutory financial statements $m CY 2021 Less: Less: CY 2021 statutory Merger & Debt adjusted results Acquisition refinancing costs transaction costs paid Receipts from customers (inclusive of GST) 252.5 - - 252.5 Payments to suppliers and employee
Slide 25: Appendix: Reconciliation of the movement in net tangible assets
Appendix: Reconciliation of the movement in net tangible assets $m # of shares (m) NTA (cps) Net tangible assets – Dec 2020 (40.8) 132.8 (30.8) Net cash from operating activities 75.8 Decrease in borrowings 4.0 Dividends paid (65.6) Other tangible asset/liability movements (9.2) Net tangible assets
Slide 26: Appendix: Balance sheet
Appendix: Balance sheet Notes $m Note 31 Dec 2021 31 Dec 2020 statutory statutory 1. Cash increased due to cashflows at 113% of Cash 1 32.5 27.4 NPATA, partially offset by Restricted cash 2 41.2 48.1 capital expenditure and Trade and other current assets 3 27.5 18.5 payment of special Current assets
Slide 27: Important notice and disclaimer
Important notice and disclaimer 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. The information is given in summary form and