Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — H1 FY2021 Earnings Presentation
33 slides from Mcmillan Shakespeare's earnings presentation, Feb 24, 2021
Slide 1: FY21 Half Year Results Presentation
For personal use only McMillan FY21 Half Year Shakespeare Results Presentation Limited 24 February 2021 Presenters Mike Salisbury, CEO Ashley Conn, CFO i
Slide 2: Overview
For personal use only Overview 1
Slide 3: 1H21 Highlights – Exceeded expectations in a challenging environment
1H21 Highlights – Exceeded expectations in a challenging environment For personal use only 1H21 UNPATA1 of $42.7m (13.1% growth vs pcp) reflects focus on efficient and improved customer engagement during a half of lockdowns and a rebound in market conditions. GRS - Salary Packaging and GRS - Plan Pa
Slide 4: Group UNPATA bridge
Group UNPATA bridge For personal use only Revenue EBITDA UNPATA1 Underlying EPS $247.6m $68.1m $42.7m 55.2 cps down (8.4%) up 19.1% up 13.1% up 17.9% AM – A&NZ AM – UK Corporate GRS $2.3m RFS $(0.2m) ($0.1m) $1.3m $1.6m JobKeeper contribution 1.6 (1.0) 0.8 (0.1) 42.7 1.3 1.8 0.5 7.3 (17.2) 37.8 35.4
Slide 5: COVID-19 management
COVID-19 management For personal use only COVID-19 was a sharp and severe impact UNPATA ($m), CY20 versus CY19 – UNPATA excl. JobKeeper for CY20 was down $24.8m or 29% on CY19 84.4 73.9 – Qualified for JobKeeper in April 20, ended in September 20 UNPATA for CY20, including 10.5 46.6 JobKeeper was $1
Slide 6: Resilient performance in challenging environment
Resilient performance in challenging environment For personal use only 364,100 72,300 35,700 $385m Salary packages Novated leases Assets pool – units Assets managed – WDV 1 1.7% 1.0% (18.0%) (25.0%) $1,335m $909m 1,240 60 Net amount financed Plan Partners client Average employees Net Promoter Score
Slide 7: Financial performance
For personal use only Financial performance 6
Slide 8: Results summary
Results summary For personal use only $m 1H21 1H20 Variance Revenue 247.6 270.4 (8.4%) EBITDA 68.1 57.2 19.1% EBITDA margin (%) 27.5% 21.2% NPBT 46.3 47.4 (2.3%) NPAT4 25.5 34.0 (25.0%) UNPATA 42.7 37.8 13.1% Basic earnings per share (cents) 32.9 42.1 (21.9%) Underlying earnings per share (cents) 55
Slide 9: Balance sheet
Balance sheet For personal use only 31 December 20 30 June 20 $m AM Other Group Group Net debt to EBITDA1 Cash at bank Other current assets 32.1 22.2 85.0 30.8 117.1 53.0 91.4 77.9 0.8x vs 2.5x pcp Total fleet funded assets 292.7 - 292.7 336.7 Group gearing 2 Group 25% vs 51% pcp Goodwill / intangib
Slide 10: Funding overview
Funding overview For personal use only – UK borrowing facilities restructured with most amortising to match profile of underlying lease portfolio > Extended and cost lowered – Diversity of on and off balance sheet funding of operating lease portfolio from Australia's major banks, with over 30% of th
Slide 11: MMS funding warehouse – On track and on budget
MMS funding warehouse – On track and on budget For personal use only Strategy Revenue recognition for warehoused assets Establishing a revolving warehouse as an additional source – Net interest margin earned throughout life of novated lease of funding for novated leases during FY21 rather than as up
Slide 12: Cash flow statement
Cash flow statement For personal use only 1H21 1H20 Group Retail Remuneration Asset Financial Unallocated / MMS MMS $m Services Management Services parent co. Group Total Group Total NPAT 33.5 (9.0) 1.7 (0.7) 25.5 34.0 Non-fleet depn/amort, reserves and other non-cash items 8.0 16.8 0.7 - 25.5 10.8
Slide 13: Segment performance
For personal use only Segment performance 12
Slide 14: Segment review
Segment review For personal use only Group Remuneration Services Asset Management Retail Financial Services Unallocated Total $m 1H21 1H20 % 1H21 1H20 % 1H21 1H20 % 1H21 1H20 % 1H21 1H20 % Revenue 111.8 108.8 2.7% 105.9 123.1 (14.0%) 29.9 38.3 (21.8%) 0.1 0.2 (68.0%) 247.6 270.4 (8.4%) Expenses 56.1
Slide 15: Group Remuneration Services (GRS)
Group Remuneration Services (GRS) For personal use only $m 1H21 1H20 Variance Commentary – COVID-19 impacts Revenue 111.8 108.8 2.7% Employee expenses 4 39.1 47.2 (17.1%) > Limited supply of new vehicles increased retail prices and average net amount financed Property & other expenses 17.0 11.9 42.0
Slide 16: GRS operating metrics
GRS operating metrics For personal use only Salary packages (000’s)1 Novated vehicles (000’s)2 Salary packages by Industry segment 358.0 364.1 71.6 72.3 339.1 5% 326.8 65.3 10% 297.1 61.0 56.8 25% 276.0 259.6 53.4 48.1 60% 1H15 1H16 1H17 1H18 1H19 1H20 1H21 1H15 1H16 1H17 1H18 1H19 1H20 1H21 – New c
Slide 17: GRS Novated performed well in a challenging new car sales market
GRS Novated performed well in the context of a challenging Australian new car sales market For personal use only MMS was able to maintain activity at similar levels to last year despite negative market volumes. Australian new car sales down 6.7% vs pcp MMS sales volumes in 1Q21 benefited from demand
Slide 18: GRS Digital investment update
GRS Digital investment update – Improvements Investments to productivity improve productivity and lower and cost lower to serve cost to serve For personal use only Digital strategy 2021 and beyond Adopt automation technologies and agile delivery practices to improve productivity, capability of emplo
Slide 19: GRS Plan Partners: Continuing to deliver growth in NDIS plan management
GRS Plan Partners: Continuing to deliver growth as a leader in NDIS plan management For personal use only – NDIS roll out now 87% complete (circa 433,0001 people) Invoices Funds under with 45% of plans managed (vs 35% 12 months prior) processed administration $m FTEs – Well positioned brand with a 9
Slide 20: Asset Management (AM) – Australia & New Zealand
Asset Management (AM) – Australia & New Zealand For personal use only $m 1H21 1H20 Variance Commentary – COVID-19 impacts Revenue 75.8 91.0 (16.6%) Fleet depreciation 23.5 30.5 (23.1%) > Limited supply of new vehicles and increase in demand for used vehicles resulted in increased remarketing yields
Slide 21: AM–ANZ operating metrics
AM–ANZ operating metrics For personal use only Fleet assets written down value ($m) MMS sales volumes reduced Abnormal market as a result of COVID-19 related conditions in 1H21 resulted contract extensions in increased average yields 312 321 346 376 377 319 4 23 56 75 Remarketing units1 indexed to p
Slide 22: AM – United Kingdom
AM – United Kingdom For personal use only $m 1H21 1H20 Variance Commentary – Off balance sheet originations increased 18% on prior year Revenue 30.0 32.2 (6.7%) supported by UK government CBILS loans attracting lower margins Lease and vehicle management expenses 17.9 17.2 4.0% Employee expenses 6.5
Slide 23: AM–UK operating metrics
AM–UK operating metrics For personal use only Fleet assets written down value ($m) 1H21 WDV breakdown1 65.5 ■ Services 57.0 8% 180.4 ■ Transportation, communication, 160.0 15% electric, gas & sanitary service 36% 137.4 136.4 ■ Finance, insurance & real estate 125.9 $66.2m 7.0 10% ■ Manufacturing 66.
Slide 24: AM–UK strategic review update – Restructure complete
AM–UK strategic review update – Restructure complete For personal use only Key objectives Update Restructure the leadership and corporate Management restructure completed office functions Acquisition of remaining 50% share of JV Maxxia Limited One off restructure costs in 1H21 excluded from UNPATA –
Slide 25: Retail Financial Services (RFS)
Retail Financial Services (RFS) For personal use only $m 1H21 1H20 Variance Commentary – COVID-19 impacted sales activity in 1H21 Revenue 29.9 38.3 (21.8%) Brokerage commissions 13.3 17.8 (25.5%) > Aggregation net amount financed down 12% on pcp Employee expenses2 6.3 8.0 (21.3%) > Warranty sales do
Slide 26: RFS operating metrics
RFS operating metrics For personal use only Net amount financed ($m) Revenue breakdown ($m) UNPATA breakdown ($m) 12.1 0.1 52.8 39.2 2.9 1.2 0.3 1.6 24.9 21.2 17.4 15.3 15.4 14.9 12.6 481.9 487.1 521.5 496.5 514.4 427.8 453.7 0.3 24.0 22.4 24.8 23.2 22.9 17.1 17.3 3.4 2.7 3.6 3.5 2.7 1.4 1.7 1H18 2H
Slide 27: Summary
For personal use only Summary 26
Slide 28: Summary and outlook
Summary and outlook For personal use only Summary Outlook Delivered a solid operating performance and Conditions in broader motor industry grown our customers in salary packaging, expected to normalise in 4Q21 novated leasing and plan management COVID-19 continues to impact operations, Strengthened
Slide 29: Appendix
For personal use only Appendix 28
Slide 30: Business on a page
Business on a page 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, insurance and and warranty broking – Plan
Slide 31: Reconciliation between NPAT and UNPATA
Reconciliation between NPAT and UNPATA For personal use only $m 1H21 1H20 Variance NPAT 25.5 34.0 (25.0%) 1. Amortisation of intangibles from acquisitions 0.8 1.7 (51.6%) 2. UK restructure costs - cash 1.8 0.1 >100% 3. UK restructure costs - non-cash 12.7 - >100% 4. Asset impairment in relation to C
Slide 32: Disclaimer and important notice
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 presentation cont
Slide 33: McMillan Shakespeare Limited
For personal use only McMillan Shakespeare Limited 32
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