Slide 1: 2021 AGM presentation materials
ASX Announcement For personal use only Release date: 12 May 2021 2021 AGM presentation materials Attached are the following documents to be presented at the 2021 Annual General Meeting (AGM) of Smartgroup Corporation Limited (ASX: SIQ) to be held at 11.00am this morning at Wesley Conference Centre,
Slide 2: Chairman's Address: Introduction and 2020 results
SMARTGROUP CORPORATION LIMITED 2021 ANNUAL GENERAL MEETING – CHAIRMAN AND CEO’S ADDRESS 11.00 AM, WEDNESDAY 12 MAY 2021 For personal use only CHAIRMAN’S ADDRESS Introduction and 2020 results In 2020, we were confronted by the business and community challenges brought on by the global COVID-19 pandem
Slide 3: Chairman's Address: dividends and shareholder returns
Despite these impacts, the Board is pleased that we have been able to deliver investors a strong fully franked final dividend of 17.5 cents per share as well as an additional fully franked special dividend of 14.5 cents per share. For personal use only Delivery of this dividend reinforces the confid
Slide 4: CEO appointment and 2021 start
In February 2020, Tim Looi was appointed Managing Director and CEO following the retirement of Deven Billimoria, Smartgroup’s previous Managing Director and CEO. For personal use only Tim developed a detailed knowledge of the business working alongside Deven in his role as Chief Financial Officer ov
Slide 5: ESS Board Sub-Committee and CFO appointment
We are also pleased to announce that the Board has resolved to establish a Board Sub-Committee dedicated to Environmental, Social and Sustainability matters at Smartgroup. This Committee will be formally established this year and For personal use only reflects our focus on the importance of our envi
Slide 6: CEO's Address
CEO’S ADDRESS This morning, I will first introduce a bit about Smartgroup and then I will talk to our 2020 results and provide an update on our performance to-date for 2021. For personal use only Finally, I will talk to the initiatives we are working on and the investments that we are making to driv
Slide 7: Long term client relationships
One of the key strengths of our business is the long term relationships we have with key clients. Typically, contracts are long term with 3-5 year average tenures. Among our top For personal use only 20 clients, more than half have had a relationship of 10 years or more with us, reappointing Smartgr
Slide 8: 2020 financial results in a pandemic year
disadvantaged communities, to supporting young mothers in continuing their education. In 2020, Smartgroup delivered a good set of financial results, in light of the For personal use only disruption caused by the pandemic. We are all aware of the broad impact the pandemic had on our economy, our soci
Slide 9: 2020 operational progress and cashflow
Second, we continued to make steady progress in what was a challenging operating environment. We renewed or extended 100% of the top 20 client contracts maturing in 2020. Packages, novated leasing and fleet metrics held For personal use only steady. Third, we continued to simplify our business opera
Slide 10: Update on 2021 progress
Our novated leases and fleet vehicles under management remained relatively stable throughout the year. Now, I would like to give you an update on our business and its progress so far For personal use only in 2021. We are off to a solid start to 2021; we are really pleased with what we have achieved
Slide 11: Organic growth program rationale
I would now like to outline our program to drive organic growth for the next few years. I will explain the rationale for it and also the benefits and outcomes we are targeting. For personal use only Over the last several years, we have acquired more than 10 private salary packaging and fleet busines
Slide 12: Customer experience and digital investment
How do we intend to do this? We have long recognised great service as a key requirement to increase uptake. Customer experience is a natural extension to complement service. The delivery of great customer experience will increase For personal use only client and customer advocacy, increasing referra
Slide 13: Progress on digital, simplification and values
We are making good progress on the introduction of a digital experience platform as well as mapping out our API requirements. We have started to roll out experience training to front line team members, as For personal use only well as customer journey mapping. On the digital front, we continue to co
Slide 14: Smart Future program and outlook
The integration work we are doing for brand consolidation will reduce at the end of 2021 and we are targeting a c.$2 million per annum pre-tax reduction in operating expenses. For personal use only With an addressable market of 1.5 million employees from existing clients alone, the Smart Future prog
Slide 15: Smartgroup Corporation 2021 Annual General Meeting
Smartgroup Corporation 2021 Annual General Meeting For personal use only 12 May 2021
Slide 16: Smartgroup Board of Directors
Smartgroup Board of Directors For personal use only Gavin Deborah Bell Homewood Non-Executive Non-Executive Director Michael Director Carapiet Chairman and Non-Executive Director Andrew John Bolam Prendiville Non-Executive Non-Executive Director Director Tim Looi Managing Director and Carolyn CEO Ia
Slide 17: Chairman's Address
Chairman’s Address For personal use only Michael Carapiet Chairman 2
Slide 18: Pleasing performance despite a challenging 2020
Pleasing performance despite a challenging 2020 For personal use only Revenue EBITDA NPATA Dividend (fully franked) 3
Slide 19: Smartgroup Leadership team
Smartgroup Leadership team For personal use only Justine Tony Carmichael Forward Chief People Chief Technology Officer Officer Bijal Tim Sarah Desai Looi Haas Chief Risk Managing Director Chief Operating Officer and CEO Officer Anthony Sophie Dijanosic MacIntosh Chief Financial Chief Legal Officer O
Slide 20: Managing Director and CEO's Address
Managing Director and For personal use only CEO’s Address Tim Looi Managing Director and CEO 5
Slide 21: Our investment proposition
Our investment proposition Smartgroup’s investment proposition is underpinned by its capital light business model, generating strong cash flows and dividends For personal use only Premium established player with scale in a Diversified customer base operating in attractive proven industry sectors
Slide 22: What we do
What we do At Smartgroup, we simplify salary packaging, fleet management and a range of other employee management services for organisations across Australia For personal use only 7
Slide 23: Strong long-term relationships with key clients
Strong long-term relationships with key clients For personal use only Salary packaging client and customer profile Relationship length of Top 20 clients 1. ‘PBI non-hospitals’ includes charities and other not-for-profit organisations registered as a public benevolent institution (PBI) and recognised
Slide 24: Supporting our people, customers and communities
We play our part in supporting our people, our customers and our communities For personal use only In 2020, Smartgroup joined a Smartsalary once again received The Smartgroup Foundation select group of Australian the highest-ever audit score from continued into its second year, companies recog
Slide 25: Delivering good performance in challenging times
Delivering good performance in challenging times Results to 31 December 2020 For personal use only Financial results in line with guidance • Revenue of $216.3m down 13% vs CY2019 • NPATA1 of $65.2m vs guidance of c.$65m, down 20% vs CY2019 Steady operational performance in a challenging environm
Slide 26: Salary packaging customer numbers remained stable
Salary packaging customer numbers remained stable For personal use only Salary packaging customers H1 2020 acquisition – novated lease portfolio acquisition 11
Slide 27: Novated leases and fleet vehicles under management remained stable
Novated leases and fleet vehicles under management remained stable For personal use only Novated leases under management H1 2020 acquisition – novated lease portfolio acquisition Fleet vehicles under management 12
Slide 28: Business update: Solid start to 2021
Business update: Solid start to 2021 Update to 30 April 2021 For personal use only New client and renewals – a positive start to the year • Onboarded new health contract in April – c.8,500 packages • Successful multi-year contract renewal for a long-term government education client • Large client
Slide 29: Client base employs a large number of Australians
We have built a client base that employs a large number of Australians Significant organic growth opportunities from existing clients For personal use only Addressable market Addressable market c.1.2-1.5m1 employees within c.0.9-1.2m2 total cars owned by existing client base those employees Equals 6
Slide 30: The Smart Future program
The Smart Future program Driving dividend and earnings growth For personal use only 15
Slide 31: The Smart Future will deliver great digital experience
The Smart Future will deliver great digital experience to our customers New digital capabilities will drive simplification, growth and efficiency For personal use only Customer experience Re-design client and Re-design websites and Leverage common customer portals and apps calculators CRM across gro
Slide 32: Good progress on the foundations of the program
We are making good progress on the foundations of the program Brand consolidation and operational simplification well advanced, paving the way for digital investment For personal use only Customer Digital Streamline experience investment operations Strategic pillars Customer journey Consolidation of
Slide 33: Smart Future program: Targeting EBITDA uplift of c.20%
The Smart Future program: Targeting EBITDA uplift of c.20% For personal use only The full implementation of the program is expected to result in significant operational and financial benefits The Smart Future outcomes Targeting $15-20 million annualised EBITDA uplift from those strategic initiat
Slide 34: 2021 off to a good start
2021 off to a good start For personal use only • We are pleased with the start to 2021. In the four months to 30 April 2021 Smartgroup has performed in line with our expectations, with client renewals and wins, and an increase in on-site client activities • Vehicle supply expected to remain tight fo
Slide 35: Important notice and disclaimer
Important notice and disclaimer 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. The information is give