Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — FY2022 Earnings Presentation
38 slides from Mcmillan Shakespeare's earnings presentation, Aug 29, 2022
Slide 1: McMillan Shakespeare Limited 2022 Investor Presentation
29 August 2022 Manager Company Announcements ASX Limited Level 4 20 Bridge Street SYDNEY NSW 2000 By E-lodgement McMillan Shakespeare Limited 2022 Investor Presentation This release contains an announcement to the Australian Securities Exchange Limited (ASX) regarding the following: 1. FY22 Results
Slide 2: FY22 Results Presentation: Focusing on our strengths
Overview Focusing on our strengths FY22 Results Presentation 29 August 2022 Presenters Rob De Luca, CEO & Managing Director Ashley Conn, CFO & Company Secretary McMillanShakespeareGroup i
Slide 3: Disclaimer and important notice
Disclaimer and important notice 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 contains selected informat
Slide 4: Overview
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Slide 5: Key messages
Overview Key messages 1 Delivered strong financial performance 2 Customer focus driving business momentum 3 Taking action to simplify the business FY22 dividend payout ratio moved to 100% (fully-franked) with new 4 dividend policy payout ratio of 70–100% of UNPATA Up to 10% off-market share buy-back
Slide 6: FY22 Financial performance
Overview FY22 Financial performance Growth in operating performance $m FY22 FY21 Variance Normalised Revenue1 594.3 544.5 9.2% Normalised EBITDA1 ($m) 132.7 123.9 7.2% Normalised UNPATA1,2 ($m) 83.8 71.9 16.5% Normalised UNPATA1,2 margin (%) 14.1% 13.2% UNPATA2 ($m) 82.1 79.2 3.6% Statutory NPAT ($m
Slide 7: Customer metrics
Overview Customer metrics Growth in customers across all segments Group Remuneration Services (“GRS”) Plan & Support Services (“PSS”) Asset Management Services (“AMS”) FY22 – New client wins including Department – Successful acquisition of Plan Tracker July 2021 – Capitalised on used vehicle market
Slide 8: Business simplification and capital returns
Overview Business simplification and capital returns Focusing operations and returning capital to shareholders Simplifying the 100% Up to 10% Off-Market Business Dividend Payout Share Buy-back – New segments: – 100% payout of – Off-market buy-back GRS, PSS, AMS Normalised UNPATA to target up to 10%
Slide 9: Our progress in sustainability during FY22
Overview Our progress in sustainability during FY22 Foundations for long-term sustainability initiatives established Low carbon future Customer Responsible wellbeing & social business inclusion Responsible Customer wellbeing Low carbon business and social inclusion future 52 Net Promoter Score (Grou
Slide 10: Electric Vehicle (EV) FBT Exemption
Overview Electric Vehicle (EV) FBT Exemption Opportunity to accelerate EV uptake Treasury Laws Amendment (Electric Car Discount) Opportunities for GRS and AM (ANZ) Bill 2022 – The Federal Treasurer stated upon introduction – Purpose is to incentivise the uptake of zero and low of the Bill that for a
Slide 11: Financial performance
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Slide 12: Group UNPATA bridge
Financial performance Group UNPATA bridge Normalised Revenue1 Normalised EBITDA1,3 Normalised UNPATA1,2 Normalised EPS1 $594.3m $132.7m $83.8m 108.3 cps up 9.2% up 7.2% up 16.5% up 16.5% AMS $11.7m GRS PSS AM - ANZ AM - UK RFS Corporate $(1.0)m $1.1m $2.9m $7.1m $1.7m $0.1m (7.3) 7.1 0.6 1.1 0.1 (1.
Slide 13: Balance sheet
Financial performance Balance sheet Net cash (excluding fleet funded debt) 30 June 2022 30 June 2021 Net debt to EBITDA1 $m AMS Other Group Group Cash at bank 21.6 139.2 160.8 158.0 0.4x vs 0.5x pcp Other current assets 12.7 31.0 43.7 50.9 Group gearing 2 Group Total fleet funded assets Goodwill / i
Slide 14: Cash flow statement
Financial performance Cash flow statement Strong cash generation UNPATA cash conversion of 155% including instant asset tax write off and one-off transaction cash flow benefits FY22 FY21 Group Plan and Asset Remuneration Support Management Unallocated / MMS MMS $m Services Services Services parent c
Slide 15: Warehouse update
Financial performance Warehouse update First leases funded, ramping up to our target of 20% Diversification of funding sources creating an annuity income stream with a higher per transaction NPV Strategic and financial benefits Estimated UNPATA impact from the Warehouse transition – Secures and dive
Slide 16: Capital allocation and dividend policy
Financial performance Capital allocation and dividend policy Capital Allocation Dividend Policy MMS intends, under its current business – Dividend payout ratio of 70% to 100% of UNPATA1 model, to prioritise surplus cash flow to: – Franking account balance of ~$58m post FY22 dividend 1 Invest in the
Slide 17: Off-market share buy-back offer overview
Financial performance Off-market share buy-back offer overview Up to 10% buy-back1 with significant franked component Off-market share buy-back overview Key dates (subject to change) – Off-market buy-back to target up to 10% of – 2 September 2022: MMS ordinary shares Last day shares can be acquired
Slide 18: Segment performance
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Slide 19: GRS: Highlights
Segment performance GRS: Highlights Strong demand, elevated yields and unrealised value in period 202.6 206.6 Activity levels continue to improve, with sales Normalised subdued by auto supply dynamic Revenue1 Orders benchmark to FY19 Novated sales benchmark to FY19 $206.6m FY20 FY20 FY21 FY21 FY22 F
Slide 20: GRS: Operating metrics
Segment performance GRS: Operating metrics Customer growth, increasing digital interactions and sales outperformance Strong customer engagement Improving customer MMS novated new car sales and new client wins driving experience driving increasing performing stronger than market customer growth digit
Slide 21: PSS: Highlights
Segment performance PSS: Highlights Investing to create a scalable platform for future growth 26.2 41.3 Customer growth 64% Support vs NDIS plan managed co-ordination hours Revenue customer growth 31% growth 20% $41.3m Customers ‘000 Support co-ordination hours ‘000 57.3% 59.2 → 25.9 FY21 FY22 49.2
Slide 22: AM ANZ: Highlights
Segment performance AM ANZ: Highlights Remarketing profits continued to deliver results 153.5 170.6 Restricted vehicle supply driving elevated remarketing yields Revenue Written down value 2.2% FY22 revenue → $170.6m $318.0m 350.3 311.2 318.0 breakdown 11.1% → 105.8 FY21 FY22 100.2 90.2 244.5 227.8
Slide 23: AM UK: Highlights
Segment performance AM UK: Highlights Elevated remarketing profits and growth in NAF. Sales network Net amount financed2 7.8% → 102.8 131.9 expansion driving off $841m Revenue balance sheet NAF $131.9m 841 780 723 28.4% → FY21 FY22 3.3 8.6 FY20 FY21 FY22 EBITDA EBITDA 1 Restricted vehicle supply dri
Slide 24: RFS: Highlights
Segment performance RFS: Highlights Improvements in NAF driving Aggregation performance. Warranty divested. Expanded lending Net amount financed3 15.9% → 59.2 43.5 panel, increased broker $1,168m Revenue activity and higher 1,168 $43.5m asset prices driving 942 1,008 (26.5%) increased NAF → FY21 FY2
Slide 25: Outlook
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Slide 26: Outlook
Outlook Outlook Business momentum benefiting 1 Managing within market conditions 2 from customer focus – Commence FY23 with~$26m1 in novated lease carryover – Onboarding recent client wins – Ongoing elevated novated & remarketing yields – Focus on upcoming client renewals and – Vehicle supply dynami
Slide 27: Appendix
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Slide 28: Reconciliation between NPAT and Normalised UNPATA
Appendix Reconciliation between NPAT and Normalised UNPATA $m FY22 FY21 Variance Statutory NPAT 70.3 61.1 15.2% Amort. acquired intangibles 1.8 1.6 22.3% Acquisition and disposal related expenses 2.2 0.0 >100% Loss on disposal of subsidaries 1.2 - >100% UK restructure costs - cash and non-cash - 14.
Slide 29: Return on equity (ROE) and return on capital employed (ROCE) calculations
Appendix Return on equity (ROE) and return on capital employed (ROCE) calculations Return on Equity (ROE) Return on Capital Employed (ROCE) Normalised UNPATA Normalised EBIT Financial year Normalised UNPATA, normalised for Warehouse in FY22 and Financial year Normalised EBIT is before the pre-tax im
Slide 30: Funding overview
Appendix Funding overview – Right sized debt facilities for Asset Financing United Kingdom > Cancellation of £5m revolving facilities > Early redemption of corporate debt – Debt facilities in Australia and New Zealand extended, no maturities earlier than 31 March 2024 – In August 2022 MMS entered in
Slide 31: Segment review
Appendix Segment review GRS PSS AMS MSL MMSG $m FY221 FY212 % FY22 FY21 % FY22 FY212 % FY22 FY21 % FY22 FY212 % Normalised Revenue 206.6 202.6 2.0% 41.3 26.2 57.3% 346.1 315.5 9.7% 0.3 0.2 >100% 594.3 544.5 9.2% Normalised EBITDA3 82.2 87.1 (5.6%) 10.1 8.5 19.6% 42.4 30.5 39.2% (2.1) (2.1) (4.0%) 13
Slide 32: GRS: Financials
Appendix GRS: Financials Full Year 2nd Half 1st Half FY221 FY212 Variance 2H221 2H21 Variance 1H221 1H212 Variance Normalised Revenue 206.6 202.6 2.0% 106.2 102.7 3.4% 100.5 99.8 0.6% Employee benefits expense 92.0 86.2 6.7% 46.1 43.1 6.9% 45.9 43.0 6.6% Property & other expenses 32.5 29.3 10.6% 15.
Slide 33: PSS: Financials
Appendix PSS: Financials Full Year 2nd Half 1st Half FY22 FY21 Variance 2H22 2H21 Variance 1H22 1H21 Variance Revenue 41.3 26.2 57.3% 21.7 14.3 51.9% 19.5 11.9 63.6% Employee benefits expense 22.6 12.9 74.9% 11.3 7.8 43.9% 11.2 5.1 >100% Property & other expenses 8.5 4.8 76.3% 4.8 2.5 95.8% 3.7 2.4
Slide 34: AM-ANZ: Financials
Appendix AM-ANZ: Financials Full Year 2nd Half 1st Half FY22 FY211 Variance 2H22 2H21 Variance 1H22 1H211 Variance Revenue 170.6 153.5 11.1% 78.2 77.7 0.7% 92.4 75.9 21.8% Leasing and vehicle management 73.3 61.7 18.8% 30.2 31.2 (3.2%) 43.1 30.5 41.3% Operating lease depn 47.2 46.3 1.9% 24.0 22.8 4.
Slide 35: AM-UK: Financials
Appendix AM-UK: Financials Full Year 2nd Half 1st Half FY22 FY21 Variance 2H22 2H21 Variance 1H22 1H21 Variance Revenue 131.9 102.8 28.4% 57.9 72.7 (20.4%) 74.1 30.0 >100% Leasing and vehicle management 103.6 79.5 30.4% 44.4 61.6 (28.2%) 59.3 17.9 >100% Employee benefits expense 11.9 13.4 (7.8%) 6.4
Slide 36: RFS: Financials
Appendix RFS: Financials Full Year 2nd Half 1st Half FY22 FY211 Variance 2H22 2H21 Variance 1H22 1H211 Variance Revenue 43.5 59.2 (26.5%) 18.6 29.3 (36.6%) 25.0 29.9 (16.5%) Brokerage commissions 25.0 27.5 (9.0%) 12.2 14.2 (14.0%) 12.8 13.3 (3.7%) Claims incurred 3.3 12.3 (73.1%) - 6.4 (100%) 3.3 5.
Slide 37: Dividend calendar
Appendix Dividend calendar FY22 Final Results Release Monday, 29 August 2022 Ex-dividend Wednesday, 26 October 2022 Record date Thursday, 27 October 2022 Payment date Thursday, 10 November 2022 McMillanShakespeareGroup 34
Slide 38: Focusing on our strengths
Overview Focusing on our strengths McMillanShakespeareGroup 35