Smartgroup Corporation Ltd · ASX:SIQ
Smartgroup — FY2016 Earnings Presentation
24 slides from Smartgroup's earnings presentation, Feb 23, 2017
Slide 1: Investor Presentation Full Year CY 2016 Results
Investor Presentation Full Year CY 2016 Results Deven Billimoria – Managing Director and CEO Tim Looi – Chief Financial Officer 23 February 2017 PAGE 0
Slide 2: Smartgroup has had another successful year
Smartgroup has had another successful year . . . Continued strong financial performance 1 - Revenue of $144.4m up 57% vs CY 2015 - NPATA (1) of $44.0m up 68% vs CY 2015 Continued client growth 2 - Significant client renewals and wins across all SIQ businesses - Organic growth of c.13,500 packages an
Slide 3: Growth across all financial and operational metrics
. . . with growth across all financial and operational metrics . . . CY 2016 $m CY 2015 CY 2016 Change % pro-forma(2) Revenue 91.8 144.4 57% 168.7 EBITDA(1) 37.6 64.3 71% 75.3 NPATA 26.2 44.0 68% 50.7 Shares on issue (millions) 103.7 121.5 17% 121.5 NPATA per share (cps) 25.3 36.2 43% 41.7 As at As
Slide 4: Continuing our track record since IPO
. . . and continuing our track record since IPO. (2) Shares on issue (1) H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 (million shares) n/a 101.5 103.7 103.7 107.3 121.5 1. Represents shares on issue (SOI) at the end of the period. 2. H1 CY 2016 dividend payment of $11.9m was based on a SOI base o
Slide 5: Growth in packages and novated leases organically and through acquisition
Smartgroup has grown salary packages and novated leases both organically and through acquisition . . . PAGE 4
Slide 6: Strong EBITDA growth in 2016
. . . resulting in strong EBITDA growth in 2016 . . . PAGE 5
Slide 7: A more diversified client base
. . . with a more diversified client base . . . Given growth in Smartgroup’s client base, the top 5 clients account for 29% of revenue vs 51% in 2013(1). Smartgroup’s employer clients now total c.1,400 vs c.200 in 2013. Client concentration by revenue Client concentration by revenue at December 2013
Slide 8: Increased market coverage across key customer segments
. . . and increased market coverage across key customer segments. Health/PBI Government Corporate Rebatable Salary packaging and novated leasing Fleet management Workforce management Share plan administration As at July 2014 IPO Incremental at December 2016 PAGE 7
Slide 9: Significant client renewals and wins in 2016
Smartgroup achieved significant client renewals and wins in 2016. 2016 Client renewals and wins Retained Queensland Government and added Queensland Health (1 of 2 packaging providers) Appointed salary packaging provider to a further NSW Local Health District Replaced larger of 2 novated leasin
Slide 10: Continued focus on driving efficiencies
Smartgroup has continued to focus on driving efficiencies . . . Smartsalary’s increased uptake of online claims has contributed to an improvement in operational efficiency of 40% since 2011 Total claims and percentage submitted Package growth and operational efficiency(2,3) online(1) 250,000 90% 160
Slide 11: Recognised as one of Australia's most innovative and customer-centric companies
. . . and to be recognised as one of Australia’s most innovative and customer-centric companies. Smartgroup capabilities triangle PAGE 10
Slide 12: Highest customer service score awarded in CSIA history
For the second consecutive year, Smartsalary achieved the highest customer service score awarded in CSIA history. (1) 1. The 2015 Smartsalary CSIA customer service score of 8.44 was the highest score ever awarded by CSIA, until surpassed by Smartsalary in 2016. PAGE 11
Slide 13: Recently appointed SIQ Group Executives
Recently appointed SIQ Group Executives add experience and capability to the Executive Management Team. Prior experience Tony was the National Health Adviser for KPMG Australia. Tony was also the Director- Dr Tony O’Connell General of Queensland Health, National Director of Hospitals for the Repub
Slide 14: Financial results Full year CY 2016
Financial results Full year CY 2016 Tim Looi Chief Financial Officer Tim PAGE 13
Slide 15: Record revenue and earnings in CY 2016
In CY 2016, Smartgroup delivered another year of record revenue and earnings. Adjusted for equity share & CY 2016 acquisition CY 2016 CY 2015 $m statutory items(1) adjusted adjusted(2) Change % Revenue 144.4 - 144.4 91.8 57% EBITDA(3) 63.3 1.0 64.3 37.6 71% NPAT 32.7 0.1 32.8 21.0 NPATA(4) 43.7 0.3
Slide 16: After-tax operating cash flow at 103% of NPATA
After-tax operating cash flow(1) remained strong at 103% of NPATA, with continued low recurring capex. $m CY 2016 CY 2015 Receipts from customers (inclusive of GST) 154.4 96.8 Payments to suppliers and employees (inclusive of GST)(2) (94.2) (64.9) Interest receipts from operations 1.6 1.0 Interest p
Slide 17: Intangibles impacted by acquisitions funded by debt and equity raise
Smartgroup’s intangibles were impacted by acquisitions, which were funded by a debt and an equity raise . . . 31 Dec 2016 31 Dec 2015 $m statutory statutory Cash 80.0 19.4 (1) Restricted cash 39.5 0.7 1. Restricted cash and customer salary packaging liabilities Trade and other current assets 22.9 13
Slide 18: Net debt position at year end of c.$72m
. . . with Smartgroup’s net debt position at year end at c. $72m, representing a debt / pro-forma EBITDA of c.1.0x. Net -$63.3m of cash used for acquisitions (1) (2) Net +$24.9m of cash generated from operations (1) (2) Net debt ($m) 33.6 72.0 72.0 (2) EBITDA ($m) 49.3 75.3 64.3 1. Excludes capitali
Slide 19: In summary
In summary… Deven Billimoria Managing Director and CEO PAGE 18
Slide 20: CY 2016 marks off another successful year
CY 2016 marks off another successful year . . . • Growth across all key financial and operational metrics • Successful acquisitions of Selectus and Autopia with synergies realised earlier than expected • Cash flows greater than 100% of NPATA • Net debt to pro-forma EBITDA of c.1.0x • Final fully fra
Slide 21: Building on our track record since inception
. . . building on our track record since inception. Smartgroup revenues Smartgroup EBITDA 1. 2006 represents 18 months of results from the change of year end from June to December. PAGE 20
Slide 22: Questions?
Questions? PAGE 21
Slide 23: Appendix – reconciliation of earnings to statutory financial statements
Appendix – reconciliation of earnings to statutory financial statements. CY 2016 Reclassify: Add back: Less: Add: statutory equity share acquisition fair value CY 2016 pro-forma CY 2016 financials investments costs gain adjusted adjustment(1) pro-forma Revenue 144.4 - - - 144.4 24.3 168.7 Operating
Slide 24: 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