Mcmillan Shakespeare Limited · ASX:MMS
Mcmillan Shakespeare — FY2024 Earnings Presentation
37 slides from Mcmillan Shakespeare's earnings presentation, Aug 27, 2024
Slide 1: MMS FY24 Results Presentation
MMS FY24 Results Presentation 27 August 2024 Presenters Rob De Luca CEO & Managing Director Ashley Conn CFO & Company Secretary
Slide 2: 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 3: Acknowledgement of Traditional Owners
We acknowledge the Traditional Owners of the lands on which we meet today and pay our respects to Elders past and present. MMS
Slide 4: FY24 Overview
FY24 Overview MMS 1
Slide 5: FY24 Overview: Key messages
FY24 Overview Key messages 1 Strong financial performance with organic growth across all segments Novated sales growth driven by continued customer demand, 2 improved supply and higher yielding EVs1 3 Continued to execute on strategic agenda for sustainable growth 4 Delivered increased dividend and
Slide 6: Delivered strong growth and returns for shareholders
FY24 Overview Delivered strong growth and returns for shareholders EPS growth Margin expansion +19.4% CAGR FY22 – FY24 +11.4%pts FY22 – FY24 Normalised EPS 2,3,5 c Normalised EBITDA Margin 3,4 % 108.3 108.1 154.5 22.3% 27.9% 33.7% FY22 FY23 FY24 FY22 FY23 FY24 Increased Normalised ROCE 6 Returns to
Slide 7: FY24 Financial performance
FY24 Overview FY24 Financial performance Continuing operations2 FY24 FY23 Variance Statutory Revenue ($m) 521.0 464.0 12.3% Normalised Revenue 3 ($m) 525.8 471.4 11.5% Normalised EBITDA 3,4 ($m) 177.0 131.3 34.8% Normalised EBITDA margin3,4 (%) 33.7% 27.9% 5.8% pts Normalised UNPATA 3,5 ($m) 107.6 7
Slide 8: Segment performance
FY24 Overview Segment performance Trusted partner, with organic growth across all segments. Trusted partner, providing solutions in making complex matters simple Group Remuneration Services Asset Management Services Plan and Support Services (GRS) (AMS) (PSS) Trusted partner and leader in the Truste
Slide 9: Simply Stronger Program (FY23–FY25)
FY24 Overview Simply Stronger Program (FY23–FY25) On track to deliver enhanced digital experience and solutions for customers and technology-enabled productivity. Excel in customer Drive technology-enabled Broaden our experience 1 productivity 2 competency-led solutions 3 Improve customer app Modern
Slide 10: Oly brand soft launched in May 2024
FY24 Overview Oly brand soft launched in May 2024 A simple and digital novated leasing solution for employees of small to medium sized businesses. Large unaddressed market for novated leases Oly brand soft launched in May 2024 with a in the small to medium sized business segment simple and digital n
Slide 11: Supporting customers' transition to a low carbon future and making social impact
FY24 Overview Supporting our customers transition to a low carbon future and making social impact GRS and AMS supporting Australia’s transition to a low carbon future GRS and PSS making a social impact Educating our customers on a low carbon future Educating customers on benefits of salary packaging
Slide 12: Segment performance
Segment performance MMS 9
Slide 13: GRS: Highlights
Segment performance GRS: Highlights Continued demand for higher yielding EVs driving organic growth, margin expansion and financial performance. $232.8m $292.5m Salary packages Novated leases i Normalised up 4.7% up 7.9% Revenue3 Salary packages ’000 Novated leases ’000 $292.5m 394.2 412.9 73.4 79.2
Slide 14: GRS: Novated leasing
Segment performance GRS: Novated leasing Value proposition of novated leasing, particularly for EVs, driving above market growth. Ongoing EV demand and Improvements in supply and Higher % of EVs driving novated value proposition EVs driving sales growth. sales growth and higher driving order growth.
Slide 15: GRS: Onboard Finance (Warehouse)
Segment performance GRS: Onboard Finance (Warehouse) Rationale for the Warehouse confirmed. FY24 Normalisation of $(17.2m) driven by higher novated volumes and yields. FY25 expected to be ~$(9m) i and the last year of Normalisation. Strong receivables growth FY25 expected to be ~$(9m) i and in FY24
Slide 16: AMS: Highlights
Segment performance AMS: Highlights Growth in NAF, WDV and managed assets from new business and improved vehicle supply. $187.4m $177.8m Net amount financed Written down value up 16.2% up 13.2% Revenue Net amount financed $m Written down value $m $177.8m 144.7 168.1 320.8 363.2 (5.1%) → FY23 i FY24
Slide 17: PSS: Highlights
Segment performance PSS: Highlights Organic customer growth and operating leverage while supporting scheme integrity and sustainability. $48.6m $50.6m PSS Customers Continued increase in plan up 10.3% duration reducing renewal frequency Revenue Customers # Plans by duration i $50.6m 31,771 35,030 0.
Slide 18: Cash flow and balance sheet
Cash flow and balance sheet MMS 15
Slide 19: Cash flow and capital allocation
balance sheet Cash flow and Cash flow and capital allocation Cash conversion 136% of UNPATA5. Benefits from working capital management, equity capital released from the Warehouse and timing tax benefit accelerated asset write off. Cash flow summary $m FY24 Cash flow positively impacted by: Normalise
Slide 20: Balance sheet
balance sheet Cash flow and Balance sheet $m 30 June 24 30 June 23 Cash at bank 153.0 60.6 Debt to EBITDA i 0.5x vs 1.3x pcp Client trust funds (GRS) 403.4 402.6 Group Other current assets 51.0 47.3 Total fleet and Warehouse funded assets 574.8 327.6 Interest times cover ii Goodwill / intangibles Ot
Slide 21: Outlook and focus
Outlook and focus MMS 18
Slide 22: FY25 Outlook and focus
Outlook and focus FY25 Outlook and focus FY25 Expected market conditions – Continued increases in auto supply and increased pricing competition – Increase in manufacturers and EV models with more price points becoming available – FBT exemption for plug-in hybrids scheduled to expire on 1 April 2025.
Slide 23: Appendix 1: Warehouse rationale
Appendix 1 Warehouse rationale MMS 20
Slide 24: The Warehouse provides strategic and financial benefits
Appendix 1 The Warehouse provides strategic and financial benefits Secures and Competition Increase in Higher overall New source diversifies our and price benefits annuity based value per of income funding sources for our customers income transaction The Warehouse The Warehouse is a The Warehouse Gr
Slide 25: Features of P&A and Warehouse securitisation models
Appendix 1 Features of P&A and Warehouse securitisation models P&A model Warehouse securitisation model – Under a P&A model, the “agent” (MMS) has – The Warehouse securitisation model is when specific authority conferred upon them by an financial assets (ie leases) are pooled into a agreement to cre
Slide 26: Comparison of each funding model
Appendix 1 Comparison of each funding model P&A Warehouse Diversification of funding model NO YES Annuity income earnings benefits NO YES Upfront brokerage fees YES NO Committed source of funding NO YES Access to capital markets investors ~ NO YES domestic and international Self-managed funding NO Y
Slide 27: Accounting impacts and changes
Appendix 1 Accounting impacts and changes P&L Balance Sheet – Annuity income received as a net interest margin – Accounting treatment results in on-balance sheet (“NIM”) replaces upfront brokerage under P&A recognition of the Warehouse in the consolidated – Recognise finance income over the term of
Slide 28: Appendix 2
Appendix 2 MMS 25
Slide 29: MMS strategy to deliver sustainable growth
Appendix 2 MMS strategy to deliver sustainable growth Making Matters Simple Our To make a difference to people’s lives Purpose Our To be the trusted partner, providing solutions in making complex matters simple Vision Excel in Drive Broaden our Our Strategic customer Technology-enabled competency-le
Slide 30: UNPATA bridge
Appendix 2 UNPATA bridge Normalised UNPATA2,3,5 Normalised EPS2,3,5 $107.6m 154.5c UK and RFS Aggregation up 38.2% up 42.9% businesses were divested in FY24 and are no longer included in Continuing operations Continuing operations $29.7m GRS AMS PSS Corporate $28.2m $0.4m $0.5m $0.6m 0.4 0.5 0.6 (17
Slide 31: Reconciliation between NPAT and Normalised UNPATA
Appendix 2 Reconciliation between NPAT and Normalised UNPATA Continuing operations $m FY24 FY23 Variance Statutory NPAT 83.5 32.3 >100% Discontinued operations2 (6.5) (32.2) 79.8% Statutory NPAT Continuing operations2 90.1 64.4 39.7% Amortisation of intangible assets acquired on business combination
Slide 32: Return on capital employed (ROCE) calculation
Appendix 2 Return on capital employed (ROCE) calculation Normalised Return on Capital Employed (ROCE) $m FY24 FY23 Normalised3 EBIT Statutory equity 128.8 145.6 Last 12 months Normalised EBIT is before the pre-tax impact of acquisition and 3 Impairments i - 42.5 divestment related activities, accoun
Slide 33: Funding overview
Appendix 2 Funding overview – Bullet loan facilities to August 2027, totalling up to $60m for working capital purposes (fully drawn) – Increased Warehouse facilities to cover growth – Revolving Asset Financing debt increased and maturity date extended to cover growth – Operating lease uncommitted P&
Slide 34: Segment financials
Appendix 2 Segment financials $m GRS AMS PSS MSL MMSG Continuing Operations 2 FY24 FY23 % FY24 FY23 % FY24 FY23 % FY24 FY23 % FY24 FY23 % Normalised Revenue 3 292.5 232.8 25.7% 177.8 187.4 (5.1%) 50.6 48.6 4.3% 4.8 2.6 86.3% 525.8 471.4 11.5% Normalised EBITDA3,4 131.8 90.2 46.2% 29.5 28.7 2.7% 13.1
Slide 35: Calendar
Appendix 2 Calendar Final FY24 Results Release Tuesday, 27 August 2024 Ex-dividend Thursday, 12 September 2024 Record date Friday, 13 September 2024 Payment date Friday, 27 September 2024 MMS 32
Slide 36: Endnotes
Appendix 2 Endnotes 1 Electric Vehicles (EV) includes Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEV). 2 Continuing operations. All financial information and metrics in this presentation are from continuing operations only unless otherwise stated. In relation to discontin
Slide 37: MMS
MMS