McMillan Shakespeare : Chair, CEO and Senior Management AGM Addresses

For personal use only

22 November 2021

Manager Company Announcements

ASX Limited

Level 4

20 Bridge Street

SYDNEY NSW 2000

By E-lodgement

Chair, CEO and Senior Management Addresses - 2021 Annual General Meeting

Please find attached for immediate release in relation to McMillan Shakespeare Limited (ASX: MMS) the following documents in relation to the Company's 2021 Annual General Meeting:

• Chair's Address;
• Managing Director and CEO's address; and
• Senior Management addresses.

Yours faithfully

McMillan Shakespeare Limited

Ashley Conn

Chief Financial Officer and Company Secretary

This document was authorised for release by the Board of Directors.

McMillan Shakespeare Limited | ABN 74 107 233 983 AFSL No. 299054

For personal use only

Chair's Address - Helen Kurincic

Today I will provide you with a brief overview of our results and strategic focus, our board renewal process and comments on FY22. Our Group Managing Director and CEO Mike Salisbury will outline more detail regarding how our businesses successfully operated in this past financial year, as well as our expectations for the road ahead, whilst three executives of the Group will talk to their respective businesses or area of strategic focus.

In no small part due to the ongoing efforts and commitment of our people, the Group achieved an improved profit performance in FY21 in a highly challenging operating environment, still impacted by the ongoing COVID-19 pandemic. Importantly, the majority of the customers your Company serves, includes healthcare, charity, government and private sector workers, many of whom are delivering essential services to communities. Group Revenue achieved of $544.5 million represented growth of 10.2% on FY20 and Group underlying net profit after tax, or UNPATA, of $79.2 million represented growth of 14.8% on the previous financial year, whilst underlying earnings per share at 102.4c was up 17.1%.

We were pleased to deliver a fully franked dividend of 61.3 cents per share for the year. This represented 66% of UNPATA excluding the contribution of the Australian Government JobKeeper payment.

In response to the pandemic, we instituted amongst other measures a wage freeze for the period and no bonuses relating to FY20 were paid, whilst we extended senior debt maturities and non-essential spending was restricted. The JobKeeper payment funding received of $7.3 million after-tax in FY21 enabled the retention of our employees despite the challenges of COVID-19 and the negative impacts on our financial performance compared to FY19. Despite the receipt of the Jobkeeper payment, UNPATA in FY21 only returned to 89% of FY19 pre COVID-19 levels.

Our core Group Remuneration Services business achieved segment UNPATA of $61.2 million representing an 0.4% increase on FY20. Plan Partners, largely unaffected by COVID-19, achieved strong customer organic growth and improved customer engagement, with funds under administration in FY21 increasing by 76% and support coordination hours increasing 43%.

Our result for the year reflected the varied and on-going impacts of COVID-19 on our businesses such as the automotive supply dynamic, as well as the benefits from execution of our key strategic priorities such as the restructure of our United Kingdom business.

A strategic review of our Retail Financial Services Retail business was also undertaken during the period and on 23 August 2021 we agreed the sale of the business via a management buy-out. This option was the most effective and efficient option, and ensured the on-going service and support for customers. The disposal transaction was completed on 30 September 2021.

During the financial year, the Board approved our inaugural Sustainability Strategy for the Group, which sets out our focus and future direction on how we aim to create positive environmental and social outcomes and value for our stakeholders, including our shareholders, clients, customers, our people and broader communities.

McMillan Shakespeare Limited | ABN 74 107 233 983 AFSL No. 299054

For personal use only

This strategy responds to key environmental, social and governance risks and opportunities for the Group, including acting on climate change, supporting greater accessibility and social inclusion, and our community engagement activities. These are supported by a number of targets for FY22 and beyond. We have committed to creating a pathway to achieve net zero emissions for our own operations, completing a climate risk assessment and the development of an MMS Accessibility and Inclusion Plan and Reconciliation Action Plan.

Himesha Jayasinghe, our dedicated Sustainability Manager for the Group, will talk in further detail to our performance and focus in these areas in a moment.

Your Board continues to undertake a diligent Board renewal and succession planning process, resulting in a new Non-Executive Director being appointed in each of the years 2018, 2020 and 2021 thus far.

This commitment to renewal saw independent Non-Executive Director Ian Elliot retiring on 1 April 2021 after more than six years of committed service to the Board. Bruce Akhurst was appointed as an independent Non-Executive Director on 1 April 2021, a highly experienced former executive and ASX director, and who is standing for election today.

We are also grateful that independent Non-Executive Director and our former Chair Tim Poole agreed to the Board's request to offer himself for re-election this year. If shareholders approve his re-election today, Tim's term will conclude in August 2022, allowing for a new Non-Executive Director recruitment and transition to occur given Tim's corporate knowledge and contributions at an important time at MMS. On behalf of all at MMS I would like to especially thank Tim, at this AGM, for his immense contribution.

Now turning to FY22.

Elements of the abnormal trading conditions that characterised FY21 are continuing in FY22, and in particular some impacts from the ongoing response of Governments to COVID-19 and importantly the global motor vehicle supply constraints which have been widely documented.

We continue to invest in enhancing our digital capability, our own financing capability with the implementation of our strategically beneficial funding warehouse and reducing our cost to serve as we look to improve our value proposition. This activity is aimed at ensuring that each of our business segments are well placed to continue to meet the changing needs of customers, in both business as usual circumstances and in the face of disrupted and changing market conditions.

Our strategic focus this year continues to pursue growth and efficiency across our businesses including integration of Plan Tracker which was a small acquisition completed on 1 July 2021, and assess further inorganic growth opportunities in that business.

As always, on behalf of the Board I thank our customers and our shareholders for their ongoing engagement and support of the Group. To Mike Salisbury, the executive leadership team, fellow Directors and all our people we thank you for your commitment and dedication to establish MMS as a trusted partner and supporting our customers' financial well-being and their lifestyle goals.

I now invite our MD & CEO, Mike Salisbury, to provide his address.

McMillan Shakespeare Limited | ABN 74 107 233 983 AFSL No. 299054

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CEO Address - Mike Salisbury

Today, I'll be providing you with a brief overview of our performance across 2021, and take you through the key financial and operational highlights for the Group, as well as giving an update on our current trading for the 2022 financial year to date.

We will also hear from three of our leaders who I will introduce in a moment.

As Helen just mentioned, the Group delivered an improved profit outcome in FY21, achieved in the face of a challenging and constantly moving operating environment.

This result was pleasing, whilst also reflecting the varied and on-going impacts of COVID-19, including the way in which we engaged with our customers, the way our people performed their roles and the challenges of constrained new vehicle supply globally - challenges which in part still exist today.

We took steps to ensure the sustainability and financial security of the Group in the face of the pandemic, whilst also developing new ways to connect and support our remote workforce and maintain high levels of service to our customers through enhanced digital capabilities.

In the year we also executed on a number of strategic priorities, including the simplification of the Group through the restructure of our UK business, and delivered strong organic customer growth in Novated Leasing and in Plan Partners, whilst also executing on our market consolidation strategy in completing our first plan management acquisition immediately post year end on 1 July this year.

This combination of factors has made for a very complex and challenging year, but one which positions the Group well as we continue to navigate challenges in our operating environment. Our result speaks to the organisation's ability to anticipate, react and respond to these conditions, which is testament to the ongoing engagement and commitment of our people.

I'll now turn to the presentation on slide 2.

Slide 2 - Overview

In terms of our performance for the period, Group revenue across FY21 of $544.5 million was up compared with $494 million achieved in FY20, with EBITDA up 31.4% to $130.7 million.

As Helen mentioned, a fully franked dividend of 61.3 cents per share was delivered for the year, inclusive of the final dividend of 31.1 cents per share.

Group cash flow remained strong, with free operating cash flow of $99.8 million or 126% of UNPATA. The Group's net cash position at the end of the year was $142 million, up from $67 million in the previous period.

In the second half of the year we re-financed our debt facilities at significantly improved pricing, meaning that group liquidity is well positioned for our future needs and growth.

Importantly, Group return on capital employed improved to 33.2%, and is now up by 13.6% over the last 5 years.

The year also underlined that the way in which we engage with our customers and our people, and the way our people perform their roles has never been more important.

McMillan Shakespeare Limited | ABN 74 107 233 983 AFSL No. 299054

For personal use only

Accordingly, investment in our people remained a priority for the Group in FY21 as we continued to adapt to new ways of working as the pandemic persisted, whilst we developed new ways to connect and support our remote workforce.

We were delighted to see our Sustainable Engagement Score increase by 6% to 85%, a figure well above the benchmark for financial services firms and in line with global high performing organisations. This affirms that our people feel more connected to the business, our values and culture than at any time in the past which is increasingly important in the current market where the attraction and retention of people is under pressure.

This level of engagement is reflected in the way we service our customers, and we received great customer satisfaction feedback throughout the year, averaging a Net Promoter Score of 60, up 15.4% from FY20.

Total salary packages under management declined marginally on FY20, primarily as a result of the loss of the salary packaging arrangements within the NSW public health network. Novated leases increased 2.2% against a backdrop of the limited supply of new vehicles, increased retail prices and net amount financed, with carry-over of sales orders increasing to over five times historical levels.

Plan Partners delivered another strong performance for the period, with pleasing growth in both plans under administration and support co-ordination hours, whilst also continuing its investment in technology.

In all, I believe we managed the period extremely well and demonstrated the resilience of our business, our people and our customer base.

Importantly, in the year we also continued to execute on a number of strategic priorities, successfully completing the restructure of our UK business as mentioned, progressing our Digital Strategy - designed to lower costs and improve our customers digital experience, furthering development of a securitisation and funding warehouse for the business and escalating our approach to sustainability across the Group.

Slide 3 - Strategic Imperatives

And in talking about sustainability, to enable a deeper understanding of our approach and priorities, I will now ask the Group's Sustainability Manager, Himesha Jayasinghe, to speak briefly to the Group's strategy in this regard.

Himesha will be followed by the Chief Executive of Plan Partners, Sean Dempsey, who will provide further insights into our focus and priorities with regards to supporting participants in the National Disability Insurance Scheme.

Sean will then introduce Kylie Pashen, Managing Director of our Group Remuneration Services segment, incorporating the Maxxia and RemServ businesses, to provide an overview of the recent performance of our GRS business, together with our key strategic initiatives.

Himesha, thank you.

Slide 4 - Himesha on Investment in Sustainability

It is a pleasure to be able to speak with you about our Group's ongoing journey towards becoming a more sustainable organisation.

McMillan Shakespeare Limited | ABN 74 107 233 983 AFSL No. 299054