Perpetual Limited · ASX:PPT
Perpetual — H1 2009 Earnings Presentation
22 slides from Perpetual's earnings presentation, Feb 18, 2009
Slide 1: 2009 Half Year Results Media briefing
For personal use only 2009 Half Year Results Media briefing 18 February 2009
Slide 2: Overview
Overview For personal use only Financial performance in line with consensus Very challenging operating environment − rapid and sustained deterioration of our key revenue drivers − further deterioration in investor confidence Proactively managing our costs and capital − significant cost managem
Slide 3: Profit result in line with market consensus
Profit result in line with market consensus For personal use only Dec 2008 Dec 2007 Change $M $M % Operating profit before tax 62.1 114.2 (46) Operating profit after tax 41.6 79.3 (48) Gain / (loss) on sale of investments(1) (4.1) 21.1 ~ EMCF losses(2) (14.9) (12.8) ~ Restructuring (8.4) - ~ Net pro
Slide 4: Rapid and sustained deterioration of our key revenue driver
Rapid and sustained deterioration of our key revenue driver For personal use only ASX All Ordinaries Index (2004-2009) 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 4 5 6 7 8 4 5 6 7 8 9 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 an an an an an an ul ul ul ul ul -J -J -J -J -J -J -J
Slide 5: Funds management industry is in outflow due to applications drought
Funds management industry is in outflow due to applications drought For personal use only Total market quarterly flows since March 2004 Net flows $B 35 32 30 Redemption rate has remained constant 25 20 Applications rate is down 15 in response to market conditions: “dash for cash” 10 5 0 -5 -4 05
Slide 6: Securitisation new issuance remains largely closed
Securitisation new issuance remains largely closed For personal use only Australian RMBS issuance (excluding repos) 16 14 RMBS by Australian Issuers 12 10 (A$B) 8 6 4 2 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2006 2007 2008 Source: Perpetual and Standard & Poor’s 5
Slide 7: Operating profit before tax down 46%
Operating profit before tax down 46% For personal use only Dec 2008(1) Dec 2007(2) Change Six months ended $M $M % Perpetual Investments 35.7 88.9 (60) Perpetual Private Wealth 17.4 25.8 (33) Perpetual Corporate Trust 20.0 13.6 47 Group and Support Services (11.0) (14.1) 22 Total operating profit be
Slide 8: Strong fundamentals despite market turmoil
Strong fundamentals despite market turmoil For personal use only Solid investment performance from key funds Australian Trend of flows to key funds improving over the last quarter Equities Continued investment out-performance Global Equities Won new $125m institutional mandate in Feb 2009 7
Slide 9: Strong investment performance from international
Strong investment performance from international Dec-08 Perpetual’s International Share Fund one year rolling excess returns Nov-08 Oct-08 Sep-08 Aug-08 Jul-08 Jun-08 May-08 Apr-08 Mar-08 Feb-08 Jan-08 Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 Jun-07 May-07 Apr-07 Mar-07 Feb-07 Jan-07 Dec-06 Nov-06
Slide 10: Strong fundamentals despite market turmoil
Strong fundamentals despite market turmoil For personal use only Solid investment performance from key funds Australian Trend of flows to key funds improving over the last quarter Equities Continued investment out-performance Global Equities Won new $125m institutional mandate in Feb 2009
Slide 11: Consolidation opportunities for Perpetual Private Wealth
Consolidation opportunities for Perpetual Private Wealth For personal use only Maintaining client base despite tough market conditions Key initiatives Well-advanced in smaller ‘bolt on’ acquisitions Streamlining processes to improve client service Second half net flows typically stronger tha
Slide 12: Perpetual Corporate Trust FUA maintained
Perpetual Corporate Trust FUA maintained Corporate Trust Funds under administration Corporate Trust Funds Under Administration For personal use only $B $B $B 250 246.1 Funds under administration 222.9 210.1 CMBS and ABS 205.7 200 RMBS - non bank 150 100 Repo 50 RMBS - bank 0 Jun 07 Dec 07 Jun 08 Dec
Slide 13: Perpetual Corporate Trust holding up well
Perpetual Corporate Trust holding up well For personal use only Greater contribution to group profitability and insulation from equity market related revenue declines Continue to be the leading trustee for all new issuances Key initiatives Appointed by one of the leading Australian banks to ma
Slide 14: Expense reductions remain on track
Expense reductions remain on track For personal use only 320 4 (39) 8 302 300 280 275 $M 260 240 269 220 234 200 June 2008 Depreciation smartsuper Reduction June 2009 and acquisition in cash current amortisation expenses expectation (1) Cash expenses Non-cash expenses (1) Based on current estimate a
Slide 15: EMCF portfolio remains strong
EMCF portfolio remains strong For personal use only High quality portfolio remains in place Significant level of maturities in next 2-3 years $M Maturity profile of credit securities % 6mths to June 2009 100 45 12mths to June 2010 360 40 35 12mths to June 2011 485 30 Total maturities by June 201
Slide 16: Strategy for structured products
Strategy for structured products For personal use only Continued de-risking of portfolio Exact Market All new cash flows invested into ‘pure’ cash Cash Fund (EMCF) Risk assets reducing as securities mature and re-invested in cash Perpetual Immediate suspension of new series for the short-med
Slide 17: Balance sheet remains strong
Balance sheet remains strong For personal use only Dec 2008 June 2008 Change $M $M % Cash holdings 107.7 183.1 (41) Investments at market value 60.5 77.0 (21) Liquid assets 168.2 260.1 (35) Net assets 261.0 314.4 (17) Key financial ratios Liquid assets per share $4.00 $6.19 Gross debt(1) to (book eq
Slide 18: Revised dividend policy prudent and appropriate
Revised dividend policy prudent and appropriate For personal use only A policy with a payout ratio of more than 100 per cent of NPAT is unsustainable over the medium to long term 2008 final dividend payout ratio exceeded 140 per cent of second Previous half NPAT dividend policy Current market
Slide 19: Cash is becoming less attractive
Cash is becoming less attractive For personal use only Official cash rate % Applications rate is down 8 in response to market 7 conditions: “dash for cash” 6 5 Cash returns are declining 4 sharply 3 2 Perpetual is the best 1 0 regarded fund manager by Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Slide 20: Outlook
Outlook For personal use only Economic outlook continues to remain uncertain despite Government stimuli packages We are focussed on what we can control while markets remain turbulent – we have a strong balance sheet with low gearing – solid investment performance − our quality investment style t
Slide 21: 2009 Half Year Results Media briefing
For personal use only 2009 Half Year Results Media briefing 18 February 2009
Slide 22: Disclaimer
Disclaimer For personal use only Important information While this information has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information c