Perpetual Limited · ASX:PPT
Perpetual — Macquarie Australia Conference 2014
33 slides from Perpetual's conference presentation, May 9, 2014
Slide 1: Perpetual Limited – Macquarie Australia Conference
Perpetual Limited For personal use only Macquarie Australia Conference Sydney, May 2014 Geoff Lloyd CEO & Managing Director 7 – 9 May 2014 Sydney ABN 86 000 431 827
Slide 2: Perpetual: Trusted Through Generations
PERPETUAL: TRUSTED THROUGH GENERATIONS For personal use only Perpetual founded in Transform- Foundation Consolidation Listing Expansion 1886 by a group of ation professionals and 1886-1944 1945-1963 1964-1989 1989-2007 2012- business people, including the Personal trustee Post-war growth and Listed
Slide 3: Perpetual – Strategy on a Page
PERPETUAL – STRATEGY ON A PAGE Delivering on our vision For personal use only AUSTRALIA’S LARGEST INDEPENDENT WEALTH MANAGER OF CHOICE ONE PERPETUAL PERSONAL ADVISORY TO SPECIALISED ASSET CORPORATE TARGETED HIGH NET MANAGEMENT FIDUCIARY SERVICES WORTH SEGMENTS FOUNDATIONS • Heritage of 127 years • M
Slide 4: Perpetual – Overview
PERPETUAL – OVERVIEW External and internal strengths For personal use only EXTERNAL INTERNAL Exposure to Perpetual $1.6 trillion Investments superannuation • Heritage market • High performing Perpetual Corporate • Independent Private Trust • Diversified wealth manager Leverage to • Deep capability s
Slide 5: External Market
EXTERNAL MARKET Well positioned to capture market opportunities For personal use only Superannuation market exposure Equity market leverage Exposure through: • 1% All Ords = $2.3m - $2.8m • PI investments and clients in Perpetual revenue • PP wealth management clients • CT fund services Australian
Slide 6: Transformation 2015
TRANSFORMATION 2015 Turnaround strategy put in place in 2012 For personal use only • Portfolio momentum • Strategic alignment • Clarity and focus • Skilled team • Comprehensive approach • Business accountability • Market share gain • Innovation • Acquisitions and partnering • Activity drives res
Slide 7: Transformation 2015 Scorecard
TRANSFORMATION 2015 SCORECARD Deliverables on track For personal use only 1H13 2H13 FY14 Reduced central cost Improved PP adviser Reduced property Simplified structure productivity footprint (stage 2) New leadership team Reduced property • Simplify PI back office Sold PLMS footprint (s
Slide 8: Transformation 2015 – The Trust Company
TRANSFORMATION 2015 – THE TRUST COMPANY Accelerating growth through acquisition of complementary business For personal use only • Completed acquisition of The Trust Company in December 2013 • Shared fiduciary and service heritage • Highly complementary to all three Perpetual businesses • Accelerates
Slide 9: Transformation 2015 Strategy Results
TRANSFORMATION 2015 STRATEGY RESULTS Strategy has delivered growth For personal use only Perpetual Private Corporate Trust FUAdvice ($b) FUAdministration ($b) $15 $550 +35%* $450 +46%* $10 $350 $250 $5 $150 2H12 1H13 2H13 1H14 2H12 1H13 2H13 1H14 PPT TRUST AUS PPT TRUST AUS Perpetual Investments FTE
Slide 10: The Trust Company Integration Scorecard
THE TRUST COMPANY INTEGRATION SCORECARD Disciplined process For personal use only OUTCOMES FY14 PROTECT 1H15 1H15 ALIGN 2H15 ONE COMPANY 2H15 Single Executive Team Reduce central cost Reduce property footprint New org structure Simplify core processes Consolidate and reduce Divested EQ
Slide 11: Perpetual Investments (PI)
PERPETUAL INVESTMENTS (PI) Unrivalled investment performance For personal use only QUARTILE RANKINGS^ % OF FUM ^ RANKED periods ending December 2013 1ST AND 2ND QUARTILE 1-10 YEARS 1Yr 3Yrs 5Yrs 7Yrs 10Yrs 2% Perpetual W Australian 1 1 1 1 1 1 yr 98% Perpetual W Concentrated Equity 1 1 1 1 1 Perpetu
Slide 12: PI Sales and Distribution Strategy
PI SALES AND DISTRIBUTION STRATEGY Focused on increasing inflows For personal use only Investment Fund Aligned Distributor Increase Increase performance ratings sales team connections APLs models and multis On On On target target target INVESTOR CONFIDENCE INCREASING INFLOWS Return to net inflows FU
Slide 13: Perpetual Private
PERPETUAL PRIVATE Positioned to provide the broadest range of advice services For personal use only TARGET SEGMENTS BY SOURCE OF WEALTH BUSINESS ESTABLISHED PROFESSIONALS OWNERS WEALTHY HNW investable $150-200b $120-170b $100-150b assets (% HNW): (30%) (25%) (20%) Growth 7-8% p.a. 8-11% p.a. 7-8% p.
Slide 14: Perpetual Private
PERPETUAL PRIVATE Journey towards sustainable growth For personal use only VISION: AUSTRALIA’S LEADING INDEPENDENT HNW BUSINESS Strategic Right Distribu- Heritage Tech Scale Segment service tion business uplift benefits focus model excellence • Strong • One • New market • Lean cost- • TrustCo • New
Slide 15: Corporate Trust
CORPORATE TRUST Focused on corporate fiduciary services For personal use only CORPORATE TRUST • Leading market share, leading capability and longstanding client relationships TRUST FUND SERVICES SERVICES • Annuity style revenues • Acquisition of The Trust Company adds a highly complementary offering
Slide 16: Corporate Trust: The Trust Company Provided Complementary Growth
CORPORATE TRUST The Trust Company provided complementary growth For personal use only Perpetual Corporate Trust Perpetual + Trust Company (Revenue pre acquisition)1 (Revenue post acquisition)1 19% 48% 52% 81% Trust Services Fund Services Trust Services Fund services 1 Charts based on FY2013 data 16
Slide 17: Corporate Trust Growth
CORPORATE TRUST GROWTH Securitisation issuance increasing For personal use only • Corporate Trust maintains 70 Securitisation issuance market leading position 60 • Public issuance mix continues 50 to improve ISSUANCE ($)B 40 • CY13 RMBS issuance +90% 30 on CY12 20 • CY13 covered bond issuance 10 dow
Slide 18: Performance
PERFORMANCE UPAT and EPS showing recovery For personal use only UPAT and EPS growth UPAT $m Diluted EPS 60 (cps) 160 120 40 80 20 40 0 0 1H11 2H11 1H12 2H12 1H13 2H13 1H14 UPAT Diluted EPS on UPAT (cps) 18
Slide 19: Disciplined Cost Management
DISCIPLINED COST MANAGEMENT T15 strategy to deliver $50m pre-tax cost savings by end FY14 For personal use only PRE-TAX P&L IMPACT • Disciplined P&L savings before tax Investment spend before tax program to 30 Savings/ (investment) pre tax deliver 20 annualised pre- 10 tax cost savings 0 program of
Slide 20: Conclusion
CONCLUSION For personal use only Strong heritage, independent and diversified Clear strategy delivering strong results Reinvigorated distribution model delivering net inflows Transformation 2015 strategy has reduced the cost base with new business model focused on growth Transformation 2015 growth a
Slide 21: Appendix
APPENDIX For personal use only Financials from the Perpetual 1H14 Results presentation
Slide 22: Financial Performance: Improvement in Key Business Metrics
FINANCIAL PERFORMANCE IMPROVEMENT IN KEY BUSINESS METRICS For personal use only Perpetual Perpetual Perpetual Group+ Investments^ Private^ Corporate Trust^ Closing FUM 33% or FUA ($b) 29.1 9.7 294.2 27% 8.8 U 31% 9.0 259.4 P 24.3 25.3 248.5 A 86.1 99.0 115.7 T 1H13 2H13 1H14 Diluted EPS on UPAT (cps
Slide 23: Financial Performance: Strength in UPAT
FINANCIAL PERFORMANCE STRENGTH IN UPAT ALLOWS INVESTMENT IN GROWTH INITIATIVE For personal use only 1H13 2H13 1H142 1H14 v 1H14 v KEY THEMES: For the period ended $m $m $m 1H13 2H13 • Operating revenue ex TrustCo +10% on Operating revenue 179.4 190.3 204.9 14% 8% 1H13, +4% on 2H13 Total expenses (13
Slide 24: Financial Performance: Cost Base Reduction
FINANCIAL PERFORMANCE At the outset of Transformation 2015 the Group identified $50m reduction in the FY12 normalised cost For personal use only base, allowing for only CPI increases over the next 3 years Normalised Expenses $m DECREASE 1H12 INCREASE 140 $143.0m* Fixed 138 -18.8 Remuneration Variabl
Slide 25: Financial Performance: Significant Items
FINANCIAL PERFORMANCE SIGNIFICANT ITEMS REFLECT THE TRUST COMPANY ACQUISITION AND INTEGRATION COSTS For personal use only 1H13 2H13 1H14 1H14 v 1H14 KEY THEMES: $m $m $m 1H13 v 2H13 UPBT 49.0 58.4 67.6 38% 16% • T15 restructuring costs Tax expense (13.9) (17.6) (19.5) (40%) (11%) of $6.9m after tax
Slide 26: Perpetual Investments Results
PERPETUAL INVESTMENTS^ RESULTS HIGHLIGHT OPERATING LEVERAGE TO EQUITY MARKETS For personal use only 1H13 2H13 1H14 1H14 v 1H14 v KEY THEMES: $m $m $m 1H13 2H13 • 1H14 revenues up in Revenue 93.6 102.3 109.5 17% 7% line with growth in average FUM Operating expenses (48.4) (49.3) (48.2) - 2% • Strong
Slide 27: Perpetual Private Results
PERPETUAL PRIVATE^ MARKET LINKED REVENUES BENEFIT FROM IMPROVED EQUITY MARKETS For personal use only 1H13 2H13 1H14 1H14 v 1H14 v KEY THEMES: $m $m $m 1H13 2H13 • Market linked revenue Market related revenue 34.5 36.7 39.4 14% 7% demonstrates leverage to equity markets Non-market related revenue 22.
Slide 28: Corporate Trust: Focus on Core Fiduciary
CORPORATE TRUST^ FOCUS ON CORE FIDUCIARY For personal use only 1H13 2H13 1H14 1H14 v 1H14 v KEY THEMES: For the six month period $m $m $m 1H13 2H13 Trust revenue 19.7 20.0 20.5 4% 3% • Renewed focus on Fund services revenue 4.9 4.6 4.4 (10%) (4%) core fiduciary activities delivers improved Total fid
Slide 29: Financial Performance: The Trust Company
FINANCIAL PERFORMANCE THE TRUST COMPANY For personal use only 1H13 2H13 1H14 KEY THEMES: For the six month period $m $m $m • TrustCo acquired Revenue n/a n/a 7.5 December 2013 Operating expenses n/a n/a (6.2) • 1H14 results include EBITDA(1) n/a n/a 1.3 1 month profit contribution from Depreciation
Slide 30: Group Balance Sheet Remains Strong
FINANCIAL PERFORMANCE GROUP BALANCE SHEET REMAINS STRONG For personal use only 1H13 2H13 1H14 KEY THEMES: At the end of period Cash & Liquid investments ($m) • Liquidity remains strong 218.8 252.5 248.5 Corporate debt ($m) (45.0) (45.0) (97.0) • TrustCo acquisition Net cash ($m) 173.8 207.5 151.5 fu
Slide 31: 1H14 Interim Dividend Fully Franked
FINANCIAL PERFORMANCE 1H14 INTERIM DIVIDEND OF 80 CENTS PER SHARE FULLY FRANKED For personal use only 1H13 2H13 1H14 KEY THEMES: Fully franked dividends (cps) 50.0 80.0 80.0 • Excluding impact of TrustCo dividend payout ratio is 87% Dividend payout ratio (%) 77 100 112 • At end of 1H14, parent compa
Slide 32: Contacts
CONTACTS For personal use only Chief Executive Officer & Managing Director Geoff Lloyd [email protected] T: +612 9229 9078 Chief Financial Officer Gillian Larkins [email protected] T: +612 9229 3547 General Manager Investor Relations (Acting) Judy Barraclough judy.barraclou
Slide 33: Disclaimer
DISCLAIMER Important information For personal use only The information in this presentation is general background information about the Perpetual Group and its activities current as at 27 February 2014. It is in summary form and is not necessarily complete. It should be read together with the compan