Perpetual Limited · ASX:PPT
Perpetual — Citigroup Investor Presentation, Boston/New York 2006
32 slides from Perpetual's conference presentation, Feb 10, 2006
Slide 1: Perpetual Limited ('Perpetual')
Perpetual Limited (‘Perpetual’) David Deverall, CEO Perpetual Limited Investor Presentation, Citigroup Boston/New York 9-10 February 2006
Slide 2: Perpetual: Key messages
Perpetual: Key messages The Australian wealth management and securitisation markets have strong fundamentals An Australian financial services company participating actively in wealth management and securitisation Well positioned to compete Currently implementing its growth strategy An attr
Slide 3: Strong growth is expected in pre and post Australian retirement assets
Strong growth is expected in pre and post Australian retirement assets Australian Managed Fund Market Overview Australian managed fund industry (Australian dollars) totals $810b with annual average Total Superannuation Funds by Year $ Billion growth of 11% over the last 10 years 3,000 Superannua
Slide 4: The Australian securitisation market has good underlying fundamentals
The Australian securitisation market has good underlying fundamentals Outstanding Securitisation (A$B) Supply is increasing Currently only ~25% of Australia’s $200B Other ABS residential loans are securitised (as opposed to ~60% in the US), and Non-bank financial institutions, the 150 largest us
Slide 5: Perpetual: Key messages
Perpetual: Key messages The Australian wealth management and securitisation markets have strong fundamentals Australian financial services company participating actively in wealth management and securitisation Well positioned to compete Currently implementing its growth strategy An attract
Slide 6: Perpetual is an ASX 100 company and largest independent wealth manager in Australia
Perpetual is an ASX 100 company and largest independent wealth manager in Australia Top performing manager in Australian equities ~A$29 billion FUM as at September2005 ~A$150 billion FUA as at September 2005 Market capitalisation ~A$2 billion and approximately 850 employees Revenues have m
Slide 7: Perpetual actively participates in two industries
Perpetual actively participates in two industries Asset Wealth Corporate Trust Management Management Responsible for producing Responsible for creating a suite of Australia’s pre-eminent provider investment returns wealth management products, of trust and administration providing the marketing, sale
Slide 8: In Wealth Management we focus on the 'value-add' ends of the value chain
In Wealth Management we focus on the ‘value- add’ ends of the value chain Our focus Asset managers who can Consolidated Advisers can continue to add alpha will be able reporting by craft value to differentiate themselves from administrators proposition competitors and charge a likely to become
Slide 9: Our Corporate Trust business provides services between corporates and investors
Our Corporate Trust business provides services between corporates and investors Investor Protection Originators of Capital Compliance Culture Investors and Stakeholders Markets Activity Banks Institutional Investors Non-bank Financial Fiduciary Services Retail Debenture Holders Institutions Fund Uni
Slide 10: 19% growth in EBITDA
19% growth in EBITDA (Australian dollars) 2005 2004 % Change Wealth Management $145.4m $115.4m 26% Corporate Trust $30.3m $25.9m 17% Group unallocated(1) ($4.6m) $2.3m - TOTAL(2) $171.1m $143.6m 19% (1) Prior year (2004) group unallocated result included provisions no longer required totalling $5.7
Slide 11: Perpetual: Key messages
Perpetual: Key messages The Australian wealth management and securitisation markets have strong fundamentals An Australian financial services company participating actively in wealth management and securitisation Well positioned to compete Currently implementing its growth strategy An attr
Slide 12: The Australian Equities team delivers consistent outstanding performance
The Australian Equities team delivers consistent outstanding performance 10% Excess over benchmark (pre-fees) (3 Year Rolling Excess Performance) 9% 8% Variance to Benchmark 7% 6% Perpetual Australian Share Fund 5% 4% 1st Quartile Mercer Universe 3% Median Mercer Universe 2% 1% 0% Mar-03 Jun-03 Sep-
Slide 13: Award winning investment teams
Award winning investment teams Money Magazine ‘Best of Best Rated Growth Fund the Best 2005’ Awards Best Fund Manager Reader’s Choice Award for Best Fund Manager Personal Investor 2005 Awards for Excellence in Australian Share Fund of the Year Financial Services Balanced Superannuation Fun
Slide 14: Wealth Management - continued healthy asset growth
Wealth Management - continued healthy asset growth Perpetual Investments Perpetual Private Clients Funds under management Funds under advice, administration up 23 per cent and trust up 11 per cent A$30B A$8B 7.3 26.7 6.6 25 6.2 6.0 21.7 6 5.8 20 19.4 17.4 15.6 15 4 10 2 5 0 0 Jun Jun Jun Jun Jun Jun
Slide 15: Good performance, strong markets and strong net inflows increased FUM by 23%
Good performance, strong markets and strong net inflows increased FUM by 23% 30 June 30 June 2004 FUM Net inflows 2005 FUM (A$B) (A$B) Other* (A$B) (A$B) Retail $6.6 $0.1 $0.8 $7.5 Masterfund $11.7 $0.8 $1.0 $13.5 Institutional $3.4 $1.1 $1.2 $5.7 All Channels $21.7 $2.0 $3.0 $26.7 Australian Equity
Slide 16: Our leading position (~60% share) in the corporate trust market supports strong growth in balances
Our leading position (~60% share) in the corporate trust market supports strong growth in balances s Under Administration (A$B) Up 28% in 2005 150 144.3 112.4 100 87.1 52.3 50 42.2 0 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 15
Slide 17: Perpetual: Key messages
Perpetual: Key messages The Australian wealth management and securitisation markets have strong fundamentals An Australian financial services company participating actively in wealth management and securitisation Well positioned to compete Currently implementing its growth strategy An attr
Slide 18: Our corporate strategy
Our corporate strategy Focus on our 4 sources of competitive advantage I. Develop a II. Develop Funds management teams and processes more balanced new growth Relationship with financial planners portfolio engines Trusted brand Fiduciary services experience III. Fully engage our people to del
Slide 19: Implementation: Develop a more balanced portfolio & new growth engines
Implementation: Develop a more balanced portfolio & new growth engines Expanded and enhanced our asset management footprint – Global equities – Australian credit – Direct Property – Quantitative investments – Property securities Implemented a long-term deferred share plan for our key asset manag
Slide 20: Expanding our asset management footprint
Expanding our asset management footprint Skill set High Low breadth breadth Domestic Stock Broad Styles Small Caps Hedge Private Picking Funds Equity Mortgage Lending Mortgages Mezz Debt LPT Stock Picking Global Domestic Infrastructure Infra- Investing structure Quantitative Global Domestic Hedge Cu
Slide 21: Global Equities business fully operational
Global Equities business fully operational Business Manufacture a focused range of global equities products strategy includes: Distribution of these products to: – Retail and institutional investors in Australia – Institutional investors outside of Australia Perpetual Limited Australian clients
Slide 22: Key points: Global Equities business
Key points: Global Equities business Perpetual is entering the very large global equities market Outstanding investment team that has worked together for over 10 years Philosophy and culture a perfect match with Perpetual Very experienced sales capability in the UK Very long term incentive
Slide 23: Pleasing results from entry into Credit
Pleasing results from entry into Credit Funds have outperformed …resulting in strong FUM growth benchmark every month to date… FUM (A$M) Cumulative Outperformance 0.8% Credit 1,500 Income Fund Credit Enhanced 0.6 Cash A 1,000 Credit Enhanced 0.4 Cash AA 500 0.2 0.0 0 Oct Nov Dec Jan Feb Mar Apr May
Slide 24: Implementation: Fully engage our people to deliver our strategy
Implementation: Fully engage our people to deliver our strategy Completed implementation of new remuneration system – Variable pay forms a significant part of overall remuneration – Variable pay linked to shareholder wealth creation – Short-term incentive payments made out of the realised profits
Slide 25: Perpetual: Key messages
Perpetual: Key messages The Australian wealth management and securitisation markets have strong fundamentals An Australian financial services company participating actively in wealth management and securitisation Well positioned to compete Currently implementing its growth strategy An attr
Slide 26: Five year performance is consistently strong
Five year performance is consistently strong (Australian dollars) Performance measures Growth 2001 2002 2003 2004 2005 (June) Rate(1) EBITDA ($m) 82 101 114 144 171 20.2% Operating profit after tax (OPAT)(2) 41 59 68 88 112 28.6% ($m) Earnings per share – OPAT (cents) 109 155 181 232 289 27.6% Retur
Slide 27: Healthy balance sheet
Healthy balance sheet (Australian dollars) June June 2005 2004 % Change Net assets $370m $315m 17% Investments at cost $56m $60m (7%) Investments at market value(1) $112m $110m 2% Cash holdings $168m $163m 3% Liquid assets $280m $273m 3% Key Financial Ratios Gross debt to book equity 12% 14% Interes
Slide 28: A new dividend policy committed in 2004
A new dividend policy committed in 2004 Starting point Dividend policy Strong cash generation Ordinary dividends of Low capital expenditure 90% of NPAT Substantial franking credits before goodwill amortisation and gains / losses on investments, fully franked High dividend pay-out 27
Slide 29: Outlook for 2006
Outlook for 2006 We delivered a strong result in 2005 while also managing to fund growth through strategic initiatives Our core businesses are growing well We have taken and continue to take a proactive, long- term and strategic approach to managing the future well being of our organisation; a
Slide 30: Perpetual is well positioned
Perpetual is well positioned Favourable operating environment – Strong underlying retirement savings industry – Government legislation focused on addressing the retirement savings gap Superannuation guarantee levy (9%) Future Fund Superannuation surcharge removed Increased co-contribution
Slide 31: Why Perpetual?
Why Perpetual? Independent wealth manager ‘Fund Manager of the Year’ for four out of the last five years Recognised top performer in Australian equities One of Australia’s largest wealth management pure plays Global option recently initiated 30
Slide 32: Perpetual Limited ('Perpetual')
Perpetual Limited (‘Perpetual’) David Deverall, CEO Perpetual Limited Investor Presentation, Citigroup Boston/New York 9-10 February 2006
Perpetual — Citigroup Investor Presentation, Boston/New York 2006 on 6ix