Perpetual Limited · ASX:PPT
Perpetual — H1 2015 Earnings Presentation
28 slides from Perpetual's earnings presentation, Feb 26, 2015
Slide 1: 1H15 results: six months to 31 December 2014
Perpetual Limited For personal use only 1H15 results: six months to 31 December 2014 Geoff Lloyd CEO & Managing Director Gillian Larkins Chief Financial Officer 26 February 2015 ABN 86 000 431 827
Slide 2: 1H15 Overview: Strategy delivering sustained growth
1H15 OVERVIEW Strategy delivering sustained growth For personal use only Strong results with positive flows, net new clients and increased returns to shareholders Transformation 2015 (T15) strategy will complete with continuing benefits to cost to income ratio Positive momentum in global equities an
Slide 3: 1H15 Strategy delivering strong returns
1H15 Strategy delivering strong returns For personal use only UPAT, $m NPAT, $m UPAT EPS, cps DPS, cps +30% +76% +17% +44% 62.1 58.6 134.4 115.0 47.7 56.4 48.3 114.7 122.8 95.0 80.0 33.3 1H14 2H14 1H15 1H14 2H14 1H15 1H14 2H14 1H15 1H14 2H14 1H15 3
Slide 4: 1H15 Results – Growth Highlights
1H15 RESULTS – GROWTH HIGHLIGHTS Major drivers were acquisition, growth in flows and new clients For personal use only All Ordinaries Index Perpetual Investments net inflows, $b 5800 5600 5400 1.6 5200 5000 4800 Average 1H15 / 2H14: +0.8% 0.6 0.5 4600 Average 1H15 / 1H14: +4.8% 4400 4200 1H14 2H14 1
Slide 5: Investments: Strong investment performance
PERPETUAL INVESTMENTS Strong investment performance For personal use only QUARTILE RANKINGS^ FUND WEIGHTED % OF FUNDS OVER periods ending December 2014 1 – 10 YEARS 1Yr 3Yrs 5Yrs 7Yrs 10Yrs Perpetual W Australian 4 2 1 1 1 1 yr 63% 37% Perpetual W Concentrated Equity 2 1 1 1 1 Perpetual W Ethical SR
Slide 6: Investments: Positive net inflows
PERPETUAL INVESTMENTS Positive net inflows For personal use only Investment Fund ratings Aligned Distributor Approved Models performance sales team connections Product Lists and multis On On On INCREASING target target target INFLOWS INVESTOR CONFIDENCE Total net flows across all strategies of $1,63
Slide 7: New Head of Equities appointed
NEW HEAD OF EQUITIES APPOINTED Orderly transition plan in place For personal use only Head of Equities Portfolio Managers Analysts Paul Skamvougeras Nathan Parkin Andrew Corbett Head of Equities Deputy Head of Equities Global Resources Analyst Portfolio Manager – Concentrated Equity, Pure Equity Por
Slide 8: Private: Improving business performance
PERPETUAL PRIVATE Improving business performance For personal use only VISION: AUSTRALIA’S LEADING INDEPENDENT HNW BUSINESS Scale Distribution benefits excellence Right Heritage Strategic Tech uplift service • TrustCo integration tracking • Continuing to focus on HNW business segment focus model to
Slide 9: Private: Strategy delivering growth
PERPETUAL PRIVATE Strategy delivering growth For personal use only Revenue, $m Delivering on strategy – PBT +257% on 1H14 and +16% on 2H14 81 82 1H Revenue growth continues with accelerated take-up of Implemented 57 58 57 59 63 2H Portfolios coupled with growth in Fordham and Estate Administration T
Slide 10: Corporate Trust: Diversified business with a leading market position
PERPETUAL CORPORATE TRUST Diversified business with a leading market position For personal use only FUA, $b Integration benefits of TrustCo acquisition 545.1 484.0 evidenced by strong performance in Fund 465.8 185.6 177.1 Services – revenue +8% on 2H14 171.6 294.2 306.9 359.5 Trust Services supporte
Slide 11: T15 Strategy – The Trust Company Scorecard
T15 STRATEGY – THE TRUST COMPANY SCORECARD Program to complete early and on track for target synergies For personal use only FY14 PROTECT 1H15 1H15 ALIGN 2015 ONE COMPANY 2H15 Single Executive Team Reduce central cost On Track: Reduce property footprint New organisation structure in (HR, Finan
Slide 12: Beyond T15
PERPETUAL – BEYOND T15 For personal use only VISION: AUSTRALIA’S LARGEST AND MOST TRUSTED INDEPENDENT WEALTH MANAGER T15 STRATEGY LEAD & GROW T15 FOUNDATIONS DELIVERED Strong Simple The right team business capabilities Lean & effective Focused on business model client needs Explore Lead Extend into
Slide 13: Financials
FINANCIALS For personal use only Gillian Larkins Chief Financial Officer
Slide 14: Financial Performance – Group
FINANCIAL PERFORMANCE – GROUP Strong results, disciplined execution of strategy For personal use only 1H15 2H14 1H14 1H15 v 1H15 v KEY THEMES: For the period ended $m $m $m 2H14 1H14 • Increase in operating Operating revenue 244.5 238.5 202.1 3% 21% revenue mainly due to higher average FUM and Total
Slide 15: Financial Performance: Significant items
FINANCIAL PERFORMANCE Significant items For personal use only 1H15 2H14 1H14 1H15 v 1H15 v KEY THEMES: For the period ended $m $m $m 2H14 1H14 UPAT 62.1 56.4 47.7 10% 30% • Lower significant items booked for the half Transformation costs - (7.4) (6.9) (100%) (100%) TrustCo Integration Costs (6.9) (3
Slide 16: Investments: Strengthening flows
PERPETUAL INVESTMENTS Strengthening flows For personal use only 1H15 2H14 1H14 1H15 v 1H15 v Average FUM, $b For the period ended $m $m $m 2H14 1H14 29.6 31.2 27.7 Revenue 119.3 113.0 109.5 6% 9% Operating expenses (53.2) (49.2) (48.1) (8%) (11%) 1H14 2H14 1H15 EBITDA1 66.1 63.8 61.4 4% 8% Revenue,
Slide 17: Private: Benefits of scale drive improved margins
PERPETUAL PRIVATE Benefits of scale drive improved margins For personal use only 1H15 2H14 1H14 1H15 v 1H15 v Revenue, $m For the period ended $m $m $m 2H14 1H14 81.3 82.3 Market related revenue 56.1 54.1 41.5 4% 35% 62.5 27.2 26.2 21.0 Non-market related revenue 26.2 27.2 21.0 (4%) 25% 54.1 56.1 41
Slide 18: Corporate Trust: Growth in Fund Services
PERPETUAL CORPORATE TRUST Growth in Fund Services For personal use only 1H15 2H14 1H14 1H15 v 1H15 v Revenue, $m For the period ended $m $m $m 2H14 1H14 Trust services revenue 20.8 21.4 19.7 (3%) 6% Fund services revenue 18.0 16.7 7.1 8% 154% 21.4 20.8 19.7 Total fiduciary services revenue 38.8 38.1
Slide 19: Financial Performance: Expenses
FINANCIAL PERFORMANCE Expenses For personal use only Group expenses TrustCo synergies and integration 156.6 pre-tax P&L impact, $m 5.5 CAGR 1H12 – 1H15: 3.2% 143.0 * 6.0 21.3 9-10 3.2% 8-9 7 6 130.4 130.9 129.8 25.0 3 137.0 118.0 -5 -6 -9 -10 1H12 T15 Proforma 1H13 1H14 TrustCo 1H15 expenses benefit
Slide 20: Financial Performance: Lower capital requirements
FINANCIAL PERFORMANCE Lower capital requirements For personal use only Capital requirements, $m At the end of period 1H15 2H14 1H14 -47.0 239.0 Cash & Liquid investments ($m) 316.0 327.9 248.5 192.0 Corporate debt ($m) (87.0) (87.0) (97.0) Net cash ($m) 229.0 240.9 151.5 2H14 1H15 Goodwill and other
Slide 21: 1H15 dividend up 44% on 1H14 and fully franked
FINANCIAL PERFORMANCE 1H15 dividend up 44% on 1H14 and fully franked For personal use only EPS, cps ROE,1 % Dividend, cps 111.7% 91.5% 122.8 134.4 126.8 22.8 22.3 21.1 21.1 91.6% 114.7 18.9 18.1 105.1 80.1 115.0 95.0 80.0 1H14 2H14 1H15 1H14 2H14 1H15 1H14 2H14 1H15 Payout ratio UPAT EPS NPAT EPS UP
Slide 22: 1H15 Strategy delivering strong returns
1H15 Strategy delivering strong returns For personal use only UPAT, $m NPAT, $m UPAT EPS, cps DPS, cps +30% +76% +17% +44% 62.1 58.6 134.4 115.0 47.7 56.4 48.3 114.7 122.8 95.0 80.0 33.3 1H14 2H14 1H15 1H14 2H14 1H15 1H14 2H14 1H15 1H14 2H14 1H15 Fully franked dividend of Payout ratio1 of Dividend p
Slide 23: Appendix
23 For personal use only APPENDIX
Slide 24: Financial Performance by division
FINANCIAL PERFORMANCE For personal use only Perpetual Perpetual Perpetual Investments Private Corporate Trust Group 29.8 31.8 12.6 12.6 545.1 UPAT diluted EPS, cps Closing FUM 29.1 484.0 or FUA, $b 9.7 134.4 114.7 122.8 294.2 33% 33% 36% 1H14^ 2H14 1H15 1H14^ 2H14 1H15 1H14^ 2H14 1H15 1H14 2H14 1H15
Slide 25: Private: Business background
PERPETUAL PRIVATE Business background For personal use only Leading HNW Advice • One of Australia’s leading and most experienced strategic advice and licensed trustee companies • Funds under advice in excess of $12.6b Fiduciary & Trustee • Serving the needs of High Net Worth Australians, including B
Slide 26: Corporate Trust: Securitisation issuance
PERPETUAL CORPORATE TRUST For personal use only Securitisation Issuance, $b Revaluation Margin, bps 55 200 50 45 40 150 35 30 100 25 20 15 50 10 5 0 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 2 year reval margin ABS CMBS Covered bonds RMBS 26
Slide 27: Contacts
CONTACTS Chief Executive Officer & Managing Director For personal use only Geoff Lloyd [email protected] T: +612 9229 9078 Chief Financial Officer Gillian Larkins [email protected] T: +612 9229 3547 General Manager Investor Relations & Corporate Finance Neil Wesley neil.wes
Slide 28: Disclaimer: Important information
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 26 February 2015. It is in summary form and is not necessarily complete. It should be read together with the compan