Perpetual Limited · ASX:PPT
Perpetual — H1 2017 Earnings Presentation
24 slides from Perpetual's earnings presentation, Feb 23, 2017
Slide 1: 1H17 Results
23 February 2017 PERPETUAL LIMITED For personal use only 1H17 RESULTS SIX MONTHS TO 31 DECEMBER 2016 Geoff Lloyd Chief Executive Officer & Managing Director Gillian Larkins Chief Financial Officer ABN 86 000 431 827
Slide 2: Continued execution of strategy
For personal use only Continued execution of strategy
Slide 3: 1H17 Overview: Lead and Grow strategy delivering returns
1H17 OVERVIEW LEAD AND GROW STRATEGY DELIVERING RETURNS For personal use only Revenue, $m NPAT, $m NPAT EPS, cps DPS, cps +5% +2% +2% +4% 253.5 252.4 64.4 67.6 66.0 139.1 145.6 141.5 125.0 130.0 130.0 240.7 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 Perpetual Perpetual Perpetual Inv
Slide 4: Drivers are markets, flows and new clients
1H17 RESULTS DRIVERS ARE MARKETS, FLOWS AND NEW CLIENTS For personal use only All Ordinaries Index Perpetual Private – high net worth1 6100 Average 1H17 / 1H16: +4% Net new clients Average FUA per new client, $m 5800 Average 1H17 / 2H16: +6% 54 4.3 46 46 5500 2.8 2.8 5200 4900 4600 Jul-15 Sep-15 Nov
Slide 5: Investments: strong business positioned for growth
PERPETUAL INVESTMENTS STRONG BUSINESS POSITIONED FOR GROWTH For personal use only Proven, disciplined approach to investing over cycles and across asset classes Investment performance in equities and multi-asset impacted by value style Overall A number of distribution arrangements secured in the hal
Slide 6: Strong long-term investment performance
PERPETUAL INVESTMENTS STRONG LONG-TERM INVESTMENT PERFORMANCE For personal use only QUARTILE RANKINGS1 % OF FUNDS OVER 1 – 10 YEAR periods ending December 2016 1Yr 3Yrs 5Yrs 7Yrs 10Yrs Perpetual W Australian 3 4 3 1 1 Open Perpetual W Concentrated Equity 3 3 2 1 1 Open 1 yr 44% 56% Perpetual W Ethic
Slide 7: Investing for the long-term
PERPETUAL INVESTMENTS INVESTING FOR THE LONG-TERM For personal use only Products gaining retail and intermediary traction (net flows) Product Development Cumulative FY14 FY15 FY16 1H17 Total $50m in seed funds employed Global Share $44m $40m $24m $108m 4 new funds in incubation Diversified Real Retu
Slide 8: Private: strategy on track
PERPETUAL PRIVATE STRATEGY ON TRACK For personal use only VISION: AUSTRALIA’S LEADING INDEPENDENT HNW BUSINESS Strategic segment Right service Scale Distribution Heritage business Tech uplift focus model benefits excellence Solid results with growth in revenue; Perpetual Private Net Flows, $b PBT
Slide 9: Corporate Trust – Debt Markets: solid growth in 1H17
PERPETUAL CORPORATE TRUST – DEBT MARKETS SOLID GROWTH IN 1H17 For personal use only REVENUE DRIVERS Securitisation FUA - $b Key revenue drivers are higher margin RMBS 427 431 380 and ABS business – consistent mortgage market 307 growth continues 259 217 Good growth in non-bank and regional bank
Slide 10: Corporate Trust – Managed Funds: solid growth in 1H17
PERPETUAL CORPORATE TRUST – MANAGED FUNDS SOLID GROWTH IN 1H17 For personal use only REVENUE DRIVERS Managed Funds is a more meaningful contributor Australian Capital Flows1 , $b to revenue and earnings Inbound capital flows into Australian property and infrastructure investments continue to ben
Slide 11: Financials
For personal use only FINANCIALS GILLIAN LARKINS CHIEF FINANCIAL OFFICER
Slide 12: Financial performance – Group
FINANCIAL PERFORMANCE – GROUP INCREASE IN NPAT AND DIVIDENDS For personal use only 1H17 2H16 1H16 1H17 v 1H17 v For the period $m $m $m 2H16 1H16 KEY THEMES Operating revenue 252.4 253.5 240.7 (0%) 5% Operating revenue benefitted Total expenses (160.7) (163.5) (152.8) 2% (5%) from higher equity mark
Slide 13: Investments: disciplined business with margin maintained
PERPETUAL INVESTMENTS DISCIPLINED BUSINESS WITH MARGIN MAINTAINED For personal use only 1H17 2H16 1H16 1H17 v 1H17 v Revenue (ex perf fees), $m For the period $m $m $m 2H16 1H16 +2% Revenue 113.8 117.9 110.0 (3%) 3% 109.9 +3% 107.5 106.2 Operating expenses (50.9) (54.0) (49.0) 6% (4%) 1H16 2H16 1H17
Slide 14: Private: higher markets, growth in flows and net new clients
PERPETUAL PRIVATE HIGHER MARKETS, GROWTH IN FLOWS AND NET NEW CLIENTS DRIVE REVENUE AND PBT For personal use only 1H17 2H16 1H16 1H17 v 1H17 v Revenue, $m For the period $m $m $m 2H16 1H16 82.3 85 85.3 85 86.6 85 Market related revenue 55.7 53.9 53.9 3% 3% 28.4 28.4 31.4 31.4 30.9 30.9 Non-market re
Slide 15: Corporate Trust: growth in revenue and PBT
PERPETUAL CORPORATE TRUST GROWTH IN REVENUE AND PBT For personal use only 1H17 2H16 1H16 1H17 v 1H17 v Revenue, $m For the period $m $m $m 2H16 1H16 24.9 26.0 24.9 26.0 25.5 25.5 Debt Market Services revenue 25.5 26.0 24.9 (2%) 2% 18.8 19.1 17.6 18.8 19.1 17.6 Managed Fund Services revenue 19.1 18.8
Slide 16: Balance sheet: strength provides opportunities
BALANCE SHEET STRENGTH PROVIDES OPPORTUNITIES For personal use only 1H17 2H16 1H16 1H17 v 1H17 v Capital requirements2, $m For the period ended $m $m $m 2H16 1H16 Net cash ($m) 245.6 266.7 229.2 (8%) 7% 171.9 160.0 160.9 Goodwill and other intangibles1 ($m) 341.2 349.6 344.3 (2%) (1%) 1H16 2H16 1H17
Slide 17: Financial performance: sustained dividend growth
FINANCIAL PERFORMANCE SUSTAINED DIVIDEND GROWTH For personal use only NPAT EPS, cps NPAT ROE,1 % Dividend, cps 145.6 141.5 22.6 130.0 130.0 139.1 21.8 21.6 125.0 90.4% 89.5% 91.7% 90.4% 1H16 130.0 2H16 91.7% 1H17 1H16 2H16 1H17 1H16 2H16 1H17 Payout ratio Fully franked dividend Fully franked dividen
Slide 18: 1H17 Overview: Lead and Grow strategy delivering returns
1H17 OVERVIEW LEAD AND GROW STRATEGY DELIVERING RETURNS For personal use only Solid results Revenue, $m NPAT, $m +5% +2% Growth delivered while investing in the business 240.7 253.5 252.4 64.4 67.6 66.0 Business model well positioned for uncertain environment Balance sheet provides opportuni
Slide 19: Appendix
For personal use only APPENDIX
Slide 20: Investments: Global Equities
PERPETUAL INVESTMENTS GLOBAL EQUITIES For personal use only Disciplined execution AUG 2014 GLOBAL SHARE FUND PROGRAM of program People Consultants and Major platform Dealer Group Models and Retail channel and process researchers placements APLs multi channels engagement ON TARGET ON TARGET Strong te
Slide 21: Focus within Multi Asset on Diversified Real Return Fund
PERPETUAL INVESTMENTS FOCUS WITHIN MULTI ASSET ON DIVERSIFIED REAL RETURN FUND For personal use only Significant 2010 DIVERSIFIED REAL RETURN FUND PROGRAM opportunity People Consultants and Major platform Dealer Group Models and Retail channel and process researchers placements APLs multi channels e
Slide 22: Focus within Credit on Pure Credit Alpha Fund
PERPETUAL INVESTMENTS FOCUS WITHIN CREDIT ON PURE CREDIT ALPHA FUND For personal use only Significant 2004 CREDIT STRATEGY opportunity People Consultants and Major platform Boutique Advisor and process researchers placements relationships ON TARGET Strong team Engaged with asset On target with major
Slide 23: Contacts
CONTACTS For personal use only Geoff Lloyd Level 18 Angel Place, 123 Pitt Street Chief Executive Officer & Managing Director SYDNEY NSW 2000 Australia [email protected] +612 9229 9078 Gillian Larkins Chief Financial Officer [email protected] +612 9229 3547 Neil Wesley Gener
Slide 24: Disclaimer
DISCLAIMER For personal use only Important information The information in this presentation is general background information about the Perpetual Group and its activities current as at 23 February 2017. It is in summary form and is not necessarily complete. It should be read together with the compan