Perpetual Limited · ASX:PPT

Perpetual — H1 2012 Earnings Presentation

27 slides from Perpetual's earnings presentation, Feb 23, 2012

1. Slide 1: 1H12 Results for 6 months ended 31 December 2011

   1H12 1H12Results Results DRAFT For personal use only for for66months monthsended ended 31 31December December 2011 2011 Geoff Lloyd Geoff Lloyd Managing Director & CEO Managing Director & CEO Roger Burrows Chief Financial Officer Roger Burrows 23 February 2012 Chief Financial Officer ABNFebruary 23

2. Slide 2: 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 2012. It is in summary form and is not necessarily complete. It should be read together with the Group’

3. Slide 3: Agenda

   Agenda For personal use only ƒ Group highlights Geoff Lloyd Managing Director & CEO ƒ Financials Roger Burrows Chief Financial Officer ƒ Key priorities Geoff Lloyd Managing Director & CEO 2

4. Slide 4: Accelerating delivery across the entire Group

   125 years of experience and performance - disciplined process - talented team For personal use only Managing for new capabilities; down net 98 FTEs, employment costs down 14% in 1H12 Drive existing growth strategy for each business unit Perpetual Perpetual Private Perpetual Investments Wealth Corpor

5. Slide 5: New initiatives – commencing immediately

   New initiatives – commencing immediately For personal use only Formed dedicated internal team to work with newly appointed international consulting firm to identify further cost reduction initiatives – commencing immediately Formal evaluation of all existing IT arrangements commenced. Calling for RF

6. Slide 6: 1H12 Overview

   1H12 Overview ƒ1H12 Statutory NPAT $22.9m (1H11: $35.0m; 2H11: $27.0m) For personal use only − $10.2m restructuring costs − $2.2m loss on market-linked investments − $0.6m gain on disposal of smartsuper ƒ1H12 UPAT $34.7m (1H11: $41.0m; 2H11: $31.9m) − Market-linked revenues adversely impacted by 11%

7. Slide 7: Off-market share buy-back increases return on equity and enhances interim dividend

   Off-market share buy-back in 1H12 increases return on equity and enhances FY12 interim dividend level For personal use only 1H11 2H11 1H12 1H12 v 1H12 v $m $m $m 1H11 2H11 For the period ended Underlying profit after tax (UPAT) 41.0 31.9 34.7 (15%) 9% Significant items (6.0) (4.9) (11.8) Statutory N

8. Slide 8: Perpetual Investments – expense initiatives offset impact of lower investment markets

   Perpetual Investments – expense initiatives offset impact of lower investment markets For personal use only Key themes: ƒ Revenue margins 1H11 2H11 1H12 1H12 v 1H12 v remain strong For the period ended $m $m $m 1H11 2H11 ƒ Appointed Wellington Management as Revenue 112.8 112.2 99.1 (12%) (12%) manag

9. Slide 9: Perpetual Investments delivers superior returns across all asset classes

   Perpetual Investments delivers superior returns across all asset classes For personal use only % Excess/(under) performance p.a. – gross as at end December 2011 Period Industrial Australian Smaller Concentrated Global Diversified Share Ethical International Share Share Companies Equity Resources Inc

10. Slide 10: A diversified portfolio across Australian equities

    A diversified portfolio across Australian equities For personal use only $1.3b $0.8b Industrials $1.7b $5.8b Ordinaries Concentrated Smaller companies Other strategies $5.8b •Australian Equities FUM as at 31 December 2011 was $15.4b (c.70% of total FUM of $22.9b) •Around 30% of FUM sourced from the

11. Slide 11: Private Wealth - well placed for accelerated growth

    Private Wealth - well placed for accelerated growth For personal use only 1H11 2H11 1H12 1H12 v 1H12 v Key themes: $m $m $m 1H11 2H11 For the period ended ƒ Maintained good margin on FUA Market related revenue 39.4 39.7 38.4 (3%) (3%) ƒ Increasing Non-market related revenue 17.5 19.6 18.4 5% (6%) co

12. Slide 12: Corporate Trust - maintaining our leading position

    Corporate Trust - maintaining our leading position Key themes: Trust & Fund Services For personal use only 1H11 2H11 1H12 1H12 v 1H12 v For the period ended $m $m $m 1H11 2H11 ƒ New issuance keeps FUA stable but new Trust and Fund Services 26.9 27.6 24.9 (7%) (10%) business at lower margins due to c

13. Slide 13: Financials

    Update FINANCIALS For personal use only Roger Burrows Chief Financial Officer 12

14. Slide 14: Challenging operating environment, with average All Ords down 11%

    1H12 - Challenging operating environment, with average All Ords down 11% For personal use only All Ords FY10 FY11 1H10 2H10 1H11 2H11 1H12 5,100 4,900 . 4,700 All Ords 4,500 4,300 4,100 3,900 Spot close (@ end of each day) All Ords 1st Half Avg All Ords 2nd Half Avg All Ords FY Avg All Ords 3,700 Ma

15. Slide 15: Funds industry returned to net outflow

    For personal use only 14 $bn (15.0) (10.0) (5.0) 0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Total Market Net Flows Mar-08 Funds industry returned to net outflow Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Source: Plan for Lif

16. Slide 16: Perpetual Investments FUM impacted by net flows and decline in Australian equity market

    Perpetual Investments FUM impacted by net flows and decline in Australian equity market For personal use only 1H11 2H11 Net Other (1) 1H12 At end of $b $b Flows $b $b $b Institutional 8.3 8.7 (1.7) (0.3) 6.7 Intermediary (master fund and wrap) 13.1 12.6 (0.8) (0.7) 11.1 Retail 6.1 5.9 (0.5) (0.3) 5.

17. Slide 17: Private Wealth FUA delivers good revenue margins

    Private Wealth FUA delivers good revenue margins but client sentiment affecting implementation of their financial plans For personal use only 1H11 2H11 Net flows Other (1) 1H12 At end of $b $b $b $b $b Financial advisory: ƒ Superannuation 3.5 3.5 (0.1) (0.1) 3.3 ƒ Non-superannuation 2.3 2.2 - (0.2)

18. Slide 18: Corporate Trust FUA received boost from new covered bonds asset class

    Corporate Trust FUA received boost from new covered bonds asset class For personal use only Non AOFM AOFM Covered Bonds Spread Margin 60 300 Average Revaluation Margin bps 50 250 - 2 Year Senior 40 200 30 150 $b 20 100 10 50 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Calendar ye

19. Slide 19: Continue to make progress on costs

    Continue to make progress on costs For personal use only Key themes: 1H11 2H11 1H12 1H12 v 1H12 v $m $m $m 1H11 2H11 ƒ Revenue down in For the period ended 1H12 due to lower equity markets and Operating revenue 227.1 221.6 202.4 (11%) (9%) FUM outflows Operating expenses (150.6) (154.9) (139.9) 7% 1

20. Slide 20: 14% decline in employment costs is key driver of reduction in expenses

    14% decline in employment costs is key driver of reduction in 1H12 Group expenses For personal use only 1H11 2H11 1H12 1H12 v 1H12 v For the period ended $m $m $m 1H11 2H11 Employment - Operating expenses 108.9 107.6 96.7 11% 10% - Equity remuneration expense 8.4 10.1 4.3 49% 57% Total employment 11

21. Slide 21: FTEs at end of 1H12 down 13% and 7% on 1H11 and 2H11

    FTEs at end of 1H12 down 13% and 7% on 1H11 and 2H11 respectively For personal use only 1H11 2H11 1H12 1H12 v 1H12 v Key themes: At end of FTEs FTEs FTEs 1H11 2H11 ƒ Perpetual Investments reflects Dublin closure, sale of smartsuper and Perpetual Investments 253 238 149 41% 37% Retail Distribution Pr

22. Slide 22: Statutory NPAT includes actions taken to improve future performance

    Statutory NPAT includes actions taken to improve future performance For personal use only 1H11 2H11 1H12 1H12 v 1H12 v Key themes: For the period ended $m $m $m 1H11 2H11 ƒ Restructuring costs include UPBT 59.1 46.3 49.4 (16%) 7% $8.9m for Dublin closure Tax expense (18.1) (14.4) (14.7) 19% (2%) ƒ F

23. Slide 23: Financial strength provides flexibility – continued de-risking of the balance sheet

    Financial strength provides flexibility – continued de-risking of the balance sheet For personal use only 1H11 2H11 1H12 Key themes: At end of $m $m $m ƒ Risk based capital coverage now 1.1x – includes inbuilt Total equity 371.8 376.1 290.0 capital conservation buffer Less: Intangibles (1) (170.6) (

24. Slide 24: Risk based capital coverage ratio reflects decrease in risk assets and share buy-back

    Risk based capital coverage ratio reflects decrease in risk assets and share buy-back For personal use only At end of 1H11 2H11 1H12 $m $m $m Liquid assets 201 242 138 Risk based capital 148 133 124 Coverage ratio 1.36x 1.82x 1.11x Liquid assets = cash + 50% of liquid investments (excluding non-cont

25. Slide 25: FY12 interim dividend fully franked in line with dividend policy

    FY12 interim dividend of 50 cps fully franked in line with dividend policy For personal use only For the period ended 1H10 2H10 1H11 2H11 1H12 Key themes: ƒ FY12 interim dividend UPAT EPS (cps) 85.1 84.1 93.9 71.8 81.5 reflects lower 1H12 Statutory NPAT and no variation to dividend policy UPAT ROE (

26. Slide 26: Key Priorities

    Update KEY PRIORITIES For personal use only Geoff Lloyd Managing Director & CEO 25

27. Slide 27: Not waiting until the market conditions improve to make further progress

    Not waiting until the market conditions improve to make further progress For personal use only Drive existing growth strategy for each business unit Accelerating delivery across the entire Group 2. Further meaningful 1. Refinement of 3. Reinvigoration of cost reductions growth strategy sales and dis

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