Perpetual Limited · ASX:PPT
Perpetual — Citi's 6th Australian Investment Conference 2014
41 slides from Perpetual's conference presentation, Oct 14, 2014
Slide 1: Investor Presentation – Citi's 6th Australian Investment Conference
Investor Presentation Citi’s 6th Australian Investment Conference For personal use only Gillian Larkins Chief Financial Officer Neil Wesley GM Investor Relations & Corporate Finance 14 – 15 October 2014 Sydney ABN 86 000 431 827 ABN 86 000 431 827
Slide 2: FY14 Summary: Strong results, delivering returns
FY14 SUMMARY Strong results, delivering returns For personal use only Strong results across all businesses Simplify and refocus phases of Transformation 2015 (T15) strategy completed Delivering growth organically and with The Trust Company (TrustCo) acquisition Upgraded forecast integration synergie
Slide 3: Perpetual's Vision
PERPETUAL’S 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 128 years • Multi-generational clients • Perpetual
Slide 4: 2014 Full Year Results - Highlights
2014 FULL YEAR RESULTS - HIGHLIGHTS Strong results driven by markets, flows and The Trust Company For personal use only Revenue, $m NPAT, $m UPAT EPS, cps DPS, cps +19% +29% +35% +34% 440.6 81.6 175.0 237.8 369.7 61.0 185.0 130.0 2013 2014 2013 2014 2013 2014 2013 2014 FUM / FUA^, $b Net inflows PI,
Slide 5: 2014 Full Year Results: All businesses delivering growth
2014 FULL YEAR RESULTS All 3 businesses delivering growth For personal use only Perpetual Investments Perpetual Private Perpetual Corporate Trust PBT, $m PBT, $m PBT, $m +30% +135% +40% 113.6 21.6 25.7 87.2 18.3 9.2 2013 2014 2013 2014 2013 2014 9 Positive net flows 9 Delivery strategy on growth 9 S
Slide 6: Perpetual Investments: Strong investment performance
PERPETUAL INVESTMENTS Strong investment performance For personal use only QUARTILE RANKINGS^ FUM^ WEIGHTED % OF FUNDS RANKED periods ending June 2014 1 – 10 YEARS 1Yr 3Yrs 5Yrs 7Yrs 10Yrs Perpetual W Australian 2 1 1 1 1 1 yr 100% Perpetual W Concentrated Equity 2 1 1 1 1 Perpetual W Ethical SRI 2 1
Slide 7: Perpetual Investments: Return to positive net inflows
PERPETUAL INVESTMENTS Return to positive net inflows For personal use only Investment Fund ratings Aligned Distributor Increase APLs Increase models performance sales team connections and multis On On On INCREASING target target target INFLOWS INVESTOR CONFIDENCE Net inflow in equities of $539m Retu
Slide 8: Perpetual Private: Journey towards sustainable growth
PERPETUAL PRIVATE Journey towards sustainable growth For personal use only VISION: AUSTRALIA’S LEADING INDEPENDENT HNW BUSINESS Right Heritage Strategic Scale Distribution Tech uplift service business segment focus benefits excellence model 9 Strong brand 9 One 9 New market 9 Lean cost-to- • TrustCo
Slide 9: Perpetual Private: TrustCo accelerates strategy
PERPETUAL PRIVATE TrustCo accelerates strategy towards sustainable growth For personal use only FUA, $b Delivering on strategy focused on high net worth segments – PBT+135% +40% 12.6 9.0 Benefiting from investment in building a scalable business 2013 2014 Delivering targeted savings, accelerated syn
Slide 10: Perpetual Corporate Trust: Diversified business with leading market position
PERPETUAL CORPORATE TRUST Diversified business with a leading market position For personal use only FUA, $b TrustCo acquisition has diversified and 484.0 strengthened business 177.1 309.2 49.8 Market leader in Trust Services and Fund 259.4 306.9 Services FY13 FY14 Disciplined exit of 5 non-core busi
Slide 11: T15 Strategy – Scorecard
T15 STRATEGY – SCORECARD Delivered “simplify” and “refocus” phases 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 ; Simplified investment footprint (
Slide 12: Transformation 2015: Strong results, strategy delivering returns
TRANSFORMATION 2015 Strong results, strategy delivering returns For personal use only UPAT, $m NPAT, $m UPAT EPS, cps DPS, cps +59% +206% +52% +94% 104.1 81.6 237.8 175.0 75.9 61.0 185.0 130.0 65.4 156.8 90.0 26.7 2012 2013 2014 2012 2013 2014 2012 2013 2014 2012 2013 2014 12
Slide 13: Financials
For personal use only FINANCIALS
Slide 14: Financial Performance – Group
FINANCIAL PERFORMANCE – GROUP Strong results, disciplined execution of strategy For personal use only FY14 2H14 1H14 FY13 FY14 v KEY THEMES: For the period ended $m $m $m $m FY13 • Operating revenue ex Operating revenue 440.6 238.5 202.1 369.7 19% TrustCo +9% on FY13 Total expenses (293.8) (158.8) (
Slide 15: Financial Performance: Improvement across all businesses
FINANCIAL PERFORMANCE Improvement across all businesses For personal use only Perpetual Perpetual Perpetual Investments^ Private^ Corporate Trust^ Group^ 29.8 12.6 484.0 UPAT diluted EPS, cps Closing FUM 25.3 or FUA, $b 9.0 237.8 309.2 185.0 29% 33% FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 0.2 47.5 *
Slide 16: TrustCo contributes to scale and increased tangible returns
FINANCIAL PERFORMANCE TrustCo contributes to scale and increased tangible returns For personal use only 9 TrustCo acquisition total consideration of $278m Cash 278 78 20 TrustCo consideration, $m 64 194 278 59 GT assets held for sale 59 − Following divestments net consideration of $194m Identified E
Slide 17: Acquisition and integration costs
FINANCIAL PERFORMANCE Acquisition and integration costs For personal use only FY14 2H14 1H14 FY13 FY14 v After tax costs, $m $m $m $m $m FY13 14.3 0.8 UPBT 146.8 79.7 67.1 107.4 37% 1.9 10.0 Tax expense (42.7) (23.3) (19.4) (31.5) 36% 0.1 0.0 3.1 UPAT 104.1 56.4 47.7 75.9 37% 6.0 Transformation cost
Slide 18: Financial Performance – Expenses: Cost discipline
FINANCIAL PERFORMANCE – EXPENSES Cost discipline For personal use only Group expenses FY12 – FY14 3.0 293.8 1 285.3 -7.0% 31.4 12.0 +1.2% 265.4 262.3 273.3 18.2 15.1 FY12 FY13 T15 FY14 BAU FY14 TrustCo TrustCo FY14 Expenses Expenses Incremental Increase Expenses ex (7 months) Synergies Expenses Savi
Slide 19: Total T15 annualised savings of $50m pre-tax achieved
FINANCIAL PERFORMANCE – EXPENSES For personal use only 9 Total T15 annualised savings of $50m pre-tax achieved $15.1m booked in FY14 $10.2m remaining in FY15 FY14 business as usual costs increase of $18.2m Full year impact of outsourced provider fees $8.3m per previous 18.2 guidance 0.9 1.7 Amortisa
Slide 20: Financial Performance: Themes FY15 and beyond
FINANCIAL PERFORMANCE Themes: FY15 and beyond For personal use only 1 Full year impact of TrustCo acquisition 2 Indicative pre-tax impact of TrustCo synergies and integration costs^, $m Pre-tax synergies 1H14A 2H14A 1H15G 2H15G 1H16G 2H16G Indicative P&L impact ‐ 3 5 6 8-9 9-10 Annualised period end
Slide 21: Perpetual Investments: Results highlight operating leverage
PERPETUAL INVESTMENTS Results highlight operating leverage to equity markets For personal use only FY14 2H14 1H14 FY13 FY14 v KEY THEMES: $m $m $m $m FY13 Revenue 222.5 113.0 109.5 195.9 14% • FY14 revenues up in line with growth in Operating expenses (97.3) (49.2) (48.1) (97.7) - Average FUM EBITDA
Slide 22: Perpetual Private: Scale drives improved margins
PERPETUAL PRIVATE Scale drives improved margins For personal use only FY14 2H14 1H14 FY13 FY14 v $m $m $m $m FY13 KEY THEMES: Market related revenue 95.6 54.1 41.5 71.2 34% • Perpetual Private business model Non-market related revenue 48.2 27.2 21.0 44.5 8% affirmed Total revenues 143.8 81.3 62.5 11
Slide 23: Perpetual Corporate Trust: Scale player in Trust and Fund services
PERPETUAL CORPORATE TRUST Scale player in Trust and Fund services For personal use only FY14 2H14 1H14 FY13 FY14 v KEY THEMES: $m $m $m $m FY13 Trust services revenue 41.1 21.4 19.7 38.1 8% • Balanced business with two market leading Fund services revenue 26.3 18.8 7.5 11.1 137% offerings Total fidu
Slide 24: Balance sheet remains strong with low gearing
FINANCIAL PERFORMANCE Balance sheet remains strong with low gearing For personal use only At the end of period FY14 FY13 KEY THEMES: Cash & Liquid investments ($m) 327.9 252.5 • Strong balance sheet • Cash reflects net Corporate debt ($m) (87.0) (45.0) proceeds received from Net cash ($m) 240.9 207.
Slide 25: Full year dividend up 35% and fully franked
FINANCIAL PERFORMANCE Full year dividend up 35% and fully franked For personal use only KEY THEMES: FY14 2H14 1H14 FY13 • Continued commitment to return capital efficiently to Fully franked dividends (cps) 175.0 95.0 80.0 130.0 shareholders • Dividend policy is to Dividend payout ratio (%) 99.8 91.6
Slide 26: Growth
For personal use only GROWTH
Slide 27: T15 Strategy – Grow
T15 STRATEGY – GROW Delivered first two phases and third phase on track For personal use only 3 3 • Clarity and focus • Skilled and client • Portfolio momentum • Market share gain • Innovation • Strategic alignment focused team • Distribution excellence • More productive • Leaner team • Partners • A
Slide 28: Strong momentum with growth initiatives
T15 STRATEGY – GROW Strong momentum with growth initiatives For personal use only 9 Growth in FUM/FUA: PI +32%, PP +58%, PCT +41%^ 9 Strong earnings growth: UPAT EPS +52%^^ Existing 9 Maintained strong client advocacy 9 Growth in revenue of Pure Equity Alpha Fund • Portfolio momentum 9 Super Wrap an
Slide 29: T15 Strategy – The Trust Company Scorecard
T15 STRATEGY – THE TRUST COMPANY SCORECARD Synergy benefits upgraded to $18-$20m For personal use only OUTCOMES FY14 PROTECT 1H15 1H15 ALIGN 2H15 ONE COMPANY 2H15 ; Single Executive Team On Track: Reduce central cost On Track: Reduce property footprint ; New organisation structure in (HR, Finance, M
Slide 30: Launch of new Perpetual Global Share Fund
T15 STRATEGY – GROW Launch of new Perpetual Global Share Fund For personal use only Opportunity Rationale Growth in superannuation market, $tr 8.4 9 Strong demand for independent domestic manager 1.9 9 Strong growth in allocation to global equities 9 Leverages our successful equities 2014 2040 proje
Slide 31: Global equities – people, performance and product
T15 STRATEGY – GROW Global equities – people, performance and product For personal use only People ANTHONY ABOUD Performance Equities Analyst MARYANNE DREWE As at 30 June 2014 1 year 2 years 3 years Equities Analyst pa pa PAUL SKAMVOUGERAS ALEX HURRELL Perpetual Global Seed Fund 35.3% 37.7% 22.9% De
Slide 32: Perpetual Equity Investment Company Limited
GROWTH – PERPETUAL EQUITY INVESTMENT COMPANY LIMITED For personal use only LIC prospectus lodged with ASIC; offer closes end of November 2014 Objective: grow income and capital gain in excess of benchmark^ over minimum 5 years Fund: 50-100% in Australian equities, 0-25% in global equities, 0-25% in
Slide 33: Summary
SUMMARY For personal use only Strong balance sheet Scale benefits to come in Perpetual Private and Perpetual Corporate Trust Upgraded forecast integration synergies Positive net inflows - Reinvigorated distribution in Perpetual Investments to capture opportunities Strong client advocacy which will l
Slide 34: Appendix
34 For personal use only APPENDIX
Slide 35: Leadership Team
LEADERSHIP TEAM For personal use only CEO & MANAGING DIRECTOR GEOFF LLOYD GE PEOPLE AND CHIEF FINANCIAL GE CORPORATE GE PERPETUAL GE PERPETUAL CULTURE OFFICER TRUST PRIVATE INVESTMENTS REBECCA NASH GILLIAN LARKINS CHRIS GREEN MARK SMITH MICHAEL GORDON 35
Slide 36: External Market: Well positioned to capture market opportunities
EXTERNAL MARKET Well positioned to capture market opportunities For personal use only Superannuation market exposure Equity market leverage Exposure through: • Ç1% All Ords = Ç$2.3m - $2.8m • PI investments and clients in Perpetual revenue • PP wealth management clients • CT fund services All Ordina
Slide 37: Perpetual Private: Broadest range of advice services
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 38: Corporate Trust: Focused on corporate fiduciary services
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 39: Transformation 2015 has simplified & reduced risk
TRANSFORMATION 2015 HAS SIMPLIFIED & REDUCED RISK For personal use only Perpetual that was Strategic Initiatives 2014 State View on Risk Australian Equities Exited Dublin and partnered Î Investments Clearer accountabilities and Î with Wellington Single Group Executive Perpetual Global Equities (Du
Slide 40: 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 & Corporate Finance Neil Wesley neil.wes
Slide 41: 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 28 August 2014. It is in summary form and is not necessarily complete. It should be read together with the company’
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