Perpetual Limited · ASX:PPT
Perpetual — Perpetual Trustees Australia — H1 2004 Earnings Presentation
31 slides from Perpetual's earnings presentation, Feb 24, 2004
Slide 1: 2003-2004 First Half Results Briefing
Perpetual Trustees Australia Limited 2003-2004 First Half Results Briefing David Deverall — Managing Director 24 February 2004
Slide 2: Agenda
Agenda 1. | Mighlights 2. Financial Analysis 3. 4. Divisional Review Outlook
Slide 3: A strong result
A strong result 1H03. 1H04 Change % Profit after tax $m 43.3 42.4 (2) Operating profit aftertax $m 33.4 41.4 24 Dividend per share (cents) 60 70 17
Slide 4: Continuation of growth in operating profit
Continuation of growth in operating profit Operating profit after tax ($m) dun Oo Dec 00 dun 014 Dec 01 dun 02 Dec 02 dun 03. Dec 03 Half year ended
Slide 5: Continuation of growth of EPS
Continuation of growth of EPS (excluding gains on investments) EPS (cents) 86.8 88.5 68.7 37.3 dun ad Dec 00 dun 07 Dec 01 dun 2 Dee 02 dun 03. Dec 03
Slide 6: All operating divisions up on prior corresponding period
All operating divisions up on prior corresponding period > Wealth Management—— up - Good revenue growth - Strong cost management > Corporate Trust-— up - Very strong revenue growth > APRL— up - Good revenue and EBITDA growth - Positive contribution to PTAL > Investment Sales—— well down
Slide 7: Drivers of strong result
Drivers of strong result > Revenue growth from: - Improvement in equity markets - Healthy net inflows - Strong securitisation volumes > Slight cost reduction despite growth in volumes: - Lower headcount - Lower support services costs - Reduced marketing spend
Slide 8: Agenda
Agenda 4. Highlights 2 | Financial Analysis Divisional Review Outlook > &
Slide 9: Financial highlights
Financial highlights Revenue $m EBITDA $m PBT (excl gains on investments) $m PAT (excl gains on investments) $m PAT $m EPS cents EPS (excl gains on investments) cents 1Ho3 tog. «Change 1305 140.0 7 56.8 669 «18 48.1 588 22 33.4 a4 2A 43.3 424 2) 145 «118 Q) 85 86 1092 B
Slide 10: Balance sheet strength
Balance sheet strength 4H03 aHo4 Change $m Net assets $m 290.5 308.3 178 Investments at cost $m 76.8 68.6 (8.2) (investments at market value $m) 105.7 109.7 4.0 Cash holdings $m 106.2 128.2 22.0 Franking credits $m 56.2 59.9 3.7 Borrowings as a % of equity 16.5 14.6 Cash and investments (mv) per sha
Slide 11: Healthy profitability ratios
Healthy profitability ratios Return on average shareholders equity (percent) Jun 00 Dec 00 dun 04 Dec 01 dun o2 Dec 02 Return calculated using operating profit after tax (excluding gains on investments) Jun 03 Dec 03 Helf year ended 1
Slide 12: EBITDA growth from revenue growth and cost control
EBITDA growth from revenue growth and cost control 1HO3 1H04 Change $m $m % Operating revenue 124.6 135.2 9 Investment income 5.9 48 (19) Total revenue 130.5 140.0 7 Staff related expenses 51.1 50.4 (1) Occupancy expenses 3.3 29 (12) Admin & general expenses 19.3 19.8 3 Total operating expenses 73.7
Slide 13: Cost containment
Cost containment Operating expenses and EBITDA % MME Total Operating Swenses © —P ESITDA (% of revenue) 16 718 737 77 Dec 01 Jun 02 Dee 02 Jun 03 Dec 03 June 03 includes restructuring costs incurred Half year ended 13
Slide 14: Productivity improvements
Productivity improvements Full-time Equivalent Employees Deco dun 2 Dec 02 Jun 03 899 ; . . Dec 03 Half year ended 14
Slide 15: Continued dividend growth
Continued dividend growth Dividends (cents) i Normal Dividends per Share eed Ci Special Dividends per Share 70.0 Jun 00 Dee 00 Junot Dec 01 Jun 02 Dec 02 Jun os Dac 03 Half year ended Note: Special dividend of 50 cents to be paid in 2H04 15
Slide 16: Agenda
Agenda Highlights Financial Analysis 1. 2. 3 | Divisional Review 4. Outlook 16
Slide 17: Improved EBITDA margins
Improved EBITDA margins EBITDA $m EBITDA % 1H03. = 1H04 1H03 9 1H04 Wealth Management 46.7 568 449 50.7 Corporate Trust 10.6 129 51.2 55.6 Unallocated (0.5) = (2.8) nla nla TOTAL 568 66.9 43.5 47.8 17
Slide 18: Wealth Management
Wealth Management Statistics on first half > Revenues up 8% to $112.0m > EBITDA up 22% to $56.8m Perpetual Investments > Revenue up 10% to $79.2m > Outstanding Australian equities performance Personal investor Magazine - Fund Manager of the Year 2003 Personal investor Magazine ~ Australian Shares Fu
Slide 19: FUM up across all channels, particularly in masterfund
FUM up across all channels, particularly in masterfund Total FUM ($b) TOTAL FUM 13.4 15.6 17.6 19.4 17.6 17.4 19.4 Dec 00 Juno Dec 01 Jun 02 Dec 02 Jun 03 De: 03 @ Masterfund O Retail Institutional 19
Slide 20: FUM up across all asset classes
FUM up across all asset classes FUM by Asset Class ($b) TOTAL FUM 13.4 15.6 17.6 19.4 17.6 17.4 19.4 Dec 00 uno Dec Ot wun a2 Dec 02 dun 03 Dec 03 Australian Equity International Equity ai Morigages, Fixed Interest & Cash & Diversified & Property 20
Slide 21: Wealth Management
Wealth Management Personal Financial Services Revenue up 2% to $32.8m Operating expenses down 16% on 1H03 Material contribution to Wealth Management EBITDA FUA of $5.2b as at 31 December 2003 Increased productivity of client service teams VV VV Vv 21
Slide 22: Wealth Management
Wealth Management Post balance date > Merger of Perpetual Investments (excluding asset management) and Personal Financial Services > New division, Wealth Management, headed by Gerard Doherty > Newstructure to provide efficiency and service gains > $5m in annualised cost savings (impact on 2005) - Ef
Slide 23: Corporate Trust
Corporate Trust Statistics on first half > Revenues up 12% to $23.2m > EBITDA up 22% to $12.9m Comments > Strong growth of securitisation volumes >» Newclients won during the half include MacarthurCook, Bank of Ireland, Tower Managed Funds NZ and Rexel > Entered alliance with the Bank of New York 23
Slide 24: Securitisation FUA for Corporate Trust
Securitisation FUA for Corporate Trust Corporate Trust FUA ($b) TOTAL FUA 42.2 46.0 62.3 768 87.1 97.3 P| WT 7A2 53.9 Jun 01 Dec O1 Jun 02 Dec 02 Jun 03 Dec 03 m Securitisation FUA Ci Preliminary funding & security trusteeships (published from Dec02 only) 24
Slide 25: ASX Perpetual Registrars
ASX Perpetual Registrars Statistics on first half > Revenues up 13% to $28.3m > EBITDA up 41% to $8.4m > Positive contribution to PTAL Comments > Strong cashflow generation in competitive market > Compete on service quality >» Growth prospects are encouraging 2
Slide 26: Agenda
Agenda Highlights Financial Analysis 1. 2. 3. Divisional Review 4, Outlook 26
Slide 27: Outlook
Outlook Current market conditions > Wealth management market benefiting from improvement in equity markets > No capacity constraints in Australian equities > Securitisation volumes remain healthy Current year outlook > Will continue to benefit from healthy market conditions > Expect second half to b
Slide 28: The way forward
The way forward 1. Realise potential of our existing businesses > The continued success of our Australian equities business tends to underplay the diversity in our products and businesses There are gaps in our coverage of some asset classes Many opportunities for further growth: New wealth managemen
Slide 29: The way forward
The way forward 2. Expand by drawing upon our core strengths > Strong and diverse set of core strengths on which to build: Management of funds management businesses Relationship management with financial services distributors A trusted brand Leading provider of fiduciary services to individuals and
Slide 30: The way forward
The way forward 2. Expand by drawing upon our core strengths (cont'd) Will seek opportunities to broaden our asset management “footprint” with preference for organic growth Ensure best practice cost and capital management Always looking at ways of managing our cost base while continuing to grow the
Slide 31: The way forward
The way forward 4. Further develop our high performance culture > Aim to be employer of choice for motivated and talented professionals > Comprehensive remuneration review to further encourage staff to contribute to overall success of the group 5. Enhance our risk management framework Appointment of
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