Perpetual Limited · ASX:PPT
Perpetual — H1 2013 Earnings Presentation
24 slides from Perpetual's earnings presentation, Feb 28, 2013
Slide 1: 1H13 Results
1H13 RESULTS 31 DECEMBER 2012 For personal use only Geoff Lloyd CEO & Managing Director Gillian Larkins Chief Financial Officer 28 February 2013 ABN 86 000 431 827
Slide 2: 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 28 February 2013. It is in summary form and is not necessarily complete. It should be read together with the compan
Slide 3: Group Results Summary: Top End of 1H13 Guidance
GROUP RESULTS SUMMARY: TOP END OF 1H13 GUIDANCE For personal use only 1H12 2H12 1H13 1H13 v 1H13 v OBSERVATIONS: For the period ended $m $m $m 1H12 2H12 • Improved UPAT and reduction of significant items resulting in improved NPAT Operating revenue 185.8 178.5 179.4 (3%) 1% • 1H13 Transformation 201
Slide 4: 1H13 Results Overview
1H13 RESULTS OVERVIEW • 1H13 UPAT for continuing operations $35.1m (1H12: $34.3m; 2H12: $31.1m) RESULTS RESULTSTOP TOPEND END • 1H13 NPAT $27.3m (1H12: $22.9m; 2H12: $3.8m) For personal use only OF OFGUIDANCE GUIDANCE • Reported NPAT EPS 67.0cps (1H12: 53.8cps; 2H12: 9.3cps) DIVIDEND DIVIDEND • FY13
Slide 5: Our Vision: Australia's Largest Independent Wealth Manager of Choice
OUR VISION For personal use only AUSTRALIA’S LARGEST INDEPENDENT WEALTH MANAGER OF CHOICE ONE PERPETUAL PERSONAL ADVISORY TO SPECIALISED ASSET REFOCUSED CORPORATE TARGETED HIGH NET MANAGEMENT FIDUCIARY SERVICES WORTH SEGMENTS FOUNDATIONS • Leading long-term investment • Depth of money management tal
Slide 6: Market Conditions Improving
MARKET CONDITIONS IMPROVING ASX ALL ORDINARIES INDEX TOTAL MARKET QUARTERLY FLOWS For personal use only TO SEP 12 (EXCLUDING CASH)2 ASX ALL ORDINARIES INDEX 5,000 Spot close (@ end of each day) All Ords 12,500 1st Half Average All Ords 2nd Half Average All Ords 10,000 4,800 Full Year Average All Ord
Slide 7: Excellent Investment Performance
EXCELLENT INVESTMENT PERFORMANCE For personal use only QUARTILE RANKINGS^ ~90% OF FUM^^ RANKED 1ST AND 2ND QUARTILE 1 Yr 3 Yrs 5 Yrs 7 Yrs 10 Yrs Perpetual W Australian 2 1 1 1 1 1 Yr 91% 9% Perpetual W Concentrated Equity 1 1 1 1 1 Perpetual W Ethical SRI 1 1 1 1 1 3 Yrs 91% 9% Perpetual W Industri
Slide 8: Perpetual Investments Trend in Net FUM Flows Is Improving
PERPETUAL INVESTMENTS TREND IN NET FUM FLOWS IS IMPROVING For personal use only APPLICATIONS & REDEMPTIONS BY CHANNEL 2 KEY THEMES: • Redemptions declining 1 • Institutional flows improving • Improvement in net 0 flows continues $ Billions -1 Mortgages Return of Capital -2 Institutional Retail Inter
Slide 9: Perpetual Private's New Capabilities for 4Q FY13
PERPETUAL PRIVATE’S NEW CAPABILITIES FOR 4Q FY13 For personal use only • For the first time, clients will enjoy a rich and contemporary online CLIENT EXPERIENCE • experience, including sophisticated reporting and self service capabilities IMPROVEMENTS Market-leading platform catering for a diverse
Slide 10: Securitisation Issuance Volumes Improving but Mix Changing
SECURITISATION ISSUANCE VOLUMES IMPROVING BUT MIX CHANGING For personal use only ISSUANCE V AVERAGE REVALUATION MARGIN Covered Bonds ABS CMBS RMBS Spread Margin 65 300 60 55 250 50 45 200 2 year 40 senior average $b 35 revaluation 150 margin 30 (bps) 25 100 20 15 10 50 5 0 0 2006 2007 2008 2009 2010
Slide 11: Transformation 2015 Scorecard
TRANSFORMATION 2015 SCORECARD OUTCOMES 1H13 2H13 FY14 For personal use only Reduce central cost Improve adviser productivity in Reduce property footprint (stage 2) (HR, Finance, Risk, Marketing) Perpetual Private Simplify investment Simplify structure, fewer managers Reduce property foot
Slide 12: Achievements and Focus
ACHIEVEMENTS AND FOCUS 1H13 Key Achievements 2H13 Focus Areas For personal use only Centralisation of all support functions and reduction in management and Improved Perpetual Private adviser productivity with the organisational layers (down ~80 FTE as at February 2013) release of manual administ
Slide 13: Transformation 2015 – Growth
TRANSFORMATION 2015 – GROWTH Focus Outcomes so far For personal use only Sales & distribution: Top quartile gross flows 1H13, net inflows for Jan & Feb 2013 PERPETUAL Improve net flows, focus on Added to model portfolios for CBA and Matrix and approved product distribution targets INVESTMENTS
Slide 14: Financials
FINANCIALS For personal use only GILLIAN LARKINS CHIEF FINANCIAL OFFICER
Slide 15: Benefits of Transformation 2015 Apparent
BENEFITS OF TRANSFORMATION 2015 APPARENT For personal use only 1H12 2H12 1H13 1H13 v 1H13 v KEY THEMES: $m $m $m 1H12 2H12 • Total expenses down 5% and 4% Operating revenue 185.8 178.5 179.4 (3%) 1% on 1H12 and Operating expenses (124.6) (123.6) (119.2) 4% 4% 2H12 respectively • Lower EBITDA (1) 61.
Slide 16: In 1H13, Expenses Reduced by 4%
IN 1H13, EXPENSES REDUCED BY 4% For personal use only GROUP EXPENSES FOR CONTINUING OPERATIONS BEFORE TAX $m KEY THEMES: 150 BAU +4% Transformation -8% • In 1H13, Transformation 2015 delivered 8% in cost reduction 145 vs. 4% increase in BAU • In 1H13, Transformation 2015 140 141.5 delivered saving t
Slide 17: Transformation 2015: 1H13 Annualised Run-Rate Savings Delivered Earlier
TRANSFORMATION 2015: 1H13 ANNUALISED RUN-RATE SAVINGS DELIVERED EARLIER For personal use only PRE-TAX P&L IMPACT KEY THEMES: 25 •KEY THEMES: 1H13 realised benefit of $12.3m equates to annualised run-rate of • 1H13 realised benefit of $12.3m 15 $31m, against $7-10m guidance, equates to annualised run
Slide 18: Perpetual Investments Delivers Strong Margin
PERPETUAL INVESTMENTS DELIVERS STRONG MARGIN For personal use only 1H12 2H12 1H13 1H13 v 1H13 v KEY THEMES: $m $m $m 1H12 2H12 • 1H13 revenues benefit from improved Revenue 99.1 91.4 93.6 (6%) 2% equity markets Operating expenses (55.2) (52.1) (48.4) 12% 7% • Cost discipline continues EBITDA(1) 43.9
Slide 19: Perpetual Private: New Initiatives Lead to Improved 1H13 Flows
PERPETUAL PRIVATE: NEW INITIATIVES LEAD TO IMPROVED 1H13 FLOWS For personal use only 1H12 2H12 1H13 1H13 v 1H13 v KEY THEMES: $m $m $m 1H12 2H12 • Market linked revenue Market related revenue 33.7 33.9 34.5 2% 2% improved 2% on 1H12 and 2H12 Non-market related revenue 23.1 24.0 22.0 (5%) (8%) • Clos
Slide 20: Corporate Trust Simplified & Refocused on Core Fiduciary Services
CORPORATE TRUST SIMPLIFIED & REFOCUSED ON CORE FIDUCIARY SERVICES For personal use only 1H12 2H12 1H13 1H13 v 1H13 v KEY THEMES: $m $m $m 1H12 2H12 • Continues to deliver strong revenue margins Revenue 26.1 25.9 • 1H13 Transformation 25.3 (3%) (2%) 2015 savings of $0.6m Operating expenses (16.6) (16
Slide 21: Improved UPAT & Fewer Significant Items Lead to Stronger NPAT
IMPROVED UPAT & FEWER SIGNIFICANT ITEMS LEAD TO STRONGER NPAT For personal use only 1H12 2H12 1H13 1H13 1H13 KEY THEMES: $m $m $m v v 1H12 2H12 • Lower restructuring UPBT 48.8 42.2 49.0 0% 16% and impairment 4% (25%) costs incurred in Tax expense (14.5) (11.1) (13.9) 1H13 UPAT Continuing operations
Slide 22: Group Balance Sheet Strength Maintained
GROUP BALANCE SHEET STRENGTH MAINTAINED For personal use only 1H12 2H12 1H13 KEY THEMES: At the end of period • Improvement in all key ratios Cash & Liquid investments ($m) 165.4 192.8 218.8 • Cash and liquid investments increased due to improved Total equity ($m) 290.0 280.5 307.2 cash inflows from
Slide 23: FY13 Interim Dividend of Cents Per Share Fully Franked
FY13 INTERIM DIVIDEND OF 50 CENTS PER SHARE FULLY FRANKED: IN LINE WITH DIVIDEND POLICY For personal use only 1H12 2H12 1H13 KEY THEMES: Fully franked dividends (cps) 50.0 40.0 50.0 • Dividend policy is to pay 80-100% of NPAT on an annualised basis Dividend payout ratio (%) 92 442 77 • At end of 1H1
Slide 24: 1H13 Results Overview
1H13 RESULTS OVERVIEW • 1H13 UPAT for continuing operations $35.1m (1H12: $34.3m; 2H12: $31.1m) RESULTS RESULTSTOP TOPEND END • 1H13 NPAT $27.3m (1H12: $22.9m; 2H12: $3.8m) For personal use only OF OFGUIDANCE GUIDANCE • Reported NPAT EPS 67.0cps (1H12: 53.8cps; 2H12: 9.3cps) DIVIDEND DIVIDEND • FY13