Hub24 Limited · ASX:HUB
Hub24 — Investor Day (November 2024)
63 slides from Hub24's investor day presentation, Nov 28, 2024
Slide 1: HUB24 Investor Strategy Day ASX Release
ASX Release: 28 November 2024 HUB24 Investor Strategy Day HUB24 Limited (ASX: HUB) is holding its Investor Strategy Day today at 10.00am (AEDT) where the Group Executive team will provide an update on our strategy. A copy of the presentation is attached. The presentation will be streamed live and ca
Slide 2: Investor Strategy Day
For personal use only Investor Strategy Day 28 November 2024 Empowering better financial futures, together
Slide 3: Welcome
For personal use only Welcome Andrew Alcock Managing Director & Chief Executive Officer 2
Slide 4: Leading the wealth industry as the best provider of integrated solutions
Leading the wealth industry as the best provider of integrated platform, technology & data solutions For personal use only Australia’s #1 for annual platform and #2 net inflows across all #1 managed accounts best platform1 retail superannuation net super funds from member capability1 inflows2,3 swit
Slide 5: HUB24 gaining market share
HUB24 gaining market share For personal use only HUB24 ranked #7 with $84b of FUA at June 2024 HUB24 increased market share from 4.3% to 7.7% over last 3 years 1 Top 10 platforms by FUA as at June 20241 3-year change in market share of top 10 platforms1 $250b 6.0% % refers to market share Losing mar
Slide 6: Tech Solutions & myprosperity – delivering consistent growth
Tech Solutions & myprosperity – delivering consistent growth ~75k 497 For personal use only households wealth practices Class accounts Companies on CM +12k households in FY24 +57 practices in FY24 210,000 850,000 205,000 800,000 Increased engagement and usage 750,000 as value proposition resonates w
Slide 7: HUB24 uniquely positioned to capture opportunity from transformation
HUB24 is uniquely positioned to capture HUB24 position significant opportunity arising from new wave of For personal use only transformation Market-leading platform and managed accounts capability Industry continues to transform, driving need for innovative wealth solutions Strong relationships in k
Slide 8: Leveraging our combined capabilities to lead industry change
Leveraging our Be the best provider of integrated platform, To enhance productivity for financial combined capabilities technology and data solutions professionals to lead industry change For personal use only • One way of doing business with access to market-leading solutions • Single view of wealt
Slide 9: Growing market leadership while transforming the industry
Growing market leadership while transforming the industry and enhancing shareholder value For personal use only Strong growth outlook in Create additional shareholder existing established businesses value through tech solutions HUB24 Platform Class & NowInfinity Technology & data solutions Market le
Slide 10: Agenda
01 Group Strategy Break Jason Entwistle 10 minutes Director, Strategic Development For personal use only 05 Class & NowInfinity 02 Innovation & Technology Paul Biggs Tim Steele Chief Product and Technology Officer Class Chief Executive Officer Agenda 03 Platform 06 CFO Update Jason Entwistle Kitrina
Slide 11: Group Strategy
01 For personal use only Group Strategy Jason Entwistle Director, Strategic Development 10
Slide 12: Technology can deliver productivity and sustainable market leadership
Technology can deliver productivity and create sustainable market leadership and growth For personal use only Industry reconstructing More demand for advice Lack of integrated around advice than the industry can deliver technology • Licensee model is evolving with • 2.3m individuals thinking of seek
Slide 13: The HUB24 digital ecosystem is deepening customer relationships
Secure Information Practice The HUB24 Document Signing Sharing Management CRM Digital ecosystem is Consent Document Audit Actuarial For personal use only deepening Live Portfolio Vault Advice Tech Reporting customer Advice Work Portals relationships Client Applications Papers Accounting Portals expe
Slide 14: The addressable market is bigger than just the Platform market
The addressable market is bigger than just the "Platform market" For personal use only Household financial assets (excluding housing, net of debt) HUB24 is uniquely positioned to provide $7.6tr1 market-leading, integrated solutions to Non-super financial assets (incl. off-platform assets / non-custo
Slide 15: Key drivers for a client portal
Key drivers for a client portal For personal use only Client engagement 53% 74% of financial customers say they of businesses still email would switch providers for sensitive client documents direct better digital experiences1 to clients (such as SOAs)3 Security Efficiency The use of digital signatu
Slide 16: myprosperity transforming client engagement & experience
myprosperity transforming client engagement & experience Bringing more solutions to For personal use only existing clients to drive further revenue growth One platform, two interfaces: • Client services • Partner services Single access point for HUB24 Group solutions for clients of over 4,700 advise
Slide 17: Clear strategy for growth
Clear strategy for growth For personal use only HUB24 ecosystem Delivering innovative Transforming client Well positioned driving competitive solutions that help engagement and to benefit from advantage and solve productivity experience industry trends enabling industry challenges for financial tran
Slide 18: Innovation & Technology
02 For personal use only Innovation & Technology Paul Biggs Chief Product & Technology Officer 17
Slide 19: Innovation that delivers: opening up new growth opportunities
Innovation that delivers: For personal use only opening up Innovation Lab Delivering new growth Started early 2018 Client solutions opportunities Innovative and best-in-class solutions Innovative technologies Research and trial ideas/technologies Productivity Supporting scale and efficiency Ideas fo
Slide 20: Innovation delivering client solutions and efficiency
Innovation delivering client solutions and efficiency For personal use only Client solutions Productivity Data security Delivering best-in-class Leveraging innovative Managing cyber risk to innovative solutions and technologies to drive efficiency safeguard customer and experiences for customers and
Slide 21: HUBconnect gives us access to quality data
HUBconnect One data store, Powering a range of services many applications & solutions and providing gives us access to quality data For personal use only competitive advantage Single view of data driving long term growth Broker Key Risk Indicators Delivering efficiencies and scalable industry soluti
Slide 22: Client solutions: HUBconnect for licensees
Client solutions: HUBconnect for licensees Delivering licensee efficiencies and scalable industry solutions For personal use only HUB24’s unique capability: providing access to quality data Documents and Data from: Planning software Flexibility Revenue Management Document Data Combine and visibility
Slide 23: Client solutions: Engage
Client solutions: Engage Leveraging HUBconnect for For personal use only market-leading reporting Present Delivering adviser efficiency, Tools to craft, customise and present content that will engage clients advocacy and client experience Publish A team workspace to efficiently publish content to mu
Slide 24: Productivity: Engineering enablement
Productivity: Engineering enablement AI powered automated testing For personal use only Improving engineering New capability accelerating productivity our testing processes… • Reduced testing time • Faster time to market Natural language • Improved speed and quality test case descriptions • More eff
Slide 25: Data security: Continuing to evolve our cyber capabilities
Data security: Continuing to evolve our cyber capabilities Strategic priorities • Identity & vulnerability management For personal use only • AI governance, data retention & privacy • Zero-Trust Best practice cyber Policy & governance enhancements framework Recover Identify • Responsible use AI gove
Slide 26: Continuing to invest in innovative technology
We are continuing to invest in innovative technology to leverage and sustain our competitive position For personal use only Delivering best-in-class Leveraging technology Unlocking the Managing cyber risk innovative solutions to drive operational power of data with to safeguard our and experiences f
Slide 27: Platform
03 For personal use only Platform Jason Entwistle Director, Strategic Development 26
Slide 28: Opportunity bigger than the Platform market
Opportunity bigger than the "Platform market" For personal use only Platform solutions for Clients seeking SMSF trustees to easily personalised solutions manage their investments Industry & SMSF market public sector (~$1.0tr)¹ funds (~$2.1tr)¹ Platform market ~$1.1tr2 Non-custody / Institutional Off
Slide 29: Industry transformation delivering opportunities for growth
Industry transformation delivering opportunities for growth Growing adviser base using HUB24 coupled with For personal use only HUB24 has strong relationships with privately owned advisory groups increased penetration (growth in FUA per adviser) Share of advisers in the market by ownership of licens
Slide 30: Significant growth opportunity from existing & new advisers
Significant growth opportunity from both existing & new advisers For personal use only Net inflows from new and existing advisers Latent opportunity Composition of net inflows by tenure of adviser relationship HUB24 has access through relationships to HUB24 FUA per adviser more than 76% of the total
Slide 31: Platform for the client's lifecycle
Platform for the client’s lifecycle: Suite of offerings deepening relationships Average account size by menu1 For personal use only <1% ~15% ~85% of of FUA of FUA FUA $600k $500k $400k Wholesale Discretionary Accounts $300k Customer balance and complexity Portfolio Admin & Reporting Service $200k $1
Slide 32: Extending market leadership by enhancing customer proposition
Extending our market leadership by enhancing customer proposition For personal use only HUB24 Discover HUB24 SMSF Access Non-custody capability Alternative asset classes growing strongly enhancements expanding becoming more accessible through HUB24 • Menu within HUB24 • Simplified application and •
Slide 33: Strategic investment in Reach Alternative Investments
Strategic investment in Reach Alternative Investments Expands range of alternative solutions available through HUB24 For personal use only Live: Reach funds now available on HUB24 Alternative Asset Administration provider custody platform & Financial advisers non-custodial service allocate on averag
Slide 34: Discover: Strong initial uptake with significant growth runway
Discover: Strong initial uptake with significant growth runway For personal use only HUB24 Discover menu Strong growth since launch • Low cost streamlined menu consisting of a select range of managed portfolios • Launched November 2023 FUA of ~$260m as at September 2024 • Designed for advised client
Slide 35: Market leading platform driving customer value and growth
Market leading platform driving customer value and growth For personal use only Strong inflows with Continued Leveraging HUB24’s Competitive significant opportunity enhancements to ecosystem to deliver advantage driving to continue growing HUB24 Platform new solutions to long-term growth market shar
Slide 36: Operational Excellence
04 For personal use only Operational Excellence Craig Lawrenson Chief Operating Officer 35
Slide 37: HUB24 has significant scale
HUB24 has significant scale For personal use only Total FUA¹ Transactions² Interactions² $113b >$50b 765k Platform FUA $92b Gross inflows $26b Calls 98k PARS FUA $21b Gross outflows $10b Chats 47k Managed Direct equity Account FUM $37b trades >$14b Tasks 620k 1. As at 30 September 2024 2. FY24 36
Slide 38: Scaling safely while delivering service excellence
Scaling safely while delivering service excellence For personal use only HUB24 has more than doubled …so too have our operational …but we have scaled safely over the last 3 years… volumes… with customer satisfaction remaining at strong levels Platform FUA Gross inflows Service interactions +104% +11
Slide 39: Innovation and technology supporting better client solutions
Innovation and technology supporting better client solutions and efficiency For personal use only Client Solutions Productivity Delivering best-in-class innovative Leveraging innovative technologies to solutions and experiences for customers drive efficiency and operational scale Examples: Examples:
Slide 40: Client solutions: Advice fee consent tool
Client solutions: Advice fee consent tool Driving increased efficiency for clients and HUB24 For personal use only Challenge - Inefficient fee consent process: • >100,000 fee consents p.a. across HUB24 client base • Lack of integration with advice CRM tools Streamlined advice Innovative solution - A
Slide 41: Productivity: Supporting more efficient superannuation operations
Productivity: Supporting more efficient superannuation operations For personal use only Significant growth in superannuation flows: Significant automation leading to $11.5b efficiency benefits of superannuation inward roll overs in FY24 Superannuation Inward Rollovers #2 94% for net inflows across a
Slide 42: Productivity: Virtual Mail Room
Productivity: Virtual Mail Room Revolutionising document management: For personal use only Leveraging machine learning removes human interaction with mail received Document storage Data and Driving improved Significant Document productivity document volumes of mail access connector across operations
Slide 43: Productivity: AI augmenting proactive servicing
Productivity: AI augmenting proactive servicing For personal use only Client service outcomes driven through multiple channels Reduce average transaction handling 98K¹ 47K¹ 620K¹ time supporting more efficient operations Building capability leveraging LLM & AI to better serve clients Better customer
Slide 44: Leveraging technology to drive customer advocacy and efficiency
Leveraging technology to drive customer advocacy and efficiency For personal use only Delivering leading Scaling safely while Leveraging Further opportunities customer satisfaction delivering service technology to reduce to leverage our levels through excellence cost to serve and investment in innov
Slide 45: Break
For personal use only Break 10 minutes 44
Slide 46: Class & NowInfinity
05 For personal use only Class & NowInfinity Tim Steele Class CEO 45
Slide 47: Market leading software solutions for accountants
Market leading software solutions for accountants with significant market share and growing above system For personal use only Class: A leading SMSF software provider NowInfinity: Fast growing corporate compliance solution Premium offer 209k 31% share of Growing Used by 1 in 4 809k entities 23% mark
Slide 48: SMSFs are a significant and growing segment
SMSFs are a significant and growing segment within superannuation market For personal use only Australians establishing SMSFs earlier and with SMSF industry delivering consistent growth with establishments higher balances accelerating in FY24 Key insights from the Class 2024 Number of SMSFs1 SMSF Es
Slide 49: Multi-year program of product enhancements commenced
Multi-year program of product enhancements commenced to support accountant productivity and value proposition For personal use only Direct feeds Directly sourced document feeds from share registries from major financial institutions Automated retrieval Automated retrieval of and reconciliation of do
Slide 50: Class delivering consistent growth & leveraging Group footprint
Class delivering consistent growth & leveraging Group footprint For personal use only Class revenue growth underpinned by new and Leveraging HUB24 Group’s large & existing solutions diverse footprint2 Volume Growing New growth ARPU1 solutions and partnerships >1,600 >200,000 >5,600 >800,000 • Expose
Slide 51: Leveraging Group capability to launch new solutions
Leveraging Group capability to launch new solutions to deliver value to clients and create new revenue streams For personal use only Virtual Mail Room New Class client portal Leveraging capability Comprehensive & Pilot with select Leveraging Safe, efficient and Pilot with select group developed in H
Slide 52: Next generation of solutions leveraging Group capability
Next generation of solutions leveraging Group capability and footprint For personal use only Enhanced client portal solutions leveraging Group Leveraging Group capability capability being rolled out from 2HFY25 onwards • Enhances whole of wealth view myprosperity • Secure communication Deepen Broade
Slide 53: Class is innovating and extending products
Class is innovating and extending products to differentiate and grow market share For personal use only Creating the future of Product Collaborating with Leveraging Group wealth accounting enhancements clients, partners and capability and footprint administration through supporting accountant HUB24
Slide 54: CFO Update
06 For personal use only CFO Update Kitrina Shanahan Chief Financial Officer 53
Slide 55: Delivering sustainable and scalable growth
Delivering sustainable $100b $80b and scalable growth $60b Platform For personal use only $40b Custody FUA 4-YR CAGR $20b +49% $0b Delivering sustainable growth FY20 FY21 FY22 FY23 FY24 • Strong FUA growth translating into revenue growth $350m • High level of recurring revenues across a diverse cust
Slide 56: Strong start to FY25 with pipeline of opportunities
Strong start to FY25 with pipeline of opportunities For personal use only Record quarter of net inflows Large migrations FY26 FUA target excluding large migrations in Q1 FY25 • Q1 FY25 Platform FUA $91.6b • $1.5b of EQT FUA migrated in early • FY26 Platform FUA target of $115-123b October 2024 (excl
Slide 57: Strong balance sheet with capital flexibility
Strong balance sheet with capital flexibility Capital management considerations For personal use only Strong operating cashflows Dividends (cps) | 4-YR CAGR +53% • 92% correlation between UEBITDA and operating cashflows in FY241 Underlying Diluted EPS (cps) | 4-YR CAGR +52% Target dividend payout ra
Slide 58: Update on depreciation & amortisation
Update on depreciation & amortisation For personal use only Underlying D&A expected to be $19-21m Acquisition related amortisation in FY25 (up from $14m in FY24) expected to be $26m in FY25 • Amortisation tracking towards capex levels • Excluded from Underlying NPAT • Increase in amortisation also r
Slide 59: Wrap Up & Q&A
07 For personal use only Wrap Up & Q&A Andrew Alcock Managing Director & Chief Executive Officer 58
Slide 60: Positioned to capitalise on significant growth opportunity
Positioned to capitalise on significant growth opportunity creating long term value for customers and shareholders For personal use only Operate in large HUB24 Platform Leveraging group Scalable operations structurally growing positioned to capability and footprint and growth enabling markets with s
Slide 61: Questions?
For personal use only Questions? 60
Slide 62: Disclaimer
Disclaimer SUMMARY INFORMATION RISK OF INVESTMENT For personal use only The material herein is a presentation of general background information about An investment in HUB shares is subject to investment and other known and HUB24 Limited’s (‘HUB’) activities current as at date of presentation. This u
Slide 63: Contacts
Contacts About HUB24 For personal use only James Cordukes HUB24 Limited is listed on the Australian Securities Exchange, and includes the award-winning HUB24 Platform, HUBconnect, Class and myprosperity. Head of Investor Relations james.cordukes@hub24.com.au The HUB24 platform offers advisers and th