Slide 1: ASX Announcement: full year result, building a platform for growth
EQT Holdings Limited 1a UITY ASX Announcement Anistees 31 August 2016 EQT Holdings Limited — full year result, building a platform for growth ¢ Funds under management up 16% to $65 billion e Revenue stable at $83.7 million (1.4% less than FY15) ¢ Operating profit before tax $26.7 million (down 5.1%)
Slide 2: Further information contacts
EQT Holdings Limited 1a EQUITY ASX Announcement nistees Eor further information please contact: Investors and analysts Mick O'Brien Philip Gentry Managing Director Chief Financial Officer +61 3 8623 5202 +61 3 8623 5372 mobrien@eqt.com.au pgentry@eqt.com.au Media Alicia Patterson Senior Manager, Mar
Slide 3: Investor Presentation: Full Year Results to 30 June 2016
For personal use only EQT Holdings Limited (Equity Trustees) Investor Presentation Full Year Results to 30 June 2016 Mick O’Brien, Managing Director Philip Gentry, Chief Financial Officer 31 August 2016
Slide 4: Agenda
Agenda For personal use only Overview Financials Strategy Update and Outlook Q&A 2
Slide 5: Overview
Overview For personal use only Solid underlying result • Underlying organic revenue growth 6% • Operating Profit Before Tax (OPBT) down 5% • FUMAS* up 16% to $65b Result reflects business transition • Exit from non-core activities ̶ Funds distribution / Superannuation administration • Investment in
Slide 6: Equity Trustees strategy: Building for growth
Equity Trustees strategy For personal use only Building for growth • Attractive market opportunities • Clear growth drivers in each business • Equity Trustees aims to be the market leader in chosen parts of the wealth value chain – Corporate Trustee Services (CTS) • Responsible entity services – Tru
Slide 7: Building the platform for growth
Building the platform for growth For personal use only • Equity Trustees undertook a key restructure and other initiatives in FY16 to streamline and reposition the business for growth: – Corporate restructure – new holding company – Repricing of superannuation and outsourcing of superannuation admin
Slide 8: CTS growth highlights
CTS growth highlights For personal use only No. Managers No. Funds New Clients FUS* 100 215 6 $b 95 210 5 4 90 205 3 85 200 2 195 80 1 190 75 FY15 FY16 0 FY15 FY16 FY15 FY16 *FUS: Funds under supervision 6
Slide 9: TWS growth highlights
TWS growth highlights For personal use only Superannuation Private Clients Philanthropy Superannuation new Perpetual business upgrade 8 new Compensation Trusts * 13 Charitable Trust • Focus on EQT core capabilities – Trustee, Custodian, Funds 20% Clients (up from long-term average Management of 3 to
Slide 10: Financials
For personal use only Financials Philip Gentry, Chief Financial Officer
Slide 11: Group financial performance
Group financial performance For personal use only FY16 v FY16 FY15 FY15 $m $m % Key Points Revenue 83.7 84.9 (1.4) • Solid underlying revenue growth offset by exit from Operating Expenses 57.0 56.7 0.5 funds distribution, upgrading of OPBT 26.7 28.2 (5.1) superannuation business and Projects 6.4 4.0
Slide 12: Solid underlying revenue growth
Solid underlying revenue growth For personal use only Revenue $90.0 $m $84.9 $83.7 $80.0 ($2.3) ($1.3) $79.3 ($2.0) $70.0 $60.0 $50.0 FY15 Impact on CTS of Superannuation Impact on TWS - Adjusted Revenue FY16 exiting Funds Upgrade ~ 3 Months average daily ASX Distribution ~ 6 200 down 7% on Months p
Slide 13: Strong growth in funds
Strong growth in funds For personal use only Strong growth in funds under management, administration, advice and supervision TWS FUMAS* CTS FUS** Total EQT FUMAS* 10 70 $b $b 9 60 8 60 $b 7 50 50 6 40 40 5 4 30 30 3 20 20 2 10 10 1 0 0 FY13 FY14 FY15 FY16 0 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 *F
Slide 14: TWS performance
TWS performance For personal use only Organic growth offset by superannuation upgrade and declining equity markets. Summary Profit or Loss TWS FUMAS* FY16 FY15 Change 10 $b $m $m % 9 Mandates Operating 8 58.3 60.0 (2.8) Super revenue 7 6 Operating Wealth 44.1 43.2 2.1 5 Advice expenses 4 3 Trusts &
Slide 15: CTS performance
CTS performance For personal use only Organic growth offsets exit of funds distribution CTS FUS* Summary Profit or Loss 58 $b FY16 FY15 Change 56 $m $m % 54 Operating 24.1 23.7 1.7 52 revenue 50 Operating 12.9 13.5 (4.4) expenses 48 46 44 42 FY15 FY16 *FUS: Funds under supervision 13
Slide 16: Balance sheet strength provides security and flexibility
Balance sheet strength provides security and flexibility For personal use only Consolidated Balance Sheet Summary FY16 FY15 • Low gearing $m $m (Debt to Equity Assets 3.3%) Cash and cash equivalents 48.7 25.0 • Surplus Trade receivables and accrued income 16.8 16.3 borrowing Goodwill and intangible
Slide 17: Strong capital position
Strong capital position For personal use only Equity Trustees has ~$53m regulatory capital in key licenced entities and can comfortably meet its expected regulatory capital needs EQT Holdings Limited ($20m debt facility, $8m drawn) Regulatory capital ~$53m Equity Trustees ~$43m AFSL NTA holding* Req
Slide 18: Capital management opportunities
Capital management opportunities For personal use only • Capital requirement of ~$43m to be held 50% in cash and 100% liquid assets (ASIC requirement) – Buffer also held in liquid assets • Additional streamlining of structures and consolidation of licences has the potential to reduce capital require
Slide 19: High cash flow conversion
High cash flow conversion For personal use only FY16 Cash Flow Bridge $70 $8.0 $1.3 $m +$4.72$15.6 $60 $50 $ $12.0 ($13.2) $48.7 $40 $30 $20 $25.0 $10 $0 Opening Cash Net cashflow from Proceeds from sale Proceeds from Other Investing Payment of Closing Cash Balance 30 Jun 15 operations on investment
Slide 20: Key initiatives on track
Key initiatives on track For personal use only • Corporate Restructure and Superannuation Upgrade complete • Business Assurance Project on track to complete by December 2016 1HFY17 Project ($m) Actual FY16 Forecast Total Corporate restructure 0.9 - 0.9 Superannuation upgrade 2.6 - 2.6 Business assur
Slide 21: Group wide operating model review on track
Group wide operating model review on track For personal use only Objective • Optimise combination of roles, skills, structures, processes, and technologies to deliver maximum value in client outcomes, efficiency and shareholder returns Scope • All end-to-end operational processes and activities that
Slide 22: Summary
Summary For personal use only • Current one-off key initiatives largely completed ‒ Strengthening corporate structure, risk management framework and upgrading superannuation business • Strong organic growth momentum • Expect organic growth to offset impact of funds distribution exit and superannuati
Slide 23: Strategy update and outlook
For personal use only Strategy update and outlook Mick O’Brien, Managing Director
Slide 24: Equity Trustees strategy: Building for growth
Equity Trustees strategy For personal use only Building for growth Equity Trustees aims to be the market leader in key parts of the wealth value chain • Wealth protection: Acting as responsible entity, superannuation trustee, executor and services in funds management and custody • Wealth transition:
Slide 25: An attractive and growing opportunity
An attractive and growing opportunity For personal use only Increasing shift towards wealth protection and transfer driven by • Demographic changes due to ageing population “~500,000 currently over age 85 - will double in 20 years…3.5% CAGR”1 • Unprecedented wealth of Australians “Inter-generational
Slide 26: TWS growth focus
TWS growth focus For personal use only • Grow our long-term, enduring revenue base through targeted initiatives – Build and capitalise on high value Will Bank • 30,000 Wills with an estimated $20b plus assets • Target top 1 or 2 position in selected growth markets, including: ‒ Living donors for our
Slide 27: Philanthropic services business model
Philanthropic services business model For personal use only Understanding clients’ philanthropic goals and needs Charitable ancillary funds Perpetual charitable trust – private or public (testamentary) (active philanthropy) STRATEGIES Investment Philanthropy Money prudently invested Varied objective
Slide 28: Philanthropy grants and process
Philanthropy grants and process For personal use only Process 26
Slide 29: TWS – upgraded superannuation business
TWS – upgraded superannuation business For personal use only Improved member outcome Where we add value - Superannuation Created scale Now more Leveraged the through the trustee services competitive and administration integration of two positioned for - Custody skills of KPMG funds to $2bn growth -
Slide 30: Superannuation growth initiatives
Superannuation growth initiatives For personal use only Key drivers for growth in FY17 Superannuation • Seek greater market share in existing $10b+ Trustee for Partner market Trustee Services • Preferred supplier of Superannuation trustee services • Leverage our trusted brand and strong balance shee
Slide 31: TWS has strong, enduring revenue streams
TWS has strong, enduring revenue streams supported by high client retention For personal use only Revenue type Enduring Maintainable Fixed-fee Revenue term1 10 years to everlasting 10+ years Transactional % TWS 65% 32% 3% revenue Comments • Philanthropic trusts, • Wealth • Estate planning PUFs and P
Slide 32: CTS continues to have substantial growth opportunities
CTS continues to have substantial growth opportunities For personal use only Growth opportunity Strategy Attribution Managed Investment Trust (AMIT) Collective Investment New product Vehicle (CIV): prioritise additional fund structuring opportunities in designs the Australian market for existing cli
Slide 33: CTS growth initiatives
CTS growth initiatives For personal use only • Expanding into growth markets – Bespoke and structured corporate trustee services – Responsible Entity in Asia • Significant opportunities with fund structures (AMIT/CIV) • Early wins in FY17 – 7 new managers, 18 new funds • Targeting to more than doubl
Slide 34: Equity Trustees – focus on six key drivers
Equity Trustees – focus on six key drivers For personal use only Increase total FUMAS* Growing sales value Enhancing operating margin EPS growth and ROE Improve customer satisfaction Lifting employee engagement Deepening community impact *FUMAS: Funds under management, administration, advice and sup
Slide 35: Conclusion and outlook
Conclusion and outlook For personal use only 1. Attractive industry fundamentals 2. Good growth in organic revenue – encouraging start to FY17 3. Capitalising on recent investments • One-off Corporate Restructure • Superannuation Upgrade • Risk and Assurance Upgrade project on track 4. Leader in cho
Slide 36: Questions
For personal use only Questions
Slide 37: Disclaimer
Disclaimer For personal use only EQT Holdings Limited ABN 22 607 797 615. This document was prepared by EQT Holdings Limited and is only provided for information purposes. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on thi
Slide 38: Appendix
For personal use only Appendix
Slide 39: Estate planning and philanthropic services drive enduring revenues
Estate planning and philanthropic services drive enduring revenues For personal use only Solicitors Services • Executor External • Trustee Client • Asset Management Compensation Trusts Estate Management Asset Management Independent Testamentary Estate Planning Advisers Trusts Indigenous Will Bank Ex