Hub24 Limited · ASX:HUB
Hub24 — H1 FY2024 Earnings Presentation
33 slides from Hub24's earnings presentation, Feb 20, 2024
Slide 1: FY24 Half Year Results
FY24 Half Year Results 20 February 2024 Empowering better financial futures, together
Slide 2: HUB24 - Australia's Best Platform and Managed Accounts
HUB24 - Australia’s Best Platform and Managed Accounts1 #1 #1 Best Platform Best Platform Overall Managed 2 years running Accounts Functionality Best in Reporting Best in Online Business Management Best Mobile Platform 1. Awards listed above refer to Investment Trends Platform Competitive Analysis a
Slide 3: Financial highlights 1HFY24
Financial highlights 1HFY241 Revenue Underlying EBITDA² Statutory NPAT $21.5m Up 39% Total Group $156.7m 14% $55.0m 10% Platform $120.0m 17% $47.9m 16% Underlying NPAT2 $30.4m Up 14% $34.8m $10.1m Tech Solutions 4% (4%) Interim Dividend 18.5cps Up 32% Fully franked Total FUA Platform FUA PARS FUA5 $
Slide 4: Consistently delivering growth and results
Consistently delivering growth and results Funds under administration Group Revenue 4-YR CAGR +31% 4-YR CAGR +54% Group UEBITDA 4-YR CAGR +48% $100b Revenue UEBITDA $90b $160m $60m $80b $140m $50m $70b $120m $60b $40m $100m $50b $80m $30m $40b $60m $30b $20m $20b $40m $10m $10b $20m $0b $0m $0m 1HFY
Slide 5: Continued market leadership, growth & enhancing our customer proposition
Continued market leadership, growth & enhancing our customer proposition Strong FUA growth and record 1HFY24 net inflows of $7.2 billion, including #1 $1.8 billion from Insignia Financial large migration platform net HUB24 Discover launched, providing cost-effective managed portfolio platform inflow
Slide 6: HUB24 Platform market share gains
HUB24 Platform market share gains HUB24 market share increased from ~1% to ~7% over last 5 years1 HUB24 ranked #1 for organic market share gains over 1 and 3 years2 HUB24 custody FUA and market share1 Top 3 platforms by organic market share gains over 1, 3, 5 years2 $80b 8.0% HUB24 total market shar
Slide 7: Growing adviser base supporting net inflows
Growing adviser base supporting net inflows Advisers 5-YR CAGR +24% HUB24 ranked #1 for 12-month organic net inflows2 28% of advisers use HUB24 (5% in 1HFY19)1 Advisers using HUB24 and FUA per adviser1 Top 3 platforms by aggregate organic net inflows over 1, 3, 5 years2 5,000 28% of advisers $25m us
Slide 8: Significant growth opportunity from existing and new advisers
Significant growth opportunity from existing and new advisers Net inflows from new and existing advisers Latent opportunity Composition of net inflows by tenure of adviser relationship HUB24 has access through relationships to FUA per adviser at more than 76% of the total adviser market1 1HFY24 was
Slide 9: Extending our managed portfolio leadership
Extending our managed portfolio leadership Leveraging our unique capability Growing demand and adoption of Extending our managed portfolio to extend market-leadership managed accounts leadership position $32.7 billion in managed portfolio FUA • Leading Tax optimisation capability 18% market share2 N
Slide 10: myprosperity – building pipeline of opportunity
myprosperity – building pipeline of opportunity Leading, secure client portal technology enabling collaboration between financial professionals, enhancing productivity and customer experience ~72k households1 Strong interest from licensees, advisers and accountants with opportunity to up ~12K since
Slide 11: Class and NowInfinity – consistent growth and supporting our strategy
Class and NowInfinity – consistent growth and supporting our strategy Diversified customer base of 6,000+ Continued growth in accounts providing recurring revenue and opportunities to expand footprint across the Group Class accounts Companies on CM 210,000 750,000 205,000 700,000 Platform Custody FU
Slide 12: Our industry recognition
Our industry recognition • Overall Best Advice Platform3 #1 Best Platform • Best Client Experience3 Overall1 • Ease of Onboarding3 2 years running • Best Functionality3 #1 Best Platform • Best Adviser Support3 SMSF Software provider of the year5 Managed Accounts • Best Investment Options3 Functional
Slide 13: Financial results
Financial results Kitrina Shanahan Chief Financial Officer
Slide 14: Group snapshot as at December 2023
Group snapshot as at 31 December 2023¹ Group¹,² Platform¹ Tech Solutions¹ Technology Solutions Corporate Other3 HUBconnect Other 4% 1% 2% Document Sales 4% 4% 22% 10% Revenue Revenue Revenue $120.0m $34.8m $156.7m Underlying EBITDA Underlying EBITDA Underlying EBITDA $47.9m $10.1m $55.0m Customer ba
Slide 15: Group financial results
Group financial results Operating Revenue ($m) +14% 156.7 137.7 1.4 0.3 1HFY24 1HFY23 Change 17.3 $m $m % 156.7 137.7 Operating Revenue 156.7 137.7 14% Operating Expenses (101.7) (87.8) 16% 1HFY23 Platform Tech Solutions Corporate 1HFY24 Underlying EBITDA1 55.0 49.9 10% Underlying EBITDA ($m) Underl
Slide 16: Platform financial results
Platform financial results Strong UEBITDA growth driven by continued Funds Under Administration ($bn) net inflows and FUA growth Stable UEBITDA margins with the benefits of scale offsetting the impacts of a lower ADI $3.0 7.2 deposit spread from December 20221 2.5 1.2 91.2 80.3 7.2 18.8 3.0 0.4 1HFY
Slide 17: Platform financial trends
Platform financial trends Platform segment delivering continued UEBITDA growth $7.2bn1 of net inflows and $2.5bn positive market Revenue and Expenses ($m) Revenue Expenses UEBITDA margin movements during UEBITDA Margin (%) $m 1HFY24 driving continued 150 42 41 FUA and revenue growth 40 in the platfo
Slide 18: Platform custody revenue and revenue margin
Platform custody revenue and revenue margin Platform FuA and Custody Revenue ($m)1 FUA ($m) Revenue ($m) 80,000 120,000 100,000 FuA growth of 30% YoY with approximately two thirds of the 60,000 growth driven by net inflows and one third driven by markets 80,000 40,000 60,000 Platform revenue margins
Slide 19: Composition of platform revenue
Composition of platform revenue Portfolio composition of custody FUA and revenue ($m) 3% 6% 6%1% 15% 5% 6% 1% 15% Composition of FuA by channel was stable in 1HFY24 1% compared to 1HFY23 • Retail clients represent 85% of Platform FUA (85% 85% 85% 93% 95% 1HFY23) and 95% of revenue (93% 1HFY23) 1HFY2
Slide 20: Tech Solutions financial results
Tech Solutions financial results Class accounts and revenue growth of 3-4%, Underlying EBITDA ($m) offset by strategic investment, lower employee vacancy rates and salary inflation UEBITDA Margin 31.4% 33.1% 29.1% Strategic investment in data infrastructure $3.0 supporting the integration of group c
Slide 21: Group expenses and margins
Group expenses and margins Group Expenses ($m) +12% 128.1 +17% 12.6 Investing to support scale and drive future growth 114.5 1.6 115.5 1.3 4.2 Group expenses before notable items increased 17% YoY (15.8) driven by the investment in headcount, inflation and salary 10.1 increases and the acquisition o
Slide 22: Increasing profitability
Increasing profitability Statutory NPAT up 39% and Underlying NPAT up 14% $4.6m of strategic transaction and Higher non-cash expenses YoY with Underlying effective tax rate of ~26% project costs in relation to Xplore share-based payments higher and benefiting from movements in integration and large
Slide 23: Strong financial performance and capital management
Strong financial performance and capital management Underlying Diluted EPS (cps) Dividends (cps) • Interim dividend of 18.5 cps up 4-YR CAGR +43% 4-YR CAGR +52% 32% YoY cps cps • Strong balance sheet with 40 20 $61m net cash 35 • HUB24 bought back ~300k 30 15 shares in 1HFY24 for $10m 25 • Expect to
Slide 24: Strategy & Outlook
Strategy & Outlook Andrew Alcock Managing Director
Slide 25: Significant demand for professional advice and wealth solutions
Significant demand for professional advice and wealth solutions Advice industry rebuilding Emergence of advice networks and opportunity to create large, professional advice and multidisciplinary businesses Greater demand for financial professionals 15,6341 10,0002 29% of unadvised Australians seekin
Slide 26: Customer balance and complexity
Shifts in population and workforce driving wealth needs across the lifecycle Customer balance and complexity Rise of the Millennials Aging Population • Digital first • Desire for certainty • SMSF preference • Longevity risks Generational Wealth • ESG focus • Govt agenda Transfer • Inheritance & Tax
Slide 27: Meeting demand with market-leading, unique capabilities
Meeting demand with market- Secure leading, unique Information Practice Management Document Sharing Single view of capabilities Signing CRM Digital Audit wealth for financial Consent Actuarial professionals Document Vault and their clients Advice Tech Live Portfolio Reporting Work Lead today Advice
Slide 28: Extending our reach to meet client needs across their life stages
Extending our reach to meet client needs across their life stages HUB24 Discover, Allianz Retire+ AGILE and HNW capabilities launched in 1HFY24 Wholesale Discretionary Accounts Customer balance and complexity Portfolio Admin & Reporting Service HUB24 Choice Retirement Income Solutions SMSF Access SM
Slide 29: Expanding HNW offer to meet growing demand
Expanding HNW offer to meet growing demand Demand for advice is increasing from growing High-Net-Wealth (HNW) segment1 HUB24 is empowering advisers with Leveraging our capability & expertise innovative solutions for their HNW to deliver future enhancements clients Current capabilities include: Integ
Slide 30: Pursuing profitable growth and maintaining leadership
Pursuing profitable growth and maintaining leadership Strong and reliable Highly scalable, Strong balance sheet, growth pipeline profitable and capital net cash and cash Platform FUA target across both existing light business with flows supporting (excluding PARS FUA) and new adviser significant rec
Slide 31: Questions?
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Slide 32: Disclaimer
Disclaimer SUMMARY INFORMATION RISK OF INVESTMENT 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 unknown risks, some of
Slide 33: Contacts
Contacts About HUB24 James Cordukes HUB24 Limited is listed on the Australian Securities Exchange, and includes the Head of Investor Relations award-winning HUB24 Platform, HUBconnect, the Xplore Wealth platform, Class and myprosperity. HUB24 Limited The HUB24 platform offers advisers and their clie