Slide 1: Results Presentation FY2023
Results Presentation FY2023 See wealth differently 16 August 2023
Slide 2: Important notice and disclaimer
Important notice and disclaimer General Information only No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved, or that there is a reasonable basis for any of these Information provided is general information presented in a
Slide 3: Our purpose
Our purpose is To enable people to see wealth differently and discover a brighter future 3 Results Presentation FY2023 16 August 2023
Slide 4: Today's presenters and agenda
Today’s presenters and agenda Meet Discover 1. FY2023 business and financial highlights 2. Strategy and product update 3. Corporate sustainability Matt Heine CEO & Managing Director 4. FY2023 financial performance 5. Outlook 6. Questions Grant Boyle 7. Appendix and additional information Chief Finan
Slide 5: Acknowledgement of Country
Acknowledgement of Country We acknowledge the traditional owners of the lands that we work and live on. Our office here in Sydney is on the lands of the traditional owners of the Gadigal people of the Eora Nation. We celebrate the stories, culture and traditions of the Aboriginal and Torres Strait I
Slide 6: FY2023 Business highlights
FY2023 Business highlights 6 Results Presentation FY2023 16 August 2023
Slide 7: Business and financial highlights FY2023
Business and financial highlights FY2023 $214.7M Total Income $70.3B FUA 507 (Current FUA $72.2B)2 Average phone calls per day Growth $38.1M (+21.6%) $100.7M EBITDA $9.9B 84 seconds FUA net inflows Avg. speed of answer by contact centre Growth1 $15.7M (+18.4%) $67.2M NPAT $16.0B FUM 9 mins Average h
Slide 8: Netwealth is the leading specialist investment platform
Netwealth is the leading specialist investment platform Award winning platform Fastest growing platform by net funds flow Top 4 institutions (with 64.4% of the market) are with increasing market share to 6.7% - losing market share Platform providers net funds flows ($) Platform providers by FUA / %
Slide 9: Structural shift continues and shows no signs of slowing down
Structural shift continues and shows no signs of slowing down Netwealth remains a significant beneficiary of structural change with growth all organic Quarterly Market Share analysis from March 2016 to March 2023 Market share increased to 6.7% NWL HUB PPS Macquarie Legacy platforms (RHS) Market Shar
Slide 10: Business growth and composition
Business growth and composition Growth in FUA, FUM and Accounts Composition of FUA 127,507 Super Wrap Institutional & Non-Custodial, 33.9% 66.1% 115,642 Family Office, 0.2% 5.8% 97,319 $70.3B $70.1B 81,804 FUA 71,424 $55.7B $47.1B $70.3B FUA Core 4.1% Plus $31.5B 95.9% $23.3B $16.0B Retail, 94.0% $1
Slide 11: Transition pipeline remains strong
Transition pipeline remains strong FUA net inflows analysis Both existing and new Financial Intermediaries contribute to yearly FUA net inflows $13.1B $2.0B New 15% $9.8B $9.8B FY2023 FUA net inflows analysis $0.8B New 9% $1.3B New 13% • New Financial Intermediaries from 1 July 2022 contributed appr
Slide 12: Strategy and product update
Strategy and product update 12 Results Presentation FY2023 16 August 2023
Slide 13: Accelerating change = Opportunity
Accelerating change = Opportunity Greater Greater computing power, accessibility, open architectures, cloud, decentralisation & • Mobile, multi-channel transparency, options • Complex vs. cheaper • ESG, digital assets, vehicles, exchanges & platforms Regs, compliance, Changing education standards, d
Slide 14: Building solutions for 65% of Australian adults
Building solutions for 65% of Australian adults Emerging Affluent (under 45 years) Established Mass (over 45 years) Established Affluent (over 45 years) 14% 40% 10% Australian population 18+ Australian population 18+ Australian population 18+ $1.32m $0.83m $2.70m Total avg. household wealth Total av
Slide 15: A world of opportunities
A world of opportunities Netwealth’s whole of wealth platform A world of investment access A world of technology A world of opportunities & administration Client Access and Engagement Improved customer 1 engagement and satisfaction Client management tools Greater staff Advanced client and business r
Slide 16: A world of investments
A world of investments Australians invest in a range of assets and their age/wealth influence their decision making. Advisers need the tools to support these investments. A world of investments and portfolio management Which do you currently invest in? Emerging Mass 45+ Emerging Affluent 18-45 Estab
Slide 17: The continued adoption of Managed Accounts
The continued adoption of Managed Accounts IMAP Managed Account FUM ($’B) Netwealth Managed Account FUM ($’B) Netwealth Managed Accounts Netwealth market share 8.5% Netwealth CAGR 33% enhancement Industry CAGR of 22% $13.6B $11.2B $144.5B $9.8B $131.7B Progressive release Integrated of Managed Accou
Slide 18: Core enhancements
Core enhancements An expanded menu helps Netwealth service the Mass Affluent Expansion of investment universe Cost effective pricing 15 bps* * $60 fixed, 15 bps capped at $750K FUA (min $225 pa) Administration fees (bps) by account balance 23 17 16 16 12 $100K $250K $500K $750k $1M Source: Netwealth
Slide 19: Client portfolio reporting
Client portfolio reporting A world of reporting Australians have high How regularly would you like to receive and analytics expectations from their investment-related information from your financial planner? financial advisers when it comes to portfolio reporting, which is not always being met, Week
Slide 20: Benchmarks Return contribution
Benchmarks Return contribution 20 Results Presentation FY2023 16 August 2023
Slide 21: Report and review builder
Report and review builder Prototype only 21 Results Presentation FY2023 16 August 2023
Slide 22: Using Advicetech to improve adviser and business efficiency
Using Advicetech to improve adviser and business efficiency A world of Which of the following business goals do you hope to achieve adviser efficiency with AdviceTech in the next 24 months? Improve profitability 44% 1 Ecosystem of partners with API and deep system integration Improve the affordabili
Slide 23: Automated RoA enhancements Activities
Automated RoA enhancements Activities 23 Results Presentation FY2023 16 August 2023
Slide 24: Using AdviceTech to improve customer satisfaction is a significant business opportunity
Using AdviceTech to improve customer satisfaction is a significant business opportunity To deliver on this your business will need “The last best experience that anyone to evolve to offer a customer 1st, digital 1st , has anywhere, becomes the minimum mobile 1st experience. expectation for the exper
Slide 25: Netwealth mobile app
Netwealth mobile app White labelling Visualise portfolios Mobile ‘whole of wealth’ Mobile app plus browser-based Get a complete view of your asset Bank and property feeds desktop configured to the brand allocation across your entire Xeppo Connect portfolio • Xplan and other 3rd party integrations •
Slide 26: Netwealth mobile app
Netwealth mobile app Insurance on the go Daily business & finance news Activities on mobile View details of group and retail A daily feed of our morning Clients can view tasks and insurance products held with business roundup business approve or action Netwealth or Netwealth and finance news adviser
Slide 27: A world of insights that matter
A world of insights that matter Events, white papers, videos, webinars and podcasts. The Advisable Australian Advice Foundations Portfolio Construction AdviceTech Report colab Megatrends A content series that analyses the A content series that looks to A content series that analyses the Netwealth’s
Slide 28: Corporate Sustainability
Corporate Sustainability 28 Results Presentation FY2023 16 August 2023
Slide 29: Corporate sustainability
Corporate sustainability • Enhance our core business • Continued to be the market leading platform for the High Net Worth sector by expanding its whole of wealth offering. • Supported existing adviser base with functionality to drive adviser efficiency. • Maintained market-leading technology positio
Slide 30: Corporate sustainability
Corporate sustainability • Create a positive social and environmental impact • Impact Partners; Live4Life, People & Parks Foundation and Food for Change through employee workplace giving, fundraising and Netwealth matched donations into the Netwealth Impact Fund. • Over 575 employee volunteering hou
Slide 31: FY2023 Financial performance
FY2023 Financial performance 31 Results Presentation FY2023 16 August 2023
Slide 32: Consistent momentum reflects macro resilience
Consistent momentum reflects macro resilience Total income and underlying EBITDA FY2019 to FY2023 CAGR • EBITDA exceeded $100 million for the first time at an 20.9%** impressive EBITDA margin of 48%* • EBITDA growth momentum with significant investment in $214.7M platform roadmap, system scalability
Slide 33: Strong operating performance
Strong operating performance Financials FY2023 FY2022 Change % Change Increasing returns to investor Platform Revenue 207.0 173.0 34.1 19.8% Other Income 7.7 3.8 4.0 105.5% Total Income 214.7 176.6 38.1 21.6% EPS (cents) Employee Benefits Expenses (77.9) (63.8) 14.0 22.0% FY2023 27.2 Share Based Pay
Slide 34: Growth in challenging environment
Growth in challenging environment FY2023 commentary Platform Statistics FY2023 FY2022 Change % Change Funds Under Administration (FUA) • FUA at 30 June 2023 of $70.3 billion, an increase of FUA - Custodial 70,146 55,652 14,494 26.0% $14.6 billion, 26.3% increase. FUA - Non-custodial 126 - 126 100% T
Slide 35: Improved revenue margins
Improved revenue margins Average FUA /average no. of accounts (#039;000) 507 521 Revenue per account and bps both improved in FY2023 437 304 367 Key Performance Statistics FY2023 FY2022 Change FY2019 FY2020 FY2021 FY2022 FY2023 Average FUA /average No. of Accounts (#039;000) 521 507 14 Platform Revenue /a
Slide 36: Core components of Platform revenue
Core components of Platform revenue A high level of recurring revenue and a focus on revenue diversification has delivered strong growth despite challenging economic environment Platform revenue split FY2021 to FY2023 Administration fees Transaction fees Wrap Brokerage 6% Super Share settlement 11%
Slide 37: A disciplined approach to long term investment
A disciplined approach to long term investment Total underlying operating expenses FY2023 commentary (comparisons FY2022) • Total underlying operating expenses of $111.6 million ($88.5 $111.6M million), an increase of $23.1 million, 26.1% increase. +$23.1M • Employee benefits expenses of $77.9 milli
Slide 38: An increased focus on expense management
An increased focus on expense management Of the 38 additional roles, 30 were in technology, reflecting our ongoing investment in enhancing the platform capability A team of 553 at 30 June 2023 Headcount by function 30 June 2023 1% Technology 3% 1% 4 6% 30 8 Investor services -1 9 -3 553 14 8 29 515
Slide 39: Summary | Strong financial and market position
Summary | Strong financial and market position Highly profitable, with An extremely high Strong balance sheet strong EBITDA margin correlation between EBITDA and operating cash • Low capital expenditure • Revenue growth flow, resulting in strong • Debt free • High level of predictable cash generatio
Slide 40: Outlook
Outlook 40 Results Presentation FY2023 16 August 2023
Slide 41: Outlook
Outlook Update on strategic initiatives Core product relaunch Key initiatives • Relaunching an upgraded Core product in September 2023. • Continuing development of our client web and mobile portal offering Financial Intermediaries the ability to interact online with all clients, • The enhanced Core
Slide 42: Outlook
Outlook Commentary • Netwealth enters FY2024 with a strong pipeline and high win rate for new business across all key segments. • We have successfully secured several important new licensee relationships that have begun transitioning and funding new accounts. • Netwealth remains in an excellent fina
Slide 43: FY2023 Questions
FY2023 Questions 43 Results Presentation FY2023 16 August 2023
Slide 44: Thank you
Thank you See wealth differently Discover the possibilities
Slide 45: FY2023 Appendix and additional information
FY2023 Appendix and additional information 45 Results Presentation FY2023 16 August 2023
Slide 46: Underlying EBITDA and NPAT for FY2023
Underlying EBITDA and NPAT for FY2023 Reconciliation from EBITDA to underlying EBITDA and NPAT for FY2023 to reflect an adjustment on non-recurring costs Consolidated Group for Period Ended 30 Jun 23 30 Jun 22 Variance Variance $’M $’M $’M % EBITDA 100.7 84.6 16.2 19.1% Add back: Non-recurring expen
Slide 47: Underlying profit for FY2023
Underlying profit for FY2023 Consolidated Group for Period Ended 30 Jun 23 30 Jun 22 Variance Variance $’M $’M $’M % Underlying EBITDA 100.7 85.1 15.7 18.4% Add back: non-cash share-based payment 2.4 3.1 (0.7) (22.0%) Underlying EBITDA excluding non-cash share-based payment 103.1 88.1 15.0 17.0% Und
Slide 48: Underlying Cash Flow
Underlying Cash Flow The table below sets out the summary of the underlying consolidated statement of cash flows for FY2023 and FY2022 Consolidated Group for Period Ended 30 Jun 23 30 Jun 22 Variance Variance $’M $”M $”M % Receipts from customers 223.4 186.4 37.0 19.9% Payments to suppliers and empl