Eqt Holdings Ltd. · ASX:EQT
Eqt — H1 FY2020 Earnings Presentation
37 slides from Eqt's earnings presentation, Feb 26, 2020
Slide 1: Investor Presentation: Results for Half-Year Ending 31 December 2019
INVESTOR PRESENTATION RESULTS FOR HALF-YEAR ENDING 31 DECEMBER 2019 Mick O’Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer 26 FEBRUARY 2020
Slide 2: Agenda
AGENDA 1 OVERVIEW 2 FINANCIALS 3 STRATEGY UPDATE AND OUTLOOK 4 QUESTIONS 2
Slide 3: Overview
OVERVIEW
Slide 4: Strong Growth Trajectory
STRONG GROWTH TRAJECTORY DELIBERATE STRATEGY TO INVEST FOR GROWTH • Funds under management, administration and supervision (FUMAS) up 43.7% to $111.1 billion • Revenue up 5.6% to $48.9 million • Expenses up 6.9% to $29.6 million - Investing for growth • Net profit after tax attributable to sharehold
Slide 5: Investing for Growth
INVESTING FOR GROWTH PEOPLE AND TECHNOLOGY INVESTMENT TO MANAGE GROWTH • Investing substantially in resources to enable Equity Trustees to capitalise on continued change in financial services – Equity Trustees’ strengths as a respected and capable trustee are being increasingly recognised – Capabili
Slide 6: FUMAS Now Exceeds $100B, Up 43.7%
FUMAS NOW EXCEEDS $100B, UP 43.7% $b TOTAL EQT FUMAS1 • FUMAS up significantly in both 120 Trustee and Wealth Services 111.1 (TWS) and Corporate Trustee 110 Services (CTS) 100 • Appointment of ETSL as Trustee of AIA/CMLA super 90 funds ~$4.5b 80.7 • Appointment of EQTL as 80 77.3 Trustee of AIA/CMLA
Slide 7: Consistent Improvement at All Levels
CONSISTENT IMPROVEMENT AT ALL LEVELS $m TOTAL REVENUE $48.9M $m NET PROFIT AFTER TAX $11.5M 50 48.9 14 46.3 45 12 11.5 43.2 11.2 39.5 10 9.6 40 35 8 7.2 30 6 1H17 1H18 1H19 1H20 1H17 1H18 1H19 1H20 Cents EARNINGS PER SHARE 55.78CENTS Cents DIVIDENDS 47CENTS 60 50 55.13 55.78 47 54 46 44 47.47 42 48
Slide 8: Delivering for All Stakeholders
DELIVERING FOR ALL STAKEHOLDERS MEASUREMENT: STEADY IMPROVEMENT IN ALL TARGETS T1 Net promoter score Net loyalty score T1 T2 T2 IMPROVING LIFTING Engaged and CLIENT EMPLOYEE enabled staff SATISFACTION ENGAGEMENT T3 Earnings per share growth and T3 T4 FUMAS growth GROWING DEEPENING T4 SHAREHOLDER COM
Slide 9: T4 Targets - Delivering for All Stakeholders
T4 TARGETS - DELIVERING FOR ALL STAKEHOLDERS T1 NET PROMOTER SCORE (NPS) NET LOYALTY SCORE (NLS) T2 EMPLOYEE ENGAGEMENT EMPLOYEE ENABLEMENT 20 80 80 20 HP Norm 15 15 (74)1 HP Norm(73) FS Norm 10 10 FS Norm (69) (67)2 5 5 60 60 - - 2017 2018 2019 2017 2018 2019 (5) (5) (10) 40 40 (10) 2016 2017 2018
Slide 10: T4 Targets - Delivering for All Stakeholders
T4 TARGETS - DELIVERING FOR ALL STAKEHOLDERS T3 Cents EARNINGS PER SHARE Cents DIVIDENDS T4 $m GRANTING 124.3 60 50 55.8 47.0 120 55.1 45 44.0 50 40.0 100 45.5 47.5 40 85.4 87.2 35.0 35 80 11.0 40 18.9 36.0 78.8 30 76.2 60 66.5 30 25 40 20 20 15 20 10 10 - 5 Jun-17 Jun-18 Jun-19 - - 1H17 1H18 1H19 1
Slide 11: Financials
FINANCIALS
Slide 12: Positive Financial Performance
POSITIVE FINANCIAL PERFORMANCE 1H20 VS. 1H19 1H20 1H19 % • Solid revenue growth Total revenue ($m) 48.9 46.3 5.6 Expenses ($m) 29.6 27.8 6.9 • Principally driven by organic growth, strategic initiatives and Finance costs ($m) 0.5 0.4 16.3 markets Depreciation and amortisation ($m) 2.6 1.9 30
Slide 13: Solid Revenue Growth
SOLID REVENUE GROWTH $m REVENUE 50 0.8 1.9 48.9 48 5.8% revenue growth driven by: • Good organic revenue 46 46.2 growth, especially in TWS • Positive markets assisting 44 FUMAS growth, particularly in CTS 42 40 2H19 Equity market impact on Organic growth 1H20 FUMAS¹ 1 FUMAS: Funds under management,
Slide 14: Strong Operating Cash Flow
STRONG OPERATING CASH FLOW $m CASH FLOW 75 • Consistent, high 7.0 1.3 quality cash generation • Cash principally used 70 for tax payments and 65 9.7 (7.1) dividends 60 • Negligible bad debts • Borrowings modestly (7.4) (0.6) 57.3 55 54.4 increased to support Superannuation 50 Trustee activity 45 40
Slide 15: TWS - Good Momentum
TWS - GOOD MOMENTUM $m TWS REVENUE $b TWS FUMAS 1 21.3 34 • Revenue up 6.8% 20 34 4.4 • Driven by good 33 0.9 0.7 organic growth and 32.8 15 14.2 1.7 positive equity 33 2.2 markets 1.2 32 4.0 • Material increase in 32 10 0.6 1.2 FUMAS, especially 31 1.9 superannuation 12.3 31 30.7 5 30 6.5 30 - 1H19
Slide 16: TWS Private Client Business – Strong Growth
TWS PRIVATE CLIENT BUSINESS – STRONG GROWTH $b CORE TRUSTEE SERVICES FUMAS1 $b EMERGING MARKETS FUMAS1 2.0 0.45 1.8 0.40 1.6 0.35 1.4 0.30 1.2 0.25 1H18 1.0 1H18 1H19 0.20 0.8 1H19 1H20 1H20 0.15 0.6 0.10 0.4 0.05 0.2 - - Testamentary Investment Perpetual Advice Indigenous Trusts Living Donors Compe
Slide 17: TWS Superannuation Business – Steady Growth
TWS SUPERANNUATION BUSINESS – STEADY GROWTH $b SUPERANNUATION TRUSTEE OFFICE FUS1 '000 SUPERANNUATION TRUSTEE OFFICE MEMBERS 14 450 400 12 350 10 300 8 250 6 200 150 4 100 2 50 - - 1H18 1H19 1H20 1H19 1H20 Major appointments over the last 12 months include: • AIA/CMLA added ~750K members to our • Zu
Slide 18: CTS – Solid Performance
CTS – SOLID PERFORMANCE $m CTS REVENUE $b CTS FUS1 • Headline half on half revenue growth of 4.2% 16.0 0.2 100 • Underlying organic revenue 89.8 15.5 0.7 90 growth positive 15.5 80 15.2 15.0 • Growth supported by strong 14.9 70 63.1 12.7 global equity markets 14.5 60 14.6 (0.3) 50 14.8 • New Clients
Slide 19: CTS – Corporate Trust and Securitisation Division
CTS – CORPORATE TRUST AND SECURITISATION DIVISION $m CORPORATE TRUST AND $b CORPORATE TRUST AND SECURITISATION DIVISION SECURITISATION DIVISION REVENUE FUS1 1.2 2.0 • Positive momentum in a 1.1 relatively new business 1.9 1.8 1.0 0.9 • Credit licence granted by 1.8 0.8 1.7 ASIC to enhance product 0.
Slide 20: Balance Sheet Strength
BALANCE SHEET STRENGTH PROVIDES SECURITY AND FLEXIBILITY 31-DEC-19 30-JUN-19 31-DEC-18 $M $M $M Assets • Debt to equity 7.1% Cash and liquid investments 72.6 69.8 65.6 • Substantial headroom Trade receivables and accrued income 29.4 22.1 23.7 in covenants Goodwill and intangible assets 209.5 210.9 2
Slide 21: Strong Capital Position
STRONG CAPITAL POSITION • Low gearing, healthy liquidity and net cash positive position • Planned transfer of former OneVue RE clients to Equity Trustees Limited has released ~$3m of capital • Comfortably meeting regulatory • Consolidation of licences has potential to reduce capital requirements by
Slide 22: Summary
SUMMARY FINANCIAL PERFORMANCE REMAINS POSITIVE DESPITE HIGH INVESTMENT • Good revenue growth • Increase in NPAT and dividend • Businesses performing well • Growing pipeline of organic and inorganic opportunities • Significant investment in resources underpinning ability to seize opportunities • Bala
Slide 23: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK
Slide 24: Our vision is to be Australia’s leading trustee company
Our vision is to be Australia’s leading trustee company A company with purpose, forming trusted relationships to look after the interests of beneficiaries, members and investors
Slide 25: Equity Trustees Strengths Are Increasingly Recognised
EQUITY TRUSTEES STRENGTHS ARE INCREASINGLY RECOGNISED INDUSTRY UPHEAVAL IS HIGHLIGHTING THE VALUE OF EXPERTISE, INDEPENDENCE AND GOOD GOVERNANCE EXPERTISE • 130 years plus of providing trustee and executor services to families and businesses throughout Australia • Deep in-house skill and capability
Slide 26: Opportunities Are Considerable as Industry Restructures
OPPORTUNITIES ARE CONSIDERABLE AS INDUSTRY RESTRUCTURES INDEPENDENCE AND EXPERTISE ARE IN DEMAND • Industry transformation with flight to independence and quality • Regulatory concern driving business to professional specialists • Divestments creating opportunities for out-sourced specialist trustee
Slide 27: Well Positioned to Capitalise on Opportunities
WELL POSITIONED TO CAPITALISE ON OPPORTUNITIES SUBSTANTIAL INVESTMENT IN PEOPLE AND TECHNOLOGY PEOPLE • Building skill base and capability to manage incoming business • Key hires across management and client-facing personnel • Maintaining quality and competitive edge TECHNOLOGY • Technology enhancem
Slide 28: TWS Private Client Focus
TWS PRIVATE CLIENT FOCUS ESTATE PLANNING PHILANTHROPY SERVICES FUNDS MANAGEMENT • Leveraging will bank for growth • Leverage • Invest in continued • Focus on distribution and strengthening of the team and • leading granting expertise to grow capability strategic partnerships living philanthropists •
Slide 29: TWS Superannuation Focus
TWS SUPERANNUATION FOCUS SPECIALIST, INDEPENDENT TRUSTEE • Leveraging the strength of our business model and brand as Australia’s leading specialist independent trustee • Providing trusteeship to superannuation funds where trustee services are not core • The prevalence of vertical integration and po
Slide 30: CTS Focus
CTS FOCUS PROVIDING INDEPENDENT, SPECIALIST TRUSTEE AND FIDUCIARY SERVICES • Growing existing business – Continuing promotion of core Responsible Entity service to existing and new fund managers – Capitalising on trend for quality fund managers to enter Australian retail market – Using our specialis
Slide 31: UK/Ireland Building Momentum
UK/IRELAND BUILDING MOMENTUM No. Clients No. Funds £b Total AuM 10 20 3.0 9 18 9 18 2.5 8 16 7 14 2.0 6 6 12 5 5 10 1.5 8 4 8 7 1.0 3 6 2 4 0.5 1 2 - - - 1H18 1H19 1H20 1H18 1H19 1H20 1H18 1H19 1H20 • Lead indicators of new clients and funds beginning to • Alliance Bernstein and River and Mercantile
Slide 32: Supporting Australian Community After Bushfires
SUPPORTING AUSTRALIAN COMMUNITY AFTER BUSHFIRES TRUSTS ESTABLISHED AND LISTED IN TAX ACT IN RECORD TIME As a result of the tragic bushfires, Equity Trustees established two perpetual charitable trusts with the Business Council of Australia to help communities around the country recover from disaster
Slide 33: Empowering Indigenous Communities
EMPOWERING INDIGENOUS COMMUNITIES CONTRIBUTE TO GREATER SOCIAL AND ECONOMIC PARITY BETWEEN OUR FIRST AUSTRALIANS AND THE BROADER COMMUNITY GOOD PIPELINE OF • Reconciliation Action Plan OPPORTUNITIES – Endorsed by Reconciliation Australia – Completed second full year $m INDIGENOUS TRUSTS FUMAS 1 – Pr
Slide 34: Positive Outlook
POSITIVE OUTLOOK CLEAR GROWTH AGENDA • Industry transformation providing more opportunities • Investing in people and technology to ensure we can capitalise on them • Pursuing growth organically and inorganically • Strengths as a respected and capable trustee increasingly recognised, with capability
Slide 35: Questions
QUESTIONS
Slide 36: Thank You
THANK YOU
Slide 37: Disclaimer
DISCLAIMER Mick O’Brien, Managing Director, has authorised that this document be given to the ASX. 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 an