Challenger Limited · ASX:CGF
Challenger — Investor Presentation (August 2025)
30 slides from Challenger's investor presentation, Aug 19, 2025
Slide 1: Financial Results 2025
Financial Results 2025 19 August 2025 challenger €3 Life. Wel ved
Slide 2: Acknowledgement of country
Acknowledgement of country Challenger acknowledges the Traditional Owners of Country throughout Australia and we pay our respects to Elders past and present. We recognise the continuing connection that Aboriginal and Torres Strait Islander peoples have to this land and acknowledge their unique and r
Slide 3: Overview
1 Business and strategy update Nick Hamilton – Managing Director and Chief Executive Officer Overview 2 Financial results and outlook Alex Bell – Chief Financial Officer 3 Looking ahead Nick Hamilton – Managing Director and Chief Executive Officer
Slide 4: Business and strategy update
1 Business and strategy update Nick Hamilton Managing Director & Chief Executive Officer
Slide 5: FY25 financial highlights
FY25 financial highlights Delivering strong growth and shareholder returns P R O F I TA B I L I T Y RETURNS Normalised NPAT Normalised ROE1 $ 456 million 9% 11.8 % 110bps Statutory NPAT Full year dividend $ 192 million 48% 29.5 cps 11% All growth rates compare the year ended 30 June 2025 against the
Slide 6: Progress on driving sustainable, profitable growth
Progress on driving sustainable, profitable growth Strategy delivering a business ready for the future 1 FINANCIAL STRENGTH 2 SIMPLIFICATION 3 GROWTH PAST 3-YEARS Capital strength & flexibility Simpler, contemporary business Sales remix improving book quality ROE target & investing for growth Aligne
Slide 7: Successfully executing strategy
Successfully executing strategy Progress in FY25 Generating long-term sustainable growth Scalable platform Retirement and efficiency leader Stronger financial performance 1.60x 29.5cps Capital Higher quality $ 1.1bn 81% Life PCA Full-year dividend, strength Record Lifetime Annuity liabilities >3yrs
Slide 8: Retirement is not a single life event - it evolves over time
Retirement is not a single life event - it evolves over time Australians are living longer driving need for financial security Industry focused on introducing greater income security and peace of mind A G E I N G P O P U L AT I O N GOVERNMENT OBJECTIVES Enhancing retirement outcomes 780 8.9 Retireme
Slide 9: Operating environment
Operating environment There is considerable change underway across our operating environment MACRO ENVIRONMENT POLICY AND REGULATION CUSTOMER CHANNELS Credit Markets Legislative reform Advice at scale Credit conditions supportive, Retirement income is Advice technology solving challenge of spreads r
Slide 10: Financial results and outlook
2 Financial results and outlook Alex Bell Chief Financial Officer
Slide 11: Strong FY25 financial performance
Strong FY25 financial performance Delivering for shareholders P R O F I TA B I L I T Y RETURNS NORMALISED NPAT ($M) NORMALISED EPS (CPS) STATUTORY NPAT ($M) NORMALISED ROE DIVIDEND (CPS) $456M +9% 66.3 CPS +9% $192M +48% 11.8% +110 BPS 29.5 CPS +11% 456 417 66.3 60.9 11.8% 364 53.3 10.7% 8.9% 29.5 1
Slide 12: Achieving higher sustainable ROE
Achieving higher sustainable ROE ROE above target N O R M A L I S E D G R O U P R O E ( P O S T- TA X ) 2H25 12.1% +130 BPS PCP 2H25 ROE drivers 12.1% 11.6% 11.3% 11.2% 11.1% 11.2% Higher earnings across the business 11.2% 10.8% 10.4% Structural change in expense base – 9.5% with cost to income rati
Slide 13: Structural reduction in expense base
Structural reduction in expense base Structurally changed expense base to capture operating leverage Cost savings reinvested back into the business EXPENSES1 EXPENSES FY25 v FY24 $316M +1% +1% 38.7% 37.7% 33.8% CTI target 32.3% 32% to 34% $4m $316m $314m 317.5 316.2 $6m 313.5 300.5 ($5m) ($3m) 2 2 F
Slide 14: FY25 normalised to statutory NPAT reconciliation
FY25 normalised to statutory NPAT reconciliation Impacted by AASB 17 accounting differences as well as returns on property and absolute return funds being lower than long-term assumptions $456m $67m ($102m) ($80m) $192m ($108m) ($33m) ($8m) FY25 Life liability accounting Other liability Property und
Slide 15: Life performance
Life performance Investing for future growth FY25 CHANGE Normalised Cash Operating Earnings (COE) $788m 5% LIFE NORMALISED NPAT NORMALISED ROE POST-TAX Expenses ($124m) 6% $461M +6% 13.5% +80 BPS Normalised NPBT $664m 5% 461 Normalised Tax ($204m) 2% 435 13.5% 12.7% Normalised NPAT $461m 6% 373 COE
Slide 16: Life sales
Life sales Record retail lifetime and Japanese annuity sales offset by lower Index Plus sales STRONG FY25 SALES PERFORMANCE LIFE SALES ANNUITY SALES $8.6bn 4.9% $5.2bn $5.2bn $5.2bn $5.2bn Total Life Annuity book +26% sales growth1 $4.6bn $3.9bn $3.4bn $1.1bn 984m +39% 26% $ 39% Record retail Record
Slide 17: Life sales
Life sales Sales remix strategy has improved book quality STRATEGY TO GROW LONGER L O N G E R - D UR ATI O N P O L I CY L I A B I L I TY DURATION SALES ANNUITY SALES PROFILE 1 15.8bn ~ $7bn + 146% 13.5bn 1 19% Lifetime + Retail lifetime Japanese sales annuity sales $2.2bn $2.2bn 16% since FY22 growt
Slide 18: Life COE margin
Life COE margin Continued uplift in COE margin despite tight credit spread environment COE MARGIN F Y 2 5 I N V E S T ME N T Y I E L D B Y A S S E T C L A S S 10.7% 9.7% 9.4% 7.4% 3.26% 6.7% 3.19% 3.20% 6.0% 6.0% 3.12% 3.11% 5.6% 3.04% 4.5% 2.88% 2.82% 3.2% 2.76% Fixed income Alternatives Property E
Slide 19: Life investment portfolio
Life investment portfolio Life asset allocation largely steady FIXED INCOME 74% PROPERTY 11% • Prepayments from ABS reinvested into attractive • Reflects strong performance in Australian retail, Australian opportunities in cash and liquids, and corporate credit industrial and Japanese properties, of
Slide 20: Funds Management performance
Funds Management performance Benefiting from income growth and lower expenses FY25 CHANGE FUM-based income & transaction fees $177m 6% NORMALISED NPAT AVERAGE FUM1 $53M +41% $118BN +12% Performance fees $11m 57% Net income +8% Fidante $101bn +14% Net income $188m 8% Expenses -6% Challenger IM $17bn
Slide 21: Fidante
Fidante Record net flows in Europe and positive market movements Low-margin institutional outflows to benefit margin outlook S T R O N G D I S T R I B U TI O N C A P A B I L I TY MARKET LEADER F U N D S U N D E R M A N A G E M E NT $1.4bn # 2 Total net outflows $11.4bn Institutional net outflows $10
Slide 22: Challenger Investment Management
Challenger Investment Management Expanding asset origination to support growth 2 0 Y R S I N V E S T I N G I N P U B L I C & P R I VAT E C R E D I T 16.4bn 5.9bn +47% since FY22 C H A L L E N G E R I M T H I R D PA R T Y F U N D S ’ F U M $ $ Fixed income FUM1 in private credit $2.5bn $ 8.4bn annual
Slide 23: Capital strength
Capital strength Strongly capitalised PCA RATIO1 CAPITAL BUFFER AND RETURNS PCA target range 1.3x to 1.7x2 13.5% 1.7x 12.7% 1.67x 1.60x 1.60x 10.5% 1.59x 9.0% $1.8bn $1.7bn $1.5bn $1.6bn 1.3x FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 Excess capital Life ROE (post-tax) 1. The PCA ratio represents total
Slide 24: APRA capital standards consultation
APRA capital standards consultation Creating the settings for a more innovative and competitive retirement income market Significant benefit to retirees A P R A O B J E C TI V E S P O T E N T I A L I M PA C T S Ensuring capital requirements for 1 life insurers are not a disincentive to the developme
Slide 25: APRA capital standard changes potential impacts
APRA capital standard changes potential impacts Increased capital resilience and flexibility for Challenger IMPACTS CHALLENGER’S SUBMISSION SUPPORTS AMENDMENTS T H AT R E M O V E T H E P R O C Y C L I C A L N AT U R E O F D AY 2 I M PA C T S T H E C U R R E N T S TA N D A R D S DAY 1 IMPACTS C H A N
Slide 26: Capital allocation
Capital allocation Strong discipline in capital management Focus on maximising shareholder returns ORGANIC GROWTH Invest in core businesses DIVIDENDS Dividend policy currently based on 30% to 50% payout ratio Delivering Seeking to grow dividends over time shareholder value CAPITAL RETURN Return exce
Slide 27: FY26 guidance and targets
FY26 guidance and targets Driving shareholder value under current prudential settings NORMALISED BASIC EPS GUIDANCE C O N S I S TE N T T H R O U G H T H E C Y C L E TA R G E T S RBA cash rate +12% Normalised ROE after tax1 66cps to 72cps Cost to income ratio 32% to 34% Midpoint 4% higher than FY25 G
Slide 28: Looking ahead
3 Looking ahead Nick Hamilton Managing Director & Chief Executive Officer
Slide 29: Progress on driving sustainable, profitable growth
Progress on driving sustainable, profitable growth Strategy delivering a business ready for the future 1 FINANCIAL STRENGTH 2 SIMPLIFICATION 3 GROWTH PAST 3-YEARS Capital strength & flexibility Simpler, contemporary business Sales remix improving book quality ROE target & investing for growth Aligne
Slide 30: Important note
IMPORTANT NOTE The material in this presentation is general background information about Challenger Limited This document may contain certain ‘forward-looking statements’. The words ‘forecast’, ‘expect’, ‘guidance’, group’s activities and is current at the date of this presentation. It is informatio