Slide 1: FY2018 Annual Results Presentation
netwealth FY2018 Annual Results Presentation
Slide 2: Important notice and disclaimer
Important notice and disclaimer General Information only Information provided is general information presented in a summary format as at 27 August 2018, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be relied upon as advice to investors
Slide 3: Our purpose is to enable people to see wealth differently
>» Ourpurposeis = © _ To enable people to _ see wealth differently _ and discover a brighter future FOr p
Slide 4: Today's presenters and agenda
Today's presenters and agenda Michael Heine Joint Managing Director 4h 1. FY2018 Business and financial highlights Matt Heine 2. FY2018 Financial performance Joint Managing 3. Operating update Director 4, FY2019 Outlook 5. Questions Grant Boyle 6. Appendices & additional financial information Chief
Slide 5: FY2018 Business and financial highlights
FY2018 2 Business and © financial highlights For personal use 5 | netwealth —-FY2018 Annual Results Presentation
Slide 6: Continued strong growth in FY2018
Continued strong growth in FY2018 $17.96B FUA $2.85B FUM 2,271 al 6d $4.2B $1.0B #1 platform” PCP~Prior comparative period; Financial Year June 2017 (1) FUAnet inflows PCP adjusted for a once off client transition of $0.88 (2) Investment Trends~ December 2017 Platform Competitive Analysis and Benchm
Slide 7: FY2018 Pro forma financial highlights
FY2018 Pro forma financial highlights FY2018 NPAT was 6.3% ahead of prospectus 4) | es) es all all all all $83.3M $42.3M° 50.8%" $29.0M" Revenue EBITDA EBITDA MARGIN % NPAT = & KX & $39 4M 11.9 cents” 5.38 cents 518 cents Operating Net Cash Flow Pre Tax EPS Dividend Per Share Special Dividend Per Sh
Slide 8: Continuing growth momentum
Continuing growth momentum Australias largest specialist platform provider Financial Intermediaries 2271 1,504 Russell transition of 449 nt Sap Ose AbetT J Sapt? Ome tF Man nt Financial Intermediaries increased by 51% June 2016 to June 2018 Source: _ Netwealth 8 | netwealth sities Russell % transiti
Slide 9: Netwealth is achieving highest netflows
9 Netwealth is achieving highest netflows Platform providers by FUA market share % market share (March 2018) Platform provider net funds flows?) % market share (12 months to March 2018) #1 —> % of net flows >11x market share Source: Strategic Insight: Master Trusts, Platforms & Wraps (Mar 2018) (1)
Slide 10: FY2018 Financial performance
FY2018 > Financial © performance For personal use 10 | netwealth = FY2018 Annual Results Presentation
Slide 11: For personal use only
• For personal use only • • • • • • NPAT margin 27.5% 34.9% 7.4% •
Slide 12: Surpassed the FY2018 pro forma prospectus forecast
Surpassed the FY2018 pro forma prospectus forecast .and delivered growth across all key financial metrics Total Income EBITDA NPAT Operating net cash flow above prospectus by above prospectus by above prospectus by pre tax above prospectus $1.7M (+2.1%) $2.4M (+5.9%) $1.7M (+6.3%) by $0.7M (+1.9%) 8
Slide 13: For personal use only
For personal use only • • • • • • •
Slide 14: Revenue growth analysis
Revenue growth analysis Focused on increasing or maintaining Platform Revenue per account and profitable revenue growth rather than bps Revenue Growth Rate 26.5% CAGR 83.3M 49.0M 41.1M FY2015 FY2016 FY2017 FY2018 m Total revenue Source: Netwealth CAGR: Compound annual growth rate 14 ‘| netwealth Rev
Slide 15: For personal use only
For personal use only • • • • • • • • • • • • • • •
Slide 16: Benefits of scale
Benefits of scale Cost as a % of Income continued to reduce in FY2018 Operating expenses composition 16.3% CAGR FY2015 FY2016 FY2017 FY2018 m Other operating expenses m IT and communications m Employee benefits expense mRent and occupancy costs Source: Netwealth 16 | netwealth Employee costs was 70%
Slide 17: For personal use only
For personal use only FY2017 209 6 Inv Serv 8 IT Inv Ops 8 Sal, Prod & 3 Mark 3 Fin, HR & OS FY2018 237
Slide 18: Exceptional cash generation
Exceptional cash generation High correlation between EBITDA and cash flow * Lowworking capital requirements * Limited capex * Internal software and product maintenance and enhancement costs expensed * Better quality of earnings as no risk of impairment of capitalised software development costs * Deb
Slide 19: Recap of financial highlights & operating update
Recap of financial highlights & operating update 19 netwealth Track record of growth in FUA, FUM, revenue and profitability Ahead of prospectus forecast in all key metrics Highly scalable cost Further margin base improvement in FY2018 Exceptional cash i Debt fr generation ebt free Tr
Slide 20: Operating update
Operating _- update For personal use o 20 | netwealth — FY2018 Annual Results Presentation
Slide 21: Australia's premier platform
Australia’s premier platform Award-winning technology enhanced by an exceptional service Rankings by Net Promoter Score commitment for investment platforms Netwealth ——4 100% Hub24 mums 26 e CFS First Choice mm 16 8 ox CFS First Wrap mm 13 © Trotweaith . Fy Platform netwealth Macquarie Wrap a4 a cox
Slide 22: For personal use only
For personal use only • • • • • • • • • • • • • •
Slide 23: Advanced tech for advice delivery and client engagement
Advanced tech for advice delivery and client engagement A focus on usability Data and Al Automated investment Ecosystems and experience services 23 | netwealth I nw
Slide 24: A focus on usability
A focus on usability Ease of use = efficiency and experience Tram, © @ Qc “©6060 Do Jane Flowers, $437,789.45 WRAP123456 (123456) ° ° — byassecass > F eswanda . Cash account 347% 0 fawn on ~ $15,180.32 Australian Equities 738% a $119,739.06 7990380 $y 2018-Now National Australia Bank L... NAB 204% P
Slide 25: Household wealth
Household wealth ‘+ suck | TnsactonMatoy Eemel Tenses Pending Maretane John Smith (18721) ~ ‘ever 2018 Now 514970120 + Yap Serves satvaseton | AscetPuchase +) or | Cheese ae Off platform external assets (xWrap) Please select your banking institution Q crypt dearen here ANZ®, DISEID Ooms BOOK —_%.. F
Slide 26: Ecosystems
Ecosystems lb al) © myprosperity QI 2 Class mess ddviserlogic ~ os netwealth RightSignature Inifices cat TIP RANKS: MORNINGSTAR’ womt ENVESTNET® © PROVISO = YODLEE #¢midwinter ScSuBe 26 | netwealth I nw
Slide 27: Enhanced reporting
Enhanced reporting New design and additional features for HNW segment Portfolio Performance -International equities & foreign currency Portfolio Valuation - Summary netwealth Pontolo valuation by asset class rar Portola valuation ang age allocation last 12 months RUA sssoiz0 0 [Asset Performance — D
Slide 28: FY2019 Outlook
FY2019 2 Outlook For personal use o 28 | netwealth = FY2018 Annual Results Presentation
Slide 29: For personal use only
For personal use only 765 809 668 690 518 598 436 431 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17Mar-18
Slide 30: For personal use only
For personal use only • • • • • • • •
Slide 31: Netwealth highlights
Netwealth highlights Attractive industry fundamentals and a significant structural shift from institutions towards specialist platform providers Dividend paid of 5.38 cents per share and Special Dividend paid of 5.18 cent per share FY2018 () Source: Strategic Insight: Master Trusts, Platforms & Wrap
Slide 32: Questions
For personal use only Questions 32 =| netwealth —FY2018 Annual Results Presentation
Slide 33: Appendices
For personal use only Appendices 33 | netwealth — FY2018 Annual Results Presentation
Slide 34: Reconciliation of the statutory profit statement to the pro forma results
Reconciliation of the statutory profit statement to the pro forma results FY2018 FY2017 Change %Change FY2018 Variance % Variance ReconcilationofStatutoryresultstoproforma Note Actual __Actual Prospectus Statutory EBITDA on continuing operations 299 242 57 BA 78 20 7.3% IPO transaction costs 124 0.2
Slide 35: Reconciliation of pro forma EBITDA to pro forma net cash flow from operating activities
Reconciliation of the pro forma EBITDA to the pro forma net cash flow from operating activities (pre tax) Cash flow workings FY2017__ FY2018 Pro forma EBITDA on continuing operations 24.9 42.3 Non-cash items in EBITDA 0.2 (0.1) Changes in working capital 0.8 (2.2) Capital expenditure (1.0) (0.9) Net
Slide 36: Consolidated Statement of Financial Position at June 2018
Consolidated Statement of Financial Position at 30 June 2018 * Debt free with $52.7M in Cash * Regulatory capital requirement — ASIC $10.0M — Operating Risk Financial Requirement $18.5M 36 | netwealth Consolidated Statement of Financial Position Fy2017__FY2018 ASSETS CURRENT ASSETS Cash and cash equ