Slide 1: Perpetual Half Year Financial Results
Perpetual Limited ABN 86 000 431 827 Angel Place, Level 18, 123 Pitt Street Sydney NSW 2000 24 February 2022 Australia Phone +61 9229 9000 ASX Limited www.perpetual.com.au ASX Market Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 Via electronic lodgement Perpetual Half Year Fi
Slide 2: 1H22 Results Presentation
Perpetual Limited (ASX:PPT) 1H22 Results Presentation For the half year ending 31 December 2021 Thursday 24 February 2022
Slide 3: Disclaimer
Disclaimer Important information Disclaimer: The Zenith Fund Awards were issued on 15 October 2021 by Zenith Investment Partners (ABN 27 130 132 672, AFSL 226872) and are determined using proprietary This presentation is in summary form and is not necessarily complete. It should be read methodologie
Slide 4: 1H22 Highlights
1H22 Highlights Rob Adams CEO and Managing Director half year ending 31 December 2021
Slide 5: 1H22 results demonstrating solid momentum
1H22 results demonstrating solid momentum Successful strategy execution delivering growth All divisions performing strongly and delivering growth Investing in new capabilities, products, distribution channels and brands to further drive growth Strategy to build a global asset management business, ad
Slide 6: Overview of 1H22 results
Overview of 1H22 results Positive momentum across all divisions delivering strong Group results Operating revenue1 $384.9m UPAT2 $79.1m NPAT $59.3m ROE3 17.3% Dividend4 $1.12 410 37% 113% bps 54% 33% 384.9 280.6 79.1 59.3 17.3 1.12 51.3 0.84 27.9 13.2 1H21 1H22 1H21 1H22 1H21 1H22 1H21 1H22 1H21 1H2
Slide 7: 1H22 operational highlights
1H22 operational highlights Execution of strategy delivering positive momentum 15% growth 17th 15% No. 1 74%5 74% in Assets Under consecutive half UPBT 10-year Zenith growth in AUM in of all funds2 Management1,2 year of net inflows CAGR3 Fund Manager Trillium since outperformed their for Perpetual P
Slide 8: A unique combination of businesses
A unique combination of businesses Accessing global markets providing new growth opportunities FY19 – Launch of new strategy 1H22 Operating revenue1,2 Operating revenue1,2 PCT Managed PCT Managed PCT Perpetual Digital Funds Services Funds Services 3% 10% 9% PCT Debt PCT Debt 29% Perpetual Asset 12%
Slide 9: Growth across all business divisions
Growth across all business divisions Growth in AUM/FUA driving revenue growth across all divisions Perpetual Asset Management Perpetual Private Perpetual Corporate Trust AUM ($b)1 FUA ($b) FUA ($b) 15% 23% 6% AUM/FUA/FUA $b 98.3 102.8 vs 1H21 vs 1H21 vs 1H21 89.2 19.0 17.0 990.4 15.5 936.2 922
Slide 10: Strategy Update
Strategy Update Rob Adams CEO and Managing Director half year ending 31 December 2021
Slide 11: A strategy delivering sustained growth
A strategy delivering sustained growth OUR STRATEGY OUR PURPOSE OUR VISION OUR VALUES Enduring prosperity Most trusted in financial services Excellence, integrity, partnership Clients People Shareholders Trusted brand and Attract, develop and inspire Delivering sustainable enduring relationships the
Slide 12: FY22 priorities – progress update
FY22 priorities – progress update Continued execution of strategy, delivering on priorities ahead of schedule Client first Deliver contemporary Investment in refreshed Enhance and embed our Deliver improved digital Remain focused on Exceptional products investment solutions – marketing across key hi
Slide 13: Investing for growth
Investing for growth Making long-term investments now, to support sustainable, long-term growth New markets / channels New products / services Global distribution Global operating model ✓ European office established ✓ Launched the Trillium Global ESG ✓ Barrow Hanley distribution team ✓ Continued imp
Slide 14: Perpetual Asset Management International – Trillium and Barrow Hanley flows
Perpetual Asset Management International – Trillium and Barrow Hanley flows Continued investment in distribution having a positive impact Trillium (Net flows1 by quarter, A$m) Barrow Hanley (1H22 Net flows1,2 by asset class, A$b) 360.9 1.6 326.4 261.2 206.6 (1.4) 60.7 -7.1 (2.6) Sept 2020 Dec 2020 M
Slide 15: Perpetual Asset Management International - Barrow Hanley and Trillium
Perpetual Asset Management International - Barrow Hanley and Trillium Fresh investment in brand, product and distribution to drive growth Strong positive market reaction to Trillium’s unique 40-year history in ESG investing and Barrow Hanley’s proven approach to ‘value’ investing leading to greater
Slide 16: Perpetual Asset Management Australia – leveraging strong performance
Perpetual Asset Management Australia – leveraging strong performance Fresh investment in products, channels and distribution delivering results Perpetual Asset Management Australia (Net flows by quarter, $m) A strong brand and history of investment outperformance ✓ 82% of strategies outperformed ben
Slide 17: Perpetual Private - Jacaranda acquisition integration on track
Perpetual Private - Jacaranda acquisition integration on track Expanding our offering to now include the pre-retiree market Progress update ✓ Successfully completed licensee conversion on 1 December 2021 ✓ On track to fully integrate the business by June 2022 • Acquired in August 20211 ✓ Funds under
Slide 18: Perpetual Corporate Trust – Establishment of Perpetual Digital
Perpetual Corporate Trust – Establishment of Perpetual Digital Combining Perpetual’s existing digital assets with capabilities from Laminar Capital Perpetual Digital’s expanded core service offering Expanded product range driving strong interest from new and existing clients Perpetual Intelligence r
Slide 19: ESG capability - a key strategic focus area
ESG capability - a key strategic focus area Increasing emphasis on growing dedicated ESG AUM 1H22 AUM1 by capability approach2 Growth in dedicated ESG AUM ($b, %) UN PRI ratings3 20 20.00% Category Trillium Barrow PAMA 16.8% Hanley 18 16.8% 18.00% 15.6% Strategy and Governance A+ A+ A+ <1% Dedicated
Slide 20: Markets appear to be favouring 'value' style investing
Markets appear to be favouring ‘value’ style investing Inflation expectations leading to a demonstrable shift to Value Elevated inflation P/E ratios - Australian value vs growth 6.0 35x 5.0 30x 25x 4.0 20x 3.0 15x 2.0 10x 1.0 5x 0.0 x Feb-92 Feb-95 Feb-98 Feb-01 Feb-04 Feb-07 Feb-10 Feb-13 Feb-16 Fe
Slide 21: Expansion of capabilities creating significant capacity for future growth
Expansion of capabilities creating significant capacity for future growth Future growth Perpetual AUM Capacity1 (A$b) c.$430 AUM2 Total Capacity c.$410 (as at 31 Dec 21) c.$120 c.$70 $98 $1032 $27 $28 (as at 31 Dec 21) FY19 FY20 FY21 FY22+ • Leading domestic asset • Acquisition of Trillium deliverin
Slide 22: Recent investment performance positions us well for value rotation
Recent investment performance positions us well for value rotation and continued demand for ESG strategies Proportion of strategies outperforming benchmark1,2 Perpetual Asset Management Australia3 100% 100% 100% 92% 92% 92% 92% 80% 83% 83% 86% 75% 57% 62% 38% 33% 20% 20% 1Yr 3Yrs 5Yrs 1Yr 3Yrs 5Yrs
Slide 23: 1H22 Financials
1H22 Financials Chris Green Chief Financial Officer year ending 31 December 2021
Slide 24: 1H22 financial results
1H22 financial results UPAT up 54% and dividend up 33% 1H22 2H214 1H214 1H22 v 2H21 1H22 v 1H21 For the period $m $m $m (%) (%) Key highlights Operating revenue 384.9 359.9 280.6 7% 37% • Revenue growth of 37% primarily driven by a full six month contribution from Barrow Hanley, and Total expenses (
Slide 25: 1H22 UPAT analysis
1H22 UPAT analysis 54% growth driven by both organic growth and acquisitions 1H21 PAMI PAMA PP PCT Group Support YoY Tax 1H22 UPAT1 UPBT UPBT UPBT UPBT Services UPBT movement UPAT2 Additional earnings Higher average equity Strategic initiatives Continued profit Higher expenses from the acquisition o
Slide 26: Expense analysis
Expense analysis Continued investment in growth initiatives 5% underlying expense growth 275.3 210.4 5.0 Variable remuneration 1H21 Group wide Performance Growth Other PAMI 1H22 Expenses1 short-term incentives fee share initiatives2 related Expenses and equity remuneration expenses3 Reflects six- In
Slide 27: UPAT to NPAT reconciliation
UPAT to NPAT reconciliation $19.8m of significant items mainly attributable to acquisitions (16.6) 1. Relates to fair value movements on the accrued incentive compensation liability. This liability reflects the 25% of employee owned units in Barrow Hanley 26
Slide 28: Cashflow analysis
Cashflow analysis Cash flow movements reflect investment in growth initiatives Free Cash Flow $30m1 350.9 147.1 115.0 130.9 147.1 147.1 147.1 110.0 130.9 30 June Net cash Tax & Lease Capex Dividends Repurchase Cash before Borrowing Acquisition2 Net FX impact 31 2021 receipts in interest financing of
Slide 29: Balance sheet
Balance sheet Strong financial position with headroom for further growth 1H22 2H211 1H211 1H22 v 2H21 1H22 v 1H21 For the period $m $m $m (%) (%) Key movements vs 2H21 Cash 130.9 147.1 172.1 (11%) (24%) • Moderate decrease in Cash related to acquired businesses and payment of the final dividend. Off
Slide 30: Dividends
Dividends Strong earnings growth delivering 33% increase in dividends to shareholders • Fully franked ordinary interim dividend for 1H22 of $1.12 per share • The interim dividend represents a payout ratio of 80%1, in line with our stated dividend policy1 • Dividend payable 1 April 2022 48% Dividen
Slide 31: FY22 guidance
FY22 guidance Continuing to invest in our growth strategy Growth related expenses Operating Expenses ($m) The operating expense growth attributable HIGH to growth investments is expected to be 2- LOW 3% ex PAMI and 13-14% for PAMI. Growth HIGH LOW investments include acquisitions (Barrow Hanley and
Slide 32: 1H22 Divisional Update
1H22 Divisional Update Chris Green Chief Financial Officer year ending 31 December 2021
Slide 33: Perpetual Asset Management International
Perpetual Asset Management International World-class investment and distribution capabilities Key Highlights ✓ Strong contribution from both Trillium and Barrow Hanley, with a full six-month revenue contribution in 1H22 from Barrow Hanley, compared to 1H21 ✓ Trillium AUM A$9.2 billion, an increase o
Slide 34: Perpetual Asset Management Australia
Perpetual Asset Management Australia Strong momentum across all asset classes Key Highlights ✓ 82% of PAMA funds outperformed1 over the year ✓ Third consecutive quarter of positive net inflows ✓ ASX listing of the Perpetual Ethical SRI Managed Fund (ASX:GIVE) and Perpetual Global Innovation Managed
Slide 35: Perpetual Corporate Trust
Perpetual Corporate Trust High quality business that continues to deliver strong earnings growth Key Highlights ✓ Laminar acquisition boosting PCT’s digital capabilities and bringing new growth opportunities ✓ Perpetual Digital revenue growth up 60% on 1H21 ✓ On track to deliver a suite of Treasury
Slide 36: Perpetual Private
Perpetual Private Segment expansion delivers 17th half of net inflows and strong earnings growth Key Highlights ✓ Over $500 million in net flows delivered in 1H22 ✓ New family office capabilities focused on ultra HNW clients attracting early interest ✓ Commencement of the Noongar Boodja Trust, one o
Slide 37: Summary
Summary Rob Adams CEO and Managing Director half year ending 31 December 2021
Slide 38: Focused on growth across all divisions
Focused on growth across all divisions - Trillium ideally positioned to benefit from - Renewed investment in brand and global ESG megatrend positioning of core capabilities Perpetual Asset Perpetual Asset - Barrow Hanley’s proven ‘value’ approach - Benefit from strong improvement in Management Manag
Slide 39: Summary and future focus
Summary and future focus Unique portfolio of Disciplined Best-in-class, high Strong balance Clear strategy businesses with investment in performance teams sheet and for growth continued positive growth initiatives, across all financial momentum FY22 expense businesses focused flexibility guidance re
Slide 40: Q&A
Q&A Rob Adams Chris Green CEO and Managing Director Chief Financial Officer
Slide 41: Thank you.
Perpetual Trust is earned.
Slide 42: Contacts
Contacts Emma Rumble Susie Reinhardt General Manager, Corporate Affairs Head of Investor Relations & Investor Relations emma.rumble@perpetual.com.au susie.reinhardt@perpetual.com.au +612 9229 3998 +61 401 399 781 Connect with us at: About Perpetual Head Office perpetual.com.au Level 18, Angel Place,
Slide 43: Appendix
Appendix Detailed divisional result commentary
Slide 44: Perpetual Asset Management International
Perpetual Asset Management International 1H22 2H21 1H21 1H22 v 1H21 For the period $m $m $m (%) Key movements Revenue 109.8 100.9 38.3 187% • Significant increase in revenue and profitability due to a full six-month contribution from Barrow Hanley, Operating expenses (76.4) (69.4) (26.3) (190%) high
Slide 45: Perpetual Asset Management Australia
Perpetual Asset Management Australia 1H22 2H21 1H21 1H22 v 1H21 For the period $m $m $m (%) Key movements Revenue 84.8 86.6 79.1 7% • Revenue increased as a result of higher average AUM resulting from stronger investment performance Operating expenses (53.0) (57.4) (55.1) (4%) and higher average equ
Slide 46: Perpetual Corporate Trust
Perpetual Corporate Trust 1H22 2H21 1H21 1H22 v 1H21 For the period $m $m $m (%) Key movements Debt Markets Services revenue 33.1 31.8 30.6 8% • Debt Markets Services revenue was 8% higher than in 1H21 as a result of underlying growth in the Managed Funds Services revenue 33.5 31.0 28.8 16% securiti
Slide 47: Perpetual Private
Perpetual Private 1H22 2H21 1H21 1H22 v 1H21 For the period $m $m $m (%) Key movements Market related revenue 77.9 65.6 61.1 27% • Market related revenue was 27% higher than 1H21 due to positive net flows, both from organic Non-market related revenue 29.1 29.0 28.1 4% measures and the acquisition of
Slide 48: Perpetual Asset Management performance charts
Appendix Perpetual Asset Management performance charts
Slide 49: PAMA investment performance
Excess returns above benchmark Below benchmark returns PAMA investment performance Majority of funds outperforming over 1 year to 31 December 2021 Annualised performance (%)1 Excess returns above benchmark (%)1 31 December 2021 Period ending 31 December 2021 Fund Benchmark 1 yr 2 yr 3 yr 5 yr 7 yr 1
Slide 50: PAMI (Barrow Hanley) investment performance
Excess returns above benchmark Below benchmark returns PAMI (Barrow Hanley) investment performance Majority of funds outperforming over 1 year to 31 December 2021 Annualised performance (%)1 Excess returns above benchmark (%)1 31 December 2021 Period ending 31 December 2021 Strategy Benchmark 1 yr 3
Slide 51: PAMI (Trillium) investment performance
Excess returns above benchmark Below benchmark returns PAMI (Trillium) investment performance Recent outperformance impacted by sector positions Annualised performance (%)1 Excess returns above benchmark (%)1 31 December 2021 Period ending 31 December 2021 Strategy Benchmark 1 yr 3 yr 5 yr 7 yr 10 y