Perpetual Limited · ASX:PPT
Perpetual — H1 2021 Earnings Presentation
42 slides from Perpetual's earnings presentation, Feb 18, 2021
Slide 1: Perpetual Half Year Financial Results
Perpetual Limited ABN 86 000 431 827 Angel Place, Level 18, 123 Pitt Street Sydney NSW 2000 18 February 2021 Australia Phone +61 9229 9000 ASX Limited www.perpetual.com.au ASX Market Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 Perpetual Half Year Financial Results The follo
Slide 2: Perpetual Limited 1H21 Results
PERPETUAL LIMITED 1H21 RESULTS 6 months to 31 December 2020 18 February 2021 Trust is earned.
Slide 3: 1H21 Overview
1H21 OVERVIEW Rob Adams CEO and Managing Director Trust is earned.
Slide 4: 1H21 Results
1H21 RESULTS $280.6m $208.5m $52.6m $0.84 Operating revenue1 Expenses UPAT2 Interim DPS 10% on 1H20 22% on 1H20 11% on 1H20 20% on 1H20 19% on 2H20 16% on 2H20 33% on 2H20 68% on 2H20 ▪ Results reflect implementation of two transformational acquisitions Trillium Asset Management (Tri
Slide 5: Perpetual's Business Model
PERPETUAL’S BUSINESS MODEL INCREASINGLY DIVERSIFIED AND GROWING SOURCES OF REVENUE Operating revenue1,4 $m Underlying profit before tax2,4 $m PCT Managed Fund Services 11% Perpetual Asset PCT Debt Market 29% Management Australia Services 14% 24% 39% 1H21 41% 1H21 Operating 43% UPBT revenue contribut
Slide 6: Perpetual's Strategy for Long-Term Growth
PERPETUAL’S STRATEGY FOR LONG-TERM GROWTH DISCIPLINED EXECUTION OF FY21 STRATEGIC PRIORITIES Empowering our people to New capabilities Exceptional products deliver high performance Global footprint Outstanding service ▪ Leading positions in chosen ▪ Investing in digital infrastructure ▪ Successful c
Slide 7: Perpetual Asset Management
PERPETUAL ASSET MANAGEMENT DISTRIBUTION STRATEGY GAINING MOMENTUM WITH INCREASING DIVERSITY BY ASSET CLASS, CHANNEL AND GEOGRAPHY Multiple world-class Strengthened capability to support Continued international investment capabilities domestic institutional and retail clients distribution build-out ▪
Slide 8: Recent Shift to Value Improves Investment Performance
PERPETUAL ASSET MANAGEMENT RECENT SHIFT TO VALUE IMPROVES INVESTMENT PERFORMANCE MSCI Large Cap Australia and Russell US 1000 Value vs Growth Rolling 5 year returns1,2 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% Russell 1000 Value vs Growth MSCI Large Cap Australia Value vs Growth ▪ Posit
Slide 9: Asset Management Australia: Building Foundations for Quality Sustainable Growth
PERPETUAL ASSET MANAGEMENT AUSTRALIA BUILDING FOUNDATIONS FOR QUALITY SUSTAINABLE GROWTH CLIENT FIRST FUTURE FIT NEW HORIZONS Focused on delivering positive A contemporary and efficient client outcomes with world-class Bringing new capabilities and operating platform client led solutions to market i
Slide 10: Asset Management Australia: Net Outflows Partially Offset by Improving Performance
PERPETUAL ASSET MANAGEMENT AUSTRALIA NET OUTFLOWS PARTIALLY OFFSET BY IMPROVING PERFORMANCE 7900 All Ordinaries Index1 7400 ▪ Whilst the equity markets continued to rebound, 6900 the local market was still 6% lower compared to 6400 1H20 average 5900 ▪ Improved investment performance across all 5400
Slide 11: Asset Management Australia: Strong Performance Across Asset Classes
PERPETUAL ASSET MANAGEMENT AUSTRALIA STRONG PERFORMANCE ACROSS ASSET CLASSES DURING THE HALF 1 1 Source: Perpetual, RBC and FactSet as at 31 December 2020 1. Returns have been calculated using exit prices after taking into account all ongoing fees, and assuming reinvestment of distributions. No allo
Slide 12: Asset Management International: Building World-Class Capabilities
PERPETUAL ASSET MANAGEMENT INTERNATIONAL BUILDING WORLD-CLASS INVESTMENT AND DISTRIBUTION CAPABILITIES CLIENT FIRST FUTURE FIT NEW HORIZONS Compelling partnerships New growth opportunities Scale through distribution Progress on FY21 strategy ✓ Strong engagement with new global and ✓ Confirmed appoin
Slide 13: Investment in Marketing and Brand Supporting Distribution Uplift
PERPETUAL ASSET MANAGEMENT INTERNATIONAL INVESTMENT IN MARKETING AND BRAND SUPPORTING DISTRIBUTION UPLIFT 12
Slide 14: AUM Growth Through Transformational Acquisition
PERPETUAL ASSET MANAGEMENT INTERNATIONAL AUM GROWTH THROUGH TRANSFORMATIONAL ACQUISITION AND STRONG PERFORMANCE AUM by channel $b (AUD)2 AUM by asset class $b (AUD)2 66.5 66.5 13.1 11.2 61.0 42.2 5.6 5.6 1.4 1.6 4.2 5.4 4.0 2H20 1H21 2H20 1H21 Intermediary Institutional US equities Global equities F
Slide 15: Asset Management International: Strong Performance (Barrow Hanley)
PERPETUAL ASSET MANAGEMENT INTERNATIONAL STRONG PERFORMANCE ACROSS ASSET CLASSES DURING THE HALF 1 1 excess returns above benchmark below benchmark returns Source: Barrow Hanley as at 31 December 2020 1.Reflects gross performance (unless otherwise stated) of 24 key investment strategies. Future retu
Slide 16: Asset Management International: Strong Performance (Trillium)
PERPETUAL ASSET MANAGEMENT INTERNATIONAL STRONG PERFORMANCE ACROSS ASSET CLASSES DURING THE HALF 1 1 excess returns above benchmark below benchmark returns Source: Trillium performance data as at 31 December 2020 1.Reflects preliminary gross composite performance (unless otherwise stated) of investm
Slide 17: Perpetual Private: Strong Foundations for Growth
PERPETUAL PRIVATE STRONG FOUNDATIONS FOR GROWTH IN CHOSEN SEGMENTS CLIENT FIRST FUTURE FIT NEW HORIZONS Strong segment focus delivering Capitalise on industry disruption Accelerate growth via pursuit to HNW, Not For Profit clients, and accelerate growth through of culturally and strategically Native
Slide 18: Successful Execution of Adviser Acquisition Strategy
PERPETUAL PRIVATE SUCCESSFUL EXECUTION OF ADVISER ACQUISITION STRATEGY CONTINUING TO DRIVE NET FLOWS Community and Social Full range of proprietary multi- 15 consecutive halves Investment segment providing manager investment solutions of positive net flows meaningful contribution available for clien
Slide 19: Corporate Trust: Continued Growth and Digital Investment
PERPETUAL CORPORATE TRUST CONTINUED GROWTH AND INVESTMENT IN DIGITAL SOLUTIONS CLIENT FIRST FUTURE FIT NEW HORIZONS Exceptional products, delivered Digitally transforming legacy Developing and launching new with service excellence technology digital products Progress on FY21 strategy across three bu
Slide 20: Corporate Trust MFS: Growth Supported by New Clients
PERPETUAL CORPORATE TRUST - MFS GROWTH SUPPORTED BY NEW CLIENTS AND STABLE ASSET PRICES MFS FUA $b MFS – revenue contribution $m 307.9 285.8 28.8 274.1 36.7 27.6 28.0 34.6 4.1 32.7 32.2 4.0 4.2 28.9 30.7 5.1 75.1 5.0 5.2 64.3 63.5 7.0 7.1 7.4 147.1 158.1 163.9 11.6 11.5 12.3 1H20 2H20 1H21 1H20 2H20
Slide 21: Corporate Trust DMS: Product Development and Service Excellence
PERPETUAL CORPORATE TRUST - DMS PRODUCT DEVELOPMENT AND SERVICE EXCELLENCE DRIVING REVENUE GROWTH DMS FUA $b DMS securitisation issuance $b DMS revenue composition $m 656.1 628.3 36.7 36.9 18.1 38.3 33.2 18.5 35.3 33.9 498.4 41.9 39.5 9.5 14.7 15.5 131.3 8.9 15.5 122.4 8.5 14.3 43.0 121.4 16.3 16.1
Slide 22: 1H21 Financials
1H21 FINANCIALS Chris Green Chief Financial Officer Trust is earned.
Slide 23: Financial Performance: Group
FINANCIAL PERFORMANCE GROUP 1H21 2H20 1H20 1H21 1H21 For the period $m $m $m v 2H20 v 1H20 Key movements Operating revenue 280.6 236.5 254.1 19% 10% ▪ Acquisitions of Barrow Hanley (17 November 2020) and Trillium (30 June 2020) have had a Total expenses (208.5) (180.5) (170.5) (16%) (22%) material i
Slide 24: 1H21 UPAT to NPAT Analysis – Significant Items
FINANCIAL PERFORMANCE 1H21 UPAT TO NPAT ANALYSIS – SIGNIFICANT ITEMS Movement in Profit after tax ($m) 20.9 1H21 Transaction and Integration costs: Non-cash Unrealised Tax affected fair 1H21 UPAT amortisation of gains/losses on value NPAT Trillium Barrow Other acquired financial assets movements1 Ha
Slide 25: Revenue and Expense Analysis
REVENUE AND EXPENSE ANALYSIS Movement in revenue ($m) Key revenue movements ▪ Higher Perpetual Corporate Trust revenue reflecting growth in both Managed Funds Services and Debt Market Services ▪ Lower Perpetual Private revenue reflecting lower non-market revenue and lower average equity markets, par
Slide 26: Asset Management Australia: Lower Revenue Due to Net Outflows
PERPETUAL ASSET MANAGEMENT AUSTRALIA LOWER REVENUE DUE TO NET OUTFLOWS & LOWER AVERAGE EQUITY MARKETS 1H21 2H20 1H20 1H21 v 1H21 v For the period $m $m $m 2H20 1H20 Revenue1 79.1 79.0 94.5 0% (16%) Key movements Operating expenses (55.1) (54.2) (50.3) (2%) (10%) ▪ 16% decrease in revenue compared wi
Slide 27: Asset Management International: Acquisitions Completed
PERPETUAL ASSET MANAGEMENT INTERNATIONAL BARROW HANLEY AND TRILLIUM ACQUISITIONS COMPLETED 1H21 2H20 For the period $m $m Revenue 38.3 - Operating expenses (26.3) - Key movements EBITDA 11.9 - Depreciation & amortisation (0.8) - ▪ The financial performance includes Trillium (completion date of 30 Ju
Slide 28: Perpetual Private: Positive Growth in Adviser Inflows
PERPETUAL PRIVATE POSITIVE GROWTH IN ADVISER INFLOWS, NON-MARKET IMPACTED BY ECONOMIC SLOWDOWN 1H21 2H20 1H20 1H21 v 1H21 v Key movements For the period $m $m $m 2H20 1H20 ▪ Market related revenue 3% lower than 1H20 due Market related revenue 61.1 59.3 62.8 3% (3%) to lower average equity markets an
Slide 29: Corporate Trust: Solid Growth in Revenue and Profit
PERPETUAL CORPORATE TRUST SOLID GROWTH IN REVENUE AND PROFIT BEFORE TAX 1H21 2H20 1H20 1H21 v 1H21 v Key movements For the period $m $m $m 2H20 1H20 ▪ Debt Markets Services revenue growth of 11% Debt Market Services revenue 36.9 36.7 33.2 0% 11% compared to 1H20 driven by underlying growth in securi
Slide 30: Balance Sheet: Maintaining Financial Flexibility
BALANCE SHEET MAINTAINING FINANCIAL FLEXIBILITY 1H21 2H20 1H20 1H21 v 1H21 v For the period ended $m $m $m 2H20 1H20 Cash 172.1 164.1 261.7 5% (34%) Key movements Liquid investments (FVTPL) 133.7 80.7 79.1 66% 69% ▪ 34% decrease in Cash predominantly reflects the acquisition of Trillium Goodwill & o
Slide 31: Financial Indicators
FINANCIAL INDICATORS EPS1 cps ROE2 % NTA3 per share DPS cps 123.9 5.97 105 19.8 95.6 84 82.3 3.95 13.5 12.0 50 0.42 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 $0.84 90% 26 March 2021 Fully franked final dividend Payout ratio4 Dividend payable 1. Diluted EPS on UPAT is calculated usi
Slide 32: FY21 Guidance
FY21 GUIDANCE CONTINUED INVESTMENT IN KEY GROWTH INITIATIVES Targeted Underlying Revised accounting Expense base of investment expenses treatment acquired businesses ▪ Responding to improving market ▪ Underlying expenses expected to ▪ Revised accounting guidance ▪ The Trillium and Barrow Hanley dyna
Slide 33: 1H21 Results Presentation
1H21 RESULTS PRESENTATION Rob Adams CEO and Managing Director Trust is earned.
Slide 34: Building a Sustainable Future for Clients, People, Communities and Environment
BUILDING A SUSTAINABLE FUTURE FOR OUR CLIENTS, PEOPLE, COMMUNITIES AND THE ENVIRONMENT CLIENTS PEOPLE COMMUNITIES ENVIRONMENT ✓ Supporting clients and advisers ✓ ‘Future Fit Workplace’ strategy to ✓ 500 Perpetual employees participated ✓ CDP climate score improved to a through COVID-19 with webinars
Slide 35: Continued Positive Momentum, Well Positioned for Future Growth
CONTINUED POSITIVE MOMENTUM WELL POSITIONED FOR FUTURE GROWTH Disciplined A diversified strategy Targeting quality business execution growth ▪ Benefits of diversification highlighted during ▪ Execution of strategy across all divisions, ▪ Each division well positioned for future growth periods of inv
Slide 36: Q&A
Q&A Trust is earned.
Slide 37: Thank You
_ THANK You f tL t ig earned. | ' I" 2 ma 4 7
Slide 38: Appendix
APPENDIX Trust is earned.
Slide 39: Overview: Our Business Today
PERPETUAL OVERVIEW: OUR BUSINESS TODAY DIVERSIFIED AND GROWING SOURCES OF REVENUE ACROSS FOUR DIVISIONS Perpetual Asset Management Australia (PAMA) Perpetual Corporate Trust (PCT) ▪ Highly regarded and award winning investments business across Australian equities, multi-asset, ▪ Leader in securitisa
Slide 40: Our Strategy: Client First, Future Fit, New Horizons
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 best people quality growth STRATEGIC I
Slide 41: Contacts
CONTACTS Emma Rumble General Manager, Corporate Affairs & Investor Relations emma.rumble@perpetual.com.au +612 9229 3998 Marisa Zammit Head of Investor Relations About Perpetual marisa.zammit@perpetual.com.au Perpetual Limited (ASX:PPT) is an ASX-listed, diversified financial services company, +61 4
Slide 42: Disclaimer
DISCLAIMER Important information This presentation has been prepared by Perpetual Limited ABN 86 000 431 827 (Perpetual). It is general information on Perpetual and its subsidiaries (Perpetual Group) current as at 18 February 2021. It is in summary form and is not necessarily complete. It should be