Slide 1: Perpetual Half Year Financial Results
Perpetual Limited ABN 86 000 431 827 Angel Place, Level 18, 123 Pitt Street Sydney NSW 2000 20 February 2020 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 1H20 Results
PERPETUAL LIMITED 1H20 RESULTS 6 months to 31 December 2019 Rob Adams Chief Executive Officer and Managing Director Chris Green Chief Financial Officer ABN 86 000 431 827
Slide 3: 1H20 Results - Rob Adams
1H20 RESULTS ROB ADAMS CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR 2
Slide 4: 1H20 Results
1H20 RESULTS $253.5m $173.8m $51.6m $1.05 Revenue1 Expenses1 NPAT Interim DPS 16% on 1H19 $1.2m on 1H19 4% on 1H19 14% on 1H19 PERPETUAL PERPETUAL PERPETUAL INVESTMENTS PRIVATE CORPORATE TRUST FUM $26.3b FUA $15.2b FUA $772.5b Highly regarded investments business Clear HNW segmentation strat
Slide 5: Our Strategy
OUR STRATEGY OUR PURPOSE OUR VISION OUR VALUES Enduring Prosperity Most trusted in Financial Services Excellence, Integrity, Partnership CLIENTS PEOPLE SHAREHOLDERS Trusted brand and enduring Attract, develop and inspire Delivering sustainable quality growth relationships the best people STRATEGIC I
Slide 6: Solid Progress in Strategy Execution
PERPETUAL SOLID PROGRESS IN STRATEGY EXECUTION Exceptional products Empowering our New capabilities Outstanding service people to deliver high Global footprint performance ✓ Capitalising on industry disruption ✓ Key senior appointments ✓ Priority Life acquisition completed, with 16 new advisers1, an
Slide 7: Investments: Elevated Markets Offset by Outflows
PERPETUAL INVESTMENTS ELEVATED MARKETS OFFSET BY OUTFLOWS 7200 7000 All Ordinaries Index 6800 6600 6400 6200 Average 1H20 v 2H19: +8% 6000 5800 Average 1H20 v 1H19: +11% Markets rebounded 5600 positively with 5400 double digit growth 5200 Jul-18 Nov-18 Mar-19 Jul-19 Nov-19 over the 12 months Average
Slide 8: Challenging Market Conditions for Value Managers
PERPETUAL INVESTMENTS CHALLENGING MARKET CONDITIONS FOR VALUE MANAGERS 20% 2000 2007 Exceeding 26x Tech bubble Pre GFC Tech bubble 21.3x bubble levels 24.4x 24x 17.9x Valuations now 15% exceed previous 22x market peaks 10% Price: Earnings Ratio ISF Outperformance 20x Our funds have Average historica
Slide 9: Long-Term Performance Remains Strong
PERPETUAL INVESTMENTS LONG-TERM PERFORMANCE REMAINS STRONG Quartile rankings1 % of funds quartile ranking Period ending 31 December 2019 6 mos 1 yr 3 yrs 5 yrs 7 yrs 10 yrs 6 mos 40% 60% 3 4 4 4 4 3 Australian Equities Perpetual W Australian Perpetual W Concentrated Equity 3 4 4 4 4 2 Perpetual W Et
Slide 10: Trillium Stands to Benefit from Two Megatrends
TRILLIUM STANDS TO BENEFIT FROM TWO MEGATRENDS: INTERGENERATIONAL WEALTH TRANSFER AND INCREASING ESG INVESTMENT DEMAND Millennials have a higher propensity to invest in ESG strategies than 2019 saw a significant increase in European Sustainable fund flows3 Baby Boomers1 European Sustainable Fund Flo
Slide 11: Acquisition of Trillium Asset Management: Integrated ESG Investing Since 1982
ACQUISITION OF TRILLIUM ASSET MANAGEMENT INTEGRATED ESG INVESTING SINCE 1982 Reputation Mission ✓ Trillium recognised as “2019 B Corporation1 best for the world overall honouree” “We will provide for the financial needs of our ✓ 20 years of fossil fuel free investing clients whilst leveraging their
Slide 12: Acquisition of Trillium: Key Transaction Features
ACQUISITION OF TRILLIUM ASSET MANAGEMENT KEY TRANSACTION FEATURES ▪ Perpetual is acquiring 100% of Trillium’s equity ▪ Completion is expected on or around 30 June 2020 ▪ Upfront consideration of US$36m to be paid on completion from existing cash resources ▪ Deferred consideration structured as an ea
Slide 13: Investing in and Building a World Class Distribution Model
PERPETUAL DISTRIBUTION INVESTING IN AND BUILDING A WORLD CLASS DISTRIBUTION MODEL Adam Quaife, General Manager - Global Head of Distribution ▪ 22 years industry experience in asset management distribution ▪ Last 18 years at Franklin Templeton Investments in senior distribution roles, including: ▪ He
Slide 14: Perpetual Private: Client Segmentation at Core of Growth
PERPETUAL PRIVATE SUCCESS IN CLIENT SEGMENTATION AT CORE OF CONTINUED GROWTH Continued growth in 13 consecutive halves Steady market related Select & implemented of positive FUA flows margins funds Funds under advice $b Funds under management $b Market related revenue margin bps 6.7 6.8 6.2 0.6 0.6
Slide 15: Referral Channels Continue to Deliver New Clients
PERPETUAL PRIVATE REFERRAL CHANNELS CONTINUE TO DELIVER NEW CLIENTS New client growth Client segmentation Continued growth in across HNW and strategy proven by Fordham medical continues high client balances Net new clients – HNW ex Fordham1 New clients –- Fordham Fordham Average FUA per new HNW clie
Slide 16: Capitalising on Industry Dislocation by Attracting Quality Talent
PERPETUAL PRIVATE CAPITALISING ON INDUSTRY DISLOCATION BY ATTRACTING CULTURALLY ALIGNED HIGH QUALITY TALENT TRANSITION ADVISERS ONBOARD CLIENTS ACCELERATE GROWTH FY20 FY21 FY22 Industry context 16 new advisers joining Perpetual3 30% of the advice industry either switched Pipeline of additional advis
Slide 17: Priority Life Acquisition Update
PERPETUAL PRIVATE PRIORITY LIFE ACQUISITION UPDATE 1H20 Business overview Accelerate growth through referrals Priority Life is one of Australia’s leading risk advisory firms, with a particular Cross referrals have commenced: strength in servicing medical professionals Australia-wide since 1992 ▪ Wea
Slide 18: PCT – Managed Fund Services
PCT – MANAGED FUND SERVICES DEMAND FROM DOMESTIC & GLOBAL INVESTORS SUPPORTING GROWTH MFS1 FUA $b MFS revenue contribution $m 269.7 274.1 26.6 27.6 255.8 24.7 30.6 32.7 3.8 4.0 28.7 29.2 30.7 4.0 24.6 5.0 5.1 58.1 63.5 4.3 57.5 6.3 7.0 6.1 145.1 151.7 147.1 10.4 11.2 11.6 1H19 2H19 1H20 1H19 2H19 1H
Slide 19: PCT – Debt Market Services
PCT – DEBT MARKET SERVICES GROWTH IN NON BANK LENDING AND DATA & ANALYTICS SOLUTIONS DMS FUA1 $b DMS Public securitisation issuance DMS revenue composition $m $b 32.7 33.2 494.9 498.4 35.3 28.9 461.2 14.5 15.5 29.3 14.8 8.9 13.6 14.3 115.5 121.4 26.7 11.2 129.2 8.0 43.3 43.0 8.0 43.1 18.3 13.7 321.7
Slide 20: PCT – Data and Analytics Solutions
PCT – DATA AND ANALYTICS SOLUTIONS BUILDING MOMENTUM WITH NEW CLIENTS AND PRODUCT EXPANSION DATA AND ANALYTICS SOLUTIONS (DAS) Australian (Securitisation) Perpetual Perpetual Data Warehouse Roundtables Business Intelligence Regulatory and investor reporting Benchmarking and insights Data analytics d
Slide 21: Corporate Trust: Product Innovation and M&A Driving Growth
PERPETUAL CORPORATE TRUST PRODUCT INNOVATION AND M&A DRIVING GROWTH PCT Revenue1 $m 13%2 Acquisition Digital Trust Co Data Services Acquisition Rfi Digital platform product launch “Fintech/Regtech acquired Analytics launched Strategy” Dec 13 2013 2014 2015 2016 2017 2018 2019 New products New produc
Slide 22: Financials
FINANCIALS CHRIS GREEN CHIEF FINANCIAL OFFICER 21
Slide 23: Financial Performance: Group
FINANCIAL PERFORMANCE GROUP 1H20 2H19 1H19 1H20 1H20 For the period Key themes $m $m $m v 2H19 v 1H19 • Revenue impacted by PI net Operating revenue1 253.5 261.8 252.3 (3%) - outflows and lower performance fees; partially offset by double Total expenses1 (173.8) (184.9) (167.0) 6% (4%) digit growth
Slide 24: Revenue and Expense Analysis
REVENUE AND EXPENSE ANALYSIS Movement in Revenue1 ($m) Key revenue movements • Higher PCT revenue reflecting growth in both MFS and DMS, as well as growth in data services revenue and full year Roundtables revenue • Higher PP revenues due to higher market related revenue partially offset by lower no
Slide 25: Operating Model Review Update
OPERATING MODEL REVIEW UPDATE REPOSITIONING THE BUSINESS AND INVESTING IN GROWTH Client centric Decision making and Centres of excellence Digital Transformation model accountability ▪ Expected to deliver $18-$23m in annualised pre-tax cost ▪ Phase 2 of the operating model review underway looking at
Slide 26: Perpetual Investments: Lower Revenue Due to Net Outflows and Performance Fees
PERPETUAL INVESTMENTS LOWER REVENUE DUE TO NET OUTFLOWS AND PERFORMANCE FEES Revenue $m 1H20 2H19 1H19 1H20 v 1H20 v For the period 1.4 $m $m $m 2H19 1H19 2.1 0.5 Revenue 94.5 99.2 105.8 (5%) (11%) 104.4 97.2 93.9 Operating expenses1 (52.2) (60.8) (54.3) 14% 4% EBITDA2 42.3 38.4 51.5 10% (18%) 1H19
Slide 27: Perpetual Private: Investing in Future Growth
PERPETUAL PRIVATE INVESTING IN FUTURE GROWTH 1H20 2H19 1H19 1H20 v 1H20 v Revenue $m For the period $m $m $m 2H19 1H19 Market related revenue 62.8 59.9 60.5 5% 4% 32.1 33.5 30.7 Non-market related revenue 30.7 33.5 32.1 (8%) (4%) Total revenues 93.5 93.4 92.6 - 1% Operating expenses1 (67.1) (68.3) (
Slide 28: Corporate Trust: Record Growth in Profit Before Tax
PERPETUAL CORPORATE TRUST DELIVERED 23% RECORD GROWTH IN PROFIT BEFORE TAX 1H20 2H19 1H19 1H20 v 1H20 v For the period Revenue $m $m $m $m 2H19 1H19 59.3 60.8 Debt Market Services revenue 33.2 32.7 28.9 2% 15% 53.6 26.6 27.6 Managed Fund Services revenue 27.6 26.6 24.7 4% 12% 24.7 Total revenues 60.
Slide 29: Balance Sheet: Strong Foundations for Future Growth
BALANCE SHEET STRONG FOUNDATIONS FOR FUTURE GROWTH 1H20 2H19 1H19 1H20 v 1H20 v Regulatory capital3 For the period ended $m $m $m 2H19 1H19 Cash 261.7 299.6 279.8 (13%) (6%) Liquid investments (FVTPL) 79.1 69.7 63.4 6% 16% 156.7 157.9 155.2 Goodwill & other intangibles 373.4 345.8 346.9 8% 8% Other1
Slide 30: Financial Indicators
FINANCIAL INDICATORS EPS1 cps DPS cps NTA per share ROE2 % 128.2 125 125 6.43 6.47 118.1 119.0 5.97 105 18.2 16.8 15.6 1H19 2H19 1H20 1H19 2H19 1H20 1H19 2H19 1H20 1H19 2H19 1H20 $1.05 95% 27 March 2020 FULLY FRANKED INTERIM DIVIDEND PAYOUT RATIO3 DIVIDEND PAYABLE 1. Fully diluted on an underlying b
Slide 31: Clients First, Future Fit, New Horizons
Clients first Exceptional products. Outstanding service Future fit Empowering our people to deliver high performance New horizons New capabilities. Global footprint
Slide 32: Contacts
CONTACTS Rob Adams Chief Executive Officer & Managing Director rob.adams@perpetual.com.au +612 9229 9700 Chris Green Chief Financial Officer chris.green@perpetual.com.au +612 9229 9861 About Perpetual Perpetual is an ASX-listed, diversified financial services Catherine Buckmaster company which has b
Slide 33: Disclaimer: Important Information
DISCLAIMER Important information The information in this presentation is general background information about Perpetual Limited and its subsidiaries (Perpetual Group) and their activities and is current as at 20 February 2020. It is in summary form and is not necessarily complete. It should be read