Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — Shareholder Meeting (October 2010)
45 slides from Eqt's shareholder meeting presentation, Oct 29, 2010
Slide 1: Equity Trustees Limited 2010 Annual General Meeting
1 Equity Trustees Limited 2010 Annual General Meeting 29 October 2010
Slide 2: Board of Directors
Board of Directors Mr JA (Tony) Killen Mr Robin Burns Mr David Groves Mr John McConnell Non Executive Managing Director Non Executive Non Executive Director Director Director Chairman Deputy Chairman The Hon Jeffrey Ms Alice Williams Mr Barry Jackson Ms Anne O’Donnell Kennett AC Non Executive Non Ex
Slide 3: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns 3. Items of business Mr Tony Killen Mr David Groves 4. Questions Trusted since 1888 3
Slide 4: Trusted since 1888
©) BA sta ‘Trustees Trusted since 1888 4
Slide 5: Sharemarket performance
Sharemarket performance S&P/ASX200 Accum Index 30 June 2007 to 30 September 2010 120 7,510 110 6,510 100 Index base date 30 June 2007 S&P/ASX 200 Accum Index 90 5,510 80 4,510 70 60 3,510 50 40 2,510 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Trusted since 1888 5
Slide 6: Net Yearly Fund Flow
Net Yearly Fund Flow Funds Management Business Unit Million $200 $150 $100 $50 $0 -$50 2007/2008 2008/2009 2009/2010 Aust Cash & Fixed Interest International Equities Aust Equities Listed Property Trusted since 1888 6
Slide 7: Overview – FY2010
Overview – FY2010 ¾ Satisfactory profits given testing conditions. ¾ Company well poised to continue to deliver for shareholders. ¾ 110¢ full-year, fully franked dividend maintained at 2009 levels. ¾ Sensible investment in the business, balanced by expenditure control. ¾ Strong balance sheet, nil de
Slide 8: Profitability
Profitability ¾ Operating profit before tax down 1.8% to $10.7m $14.6m ¾ Net profit after tax maintained at $8.0m (Includes profit on sale of investments) $11.1m $10.9m $10.7m $10.6m Operating profit before tax Net profit after tax $8.1m $8.0m $8.0m $6.6m $5.2m $4.2m $3.4m 2005 2006 2007 2008 2009 2
Slide 9: Shareholder Dividends
Shareholder Dividends 110 110 110 Final (cps) Interim (cps) 60 60 60 75 50 45 40 30 30 25 50 50 50 20 30 20 15 10 2004 2005 2006 2007 2008 2009 2010 Trusted since 1888 9
Slide 10: Franking Credits Balance
Franking Credits Balance Greater utilisation in 2009 and 2010 due to increased dividend. 8000 7335 7311 7000 6246 6000 5876 5252 5000 4000 3610 3000 3060 2000 2004 2005 2006 2007 2008 2009 2010 Trusted since 1888 10
Slide 11: Dividend payout ratio
Dividend payout ratio Full-year dividend as percentage of Earnings Per Share 140% 120% 114.5% 111.7% Note, change of policy to 70-90% of NPAT (from 60-80%) 100% 82.5% 80% 75.5% 71.5% 71.3% 65.9% 60% 40% 20% 0% 2004 2005 2006 2007 2008 2009 2010 Dividend payout policy range Trusted since 1888 11
Slide 12: Sustained share price outperformance
Sustained share price outperformance 1 July 2005 to 30 June 2010 S&P/ASX 200 Accum. Index 24.8% EQT Total Shareholder Return 74.8% EQT Compound Growth pa. over the 5 years 11.8% 300 250 EQT Share Price 200 150 132.9 100 S&P/ASX 200 Index 107.1 Base (100) taken at 1 July 2005 50 Jun-2005 Jun-2006 Jun
Slide 13: Recent acquisition – OAMPS Superfund
Recent acquisition – OAMPS Superfund ¾ Further step growth into Super ¾ 27,000 members ¾ $265m FUM ¾ Cost approximately $10 million – funded from internal resources ¾ Profitable from day one, 1 November 2010 ¾ Synergy benefits expected ¾ Bolt-on to existing master trust ¾ Earnings accretive in first
Slide 14: The Board
The Board ¾ Triennial formal performance appraisal in March 2010 – some suggestions to be considered but overall conclusion was positive. ¾ Succession planning process is in place – based on desired skills mix and timetable for renewal. ¾ Barry Jackson stepping down after 8 years – distinguished ser
Slide 15: Looking ahead
Looking ahead Outlook for 2011: ¾ Economic conditions still difficult in US and Europe – impacting confidence and equity markets worldwide, and hence investors. ¾ Company well placed to benefit from a sustained recovery. ¾ Overall strategic plan still relevant and balanced – appropriate to the condi
Slide 16: Mr Robin Burns, Managing Director
Mr Robin Burns Managing Director Equity Trustees Limited Trusted since 1888 16
Slide 17: Overview – FY2010
Overview – FY2010 ¾ Operating revenue growth 2.1%. ¾ Operating margin 31.1%, compared with 32.4% in previous year. ¾ New business generation continued, although varied between business units. ¾ All business units continue to earn positive EBIT. ¾ Expenses grew 4% ¾ No impairment charges. ¾ Strong ca
Slide 18: Revenue recovering
Revenue recovering S&P / ASX200 Index July 2007 to June 2010 7500 7000 6828.7 6500 FY 2008 FY 2009 FY 2010 6000 S&P/ASX200 5500 (16.9%) (24.1%) +10.9% 4954.3 Year on year 5000 4500 EQT operating revenue +21.2% (13.7%) +2.1% 4000 4301.5 year on year 3500 3145.5 3000 09/08 11/08 01/09 03/09 05/09 07/0
Slide 19: S&P/ASX All Ordinaries Index Year on Year
S&P/ASX All Ordinaries Index Year on Year FY08/09, FY09/10 & YTD10/11 5500 5000 4500 4000 3500 3000 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun All Ords 2010/11 All Ords 2009/10 All Ords 2008/9 Trusted since 1888 19
Slide 20: Expense management and margins
Expense management and margins Growth - operating revenue (net of gains on the sale of investments) Growth - operating expenses (net of depreciation/amortisation) +30.8% +25.0% +21.1% +18.0% +15.7% +14.1% +14.2% +14.6% +4% +2.1% 2005 2006 2007 2008 2009 2010 (10.5%) (13.7%) Operating 21.2% 26.8% 34.
Slide 21: Business units – activities and key measures
Business units – activities and key measures 2010 2010 Revenue Business unit Key services Target market / channel FUM/FUA vs 2009 vs 2009 Private Clients ¾ Wealth Management ¾ Private investors $8.5m $1,261m ¾ Asset Management ¾ Business to business +12.6% +13.5% ¾ Trusts & Estates referrals ¾ Phila
Slide 22: Business unit overview - Private Clients
Business unit overview - Private Clients Operating revenue up 12.6% to $8.5m FUM up 13.5% to $1,261m Significant one-off estates boost 1,490 10.4 1,303 1,333 9.3 1,261 8.5 1,128 1,112 7.6 998 5.9 6.1 5.2 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 ¾ Continuing growth in Wea
Slide 23: Business unit overview – Funds Management
Business unit overview – Funds Management Operating revenue down 2.3% to $8.3m FUM up 12.3% to $2,176m 2,367 10.0 2,176 9.0 2,002 1,938 8.5 8.3 7.5 6.4 1,414 5.9 989 617 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 ¾ Strong increase in flows into the EQT co-branded funds ¾ F
Slide 24: Business unit overview - Fund Services
Business unit overview - Fund Services Operating revenue up 4.8% to $8.5m FUA up 28.9% to $14,452m 13,845 14,046 14,452 9.6 8.1 8.5 11,130 11,209 7.7 5.6 7,211 3.1 4,130 2.1 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 ¾ Activity from domestic and global investment managers
Slide 25: Business unit overview - Superannuation
Business unit overview - Superannuation Operating revenue down 1.8% to $8.3m FUM up 10.4% to $624m 8.5 8.3 635 624 7.9 615 565 5.3 400 4.4 319 2.9 3.4 149 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 ¾ The EquitySuper brand was launched and the integration of the Templeton's
Slide 26: Support Services
Support Services ¾ Support services provided by Corporate, Human Resources, Business Systems & Technology, Marketing, Operations, Risk Management & Compliance are all integral parts of the business. ¾ Last stages of implementing new back office system. ¾ Business Process Management project now under
Slide 27: Business update
Business update Regulatory changes ¾ Trustee companies have commenced the transition to national legislation (from the previous state based legislation). ¾ Cooper, Ripoll and Henry reviews contain recommendations which may affect EQT’s operation, products and services . All business units are well p
Slide 28: Summary
Summary Current results and activities ¾ Business has diversified revenue streams, all making solid earnings contributions. ¾ Despite continuing volatility, underlying margins remain healthy and revenue has held up well. ¾ Tight expenditure control through difficult period but future growth requires
Slide 29: Summary (cont)
Summary (cont) Looking ahead ¾ Demographic opportunity in private wealth management, good leverage to funds management industry. ¾ A market recovery and sustained return to equities will flow into revenue improvement. ¾ Focus on business development and sales/marketing culture, but maintain manageme
Slide 30: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns Items of business Mr Tony Killen Mr David Groves 4. Questions Trusted since 1888 30
Slide 31: Items of business
Items of business Item 1: To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2010. Item 2: To adopt the remuneration report for year ended 30 June 2010. Item 3: To consider the election of directors. Item 4: To consider the grant
Slide 32: Items of ordinary business – Item 1
Items of ordinary business – Item 1 Item 1: To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2010. Trusted since 1888 32
Slide 33: Items of ordinary business – Item 2
Items of ordinary business – Item 2 Item 2: To adopt the remuneration report for year ended 30 June 2010. Trusted since 1888 33
Slide 34: Remuneration
Remuneration ¾ Pay freeze 1 July 2009. ¾ No Short Term Incentives paid for 2008/09 and 2009/10. ¾ Long Term Incentive allocations each year: ¾ Series 1 Earned (ended 30/6/08) ¾ Series 2 Partially Earned (ended 30/6/09) ¾ Series 3 Not Earned (ended 30/6/10) ¾ Series 4 Under Assessment (ended 30/6/11)
Slide 35: Tracking remuneration vs DPS
Tracking remuneration vs DPS 20 18 Cumulative growth in Non-Executive Director remuneration 16 Cumulative growth in Top 5 Executive plus MD remuneration 14 Cumulative growth in Dividends Per Share (DPS) 12 10 8 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 Trusted since 1888 35
Slide 36: Item 2 – proxies received
Item 2 – proxies received To adopt the remuneration report for year ended 30 June 2010 In respect of item 2 of ordinary business, the following proxies have been received: For Against 3,676,988 199,387 Open (total) = 149,680 Open (held by EQT directors) = 114,504 Trusted since 1888 36
Slide 37: Items of ordinary business – Item 3
Items of ordinary business – Item 3 Item 3(a): To consider the re-election of Mr J A Killen Mr. Groves to Chair the meeting for Item 3(a). Trusted since 1888 37
Slide 38: Item 3 (a) – proxies received
Item 3 (a) – proxies received To consider the re-election of Mr J A Killen In respect of item 3 (a) of ordinary business, the following proxies have been received: For Against 3,872,363 7,015 Open (total) = 170,180 Open (held by EQT directors) = 135,004 Trusted since 1888 38
Slide 39: Items of ordinary business – Item 3
Items of ordinary business – Item 3 Item 3(b): To consider the election of Ms A M O’Donnell Trusted since 1888 39
Slide 40: Item 3 (b) – proxies received
Item 3 (b) – proxies received Item 3 (b) – to consider the election of Ms Anne O’Donnell Ms Anne O’Donnell retires in accordance with Rule 48 of the company’s Constitution and, being an eligible person, offers herself for election. In respect of item 3 (b) of ordinary business, the following proxies
Slide 41: Items of special business – Item 4
Items of special business – Item 4 Item 4: To consider the grant of a long-term incentive award to the Managing Director. Trusted since 1888 41
Slide 42: Managing Director’s LTI 2010/11 Series
Managing Director’s LTI 2010/11 Series ¾ Quantum: 60% of TEC ($425,000) = $255k ¾ Measures: 50% TSR / 50% EPS, over 3 years ¾ Vesting Scales: TSR ¾ Less than 50 th per-centile Nil ¾ 50 th per-centile 50% ¾ 75 th per-centile 100% EPS ¾ Less than 5% pa Nil ¾ 5% pa 25% ¾ 15% pa and above 100% Trusted s
Slide 43: Item 4 – proxies received
Item 4 – proxies received To consider the grant of a long-term incentive award to the Managing Director. In respect of item 4 of special business, the following proxies have been received: For Against 3,611,476 218,494 Open (total) = 150,119 Open (held by EQT directors) = 114,468 Trusted since 1888
Slide 44: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns 3. Items of business Mr Tony Killen Mr David Groves Questions Trusted since 1888 44
Slide 45: ‘[rustees
EO ‘[rustees Trusted since 1888