Slide 1: Netwealth FY2021 Results Presentation
Netwealth FY2021 Results Presentation | netwealth
Slide 2: Our purpose
Our purpose is To enable people to see wealth differently and discover a brighter future
Slide 3: Our culture is value-driven
Our culture is value-driven Curious Optimistic Collaborative
Slide 4: Our strategy
Our strategy is to deliver Best-in-class technology Market leading, home grown platform, agile and tailored to client needs Best-in-class service Award winning, nimble and highly responsive — ‘we make our clients look good’ Insights that matter Provide deep insights to our clients and spot change th
Slide 5: Today's presenters and agenda
FY2021 Results Presentation Today's presenters and agenda Michael Heine Joint Managing Director Matt Heine Joint Managing Director Grant Boyle Chief Financial Officer 1. FY2021 business and financial highlights 2. FY2021 financial performance 3. Outlook 4. Questions 5. Appendix and additional inform
Slide 6: Business and Financial highlights
FY2021 Business and Financial highlights
Slide 7: Financial Highlights FY2021
FY2021 Results Presentation 7 Financial Highlights FY2021 Netwealth delivered NPAT growth of 23.9% and Dividend per share growth of 26.3% al ol 6S) ol $144.9M $79.4M 54.8% $54.1M Total Income EBITDA EBITDA Margin NPAT a all = BLY v $77.9M' 221cents2 Dividend 18.56cps__Investment Operating net cashfl
Slide 8: Business Highlights FY2021
FY2021 Results Presentation 8 Business Highlights FY2021 es & & & $471BFUA = $11.7B FUM $9.8BMA $49.7B/$10.5B Growth of $15.6B (+49.6%) Growth of $4.5B (+61.4%) Growth of $4.0B (+69.7%) 16 Aug- FUA and MA al «al al Sf $9.8B $3.2B $3.0B 97,319 Clients FUA net inflows FUM net inflows MA net inflows Gr
Slide 9: Strong financial and market position
FY2021 Results Presentation 9 Strong financial and market position Strong balance sheet * low capital High correlation between expenditure EBITDA and operating High level of recurring and * no debt cash flow (98.1% growing revenue we conversion! + significant cash ) reserves Ongoing strategic . A le
Slide 10: Ranked number 1 by advisers
FY2021 Results Presentation 10 Ranked number 1 by advisers Ranked number 1 for overall satisfaction among primary users for the tenth year in a row, according to research by Investment Trends 2021 Adviser Technology 2021 Adviser Technology 90% Needs Report Needs Report t Overall functionality score
Slide 11: Disruption = Opportunity
FY2021 Results Presentation n Disruption = Opportunity Platform providers by FUA market share Platform providers net funds flows % market share (Mar 20 and Mar 21) #039;Billions (12 months to Mar 21) Top 4 Institutions are in outflows #6 #1 Netwealth #1 for the thirteenth consecutive quarter and repres
Slide 12: Accelerating FUA and account number growth
FY2021 Results Presentation 12 Accelerating FUA and account number growth Growth in FUA, FUM and Accounts Growth in market share to 4.6% for the year to Mar 2021 149 Dec16 Jun-17 Dec-17 Jun-t8 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Mar-2016 Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 mmm FUA (38) mms F
Slide 13: Driven by new and existing Financial Intermediaries
FY2021 Results Presentation 13 Driven by new and existing Financial Intermediaries 3,130 Financial Intermediaries on the platform at 30 June 2021, up 287 (10.1%) on PCP FUA growth is driven by Breakdown of FUA growth FY2015 to FY2021 $47.18 Existing Financial Intermediaries: - * Continued migration
Slide 14: A large and growing addressable market
FY2021 Results Presentation A large and growing addressable market * The proportion of advisers that have their a Changing structure of Specialist platforms are well own AFSL or are Majority Independent 9 Adviser market! positioned for continued growth increased from 45% of the market to 78% Market
Slide 15: A single ecosystem for investors and wealth professionals
FY2021 Results Presentation 15 A single ecosystem for investors and wealth professionals Mass Affluent Client data Wealth professionals Investors Software &data integrations netwealth
Slide 16: The gap between customer digital needs and advice digitisation
FY2021 Results Presentation The gap between customer digital needs and advice digitisation * 51% of Advisable Australians say a brand or firm’s digital or online capabilities (e.g. their app, client portal, website and social media presence) play a critical or major role in delivering a positive cus
Slide 17: Keep track of Netwealth accounts and assets on the go
FY2021 Results Presentation Keep track of Netwealth accounts and assets on the go ACCOUNTS LIABILITIES $1,250,000 Get a complete view of portfolio asset allocations across multiple accounts UNTS ASSETS LIABILITIES. $120,000 $750,000 $1800.50 + $250,000 Senne Track overall portfolio performance with
Slide 18: Solution for off-platform assets
FY2021 Results Presentation Solution for off-platform assets Xwrap is attracting strong levels of interest from key clients Around 20% of clients’ assets held “Off-platform” Average held off- platform = 19% 21.1% Less than 5% held off-platform 27.9% Between 5- 10% 25.7% Between 10 - 25% 25.7% More t
Slide 19: Well positioned to perform during COVID-19
FY2021 Results Presentation 19 Well positioned to perform for our clients and staff during COVID-19 and subsequent economic disruption + All staff working remotely in Melbourne and Sydney during current State Government lockdowns + In our recent annual staff survey, staff engagement score improved t
Slide 20: Launch of Netwealth Corporate Sustainability Framework
FY2021 Results Presentation 20 Launch of Netwealth Corporate Sustainability Framework We protect and enhance our core business + Weare ethical, genuine, and transparent in our dealings ov' Core 2 &, * We promote diversity and talent and believe all people have a 4 right to wellbeing + We partner wit
Slide 21: Financial performance
FY2021 Financial performance FY2021 Results Presentation
Slide 22: Delivered scalable growth for FY2021
FY2021 Results Presentation 22 Delivered scalable growth for FY2021 FY2021 Total Income of $144.9M, up 16.9% FY2021 NPAT of $54.1M, up 23.9% $144.9M $54.1M $123.9M $43.8M $98.8M $26.0M $83.3M $29.0M $61.3M FY2017 FY2018 FY2019 FY2020 Fy2021 FY2017 FY2018 FY2019 FY2020 Fy2021 wiH w2H wiH w2H Source:
Slide 23: FY2021 financial results
FY2021 Results Presentation 23 FY2021 financial results Fi ial Fy2020 FY2021 Change %Change 1H2021 2H2021 Change _% Change FY2021 commentary (comparisons FY2020) Inanclals Actual Actual 20V21 += 20V21_~—s Actual. = Actual. «= THV2H = 1HV2H . Highly profitable Platform Revenue 34202068 170% = 2 708 (
Slide 24: FY2021 key performance metrics
FY2021 Results Presentation 24 FY2021 key performance metrics Platform Statistics Naat aut Gov't “wvit’ a “Reus vn “ws FY2021 commentary (comparison FY2020) Funds Under Administration + FUA of $47.1B, up $15.6B (+49.6%) FUA (EOP) 31,502 47,138 15,637 49.6% 38,799 47,138 8,340 21.5% . 65.6% fee payin
Slide 25: Key statistics analysis
FY2021 Results Presentation Key statistics analysis Focused on profitable & sustainable revenue growth * Average Account size increased to $481K as at 30Jun 2021 — as average Account size increases, revenue streams are diversified and ancillary revenues increase * Platform Revenue per Account increa
Slide 26: Platform revenue composition
FY2021 Results Presentation Platform revenue composition Non-administration fee income percentage of platform revenue increased by 3% to 50% for FY2021 Platform revenue split FY2020 & FY2021 4% FY2020 FY2021 . Source: Netwealth @ = Administration fees Wrap Super @ = Ancillary fees Pool cash interest
Slide 27: Ongoing investment supporting growth
FY2021 Results Presentation 27 Ongoing investment supporting growth Strategic investments across IT infrastructure, people and software Total operating expenses $65.5M +$7.8M $57.8M 13.5% +$10.9M 23.4% $46.8M FY2019 FY2020 Fy2021 Employee benefits expense m Other operating expenses mIT and communica
Slide 28: Investing in our people and Technology
FY2021 Results Presentation 28 Investing in our people and Technology Across technology, operations and distribution to support continued stability, scalability and innovation Strategic increase in headcount, increase of 43 in Headcount by function 30 June 2021 Technology for FY2021 (27 Melbourne an
Slide 29: Strong cost management and exceptional cash generation
FY2021 Results Presentation 29 Strong cost management and exceptional cash generation High correlation between EBITDA and cash flow! * Strong cost management, demonstrated operating leverage & further invested in the platform to maintain scalability and efficiency * Strategic investment in IT infras
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Slide 31: Outlook
Outlook FY2021 Results Presentation
Slide 32: Outlook
FY2021 Results Presentation Outlook Fastest growing platform in the industry in both percentage and absolute terms in FY2021 + We expect continued market share growth in the years ahead * Incumbents are losing market share and face increasingly large service, technology and functionality gap and are
Slide 33: Outlook
FY2021 Results Presentation 33 Outlook * Continuing to invest heavily in technology to ensure our + Revenue margin systems remain scalable and enable us to continue to operate efficiently, while maintaining our high standards of ~ new pricingis in place from 1 Jan 2021 client service — no legacy pro
Slide 34: Questions
Questions FY2021 Results Presentation 34
Slide 35: Thank you
Thank you
Slide 36: Important notice and disclaimer
FY2021 Results Presentation 36 Important notice and disclaimer General Information only Information provided is general information presented in a summary format as at 18 August 2021, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be rel
Slide 37: Appendix and additional information
Appendix and additional information FY2021 Results Presentation 37
Slide 38: Appendix 1 - Reconciliation from EBITDA to net cash flow pre tax
FY2021 Results Presentation 38 Appendix 1- Reconciliation from EBITDA to net cash flow pre tax Cash flow workings fy2o29 200) Actual Actual EBITDA 662 79.3 Non-cash items in EBITDA 06 o7 Changes in working capital 03 (89) Capital expenditure (0.9) (a) Net (purchases)/sale proceeds on investments 24
Slide 39: Appendix 2 - Consolidated statement of financial position
FY2021 Results Presentation 39 Appendix 2-— Consolidated statement of financial position 30 June 2021 30 June 2020 Assets Current assets Cash and cash equivalents 81421 85516 Trade and other receivables 14,303 10,324 Other current assets 1197 aan Financial assets 535 1186 Total current assets 107,45