Slide 1: Perpetual Half Year Financial Results
Perpetual Limited ABN 86 000 431 827 Angel Place, Level 18, 123 Pitt Street Sydney NSW 2000 28 February 2024 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: 1H24 Results Presentation
Perpetual Limited (ASX:PPT) 1H24 Results Presentation For the half year ending 31 December 2023 Wednesday 28 February 2024 Presented by: Rob Adams, CEO & Managing Director Chris Green, Chief Financial Officer
Slide 3: Disclaimer
Disclaimer Important information This presentation is in summary form and is not necessarily complete. It should be The Product Disclosure Statements (PDS) for the Perpetual Asset Management read together with Perpetual Limited’s (Perpetual) consolidated financial statements Australia funds are issu
Slide 4: 1H24 Highlights
1H24 Highlights Rob Adams CEO and Managing Director half year ending 31 December 2021
Slide 5: Simplification and sustainable growth
Simplification and sustainable growth Key themes • Solid performance from Corporate Trust and Wealth Management, demonstrating resilience in higher interest rate environment • Asset Management benefiting from larger, diversified AUM base, offsetting outflows in the second quarter • Progressing strat
Slide 6: Business highlights
Business highlights Building strong foundations to drive sustainable growth ~A$214b 78% No.1 ~A$2.5b 18% 5% AUM in Asset of strategies1 in Perpetual Asset in net inflows into Growth in Wealth Growth in FUA Management Asset Management Barrow Hanley Management’s for Corporate reflecting a large Manage
Slide 7: Asset Management
Asset Management ~$214 billion in AUM provides a larger, more diversified and scalable platform for future growth • UPBT up 165% on 1H23 (-1% on 2H231), revenue up 142% on 1H23 (+5% on 2H231), due to the inclusion of Pendal AUM by Boutique2 (%) Group in January 2023 TSW • Cost to income ratio improv
Slide 8: Asset Management distribution update
Asset Management distribution update Improvement in consistency of net flows our prime focus • TSW impacted by asset allocation shifts as clients re-risk • Select client losses in J O Hambro international and global strategies 1H24 Net flows • Volatility in flows in low margin Australian cash • Cont
Slide 9: Asset Management delivering strong investment outperformance
Asset Management delivering strong investment outperformance 78% of strategies ahead of benchmark over 3 years to 31 December 2023 Proportion of strategies outperforming benchmark1,2 Value style strategies3 Growth style strategies Value style strategies ESG strategies Value style strategies 100% 95%
Slide 10: Corporate Trust
Corporate Trust A quality, sector leading business with long-term client relationships delivering revenue growth • Revenue growth of 3% compared to 1H23, UPBT down 2% versus 1H23 • Expense growth was driven by increased investment in SaaS products for clients and investments to digitise Corporate Tr
Slide 11: Wealth Management
Wealth Management Strong results driven by growth in non-market related revenue • UPBT of $26.0 million, up 18% on 1H23; total revenues up 4% to $111.0 million driven by strong organic growth across all segments • 1H24 FUA growth of 7% and net inflows of $0.1 billion, lower than previous halves due
Slide 12: Strategy focused on improving efficiency and delivering sustainable growth
Strategy focused on improving efficiency and delivering sustainable growth Continuing to take steps to simplify our business Strategy execution in 1H24 ✓ Integration of Pendal Group delivering synergy benefits ahead of schedule ✓ Ensuring we have a focused Asset Management product suite, meeting cli
Slide 13: 1H24 Group Financials
1H24 Group Financials Chris Green Chief Financial Officer year ending 31 December 2021
Slide 14: 1H24 financial results
1H24 financial results Revenue and UPAT up, driven by inclusion of Pendal Group and growth in Corporate Trust and Wealth Management 1H24 2H23 1H23 1H24 v 1H24 v For the period $m $m $m 2H23 (%) 1H23 (%) Summary points: Operating revenue 657.8 625.5 388.3 5% 69% • Revenue growth driven primarily by t
Slide 15: Growth in AUM/FUA supports revenue growth
Growth in AUM/FUA supports revenue growth Asset Management Wealth Management Corporate Trust Closing AUM ($b)1 128% Closing FUA ($b) 7% Closing FUA ($b) 5% AUM/FUA/FUA $b vs 1H23 vs 1H23 vs 1H23 1,144 1,163 1,198 694.0 691.0 716.0 19.1 212.1 213.9 DMS2 18.5 93.7 17.9 450.0 471.0 482.0 MFS2 1H2
Slide 16: 1H24 UPAT analysis
1H24 UPAT analysis 760.9 98.2 67.0 67.0 298.3 275.3 1H23 Asset Management Wealth Management Corporate Trust Group Support Services HoH Tax Movement 1H24 UPAT UPBT UPBT UPBT UPBT UPAT Additional earnings Solid organic growth Continued profit Higher interest expense from the acquisition across all seg
Slide 17: Pendal integration update
Pendal integration update Synergies delivered ahead of year 1 target; on track for $80 million1 by January 2025 • $56.8 million of annualised synergies delivered as at 31 December • Key integration focus areas for 2H24 are further progressing: 2023, ahead of schedule • Technology application consoli
Slide 18: Expense analysis
Expense analysis Overall expense growth incorporates Pendal Group expenses % Controllable cost growth 4% +4% 8% +67% 75% change 794.6 522.4 298.3 311.3 320.8 298.3 275.3 9.9 Variable 9.5 201.6 remuneration External factors Pendal expenses 1H23 Group wide Performance Technology Investments in Other T
Slide 19: Cashflow analysis
Cashflow analysis Cash balance remains healthy, with surplus free cashflow Free Cash Flow $34.6m1 Key themes • Positive free cashflow includes: Pendal contribution, stronger earnings in Wealth Management, offset by growth in expenses • Borrowings reflects net repayment of debt through the period • N
Slide 20: Balance sheet
Balance sheet Debt reduction a priority; targeting ~1.2x gross debt/EBITDA1,5 by 2026 31 Dec 20232 30 June 20232,3 1H24 v 2H23 For the period $m $m (%) 2 Key movements vs 2H23 Cash 189.5 263.2 (28%) • Goodwill and other intangibles decreased by $77.2 million due to the amortisation of customer contr
Slide 21: Dividends
Dividends Dividend payout ratio within stated target payout range • Interim dividend of 65 cps declared, 35% franked, to be paid on 8 April 2024 • Interim dividend represents a 75% of 1H24 UPAT payout ratio, within the Board’s stated target range to payout between 60% - 90% of UPAT on an annualised
Slide 22: Summary & Outlook
Summary & Outlook Rob Adams CEO and Managing Director half year ending 31 December 2021
Slide 23: Summary & Outlook
Summary & Outlook Delivering sustainable growth and improving efficiencies Net flows Scalable platform Pendal integration Simplify Strategic Review Focused on leveraging Leverage our Deliver integration Reduce complexity Complete the Strategic strong investment diversified base of and synergies to i
Slide 24: Contacts
Contacts Emma Rumble Susie Reinhardt Global Head of Corporate Affairs Head of Investor Relations & Sustainability emma.rumble@perpetual.com.au susie.reinhardt@perpetual.com.au +612 9229 3998 +612 9125 7047 Connect with us at: About Perpetual perpetual.com.au pendal.com.au Head Office johcm.com Perpe
Slide 25: Appendix: Our strategy
Appendix Our strategy Perpetual GROUP
Slide 26: Our strategy
Our strategy Simplifying and driving sustainable growth Our purpose: To create enduring prosperity Our values: Excellence, Integrity, Partnership Clients: Enduring relationships and People: Inclusive, empowered and accountable Shareholders: Delivering sustainable Community: Support strong and truste
Slide 27: Appendix: Detailed divisional result commentary
Appendix Detailed divisional result commentary
Slide 28: Asset Management
Asset Management 1H24 2H231 1H23 1H24 v 2H23 1H24 v 1H23 For the period $m $m $m Revenue 439.6 418.4 182.0 5% 142% Operating expenses (321.2) (298.5) (139.2) 8% 131% EBITDA 118.4 119.9 42.8 (1%) 176% Depreciation & amortisation (9.8) (9.0) (4.2) 8% 135% Equity remuneration (12.0) (13.3) (2.2) (10%)
Slide 29: Corporate Trust
Corporate Trust 1H24 2H23 1H23 For the period 1H24 v 2H23 1H24 v 1H23 $m $m $m Debt Market Services revenue 38.1 38.9 38.3 (2%) (1%) Managed Funds Services revenue 41.1 38.3 39.0 7% 5% Perpetual Digital revenue 12.2 12.1 11.3 1% 8% Total revenues 91.4 89.3 88.7 2% 3% Operating expenses (44.8) (43.4)
Slide 30: Wealth Management
Wealth Management 1H24 2H23 1H23 For the period 1H24 v 2H23 1H24 v 1H23 $m $m $m Market related revenue 73.0 71.3 73.8 2% (1%) Non-market related revenue 38.0 39.1 33.2 (3%) 15% Total revenues 111.0 110.4 107.0 1% 4% Operating expenses (77.7) (77.8) (77.6) (0%) 0% EBITDA 33.3 32.6 29.3 2% 14% Deprec
Slide 31: Appendix: UPAT to NPAT reconciliation
Appendix UPAT to NPAT reconciliation
Slide 32: UPAT to NPAT reconciliation
UPAT to NPAT reconciliation $63.6m of significant items mainly attributable to acquisitions (35.8) 1H24 Transaction, Integration and Strategic Review Costs: Non-cash Net unrealised Accrued incentive 1H24 UPAT amortisation losses on compensation NPAT Trillium Barrow Pendal Other Hanley of acquired fi
Slide 33: Assets under Management – Investment Performance
Appendix Assets under Management – Investment Performance of key strategies
Slide 34: Asset Management
Asset Management Investment performance1,2 across key3 strategies (to 31 December 2023) Annualised gross performance (%) Excess returns above benchmark (%) 1 31 December 20231 Period ending 31 December 2023 1. Investment performance presented gross of fees and includes reinvestment of distributions.
Slide 35: Asset Management: Disclaimer notes to slide
Asset Management Disclaimer notes to Slide 33 Barrow Hanley Material presented is based on the respective GIPS® compliant composite and not an individual account. Performance is expressed in USD currency. J O Hambro Capital Management Gross performance is the unit price returns grossed up by fees. F
Slide 36: Assets under Management, Funds under Advice and Funds under Administration
Appendix Assets under Management, Funds under Advice and Funds under Administration
Slide 37: Asset Management: AUM and flows
Asset Management: AUM and flows AUM by asset class ($b) Foreign 31 December 30 June 2023 For the period Flows Other1 Exchange 2023 ($b) Impacts2 ($b) Equities Australia 28.9 (0.6) 1.2 - 29.5 Global/International 69.8 (1.4) 3.1 (1.7) 69.9 UK 8.8 (0.4) 0.6 (0.2) 8.8 US 52.3 (2.1) 3.4 (1.4) 52.2 Europe
Slide 38: Asset Management: AUM by asset class and base management fee margins
Asset Management: AUM by asset class and base management fee margins AUM (A$b) Asset Class (31 Dec 2023) Base management fee (bps) – margin map as at 31 December 2023 Australian equities 29.5 Australian equities UK equities Global/International equities 69.9 Global/International equities European eq
Slide 39: Wealth Management FUA and AUM
Wealth Management FUA and AUM FUA by client segment and AUM FUA ($b) (Inclusive of AUM) AUM ($b) 1H24 1H231 1H24 v 1H23 1H24 1H23 1H24 v 1H23 Community and Social Investments Select Portfolios 2.8 2.7 4% (CSI) 6.4 5.7 12% Implemented Portfolios 4.5 3.9 15% High Net Worth 11.9 11.3 5% Growth Opportun
Slide 40: Corporate Trust
Corporate Trust FUA by segment ($b) For the period 1H24 2H23 1H23 1H24 v 2H23 1H24 v 1H23 Public Market Securitisation RMBS - bank (ADI) 61.2 52.4 54.3 17% 13% RMBS - non bank 85.2 79.3 83.0 8% 3% ABS and CMBS 64.5 60.7 61.7 6% 5% Balance Sheet Securitisation RMBS - repos 390.1 393.3 393.1 (1%) (1%)