Australian Ethical Investment Ltd · ASX:AEF
Australian Ethical Investment — FY2015 Earnings Presentation
26 slides from Australian Ethical Investment's earnings presentation, Aug 31, 2015
Slide 1: FY2015 Results and company update
FY2015 Results and company update 31 August 2015
Slide 2: Australia's leading ethical investment and superannuation company
Australian Ethical is Australia’s leading ethical investment and superannuation company. We invest and manage our business according to a social and environmental charter. We do not compromise on ethics or performance. We achieve both. We are the model for business of the future. Operating today.
Slide 3: Leader in ethical investing and wealth management
Leader in ethical investing and wealth management Achieving strong ü Almost 30 years of investing with a difference; an unwavering commitment to ethical investing financial and ü Unrivalled and trusted brand shareholder returns ü Thought leader in ethical investment while maintaining ü Only integr
Slide 4: Business model
Business model Vertically integrated business, offering a broad range of products, across most asset classes accessed through multiple channels Channels Direct Employers Advisers Product Super and Pension Managed funds $777m (67%) $390m (33%) packaging 13 options 8 products Investment management Manu
Slide 5: Our approach: Examples of areas where we invest
Our approach: Examples of areas where we invest We make good investments in areas such as: We avoid companies involved in: 5
Slide 6: Examples of companies we invest in
Examples of companies we invest in Our investment portfolios are well-balanced with larger well-known companies, as well as small and emerging companies. Example investments below. You can view all of the companies we invest in on our website. Financial services Health & wellbeing Education Property
Slide 7: Our Ethical Process
Our Ethical Process We’ve had the same clear starting point for our investment decisions since the company began in 1986 – our Australian Ethical Charter. The Charter (see our website) lists 12 things we will support and 11 harms we will avoid when investing. INVESTMENT ASSESSMENT PROCESS (for financ
Slide 8: Australian Ethical Foundation and Community Grants
Australian Ethical Foundation and Community Grants Australian Ethical has donated over $2m to charitable, benevolent and conservation purposes including $373k set aside this financial year § Every year Australian Ethical Investment donates 10% of its pre-tax profits to organisations making a positive
Slide 9: Credentialed Board of Directors
Credentialed Board of Directors STEVE GIBBS TONY COLE Non-Executive Chair Non-Executive Director § Former CEO of ARIA, superfund for federal § 17+ years as a Senior Partner in Mercer’s govt. employees Investment Consulting business § Former Executive Officer of Australian § AO in 1995 for services
Slide 10: Proven management team with a record of success
Proven management team with a record of success PHILLIP VERNON DAVID MACRI Managing Director Chief Investment Officer § 30+ years of financial services experience § 17+ years of financial services experience § Previous member of Executive § Previously worked at Macquarie Securities, Committee of Per
Slide 11: FY 2015 Results
FY 2015 Results
Slide 12: Highlights
Highlights Net inflows almost double previous year. Superannuation Strong Growth client growth 20% above previous year. Superannuation fees on key MySuper product reduced by Improved competitiveness 0.67%. Strategy to be at 75th percentile of peer group by 2020. Strong investment Regular top quartile
Slide 13: Financial results
Financial results Solid profit result in year of transition Key Financials (A$000s) FY2014 FY2015 Change (yoy) Revenue 19,889 21,171 6% Operating expenses (14,476) (16,478) (14%) Non-operating expenses (2,871) (2,723) 6% NPAT 2,542 1,970 (23%) UPAT 1 3,111 2,454 (21%) Operating cashflow 5,363 6,453 +2
Slide 14: Key drivers
Key drivers Key metric Drivers ↑ Net inflows of $179m (96% increase) FUM ↑ Asset management performance $100m ↑ Increased FUM (32%) Revenue ↓ Reduction in superannuation fees of 0.67% to shore up long term sustainability Operating ↑ Staff costs up 1.9m (27%) due to a combination of: expenses • Increas
Slide 15: Funds under management and net inflows
Funds under management and net inflows Strong growth in net flows in both superannuation and managed funds ($000s) FY2014 FY2015 Change (yoy) Opening 708 887 25% Super flows 78 132 70% Managed funds 14 47 240% Net flows 92 179 96% Market movement 87 101 14% Closing 887 1,167 32% 15
Slide 16: Strong net inflows
Strong net inflows § Net inflows have increased dramatically over recent years § Growth driven by increased demand for ethical investing, consistent asset management performance, more competitive products, our large digital community and investment in online optimisation § Growth across both supera
Slide 17: Top quartile asset management performance
Top quartile asset management performance Proven track record of asset management outperformance § Regular top quartile performance by numerous products § Flagship Australian Shares fund celebrated 20th anniversary having delivered top quartile performance over the period returning 10% p.a. over i
Slide 18: FY2015 relative to previous years
FY2015 relative to previous years Strong growth in operational and financial performance 18
Slide 19: Strong operating performance
Strong operating performance Operating performance has translated into attractive shareholder returns § Australian Ethical has a proven track record Key metric Outcome of converting its competitive advantages into FUM § 14% average increase p.a for the last 10 years positive financial outcomes for
Slide 20: Our opportunity
Our opportunity
Slide 21: Rising social consciousness is driving growing demand for ethical investment
Rising social consciousness is driving growing demand for ethical investment and better ways of doing business. Our leadership position, high ethical conviction, professional investment approach and strong digital capability make us well placed for considerable growth.
Slide 22: Positioned for growth
Positioned for growth Increasing demand Growing for ethical savings pool investment ü In Australia, funds in core responsible ü Compulsory, tax advantaged investment strategies has doubled over superannuation system the past two years to be now 2.5% of ü Underfunded ageing population the total ma
Slide 23: Breaking down the barriers to ethical investing
“Breaking down the barriers” to ethical investing 70% of Australians believe ethical funds will perform the same or better than mainstream funds. Our track record supports this. Returns Ethical investors require competitive fees. Strategy is to be at 75th percentile of peer group by 2020. Reductions
Slide 24: Avenues for growth
Avenues for growth Our strong, highly engaged digital community, targeted digital advertising, optimisation of the online experience and support of many aligned organisations continues to give us strong Direct growth from the direct channel. We aim to be the default superannuation fund of choice for
Slide 25: Company overview
Company overview CORPORATE OVERVIEW 12 MONTH SHARE PRICE PERFORMANCE § Australian Ethical is Australia’s largest dedicated Price (A$) Volume (‘000) ethical investment and superannuation 70 7 manager listed on the ASX § Investments are guided by the Australian Ethical 60 6 Charter which guides both
Slide 26: Disclaimer
Disclaimer Australian Ethical Investment Ltd (ABN 47 003 188 930; Australian Financial Services Licence No. 229949) is the Responsible Entity and Investment Manager of the Australian Ethical Managed Investment Funds. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743;
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