Eqt Holdings Ltd. · ASX:EQT
Eqt — FY2023 Earnings Presentation
45 slides from Eqt's earnings presentation, Aug 25, 2023
Slide 1: Results for Year Ended 30 June 2023
INVESTOR PRESENTATION RESULTS FOR YEAR ENDED 30 JUNE 2023 Mick O'Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer 25 AUGUST 2023
Slide 2: Agenda
AGENDA @ (1) FY23 OVERVIEW (2) FINANCIALS (3) STRATEGY AND OUTLOOK (4) QUESTIONS Equity Trustees acknowledges Aboriginal and Torres Strait Islander people as the First Australians and respects their long and enduring connection to their land. We pay our respects to all Elders past, present and emerg
Slide 3: FY23 Overview
FY25 OVERVIEW
Slide 4: Strong revenue increase on continued FUMAS growth
STRONG REVENUE INCREASE ON CONTINUED FUMAS @ GROWTH FUMAS* REVENUE NPAT DIVIDENDS $160.1 b $1 41.4m $18.8m 5O.ents . on on inderlyin: im cent on 4 Up 7.5% on FY22 4 Up 27% on FY22 Underlying NPAT $29.1 Up 1 1H23 t 19.4% on FY22 1 Total FY23 dividends up 2 cents per share on FY22 Strong growth in rev
Slide 5: FUMAS continues steady upward trend
FUMAS CONTINUES STEADY UPWARD TREND Sb TOTAL EQT FUMAS! 160.1 160 — 7.0 148.9 144.2 140 120 101.0 100 86.2 85.4 80 71.4 ,§ = FY17 FY18 FY19 FY20 FY21 FY22 FY23 AET FUMAS " FUMAS: Funds under management, administration, advice and supervision FUMAS up 7.5% on FY22 to $160.1b Significant new business
Slide 6: FUMAS benefit from organic growth and AET
FUMAS BENEFIT FROM ORGANIC GROWTH AND AET $b 110 105 100 CTS Fus! $b STS FUs! 50 105.1 aaa 46 ; 100.8 990 0.8 42 38 347 38 33.6 CO , — Fy21 FY22 FY23 FY21 FY22 FY23 Aer FUS down 5.8% on pcp + FUS up 29% on pcp Multiple new fund manager + Benefiting from increased client appointments offset by a smal
Slide 7: Transformation to improve competitive edge and drive growth
TRANSFORMATION TO IMPROVE COMPETITIVE EDGE AND DRIVE GROWTH Growth agenda — Expertise in an increasingly intense regulatory environment is giving us a competitive edge - FUMAS and revenue remain on steady upward trend — Focused strategy to be Australia’s leading provider of trustee services Building
Slide 8: Technology implemented in FY23 delivering substantial uplift in service capability
TECHNOLOGY IMPLEMENTED IN FY23 DELIVERING SUBSTANTIAL UPLIFT IN SERVICE CAPABILITY TRUSTEE & WEALTH SERVICES (TWS) CORPORATE TRUSTEE SERVICES (CTS) Deployed iPhi, a leading US philanthropy technology platform - December 22 Active client base now over 350 accounts Enables us to accelerate development
Slide 9: Delivering for all stakeholders
DELIVERING FOR ALL STAKEHOLDERS 7 FY22 FY23 FY22 Underlying EPS' mw Statutory EPS. 99 FY23 CLIENTS EMPLOYEES NPS NLS ENGAGEMENT ENABLEMENT +28 428 +41 x 15 2B 75 q ‘| : i | i FY22 FY23 FY22 FY23 2022 2023 2022 2023 HP Norm — — FS Norm SHAREHOLDERS COMMUNITY EPS DIVIDEND TOTAL GRANTING & BEQUESTS 114
Slide 10: Delivering for shareholders
DELIVERING FOR SHAREHOLDERS Cents EARNINGS PER SHARE 5 120 114.8 114.38 110 101.72 106.16 113.94 1 100 = 102.03 90 92.04 — 114.38 cents 80 i— : = 60 FY19 FY20 FY21 FY22 FY23 Underlying EPS' Statutory EPS Cents DIVIDENDS 55 50 50 y 48 49 49 45 . 40 50 cents 35 30 2H21 1H22 2H22 1H23 2H23 Underlying n
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Slide 13: Asset management - sustained performance and growth
ASSET MANAGEMENT - SUSTAINED PERFORMANCE @ AND GROWTH POSITIVE ACTIVE PERFORMANCE FUM growth of +12% to $4.8bn from mandate wins, market growth and AET integration Team grown from 12 to 15 with strengthened capability in defensive assets and portfolio implementation Extended independent asset consul
Slide 14: Overall synergies target increased and implementation costs on track
OVERALL SYNERGIES TARGET INCREASED & @ IMPLEMENTATION COSTS ON TRACK NET COST SYNERGIES REVENUE SYNERGIES IMPLEMENTATION COS CAPI RELEASE Targeted amount $3.1m pa ($3.5m pa) $5.5m pa ($3.3m) $22m ($22m) $10m (nil) Timing Run-rate in FY25 $0.4m in FY23 Across FY23, FY24 & 1H25 Dec 2024 $3.3m pa in FY
Slide 15: Summary
SUMMARY @ STRONG PERFORMANCE WITH CONTINUED GROWTH MOMENTUM FUMAS increasing to $160.1 billion, supported Major technology investment creating a by organic growth and the acquisition ot AET foundation for more sustainable future growth Statutory EPS impacted SIE BcOauistt on / integration costs, inc
Slide 16: Financials
FINANCIALS
Slide 17: Strong financial performance
STRONG FINANCIAL PERFORMANCE @ FY23 2H23 1H23 FY23 v FY22 + Strong revenue growth up 26.8% + Total expenses up 48.7% Total revenue ($m) 78.6 628 1115 26.8 reflecting a combination of: - One-off Total expenses ($m) 60.9 49.6 74.3 (48.7) acquisition/integration/ EBITDA ($m) 22.8 16.3 43.9 (10.9) techn
Slide 18: Strong revenue growth
STRONG REVENUE GROWTH $m 148 10.2 140 22.5 132,—. ——————_ a a 124 116 111.5 108 100 FY22 AET Equity market Four large mandate Organic growth impact on FUMAS' losses (CTS-A) 1 FUMAS: Funds under management, administration, advice and supervision 141.4 FY23 @ Headline revenue growth of 27% driven by:
Slide 19: Expense analysis
EXPENSE ANALYSIS ® $m NON-RECURRING NON-CORE AET UPLIFT NET OPEX INCREASE + Non-recurring costs of 120 ( VY VY Y ‘\ $12.2m associated with one- off AET acquisition / 1105 integration and technology 110 implementation costs 0.6 * Underlying 12% increase in 100 salaries and related costs driven by: 90
Slide 20: Continued improvement on key financial measures
CONTINUED IMPROVEMENT ON KEY FINANCIAL @ MEASURES $141.4M sm $51.2M $m TOTAL REVENUE EBITDA 150 141.4 55 B12 130 50 - 45 44.1 i 110 40 38.9 i 90 35 70 30 FYI9 FY20 FY21 Fv22 FY23 FYI9 FY20 FY21 Fy22 FY23 Underlying EBITDA’ —_mStatutory EBITDA $29.1M . 5Ocens Sm NET PROFIT AFTER TAX ents DIVIDENDS 32
Slide 21: TWS - significant growth in revenue driven by organic growth and 7 month AET contribution
TWS - SIGNIFICANT GROWTH IN REVENUE DRIVEN BY @ ORGANIC GROWTH AND 7 MONTH AET CONTRIBUTION $m TWS REVENUE $b TWS FUMAS! 80 54 76.0 18 16.3 7m 20.2 (0.7) 64 56 514 . mm 40 - FY22 AET Equity market. Organic growth ——-FY23 FY22 FY23 eas m Trustee Services & Advice» Asset Management? * Strong organic r
Slide 22: TWS - AET boosts key businesses
TWS - AET BOOSTS KEY BUSINESSES KEY BUSINESS FUMAS! & HIGHLIGHTS Estate Management Large estate completed FY21 Number of estates more than doubled EQT fees implemented for all new estates uplifting revenue 700 500 300 All graphs in $ Millions if oo FY2) Active Philanthropy iPhi platform launched Str
Slide 23: STS - continuing growth trajectory
STS - CONTINUING GROWTH TRAJECTORY $m STS REVENUE 27 2.3 25 2.2 23 (0.1) a1 20.9 19 7 FY22 AET Equity market Organic FY23 impact on growth FUS? KEY DRIVERS INCLUDE: * Growth in platform clients — 45% growth in FUS in FY23 + Super Simplifier FUS $1.1bn + AET FUS $830m + Raiz Invest Super $120m + Full
Slide 24: CTS - organic growth offset by a small number of large mandate losses
CTS - ORGANIC GROWTH OFFSET BY A SMALL NUMBER @ OF LARGE MANDATE LOSSES $m CTS REVENUE $b CTS Fus! a 120 39.9 ws 99.0 40 24 - 100 . 39 80 38 60 6.2 37 40 36 20 35 - FY22 Equity market impact Four large mandate Other net FY23 FY22 FY23 on FUS! losses organic growth + FUS: Moderated underlying organic
Slide 25: CTS - servicing the global fund manager industry
CTS - SERVICING THE GLOBAL FUND MANAGER INDUSTRY @ 450 400 350 300 250 200 160 150 140 130 120 110 100 FUND MOVEMENTS 39 354 Le a : FY22 New Funds Funds Closed FUND MANAGER MOVEMENTS 16 FY22 New Managers Managers Exited FUND MANAGER LOCATION (25)
Slide 26: Consistent revenue growth in custody, debt and securitisation services
CONSISTENT REVENUE GROWTH (~22% CAGR) IN CUSTODY, @ DEBT AND SECURITISATION SERVICES $m REVENUE Sb Fus! NUMBER OF ACCOUNTS 17.5 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Continued growth in ‘Custody and Property’ transactions in FY23 increasing market share in property related tran
Slide 27: CTS - UK/Ireland - exit underway
CTS - UK/IRELAND - EXIT UNDERWAY ® EXITING INVESTMENT - PLANNING WELL ADVANCED NO. CLIENTS NO. FUNDS fb TOTAL AUM FYI9 FY20 FY21 FY22 FY23 FYI9 FY20 FY21 FY22 FY23 FY19-FY20.-FY21.—FY22_—FY23 * Slightly lower FUMAS principally reflecting adverse markets and exit of small, uneconomic clients * 2new c
Slide 28: Strong balance sheet
STRONG BALANCE SHEET Assets Cash and liquid investments 87.3 73.9 ORFR cash 1 31.0 23.3 Trade receivables and accrued income I 30.9 34.6 Goodwill and intangible assets I 205.2 206.4 Other assets | 16.7 15.7 Total assets ! 371.2 353.9 Liabilities I Trade payables and other liabilities ! 16.6 14.8 Bor
Slide 29: Solid cash flow
SOLID CASH FLOW @ $m 130 120 28.4 110 * Healthy cash generation 100 * Borrowings relate to funding and 90 integration for AET acquisition 80 * Minimal bad debts 70 60 Fy22 Net cash flow from Payment of dividends Income tax paid Net proceeds from Payments for share Other FY23 operations borrowings is
Slide 30: Strong liquidity position
STRONG LIQUIDITY POSITION @ $m FY23 UNENCUMBERED LIQUIDITY POSITION 140 * Low gearing and healthy liquidity 120 + $91.1m regulatory capital requirement consisting of: 00 — $77.9m in net tangible assets 80 (largely held as cash) 60 — $13.2m of ORFR (77.9) la ng related cash 40 (13.2) * Debt facility
Slide 31: Summary
SUMMARY STRONG EARNINGS PERFORMANCE ON CONTINUED FUNDS GROWTH Strong organic revenue growth despite adverse equity markets Higher expenses largely due to one-off acquisition/ integration costs and increased investment Statutory NPAT impacted by one-off costs. Underlying NPAT solid AET performing as
Slide 32: Strategy update and outlook
STRATEGY UPDATE AND OUTLOOK
Slide 33: A company founded on trust
A COMPANY FOUNDED ON TRUST @ PURPOSE: HELP PEOPLE TAKE CARE OF THE FUTURE Safeguard people's wealth now and for Provide trustee services to help clients protect generations to come members’ and investors’ interests Act as a trusted, independent partner to grow Empower clients to improve the lives of
Slide 34: Group strategy overview
GROUP STRATEGY OVERVIEW OUR OBJECTIVES GROUP STRATEGY BUSINESS GROWTH CLIENT SERVICE CAPABILITY COMMUNITY * Capture opportunities from market demand for fiduciary independence with prudent cost control * Compete in additional lines of trusteeship to maximise our opportunity set * Scale up areas of b
Slide 35: Strengthened market leadership
STRENGTHENED MARKET LEADERSHIP TRUSTEE & WEALTH SERVICES * Philanthropy - Leading provider * Health & Personal Injury - Leading provider + Estate Management - Leading provider * Estate Planning - Leading provider * Continuing Trusts — Leading provider + Advice - Specialist advice provider for truste
Slide 36: Business unit initiatives in FY2024
TRUSTEE & WEALTH SERVICES (TWS) AET Integration Platform divestment Capitalise on market leading business development capability Publicly launch Australian leading philanthropy platform — iPhi Continue two-year technology investment focused on excellent client service Continue to develop Responsible
Slide 37: Investing in technology
INVESTING IN TECHNOLOGY CONTINUING TO DRIVE EFFICIENCIES AND ENHANCE THE CLIENT EXPERIENCE CORPORATE TRUSTEE SERVICES + Solutions to create scale and efficiency through process reengineering, data analytics and automation using Salesforce * Centralises client and task management and reporting SUPERA
Slide 38: Governance, risk and regulatory management
GOVERNANCE, RISK AND REGULATORY MANAGEMENT @ ARE CORE TO OUR BUSINESS PRODUCTIVE REGULATOR RELATIONSHIPS * Broad and deep relationships with APRA, ASIC, AUSTRAC, ACNC and AFCA * Constructive relationships CAPABLE OF MANAGING SIGNIFICANT REGULATORY OBLIGATIONS ACROSS A MARKET LEADING FUND POPULATION
Slide 39: Summary and outlook
SUMMARY AND OUTLOOK ® STRATEGY REINFORCED WHILE DRIVING TRANSFORMATION * Strategy on track driven by organic and inorganic growth and business transformation * Revenue and funds continue to rise, while net profit reflects investment for growth + AET acquisition provides market leadership position —
Slide 40: Appendix
APPENDIX
Slide 41: EQT's revenues are leveraged to equity markets as fees largely asset-based
EQT’S REVENUES ARE LEVERAGED TO EQUITY MARKETS AS FEES LARGELY ASSET-BASED FY23 REVENUE TOTAL FUMAS AS AT FY23 $44.8b $99.0b 60%-70% to average daily ASX200 20%-30% to average daily ASX200 40%-50% to average daily World MSCI @ LEVERAGE + Average equity markets for the 12 months to 30 June 23 slightl
Slide 42: NPAT to underlying NPAT reconciliation
NPAT TO UNDERLYING NPAT RECONCILIATION @ $m 40.0 35.0 30.0 2.1 29.4 7 25.0 0.9 20.0 19.2 15.0 10.0 NPAT Major technology systems AET acquisition and intergration _ Impairment of investment in CTS-EU Underlying NPAT replacements costs expenses (42)
Slide 43: Questions
QUESTIONS
Slide 44: Thank you
THANK YOU
Slide 45: EQT Holdings Limited
EQT Holdings Limited @ ABN 22 607 797 615 Level 1, 575 Bourke Street Melbourne VIC 3000 1300 133 472 www.eqt.com.au Disclaimer The Board has authorised that this document be given to the ASX. EQT Holdings Limited ABN 22 607 797 615. This document was prepared by EQT Holdings Limited and is only prov