Eqt Holdings Ltd. · ASX:EQT
Eqt — FY2021 Earnings Presentation
42 slides from Eqt's earnings presentation, Aug 19, 2021
Slide 1: Investor Presentation: Results for Year Ended 30 June 2021
INVESTOR PRESENTATION RESULTS FOR YEAR ENDED 30 JUNE 2021 Mick O’Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer
Slide 2: Agenda
AGENDA 1 FY21 OVERVIEW 2 FINANCIALS 3 STRATEGY UPDATE 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 emerging
Slide 3: FY21 Overview
FY21 OVERVIEW
Slide 4: Financial Performance Driven by Strong FUMAS Growth
FINANCIAL PERFORMANCE DRIVEN BY STRONG FUMAS GROWTH FUMAS* REVENUE UNDERLYING NPAT DIVIDENDS $144.2b $101.0m $22.4m 91 cents ↑ Up 43% on FY20 ↑ Up 5.9% on FY20 ↑ Up 5.5% on FY20 ↑ Up 1 cent per share on FY20 (Final dividend of 47 cents) • Solid growth in earnings primarily as a result of strong orga
Slide 5: Investing for Growth with Demand for Our Services Continuing to Grow
INVESTING FOR GROWTH WITH DEMAND FOR OUR SERVICES CONTINUING TO GROW • New wins and pipeline of opportunities provide growth momentum • Investing in capability underpinning success • Industry trend to outsource fiduciary roles continues to benefit EQT • Investing in people capability and technology
Slide 6: FUMAS Up 43% to $144.2b
FUMAS UP 43% TO $144.2B $b TOTAL EQT FUMAS1 160 140 144.2 43% increase in FUMAS principally 43% driven by: 120 • Large Superannuation Trustee 100 appointments – especially 101.0 AMP/Life Resolution and HUB24 80 86.2 85.4 • Significant new business activity 71.4 60 in Corporate Trustee Services 40 •
Slide 7: FUMAS Growth Across All Businesses
FUMAS GROWTH ACROSS ALL BUSINESSES $b CTS FUS1 $b STS FUS1 $b TWS FUMAS2 120 40 11 35 100 10 100.8 30 33.6 9.8 80 9 81.7 25 Aon*** 60 20 8 8.7 68.6 8.1 15 40 7 10 20 11.2 6 5 8.1 - - 5 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 • FUMAS up 23% • FUMAS up 200% • FUMAS up 21% • 8 new fund manager cli
Slide 8: Delivering for Stakeholders
DELIVERING FOR STAKEHOLDERS EMPLOYEE CLIENT SHAREHOLDER COMMUNITY ENGAGEMENT SATISFACTION VALUE IMPACT Engaged and enabled Net Promoter score (NPS)1 Earnings per share growth Granting and pro bono/ staff Net Loyalty score (NLS)2 and FUMAS growth volunteering ENGAGEMENT STATUTORY EPS NPS 103.04 cents
Slide 9: Delivering for Shareholders
DELIVERING FOR SHAREHOLDERS Cents EARNINGS PER SHARE (EPS) 120 110 108.61 107.21 102.73 100 97.27 103.04 • Good EPS growth: 107.2CENTS – Underlying EPS up 4.4% 90 97.27 92.95 80 77.00 – Statutory EPS up 10.9% 70 60 FY17 FY18 FY19 FY20 FY21 Underlying EPS 1 Statutory EPS Cents DIVIDENDS 95 90 90 91 9
Slide 10: Other Achievements
OTHER ACHIEVEMENTS PEOPLE TECHNOLOGY • HR initiatives enabled increased engagement • Deployed new risk and compliance platform - despite lockdowns CAMMS • Successful Board changes and renewal • Deployed new third party service provider oversight • Transitioned new leadership into CTS platform - Zied
Slide 11: Summary
SUMMARY RESILIENT PERFORMANCE WITH GROWTH MOMENTUM Robust FUMAS growth to $144.2 billion, Continuing investment creating a supported by organic growth and strong foundation for more sustainable future equity markets growth Solid EPS growth on both an underlying Continuing to deepen our community and
Slide 12: Financials
FINANCIALS
Slide 13: Consistent Performance
CONSISTENT PERFORMANCE $101.0M $m $38.9M $m TOTAL REVENUE EBITDA 105 101.0 40 38.9 100 36.2 36.7 95.4 95 92.5 35 33.4 37.1 88.5 90 85 30 79.9 80 26.1 75 25 70 FY17 FY18 FY19 FY20 FY21 20 FY17 FY18 FY19 FY20 FY21 1 Underlying EBITDA1 Statutory EBITDA $22.4M Cents 91CENTS DIVIDENDS $m NET PROFIT AFTER
Slide 14: Financial Performance
FINANCIAL PERFORMANCE FY21 FY20 % • Solid half on half revenue growth – up 9.1% in 2H FY21 (vs 1H FY21), and Total revenue ($m) 101.0 95.4 5.9 annual revenue up 5.9% on FY20 primarily as a result of organic growth Total expenses ($m) 70.7 65.1 8.6 EBITDA ($m) 37.1 36.7 1.1 • Underlying expense growt
Slide 15: Strong Organic Revenue Growth
STRONG ORGANIC REVENUE GROWTH $m REVENUE 105 • Revenue up 5.9% on a headline 7.3 basis, and 7.3% on an adjusted Net impact of markets negligible 100 101.0 basis • Organic growth contributed to 95 2.2 most of the uplift as a result of 95.4 (1.4) 94.0 (0.2) 93.8 growth in new clients, particularly 90
Slide 16: TWS – Lower Revenue Driven by a Range of Impacts
TWS – LOWER REVENUE DRIVEN BY A RANGE OF IMPACTS $m TWS REVENUE TWS FUMAS1 50 $b 21% 9.8 49 10 49.1 8.1 48 8 0.3 4.6 47 (1.4) 47.7 (0.2) 0.9 47.0 6 3.9 46 (1.0) 0.6 (0.7) 45 4 0.6 2.1 1.6 44 2 FY20 Single estate Adjusted Competitive Interest rate Equity Equity Organic FY21 2.5 2.0 impact on Revenue
Slide 17: TWS – Consistent Growth in Most Businesses
TWTH – GROWTH ACROSS TWS – CONSISTENT GROWTHALL BUSINESSES IN MOST BUSINESSES CORE TRUSTEE SERVICES FUMAS1 EMERGING MARKETS FUMAS1 All graphs in Millions All graphs in Millions 347 1,000 Living Donors 400 288 279 Estate Management 663 608 • New clients, material growth 200 • Material new business 50
Slide 18: STS – Rapid Growth Creating Scale
STS – RAPID GROWTH CREATING SCALE $m SUPERANNUATION TRUSTEE SERVICES REVENUE SUPERANNUATION TRUSTEE SERVICES 20 '000 MEMBERS 5.1 800 19.2 18 700 600 16 500 0.1 400 14 14.0 300 12 200 100 10 - FY20 Equity market impact on Organic growth FY21 FY19 FY20 FY21 FUS¹ MAJOR NEW APPOINTMENTS INCLUDE: SUPERAN
Slide 19: CTS – Strengthened Market Leadership
CTS – STRENGTHENED MARKET LEADERSHIP $b CTS FUS1 $m CTS REVENUE 34.0 120 0.9 23.4% 33.5 100 33.4 33.0 1.2 80 34.4 32.5 23.5 60 9.9 32.0 9.8 31.5 40 38.0 31.6 32.3 31.0 (0.3) 20 7.7 8.0 30.5 10.5 8.4 - 30.0 FY20 FY21 FY20 Lower RE fees on Equity market impact Organic growth FY21 Total inhouse funds o
Slide 20: CTS – Servicing the Global Fund Manager Industry
CTS – SERVICING THE GLOBAL FUND MANAGER INDUSTRY FUND MANAGER LOCATION FUND TYPE New Asia Other FUNDS Zealand 2% 4% 3% 310 ↑ +21 1 UK/Europe 12% Wholesale Retail funds funds 49% FUND MANAGERS USA 18% Australia 61% 51% 123 ↑ +8 1 1 Note a reclassification of funds and fund managers was implemented in
Slide 21: CTS – Corporate Trust and Securitisation
CTS – CORPORATE TRUST AND SECURITISATION $m CORPORATE TRUST AND SECURITISATION NUMBER OF ACCOUNTS DIVISION REVENUE 3.0 2.9 70 61 2.5 60 2.5 54 50 46 2.0 1.8 40 33 1.5 1.4 30 20 1.0 10 0.5 0 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 • Significant retail note transactions for Macquarie and Challenger •
Slide 22: CTS – UK/Ireland Building Momentum
CTS – UK/IRELAND BUILDING MOMENTUM NO. CLIENTS NO. FUNDS £b TOTAL AUM 3.0 12 35 10 30 2.5 25 2.0 8 20 6 1.5 15 4 1.0 10 2 5 0.5 - - - FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Post 30 June 2021 establishment Post 30 June 2021 establishment • Generated FUMAS and fund growth, notwith
Slide 23: Balance Sheet Strength
BALANCE SHEET STRENGTH PROVIDES SECURITY AND FLEXIBILITY $M FY21 1H21 FY20 Assets • Debt/equity (excluding cash-backed Cash and liquid investments 73.9 73.9 80.7 ORFR Loans) 3.6% ORFR cash 23.3 23.3 9.0 • ORFR cash and debt facilities relate to Trade receivables and accrued income 34.6 31.6 27.5 spe
Slide 24: Strong Cash Flows
STRONG CASH FLOWS CASH FLOW* $m 110 30.4 105 100 • Consistent, high quality cash generation 95 • Cash principally used for 90 (14.5) tax payments, dividends and debt repayment 85 • Negligible bad debts 80 (11.1) 75 75.7 70 (10.0) (1.6) 68.9 65 60 FY20 Net cash flow from Payment of Income tax paid Re
Slide 25: Strong Liquidity Position
STRONG LIQUIDITY POSITION $m FY21 LIQUIDITY POSITION • Low gearing, healthy liquidity and net cash positive position 100 97.2 • $81.8m regulatory capital cash requirement consisting of: 80 − $58.5m in net tangible assets ( largely held as cash) 60 − $23.3m of ORFR related 30.0 cash 40 (58.5) 45.4 •
Slide 26: Summary
SUMMARY RESILIENT PERFORMANCE WITH GROWTH MOMENTUM Strong organic revenue growth, supported Continue to maintain healthy margins by growth in equity markets (38.5% on underlying EBITDA) Underlying cost growth in-line with revenue growth as we invest and create a Consistent cash conversion foundation
Slide 27: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK
Slide 28: 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 o
Slide 29: Equity Trustees Is a Leader in the Provision of Independent Trustee Services
EQUITY TRUSTEES IS A LEADER IN THE PROVISION OF INDEPENDENT TRUSTEE SERVICES Australia’s largest specialist independent trustee providing services to individuals, families and corporate clients SUPERANNUATION CORPORATE TRUSTEE SERVICES TRUSTEE & WEALTH SERVICES (TWS) TRUSTEE SERVICES (STS) (CTS) • P
Slide 30: Equity Trustees Products and Services
EQUITY TRUSTEES PRODUCTS AND SERVICES A diversified range of trustee and related services provided across a number of sectors Financial Advice 30
Slide 31: Trust Is in Demand
TRUST IS IN DEMAND Increasing demand for an independent fiduciary model Regulatory landscape continues to evolve following the Royal Commission Increasing Conflicts of regulatory interest oversight Changes in ownership of wealth management businesses has increased Ownership changes in KEY Focus on G
Slide 32: Group Strategy Overview
GROUP STRATEGY OVERVIEW OUR OBJECTIVES Consistent growth in shareholder value Reputation as a stable, enduring, Market leadership in our specialty areas and returns trusted corporation GROUP STRATEGY BUSINESS GROWTH CLIENT SERVICE CAPABILITY COMMUNITY • Capture opportunities from • Deliver seamless,
Slide 33: Investing in Technology
INVESTING IN TECHNOLOGY CONTINUING TO DRIVE EFFICIENCIES AND ENHANCE THE CUSTOMER EXPERIENCE FOCUS FOR FY22-23 • EQT are continuing to invest in a number of critical technology areas such as: − Information & Cyber Security − Process digitisation and automation − Digital solutions for clients to self
Slide 34: Business Unit Strategies
BUSINESS UNIT STRATEGIES TRUSTEE & WEALTH SERVICES SUPERANNUATION CORPORATE TRUSTEE SERVICES (TWS) TRUSTEE SERVICES (STS) (CTS) Achieve leadership in Achieve further scale by Build on Australian multiple states and more securing trusteeship for leadership position in lines of business large funds an
Slide 35: TWS Initiatives
TWS INITIATIVES IMPROVED CLIENT ENGAGEMENT AND BUSINESS DEVELOPMENT • Investment in targeted business development through strategic partners (legal industry, planners, HNW advisors) • Increasing focus on non-wealth transition market segments • Expand the services provided to each client • Commitment
Slide 36: TWS Initiatives - Indigenous Communities
TWS INITIATIVES - INDIGENOUS COMMUNITIES CONTRIBUTE TO GREATER SOCIAL AND ECONOMIC PARITY BETWEEN OUR FIRST AUSTRALIANS AND THE BROADER COMMUNITY Innovate Reconciliation Action Plan • Endorsed by Reconciliation Australia $m INDIGENOUS TRUSTS FUMAS1 • Providing trustee and investment management servi
Slide 37: STS Initiatives
STS INITIATIVES LEVERAGING OUR INDEPENDENT TRUSTEE MODEL • Take advantage of industry changes and potential conflicts of interest that drive strong demand for independent governance capability • Assist superannuation funds with externalising their RSE functions • Complete APRA data transformation •
Slide 38: CTS Initiatives
CTS INITIATIVES PROVIDING INDEPENDENT, SPECIALIST TRUSTEE AND FIDUCIARY SERVICES • Growing existing business – Continuing promotion of core Responsible Entity service to existing and new fund managers – Strengthen leading proposition for quality fund managers to enter Australian retail market – Usin
Slide 39: Outlook
OUTLOOK STRATEGY REINFORCED AND MOMENTUM CONTINUES • Strategy is showing momentum in FUMAS and revenue growth • Trend to outsource fiduciary services continues to transform industry and benefit Equity Trustees • Strong equity markets continue to generate a positive impact • Growth in securitisation
Slide 40: Questions
QUESTIONS
Slide 41: Thank You
THANK YOU
Slide 42: 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 provid