Perpetual Limited · ASX:PPT
Perpetual — FY2020 Earnings Presentation
33 slides from Perpetual's earnings presentation, Aug 20, 2020
Slide 1: Perpetual FY20 Financial Results
Perpetual Limited ABN 86 000 431 827 Angel Place, Level 18, 123 Pitt Street Sydney NSW 2000 20 August 2020 Australia Phone +61 9229 9000 ASX Limited www.perpetual.com.au ASX Market Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 Perpetual FY20 Financial Results The following an
Slide 2: Perpetual Limited FY20 Results
PERPETUAL LIMITED FY20 RESULTS 12 months to 30 June 2020 Rob Adams Chief Executive Officer and Managing Director Chris Green Chief Financial Officer 20 August 2020
Slide 3: FY20 Results
FY20 RESULTS ROB ADAMS CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR 2
Slide 4: A diversified business
A diversified business Supported by balance sheet strength, brand & client relationships Responding to the current environment Earning trust every day supporting our clients, protecting our people, remaining true to label Executing on our strategy Clients first, future fit, new horizons
Slide 5: FY20 Results
FY20 RESULTS $489.2m $356.8m $82.0m $93.5m Operating revenue1 Expenses NPAT UPAT1 5% on FY19 1% on FY19 29% on FY19 19% on FY19 PERPETUAL PERPETUAL PERPETUAL INVESTMENTS PRIVATE CORPORATE TRUST FUM $28.4b FUA $14.3b FUA $941.9b Highly regarded investments business Clear HNW segmentation stra
Slide 6: Perpetual's diversified business model
PERPETUAL’S DIVERSIFIED BUSINESS MODEL DIVERSIFIED SOURCE OF REVENUES PROVIDE SOME PROTECTION FROM MARKET VOLATILITY Operating revenue1 $m Operating profit before tax2 $m 12% 14% FY20 36% 39% FY20 39% Operating Operating Revenue Profit before tax contribution1 contribution2 13% 25% 22% Perpetual Inv
Slide 7: Perpetual swiftly adapted to COVID-19
PERPETUAL SWIFTLY ADAPTED TO COVID-19 CONNECTING WITH OUR CLIENTS AND OUR PEOPLE Digital solutions for staff and clients Record transaction volumes in PCT • Seamless transition with more than • RBA reporting delivered on time 95% of staff working remotely despite increased volumes due to under our C
Slide 8: Strategic imperatives: solid progress in strategy execution
PERPETUAL STRATEGIC IMPERATIVES SOLID PROGRESS IN STRATEGY EXECUTION Our vision: Enduring Prosperity for all our stakeholders CLIENT FIRST FUTURE FIT NEW HORIZONS Exceptional products Empowering our New capabilities Outstanding service people to deliver high Global footprint performance FY20 strateg
Slide 9: Perpetual Investments: outflows and change in asset class mix impacting revenue
PERPETUAL INVESTMENTS OUTFLOWS AND CHANGE IN ASSET CLASS MIX IMPACTING REVENUE All Ordinaries Index1 Equity markets 7800 collapsed in late 7300 February/March in 6800 Average FY19 v FY18 : +3% response to COVID- 6300 19 pandemic before partially rebounding 5800 Average FY20 v FY19 : +4% 5300 The ave
Slide 10: Perpetual Investments: mixed performance across asset classes
PERPETUAL INVESTMENTS MIXED PERFORMANCE ACROSS ASSET CLASSES Quartile rankings1 % of funds quartile ranking Period ending 30 June 2020 1 yr 3 yrs 5 yrs 7 yrs 10 yrs 50% 50% Perpetual W Australian Share 3 3 4 4 3 1 Yr Australian Equities Perpetual W Concentrated Equity 4 4 4 4 3 Perpetual W Ethical S
Slide 11: Perpetual Private: strong foundations for growth in chosen segments
PERPETUAL PRIVATE STRONG FOUNDATIONS FOR GROWTH IN CHOSEN SEGMENTS Our vision: Lead the market in advisory and professional services in our chosen segments Future proof the business Capitalise on industry Accelerate growth via pursuit and focus on the needs of dislocation and accelerate of culturall
Slide 12: Perpetual Private: adviser acquisition strategy contributing to higher net flows
PERPETUAL PRIVATE ADVISER ACQUISITION STRATEGY CONTRIBUTING TO HIGHER NET FLOWS 7th consecutive year of Full range of proprietary Community and Social positive net flows multi manager Investment providing bolstered by adviser investment solutions meaningful contribution growth strategy in 2H20 avail
Slide 13: Perpetual Corporate Trust: a year of record growth and client advocacy
PERPETUAL CORPORATE TRUST A YEAR OF RECORD GROWTH AND CLIENT ADVOCACY Our vision: Leading provider of fiduciary, custodian, and digital solutions to the financial services industry Managed Fund Services (MFS) Debt Market Services (DMS) Data & Analytics Solutions (DAS) Full service cross border offer
Slide 14: Corporate Trust MFS: growth supported by stable asset prices and demand
PERPETUAL CORPORATE TRUST - MFS GROWTH SUPPORTED BY STABLE ASSET PRICES AND DEMAND FROM DOMESTIC AND GLOBAL INVESTORS MFS FUA $b MFS – revenue contribution $m 55.6 51.3 285.8 8.2 269.7 45.8 7.4 242.9 34.6 5.8 10.2 30.6 9.5 24.3 28.9 8.0 29.2 23.8 14.1 58.1 64.3 12.5 57.3 11.7 151.7 158.1 20.2 21.9 2
Slide 15: Corporate Trust DMS: product development and service excellence driving revenue growth
PERPETUAL CORPORATE TRUST - DMS PRODUCT DEVELOPMENT AND SERVICE EXCELLENCE DRIVING REVENUE GROWTH DMS FUA $b DMS public securitisation issuance $b DMS revenue composition $m1 656.1 18.1 69.9 494.9 75.2 73.6 450.3 41.9 61.6 57.5 14.5 131.3 17.4 18.4 57.7 29.8 15.4 43.3 18.5 24.9 42.7 16.1 115.5 27.9
Slide 16: Financials
FINANCIALS CHRIS GREEN CHIEF FINANCIAL OFFICER 15
Slide 17: Financial performance: Group
FINANCIAL PERFORMANCE GROUP FY20 2H20 1H20 FY19 FY20 Key themes For the period $m $m $m $m v FY19 • Revenue 5% lower due to lower Perpetual Operating revenue1 489.2 235.7 253.5 514.1 (5%) Investment and Perpetual Private revenue offset by higher Perpetual Corporate Trust revenue Total expenses1,2 (3
Slide 18: Revenue and expense analysis
REVENUE AND EXPENSE ANALYSIS Movement in Revenue1 ($m) Key revenue movements • Higher PCT revenue reflecting growth in both MFS and DMS, as well as growth in Data and Analytic Solutions revenue following RFi acquisition and launch of new Perpetual Business Intelligence products in FY20 • Lower PP re
Slide 19: Expense deep dive: disciplined cost management with cost growth limited to 1%
EXPENSE DEEP DIVE DISCIPLINED COST MANAGEMENT WITH COST GROWTH LIMITED TO 1% Expense analysis1 ($m) 6.2 0.2 (2.2) 2.8 356.8 351.9 (8.5) 6.4 FY19 Target Technology Organic & Regulatory Discretionary Other FY20 Expenses operating inorganic Expenses model benefits2 growth initiatives Key drivers Lower
Slide 20: Perpetual Investments: lower revenue due to net outflows and performance fees
PERPETUAL INVESTMENTS LOWER REVENUE DUE TO NET OUTFLOWS AND PERFORMANCE FEES FY20 2H20 1H20 FY19 FY20 v FY20 v FY19 For the period $m $m $m $m FY19 Key factors impacting the result: • 15% decline in Revenue reflecting 13% lower Revenue 173.4 78.9 94.5 205.0 (15%) average FUM due to combination of ou
Slide 21: Perpetual Private: growth in market revenue offset by lower non-market revenue
PERPETUAL PRIVATE GROWTH IN MARKET REVENUE OFFSET BY LOWER NON-MARKET REVENUE FY20 2H20 1H20 FY19 FY20 v FY20 v FY19 For the period $m $m $m $m FY19 Key factors impacting the result: • 2% decline in Revenue reflecting 1% higher market Market related revenue 122.1 59.3 62.8 120.4 1% related revenue d
Slide 22: Perpetual Corporate Trust: double digit growth in revenue and profit before tax
PERPETUAL CORPORATE TRUST DOUBLE DIGIT GROWTH IN REVENUE AND PROFIT BEFORE TAX FY20 2H20 1H20 FY19 FY20 v FY20 v FY19 For the period $m $m $m $m FY19 Key factors impacting the result: • 11% increase in Revenue reflecting increases in both DMS (13%) and MFS (8%). Higher increase in DMS Debt Market Se
Slide 23: Balance sheet: maintaining financial flexibility
BALANCE SHEET MAINTAINING FINANCIAL FLEXIBILITY FY20 v 2H20 v FY20 v FY19 For the period ended FY20 2H20 1H20 FY19 FY19 1H20 Key movements on the consolidated balance sheet include: Cash 164.1 164.1 261.7 299.6 (45%) (37%) • 45% decrease in Cash reflects acquisition of Trillium ($58.3m) and the repa
Slide 24: Pro-forma impact of Barrow Hanley & Trillium acquisitions
PRO-FORMA IMPACT OF BARROW HANLEY & TRILLIUM ACQUISITIONS ALIGNS WITH PURSUIT OF DIVERSIFYING REVENUE Perpetual OPERATING REVENUE Combined Pro-forma1 26% 27% Operating 36% Pro-forma Revenue Operating contribution Revenue 12 months contribution1,2,3 55% 30 June2 12 months 30 June 18% 38% Perpetual In
Slide 25: FY21 expense guidance
FY21 EXPENSE GUIDANCE CONTINUED INVESTMENT IN GROWTH INITIATIVES OFFSET BY COST SAVINGS FROM OPERATING MODEL CLIENT FIRST FUTURE FIT NEW HORIZONS Exceptional products Empowering our New capabilities outstanding service people to deliver high Global footprint performance • Underlying expenses1 expect
Slide 26: Future dividend settings: change in underlying profit definition
FUTURE DIVIDEND SETTINGS CHANGE IN UNDERLYING PROFIT DEFINITION • The Barrow Hanley acquisition1 is a key milestone in Perpetual’s growth strategy and will have a material impact on the Group’s statutory earnings profile for the foreseeable future • Revised definition of UPAT2 to reflect the changes
Slide 27: Financial indicators
FINANCIAL INDICATORS EPS1 cps DPS cps NTA per share ROE2 % 6.47 6.68 296.8 21.6 275 246.3 250 17.5 3.95 172.8 12.5 155 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 $0.50 94% 25 September 2020 FULLY FRANKED FINAL DIVIDEND PAYOUT RATIO3 DIVIDEND PAYABLE 1. Fully diluted on an underlying
Slide 28: FY21 Strategic Priorities
FY21 STRATEGIC PRIORITIES ROB ADAMS CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR 27
Slide 29: Perpetual's strategic imperatives: FY21 priorities
PERPETUAL’S STRATEGIC IMPERATIVES FY21 PRIORITIES CLIENT FIRST FUTURE FIT NEW HORIZONS Exceptional products Empowering our New capabilities outstanding service people to deliver high Global footprint performance FY21 strategic priorities Improve or maintain leadership positions in Continue to de
Slide 30: A diversified business
A diversified business Supported by balance sheet strength, brand & client relationships Responding to the current environment Earning trust every day supporting our clients, protecting our people, remaining true to label Executing on our strategy Clients first, future fit, new horizons
Slide 31: Key dates for remainder of 2020
KEY DATES FOR REMAINDER OF 2020 Event Date Shareholder update Friday, 21 August 2020 12.30pm (Sydney AEST Time) Share Purchase Plan (SPP) Closing Date Wednesday, 26 August 2020 5pm (Sydney AEST time) Announcement of results of SPP Monday, 31 August 2020 Issue Date for SPP Shares & record date for FY
Slide 32: Contacts
CONTACTS Emma Rumble General Manager, Corporate Affairs & Investor Relations emma.rumble@perpetual.com.au +612 9229 3998 Catherine Buckmaster Senior Manager, Investor Relations catherine.buckmaster@perpetual.com.au +612 9229 3011 About Perpetual Perpetual is an ASX-listed, diversified financial serv
Slide 33: Disclaimer
DISCLAIMER Important information This presentation has been prepared by Perpetual Limited ABN 86 000 431 827 (Perpetual). It is general information on Perpetual and its subsidiaries (Perpetual Group) current as at 20 August 2020. It is in summary form and is not necessarily complete. It should be re