Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — Shareholder Meeting (October 2008)
51 slides from Eqt's shareholder meeting presentation, Oct 31, 2008
Slide 1: Chairman's address to the 153rd General Meeting
Equity Trustees Limited Chairman’s address to the 153rd General Meeting For personal use only Fellow shareholders, ladies and gentlemen, good afternoon. It gives me great pleasure to welcome you to the 153rd general meeting of Equity Trustees Limited. We have a quorum present and I declare the meeti
Slide 2: Chairman's address (continued)
Equity Trustees Limited Chairman’s address to the 153rd General Meeting For personal use only As we noted at the time of announcing Mr Kennett’s appointment, his family has had a long association with Equity Trustees. His great-grandfather – Mr Edward Fanning – was a founding director of the company
Slide 3: Chairman's address (continued)
Equity Trustees Limited Chairman’s address to the 153rd General Meeting For personal use only Notwithstanding recent volatility in the company’s share price, Total Shareholder Return remains comfortably ahead of relevant indices over the past 5 years. TSR measures the return to shareholders from the
Slide 4: Chairman's address (continued)
Equity Trustees Limited Chairman’s address to the 153rd General Meeting For personal use only As we go through periods such as this, it is often easy to lose perspective on the bigger picture. I offer you two views of the bigger picture in order to provide context for the current circumstances, appr
Slide 5: Chairman's address conclusions
Equity Trustees Limited Chairman’s address to the 153rd General Meeting And while we are directly leveraged to the market as a whole, we enjoy a diversity of For personal use only revenue streams which means we are not overly reliant on any one component of it. I take this opportunity to re-emphasis
Slide 6: 153rd General Meeting October 2008
1 For personal use only Equity Trustees Limited 153rd General Meeting 31 October 2008
Slide 7: Equity Trustees' 120th year
Equity Trustees’ 120th year For personal use only 2
Slide 8: Board of Directors
Board of Directors For personal use only Mr JA (Tony) Killen Mr Peter Williams Mr David Groves Non Executive Director Managing Director Non Executive Director Chairman Vice Chairman Mr John McConnell Mr Barry Jackson Ms Alice Williams The Hon Jeffrey Non Executive Director Non Executive Director Non
Slide 9: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen 5. Questions Trusted since 1888 4
Slide 10: Overview – group results
Overview – group results For personal use only 2008 2007 Net profit (after-tax) $10.6m $8.1m + 29.7% Earnings per share (basic) 133.35¢ 105.18¢ + 26.8% Dividend per share (full-year, fully franked) 110¢ 75¢ + 46.7% Operating margin (pre-tax, excluding gains on the sale of investments) 36.5% 34.3% +
Slide 11: A strong track record of growth
A strong track record of growth For personal use only 1 C.A.G.R. 2008 result (2004-2008) Operating revenue $39.2m 23.7% Net profit after tax $10.6m 38.9% Earnings per share 133.35¢ 30.8% Net Assets $52.0m 33.2% 1 C.A.G.R. = Compound Annual Growth Rate. It refers to the annual (year-on-year) growth r
Slide 12: Returns to shareholders
Returns to shareholders For personal use only Full-year, fully-franked dividend Dividend payout ratio is within the range of 70-90% of operating profit after tax up 46.7% to 110¢ per share 110¢ (including gains on the sale of investments). Final Interim Franking credit balance ($’000) 75¢ 60 7,402 C
Slide 13: Total shareholder return
For personal use only 1- Ju l- 2 0 100 200 300 400 500 600 700 800 8- 00 A ug 3 19 -20 -S 0 ep 3 31 -200 -O 3 ct 12 -20 -D 03 ec - 23 200 -Ja 3 EQT n- 20 5- M 0 4 ar 16 -20 -A 04 p 28 r-20 -M 0 ay 4 -2 9- 0 0 Ju 4 20 l-20 -A 0 ug 4 -2 1- 00 O 4 c S&P/ASX 200 Accum 12 t-20 -N 04 ov 24 -20 S&P/ASX 200
Slide 14: Market impact and volatility
For personal use only Ju 100 120 140 160 180 200 220 240 l-0 A 3 ug -0 Se 3 p- N 03 ov -0 D 3 ec -0 3 Ja n- 04 M ar -0 A 4 pr -0 Ju 4 n- 04 Ju l-0 A 4 ug -0 O 4 ct -0 Volatility (ASX200) N 4 ov -0 D 4 ec -0 Fe 4 b- 0 M 5 ar -0 M 5 S&P/ASX All Ordinaries Index ay Trusted since 1888 -0 Ju 5 n- 05 Ju M
Slide 15: EQT co-branded fund managers
EQT co-branded fund managers For personal use only Trusted since 1888 10
Slide 16: Current trading & outlook
Current trading & outlook For personal use only • Modest increase in revenue in 1st quarter despite depressed market conditions – however revenue is under pressure • Margin contraction as we continue to make responsible investment in our business (people, processes and systems) • Cost control critic
Slide 17: Historical market returns
For personal use only 3/ 07 / 3/ 19 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 10 98 / 3/ 19 01 98 / 3/ 19 04 99 / 3/ 19 07 99 / 3/ 19 10 99 / 3/ 19 01 99 / 3/ 20 04 00 / 3/ 20 07 00 1 / 3/ 20 5 year 3 year 1 year 10 00 10 year / 6 month 3 month 3/ 20 01 00 / 3/ 20 04 01 / 3/ 20 07 01 /
Slide 18: Strong growth in Australian investments
Strong growth in Australian investments For personal use only Australia’s investment market has grown at a compound rate of 12.7% per annum since 1990 and is projected to grow by another 66% by 2015: Projected growth of 66% to 2015 2015: Compound annual growth in $1,979b Australian investment funds
Slide 19: Australia has the largest investment market in Asia
Australia has the largest investment market in Asia For personal use only Australia’s investment market is over 45% bigger than the next largest market in the Asian region Australia Hong $1,193b Kong $818b Singapore $814b Japan $714b China $434b South Korea India $330b NZ Taiwan $109b $15b $58b Sour
Slide 20: Australia has the 4th largest investment market in the world
Australia has the 4th largest investment market in the world For personal use only Australia’s retirement income system (compulsory superannuation) is a strong driver of the attractiveness of the Australian market to global investors USA Luxembourg $12,021b $2,685b France $1,990b Australia Ireland $
Slide 21: EQT remains well placed
EQT remains well placed For personal use only EQT retains a broad exposure to the financial services industry and diverse revenue streams: Institutional Fiduciary Advisor Services Services Services • RE • Trusts • Platforms • RSE • Estates • Financial Planners • Corporate Trust • Philanthropy Super-
Slide 22: Looking ahead
Looking ahead For personal use only Our run has been checked, it has not ended: • Financial services remains a lucrative market in which to compete • EQT remains well placed relative to our competitors • Expenses are being carefully monitored however we will maintain a prudent level of investment in
Slide 23: Mr Peter Williams, Managing Director
For personal use only Mr Peter Williams Managing Director Equity Trustees Limited Trusted since 1888 18
Slide 24: Four business units – sources of revenue
Four business units – sources of revenue For personal use only Corporate superannuation: Sales & marketing + product management for • Wealthpac EQT co-branded funds • Templetons managed by external • www.super.com.au Super specialists • Freedom of -annuation 21% Funds Choice Management 26% Fund Serv
Slide 25: Business unit summary (2007/08)
Business unit summary (2007/08) For personal use only A good spread of operating revenue $38.0m 21% Superannuation $31.3m Revenue growth from all business units Fund Services Funds Management 17% Revenue Private Clients 2008 vs 2007 $23.5m 25% Private Clients +12.0% 25% 19% Funds Mgt +11.6% $18.8m F
Slide 26: Private Clients
Private Clients For personal use only Operating revenue up 12.0% to $10.4m CAGR since 2004 = 19.3% 10.4 9.3 5.9 6.1 5.2 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Strong 2H in Trusts & Estates • Ongoing sales focus • Increase in Portfolio Manager client numbers • Expansion of service of
Slide 27: In-house asset management capability
In-house asset management capability For personal use only EQT Flagship Fund EQT Charitable Balanced Fund Australian equities team incubated in In-house fund of funds model for tax- 2003. exempt investors Concentrated large cap fund generating a Invests predominantly in EQT co- tax effective income
Slide 28: Funds Management
Funds Management For personal use only Operating revenue up 11.6% to $10.0m CAGR since 2004 = 14.1% 10.0 9.0 7.5 5.9 6.4 2004 2005 2006 2007 2008 2008 highlights 2009 Outlook • Positive net inflows in 2H despite market volatility. Total • Leverage market volatility with breadth of investment FUM = $
Slide 29: Funds Management: increasing share from platform (IDPS) source
Funds Management For personal use only Increasing share from platform (IDPS) source Retail (external) 11.0% Retail (internal) IDPS 12.4% 21.1% 25.9% 18.0% 67.9% of FUM 33.8% sourced 22.5% 67.9% via IDPS 31.9% 42.7% 61.7% channel vs 12.7% Net inflows lower in 2H but 55.4% 48.2% in 2004 positive (+$17
Slide 30: Fund Services
Fund Services For personal use only Operating revenue up 24.6% to $9.6m Growth in managers and funds Managers Funds CAGR since 2004 = 46.2% 2004 8 ≈ 30 2005 14 ≈ 50 9.6 7.7 2006 19 > 75 5.6 2007 27 > 100 3.1 2.1 2008 32 > 150 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Scalability of mod
Slide 31: Superannuation
Superannuation For personal use only Operating revenue up 50.6% to $7.9m CAGR since 2004 = 29.2% 7.9 5.3 4.4 2.9 3.4 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Integration of acquired businesses while still growing • Improving distribution for Freedom of Choice model revenue from existi
Slide 32: Information technology upgrade
Information technology upgrade For personal use only • Contract signed to upgrade to Garradin system • Further integrates key services – asset management, unit registry, fiduciary accounting and tax • Builds on provision for specialised trust & estate requirements • Improvement to on-line component
Slide 33: Acquisitions update
Acquisitions update For personal use only • Recent acquisitions successfully integrated • Exploratory merger discussions initiated with Trust Company ceased in May 2008. • EQT remains open to opportunities that are in the best interests of shareholders • Continuing to seek bolt-on acquisitions – foc
Slide 34: Summary
Summary For personal use only • Record profitability achieved in 2008 • Contribution from all business units • Ongoing improvement in operational efficiency • Will continue to assess acquisitions / strategic opportunities • Impact of market volatility evident in 2H and into 2009 • Business on solid
Slide 35: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen 5. Questions Trusted since 1888 30
Slide 36: Items of ordinary business – item 1
Items of ordinary business – item 1 For personal use only Item 1: To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2008. Trusted since 1888 31
Slide 37: Items of ordinary business – item 2
Items of ordinary business – item 2 For personal use only Item 2: To adopt the remuneration report for year ended 30 June 2008. Trusted since 1888 32
Slide 38: Item 2 – proxies received
Item 2 – proxies received For personal use only To adopt the remuneration report for year ended 30 June 2008 In respect of item 2 of ordinary business, the following proxies have been received: For Against 2,232,130 66,478 Open = 252,094 Trusted since 1888 33
Slide 39: Items of ordinary business – item 3(a)
Items of ordinary business – item 3(a) For personal use only Item 3(a) – to consider the election of directors Mr David F Groves retires in accordance with Rule 73(1) of the company’s Constitution and, being an eligible person, offers himself for re-election. Trusted since 1888 34
Slide 40: Item 3(a) – proxies received
Item 3(a) – proxies received For personal use only To consider the re-election of Mr David F Groves In respect of item 3(a) of ordinary business, the following proxies have been received: For Against 2,403,894 989 Open = 251,842 Trusted since 1888 35
Slide 41: Items of ordinary business – item 3(b)
Items of ordinary business – item 3(b) For personal use only Item 3(b) – to consider the election of directors Mr John R McConnell retires in accordance with Rule 73(1) of the company’s Constitution and, being an eligible person, offers himself for re-election. Trusted since 1888 36
Slide 42: Item 3(b) – proxies received
Item 3(b) – proxies received For personal use only To consider the re-election of Mr John R McConnell In respect of item 3(b) of ordinary business, the following proxies have been received: For Against 2,383,334 989 Open = 252,842 Trusted since 1888 37
Slide 43: Items of ordinary business – item 3(c)
Items of ordinary business – item 3(c) For personal use only Item 3(c) – to consider the election of directors The Hon Jeffrey G Kennett AC having been appointed in accordance with Rule 60 of the company’s Constitution since the last Annual General Meeting, retires in accordance with that Rule and,
Slide 44: Item 3(c) – proxies received
Item 3(c) – proxies received For personal use only To consider the election of The Hon Jeffrey G Kennett AC In respect of item 3(c) of ordinary business, the following proxies have been received: For Against 2,305,925 15,630 Open = 271,929 Trusted since 1888 39
Slide 45: Items of ordinary business – item 4
Items of ordinary business – item 4 For personal use only Item 4 To approve an increase in the maximum aggregate remuneration which may be paid to non-executive directors of the Company under Rule 61 of the Constitution from $450,000 per annum to $750,000 per annum, with effect from 1 January 2009.
Slide 46: Item 4 – proxies received
Item 4 – proxies received For personal use only To approve an increase in the maximum aggregate remuneration which may be paid to non-executive directors of the company In respect of item 4 of ordinary business, the following proxies have been received: For Against 1,561,821 271,287 Trusted since 18
Slide 47: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen Items of special business Mr Tony Killen 5. Questions Trusted since 1888 42
Slide 48: Items of special business – adoption of new Constitution
Items of special business – item 5 For personal use only Item 5 – adoption of new Constitution To consider and, if thought fit, to pass the following resolution as a special resolution: “That, the new Constitution contained in the document submitted to this meeting and signed by the Chairman of this
Slide 49: Item 5 – proxies received
Item 5 – proxies received For personal use only To consider and, if thought fit, pass the adoption of a new Constitution In respect of item 5 of ordinary business, the following proxies have been received: For Against 2,388,098 1,180 Open = 257,165 Trusted since 1888 44
Slide 50: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen Questions Trusted since 1888 45
Slide 51: For personal use only
EO [Trustees Trusted since 1888