Perpetual Limited · ASX:PPT
Perpetual — FY2021 Earnings Presentation
55 slides from Perpetual's earnings presentation, Aug 19, 2021
Slide 1: FY21 Results Presentation
Perpetual Limited (ASX:PPT) FY21 Results Presentation For the full year ended 30 June 2021 Thursday 19 August 2021
Slide 2: Overview of Perpetual
Overview of Perpetual A high quality financial services firm investing in future growth High quality business complemented by transformational Highlights acquisitions • Unique business combination delivering results across all divisions: Revenue ($m) 640.6 • Perpetual Asset Management International
Slide 3: Agenda
Agenda Full Year FY21 Highlights Rob Adams CEO and Managing Director 4 FY21 Financials Chris Green Chief Financial Officer 18 Divisional Updates Rob Adams CEO and Managing Director 27 Summary Rob Adams CEO and Managing Director 35 Rob Adams CEO and Managing Director Q&A 36 Chris Green Chief Financia
Slide 4: Full Year 2021 Highlights
Full Year 2021 Highlights Rob Adams CEO and Managing Director
Slide 5: FY21 overview
FY21 overview Investing for growth and delivering results $640.6m $124.1m $74.9m 15.8% $1.80 Operating revenue1 UPAT2 NPAT ROE3 Total dividend 31% on FY20 26% on FY20 9% on FY20 80bps on FY20 16% on FY20 640.6 124.1 82.0 1.80 74.9 15.8 1.55 490.5 98.6 15.0 FY20 FY21 FY20 FY21 FY20 FY21 FY2
Slide 6: Key highlights
Key highlights Execution of strategy driving sustainable growth Strategy to build a global FY21 financial performance A unique business Entering FY22 with renewed asset management business, reflects growing contribution combination with all divisions confidence and positive adding world-class of tra
Slide 7: Momentum building across each division
Momentum building across each division Perpetual Asset Management Perpetual Private Perpetual Corporate Trust AUM ($b)1 FUA ($b) FUA ($b) 246% 19% 2% 941.9 AUM/FUA/FUA $b vs FY20 vs FY20 922.8 vs FY20 98.3 764.5 17.0 27.2 28.4 14.8 14.3 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 76% flat 7%
Slide 8: A unique combination of businesses
A unique combination of businesses High quality capabilities across asset management, corporate trust and private wealth Operating revenue1,2 Underlying profit before tax 3,4 PCT Managed Funds Services 10% Perpetual Asset Management Australia PCT Debt Markets Services 27% 12% 22% 35% 45% 49% Perpetu
Slide 9: Evolution to a truly global asset management firm well underway
Evolution to a truly global asset management firm well underway Where we are going Where are we today • A successful, growing global asset manager • Global presence, diversified by and financial services provider Where we were geography, distribution channel and • Leveraging ESG strengths to build f
Slide 10: Transforming Perpetual with complementary acquisitions and service offerings
Transforming Perpetual with complementary acquisitions and service offerings delivering scale and capability 2021 2020 2021 Perpetual acquires Jacaranda Financial Perpetual acquires Barrow Hanley Trillium adds new Planning, a highly Global Investors adding 32 new investment team managing scalable bu
Slide 11: Barrow Hanley and Trillium
Barrow Hanley and Trillium Investment bringing transformational opportunities and strong growth horizons Where we are going • Relevant product structures across Where we are today all key regions • The Barrow Hanley distribution • Limited sales capability • Supported by expansion of our team has bee
Slide 12: International expansion driving scale and growth
International expansion driving scale and growth A$98.3b1 AUM across multiple asset classes, channels and regions AUM by asset class1 AUM by channel1 AUM by account domicile1 Retail Other 1% Australian Listed investment vehicles 5% EMEA (incl Bermuda), 6% Fixed equities 1% Asia income 14% 6% 21% Int
Slide 13: Expanding our global footprint
Expanding our global footprint 75% of AUM managed offshore supported by growing presence in key regions UK, Europe • Head of European Distribution recently appointed and building a team of four initially 2 • Planning underway to launch a UCITS1 range of funds • Offices in London, Edinburgh and The A
Slide 14: ESG is now mainstream
ESG is now mainstream Foundations of ESG throughout Perpetual's 135 year history Trillium • Unrivalled 39 years of impact driven investing • Record net flows in FY21 with AUM growth of 50% in USD since acquisition1 • Global Equities now 5 Star-rated by Morningstar in the US2 • Launched Trillium ESG
Slide 15: Building a sustainable future
Building a sustainable future Active year across Environment, Social and Governance Environment Social Governance Support c.100 NFP clients with ‘Future Fit Workplace’ PAMA launched Principles for PP assisted philanthropists to CDP climate score improved to a more than $103m through strategy to supp
Slide 16: Perpetual's strategy for sustained growth
Perpetual’s strategy for sustained growth OUR STRATEGY OUR PURPOSE OUR VISION OUR HOLDERS Enduring prosperity Most trusted in financial services Excellence, integrity, partnership Clients People Shareholders Trusted brand and Attract, develop and inspire Delivering sustainable enduring relationships
Slide 17: FY21 progress report
FY21 progress report Disciplined execution of strategy providing substantial growth opportunities Client first Future fit New horizons Exceptional products Empowering our people New capabilities Outstanding service to deliver high performance Global footprint ✓ High client satisfaction with overall
Slide 18: FY21 Financials
FY21 Financials Chris Green Chief Financial Officer
Slide 19: FY21 financial results
FY21 financial results UPAT up 26% and dividend up 16% FY21 2H21 1H21 FY20 FY21 For the period $m $m $m $m v FY20 Key highlights Operating revenue 640.6 359.9 280.6 490.5 31% • Earnings accretive acquisitions of Barrow Hanley (17 November 2020) and Trillium (30 June 2020) Total expenses (469.4) (260
Slide 20: FY21 UPAT analysis
FY21 UPAT analysis 26% growth driven by acquisitions FY20 PAMI PAMA PP PCT Group Support YoY Tax FY21 UPAT1 UPBT UPBT UPBT UPBT Services UPBT movement UPAT1 Acquisitions of Barrow Net outflows, product Strategic initiatives Continued profit Higher expenses Hanley & Trillium and repricing and transit
Slide 21: Expense analysis
Expense analysis Disciplined expense growth in line with business performance improvement 31% PAMI expense growth 3% underlying expense growth 469.4 20.9 350.9 Variable remuneration FY20 Target operating Group wide Performance Technology PP growth Other PAMI FY21 Expenses model benefits short-term f
Slide 22: UPAT to NPAT reconciliation
UPAT to NPAT reconciliation $49.2m of significant items mainly attributable to the acquisitions 32.1 1. Post completion of Barrow Hanley acquisition in November 2020, the definition of UPAT was revised. For more information refer to slide 52 of this presentation for UPAT revised definition and Appen
Slide 23: Cashflow analysis
Cashflow analysis Strong free cash flow funding disciplined growth investments and shareholder returns Low debt-to-capital ratio of Surplus liquid funds of $198m Acquisitions funded through 15.8% with headroom for at 30 June 2021 equity and debt further growth Free Cash Flow $100m1 164.1 184.1 147.1
Slide 24: Balance sheet
Balance sheet Minimal gearing with headroom for further growth 2H21 1H21 2H20 1H20 For the period $m $m $m $m Key movements vs 2H20 Cash 147.1 172.1 164.1 261.7 • Moderate decrease in Cash • Increase in Liquid investments reflects an Liquid investments (FVTPL) 150.4 133.7 80.7 79.1 increase in seed
Slide 25: Shareholder returns
Shareholder returns 6% 16% EPS1 cps vs FY20 Dividend $ps Vs FY20 Highlights 1.80 • Final fully franked ordinary dividend for 2H21 of 96 cents per share in 220.6 1.55 line with midpoint of our dividend 207.7 policy with payout ratio of 76%3 0.96 • Total FY21 dividend for the year of FY20 FY21 1.0
Slide 26: FY22 guidance
FY22 guidance Continuing to invest in our growth strategy Significant items Operating Expenses ($m) Significant items relating to transaction and HIGH integration costs as well as amortisation of acquired intangibles with range between $35-39 HIGH LOW LOW million2 after tax 70.4 79.8 IFRIC treatment
Slide 27: FY21 Divisional Update
FY21 Divisional Update Rob Adams CEO and Managing Director
Slide 28: Perpetual Asset Management International
Perpetual Asset Management International World-class investment and distribution capabilities AUM AUM by channel $b (AUD)2,5 FY21 key highlights $73.6b large 66.5 73.6 ✓ Strong contribution from acquisitions vs FY20 6.6 5.4 ✓ Trillium AUM A$7.7b increase of 37% (A$2.1b) or in USD 50% increase Revenu
Slide 29: Perpetual Asset Management Australia
Perpetual Asset Management Australia Strong investment performance across asset sectors FY21 key highlights AUM ✓ All PAMA funds outperformed1 over the year and net flows moved to AUM by channel $b5 positive in Q4 FY21 $24.7b 8% vs FY20 27.2 ✓ Strong outperformance of all Australian equity funds o
Slide 30: Perpetual Private
Perpetual Private Successful execution of adviser growth strategy drives record net flows FUA Net flows $b FY21 key highlights $17.0b 19% vs FY20 ✓ Record net flows of $783m, including $405m from adviser growth strategy in FY21 (delivered $696m since commencement of strategy) Revenue 0.8 0.6 ✓ New
Slide 31: Perpetual Corporate Trust
Perpetual Corporate Trust High quality business that continues to deliver strong earnings growth FUA DMS FUA $b4,5 FY21 key highlights $922.8b 2% vs FY20 656.1 ✓ MFS Responsible Entity solutions attracting new domestic and global clients 18.1 582.9 with a 67% increase in FUA Revenue 131.3 18.3 ✓ M
Slide 32: Managed Funds Services
Managed Funds Services High tenure of quality clients and a growing client base Managed Funds Services comprise of wholesale trustee, custody and responsible entity services, plus product extensions Investment Management, Accounting and Fordham Accounting 32
Slide 33: Debt Markets Services and Data and Analytics Solutions
Debt Markets Services and Data and Analytics Solutions Strong activity in non-bank sector driving growth Bank Two transactions One transaction One transaction One transaction One transaction $2b $1b $300m $1b $1b Non-Bank Three transactions One transaction One transaction Two transactions Four trans
Slide 34: Key priorities for FY22
Key priorities for FY22 Continued execution of strategy to drive sustained quality growth Client first Future fit New horizons Exceptional products Empowering our people New capabilities Outstanding service to deliver high performance Global footprint ❑ Deliver contemporary investment ❑ Continue to
Slide 35: Summary
Summary Execution of strategy driving sustainable growth Unique portfolio of Executing well Disciplined investment in businesses on strategy quality growth opportunities • High quality businesses well- • Strategy to build a global asset • Focus on new product and positioned for future growth managem
Slide 36: Q&A
Q&A Rob Adams Chris Green CEO and Managing Director Chief Financial Officer 36
Slide 37: Thank you
pa ea ens “Trust is earned.
Slide 38: Contacts
Contacts Emma Rumble Marisa Zammit General Manager, Corporate Affairs Head of Investor Relations & Investor Relations emma.rumble@perpetual.com.au marisa.zammit@perpetual.com.au +612 9229 3998 +61 425 282 805 Connect with us at: About Perpetual Head Office perpetual.com.au Level 18, Angel Place, bar
Slide 39: Appendix
Appendix Detailed divisional result commentary 39
Slide 40: Perpetual Asset Management International
Perpetual Asset Management International Barrow Hanley and Trillium acquisitions completed FY21 2H21 1H21 FY20 For the period $m $m $m $m Key movements Revenue 139.2 100.9 38.3 - • The financial performance includes Trillium (completion date of 30 June 2020) and Operating expenses (95.8) (69.4) (26.
Slide 41: Perpetual Asset Management Australia
Perpetual Asset Management Australia Lower revenue due to net outflows and prior period distributions FY21 2H21 1H21 FY20 FY21 For the period $m $m $m $m v FY20 Key movements Revenue1 165.7 86.6 79.1 173.5 (5%) • 5% decrease in revenue compared with FY20 mainly driven by lower average AUM Operating
Slide 42: Perpetual Private
Perpetual Private Positive growth in adviser inflows, non-market impacted by economic slowdown FY21 2H21 1H21 FY20 FY21 For the period $m $m $m $m v FY20 Key movements Market related revenue 126.7 65.6 61.1 122.1 4% • Market related revenue 4% higher than FY20 due to higher average equity markets an
Slide 43: Perpetual Corporate Trust
Perpetual Corporate Trust Solid growth in revenue and profit before tax FY21 2H21 1H21 FY20 FY21 For the period $m $m $m $m v FY20 Key movements Debt Markets Services revenue 75.0 38.2 36.9 69.9 7% • Debt Markets Services revenue growth of 7% compared to FY20 driven by underlying growth in Managed F
Slide 44: Appendix
Appendix Perpetual Asset Management performance charts 44
Slide 45: Excess returns against benchmark by fund, 1 year
Perpetual W Geared Australian Share 69.7% Perpetual Pure Microcap - Class A 15.9% Perpetual W Ethical SRI 14.0% Perpetual Equity Investment Company (ASX:PIC)2 Perpetual Pure Value 13.9% 13.2% Perpetual W Smaller Companies 7.3% 1. Refer to slide 46 for multi-year performance and full disclosure Austr
Slide 46: PAMA net performance as at 30 June 2021
Excess returns above benchmark Below benchmark returns PAMA net performance as at 30 June 2021 All funds outperformed over the year Annualised performance (%)1 Excess returns above benchmark (%)1 Fund Benchmark 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr Perpetual W Australian Shar
Slide 47: PAMI investment performance, Barrow Hanley 1 year
Diversified Small Cap Value 16.0% Small Cap Value (4.8%) Mid Cap Value 14.2% US Opportunistic Value Equity 15.3% Diversified Large Cap Value 15.9% Global Equity Value 12.4% 1. Refer to slide 48 for multi-year performance and full disclosure Equities Large Cap Value 5.4% Emerging Markets 7.4% Non-US
Slide 48: PAMI investment performance, Barrow Hanley
Excess returns above benchmark Below benchmark returns PAMI investment performance as at 30 June 2021 Strong rebound in Barrow Hanley relative performance Annualised performance (%)1 Excess returns above benchmark (%)1 Strategy Benchmark 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr Large Cap Value Russ
Slide 49: Trillium investment performance, 1 year
PAMI investment performance as at 30 June 2021 Continuation of solid performance for Trillium 1 year excess returns against benchmark as at 30 June 20211 8.8% 8.0% 2.2% (1.7%) (1.5%) (1.8%) Large Cap Core All Cap Core Fossil Fuel Free ESG Global Equities Sustainable Opportunities Small Mid Cap Core
Slide 50: PAMI investment performance as at 30 June 2021 Trillium
Excess returns above benchmark Below benchmark returns PAMI investment performance as at 30 June 2021 Continuation of solid performance for Trillium Trillium 30 June 2021 Performance against benchmark Annualised performance (%)1 Excess returns above benchmark (%)1 Strategy Benchmark 1 yr 3 yr 5 yr 1
Slide 51: Appendix
Appendix Other 51
Slide 52: Definitions
Definitions Change in UPAT1 Dividend settings • Revised definition of UPAT to reflect the changes to the Group’s • The Board's current policy is that from FY21 future dividends will be operating cashflows from both existing and future opportunities paid on the revised UPAT metric • From FY21, NPAT w
Slide 53: Definitions
Definitions Term Definition Term Definition Term Definition $A/AUD Australian Dollar Earnings before interest, tax, depreciation and PCT Perpetual Corporate Trust EBITDA amortisation of intangible assets, equity FY19 Full Year ended 30 June 2019 remuneration expense, and significant items PP Perpetu
Slide 54: Disclaimer
Disclaimer Important information Nothing in this presentation should be construed as either an offer to sell or solicitation of an offer to buy or sell Perpetual Limited securities or units in any fund referred to in this presentation in any jurisdiction. The This presentation has been prepared by P
Slide 55: Key dates for the remainder of 2021
Key dates for the remainder of 2021 Payment of FY21 Final Dividend - Friday 24 September 2021 Perpetual Annual General Meeting - Thursday 21 October 2021 Perpetual Investor Day - Wednesday 10 November 2021 This timetable is indicative only and may be subject to change. Perpetual reserves the right t