Eqt Holdings Ltd. · ASX:EQT
Eqt — FY2024 Earnings Presentation
34 slides from Eqt's earnings presentation, Aug 22, 2024
Slide 1: Investor Presentation: Results for Year Ended 30 June 2024
INVESTOR PRESENTATION RESULTS FOR YEAR ENDED 30 JUNE 2024 Mick O’Brien – Managing Director Johanna Platt – Chief Financial Officer 22 AUGUST 2024
Slide 2: Agenda
AGENDA 1 FY24 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 and present. 2
Slide 3: FY24 Overview
FY24 OVERVIEW
Slide 4: Strong Growth with Market Leading Positions
STRONG GROWTH WITH MARKET LEADING POSITIONS DIVIDENDS FUMAS1 REVENUE NPAT 2H24 53 cents $202.8b $174.0m $20.7m FY 104 cents Vs. FY23 Up 26.7% Up 23.1% Up 10.0% Up 5 cents per share Up 13.8% (UNPAT $37.9m) Continued successful integration of the AET business, onboarding of new clients and p
Slide 5: Strong Progress Across Our T4 Objectives
STRONG PROGRESS ACROSS OUR T4 OBJECTIVES T1 T2 T3 T4 Improving Lifting Growing Deepening client satisfaction employee shareholder value community impact engagement Our clients are surveyed Clients are best served over We are proud of the trust every year and action taken Our goal is to have highly t
Slide 6: Multiple Sources of Growth
MULTIPLE SOURCES OF GROWTH • FUMAS CAGR FY20 to FY24 of 19.0%, made up of: • Revenue CAGR FY20 to FY24 of 16.2%, made up of: ̶ Organic growth ~55% ̶ AET acquisition ~50% ̶ Investment market effect ~40% ̶ Organic growth ~35% ̶ AET acquisition 5% ̶ Investment market effect ~15% $b TOTAL EQT FUMAS1 $m
Slide 7: Trustee Wealth Services
TRUSTEE WEALTH SERVICES • Leading market position in key segments and geographies • Positive market fundamentals of ageing demographic and increasing levels of inter-generational wealth transfer • Strong recurring revenue characteristics • FY24 FUMAS increased by 8.6%, Revenue by 30.3% and NBPT of $
Slide 8: Asset Management Performance
ASSET MANAGEMENT PERFORMANCE • Specialist manager for the For Purpose/Endowment sector with focus on preservation and growth in real capital value while generating strong after- tax income • Multi-asset class funds, utilising a combination of internal strategies and external managers • Highly experi
Slide 9: Corporate & Superannuation Trustee Services
CORPORATE & SUPERANNUATION TRUSTEE SERVICES • Market leader in both Corporate and Superannuation Trustee services (CSTS) • Very strong new business across both corporate and superannuation • Strong global fund manager demand for Fund Governance and Trustee services • Investment in capability and tec
Slide 10: AET Integration Progressing Well – On Track
AET INTEGRATION PROGRESSING WELL – ON TRACK DEC 22 – JUN 23 FY24 FY25 PLAN Employees Employees Employees • Effective employee retention • Cultural alignment • Release of ~50 roles – half in August and • Combined client facing teams • New office in Adelaide half in November • Co-location of all emplo
Slide 11: Overall Synergies Target Increased & Implementation Costs on Track
OVERALL SYNERGIES TARGET INCREASED & IMPLEMENTATION COSTS ON TRACK NET COST SYNERGIES REVENUE SYNERGIES IMPLEMENTATION COSTS CAPITAL RELEASE Forecast amount $3.5m p.a. $5.9m+ p.a. $22.0m $10.0m Original amount $3.5m p.a. $3.3m p.a. $22.0m $nil Timing Achieve run-rate in FY25 $0.4m in FY23 $5.6m in F
Slide 12: Summary
SUMMARY STRONG PERFORMANCE WITH CONTINUED GROWTH MOMENTUM FUMAS growth driven by new business Delivering for all stakeholders Earnings and dividend growth delivery Continuing to deepen our community impact AET integration and technology Well positioned to realise benefits of scale in transformation
Slide 13: Financials
FINANCIALS
Slide 14: FY24 Financial Result
FY24 FINANCIAL RESULT FOR THE PERIOD FY24 FY23 % Total revenue ($m) 174.0 141.4 23.1 • Revenue growth of 23.1% driven by full year inclusion of AET, Total expenses ($m) 141.8 110.5 28.3 CSTS new business and strong equity market performance EBITDA ($m) 44.1 39.1 12.8 • Total expense growth of 28.3%
Slide 15: Continued Improvement on Key Financial Measures
CONTINUED IMPROVEMENT ON KEY FINANCIAL MEASURES $m TOTAL REVENUE $174.0M $m EBITDA $64.7M 180 174.0 80 64.7 141.4 140 60 55.6 111.5 47.9 95.4 101.0 38.9 100 40 43.9 44.1 36.7 37.1 39.1 60 20 20 - FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Underlying EBITDA1 Statutory EBITDA $m NET PROFIT AFTE
Slide 16: Strong Revenue Growth
STRONG REVENUE GROWTH $m 178 Strong revenue growth of $32.6m 9.1 174.0 driven by: 170 ̶ $17.1m AET annualised revenue 3.2 4.5 ̶ $4.5m investment market 162 impact on FUMAS based 17.1 revenue (1.3) 154 ̶ ($1.3m) decline due to mandate client loss in Corporate Fund Services 146 141.4 ̶ $3.2m FY24 incr
Slide 17: Expense Growth Driven by AET
EXPENSE GROWTH DRIVEN BY AET $m NON-RECURRING AET ANNUALISATION BAU INCREASES 150 $31.3m increase in expenses 2.2 141.8 YOY 1.8 140 9.0 ̶ $4.0m increase in non- recurring expenses due to exit of UK/Ireland, AET 1.0 130 12.3 1.0 integration and technology projects ̶ $14.3m increased relating to 120 a
Slide 18: FY24 After Tax Profit Reconciliation
FY24 AFTER TAX PROFIT RECONCILIATION $m FY24 NPAT STATUTORY TO UNDERLYING 40 1.9 37.9 6.6 0.8 $17.2m difference between 35 statutory and underlying profit made up of: 7.9 30 ̶ Wind down and sale of UK/Ireland business 25 20.7 ̶ AET integration costs and 20 platform exit ̶ Technology spend 15 FY24 NP
Slide 19: TWS – Significant Growth in Revenue Driven by Organic Growth and Synergies
TWS – SIGNIFICANT GROWTH IN REVENUE DRIVEN BY ORGANIC GROWTH AND SYNERGIES TWS FUMAS1 $m TWS REVENUE $b 106 17.7 2.6 99.1 18 0.6 3.2 16.3 98 16 0.5 15.6 1.7 90 5 14 4.2 82 12 76.0 10 74 6.2 5.7 8 66 6 0.6 58 1.7 4 2.0 1.4 50 2 FY23 Full year Investment Equity market AET synergy Organic growth FY24 2
Slide 20: CSTS – Strong Growth Momentum
CSTS – STRONG GROWTH MOMENTUM CSTS FUS REVENUE $m $b 78 200 185.1 6.9 75.0 3.6 74 66.1 160 143.8 139.8 5.9 70 2.7 5.7 34.7 44.0 1.5 120 66 65.2 (1.3) 115.4 0.8 99.4 80 93.1 62 58 40 FY23 Full year Investment Equity market Largemandate Large mandate Organic growth FY24 FY22 FY23 FY24 contribution of
Slide 21: CSTS Australia – Corporate – Fund Services
CSTS AUSTRALIA – CORPORATE – FUND SERVICES STRONG PIPELINE OF NEW FUND FIDUCIARY SERVICES $m REVENUE $b CSTS - A FUS1 50 100 91.0 46 80 75.6 20.3 22.0 8.0 42 3.0 40.8 60 2.4 6.2 36.8 38 36.7 40 (1.3) 30.1 34 20 6.9 5.0 19.0 12.3 30 - FY23 Investment Equity market market Largemandate impact Large man
Slide 22: CSTS Australia – Corporate – Custody, Debt & Securitisation Services
CSTS AUSTRALIA – CORPORATE – CUSTODY, DEBT & SECURITISATION SERVICES $m REVENUE NUMBER OF ACCOUNTS $b FUS1 6.5 95 27 92 24.4 5.5 5.3 90 23 4.5 85 4.5 85 3.8 19 17.5 3.5 80 77 14.7 15 2.5 75 11 1.5 70 0.5 65 7 FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24 REVENUE HIGHLIGHTS: • Revenue is ~80% fixed fe
Slide 23: CSTS Australia – Superannuation
CSTS AUSTRALIA – SUPERANNUATION GROWTH FROM EXISTING AND NEW FUNDS REVENUE MEMBERS FUS1 $m '000 $b 32 3.6 30.7 1,000 70 66.1 30 800 28 60 1.5 0.3 25.3 600 26 50 44.8 24 400 0.8 40 22 200 34.7 - 20 - 30 FY23 Full year Investment Equity market Organic growth FY24 FY22 FY23 FY24 FY22 FY23 FY24 contribu
Slide 24: Solid Operating Cash Flow
SOLID OPERATING CASH FLOW $m 150 49.9 140 • Cash position excludes cash held for ORFR purposes 130 • Operating net cash flow before 10.0 tax of $49.9m, increasing 120 (23.0) $19.3m vs PCP, primarily from 113.2 the AET acquisition 110 (9.3) (10.8) 10.0 • Additional borrowings utilised for AET integra
Slide 25: Strong Balance Sheet
STRONG BALANCE SHEET $M FY24 FY23 • Movement in the balance sheet Assets reflects increased debt to Cash and liquid investments 113.2 96.5 support AET integration costs and increased Operational Risk Operational Risk Financial Requirement (ORFR) - cash 25.6 13.2 Financial Requirement Trade receivabl
Slide 26: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK
Slide 27: 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 market • Deliver se
Slide 28: Market Leadership in Both Businesses
MARKET LEADERSHIP IN BOTH BUSINESSES PRIVATE CLIENT BUSINESSES CORPORATE & SUPERANNUATION TRUSTEE SERVICES TRUSTEE & WEALTH SERVICES CORPORATE • Philanthropy – Leading provider • Responsible Entity Services – Long term clear leader • Health & Personal Injury – Leading provider • Custody & Real Asset
Slide 29: Business Unit Initiatives in FY25
BUSINESS UNIT INITIATIVES IN FY25 PRIVATE CLIENT BUSINESSES CORPORATE & SUPERANNUATION TRUSTEE SERVICES TRUSTEE & WEALTH SERVICES CORPORATE • Digital launch of Australian leading philanthropy platform – iPhi • Growing existing business • Capitalise on market leading business development capability •
Slide 30: Completing Technology Modernisation Programme
COMPLETING TECHNOLOGY MODERNISATION PROGRAMME $5M TECHNOLOGY INVESTMENT PLANNED FOR FY25 $2M PLATFORM MODERNISATION AND $3M AET INTEGRATION CORPORATE & TRUSTEE WEALTH INFRASTRUCTURE & SUPERANNUATION FINANCE & PEOPLE SERVICES TECHNOLOGY SERVICES TRUSTEE SERVICES • Standardise and automate • Achieve s
Slide 31: FY25 Outlook & Priorities
FY25 OUTLOOK & PRIORITES DELIVER RETURN ON INVESTMENT IN TECHNOLOGY AND AET BUSINESS Complete AET integration and embed Ongoing investment required to meet synergy benefits increasingly complex regulatory obligations Expand and scale new service offerings in Achieving improvements in client experien
Slide 32: Questions
QUESTIONS
Slide 33: Thank You
THANK YOU
Slide 34: 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