Fiducian Group Ltd · ASX:FID
Fiducian — FY2018 Earnings Presentation
30 slides from Fiducian's earnings presentation, Aug 16, 2018
Slide 1: FY 2018 Results Investor Presentation
Fiducian Group (ASX:FID) FY 2018 RESULTS INVESTOR PRESENTATION 16 August 2018 1
Slide 2: Fiducian Group Investor Presentation
Fiducian Group Investor Presentation • FY 2018 Highlights • Business Overview • Financials • Growth Strategy and Business Outlook • Key Dates and Contacts • Annexures 2
Slide 3: FY 2018 Highlights
FY 2018 Highlights HIGHLIGHTS 3
Slide 4: Profit Generating Sustainable Business Model
Profit Generating Sustainable Business Model Management • Process driven, client focused investment products Funds • 15 Managed Funds: 4 Diversified Funds, 4 Sector Funds, 7 Specialist Funds • $2.37 Billion in Funds under Management (FUM) • Listed comparables include NGI, MFG, PCG, PPT • Market comp
Slide 5: Funds Management
Funds Management • 15 Funds using Fiducian’s Manage-the-Manager (MTM) system of Investment • Select expert Managers – with proven performance, differing investment processes / styles • Combine experts with different weightings – up to 39 Fund Managers • Dynamic asset allocation and continuous manage
Slide 6: WRAP Platforms (FSS/FIS) – FinTech
WRAP Platforms (FSS/FIS) – FinTech (FORCe & FASTrack) • Public offer “Superannuation Fund” • Investor Directed Portfolio Service (IDPS) • 15 – Multi-manager Funds using the Fiducian Manage-the-Manager system • 57 – Single Manager Fund Choices • 13 – Managed Discretionary Accounts ( Direct Share Owne
Slide 7: Financial Planning – Focus on Quality and Expertise
Financial Planning – Focus on Quality and Expertise • We are selective in recruiting Financial Planners • National footprint with 37 practices, 61 representatives 30 Franchise Offices 7 Salaried Offices Total 61 Authorised Representative BUSINESS OVERVIEW 7
Slide 8: Integrated Business Model
Integrated Business Model Our clients experience the Fiducian difference: Funds Management Administration / Financial Platforms Planning $2.37 bil $1.94 bil $2.41 bil Full Year Gross Revenue $45.9 mil Fiducian Integrated Business Model FUMAA $6.72 bil BUSINESS OVERVIEW 8
Slide 9: FY 2018 Results: Financial Highlights
FY 2018 Results: Financial Highlights FINANCIALS 9
Slide 10: FY 2018 Results: 21% UNPAT Growth
FY 2018 Results: 21% UNPAT Growth Revenue increase from Organic & Inorganic inflows plus increased financial market valuations Funds Management, Administration and Financial Advice performed strongly Service provider costs increased in line with higher revenue Staff and Other costs increase
Slide 11: Segment Update
Segment Update Revenue for the full-year is $15.7 mil Funds Management Top quartile performance has driven significant inflows Benefitting from scaled fees from underlying managers Administration, Revenue for the full-year is $14.0 mil Scale efficiencies. Reduction of Cost to Income ratio (2012: 79%
Slide 12: FID outperformance against All Ords Accum
FID outperformance against All Ords Accum • Since Jun 12, outperformance 382% including dividend • Dividend pay-out policy 60-70% of Net Profit After Tax • Double digit EPS growth in 14 out of 18 years since listing • Full year dividends 20 cents – 25% growth over comparable period FINANCIALS 12
Slide 13: Growth Strategy
Growth Strategy Funds Leverage of successful Manage-The-Manager Management model and expand in new markets where profitable Distribute SMA capabilities, offer Badged solutions Administration to IFA market and Build SMSF Administration Financial Continue to attract high quality planners and expand Pl
Slide 14: Business Outlook – Revenue Streams
Business Outlook – 3 Revenue Streams Revenue Growth is a function of volume of FUMAA Example: Financial Funds Platform Planning Under FUMAA 3 Admin Advice Management Growth Revenue increase increases Increases $300 mil Streams $100 mil $100 mil $100 mil Plus, additional revenue growth if financial m
Slide 15: Projecting the Potential: Conceptual Representation
Projecting the Potential: Conceptual Representation The following is a concept extrapolation* of how increasing scale lifts EBITDA at an accelerating rate above a relatively fixed cost base: Funds under Management, Administration and Advice (FUMAA) & EBITDA This is simply extrapolating how revenue a
Slide 16: Regulatory Overview
Regulatory Overview • Royal Commission • The government has instituted a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. • Fiducian has not been contacted by the Commission, but is monitoring the progress of the hearings. • The Commission’s final repo
Slide 17: Regulatory Overview
Regulatory Overview • Vertical Integration (cont’d) • ASIC identified the potential benefits of vertical integration in the financial advice industry in ASIC Report 562 and their Round 2 submission to Hayne Royal Commission: • the creation of economies of scale, which potentially improve cost effici
Slide 18: Regulatory Overview
Regulatory Overview • Trail Commission • Grandfathered Commission (“Trail Commission”, “Ongoing Commission”) is embedded within the FoFA legislation. This commission is paid out of the product / service providers’ margins to the advisers and is not contingent on providing an ongoing service by an ad
Slide 19: Industry Consolidation and Opportunities
Industry Consolidation and Opportunities • A number of established participants are exiting or have announced their intentions to exit the industry • New educational standards may expedite adviser exits in the short to medium term • Regulation and change in industry dynamics could lead to enhanced o
Slide 20: Outlook
Outlook • Grow Funds Under Advice organically and through strategic acquisitions of financial planning businesses • Expand platform administration services and SMA capabilities to IFAs and capture market share where value accretive • Build SMSF Admin Services • Continue delivering superior investmen
Slide 21: Key Dates and Contacts
Key Dates and Contacts Key Dates • Record date for final dividend: Wednesday, 29 August 2018 • Final dividend payment date: Wednesday, 12 September 2018 • Annual General Meeting: Thursday, 25 October 2018 • H1 FY 2018-19 results announcement: Thursday, 14 February 2019 Contacts Investor Relations: M
Slide 22: Fiducian Offices
Fiducian Offices ACT Coffs Coast Southern Highlands SA VIC Canberra Gosford Sydney CBD Adelaide City Central Mt Waverley Hunter Tamworth Ringwood NSW Kellyville Taren Point Sale Abbotsford TAS Macarthur Walcha St Kilda Ballina Devonport Narrabri Windsor Surrey Hills Bathurst Hobart Newcastle Bondi Q
Slide 23: Five Year Summary: Financials
Five Year Summary: Financials Sustainable growth history consistently over long term ANNEXURES 23
Slide 24: Five Year Summary: Revenue and EPS Growth
Five Year Summary: Revenue and EPS Growth Top-line Revenue Growth: 19% annualised EPS Growth: 23% annualised Economic Leverage: EPS Growth faster than Revenue Growth Sustainability: Double- digit EPS growth in 14 out of 18 years since listing ANNEXURES 24
Slide 25: Five Year Summary: Expense Management
Five Year Summary: Expense Management Expanding Jaws: Revenue growth faster than Expense growth Improving Cost To Income (CTI) Ratio: from 63% in 2014 to 56% in 2018 Carefully managed expenses to support growth in infrastructure and revenue generating functions ANNEXURES 25
Slide 26: Dividends Growth
Dividends Growth • $1,000 invested in July 2013: 20% current year yield 22% Annualised Dividend growth ANNEXURES 26
Slide 27: Five Year Summary: Balance Sheet
Five Year Summary: Balance Sheet Stable Cash position in excess of regulatory requirement of $5.1 mil to support growth initiatives Significant reinvestments into business: $29.7 mil client acquisitions through aligned planners Net Assets Growth 13% annualised Sustainable growth history cons
Slide 28: Net Fund In-Flows in Platform
Net Fund In-Flows in Platform Net In- Flows of $229 mil during FY17-18 Both Salaried and Franchised networks contributing to the Inflows Combination of organic flows from active referrals and inorganic flows from strategic acquisitions ANNEXURES 28
Slide 29: FUMAA Growth
FUMAA Growth Consistent FUMAA growth contributed by strong organic and inorganic inflows and market improvements $83 mil acquisition announced by Fiducian for Franchisees and salaried offices in FY18: strengthens retention Increase in FUA as proportion of FUMAA reflects recent acquisition Expl
Slide 30: Disclaimer
Disclaimer Information in this document and given in the presentation is of a general nature. It is not intended to be, nor does it, constitute financial, legal or tax advice. The information is given in good faith and, although care has been exercised in compiling it, Fiducian Services Pty Limited