Perpetual Limited · ASX:PPT
Perpetual — Shareholder Meeting (October 2007)
40 slides from Perpetual's shareholder meeting presentation, Oct 30, 2007
Slide 1: Chairman's address to shareholders
Chairman’s address to shareholders For personal use only Mr Robert Savage
Slide 2: Agenda
Agenda For personal use only Part I - Addresses Chairman’s address to shareholders Mr Robert Savage Chief Executive Officer and Managing Director’s address to shareholders Mr David Deverall Part II - Resolutions Chairman’s address to shareholders on the Remuneration Report Mr Robert Savage
Slide 3: Our vision is to be Australia's leading creator and protector of wealth
Our vision is to be Australia’s leading creator and protector of wealth For personal use only Focus on our four sources of competitive advantage I. Develop a II. Develop • Funds management policies and processes more balanced new growth • Relationship with financial planners portfolio engines • Trus
Slide 4: Perpetual's performance 2003-2007
Perpetual’s performance 2003-2007 For personal use only 2003-2007 Annual 2003 2007 growth rate Share price $30.70 $78.51 26% Market capitalisation $1.1bn $3.2bn 29% Total shareholder return (TSR) 34%
Slide 5: Perpetual Investments FUM flows 2003 - 2007
Perpetual Investments FUM flows 2003 - 2007 For personal use only Australian equities Other new 23% 77% of new flows into non- asset classes traditional Australian equities 29% classes Credit Funds 48%
Slide 6: Perpetual Private Clients revenue and profit growth
Perpetual Private Clients revenue and profit growth 2003 - 2007 For personal use only $m 100 Revenue $83m 80 Perpetual Private Revenue Clients delivering strong $58m Costs 60 $45m revenue and profit growth 40 Costs $48m 20 Profit $38m Profit $10m 0 2003 2007
Slide 7: Perpetual Corporate Trust revenue growth 2003 - 2007
Perpetual Corporate Trust revenue growth 2003 - 2007 For personal use only Mortgage Services Nearly one third of 32% revenue growth from mortgage services Securitisation 68% Our objective is to become the outsource partner of choice to the lending industry
Slide 8: Our vision is to be Australia's leading creator and protector of wealth
Our vision is to be Australia’s leading creator and protector of wealth For personal use only Focus on our four sources of competitive advantage I. Develop a II. Develop • Funds management policies and processes more balanced new growth • Relationship with financial planners portfolio engines • Trus
Slide 9: A solid full year result
A solid full year result For personal use only 2007 2006 Change $M $M % Operating profit after tax(1) 145.3 122.4 19 Net profit after tax 182.1 135.3 35 Dividends per share – ordinary 360¢ 326¢ 10 (1) Operating profit after tax excludes significant items
Slide 10: Chairman's address to shareholders
Chairman’s address to shareholders For personal use only
Slide 11: Forecast profit guidance - half year to December 2007
Forecast profit guidance - half year to 31 December 2007 For personal use only “We forecast an increase of approximately 10 per cent in operating profit after tax (OPAT) for the first half of the current year over the prior half year OPAT of $68.8 million. Events in the credit markets in the first h
Slide 12: Chairman's address to shareholders
Chairman’s address to shareholders For personal use only
Slide 13: Chief Executive Officer and Managing Director's address to shareholders
Chief Executive Officer and Managing Director’s For personal use only address to shareholders Mr David Deverall
Slide 14: Wealth Management operating profit before tax up per cent
Wealth Management operating profit before tax up 23 per cent For personal use only 2007 2006 Change $M $M % Total revenues 380.9 330.0 15 Operating expenses 188.8 173.4 9 Operating profit before tax 192.1 156.6 23
Slide 15: Perpetual Investments operating profit before tax up per cent
Perpetual Investments operating profit before tax up 25 per cent For personal use only 2007 2006 Change $M $M % Total revenues 297.9 257.0 16 Operating expenses 143.6 133.6 7 Operating profit before tax 154.3 123.4 25 PBT margin 52% 48% ~
Slide 16: Perpetual Investments continued solid asset growth
Perpetual Investments continued solid asset growth For personal use only Perpetual Investments funds under management up 19% $40B 39.1 35 32.8 30 26.7 25 Funds 21.7 under management 20 17.4 (FUM) 15 10 5 0 June 03 June 04 June 05 June 06 June 07
Slide 17: Chief Executive Officer and Managing Director's address to shareholders
Chief Executive Officer and Managing Director’s For personal use only address to shareholders
Slide 18: Quality investments outperform over the long-term
Quality investments outperform over the long-term For personal use only Stocks with strong quality characteristics out perform over time Quality stocks under perform when risk pricing is low and credit conditions are loose Quality stocks have experienced a prolonged period of underperformance
Slide 19: Perpetual Investments new business initiatives
Perpetual Investments new business initiatives For personal use only We launched a number of new funds during the year: Our first series of Perpetual Protected Investments Quantitative Investments Market Neutral Fund Diversified Income Fund Wholesale Geared International Fund
Slide 20: Perpetual was recognised by its peers in 2007
Perpetual was recognised by its peers in 2007 For personal use only Money magazine’s ‘Best Fund Manager 2007 Awards’: Best Australian Share Fund Best Smaller Companies Fund Australian Financial Review/Smart Investor ‘Blue Ribbon Awards’ Australian Small-Cap Shares Australian Mortgages
Slide 21: Perpetual Private Clients operating profit before tax up per cent
Perpetual Private Clients operating profit before tax up 14 per cent For personal use only 2007 2006 Change $M $M % Total revenues 83.0 73.0 14 Operating expenses 45.2 39.8 14 Operating profit before tax 37.8 33.2 14 PBT margin 46% 45% ~
Slide 22: Perpetual Private Clients experienced strong growth
Perpetual Private Clients experienced strong growth For personal use only Perpetual Private Clients funds under advice up 27% $10B 8.4 8 6.6 Funds 6 5.8 under 5.1 advice 4.7 (FUA) 4 2 0 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07
Slide 23: Perpetual Private Clients new business initiatives
Perpetual Private Clients new business initiatives For personal use only Dedicated client solutions team Expanded service offerings Expanded sales force capability
Slide 24: Continued growth for Perpetual Corporate Trust
Continued growth for Perpetual Corporate Trust For personal use only 2007 2006 Change $M $M % Total revenues 68.9 58.2 18 Operating expenses 33.2 26.2 27 Operating profit before tax 35.7 32.0 12 PBT Margin 52% 55% ~
Slide 25: Strong volume growth in Perpetual Corporate Trust
Strong volume growth in Perpetual Corporate Trust For personal use only Perpetual Corporate Trust funds under administration up 18% $250B 210.1 200 178.6 Funds under 150 144.3 administration (FUA) 112.4 100 87.1 50 0 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07
Slide 26: Perpetual Corporate Trust new business initiatives
Perpetual Corporate Trust new business initiatives For personal use only Premier provider of trustee and administrative services to the Australian financial services industry: retaining our position as Australia’s leading trustee to securitisation providers mortgage services capabilities res
Slide 27: Group Support Services initiatives
Group Support Services initiatives People and Culture For personal use only Updated ‘parental leave’ policy Introduced ‘contribution leave’
Slide 28: Group Support Services initiatives
Group Support Services initiatives Risk For personal use only Continued investment in our risk management framework Established Perpetual Superannuation Limited Created an Office of Superannuation Trustee Commenced the implementation of anti-money laundering and counter terrorism financing p
Slide 29: Key strategic business priorities
Key strategic business priorities For personal use only Australian New and innovative products in Australian equities to grow Equities revenue margins Global Equities and Aggressively grow funds under management Income & Multi Sector Perpetual Accelerate growth by expanding adviser teams and improvi
Slide 30: Perpetual's new organisation structure
Perpetual’s new organisation structure For personal use only Managing Director David Deverall Australian Global Income and Private Corporate Equities Equities Multi Sector Wealth Operations Trust Emilio Emilio Richard David Eric Wang Phil Vernon Gonzalez Gonzalez Brandweiner Deverall Finance New bus
Slide 31: Current credit market crisis
Current credit market crisis For personal use only Events of this nature are very unusual Impact on Perpetual’s Income and Corporate Trust businesses Credit crisis a timely reminder of importance of diversification and quality – both principles at the heart of Perpetual’s investment philosophy
Slide 32: Chief Executive Officer and Managing Director's address to shareholders
Chief Executive Officer and Managing Director’s For personal use only address to shareholders
Slide 33: Chairman's address to shareholders on the Remuneration Report
Chairman’s address to shareholders on the For personal use only Remuneration Report Mr Robert Savage
Slide 34: Total shareholder return
Total shareholder return For personal use only $400,000 34% CAGR* $350,000 Perpetual (total shareholder return) S&P/ASX100 Accumulation Index $300,000 $250,000 25% CAGR* $200,000 $150,000 $100,000 $50,000 $0 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 *CAGR = Compound Annual Growth Rate
Slide 35: Chairman's address to shareholders on the Remuneration Report
Chairman’s address to shareholders on the For personal use only Remuneration Report
Slide 36: Perpetual's remuneration is based on five core principles
Perpetual’s remuneration is based on five core principles For personal use only Variable pay forms a significant part of overall remuneration Variable pay is linked to shareholder wealth creation Short-term incentive payments are uncapped Short-term incentive payments are made out of realise
Slide 37: Strong correlation between OPAT and STI index
Strong correlation between OPAT and STI index For personal use only
Slide 38: Incentive hurdles and re-testing
Incentive hurdles and re-testing For personal use only LTI hurdles Are very stringent Employees must perform beyond expectations Must deliver returns to shareholders over a three year period Why re-test hurdles? Not always sufficient time for strategic benefits to flow through to the busines
Slide 39: Perpetual's performance 2003-2007
Perpetual’s performance 2003-2007 For personal use only 2003-2007 Annual 2003 2007 growth rate Operating profit after tax $72.5m $145.3m 19% EBITDA $117.4m $238.0m 19% EPS(1) (OPAT) $1.91 $3.53 17% (1) Diluted EPS calculated using operating profit after tax divided by the weighted average number of
Slide 40: Allocation of shares and options to David Deverall under the long-term incentive plan
Allocation of shares and options to David Deverall under the long-term incentive plan For personal use only LTI business benefit equivalent to up to $6 million Subject to a number of challenging performance hurdles LTI business benefit vests over a five year period ending 2012, if targets are