Eqt Holdings Ltd. · ASX:EQT
Eqt — Shareholder Meeting (October 2022)
43 slides from Eqt's shareholder meeting presentation, Oct 20, 2022
Slide 1: AGM: Chair's Address and Managing Director's Presentation
Thursday, 20 October 2022 AGM: Chair’s Address and Managing Director’s Presentation Attached is a copy of the addresses to be given by the Chair and the Managing Director and the presentation for the EQT Holdings Limited’s (EQT) Annual General Meeting today. The Managing Director has authorised that
Slide 2: Annual General Meeting
ANNUAL GENERAL MEETING Carol Schwartz AO, Chair Mick O’Brien, Managing Director EQT Holdings Limited 20 October 2022
Slide 3: Agenda
AGENDA A CHAIR'S ADDRESS B MANAGING DIRECTOR’S ADDRESS C ITEMS OF BUSINESS 1 FINANCIAL REPORT, DIRECTORS’ REPORT AND AUDITOR’S REPORT 2 RE-ELECTION OF DIRECTORS 3 ADOPTION OF REMUNERATION REPORT 4 APPROVAL OF LONG-TERM INCENTIVE AWARD FOR MANAGING DIRECTOR 2
Slide 4: Carol Schwartz AO, Chair
CAROL SCHWARTZ AO CHAIR
Slide 5: Board of Directors
BOARD OF DIRECTORS CAROL SCHWARTZ AO Chair ANNE M O’DONNELL KEVIN J ELEY D. GLENN SEDGWICK Independent Director MICK O’BRIEN Independent Director Independent Director Managing Director TIM HAMMON CATHERINE ROBSON KELLY O’DWYER Independent Director Independent Director Independent Director 4
Slide 6: Mick O'Brien, Managing Director
MICK O'BRIEN MANAGING DIRECTOR
Slide 7: Leadership Team
LEADERSHIP TEAM MICK O’ BRIEN Managing Director PHILIP GENTRY GEORGIE TAYLOR RUSSELL BEASLEY IAN WESTLEY MARK BLAIR Chief Financial Officer Executive General Executive General Executive General Executive General & Chief Operating Officer Manager, Manager, Manager, Manager, Human Resources Corporate
Slide 8: Strong Earnings Increase on Continued FUMAS Growth
STRONG EARNINGS INCREASE ON CONTINUED FUMAS GROWTH FUMAS* REVENUE NPAT DIVIDENDS $148.9b $111.5m $24.2m 97 cents ↑ Up 3.3% on FY21 ↑ Up 10.4% on FY21 ↑ Up 12.5% on FY21 ↑ Up 6 cents per share on FY21 ↑ (Up 9.0% on FY21 Underlying NPAT) ↑ (Final dividend of 49cents) • Strong growth in revenue and ear
Slide 9: FUMAS Up 3.3% on FY21 to $148.9b
FUMAS UP 3.3% ON FY21 TO $148.9b $b TOTAL EQT FUMAS1 160 150 148.9 3.3% increase in FUMAS principally 140 144.2 driven by: 130 • Significant new business activity in Corporate Trustee 120 Services 110 • Growth in Superannuation Trustee funds under supervision 100 101.0 • Offset by deterioration in 9
Slide 10: FUMAS Growth Continues
FUMAS GROWTH CONTINUES $b CTS FUS1 $b STO FUS1 $b TWS FUMAS2 110 45 11 10 105.1 100 35 9.8 100.8 34.7 9 Aon*** 33.6 9.1 90 25 8 8.1 7 80 15 81.7 6 11.2 70 5 5 FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22 • FUS up 4.3% • FUS up 3.3% • FUMAS down 7.1%, vs ASX200 • down 10.2% • Multiple new fund manage
Slide 11: Delivering for All Stakeholders
DELIVERING FOR ALL STAKEHOLDERS T1 – CLIENT SATISFACTION T3 – SHAREHOLDER VALUE 79 83 115.90 107.21 91 97 41 28 16 12 1 2 3 NPS NLS SAT DIVIDENDS FULL YEAR UNDERLYING EPS FY21 FY22 FY21 FY22 T2 – EMPLOYEE ENGAGEMENT T4 COMMUNITY IMPACT $92m $14m 73 71 GRANTED TOTAL IN COMMUNITY 70 70 TRUSTS FY21 FY2
Slide 12: Delivering for Shareholders
DELIVERING FOR SHAREHOLDERS Cents EARNINGS PER SHARE 120 115.94 108.61 115.07 • Strong EPS growth: 110 107.21 102.73 – Statutory EPS up 11.7% – Underlying EPS up 8.1% 115.94CENTS 100 97.27 103.04 90 92.95 80 FY18 FY19 FY20 FY21 FY22 1 Underlying EPS1 Statutory EPS Cents DIVIDENDS 100 97 90 90 91 • H
Slide 13: Other Achievements
OTHER ACHIEVEMENTS PEOPLE TECHNOLOGY ASSET MANAGEMENT • Continuing to build capability • Deployed new risk and • Built top quartile investment while managing turnover and compliance platform – CAMMS record: pressure on remuneration in some • Deployed new third-party service • Aust. Equity alpha 5.0%
Slide 14: Strong Balance Sheet
STRONG BALANCE SHEET $M FY22 1H22 FY21 Assets Cash and liquid investments 87.3 79.8 73.9 • Debt/equity 3.6% (excluding cash backed ORFR facilities) ORFR cash 31.0 30.5 23.3 • Majority of cash and liquid assets Trade receivables and accrued income 30.9 33.9 34.6 supports regulatory capital Goodwill a
Slide 15: Summary of Results
SUMMARY OF RESULTS STRONG PERFORMANCE WITH CONTINUED GROWTH MOMENTUM Continuing investment creating a FUMAS increasing to $148.9b supported by foundation for more sustainable future strong organic growth growth Strong EPS growth on both underlying and Continuing to deepen our community statutory bas
Slide 16: A Company Founded on Trust
A COMPANY FOUNDED ON TRUST PURPOSE: HELP PEOPLE TAKE CARE OF THE FUTURE Providing trustee services and fiduciary Safeguard people’s wealth now and for support to help to protect the interests of generations to come investors, members and beneficiaries Act as a trusted, independent partner to grow Em
Slide 17: Business Unit Strategies
BUSINESS UNIT STRATEGIES TRUSTEE & WEALTH SERVICES SUPERANNUATION CORPORATE TRUSTEE SERVICES (TWS) TRUSTEE SERVICES (STS) (CTS) Achieve leadership in Achieve further scale by Build on Australian multiple states and more securing trusteeship for leadership position in lines of business large funds an
Slide 18: Acquisition of AET
ACQUISITION OF AET • Transformative acquisition for EQT • Scale provides ability to invest in products and services – To better serve clients – Improve our employees’ experience AUSTRALIA’S LEADING TRUSTEE • Highly complementary COMPANY • Expected to be earning’s accretive for shareholders • Deliver
Slide 19: Successful Equity Raising Completed
SUCCESSFUL EQUITY RAISING COMPLETED ALONG WITH ESTABLISHMENT OF NEW DEBT FACILITY TO FUND AET ACQUISITION SOURCES* USES* Institutional Placement $40m Purchase Price $135m (including18 new shareholders) Institutional Entitlement $50m Transaction Costs $8m (~100% take-up) Retail Entitlement $35m Integ
Slide 20: Adding Transformative Scale for EQT
ADDING TRANSFORMATIVE SCALE FOR EQT Pro-forma FY22 including net synergy potential REVENUE1 ($M) EBITDA1,2 ($M) FTEs +36% +40% +47% 151.1 63.1 381 111.5 45.2 260 FY22 EQT FY22 EQT + AET FY22 EQT FY22 EQT + AET FY22 EQT FY22 EQT + AET 1 Excludes revenue contribution from SMSF and PMS businesses. Incl
Slide 21: AET Snapshot
AET SNAPSHOT AET EQT Established 1880 EQT 1888 / ANZT 1879 Headquarters Adelaide Melbourne Market Leading Positions Health & Personal Injury Philanthropy Adelaide & Perth Melbourne Investment Capability & Funds No Yes Services Private Client Trustee Services All Trustee Services Platform Services As
Slide 22: AET Has Two Main Divisions
AET HAS TWO MAIN DIVISIONS TRUSTEE SERVICES PLATFORM SERVICES Services FUMAS ($bn) Products and services FUMAS ($bn) Health & Personal Injury 2.8 Small APRA Funds (Superannuation) 1.1 Testamentary Trusts 0.6 Philanthropy 0.4 Community Trusts 0.4 Advice 0.3 Self Managed Super Funds 0.4 Estate Managem
Slide 23: Complementary by Geography
COMPLEMENTARY BY GEOGRAPHY AET: ~175 FTE EQT TWS: 273 FTE TOTAL EQT 448 FTE 8 FTE 30 FTE 45 FTE 123 FTE 242 FTE Legend: AET EQT TWS 22
Slide 24: Complementary by Lines of Business for TWS
COMPLEMENTARY BY LINES OF BUSINESS FOR TWS FUMAS COMMUNITY TRUSTS 0.1 0.4 $0.5b ESTATE PLANNING (REVENUE $M) 0.5 1 $1.5m HEALTH & PERSONAL INJURY 0.5 2.8 $3.2b ESTATE MANAGEMENT 0.6 0.1 $0.8b ADVICE 0.6 0.3 $0.9b TESTAMENTARY TRUSTS 0.7 0.6 $1.3b PHILANTHROPY 2.1 0.4 $2.5b EQT AET 23
Slide 25: 1Q23 FUMAS Update
1Q23 FUMAS UPDATE Weaker markets offset by continued organic growth $b CTS FUS1 $b STS FUS1 $b TWS FUMAS2 110 45 11 10 105.1 94.7 100 35 9.8 100.8 34.7 35.8 9 Aon*** 33.6 9.1 9.1 90 25 8 8.1 7 80 15 81.7 6 11.2 70 5 5 FY20 FY21 FY22 1Q23 FY20 FY21 FY22 1Q23 FY20 FY21 FY22 1Q23 • FUS down 9.9% • FUS
Slide 26: EQT's Revenues Are Leveraged to Equity Markets
EQT’S REVENUES ARE LEVERAGED TO EQUITY MARKETS AS FEES LARGELY ASSET-BASED FY22 LEVERAGE REVENUE TWS $51.0m 60%-70% to average daily ASX200 • Significant STS $20.7m 20%-30% to average daily ASX200 reduction in CTS $38.9m 40%-50% to average daily World MSCI and ASX200 equity markets with consequent i
Slide 27: 1Q23 Update
1Q23 UPDATE GOOD MOMENTUM AND KEY INITIATIVES ON TRACK • Total Group FUMAS decreased by 6.4% in 1Q - good organic growth partially offsets weaker equity markets • $125m capital raising and additional $40m acquisition debt facility maintains strong balance sheet and flexibility for future opportuniti
Slide 28: Summary and Outlook
SUMMARY AND OUTLOOK STRATEGY REINFORCED AND MOMENTUM CONTINUES • Strategy reinforced by strong client and revenue growth • Trend to outsource fiduciary services continues to transform industry and benefit Equity Trustees • Growth in debt/securitisation and other corporate trust products provide furt
Slide 29: Thank You
THANK YOU
Slide 30: EQT Holdings Limited Disclaimer
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
Slide 31: Chair's Speech – AGM 2022
CHAIR’S SPEECH – AGM 2022 Shareholders, ladies and gentlemen, good morning and welcome. My name is Carol Schwartz and I am the Chair of EQT Holdings Limited. As we begin, I take this opportunity to acknowledge the Wurundjeri People as the traditional custodians of this land on which this office is l
Slide 32: Chair's Speech: Agenda and Introductions
able to offer valuable insights and perspectives around the Board table. On behalf of the Board, I wish her well and all the best for the future. Also representing the Company here today are our Chief Financial Officer & Chief Operating Officer, Philip Gentry, and Samantha Einhart who is our Company
Slide 33: Mick O'Brien, Managing Director Speech
The transition process itself is well underway with great commitment from everyone involved. While the acquisition was an excellent match with our existing services and creates enormous opportunities for our heritage brand, the genuine collaborative spirit of our employees and their incoming colleag
Slide 34: Slide 7 - Strong Earnings Increase on Continued FUMAS Growth
2. Georgie Taylor, our Executive General Manager of Human Resources, who joined us last month and has hit the ground running and been an invaluable contributor over her first six weeks with the group, particularly with the AET transaction. 3. Russell Beasley, Executive General Manager, Corporate Tru
Slide 35: Slide 8 - FUMAS Up 3.3% on FY21 to $148.9b
SLIDE 8 - FUMAS UP 3.3% ON FY21 TO $148.9B This slide shows the progression in growth in funds. It shows a very consistent pattern in growth, despite little growth in equity markets over that whole period. The only year where funds didn’t grow and were stable was FY19, when the group’s largest clien
Slide 36: Slide 11 - Delivering for Shareholders
of the culture of Equity Trustees. All of the measures we look at in these areas are moving in the right direction. Client satisfaction measures such as NPS – propensity to recommend EQT, Net Loyalty Score – propensity to buy another service and satisfaction, improved markedly and are very positive.
Slide 37: Slide 13 - Strong Balance Sheet
The Company Secretary role is critical in a governance business like ours. The GM of Business Development in CTS has strengthened considerably our capability in the custody and real asset side of the business. The appointment of a Head of Responsible Investing is really important as we focus on this
Slide 38: Slide 14 - Summary of Results
SLIDE 14 – SUMMARY OF RESULTS So, in summary, funds have grown to $149bn. EPS has grown strongly in the year. The earnings translate to high cash generation and have been available for distribution and the dividend increased materially for the full year. We continue to invest in the business to buil
Slide 39: Slide 17 - Acquisition of AET
In Superannuation we are planning to achieve further scale by securing more new funds as the regulatory load becomes difficult for those that aren’t specialists. We will continue to capitalise on the significant changes that are happening in this part of the industry as banks exit wealth and the adv
Slide 40: Slide 19 - Adding Transformational Scale for EQT
SLIDE 19 – ADDING TRANSFORMATIONAL SCALE FOR EQT The acquisition provides great scale, our pro forma revenue increases by 36%, pro forma EBITDA increases by 40% and the number of employees increases by 47% - so be any measure the acquisition is providing very meaningful scale. SLIDE 20 – AET SNAPSHO
Slide 41: Slide 23 - Complementary by Line of Business
leadership position in Adelaide, a very strong position in Perth, to go alongside our leadership position in Melbourne and it adds to our presence in Sydney and Brisbane. SLIDE 23 – COMPLEMENTARY BY LINE OF BUSINESS It is likewise extremely complimentary by line of business. AET is the leader in Hea
Slide 42: Slide 25 - EQT's Revenues Are Leveraged to Equity Markets
SLIDE 25 – EQT’s REVENUES ARE LEVERAGED TO EQUITY MARKETS This slide shows the sensitivity of our results to equity market movement and whilst its not possible to be precise, these numbers provide some good guidance. The important points on this slide are that TWS revenue is leveraged 60 to 70% to t
Slide 43: Closing Statement - No Slide
We take some real comfort from the solid balance sheet and low gearing and our first quarter has shown some strong momentum. CLOSING STATEMENT – NO SLIDE So, in closing……. I'm delighted to lead this business. I want to thank the executive team for their support and all the hard work of our employees