Slide 1: Netwealth 1H 2019 Results Presentation
Netwealth 1H 2019 Results Presentation See wealth differently ee netwealth $437,789.45 ByAsset Class ~ T expandall Cash account $15,180.32 347% ‘Australian Equities 735% $119,739.06 $79893.80- National Australia Bank L... NAB 004% Price Value $29.83, $105,240.24 $76,448.91 = Ramsay Health Care Ltd R
Slide 2: Our purpose is
Ourpurposeis To enable peo} see wealth di and discover a antly shter future
Slide 3: The foundations of Netwealth's success
The foundations of Netwealth's success Our purpose Our values To enable people to see wealth differently + Curious and discover a brighter future + Optimistic + Collaborative See Wealth Differently + Agile Trormealth + Genuine netwealth + Courageous 3 | netwealth —_1H 2019 Results Presentation Our s
Slide 4: Important notice and disclaimer
Important notice and disclaimer General Information only Information provided is general information presented in a summary format as at 18 February 2019, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be relied upon as advice to investo
Slide 5: Today's presenters and agenda
Today's presenters and agenda Michael Heine Joint Managing Director Matt Heine Joint Managing Director Grant Boyle Chief Financial Officer 5 | netwealth —_1H 2019 Results Presentation 1. 1H 2019 Business and financial highlights 2. 1H 2019 Financial performance 3. Operating update 4. FY2019 Outlook
Slide 6: Business and Financial highlights
1H 2019 Business and Financial highlights
Slide 7: 1H 2019 financial highlights
1H 2019 financial highlights Revenue, profit and margin growth continued in 1H 2019 4) | rs) es | all all all all $48.2M $24.8M° 51.5%" $16.3M° Revenue EBITDA EBITDA MARGIN % NPAT . G $25.1M° 7.0 cents” 5.5 cents 941% Operating Net Cash Flow Pre Tax EPS Dividend Per Share Recurring Revenue $44.3B 7
Slide 8: FUA net inflows offset negative global markets in 1H 2019
FUA net inflows offset negative global markets in 1H 2019 $19.0B FUA $3.1B FUM 2,393 al al 4 $1.9B $0.4B #1 platform” 8 | netwealth 1H 2019 Results Presentation Reference; 1H 2019-6 months to December 2018 CY2018-12 months to December 2018
Slide 9: Financial Intermediaries
Financial Intermediaries 2,393 1,504
Slide 10: Netwealth has the highest netflows
Netwealth has the highest netflows Platform providers by FUA market Platform provider net funds flows % Platform providers net funds flow?) % share % market share (Sep 2018) market share (12 months to Sep 2018) market share (quarter to Sep 2018) #9 #1 |-—»% of net flows >23x market share #1 |-—$1.1
Slide 11: Shift in platform flows to specialist providers accelerating
Shift in platform flows to specialist providers accelerating Market share percentage of net funds flows (12 month rolling) 120.0% 108.9% 100.0% 80.0% 60.0% 40.0% 20.0% =- =o 0.0% =——.9" eae" Mee, 20.0% 6.7% PP DD DD © S © © SS BHAA AA S & é é ee Ss © A A A A & & SP PK oe ask ge Wh eo ge ok = Wyo Tra
Slide 12: Financial performance
1H 2019 Financial performance 12° | netwealth —_1H 2019 Results Presentation
Slide 13: Delivered strong growth across all key financial metrics
Delivered strong growth across all key financial metrics Growth in NPAT® Growth in operating net Growth in EBITDA® cash flow pre tax" Growth in total income CAGR 44.7% 25.1M 18.9M 12,0M : 1H 2017 1H 2018 1H 2019 CAGR 39,0% CAGR 37.8% 248M CAGR 28.9% 48.2M 29.0M 131M aem : 1H 2017 1H 2018 1H 2019 1H
Slide 14: 1H 2019 Financial results
1H 2019 Financial results Platform revenue increased by $7.2M (18.2%) versus PCP. 1H2018 1H2019 Change %Change . Financialst” Actual Actual ® ee nH 2019, 94.1% of platform revenue was recurring revenue. + Total operating expenses increased by $3.4M (16.8%) to $23.4M Bato Revenue 3 " oe oe versus PCP
Slide 15: 1H 2019 Key performance metrics
1H 2019 Key performance metrics 1H2018 + 1H2019 Change %Change ° Platform Statistics Actual Actual Funds Under Administration FUA (eop) 15,436 18,988 3,552 23.0% . Fee Paying FUA % 65.2% 62.3% (2.9%) (4.4%) FUA net inflows 1847 1,936 89 48% Funds Under Management Managed Account 1406 2114 708 50.4%
Slide 16: Platform Revenue analysis
Platform Revenue analysis Focused on increasing or maintaining Platform Revenue / average number of accounts and profitable revenue growth rather than bps Platform Revenue growth Revenue per account and Revenue bps ” 1,461 CAGR 28.1% 471M 1,308 28.7M 63.6 bps 56.5 bps 49.3 bps 1H2017 TH2018 12019 12
Slide 17: Platform revenue composition 1H 2019
Platform revenue composition 1H 2019 Source: Netwealth 7 | netwealth 1H 2019 Results Presentation Platform revenue split 1H 2019 57% Administration fees Wrap Super 33% Ancillary fees Cash admin International equities admin Managed model service Fund manager service Insurance admin SMSF admin 6% Tran
Slide 18: Margin analysis
Margin analysis Strong cost management, demonstrated operating leverage & continued investment in the platform 515% * Netwealth has a track record of strong cost management, 50.5% scalable cost base and has demonstrated operating leverage, as EBITDA margin improved in 1H 2019 to 51.5%. * Total expen
Slide 19: Continue to invest in people, technology and compliance
Continue to invest in people, technology and compliance Headcount increased by 9 to 246 in the 6 months to 31 Dec 2018 * To capitalise on the significant market opportunities and expected increase in new business inflows, we brought forward the addition of resources in IT & Sales into 1H 2019, large
Slide 20: Exceptional cash generation
Exceptional cash generation High correlation between EBITDA and cash flow 45.1% Low working capital requirements Limited capex Internal software and product maintenance and enhancement eee. : costs expensed y : Better quality of earnings as no risk of impairment of capitalised software development c
Slide 21: Summary of Business and financial highlights
Summary of Business and financial highlights 2 | netwealth Track record of growth in FUA, FUM, Revenue and profitability + Recurring revenue at 94.1% + FUAhas almost doubled in the past 2 years Exceptional cash generation + Debt free + Internal software and product maintenance and enhancement costs
Slide 22: Operating update
Operating update 22 | netwealth ‘1H 2019 Results Presentation
Slide 23: Australia's premier platform
Australia’s premier platform Award-winning technology enhanced by an exceptional service Rankings by Net Promoter Score commitment for investment platforms Netwealth ——4 100% Hub24 mums 26 e CFS First Choice mm 16 2 ox CFS First Wrap mm 13 © Trotweaith . Fy Platform netwealth Macquarie Wrap a4 a cox
Slide 24: Advanced tech for advice delivery and client engagement
Advanced tech for advice delivery and client engagement A focus on usability Data and Al Automated investment Ecosystems and experience services 24 | netwealth — 1H 2019 Results Presentation [ nw
Slide 25: Royal Commission
Royal Commission Based on the recommendations in the final report of Royal Commission being adopted Phasing out of grandfathered commissions (GC) + Estimated potential industry-wide FUA subject to GC was $189 billion, at June 2018!) + Less than 3.5 % of our FUA is subject to GC. No negative impact o
Slide 26: Pricing competition is set to continue
Pricing competition is set to continue Despite the rate cuts by our competitors, our platform functionality, quality service and pricing continue to be successful in winning new clients against incumbents and other SPPs. Superior offering * Netwealth seeks not to be the cheapest provider in the mark
Slide 27: Outlook
Outlook Our new business pipeline continues to grow and will convert to inflows throughout 2019 and beyond. A significant number of advisers and intermediaries have recently selected Netwealth as their preferred platform against incumbent platforms and/or in-house administration. Transitions traditi
Slide 28: Q&A
Q&A 28 | netwealth — 1H 2019 Results Presentation
Slide 29: Additional information
Additional information 29 | netwealth 1H 2019 Results Presentation
Slide 30: Appendix 1- Reconciliation to Statutory Income Statement
Appendix 1- Reconciliation to Statutory Income Statement Reconciliation of underlying adjustments to the Statutory Income Statement Half Year Ended 31-Dec18 31-Dec17 Variance Variance $M's $M"s $M"s % Statutory EBITDA on continuing operations 23.7 8.4 15.3 182.3% Add Back: IPO transaction costs - 12
Slide 31: Appendix 2- Cash flow reconciliation
Appendix 2- Cash flow reconciliation Reconciliation of adjustments to the Consolidated Statement of Cash Flows 31-Dec-18 — 31-Dec-17 $M's $Ms Net cash generated by operating activities 18.0 26 Income Tax Paid 76 47 IPO transaction costs (incl accrual and prepayments) - 127 Operating cashflow relatin
Slide 32: Cash and cash equivalents, trade and other receivables, other current assets
Cash and cash equivalents 45,076 52,669 Trade and other receivables 7,959 5,959 Other current assets 2,720 2,510 Financial assets 5,947 5,606 Assets classified as held for sale - 52 Property, plant and equipment 2,600 2,859 Intangible assets 294 343 Financial assets 2,227 2,227 Deferred tax assets 6
Slide 33: Thank you
Thank you
Slide 34: Netwealth's Board of Directors
Netwealth's Board of Directors Jane Tongs Chairman and Non-Executive Director (joined 2000) + Previously a partner at PwC specialising in the financial services sector + Director of Cromwell Property Group, Warakirri Group, CCI Insurance Ltd and Brighton Grammar Davyd Lewis Non-Executive Director (j
Slide 35: Netwealth's capable Management Team
Netwealth's capable Management Team Grant Boyle Chief Financial Officer and Joint Company Secretary (joined 2017) + Over 30 years experience in financial services and accounting profession + Has held CFO/COO roles at BlackRock (Aus), Phillip Capital, EMR Capital and Powerwrap Rachel Axton General Ma