Slide 1: FY12 Results
FY12 RESULTS 30 JUNE 2012 Geoff Lloyd CEO & Managing Director Roger Burrows Chief Financial Officer 30 August 2012 ABN 86 000 431 827
Slide 2: Disclaimer
DISCLAIMER Important information The information in this presentation is general background information about the Perpetual group and its activities current as at 30 August 2012. It is in summary form and is not necessarily complete. It should be read together with the company’s audited full year ac
Slide 3: FY12 Overview – Financial Result
FY12 OVERVIEW – FINANCIAL RESULT • FY12 UPAT & NPAT in line with guidance – UPAT $67.6m / 162.0 cps – NPAT $26.7m / 64.0 cps – FY12 final dividend of 40 cps fully franked • Markets challenging and investor confidence remains low – Reflected in lower market related revenues • Offset by: – Strategic e
Slide 4: FY12 Overview – Transformation 2015 Update
FY12 OVERVIEW – TRANSFORMATION 2015 UPDATE • Sold smartsuper, exited Dublin international equities manufacturing, and sold PLMS1 • Completed $70 million off-market share buy-back • Transformation 2015 announced and on track to deliver $50 million in annual savings in FY15 • Smaller executive leaders
Slide 5: Results Summary
RESULTS SUMMARY FY11 FY12 FY12 v OBSERVATIONS: $m $m FY11 • PI delivers strong result Business Units despite difficult markets Perpetual Investments 73.3 72.0 (2%) • PP results reflect investment Perpetual Private 13.3 8.3 (38%) in the business Corporate Trust 21.5 17.4 (19%) Group Support Services
Slide 6: Challenging Environment
CHALLENGING ENVIRONMENT ALL ORDS1 TOTAL MARKET QUARTERLY FLOWS (EXCLUDING CASH)2 25,000 5,100 22,500 20,000 4,900 17,500 15,000 4,700 12,500 10,000 4,500 7,500 5,000 2,500 4,300 0 (2,500) 4,100 (5,000) Spot close (@ end of each day) All Ords (7,500) 1st Half Avg All Ords 3,900 (10,000) FY Avg All Or
Slide 7: Unrivalled Investment Performance
UNRIVALLED INVESTMENT PERFORMANCE QUARTILE RANKINGS^ ~90% OF FUM^^ RANKED 1ST AND 2ND QUARTILE 1Yr 3Yrs 5Yrs 7Yrs 10Yrs Perpetual W Australian 1 1 1 1 1 10 Yrs 88% 12% Perpetual W Concentrated Equity 1 1 1 1 1 Perpetual W Ethical SRI 1 1 1 1 1 7 Yrs 91% 9% Perpetual W Industrial 1 1 1 2 2 Perpetual
Slide 8: Issuance Volumes Improving but Mix Changing
ISSUANCE VOLUMES IMPROVING BUT MIX CHANGING ISSUANCE V AVERAGE REVALUATION MARGIN 80 300 Non AOFM AOFM Covered Bonds Spread Margin Average Revaluation Margin bps - 2 Year Senior 70 250 60 200 50 $b 40 150 30 100 20 50 10 0 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: www.aof
Slide 9: Our Vision
OUR VISION AUSTRALIA’S LARGEST INDEPENDENT WEALTH MANAGER OF CHOICE ONE PERPETUAL PERSONAL ADVISORY TO SPECIALISED ASSET REFOCUSED CORPORATE TARGETED HIGH NET MANAGEMENT FIDUCIARY SERVICES WORTH SEGMENTS FOUNDATIONS • Heritage of 125 years • Multi-generational clients • Perpetual brand • Leading cli
Slide 10: Transformation 2015
TRANSFORMATION 2015 OUTCOMES 1H13 2H13 FY14 On track: Reduce central cost Improve adviser Reduce property footprint (HR, Finance, Risk, Marketing) productivity in PP (stage 2) Complete: Simplify structure, fewer Reduce property footprint Simplify investment managers and wider spans (stage 1)
Slide 11: Transformation 2015 – Update
TRANSFORMATION 2015 – UPDATE OUTCOMES 1H13 On track: Reduce central cost • Phase 1: design complete, Phase 2: on track (HR, Finance, Risk, Marketing) Complete: Simplify structure, fewer • New structure introduced managers and wider spans On track: Introduce new leadership • Three of four new GE posi
Slide 12: IT Outsourcing: Fujitsu Appointed
IT OUTSOURCING: FUJITSU APPOINTED Fujitsu selected as IT vendor to: • Deliver IT through a partnership that adds substantial value to Perpetual's business SCOPE • Significant upgrade to service and capability • ~100 roles affected post full transition, small retained IT team focused on governance an
Slide 13: Growth Initiatives
GROWTH INITIATIVES Sales and distribution 9 Top quartile market inflows for Apr 11–Mar 12 (~$1.45b) 9 ASF and DIF launched on Colonial First State FirstChoice platform 9 Received “A” rating for Share-Plus Fund^^ 9 Positive rating for Diversified Real Return Fund 9 First off-shore client in Global Re
Slide 14: Financials
FINANCIALS ROGER BURROWS CHIEF FINANCIAL OFFICER
Slide 15: Maintained UPBT Margin on Revenue in FY12
MAINTAINED UPBT MARGIN ON REVENUE IN FY12 FY11 FY12 FY12 v KEY THEMES: $m $m FY11 • Revenue decline mitigated by: Operating revenue 408.7 364.3 (11%) • strong expense Operating expenses (271.0) (248.2) 8% control EBITDA (1) 137.7 116.1 (16%) • reduced variable Depreciation & amortisation (14.0) (13.
Slide 16: FY12 NPAT Impacted by Significant Items
FY12 NPAT IMPACTED BY SIGNIFICANT ITEMS FY11 FY12 FY12 v KEY THEMES: $m $m FY11 • PLMS discontinued UPBT 101.6 91.0 (10%) operation and sold in Tax expense (31.4) (25.6) 18% August 2012 • Significant items UPAT Continuing operations 70.2 65.4 (7%) include: Discontinued operations after tax 2.7 2.2 (
Slide 17: Significant Change in FTEs – Down 29%
SIGNIFICANT CHANGE IN FTEs – DOWN 29% FROM 30 JUNE 2011 KEY THEMES: 1,600 • Transformation 2015 on track to reduce FTEs by 580 1,500 • Since 30 June 2012: PLMS 1,400 • PLMS sold: ~280 FTEs • IT outsourcing: ~100 FTEs affected 1,300 253 • 37 FTEs departed Total FTEs 1,200 • 50 FTEs advised but not ye
Slide 18: Perpetual Investments Delivers Strong Margin
PERPETUAL INVESTMENTS DELIVERS STRONG MARGIN FY11 FY12 FY12 v KEY THEMES: $m $m FY11 • Net flows and markets impacted revenues Revenue 225.0 190.5 (15%) • Strong cost control Operating expenses (131.0) (107.3) 18% • Significant reduction in EBITDA(1) 94.0 83.2 (11%) equity remuneration Depreciation
Slide 19: Trend in Net FUM Flows Is Improving
TREND IN NET FUM FLOWS IS IMPROVING APPLICATIONS & REDEMPTIONS BY CHANNEL KEY THEMES: • FY12 net quarterly flows 2,000 Institutional improved over the last 1,500 Retail three periods Intermediary 1,000 Net Flows • July and August 2012 net 500 flows are broadly in line with pro-rata experience in Q4
Slide 20: Perpetual Private Revenues Stable in a Difficult Environment
PERPETUAL PRIVATE REVENUES STABLE IN A DIFFICULT ENVIRONMENT FY11 FY12 FY12 v KEY THEMES: $m $m FY11 • Revenues are resilient Market related revenue 79.1 77.8 (2%) • FY12 market related Non-market related revenue 37.1 36.9 (1%) revenue margin +4bps Total revenues 116.2 114.7 (1%) • Foreshadowed Oper
Slide 21: Corporate Trust Focused on Fiduciary Opportunities
CORPORATE TRUST FOCUSED ON FIDUCIARY OPPORTUNITIES FY11 FY12 FY12 v KEY THEMES: $m $m FY11 • Reduced PBT margin: Total revenues 57.2 52.0 (9%) • new business mix Operating expenses (33.6) (32.7) 3% • challenging markets • PLMS excluded – sold 1H13 EBITDA(1) 23.6 19.3 (18%) • Expenses include ~$2m of
Slide 22: Financial Strength Maintained
FINANCIAL STRENGTH MAINTAINED FY11 FY12 KEY THEMES: • Robust risk-based capital coverage maintained Total equity ($m) 376.1 280.5 Less: Intangibles(1) ($m) (175.2) (145.3) • Strong position in FY11 enabled $70m share buy-back Net tangible assets ($m) 200.9 135.1 • Balance sheet de-risking as PPI and
Slide 23: FY12 Final Dividend of 40 Cents per Share Fully Franked
FY12 FINAL DIVIDEND OF 40 CENTS PER SHARE FULLY FRANKED FY11 FY12 KEY THEMES: • Policy seeks to return capital to UPAT EPS (cps) 165.5 162.0 shareholders efficiently • Adjusting for non-cash item UPAT ROE (%) 20.1 21.3 recalibrates dividend pay-out ratio to 96% • ROE on UPAT up 120bps on buy- NPAT E
Slide 24: Transformation 2015: On Track for $50M Pre-Tax Cost Reduction by FY15
TRANSFORMATION 2015: ON TRACK FOR $50M PRE-TAX COST REDUCTION BY FY15 PRE-TAX P&L IMPACT KEY THEMES: • For FY13, as previously advised, $25M Group expenses need to take into account: • Project ICE: additional $6m and 0 • Equity remuneration: additional $5-7m Net pre-tax P&L impact of transformation
Slide 25: Highlights
HIGHLIGHTS • FY12 UPAT of $67.6m FY12 UPAT & NPAT • FY12 NPAT of $26.7m • FY12 final dividend of 40 cents per share fully franked DIVIDEND • FY12 full-year dividends total 90 cents per share fully franked TRANSFORMATION 2015: • Fujitsu contract will add significant service and capability improvement