Hub24 Limited · ASX:HUB
Hub24 — Investor Day (November 2024)
62 slides from Hub24's investor day presentation, Nov 28, 2024
Slide 1: Investor Strategy Day
Investor Strategy Day 28 November 2024 Empowering better financial futures, together
Slide 2: Welcome
Welcome Andrew Alcock Managing Director & Chief Executive Officer 2
Slide 3: Leading the wealth industry as the best provider of integrated platform, technology & data solutions
Leading the wealth industry as the best provider of integrated platform, technology & data solutions Australia’s #1 for annual platform and #2 net inflows across all #1 managed accounts best platform1 retail superannuation net super funds from member capability1 inflows2,3 switching incl industry fu
Slide 4: HUB24 gaining market share
HUB24 gaining market share HUB24 ranked #7 with $84b of FUA at June 2024 HUB24 increased market share from 4.3% to 7.7% over last 3 years 1 Top 10 platforms by FUA as at June 20241 3-year change in market share of top 10 platforms1 $250b 6.0% % refers to market share Losing market share Gaining mark
Slide 5: myprosperity – delivering consistent growth
Tech Solutions & myprosperity – delivering consistent growth ~75k 497 households wealth practices Class accounts Companies on CM +12k households in FY24 +57 practices in FY24 210,000 850,000 205,000 800,000 Increased engagement and usage 750,000 as value proposition resonates with 200,000 700,000 fi
Slide 6: HUB24 is uniquely positioned to capture significant opportunity from new wave of transformation
HUB24 is uniquely positioned to capture HUB24 position significant opportunity arising from new wave of transformation Market-leading platform and managed accounts capability Industry continues to transform, driving need for innovative wealth solutions Strong relationships in key client segments Dem
Slide 7: Leveraging our combined capabilities to lead industry change
Leveraging our Be the best provider of integrated platform, To enhance productivity for financial combined capabilities technology and data solutions professionals to lead industry change • One way of doing business with access to market-leading solutions • Single view of wealth for financial profes
Slide 8: Growing market leadership while transforming the industry and enhancing shareholder value
Growing market leadership while transforming the industry and enhancing shareholder value Strong growth outlook in Create additional shareholder existing established businesses value through tech solutions HUB24 Platform Class & NowInfinity Technology & data solutions Market leadership with signific
Slide 9: Agenda
01 Group Strategy Break Jason Entwistle 10 minutes Director, Strategic Development 05 Class & NowInfinity 02 Innovation & Technology Paul Biggs Tim Steele Chief Product and Technology Officer Class Chief Executive Officer Agenda 03 Platform 06 CFO Update Jason Entwistle Kitrina Shanahan Director, St
Slide 10: Group Strategy
01 Group Strategy Jason Entwistle Director, Strategic Development 10
Slide 11: Technology can deliver productivity and create sustainable market leadership and growth
Technology can deliver productivity and create sustainable market leadership and growth Industry reconstructing More demand for advice Lack of integrated around advice than the industry can deliver technology • Licensee model is evolving with • 2.3m individuals thinking of seeking • Data integration
Slide 12: The HUB24 ecosystem is deepening
Secure Information Practice The HUB24 Document Signing Sharing Management CRM Digital ecosystem is Consent Document Audit Actuarial deepening Live Portfolio Vault Advice Tech Reporting customer Advice Work Portals relationships Client Applications Papers Accounting Portals experience Digital Advice
Slide 13: The addressable market is bigger than just the "Platform market"
The addressable market is bigger than just the "Platform market" Household financial assets (excluding housing, net of debt) HUB24 is uniquely positioned to provide $7.6tr1 market-leading, integrated solutions to Non-super financial assets (incl. off-platform assets / non-custody) financial professi
Slide 14: Key drivers for a client portal
Key drivers for a client portal Client engagement 53% 74% of financial customers say they of businesses still email would switch providers for sensitive client documents direct better digital experiences1 to clients (such as SOAs)3 Security Efficiency The use of digital signatures Email compromise a
Slide 15: myprosperity transforming client engagement & experience
myprosperity transforming client engagement & experience Bringing more solutions to existing clients to drive further revenue growth One platform, two interfaces: • Client services • Partner services Single access point for HUB24 Group solutions for clients of over 4,700 advisers and 6,500 accountin
Slide 16: Clear strategy for growth
Clear strategy for growth HUB24 ecosystem Delivering innovative Transforming client Well positioned driving competitive solutions that help engagement and to benefit from advantage and solve productivity experience industry trends enabling industry challenges for financial transformation professiona
Slide 17: Innovation & Technology
02 Innovation & Technology Paul Biggs Chief Product & Technology Officer 17
Slide 18: Innovation that delivers: opening up new growth opportunities
Innovation that delivers: opening up Innovation Lab Delivering new growth Started early 2018 Client solutions opportunities Innovative and best-in-class solutions Innovative technologies Research and trial ideas/technologies Productivity Supporting scale and efficiency Ideas for products The Innovat
Slide 19: Innovation delivering client solutions and efficiency
Innovation delivering client solutions and efficiency Client solutions Productivity Data security Delivering best-in-class Leveraging innovative Managing cyber risk to innovative solutions and technologies to drive efficiency safeguard customer and experiences for customers and operational scale sha
Slide 20: HUBconnect gives us competitive advantage driving long term growth
HUBconnect One data store, Powering a range of services many applications & solutions and providing gives us access to quality data competitive advantage Single view of data driving long term growth Broker Key Risk Indicators Delivering efficiencies and scalable industry solutions Improving efficien
Slide 21: Client solutions: HUBconnect for licensees
Client solutions: HUBconnect for licensees Delivering licensee efficiencies and scalable industry solutions HUB24’s unique capability: providing access to quality data Documents and Data from: Planning software Flexibility Revenue Management Document Data Combine and visibility Software Classifier E
Slide 22: Client solutions: Engage
Client solutions: Engage Leveraging HUBconnect for market-leading reporting Present Delivering adviser efficiency, Tools to craft, customise and present content that will engage clients advocacy and client experience Publish A team workspace to efficiently publish content to multiple clients at a ti
Slide 23: Productivity: Engineering enablement
Productivity: Engineering enablement AI powered automated testing Improving engineering New capability accelerating productivity our testing processes… • Reduced testing time • Faster time to market Natural language • Improved speed and quality test case descriptions • More efficient feature deliver
Slide 24: Data security: Continuing to evolve our cyber capabilities
Data security: Continuing to evolve our cyber capabilities Strategic priorities • Identity & vulnerability management • AI governance, data retention & privacy • Zero-Trust Best practice cyber Policy & governance enhancements framework Recover Identify • Responsible use AI governance framework • Str
Slide 25: We are continuing to invest in innovative technology
We are continuing to invest in innovative technology to leverage and sustain our competitive position Delivering best-in-class Leveraging technology Unlocking the Managing cyber risk innovative solutions to drive operational power of data with to safeguard our and experiences for scale and support A
Slide 26: Platform
03 Platform Jason Entwistle Director, Strategic Development 26
Slide 27: Opportunity bigger than the "Platform market"
Opportunity bigger than the "Platform market" Platform solutions for Clients seeking SMSF trustees to easily personalised solutions manage their investments Industry & SMSF market public sector (~$1.0tr)¹ funds (~$2.1tr)¹ Platform market ~$1.1tr2 Non-custody / Institutional Off platform assets clien
Slide 28: Industry transformation delivering opportunities for growth
Industry transformation delivering opportunities for growth HUB24 has strong relationships with Growing adviser base using HUB24 coupled with privately owned advisory groups increased penetration (growth in FUA per adviser) Share of advisers in the market by ownership of licensee 1 5,000 29% of advi
Slide 29: Significant growth opportunity from both existing & new advisers
Significant growth opportunity from both existing & new advisers Net inflows from new and existing advisers Latent opportunity Composition of net inflows by tenure of adviser relationship HUB24 has access through relationships to HUB24 FUA per adviser more than 76% of the total adviser market1 at FY
Slide 30: Platform for the client's lifecycle
Platform for the client’s lifecycle: Suite of offerings deepening relationships Average account size by menu1 <1% ~15% ~85% of of FUA of FUA FUA $600k $500k $400k Wholesale Discretionary Accounts $300k Customer balance and complexity Portfolio Admin & Reporting Service $200k $100k HUB24 Choice $0k R
Slide 31: Extending our market leadership by enhancing customer proposition
Extending our market leadership by enhancing customer proposition HUB24 Discover HUB24 SMSF Access Non-custody capability Alternative asset classes growing strongly enhancements expanding becoming more accessible through HUB24 • Menu within HUB24 • Simplified application and • Non-custodial administ
Slide 32: Strategic investment in Reach Alternative Investments
Strategic investment in Reach Alternative Investments Expands range of alternative solutions available through HUB24 Live: Reach funds now available on HUB24 Alternative Asset Administration provider custody platform & Financial advisers non-custodial service allocate on average 5% of Facilitating a
Slide 33: Discover: Strong initial uptake with significant growth runway
Discover: Strong initial uptake with significant growth runway HUB24 Discover menu Strong growth since launch • Low cost streamlined menu consisting of a select range of managed portfolios • Launched November 2023 FUA of ~$260m as at September 2024 • Designed for advised clients with less complex ne
Slide 34: Market leading platform driving customer value and growth
Market leading platform driving customer value and growth Strong inflows with Continued Leveraging HUB24’s Competitive significant opportunity enhancements to ecosystem to deliver advantage driving to continue growing HUB24 Platform new solutions to long-term growth market share proposition service
Slide 35: Operational Excellence
04 Operational Excellence Craig Lawrenson Chief Operating Officer 35
Slide 36: HUB24 has significant scale
HUB24 has significant scale Total FUA¹ Transactions² Interactions² $113b >$50b 765k Platform FUA $92b Gross inflows $26b Calls 98k PARS FUA $21b Gross outflows $10b Chats 47k Managed Direct equity Account FUM $37b trades >$14b Tasks 620k 1. As at 30 September 2024 2. FY24 36
Slide 37: Scaling safely while delivering service excellence
Scaling safely while delivering service excellence HUB24 has more than doubled …so too have our operational …but we have scaled safely over the last 3 years… volumes… with customer satisfaction remaining at strong levels Platform FUA Gross inflows Service interactions +104% +117% +100% +53 Industry
Slide 38: Innovation and technology supporting better client solutions and efficiency
Innovation and technology supporting better client solutions and efficiency Client Solutions Productivity Delivering best-in-class innovative Leveraging innovative technologies to solutions and experiences for customers drive efficiency and operational scale Examples: Examples: • Advice fee consent
Slide 39: Client solutions: Advice fee consent tool
Client solutions: Advice fee consent tool Driving increased efficiency for clients and HUB24 Challenge - Inefficient fee consent process: • >100,000 fee consents p.a. across HUB24 client base • Lack of integration with advice CRM tools Streamlined advice Innovative solution - Advice fee consent tool
Slide 40: Productivity: Supporting more efficient superannuation operations
Productivity: Supporting more efficient superannuation operations Significant growth in superannuation flows: Significant automation leading to $11.5b efficiency benefits of superannuation inward roll overs in FY24 Superannuation Inward Rollovers #2 94% for net inflows across all super funds for swi
Slide 41: Productivity: Virtual Mail Room
Productivity: Virtual Mail Room Revolutionising document management: Leveraging machine learning removes human interaction with mail received Document storage Data and Driving improved Significant Document productivity document volumes of mail access connector across operations resulting from direct
Slide 42: Productivity: AI augmenting proactive servicing
Productivity: AI augmenting proactive servicing Client service outcomes driven through multiple channels Reduce average transaction handling 98K¹ 47K¹ 620K¹ time supporting more efficient operations Building capability leveraging LLM & AI to better serve clients Better customer experience with faste
Slide 43: Leveraging technology to drive customer advocacy and efficiency
Leveraging technology to drive customer advocacy and efficiency Delivering leading Scaling safely while Leveraging Further opportunities customer satisfaction delivering service technology to reduce to leverage our levels through excellence cost to serve and investment in innovation, technology supp
Slide 44: Break
HUB” Break 10 minutes 44
Slide 45: Class & NowInfinity
05 Class & NowInfinity Tim Steele Class CEO 45
Slide 46: Market leading software solutions for accountants with significant market share
Market leading software solutions for accountants with significant market share and growing above system Class: A leading SMSF software provider NowInfinity: Fast growing corporate compliance solution Premium offer 209k 31% share of Growing Used by 1 in 4 809k entities 23% market Growing above under
Slide 47: SMSFs are a significant and growing segment within superannuation market
SMSFs are a significant and growing segment within superannuation market Australians establishing SMSFs earlier and with SMSF industry delivering consistent growth with establishments higher balances accelerating in FY24 Key insights from the Class 2024 Number of SMSFs1 SMSF Establishments1 Annual B
Slide 48: Multi-year program of product enhancements to support accountant productivity
Multi-year program of product enhancements commenced to support accountant productivity and value proposition Direct feeds Directly sourced document feeds from share registries from major financial institutions Automated retrieval Automated retrieval of and reconciliation of documents including data
Slide 49: Class delivering consistent growth & leveraging Group footprint
Class delivering consistent growth & leveraging Group footprint Class revenue growth underpinned by new and Leveraging HUB24 Group’s large & existing solutions diverse footprint2 Volume Growing New growth ARPU1 solutions and partnerships >1,600 >200,000 >5,600 >800,000 • Exposed to • Supported by •
Slide 50: Leveraging Group capability to launch new solutions
Leveraging Group capability to launch new solutions to deliver value to clients and create new revenue streams Virtual Mail Room New Class client portal Leveraging capability Comprehensive & Pilot with select Leveraging Safe, efficient and Pilot with select group developed in HUB24 efficient physica
Slide 51: Next generation of solutions leveraging Group capability and footprint
Next generation of solutions leveraging Group capability and footprint Enhanced client portal solutions leveraging Group Leveraging Group capability capability being rolled out from 2HFY25 onwards • Enhances whole of wealth view myprosperity • Secure communication Deepen Broaden Deepen integration a
Slide 52: Class is innovating and extending products to differentiate and grow market share
Class is innovating and extending products to differentiate and grow market share Creating the future of Product Collaborating with Leveraging Group wealth accounting enhancements clients, partners and capability and footprint administration through supporting accountant HUB24 to deliver to create o
Slide 53: CFO Update
06 CFO Update Kitrina Shanahan Chief Financial Officer 53
Slide 54: Delivering sustainable and scalable growth
Delivering sustainable $100b $80b and scalable growth $60b Platform $40b Custody FUA 4-YR CAGR $20b +49% $0b Delivering sustainable growth FY20 FY21 FY22 FY23 FY24 • Strong FUA growth translating into revenue growth $350m • High level of recurring revenues across a diverse customer base $300m • Sign
Slide 55: Strong start to FY25 with pipeline of opportunities
Strong start to FY25 with pipeline of opportunities Record quarter of net inflows Large migrations FY26 FUA target excluding large migrations in Q1 FY25 • Q1 FY25 Platform FUA $91.6b • $1.5b of EQT FUA migrated in early • FY26 Platform FUA target of $115-123b October 2024 (excluding PARS FUA) • Q1 F
Slide 56: Strong balance sheet with capital flexibility
Strong balance sheet with capital flexibility Capital management considerations Strong operating cashflows Dividends (cps) | 4-YR CAGR +53% • 92% correlation between UEBITDA and operating cashflows in FY241 Underlying Diluted EPS (cps) | 4-YR CAGR +52% Target dividend payout ratio 40-60% cps • Fully
Slide 57: Update on depreciation & amortisation
Update on depreciation & amortisation Underlying D&A expected to be $19-21m Acquisition related amortisation in FY25 (up from $14m in FY24) expected to be $26m in FY25 • Amortisation tracking towards capex levels • Excluded from Underlying NPAT • Increase in amortisation also reflects new Sydney pre
Slide 58: Wrap Up & Q&A
07 Wrap Up & Q&A Andrew Alcock Managing Director & Chief Executive Officer 58
Slide 59: Positioned to capitalise on significant growth opportunity
Positioned to capitalise on significant growth opportunity creating long term value for customers and shareholders Operate in large HUB24 Platform Leveraging group Scalable operations structurally growing positioned to capability and footprint and growth enabling markets with strong significantly gr
Slide 60: Questions?
Questions? 60
Slide 61: Disclaimer
Disclaimer SUMMARY INFORMATION RISK OF INVESTMENT The material herein is a presentation of general background information about An investment in HUB shares is subject to investment and other known and HUB24 Limited’s (‘HUB’) activities current as at date of presentation. This unknown risks, some of
Slide 62: Contacts
Contacts About HUB24 James Cordukes HUB24 Limited is listed on the Australian Securities Exchange, and includes the award-winning HUB24 Platform, HUBconnect, Class and myprosperity. Head of Investor Relations james.cordukes@hub24.com.au The HUB24 platform offers advisers and their clients a comprehe