Australian Ethical Investment Ltd · ASX:AEF
Australian Ethical Investment — H1 FY2021 Earnings Presentation
26 slides from Australian Ethical Investment's earnings presentation, Feb 24, 2021
Slide 1: FY21 Half Year Results
FY21 Half Year Results John McMurdo | Managing Director & CEO Mark Simons | CFO
Slide 2: Highlights
Highlights
Slide 3: FY21 H1 highlights
Growth Excellent momentum in the first half FY21 H1 Customer Net inflows~ Funds under management highlights numbers up $0.42bn $5.05bn 22% 43% 30% Continued strong growth with focused UPAT $4.9m NPAT attributable Operating revenue Diluted EPS^ strategic investment to shareholders* $25.6m 3 year CAGR
Slide 4: Excellent investment performance
Excellent investment performance ESG 1 of only 6 MySuper Balanced FY21 H1 Trailblazer Fund managers globally to be named a “leader” option ranked second against its peers over award the year to highlights from Money Magazine for ESG commitment by Morningstar December, returning 8.0%~ Exceptional inv
Slide 5: Financials
Financials
Slide 6: Key financials
Key financials • Increase in revenue driven by: Operating revenue 25,609 23,322 10% Other income 399 66 nm** • strong FUM and member growth Total Revenue 26,008 23,388 11% Operating expenses (18,899) (17,049) 11% • partially offset by the impact of superannuation fee reductions Profit before income
Slide 7: Strong FUM growth of 30%
Strong FUM growth of 30% 5.05 0.35 FUM ($bn) 3.87 1.40 0.25 2.85 1.07 2.60 0.16 $5.05bn as at 31 December 2020 0.16 1.84 0.81 0.74 0.01 0.57 3.30 2.56 1.70 1.89 1.26 2016 2017 2018 2019 2020 Superannuation Managed Funds Institutional Total Managed Funds As at 31 December of each year Superannuation
Slide 8: 22% increase in customers
22% increase in customers Customers at 31 December 62,823 • Customers grew 22% since December 2019 10,111 51,566 • Over 10,000 managed fund investors 45,991 8,302 • Super membership continues to 42,521 7,653 grow, primarily in the direct channel 34,541 7,137 6,580 52,712 43,264 35,384 38,338 27,961
Slide 9: Record netflows in 1H21
Record netflows in 1H21 $m 421.5 • Net inflows up 43% compared to first half FY20 341.4 295.8 • 82% growth in managed fund net inflows to $121m (excludes insto) 208.2 147.8 • Super netflows up 27% to $253m Inflows driven by higher rollovers (up 31%) and higher SG contributions (up 29%) Outflows • Su
Slide 10: Managed Funds netflows up 82%
Managed Funds netflows up 82% $m • Increased brand awareness and 120.7 stronger traction in our targeted growth areas (high networth and 66.3 advisers) has driven 82% growth in 46.1 managed fund net inflows to Inflows 53.9 63.8 $121m (excludes insto) • Strong indication that investors are shifting t
Slide 11: Revenue margin
Revenue margin Average revenue margin $bn 5.5 2.00% • Long track record of fee reductions continues 5.0 • As part of our fee strategy, we will continue to 4.5 reduce fees as we grow, to increase our 1.50% competitiveness and to benefit our customers 4.0 • Continued growth has allowed further fee 3.5
Slide 12: 10% increase in operating revenue
10% increase in operating revenue Operating Revenue ($m) (0.2) • Strong FUM based revenue growth 1.0 underpinned by strong super and managed fund FUM growth, 0.5 partially offset by the impact of superannuation fee reductions 1.0 (including those implemented in the second half of FY20^^) and fee and
Slide 13: Expenses
Expenses Continuing to invest for growth Expenses by category* $m • Increase in operating expenses driven by focused investment in the business to take advantage of growth opportunities: 25 ➢ increased employment costs due to new hires, full year impact of FY20 hires and promotions as we continue to
Slide 14: Balance sheet strength
Balance sheet strength • Strong balance sheet with no debt 20.8 • Strong cash position 17.7 • Parent holds surplus regulatory capital of $10m 14.8 20.7 12.3 17.4 11.4 15.0 13.6 11.7 2016 2017 2018 2019 2020 Net Assets Cash and cash equivalents * Represents total assets less total liabilities attribu
Slide 15: Key financials
Funds under management^ ($bn) Operating revenue ($m) 5.05 25.6 23.3 3.87 19.8 17.4 2.60 2.85 13.3 Key 1.84 financials 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 As at 31 December of each year For the 6 months ended 31 December each year Strong growth Net profit after tax * ($m) Underlying pro
Slide 16: Key financials
Key financials 4.60 3.5 3.95 3.00 3 2.50 2.5 2.84 2.00 2 1.65 1.93 1.5 1 0.51 0.50 0.5 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 * Attributable to shareholders for six months ending 31 December Reflects six months ending 31 December of each year. Historic data restated for share split. **
Slide 17: Investment performance – strong returns, less risk
Investment performance – strong returns, less risk Australian Shares Fund: Stellar risk-adjusted returns 16,000 Benchmark* Australian Ethical Australian Shares Fund 14,000 S&P/ASX 300 – Total Return Australian Share Fund - Net S&P/ASX SMALL INDUSTRIALS – Total Return 12,000 ASX Small Industrials 10,
Slide 18: Long track record of outperformance
Long track record of outperformance Balanced Accumulation Option (FUM $1.79bn) Our default MySuper option, the Balanced Accumulation Option ranked second against its peers over the year to December 2020#, whilst also outperforming its peer-based benchmark over all time periods Since 6mths 1Y 3Y 5Y 7
Slide 19: Long track record of outperformance
Long track record of outperformance Australian Shares Fund (FUM $1.4bn) Australian Shares Fund continues to outperform the market over the short, medium, long and very long term. Returning 17.3% above the benchmark for the 6 months** Since 6mths 1Y 3Y 5Y 7Y 10Y 20Y Inception Retail* 30.4% 19.9% 13.5
Slide 20: Significant outperformance
Significant outperformance Emerging Companies Fund (FUM $0.2bn) Emerging Companies Fund continuing to show strong outperformance; 21.7% above the benchmark for the 6 months** 6mths 1Y 3Y 5Y Since Inception Retail* 41.3% 35.1% 24.0% 18.5% 20.0% S&P/ASX Small Industrials Accum Index 19.9% 5.9% 7.2% 8.
Slide 21: AEI Strategy on a Page
AEI STRATEGY ON A PAGE S T R AT E G I C P I L L A R S Principled Advocates Compelling Impactful investment for a better client business leadership world experience • Extend our leadership in • Foster a coalition of • Enhance our client relationships • Leverage our brand to principled investment co-i
Slide 22: Good momentum on delivering our Strategy
Good momentum on delivering our Strategy ➢ Continued long term outstanding investment performance and ➢ Awards & recognition: Recognised for a leading approach to recent outperformance vs benchmark of 21.7% for the Responsible investing (RIAA)2, Fund Manager most recognised Principled Emerging Compa
Slide 23: Outlook
Well positioned Implementing our for future growth strategic roadmap as ethical investment against a backdrop of increased ‘green’ continues to gain investment globally by world leaders, and with momentum and our the pandemic accelerating the existing trend excellent returns and impact towards susta
Slide 24: Contacts
Contacts John McMurdo Melanie Hill Chief Executive Officer Head of Business Performance jmcmurdo@australianethical.com.au mhill@australianethical.com.au 0449 903 207 0428 879 348 Mark Simons Camilla Herring Chief Financial Officer Head of Communications msimons@australianethical.com.au cherring@aust
Slide 25: Disclaimer
Disclaimer The information contained in this presentation is general information only, and does not take into account your individual investment objectives, financial situation or needs. Before acting on it, you should consider seeking independent financial advice that is tailored to suit your perso
Slide 26: australianethica
australianethica
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