Eqt Holdings Ltd. · ASX:EQT
Eqt — H1 2023 Earnings Presentation
43 slides from Eqt's earnings presentation, Feb 23, 2023
Slide 1: Results for Half Year Ended 31 December 2022
INVESTOR PRESENTATION RESULTS FOR HALF YEAR ENDED 31 DECEMBER 2022 Mick O'Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer 23 FEBRUARY 2023
Slide 2: Agenda
AGENDA @ (1) 1H23 OVERVIEW AND AET UPDATE (2) FINANCIALS (3) STRATEGY AND OUTLOOK (4) QUESTIONS Equity Trustees acknowledges Aboriginal and Torres Strait Islander people as the First Australians and respects their long and enduring connection to their land. We pay our respects to all Elders past, pr
Slide 3: 1H23 Overview & AET Update
1H23 OVERVIEW & AET UPDATE
Slide 4: Strong Revenue Increase on Continued FUMAS Growth
STRONG REVENUE INCREASE ON CONTINUED FUMAS @ GROWTH FUMAS* REVENUE NPAT DIVIDENDS $155.5b $62.8m $7.6m LY cents 4 Up 4.4% on 2H22 4 Up 12.3% on 1H22 Underlying NPAT $13.0m + Up 1 cent per share on 1H22 4 11.3% on 2H22 Consistent with 2H22 + 2.5% on 1H22 ¢ Strong growth in revenue reflecting: - Good
Slide 5: FUMAS Continues Steady Upward Trend
FUMAS CONTINUES STEADY UPWARD TREND Sb TOTAL EQT FUMAS'! 160 155.5 151.8 ba 150 148.9 ' 144.2 140 130 128.1 120 m4 110 101.0 100 90 80 1420 2H20 1H21 2H21 1H22 2H22 1H23 AET FUMAS FUMAS: Funds under management, administration, advice and supervision FUMAS up 4.4% on 2H22 to $155.5b Significant new b
Slide 6: FUMAS Benefit from Organic Growth and AET
FUMAS BENEFIT FROM ORGANIC GROWTH AND AET Sb 110 100 90 80 70 60 50 $b CTS Fus! STS Fus! Sb TWS FUMAS? — 106.2 — 195, ——— 42 16 15.4 100.2 40 =. 2 14 38 12 59 36 10 34 8 32 ia 6 30 4 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 _ Hes FUS down 6.1% on pcp Multiple new fund manager client appointments offs
Slide 7: Transformation to Improve Competitive Edge and Drive Growth
TRANSFORMATION TO IMPROVE COMPETITIVE @ EDGE AND DRIVE GROWTH ¢ Growth agenda - Expertise in an increasingly intense regulatory environment is giving us a competitive edge - FUMAS and revenue remain on steady upward trend - Focused strategy to be Australia’s leading provider of trustee services ¢ Bu
Slide 8: Technology Implemented in 1H23 Delivering Unprecedented Uplift in Service Capability
TECHNOLOGY IMPLEMENTED IN 1H23 DELIVERING UNPRECEDENTED UPLIFT IN SERVICE CAPABILITY TRUSTEE & WEALTH SERVICES (TWS) CORPORATE TRUSTEE SERVICES (CTS) Deployed iPhi- December 22 Leading US philanthropy technology from Stellar Full active client base (~$250m) Enables us to accelerate development of th
Slide 9: Delivering for Stakeholders
DELIVERING FOR STAKEHOLDERS @ EMPLOYEE CLIENT SHAREHOLDER ENGAGEMENT SATISFACTION VALUE COMMUNITY IMPACT Engaged and enabled Net Promoter score (NPS)' Earnings Per Share (EPS) staff Net Loyalty score (NLS)? and dividend Granting and pro bono/ volunteering 1 Net Promoter score— net measure of client
Slide 10: Delivering for Shareholders
DELIVERING FOR SHAREHOLDERS @ Cents EARNINGS PER SHARE 70 * Statutory EPS down primarily 59.88 reflecting 60 55.47 54.92 we 50.69 53.17 * One-off acquisition / 50 . 53.2 integration costs 40 i +f CENTS + Recent capital raise and 30 only 1 months’ earnings 20 | oe from AET 1H21 2H21 1H22 2H22 1H23 +
Slide 11: AET Integration - Strong Governance and Delivery on Track
AET INTEGRATION - STRONG GOVERNANCE AND DELIVERY ON TRACK Announcement Date Completion date Organisational Restructure Exit of Platforms Conditions precedent Single Organisational Exit of Platforms TWS Applications @ End of TSA completed Structure , (Nirvana, NavOne, Employment oft Single Product se
Slide 12: AET Integration Progressing Well
AET INTEGRATION PROGRESSING WELL PEOPLE * Common ‘trustee’ mindset * Building cultural alignment * Secured all key employees ORGANISATION STRUCTURE + Client facing leaders and staff fully combined in February + Five clear Business Units: . Private Wealth & Partnerships . Private Trustee Services . P
Slide 13: Synergies & Implementation Costs on Track
SYNERGIES & IMPLEMENTATION COSTS ON TRACK NET COST SYNERGIES REVENUE SYNERGIES IMPLEMENTATION COSTS CAPITAL RELEASE @ Targeted amount $3.5mpa $3.3m pa $22m $10m Timing Run-rate in FY25 By FY24 Across FY23, FY24 & 1H25 End 2024 Key sources ¢ Exit from PMS & SMSF Investment * Technology and Licence an
Slide 14: Summary
SUMMARY STRONG PERFORMANCE WITH CONTINUED GROWTH MOMENTUM FUMAS increasing to $155.5 billion, supported by organic growth and the acquisition of AET Statutory EPS impacted by one-off acquisition / integration costs, increased technology investment and adverse markets AET Integration proceeding very
Slide 15: Financials
FINANCIALS
Slide 16: Robust Financial Performance
ROBUST FINANCIAL PERFORMANCE @ 1H23v so IH23.v FOR THE PERIOD 1H23 2H22 2H22% 1H22% * Strong revenue growth up 12.3% including one month Total revenue ($m) 55.6 55.9 12.8 12.3 contribution from AET Total expenses ($m) 38.2 36.1 29.7 37.3 . Expense growth reflecting EBITDA ($m) 20.7 23.2 (21.3) (29.7
Slide 17: Strong Revenue Growth
STRONG REVENUE GROWTH $m 64 62 60 58 56 54 52 1 FUMAS: Funds under management, administration, advice and supervision Equity market impact on FUMAS' Organic growth @ * 12.3% growth in revenue on the prior corresponding period despite adverse markets driven by: * Double digit organic growth of 10% *
Slide 18: Expense Analysis
EXPENSE ANALYSIS @ $m NON-RECURRING AET UPLIFT OPEX INCREASE lI l| * Non-recurring costs of $6m associated with AET acquisition / integration and 0.4 49.6 one-off technology implementation costs 55.0 50.0 + Increase in salaries and related costs driven by: 45.0 * Significant reduction in vacancy lev
Slide 19: Continued Improvement on Key Financial Measures
CONTINUED IMPROVEMENT ON KEY FINANCIAL MEASURES $62.8M Sm TOTAL REVENUE sm EBITDA 65 62.8 25 23.2 60 20.6 20 18.4 20.5 55 15 50 45 10 1H21 2H21 1H22 2H22 1H23 1H21 2H21 1H22 2H22 1H23 Underlying EBITDA' Statutory EBITDA $m NET PROFIT AFTERTAX $13.0M 49 cents 16 Cents DIVIDENDS 127 13.0 50 ” 48 49 49
Slide 20: TWS - Significant Growth in Revenue Driven by Organic Growth and 1 Month AET
TWS - SIGNIFICANT GROWTH IN REVENUE DRIVEN BY @ ORGANIC GROWTH AND 1 MONTH AET CONTRIBUTION $m TWS REVENUE $b TWS FUMAS! 32 16 15.4 2.6 30 29 28, ——___— a (1.1) 26 24 2 20 - 1H22 AET Equity market. Organic growth 123 1H22 Fv22 1423 TOMAS Philanthropy mTrusts & Estates Wealth Advice m Asset Managemen
Slide 21: TWS - Impact of AET Acquisition
TWS - IMPACT OF AET ACQUISTION CORE TRUSTEE SERVICES FUMAS! EMERGING MARKETS FUMAS! All graphs in Millions . . All graphs in Millions Estate Management 800 $$$ ees Active Philanthropy 600 Number of estates doubled 600 4100 [_ + iPhi platform launched 400 Consistently winning 200 ae + Strong new busi
Slide 22: STS - Continuing Growth Trajectory
STS - CONTINUING GROWTH TRAJECTORY ‘000 11.2 10.8 10.4 10.0 STS REVENUE 0.7 0.3 (0.2) 10.5 1H22 AET Equity market Organic 1H23 impact on growth Fus' KEY DRIVERS INCLUDE: Super Simplifier FUS $923m AET FUS $885m Raiz Invest Super $120m Full half impact of the appointment to Platformplus Super Wrap FU
Slide 23: CTS - Strengthened Market Leadership
CTS - STRENGTHENED MARKET LEADERSHIP ® Sm CTS REVENUE Sb CTS Fus! 19.3 1.2 120 106.7 19.1 100 18.9 18.7 80 18.5 60 18.3 18.1 40 17.9 (0.7) 20 17.7 17.5 - 1H22 Equity market impact on FUS! Organic growth 1H23 1H22 1H23 = Australian Equities * Good underlying organic revenue growth of 6.4% partially o
Slide 24: CTS - Custody, Debt and Securitisation Services
CTS - CUSTODY, DEBT AND SECURITISATION SERVICES @ $m REVENUE $b Fus! NUMBER OF ACCOUNTS 18 165— 100 80 60 40 20 2H21 1H22 2H22 1H23 FY21 1H22 FY22 1H23 FY21 1H22 FY22 1H23 * Significant growth in ‘Custody and Property’ transactions in 1H23 increasing market share in property related transactions + K
Slide 25: CTS - UK/Ireland
CTS - UK/IRELAND @ NO. CLIENTS NO. FUNDS £b TOTAL FUMAS 12 36 10 FY19 FY20 FY21 FY22 1H23 FY19 FY20 FY21 FY22 1H23 FY19, -FY20.—FY21 FY22 = 1H23 + Slightly lower FUMAS principally reflecting adverse markets and exit of small, uneconomic clients * 2 new clients launched in 2H23, with approval being s
Slide 26: Strong Balance Sheet
STRONG BALANCE SHEET ® Assets Cash and liquid investments 87.3 79.8 * Debt/equity 8% (excluding cash backed ORFR facilities) ORFR cash 31.0 30.5 Trade receivables and accrued income 30.9 33.9 * Majority of cash and liquid . . . assets supports regulatory Goodwill and intangible assets 205.2 205.6 ca
Slide 27: Solid Operating Cash Flow
SOLID OPERATING CASH FLOW ® $m 110 a re “ a Healthy cash generat ° . 94.6 lealthy cash generation 7) ji 90 873 (1.6) mo = * Borrowings relate to funding and integration so . 102 (11.2) || for AET acquisition ea) * Timing of collections 70 expected to materially improve in the second 60 half * Neglig
Slide 28: Strong Liquidity Position
STRONG LIQUIDITY POSITION sm 1H23 UNENCUMBERED LIQUIDITY POSITION 120 100 80 48.0 60 40 ” | 20 (14.4) 21.6 Liquid assets held’ Less net tangible Less ORFR related Net available cash Committed undrawn Surplus Liquid assets asset regulatory cash? facilities + Committed capital ? undrawn facilities 1 L
Slide 29: Summary
SUMMARY STRONG EARNINGS PERFORMANCE ON CONTINUED FUNDS GROWTH Strong organic revenue growth despite adverse equity markets Higher expenses largely due to one-off acquisition/ integration costs and increased investment Statutory NPAT impacted by one-off costs. Underlying NPAT solid AET performing as
Slide 30: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK
Slide 31: A Company Founded on Trust
A COMPANY FOUNDED ON TRUST @ PURPOSE: HELP PEOPLE TAKE CARE OF THE FUTURE Safeguard people's wealth now and for Provide trustee services to help clients protect generations to come members’ and investors’ interests Act as a trusted, independent partner to grow Empower clients to improve the lives of
Slide 32: Group Strategy Overview
GROUP STRATEGY OVERVIEW OUR OBJECTIVES GROUP STRATEGY BUSINESS GROWTH CLIENT SERVICE CAPABILITY COMMUNITY * Capture opportunities from market demand for fiduciary independence with prudent cost control * Compete in additional lines of trusteeship to maximise our opportunity set * Scale up areas of b
Slide 33: Equity Trustees Leads the Trustee Market
EQUITY TRUSTEES LEADS THE TRUSTEE MARKET ® CONSOLIDATION 2014 2017 2019 Sandhurst Trusts and Zurich Superannuation ANZ Trustees Estates Business Australia (Trustee) 2018 2022 One Vue Responsible Australian Executor Entity Trustees Australian Executor Trustees is made up of: Executor Trustee and Agen
Slide 34: Equity Trustees is the Leader Geographically and by Business Line
EQUITY TRUSTEES IS THE LEADER GEOGRAPHICALLY AND @ BY BUSINESS LINE ~~ 34
Slide 35: Business Unit Initiatives in FY 2023
BUSINESS UNIT INITIATIVES IN FY 2023 TRUSTEE & WEALTH SERVICES SUPERANNUATION CORPORATE TRUSTEE SERVICES (TWs) TRUSTEE SERVICES (STS) (CTS) AET Integration Capitalise on market leading business development capability Launched Australian leading philanthropy platform - iPhi Two-year technology invest
Slide 36: Investing in Technology
INVESTING IN TECHNOLOGY CONTINUING TO DRIVE EFFICIENCIES AND ENHANCE THE CLIENT EXPERIENCE CORPORATE TRUSTEE SERVICES + Solutions to create scale and efficiency through process reengineering, data analytics and automation using Salesforce * Centralises client and task management and reporting * Targ
Slide 37: Governance, Risk and Regulatory Management Are Core to Our Business
GOVERNANCE, RISK AND REGULATORY MANAGEMENT ARE CORE TO OUR BUSINESS PRODUCTIVE REGULATOR RELATIONSHIPS * Broad and deep relationships with APRA and ASIC + Expert advice being sought CAPABLE OF MANAGING SIGNIFICANT REGULATORY OBLIGATIONS ACROSS A MARKET LEADING FUND POPULATION * Design and Distributi
Slide 38: Summary and Outlook
SUMMARY AND OUTLOOK ® STRATEGY REINFORCED WHILE DRIVING TRANSFORMATION * Strategy on track driven by organic and inorganic growth and business transformation * Revenue and funds continue to rise, while net profit reflects investment for growth ¢ AET acquisition provides market leadership position -
Slide 39: Appendix
APPENDIX
Slide 40: EQT's Revenues Are Leveraged to Equity Markets as Fees Largely Asset-Based
EQT’S REVENUES ARE LEVERAGED TO EQUITY ® MARKETS AS FEES LARGELY ASSET-BASED 1H23 TOTAL FUMAS LEVERAGE + Average equity markets REVENUE AS AT 1H23 for the 6 months to $15.4b 60%-70% to average daily ASX200 31/12/22 materially lower than the PCP $39.9b 20%-30% to average daily ASX200 0 CEiguitay mmen
Slide 41: Questions
QUESTIONS
Slide 42: Thank You
THANK YOU
Slide 43: EQT Holdings Limited
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 prov