Sequoia Financial Group Ltd. · ASX:SEQ
Sequoia Financial — FY2023 Earnings Presentation
16 slides from Sequoia Financial's earnings presentation, Aug 31, 2023
Slide 1: FY23 Financial Results
FY23 Financial Results Garry Crole CEO and Managing Director 31 August 2023
Slide 2: Disclaimer
Disclaimer This presentation is for general information purposes only and may contain non-GAAP financial measures. Therefore, it should be read in conjunction with the Full Year Annual Report for the year ended 30 June 2023 and the Appendix 4E lodged with the Australian Securities Exchange by Sequoi
Slide 3: FY23 Financial Highlights
FY23 Financial Highlights • Revenue $131.5m; Operating Profit $5.5m • Results impacted by weaker equity market conditions and non-recurring expenses • Transformational asset sale provides funding for future growth (completed 80% of Morrison divestment for $40.5m today) • No final dividend but the di
Slide 4: FY23 Business Highlights
FY23 Business Highlights • Market share gains for Licensees Services with 5% growth in advisor network despite a reduction in total industry adviser numbers • Acquisitions completed on value accretive terms: Euree AM and Castle Corporate & Castle Group • Strong Q4 FY23 for Equity Markets division co
Slide 5: Group Financial Snapshot
Group Financial Snapshot $ millions FY23 FY22 Change % Comments Revenue $131.5 $147.3 (10.7)% • Adjusted normalised EBITDA add back approximately $4.1m Cost of Sales $99.3 $110.8 (10.4)% for non-recurring items in FY23. Gross Profit $32.3 $36.5 (11.5)% • FY24 expect revenue to exceed FY22 as the bus
Slide 6: Scalable financial model impacted by 2023 challenges
Scalable financial model impacted by 2023 challenges Group Revenue ($m) Group EBITDA ($m) 147.3 12.4 131.5 11.5 116.5 84.5 4.8 5.5 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Adjusted normalised EBITDA of $9.6m in FY23 adds back ~$4.1m for non-recurring items Note: Adjusted normalised EBITDA of $9.6m in
Slide 7: Sum of parts snapshot
Sum of parts snapshot Segment FY23 Revenue Gross Margin FTE Management Target Returns Revenue ($m) growth Enterprise Valuation * Direct $3.0 16% 76% 10.2 $5m 15% Investments Equity Markets $41.7 (40%) 19% 20.8 $15m** 15% Professional $8.5 9% 78% 35.4 $25m 15% Services Licensee $77.9 23% 20% 37.7 $40
Slide 8: Direct Investments restructured to deliver growth in FY24
Direct Investments restructured to deliver growth in FY24 Direct Investments Revenue ($m) Direct Investments EBITDA ($m) 3.0 2.6 1.0 2.2 1.9 0.6 0.3 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 -0.2 Customers: Wholesale sophisticated investors (high net worth consumer) and listed corporates Services: Gen
Slide 9: Equity Markets impacted by weaker trading conditions
Equity Markets impacted by weaker trading conditions Equity Markets Revenue ($m) Equity Markets EBITDA ($m) 70.1 6.3 5.9 52.3 41.8 37.0 3.6 2.3 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Customers: Retail and wholesale investors of advisers , AFSL holders. Services: ASX clearing services (Morrison) | S
Slide 10: Professional Services grows in tough market
Professional Services grows in tough market Professional Services Revenue ($m) Professional Services EBITDA ($m) 2.9 9.9 8.5 2.4 2.1 7.1 1.5 4.7 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Customers: Public practicing Accountancy firms , legal firms , financial planners and tax agents Services: Legal Do
Slide 11: Licensees Services gaining market share
Licensees Services gaining market share Licensee Services Revenue ($m) Licensee Services EBITDA ($m) 77.9 6.1 5.5 64.8 55.3 3.9 40.6 2.9 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Customers: Licensees and Authorized representatives Services: AFSL of InterPrac / SWM | InterPrac Securities | Family Offic
Slide 12: Adjusted normalised EBITDA (after non-recurring items)
Adjusted normalised EBITDA (after non-recurring items) FY23 Results S e q u o i a F i n a n c i a l G r o u p | 12
Slide 13: Sequoia is a profitable, growing and well capitalised financial services business
Sequoia is a profitable, growing and well capitalised financial services business seeking to generate >15% ROME* p.a. across each of our 4 key divisions Sequoia’s broad customer base includes financial planners, stockbrokers, wholesale and sophisticated investors, retail funds, accountants and tax a
Slide 14: Outlook
Outlook In FY24 Sequoia anticipates a return to earnings growth for all business divisions. It is seeking to deliver >15% ROME* by division. Notably, recent trading, including Q4 FY23 provides confidence that the Equity Markets division has returned to growth following a difficult H1 FY23. Managemen
Slide 15: Track record of generating returns for investors
Track record of generating returns for investors Growth FY20 – FY23 +189% +217% +56% +100% Share Price Market Cap Revenue EBITDA (FY23 normalised) FY23 Results S e q u o i a F i n a n c i a l G r o u p | 15
Slide 16: Contacts
CONTACTS Garry Crole | Managing Director and CEO garrycrole@sequoia.com.au Web: www.sequoia.com.au Phone: +61 (0)3 8548 3333
Sequoia Financial Group — FY2023 Earnings Presentation on 6ix