Slide 1: FY2019 Results Presentation
Netwealth FY2019 Results Presentation See wealth differently ee netwealth $437,789.45 ByAsset Class ~ T expandall Cash account $15,180.32 347% ‘Australian Equities 735% $119,739.06 $79893.80- National Australia Bank L... NAB 004% Price Value $29.83, $105,240.24 $76,448.91 = Ramsay Health Care Ltd RH
Slide 2: Important notice and disclaimer
Important notice and disclaimer General Information only Information provided is general information presented in a summary format as at 19 August 2019, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be relied upon as advice to investors
Slide 3: Our purpose is
Our purpose is To enable peo} see wealth di and discover a antly shter future
Slide 4: The foundations of Netwealth's success
The foundations of Netwealth's success Our purpose Our values To enable people to see wealth differently + Curious and discover a brighter future + Optimistic + Collaborative See Wealth Differently + Agile Trormealth + Genuine netwealth + Courageous 4 | netwealth —FY2019 Results Presentation Our str
Slide 5: Today's presenters and agenda
Today's presenters and agenda Michael Heine Joint Managing Director Matt Heine Joint Managing Director Grant Boyle Chief Financial Officer 5 | netwealth —FY2019 Results Presentation 1. FY2019 business and financial highlights 2. FY2019 financial performance 3. Outlook 4. Questions 5. Appendix and ad
Slide 6: Business and Financial highlights
FY2019 Business and Financial highlights
Slide 7: Financial highlights FY2019
Financial highlights FY2019 Revenue, profit and margin growth continued all $98.8M Revenue $49.5 Operating net cash flow pre tax 7 ‘| netwealth —-FY2019 Results Presentation 2 7. y 7. fF 7, y af af af $52.0M' 52.6%! $36.0M" EBITDA EBITDA margin NPAT S 14.8cents' Dividend12.cps_ Recurring rev EPS Int
Slide 8: $23.3B FUA $3.9B FUM 2,979
$23.3B FUA $3.9B FUM 2,979 al 6d 4 $4.3B $0.9B #1 platform” 8 =| netwealth —FY2019 Results Presentation Reference; Growth in comparison to FY2018
Slide 9: Financial Intermediaries
Financial Intermediaries 2,579 1,504
Slide 10: Growth in quality financial intermediaries key
Growth in quality financial intermediaries key 2,579 Financial Intermediaries on the platform at 30 June 2019, up 13.6% versus prior year Growth is driven by 10 Existing Financial Intermediaries: Continued migration of accounts from our existing Financial Intermediaries accounted for approximately 7
Slide 11: Shift in industry platform flows
Shift in industry platform flows Specialist platform providers continue to generate net inflows and win business from its competitors Market share net funds flows in dollar value (12 month rolling) 35 $31.2B 30 Sp gd © © © SS SS KDA AS SR SB SS SEHK SF KK SH KW SK oF Traditional institutionals (larg
Slide 12: Significant market opportunity for growth
Significant market opportunity for growth Platform providers by FUA market share! % market share (March 2019) 18.1% 17.5% $128B ig $150B CBA/ Colonial Macquarie Rees Kelels $368 Mercer yz) BT/ Westpac NAB/ MLC [RIE ANZ Wealth Extyst Source: Strategic Insight: Master Trusts, Platforms & Wraps (Mar 20
Slide 13: Australia's premier platform
Australia's premier platform Award-winning technology Investment Trends Platform Rankings by Net Promoter Score enhanced by an exceptional service Competitive Analysis & by users commitment Benchmarking Report (Dec 2018) | + Ranked #1 for overall functionality Platform 1 100% oo 95% + Awarded best n
Slide 14: Strategic initiatives — evolving the revenue model
Strategic initiatives — evolving the revenue model “Software as a service” (SAAS) based subscriptions + extension of FUA & FUM revenue 4 Advice delivery is changing as consumers demand different engagement and service options Netwealth as a trusted technology provider is in a unique position to supp
Slide 15: Financial performance
FY2019 Financial performance 15 | netwealth —FY2019 Results Presentation
Slide 16: Delivered growth across all key financial metrics
Delivered growth across all key financial metrics Total income growth of EBITDA! growth of 22.9% NPAT' growth 23.9% Operating net cash flow 18.6% pre tax! growth of 25.7% $36.0 $988 we M $49.5 M M $29.0 #23 Wa S / gaa a M $33.3 M / FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 1, Underiyin
Slide 17: FY2019 financial results
° . FY2019 commentary (comparisons FY2018) FY201 9 fi n an Cc I al res u Its Revenue increased by $15.5M (18.6%) to $98.8M. * Operating expenses of $46.8M for FY2019, increased by $5.8M FY2018 FY2019 Change %Change (14.2%). Financials! Actual Actual + Employee benefits expense represents 69% of tota
Slide 18: FY2019 key performance metrics
FY2019 key performance metrics FY2018 FY2019 Change %Change FY2019 commentary (comparisons FY2018) Platform statistics Actual Actual Funds Under Administration + FUA of $23.3B increased by $5.4B (29.9%). FUA (cop) 17960 © -23337—= «8377 29.9% . . Fee paying FUA% 616% 61.0% (0.6%) * Fee paying FUA %
Slide 19: Platform revenue / average FUA
Platform revenue / average FUA
Slide 20: Platform revenue composition FY2019
Platform revenue composition FY2019 Non Admin fee income at 43% of platform revenue (increased by 1%). We expect ancillaries to continue to increase as we leverage scale and are successful in the HNW space Platform revenue split Platform revenue split Source: Netwealth 20 | netwealth — FY2019 Result
Slide 21: Demonstrated scalability
Demonstrated scalability Management continue to seek the benefits of scale and deliver cost efficiencies to ensure Netwealth is best placed to deliver on forthcoming opportunities Total operating expenses composition + Employee costs of $32.3M includes inhouse IT development, product development and
Slide 22: Continuing to invest in technology, sales and operations
Continuing to invest in technology, sales and operations Ensuring our infrastructure is secure, stable, flexible and scalable Further 13 headcount added to technology team FY2017 IT Inv Inv Sal, Other FY2018 IT InvSer Inv Sal, Serv Ops Prod & Ops Prod & Mark Mark Source: Netwealth 22 (| netwealth —F
Slide 23: Exceptional cash generation
Exceptional cash generation High correlation between EBITDA and cash flow * Low working capital requirements. 52.6% * Limited capex. * Internal software and product maintenance and enhancement costs expensed. 4 + Better quality of earnings as no risk of impairment of capitalised software development
Slide 24: Summary of business and financial highlights
Summary of business and financial highlights Track record of growth in FUA, FUM, revenue and profitability NPAT of $36.0M (up 23.9%) FUA has increased over $10B over past 2 years $4.3B FUA net inflows FY2019 Continuing to invest for future growth in technology, sales and operations to capitalise on
Slide 25: Outlook
Outlook 25 | netwealth — FY2019 Results Presentation
Slide 26: Outlook
Outlook Investing for future growth and changing market place We expect FUA net inflows in FY2020 in excess of $7B and FUA in excess of $30B at 30 June 2020! driven by: — continued support from our existing advisers (~75% of net inflows each financial year typically come from advisers who were our c
Slide 27: Thank you
Thank you
Slide 28: Q&A
Q&A 28 | netwealth — FY2019 Results Presentation
Slide 29: Appendix and additional information
Appendix and additional information 29 | netwealth — FY2019 Results Presentation
Slide 30: Appendix 1 - Reconciliation from statutory results to underlying results
Appendix 1- Reconciliation from statutory results to underlying results Fy2019 FY2018 Change %Change Reconciliation from statutory results to underlying results Actual Actual EBITDA on continuing operations 508 23.9 2.0 70.2% Add back: IPO transaction costs - 124 (124) (100.0%) Add back: Client rect
Slide 31: Appendix 2 - Reconciliation to underlying net cash flow pre tax
Appendix 2- Reconciliation to underlying net cash flow pre tax Cash flow workings Fy2019 _FY2018 Underlying EBITDA 520 423 Non-cash items in EBITDA 0.2 (0.1) Changes in working capital (1.6) (22) Capital expenditure (07) (0.9) Net (purchases) / sale proceeds on financial investments (0.3) 0.3 Underl
Slide 32: Appendix - Consolidated statement of financial position
Appendix 3 - Consolidated statement of financial position sat 30 June Fr18 _ FY2018 estes A . peste: cots Debt free with $58.5M in cash Cash and cash equivalents, 585 527 . . . Trade and other ecevebes 8580 Including regulatory capital required Other current assets 35 25 ASIC NTA $10 OM Financial as
Slide 33: Netwealth's Board of Directors
Netwealth's Board of Directors Jane Tongs Chairman and Non-Executive Director (joined 2000) + Previously a partner at PwC specialising in the financial services sector Director of Cromwell Property Group, Warakirri Group, CCI Insurance Ltd, Hollard General Insurance and Brighton Grammar Davyd Lewis
Slide 34: Netwealth's experienced Management Team
Netwealth's experienced Management Team Grant Boyle Powerwrap Chief Financial Officer and Joint Company Secretary (joined 2017) + Over 30 years experience in financial services and accounting + Was most recently the CFO of EMR Capital + Has held CFO/COO roles at BlackRock (Aus), Phillip Capital and
Slide 35: Australian superannuation and platform market data
CAGR5.2% A$2.8 trillion ne . . WM Superannuation assets cf (Mar 2019) 1% vas an Jun-12"Jun-4"Jun-16"Jun-18" Mari9"Jun-20 Mastertrust, platform A$859 billion 1% seq 668 690 859 and wrap FUA Strategic Insight (Mar 19) oe A$62.12 billion 2 Managed accounts FUM (Dec-18) N/A Dec-16 Dect? Dec-18 Source: A
Slide 36: API-first, Microservice architecture
API-first, Microservice architecture API-first back-end Example services support web _microservices Old and native client apps Annuiti » Annuities and 3rd party wae interface interfaces. * Application Microservice * Bank Feeds architecture enables: . Fees Business Data » Dynamic capacity —- Identity