Eqt Holdings Ltd. · ASX:EQT
Eqt — FY2020 Earnings Presentation
47 slides from Eqt's earnings presentation, Aug 19, 2020
Slide 1: Results for Year Ended 30 June 2020
INVESTOR PRESENTATION RESULTS FOR YEAR ENDED 30 JUNE 2020 Mick O'Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer 19 AUGUST 2020
Slide 2: Agenda
AGENDA (1) 2020 IN REVIEW (2) FINANCIALS (3) STRATEGY UPDATE AND OUTLOOK (4) QUESTIONS
Slide 3: 2020 in Review
2020 IN REVIEW
Slide 4: Strong funds growth in challenging environment
STRONG FUNDS GROWTH IN CHALLENGING ENVIRONMENT GROWTH STRATEGY UNDERPINS STEADY FINANCIAL PERFORMANCE ¢ FUMAS up 19% to $101 billion ¢ Substantial investment in capability underpinning success ¢ New wins and pipeline of opportunities provide growth momentum * Capitalising on industry trend for compa
Slide 5: Steady financial performance
STEADY FINANCIAL PERFORMANCE RESULTS DEMONSTRATE OUR RESILIENCE ¢ Revenue up 3.2%, notwithstanding equity market downturn in second half ¢ Net profit before tax $30.3m compared with $31.3m in FY19 ¢ Net profit after tax $19.2m, including provision for longstanding tax matter ¢ Underlying earnings pe
Slide 6: FUMAS exceeds $100B, up 19%
FUMAS EXCEEDS $100B, UP 19% $b 105 100 95 90 85, 80 75 70 65 60 TOTAL EQT FUMAS! 14 86.2 84.9 FY17 FY18 FYI9 ' FUMAS: Funds under management, administration, advice and supervision 2,Annualised Revenue is measured in its first full year and increases in future years 101.0 FY20 @ Major appointments s
Slide 7: Consistent performance
CONSISTENT PERFORMANCE @ $95.4M $21.2M oa TOTAL REVENUE $m NET PROFIT AFTER TAX 95.4 24 95 92.5 90 88.5 22 21.2" as 20 79.9 18 oe 8 16 19.7 fam 4 454 70 12 FYI7 FY18 FYI9 FY20 FYIT FY18 FYI9 FY20 102.7 cents 9Ocents Cents EPS Cents DIVIDENDS 120 102.66* 100 90 100 82 80 71 80 60 60 — om 108.61 40 —
Slide 8: FUMAS on growth trajectory
FUMAS ON GROWTH TRAJECTORY 40.0 35.0 30.0 25.0 20.0 15.0 1 FUMAS: Funds under management, administration, advice and supervision TWS FUMAS! = AMP mHUB24 FY18 FYI9 FY20 + AMP Life and HUB 24 appointments post balance date. 2 FUS: Funds under supervision $b 85 80 75 70 65 60 55 50 CTS FUS? 81.7 mA 68.
Slide 9: Strong growth momentum
STRONG GROWTH MOMENTUM @ DRIVEN BY INCREASING DEMAND FOR INDEPENDENT TRUSTEE MODEL ¢ Superannuation — Appointment as trustee of AIA/CMLA super funds ~$4.5b — Post year-end appointments as trustee for AMP Life super funds (1 July) ~$7.5b and HUB24 super (1 August) ~$7.9b * Corporate Trustee business
Slide 10: Positioned for continuing growth
POSITIONED FOR CONTINUING GROWTH @ ¢ Investing heavily in people capability and technology to support further growth - Key board and management appointments ensure increased depth and capacity to service existing business and new opportunities as they arise - Targeted technology investment - Continu
Slide 11: Delivering for all stakeholders
DELIVERING FOR ALL STAKEHOLDERS TI IMPROVING CLIENT SATISFACTION T3 GROWING SHAREHOLDER VALUE T2 LIFTING EMPLOYEE ENGAGEMENT T4 DEEPENING COMMUNITY IMPACT @ MEASUREMENT: 11 Net promoter score Net loyalty score T2 Engaged and enabled staff T3 Earnings per share growth and FUMAS growth T4 Granting and
Slide 12: T1 - Improving client satisfaction
Tl - IMPROVING CLIENT SATISFACTION NET PROMOTER SCORE (NPS)* NET LOYALTY SCORE (NLS)** 30 35 25 24 30 29 2» 25 20 15 14 15 7 12 12 15 10 4 = }— 10 5 5 5 — i FYI7 FYI8 FYI9 FY20 FYI7 FY18 FYI9 FY20 (5) (5) (10) (10) FYI7 SFY18 =FYI9 = FY20 FYI7 SFY18 SFY19 =FY20 *Net Promoter score — net measure of c
Slide 13: T2 - Solid employee engagement
T2 - SOLID EMPLOYEE ENGAGEMENT ®@ EMPLOYEE ENGAGEMENT EMPLOYEE ENABLEMENT - Employee Engagement and Enablement eee eee eee 70. = °° 7 er maintained above eee eee 7 me Financial Services Norm a 0 tp despite remote working 49 environment. gaa Stil we EMPLOYEE BENEFITS. TRAINING FY16 FYI7 FY18 FY19 FY2
Slide 14: T3 - Growing shareholder value
T3 - GROWING SHAREHOLDER VALUE @ EPS DIVIDENDS C Cents ents 120 100 90 90 00 102-66" 82 * Resilient earnings in | . eo challenging 20 environment 60 — -—I — . oe * Consistent dividend oF | _ for FY20 on FY19 97.27 40 — -—I -—I 40 — 77.00 — — 20 — — = 20 — — = FY17 FY18 FY19 FY20 : FY17 FY18 FY19 FY2
Slide 15: T4 - Deepening community impact
T4 - DEEPENING COMMUNITY IMPACT @ $m GRANTING CHARITABLE TRUSTS BY GRANT TYPE 130 . 1243 * Annual granting program to ~3,000 beneficiaries 110 * 1200 hours of pro bono work 0 * 40 volunteering days 70 50 = Medical Research & Health = Other - Children & Young People = Animals & Environment ris rig Fy
Slide 16: Financials
FINANCIALS
Slide 17: Solid financial performance
SOLID FINANCIAL PERFORMANCE YEAR ENDED 30 JUNE FY19 Total revenue ($m) 92.5 A 3.2 Expenses ($m) 56.5 A 41 Finance costs ($m) 0.8 A 25.0 Depreciation and amortisation ($m) 39 A 35.9 Net profit before tax (NPBT $m) 31.3 Vv (3.3) NPBT margin (%) 33.9 Vv (6.2) Effective tax rate (%) 31.8 22.6 Net prof e
Slide 18: Half on half performance
HALF ON HALF PERFORMANCE ®@ CONSISTENT WITH YEAR-ON-YEAR TREND Slower 2H20 due to: Total revenue ($m) 48.9 46.2 46.3 * Increasing investment in the TWS - STO business Total expenses ($m) 327 314 30.1 + Impact of adverse equity Net profit before tax (NPBT $m) 16.2 15.1 16.2 markets on revenues NPBT m
Slide 19: Solid revenue growth
SOLID REVENUE GROWTH @ Sm REVENUE 97 * 3.2% headline growth in 95 revenue 3 * 3.7% underlying organic revenue growth 1 * Adverse impact from equity market downturn 89 * Growth achieved in all key businesses 87 85 FY19 Fund closure fees Adjusted Revenue Equity market Organic growth FY20 and client ex
Slide 20: Strong operating cash flow
STRONG OPERATING CASH FLOW $m 120 110 100 90 80 70 60 50 40 CASH FLOW 17.0 10.2 1.2 LI 31.0 a ~ LJ 54.4 FYI9 operations borrowings Net cash flow from Proceeds from Redemption from Proceeds from Payment of managed issues of equity dividends investment securities schemes Income tax paid investing/fina
Slide 21: Improved TWS performance
IMPROVED TWS PERFORMANCE @ sm TWS REVENUE ‘ TWS FUMAS' 63.5 * Headline revenue 63.0 up 2.9% 625 * Significant growth in 62.0 superannuation FUS ss from AIA/CMLA appointment 61.0 60.5 60.0 59.5 59.0 FY19 FY20 58.5 ™Superannuation _= Philanthropy FYI9 Equity market Organic growth FY20 impact on FUMAS'
Slide 22: TWS private client business - good growth
TWS PRIVATE CLIENT BUSINESS - GOOD GROWTH @ IMPACTED BY ADVERSE MARKETS IN THE SECOND HALF $b 2.0 18 16 14 1.2 1.0 08 0.6 0.4 0.2 TRADITIONAL TRUSTEE SERVICES FUMAS! : FY18 | Fy19 mm FY20 Estate Testamentary Investment Perpetual Advice Management Trusts Mandates Charitable Trusts Focus on high value
Slide 23: TWS superannuation business - rapid growth
TWS SUPERANNUATION BUSINESS - RAPID GROWTH @ SUPERANNUATION TRUSTEE OFFICE SUPERANNUATION TRUSTEE $b (FUS) “000 OFFICE MEMBER NUMBERS 25 800 25 700 20 600 15 500 400 10 300 200 - FY17 FY18 FY19 FY20 - FY19 FY20 ™MSUPERANNUATION TRUSTEE OFFICE (FUS) =AMP =HUB24 ™MEMBER NUMBERS AMP ®HUB24 Major new ap
Slide 24: Solid CTS performance
SOLID CTS PERFORMANCE Sm CTS REVENUE 32.0 31.5 31.0 30.5 30.0 29.5 29.0 28.5 28.0 FYI9 Fund closure Adjusted Equity market Organic fees and client revenue FY19 impact on growth exit FUS" 1 FUS: Funds under supervision Market impact on FUS links ~50% of CTS revenue to the average MSCI World and ASX20
Slide 25: CTS - Corporate trust and securitisation
CTS - CORPORATE TRUST AND SECURITISATION @ $m CORPORATE TRUST AND Sb CORPORATE TRUST AND SECURITISATION DIVISION SECURITISATION DIVISION . REVENUE Fus! * Strong momentum ina 3.0 3.2 relatively new business 25 30 * Credit licence granted by s 28 ASIC to enhance product 26 suite ° 24 . sy: . . 14 22 *
Slide 26: UK/Ireland building momentum
UK/IRELAND BUILDING MOMENTUM @ NO. CLIENTS NO. FUNDS £b TOTAL AUM 10 2g 2.0 18 8 20 16 14 16 6 1.2 12 1.0 4 = 08 8 06 2 = 04 4 | 0.2 FvI8 Fv19 Fv20 : FYI8 FY19 FY20 FYI8 FYI9 FY20 * Lead indicators of new clients and funds * Alliance Bernstein and River and Mercantile, key new beginning to accelerat
Slide 27: Balance sheet strength
BALANCE SHEET STRENGTH PROVIDES SECURITY AND FLEXIBILITY $m Assets Cash and liquid investments Trade receivables and accrued income Goodwill and intangible assets Other assets Total assets Liabilities Trade payables and other liabilities Borrowings Other non-current liabilities Total liabilities Net
Slide 28: Strong capital position
STRONG CAPITAL POSITION * Capital release of $2-3m associated with the transfer of OVRE clients to Equity Trustees Limited completed * Consolidation of licences has potential to reduce capital requirements by a further $5m in the next 12 months ¢ A 10%* increase in revenue for CTS requires an additi
Slide 29: Summary
SUMMARY @ RESILIENT PERFORMANCE AND GOOD GROWTH MOMENTUM * Strong FUMAS growth in challenging environment ¢ Sound revenue growth despite market downturn ¢ Underlying EPS and NPAT marginally down reflecting adverse markets in the second half * Continuing investment creating a foundation for more sust
Slide 30: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK
Slide 31: > sie
> sie Our vision is to g trusted relatic k after the inter Investors
Slide 32: Our broader purpose
OUR BROADER PURPOSE @ AS AUSTRALIA’S TRUSTED FIDUCIARY SPECIALIST CONTINUING TO SUPPORT CLIENTS AND THE COMMUNITY ¢ Ensured that more than $100 billion in savings held by investors, beneficiaries and members was looked after securely ¢ Managed and cared for more than 2,500 private estates and trusts
Slide 33: Opportunities are considerable as industry restructures
OPPORTUNITIES ARE CONSIDERABLE AS INDUSTRY RESTRUCTURES OUR CORE STRENGTHS OF INDEPENDENCE AND EXPERTISE ARE IN DEMAND ¢ Changing industry environment continues to support independent trustee model - ~99% of all assets in Australia’s superannuation system are overseen by an ‘internal’ trustee: as a
Slide 34: Well positioned to capitalise on opportunities
WELL POSITIONED TO CAPITALISE ON OPPORTUNITIES @ SUBSTANTIAL INVESTMENT IN PEOPLE AND TECHNOLOGY PEOPLE ¢ Building skill base and capability to manage incoming business and support revenue growth ¢ Key hires across management and client-facing roles ¢ Maintaining quality and competitive edge TECHNOL
Slide 35: Investing in technology to support growth
INVESTING IN TECHNOLOGY TO SUPPORT GROWTH @ PROVIDING A FIRST-CLASS CUSTOMER EXPERIENCE AS AUSTRALIA’S LEADING INDEPENDENT TRUSTEE COMPANY FOCUS FOR FY21-22 * Continuing investment in information and cyber security * Increased process digitisation and automation * Investment in critical client manag
Slide 36: Investing in governance and capability
INVESTING INGOVERNANCE AND CAPABILITY SIGNIFICANT INVESTMENT IN BOARDS New appointments to EQT Holdings Board * Carol Schwartz AO (Chair-elect) * Catherine Robson New appointments to licensed RSE Boards + Paul Rogan * George Zielinski New appointments to UK and Ireland Boards * Deirdre O'Reilly * Vi
Slide 37: Enhanced risk management in less certain environment
ENHANCED RISK MANAGEMENT IN LESS CERTAIN ® ENVIRONMENT RISK CULTURE - PROPORTION OF OPERATIONAL RESPONSE POSITIVE RESPONSES’ + All operations working remotely from March 100% * Perth, Brisbane, Sydney, Dublin have now returned to work in line with COVID safe plans 80% . . . . * No material interrupt
Slide 38: TWS private client focus
TWS PRIVATE CLIENT FOCUS ® ESTATE MANAGEMENT ESTATE PLANNING Focus on beneficiary experience Leveraging will bank for growth Create increased cross-sell opportunities Focus on distribution and strategic Launched new delivery model waist partnerships Launched on-line estate planning assistant, combin
Slide 39: TWS superannuation focus
TWS SUPERANNUATION FOCUS ® SPECIALIST, INDEPENDENT TRUSTEE PROPOSITION GAINING MOMENTUM ¢ AMP Life ($7.5b) and HUB24 ($7.9b) superannuation appointments on 1 July and 1 August 2020 respectively boost superannuation FUS to over $26b ¢ Leveraging the strength of our business model and brand as Austral
Slide 40: Supporting Australia through disaster response
SUPPORTING AUSTRALIA THROUGH DISASTER RESPONSE BUSHFIRES RECOVERY * Supported recovery of bushfire-impacted areas through two dedicated trusts established with Business Council of Australia COVID-19 PANDEMIC ¢ Approved almost $3m in charitable grants to more than 70 NFP organisations impacted by COV
Slide 41: Empowering Indigenous communities
EMPOWERING INDIGENOUS COMMUNITIES CONTRIBUTE TO GREATER SOCIAL AND ECONOMIC PARITY BETWEEN OUR FIRST AUSTRALIANS AND THE BROADER COMMUNITY Innovate Reconciliation Action Plan — Endorsed by Reconciliation Australia — Providing trustee and investment management services to Aboriginal and Torres Strait
Slide 42: CTS focus
CTS FOCUS @ PROVIDING INDEPENDENT, SPECIALIST TRUSTEE AND FIDUCIARY SERVICES * Growing existing business - Continuing promotion of core Responsible Entity service to existing and new fund managers — Capitalising on trend for quality fund managers to enter Australian retail market — Using our special
Slide 43: Summary
SUMMARY @ RESILIENT PERFORMANCE AND GOOD GROWTH MOMENTUM * Strong FUMAS growth in challenging environment ¢ Sound revenue growth ¢ Underlying EPS and NPAT marginally down reflecting adverse markets in the second half * Continuing investment creating a foundation for sustainable future growth ¢ New a
Slide 44: Positive outlook
POSITIVE OUTLOOK @ CLEAR GROWTH AGENDA WITH GOOD MOMENTUM * Industry transformation continuing to provide opportunities * Investing in people and technology to ensure we can capitalise on them * Pursuing growth organically and inorganically * Strengths as a respected and capable trustee increasingly
Slide 45: Questions
QUESTIONS
Slide 46: Thank you
THANK YOU
Slide 47: Disclaimer
DISCLAIMER @ EQT Holdings Limited ABN 22 607 797 615. This document was prepared by EQT Holdings Limited and is only provided for information purposes. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. To th