Slide 1: For personal use only
For personal use only
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 26 October 2018, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be relied upon as advice to investor
Slide 3: Our purpose is to enable people to see wealth differently
>» Ourpurposeis = © _ To enable people to _ see wealth differently _ and discover a brighter future FOr p
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 Investor Presentation Our strategy 6
Slide 5: Business and financial highlights
Business and — financial highlights For personal use o 5 | netwealth —_ Investor Presentation
Slide 6: Continued strong growth in Q1 FY2019
Continued strong growth in Q1 FY2019 $19.3B FUA $3.1B FUM 2,271 al al $1.1B $0.2B #1 platform” PCP-Prior comparative period being Sep 2017 quarter (1) Investment Trends~ December 2017 Platform Competitive Analysis and Benchmarking Report & May 2018 Planner technology report 6 | netwealth —_Investor
Slide 7: FY2018 Pro forma financial highlights
FY2018 Pro forma financial highlights FY2018 NPAT growth was $12.2 million (an increase of 72.7%) in the year 4) | es) es all all all all $83.3M $42.3M° 50.8%" $29.0M" Revenue EBITDA EBITDA MARGIN % NPAT = & KX & $39 4M 11.9 cents” 5.38 cents 518 cents Operating Net Cash Flow Pre Tax EPS Dividend Pe
Slide 8: Continuing growth momentum
Continuing growth momentum Australias largest specialist platform provider se Russell 22m = transition of Financial Intermediaries = One off client transition 1,504 Russell transition of » 449 Jimi Spié Ost MetT ttt St? OseNT Mirth nt _ —_ 12mthtoSep-17 | 12mthto Sep-18 unis Junl6 Jun? Jun, Financia
Slide 9: Netwealth has the highest netflows
Netwealth has the highest netflows Platform providers by FUA market Platform provider net funds flows % Platform providers net funds flow?) % share” % market share (June 2018) market share (12 months to June 2018) market share (quarter to June 2018) 18.5% #9 #1 | % of net flows >15x market share #1
Slide 10: Comprehensive range of products and services
Comprehensive range of products and services Servicing different sectors of the market Superannuation Wrap Managed Investment Schemes Accelerator Plus products Accelerator Core products 10 | netwealth Investor Presentation Global Specialist Managed Series Accounts Managed Funds xWrap pro and Annuiti
Slide 11: For personal use only
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Slide 13: Accelerating forces reshaping financial advice
Accelerating forces reshaping financial advice The age of the customer Customers compare us to Netflix and Amazon, not other financial intermediaries and as such their expectations continually increase. 13 | netwealth Investor Presentation Proliferation of advice technologies New low-cost cloud base
Slide 14: A focus on usability
A focus on usability Ease of use = efficiency and experience oo0o0a0000 14 | netwealth Investor Presentation $437,789.45 WRAP123456 (123456) ByAsset Class ~ Cash account $15,180.32 Australian Equities $119,739.06 National Australia Bank L... NAB Price Value $29.83, $105,240.24 Ramsay Health Care Ltd
Slide 15: Household wealth
Household wealth ‘+ suck | TnsactonMatoy Eemel Tenses Pending Maretane John Smith (18721) ~ ‘ever 2018 Now 514970120 + Yap Serves satvaseton | AscetPuchase +) or | Cheese ae Off platform external assets (Xwrap) Please select your banking institution Q crypt dearen here ANZ®, DISEID Ooms BOOK —_%.. F
Slide 16: Enhanced reporting
Enhanced reporting New design and additional features for HNW segment Portfolio Performance -International equities & foreign currency | netweatth eset Refermance Pati Assetatoctton a on convinn Rese neha Chr are—_—tent oN Sees = = cs a2 oe — = = am et ae a oy aes ron ee ———_ ee f a an ane wae Ponto
Slide 17: Ecosystems
Ecosystems lb al) © myprosperity Qo 2 Class Ig Ne i sis mess ddviserlogic ~ os netwealth RightSignature Inifices- cat TIP RANKS: MORNINGSTAR Bosse © PROVISO = “¢midwinter SSSuBe 17 ‘| netwealth —_ Investor Presentation Taw
Slide 18: Advanced tech for advice delivery and client engagement
Advanced tech for advice delivery and client engagement A focus on usability Data and Al Automated investment Ecosystems and experience services 18 | netwealth — Investor Presentation [ nw
Slide 19: Financial performance
Financial SS performance For personal use o 19 | netwealth Investor Presentation
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Slide 21: For personal use only
• For personal use only • • • • • NPAT margin 27.5% 34.9% 7.4% • • •
Slide 22: Surpassed the FY2018 pro forma prospectus forecast
Surpassed the FY2018 pro forma prospectus forecast .and delivered growth across all key financial metrics Total Income EBITDA NPAT Operating net cash flow pre above prospectus above prospectus above prospectus tax above prospectus by $1.7M (+2.1%) by $2.4M (+5.9%) by $1.7M (+6.3%) by $0.7M (+1.9%) 8
Slide 23: Revenue growth analysis
Revenue growth analysis Focused on increasing or maintaining Platform Revenue per account and profitable revenue growth rather than bps Revenue Growth Rate 26.5% CAGR 83.3M 49.0M 41.1M FY2015 FY2016 FY2017 FY2018 m Total revenue Source: Netwealth CAGR: Compound annual growth rate 23 | netwealth —_ I
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Slide 25: Benefits of scale
Benefits of scale Cost as a % of Income continued to reduce in FY2018 Operating expenses composition + Employee costs was 70% of total operating expenses (includes inhouse IT development, product development and client service teams). * Rent and occupancy increased by $0.2M to $1.7M in FY2018 as an
Slide 26: Despite FUA growth, limited headcount increases
Despite FUA growth, limited Headcount increases Continue to invest in technology Total headcount increase in FY2018 was 28 Headcount by function FY2018 _ Legal, risk and Executive & compliance directors 2% Finance, HR& = 5% Investor office services services 9% 29% Sales, product and marketing 13% S
Slide 27: Exceptional cash generation
Exceptional cash generation High correlation between EBITDA and cash flow 41.6% % 36.6% 40.7% $24.9 |$24.9 FY2015 FY2016 FY2017 FY2018 mame EBITDA —e— EBITDA margin mame Operating net cash flows before taxation —------- Cash conversion ratio Source: Netwealth (1) Includes sales proceeds on investmen
Slide 28: Recap of financial highlights & operating update
Recap of financial highlights & operating update Track record of growth Exceptional cash in FUA, FUM, revenue EBITDA Margin > 50% generation and profitability Debt free Highly scalable cost base 28 Investor Presentation Tr
Slide 29: FY2019 Outlook
_ FY2019 Outlook For personal use onl 29 | netwealth Investor Presentation
Slide 30: Superannuation and platform market size
A$2.7 trillion 1% Superannuation assets P ASFA (Aug-18) ist Jun-ié Jun-t6 Jun-18Jun-20 Mastertrust, platform A$847 billion 10% sig 998 608 692 767 847 and wrap FUA Strategic Insight (Jun-18) 436 431 Managed accounts FUM $97 billion N/A (Dec-17) : 2015-2016 2017 "2018 "20192020 Source: APRA Superannu
Slide 31: Shift in platform flows to specialist providers accelerating
Shift in platform flows to specialist providers accelerating Market share percentage of net funds flows (12 month rolling) 100.0% + Net funds flow for the specialist platform providers (SPPs) 90.0% 5 aS (70.5%) exceeded the net funds flows for institutional 30.0% providers (36.6%) for the first time
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Slide 35: Netwealth highlights
Netwealth highlights Attractive industry Significant scope for Track record of fundamentals and a . . ane growth in a large exceptional growth, significant structural cae a, ee addressable market from profitability and cash shift from institutions 2.1% market share eneration towards SPP’s ue 8 Divid
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Slide 38: Questions
For personal use only Questions 38 | netwealth Investor Presentation