Australian Ethical Investment Ltd · ASX:AEF
Australian Ethical Investment — FY2016 Earnings Presentation
29 slides from Australian Ethical Investment's earnings presentation, Aug 31, 2016
Slide 1: Full Year Results
Full Year Results For personal use only 30 June 2016 Phil Vernon | Managing Director 31 August 2016
Slide 2: Results
For personal use only Results
Slide 3: Highlights
Highlights For personal use only • Strong growth in Superannuation clients (24%) Strong Growth • Net flows (78%) • Funds under Management (33%) • Regular top quartile performance for a number of funds over Strong investment many time periods performance • Australian Shares Fund ranked 1st in Mercer
Slide 4: Financial results
Financial results For personal use only Key Financials (A$000s) FY2016 FY2015 Change (YoY) Revenue 23,039 21,171 8.8% Expenses (20,029) (19,201) (4.3%) Net Profit After Tax 3,010 1,970 53% Property impairment 181 484 63% Provision for remediation 900 0 n/a Tax adjustment (270) 0 n/a Underlying Profi
Slide 5: Balance sheet and capital
Balance sheet and capital For personal use only Balance sheet highlights (A$000s) FY2016 FY2015 Change (YoY) Cash and liquid investments 14,072 12,227 15% Property 1,460 1,725 (15%) Other assets 2,140 3,275 (35%) Total assets 17,672 17,227 3% Financial debt nil nil no change Total liabilities 4,856
Slide 6: FUM and net inflows
FUM and net inflows For personal use only (A$m) FY2016 FY2015 Change (YoY) Opening FUM 1,167 887 32% Super flows 237 132 80% Managed funds 82 47 73% Net flows 319 179 78% Market movement 71 101 (29%) Closing FUM 1,557 1,167 33%
Slide 7: Our strategy
For personal use only Our strategy
Slide 8: Our opportunity
Our opportunity For personal use only Ethically conscious consumers = 10% = 1.5m investors
Slide 9: Seizing our opportunity
Seizing our opportunity For personal use only Grow the ethical investing market We aim to grow the awareness and trust in ethical investing both directly and through our Target market (1.5m) industry associations and intermediaries by: Educating the ethical consumer of the availability of ethical
Slide 10: Growing the ethical investment market
Growing the ethical investment market For personal use only AUM $m 60,000 Core Responsible Investment ($) 51,508 50,000 40,000 31,611 30,000 25,590 20,000 15,202 16,489 10,000 0 2011 2012 2013 2014 2015 Core Responsible Investments (% of TAUM) TAUM % 4.5 4 4 3.5 3 2.6 2.7 2.5 1.8 1.8 2 1.5 1 0.5 0 2
Slide 11: Building our digital community
Building our digital community For personal use only Australian Ethical Facebook Followers 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - Facebook Engagement Rate
Slide 12: Delivering consistent investment performance
Delivering consistent investment performance For personal use only 1 year 3 years 5 years 7 years 10 years MANAGED FUNDS Quartile Quartile Quartile Quartile Quartile Balanced 1st 1st 1st 4th 2nd Australian Shares (retail) 1st 1st 1st 1st 1st Diversified Shares (retail) 1st 1st 1st 3rd 2nd Advocacy (
Slide 13: Ensuring our products are competitive
Ensuring our products are competitive For personal use only Total FUM Total average revenue margin (ARM) 2.50% $2,000 2.00% $1,500 1.50% FUM($m) ARM (%) $1,000 1.00% $500 0.50% $0 0.00% 2012 2013 2014 2015 2016 Average revenue margin is FUM-based revenue as a proportion of average FUM over the year.
Slide 14: High employee engagement
High employee engagement For personal use only Australian Ethical 2016 (77%) Australian Ethical 2015 (73%) Australian Ethical 2014 (78%) Best Employers Benchmark 2016 (82%) Source: Annual engagement survey conducted by AON Hewitt. Best Employer comparison is for Australia and New Zealand
Slide 15: Has lead to strong client satisfaction
Has lead to strong client satisfaction For personal use only Our NPS is one of the highest in the industry (Net promoter score = promoters LESS detractors)
Slide 16: And driven our growth
And driven our growth For personal use only Net Flows FUM($m) ($m) Super Managed Funds Net flows - Super Net flows - Managed Funds $1,800 $400 $1,600 $350 $1,400 $300 $1,200 $250 $1,000 $200 $800 $150 $600 $400 $100 $200 $50 $0 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010
Slide 17: Which has delivered exceptional shareholder returns
Which has delivered exceptional shareholder returns For personal use only Funds Under Management ($m) Revenue ($m) 23.0 21.2 1,557 19.9 16.4 1,167 14.8 892 708 626 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Profit After Tax ($m) Underlying Profit After Tax ($m) 3.0 3.8 2.5 3.1 2.0 2.5 2.0 1.1
Slide 18: Exceptional shareholder returns
Exceptional shareholder returns For personal use only Revenue breakdown ($m) 300 Dividends (cps) 23.0 21.2 19.9 200 200 16.4 13.9 85 60 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Significant items NPAT Basic earnings per share (cps) ROE (%) 282.0 33.0% 248.5 27.8% 190.4 21.5% 15.5% 104.8 40.1
Slide 19: About us
For personal use only About us
Slide 20: Our story
ly = © Our story It's been 30 years since a group of progressive, like-minded friends got together to make money do good - for their clients and the planet. ersonal use The Australian Ethical Retail ‘Superannuation Fund is ‘The community grants program istaunched, 86 1992 1998 Company is formed Comp
Slide 21: Our year in numbers
$23) wy _ $3.00 if (282¢ | earnings | y Our year in numbers #1 “BEST RESPONSIBLE aaa 60, 259 bid $395, =) $41 5Spillion provisioned for | IN FUNDS UNDER 28% mm : 4 = \ MANAGEMENT 4 26,000- / \ {) Super members | | \ 24% increase since FY1 7 OVER RETURN ON EQUITY Top quartile . WIL | for performance
Slide 22: Where we invest
Where we invest For personal use only We invest in areas such as: We avoid companies involved in:
Slide 23: Our commitment to the community
Our commitment to the community 5,000 East Gippsland Rainforest Conservation Management Network Abundant Water The Incredable Tip Shop incre ipShopMackay AGirl & Her World $10,000 Environmental Animal Aid Abroad Defenders Office Inc (NT) , i f Australian Red Cross with the Wildlife Asia proving Roya
Slide 24: Our business model
Our business model For personal use only Vertically-integrated business, offering a broad range of products, across most asset classes accessed through multiple channels Channels Direct Employers Advisers Super and Pension Managed funds Product A$1,041m (67%) A$516m (33%) packaging 13 options 9 prod
Slide 25: Product and channel breakdown
Product and channel breakdown For personal use only Total FUM = $1.6bn $255m 16% $261m 17% $943m 61% Super (Direct) $98m Super (Advised) 6% Managed Funds (Direct) Managed Funds (Advised)
Slide 26: Board of Directors
Board of Directors For personal use only STEVE GIBBS TONY COLE Non-Executive Chair Non-Executive Director Former CEO of ARIA, superfund for federal 17+ years as a Senior Partner in Mercer’s govt. employees Investment Consulting business Former Executive Officer of Australian AO in 1995 for s
Slide 27: Management team
Management team For personal use only DAVID MACRI Chief Investment Officer PHILLIP VERNON Managing Director 17+ years of financial services experience Previously worked at Macquarie Securities, 30+ years of financial services experience Credit Suisse, Mellon and Mercer Previous member of Exe
Slide 28: For personal use only
(eee SB} custiaianethicat ’ * an < 4 G-,'
Slide 29: Disclaimer
Disclaimer For personal use only Australian Ethical Investment Ltd (ABN 47 003 188 930; Australian Financial Services Licence No. 229949) is the Responsible Entity and Investment Manager of the Australian Ethical Managed Investment Funds. Interests in the Australian Ethical Retail Superannuation Fun
Australian Ethical Investment — FY2016 Earnings Presentation on 6ix