Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — FY2007 Earnings Presentation
37 slides from Eqt's earnings presentation, 2007
Slide 1: Equity Trustees Limited Full Year Results to 30 June 2007
1 Equity Trustees Limited Full Year Results to 30 June 2007
Slide 2: Equity Trustees
2 Equity Trustees An independent Australian based Trusted since 1888 financial services firm that is increasing its market presence and generating improved returns. Our performance is based upon: ¾ Well developed revenue streams ¾ Clear performance indicators ¾ An established growth strategy
Slide 3: Strategic direction
3 Strategic direction 2004 2005/06 2006/07 Æ Trusted since 1888 Recovery Organic Step Growth Growth Cultural change. Improvement in Improvement in processes profit margins enabling better Development of appropriate through quality business. marketing, merger and efficiency gains. acquisition opportu
Slide 4: Agenda
4 Agenda Themes – 2006/07 Trusted since 1888 Financial performance Operating performance Acquisitions Outlook
Slide 5: Agenda: Themes – 2006/07
5 Agenda 9 Themes – 2006/07 Trusted since 1888 Financial performance Operating performance Acquisitions Outlook
Slide 6: Themes - 2006/07: Record full year result
6 Themes - 2006/07 Record full year result: Trusted since 1888 – Record group operating revenue – Record group operating profit – Record net profit after tax – Record operating margin – Record earnings per share – Record dividend per share
Slide 7: Themes – 2006/07
7 Themes – 2006/07 Growth in all business units Trusted since 1888 Prudent approach to costs Investment in people Eastern seaboard expansion Acquisition activity
Slide 8: Agenda: Financial performance
8 Agenda Themes – 2006/07 Trusted since 1888 9 Financial performance Operating performance Acquisitions Outlook
Slide 9: Overview
9 Overview 2007 2006 Variance Trusted since 1888 (1) Group operating revenue $32.4m $24.8m 30.8% (1) Group operating profit (pre tax) $11.1m $6.6m 67.7% (1) Group operating profit (after tax) $7.7m $4.7m 61.3% Net profit (after tax) $8.1m $5.2m 58.0% Earnings per share (basic) 105.18¢ 69.94¢ 50.4% (
Slide 10: Operating revenue
10 Operating revenue 35 $m 32.4 • Growth across all Trusted since 1888 +30.8% 30 business lines 25 24.8 • Benefiting from past +25.3% investment in 20 19.8 systems, marketing 16.8 +17.9% and people 15 • Positive impact of regulatory changes • Favourable market 10 conditions 5 • Excludes gains from 0
Slide 11: Profitability
11 Profitability Operating profit pre-tax Net profit after-tax ($m) ($m) Trusted since 1888 12 Excludes gains from the sale of investments 9 $m $m 11.1 8.1 8 10 +67.7% 7 +58.0% 8 6 5.2 6.6 5 6 +25.3% +52.9% 4 3.4 4.2 2.8 4 3 +21.4% 3.1 +35.5% 2 2 1 0 0 2004 2005 2006 2007 2004 2005 2006 2007 • Stron
Slide 12: Operating margin
12 Operating margin 50 $m 13 $m 45.0% Operating revenue and Operating profit ($m) and expenses ($m) margin (%) 11.1 40.0% 40 Trusted since 1888 11 32.4 34.3% 35.0% 30 Operating profit 24.8 9 Operating margin 30.0% 19.8 20 16.8 26.8% 7 6.6 25.0% 10 21.2% CAGR = 24.5% 18.5% 20.0% 5 4.2 0 2004 2005 200
Slide 13: Earnings per share
13 Earnings per share 120 ¢ cents per share Weighted average 105.18 Trusted since 1888 number of shares on 100 issue +50.4% 2004 6.18m 80 69.94 2005 6.42m +32.0% 60 52.98 45.52 +16.4% 2006 7.37m* 40 2007 7.74m 20 * Note – a capital raising in late 2005 increased the number of 0 shares on issue by 14
Slide 14: Dividends
14 Dividends 80 ¢ cents per share 75 • Dividend payout ratio is Trusted since 1888 70 at the upper end of the +50.0% stated target range – 60 being 60-80% of Operating Profit after 50 45 50 Final Tax (excl gains on the Interim sale of investments) 40 40 30 • Dividends remain fully 30 30 franked @ 30
Slide 15: Total shareholder return
15 Total shareholder return 800,000 $ $100,000 invested in Equity Trustees shares on 1 July 2003 Trusted since 1888 700,000 would be worth over $650,000 in July 2007. 600,000 This represents an annual return of approximately 61.3% 500,000 Note – total shareholder return incorporates movements in the
Slide 16: Balance sheet
16 Balance sheet 50.0 $m 7 Net assets ($m) Franking credit balance ($m) 45.0 44.4 +22.2% Trusted since 1888 6 5.8 40.0 +36.7% 36.4 5 35.0 4.3 30.0 4 3.6 25.0 21.6 3.1 3 20.0 16.5 15.0 2 10.0 1 5.0 0.0 0 2004 2005 2006 2007 2004 2005 2006 2007 • Investment portfolio reflects unrealised gains (net of
Slide 17: Agenda: Operating performance
17 Agenda Themes – 2006/07 Trusted since 1888 Financial performance 9 Operating performance Acquisitions Outlook
Slide 18: Company overview
18 Company overview Board of Directors Trusted since 1888 Managing Director Private Funds Fund Superannuation Clients Management Services 29% of 29% of 25% of 17% of operating operating operating operating revenue revenue revenue revenue Support Services An uncomplicated structure designed for effic
Slide 19: Eastern seaboard
19 Trusted since 1888 Eastern seaboard The eastern seaboard states account for: • 77.5% of Australia’s population Brisbane • 80.8% of Australia’s population growth 2006 • 77.7% of Australia’s high income earners Sydney 2003 Melbourne 1888 Data sourced from Australian Bureau of Statistics – 2006 Cens
Slide 20: Business unit overview
20 Business unit overview Corporate superannuation: Sales & marketing + product management for Trusted since 1888 • Wealthpac EQT co-branded funds • Templetons managed by external • Freedom of Super- specialists Choice annuation 17% Funds Management 29% Fund Services 25% Private Clients Wealth manag
Slide 21: Funds Management
21 Funds Management A strategic approach to the value chain Trusted since 1888 Investment Trustee / RE Distribution Investor Manager Institutional Provision of RE Alliances with services to a external range of investment Platforms domestic and managers to Sales & marketing international offer EQT co
Slide 22: Funds Management
22 Funds Management 10.0 $m Operating revenue ($m) +20.5% 9.0 9.0 8.0 7.5 • Strong net FUM inflows Trusted since 1888 7.0 6.4 5.9 6.0 5.0 • Focus on IDPS presence 4.0 3.0 • Good relationships with external managers 2.0 1.0 0.0 2004 2005 2006 2007 $m Funds under management ($m) 2,002 • Expanded BDM p
Slide 23: Private Clients
23 Private Clients Generates Asset Fiduciary Trustee Trusted since 1888 investment Management responsibility heritage is returns the basis of relative to Wealth creation all client client risk interaction profile Wealth protection Investment structures Philanthropy Trust structures Estate planning S
Slide 24: Private Clients
24 Private Clients 10.0 $m Operating revenue ($m) 9.3 +54.2% • Impact of fee 9.0 8.0 Trusted since 1888 7.0 5.9 6.1 improvements 6.0 5.2 • Focus on building 5.0 4.0 3.0 portfolio management services – cross-sell 2.0 1.0 0.0 • Consistent growth from 2004 2005 2006 2007 $m Assets under management ($m)
Slide 25: Fund Services
25 Fund Services Responsible Entity service chain Trusted since 1888 Risk Compliance Documents Regulatory Operations management Due diligence Development Offer Management of Fund and plan on manager and approval of documentation. required operation. compliance and Appointment of documentation Daily
Slide 26: Fund Services
26 Fund Services 9.0 $m Operating revenue ($m) 7.7 • Consistently strong 8.0 +37.8% Trusted since 1888 7.0 6.0 5.6 demand for RE 5.0 expertise 4.0 3.1 3.0 2.0 2.1 • Domestic and global 1.0 fund managers 0.0 • > 30 managers 2004 2005 2006 2007 16,000 $m Funds under administration ($m) 14,000 +24.9% 1
Slide 27: Superannuation
27 Superannuation Focus on superannuation services Trusted since 1888 ¾ Wealthpac master-trust (acquired in 2003) ¾ Templetons master-trust (2005) ¾ Freedom of Choice master-trust (2007)
Slide 28: Superannuation
28 Superannuation 6.0 $m Operating revenue ($m) 5.3 +18.5% 5.0 4.4 • Sydney base with Trusted since 1888 4.0 eastern seaboard reach 3.4 2.9 3.0 • Equity Trustees brand 2.0 introduced • Increased resources for 1.0 0.0 2004 2005 2006 2007 sales & marketing 700 $m Funds under management ($m) 635 600 No
Slide 29: Support services
29 Support services • Continuing to invest in the business Trusted since 1888 • Right people, right systems to match business requirements • Marketing activity lifting profile • IT projects delivering scale & efficiency • Process improvement in all business lines
Slide 30: Agenda: Acquisitions
30 Agenda Themes – 2006/07 Trusted since 1888 Financial performance Operating performance 9 Acquisitions Outlook
Slide 31: Acquisitions
31 Acquisitions Strategy Trusted since 1888 • Flexibility in approach • Consistent with existing business lines • Eastern seaboard focus • Clearly measurable returns Capability • Consistent pipeline being reviewed • In-house assessment process • Quick turnaround – deal & integration
Slide 32: Acquisitions: Freedom of Choice
32 Acquisitions Freedom of Choice Trusted since 1888 • Expands superannuation offering • $150m+ in FUM • Integration nearing completion Two small “bolt-ons” for the superannuation business are nearing due diligence
Slide 33: Agenda: Outlook
33 Agenda Themes – 2006/07 Trusted since 1888 Financial performance Operating performance Acquisitions 9 Outlook
Slide 34: Outlook
34 Outlook Continue to push organic growth in all business lines Trusted since 1888 Seeking acquisitions where appropriate Investments in people, systems and process improvements Market movements can affect performance Focus on key KPIs: • Revenue • Margin
Slide 35: Outlook
35 Outlook Market dynamics remain favourable: Trusted since 1888 • Superannuation contributions = growth • “Better Super” = opportunity • Volatility Æ investors seeking safety • Risk management processes are critical • Diversification of revenue streams
Slide 36: Summary
36 Summary Strong year all-around Trusted since 1888 Performance from all business units Margin growth reflects efficiency Step growth under way – eg: FoC Eastern seaboard expansion – Qld office Investment in people and system resources
Slide 37: ‘[rustees
EO ‘[rustees Trusted since 1888