Slide 1: 2012 AGM Chairman & MD Speeches
1 Equity Trustees Limited For personal use only 2012 AGM Chairman & MD Speeches Slide 1: 1. Shareholders, ladies and gentlemen, good morning. My name is Tony Killen, I have the honour of being your Chairman. 2. On behalf of my fellow directors, executives and all staff of Equity Trustees it gives me
Slide 2: Speech notes: board introductions
2 9. The Honourable Jeffrey Kennett AC joined the Board in September 2008 and is a member of the Remuneration, Human Resources and Nominations Committee. For personal use only 10. Ms Anne O’Donnell joined the Board in September 2010. Anne is a member of the Audit & Compliance Committee and recently
Slide 3: Speech notes: agenda and annual report
3 you will have an opportunity to meet informally with the directors and management of the company. Slide 4: Annual Report and Shareholder Review For personal use only 16. As you know, we have a two tiered approach to the company’s reporting to shareholders. 17. On the left of the screen is the Shar
Slide 4: Speech notes: overview
4 Slide 6: Overview 21. Despite these conditions the company again managed a small increase in profit, with our two main business units each generating organic revenue For personal use only growth. The acquisition of the aged care advisory business, which I spoke about last year, completed early in
Slide 5: Speech notes: dividends and payout ratio
5 fully underwritten as a capital management initiative. The Managing Director will explain the background to this initiative, and its likely use in future years, during the course of his address. For personal use only Slide 9: Dividend Payout Ratio 25. Dividends have been brought back to within our
Slide 6: Speech notes: share price and the Board
6 29. The EQT share price line on this chart is a relative measure but the share price in real dollar terms has declined significantly since those peaks in 2007 and 2008. This needs, however, to be seen in context. In the middle of 2007 our share price was trading at its peak on a trailing earnings
Slide 7: Speech notes: Board and looking ahead
7 33. The Board has had a busy year, reflecting not only the challenges of the operating environment but also the opportunities opening up for the company, especially in but not limited to the responsible entity space. For personal use only 34. We maintain an agreed timetable for orderly renewal as
Slide 8: Speech notes: outlook and staff thanks
8 appetite and capability to pursue these and build on our current strengths and role. 39. The results for our first quarter are comfortably ahead of last year’s, noting For personal use only that in the same period last year EQT had only 2 months of the aged care business it acquired versus a full
Slide 9: Speech notes: FY2012 overview
9 Slide 15: Overview FY2012 (1) 43. In 2012 we experienced business conditions that were consistent with the trend of the previous few years. It seems likely that we will continue to face For personal use only challenging factors – market volatility, low investor confidence, reduced discretionary in
Slide 10: Speech notes: reorganisation and Project Foundation
10 product or service based activities, each with its own support lines, to an integrated business with centralised support units supporting two revenue units, each solely focussed on the needs of one of our two client groups – private individuals and corporates. For personal use only 48. A second s
Slide 11: Speech notes: private wealth services focus
11 52. By bringing together our range of advice, services and products for individual clients in one business unit, we aim to broaden our relationship with clients by serving them at many stages along their life-cycle of needs, and increase the number of cross-sales and internal referrals. This chan
Slide 12: Speech notes: business update
12 56. Nevertheless we do as a matter of course consider possible new channels or markets to develop our corporate business and will continue to do so in future. For personal use only Slide 18: Business Update 57. The Chairman has already commented on first quarter profit performance compared to the
Slide 13: Speech notes: regulatory capital (CO1140)
13 62. At present the company is also regulated under a separate obligation which overrides CO1140 and does not have the same capital backing obligation attached to it. On our current level of responsible entity business, if CO1140 was applied to us we would need to increase our For personal use onl
Slide 14: Speech notes: CAMAC review and trustee portability
14 66. The second part of this review is the issue of trustee portability. CAMAC has been asked to consider if the law should be changed to allow non- professional co-trustees and beneficiaries of charitable trusts to remove a professional trustee and replace them with another trustee, for reasons F
Slide 15: Speech notes: regulation and summary
15 industry. Again, we are actively engaged to try to ensure that these regulations are carefully thought about before being finally passed. Slide 19: Summary For personal use only 70. The company remains strong financially, with no debt on the balance sheet and healthy cash flow. 71. We expect to c
Slide 16: Speech notes: staff thanks and items of business
16 75. Business life is of course more complex than that. It’s not just about ‘having a job’, but as a company we want our people to have a job they enjoy and value, and a workplace they feel positive about and energised to come to, motivated to do the best possible and contribute to the growth, For
Slide 17: Speech notes: financial statements item
17 80. The Financial Statements have been formally approved by the board, audited and lodged with the ASX and ASIC. Therefore, at today’s meeting the financial statements are final and presented for your consideration. There is no vote required for this item of business. For personal use only 81. I
Slide 18: Speech notes: remuneration report
18 89. Before opening up the matter for discussion I would like to make a number of introductory remarks. Slide 24: Remuneration For personal use only 90. Shareholders may recall that a total pay freeze was applied in 2009. We have instituted another pay freeze this year. Normal pay reviews took eff
Slide 19: Speech notes: remuneration and directors' fees
19 94. The Board believes that the executive and employee remuneration arrangements are appropriately balanced between long and short-term outcomes, with variable incentives for performance meeting and exceeding pre-defined objectives, and an appropriate linkage to For personal use only shareholder
Slide 20: Speech notes: questions on remuneration
20 98. I invite questions from shareholders, proxyholders and authorised representatives of shareholders. For personal use only 99. If you would like to comment or ask a question would you kindly show your meeting admittance card, (blue or yellow), identify yourself, including who you represent, and
Slide 21: Speech notes: proxies and remuneration vote
21 Slide 26: Items of ordinary business – Item 2: Proxies received 102. I would like to inform the meeting that the proxy position at the outset of the meeting is as shown on the screen. For personal use only 103. In accordance with the Notice of Meeting, Key Management Personnel (KMP’s), which incl
Slide 22: Speech notes: election of directors
22 Slide 27: Items of ordinary business – Item 3 Election of Directors 111. In relation to this item of business you would be aware from the Notice of Meeting that in accordance with Rules 48 and 49 of the company’s For personal use only constitution two Directors are retiring and, being eligible, a
Slide 23: Speech notes: re-election vote
23 119. In relation to the Open votes, the directors of EQT hold proxies totalling 240,032 shares, which we intend to vote in Favour of the re-election of Ms Williams. For personal use only <Pause> 120. I would now like to put this resolution to a vote. 121. This will be determined by a show of hand
Slide 24: Speech notes: election of Mr Eley
24 129. If you would like to comment or ask a question would you kindly show your meeting admittance card, (blue or yellow), identify yourself, including who you represent, and be clear and concise. For personal use only 130. Are there any questions or comments? <Pause> 131. Thank you Slide 31: Prox
Slide 25: Speech notes: director fee cap increase
25 Slide 32: Items of ordinary business – Item 4 140. Item 4 is a resolution to approve an increase in the maximum aggregate remuneration for non-executive directors from $750,000 to $900,000. For personal use only Slide 33: Items of ordinary business – Item 4 141. The Board is conscious that there
Slide 26: Speech notes: fee cap proxies
26 145. As was indicated in the explanatory notes accompanying the Notice of Meeting, the Board has resolved not to increase fees paid to directors For personal use only again before July 2014; and in the absence of any major change in the company’s operations, expects no need to consider any furthe
Slide 27: Speech notes: MD long-term incentive
27 <Count> 153. I declare that the resolution is passed. 154. Thank you. For personal use only Slide 35: Items of Special business – Item 5 155. Item 5 is the approval of the Long Term Incentive Award for the Managing Director, Series 2012/13, with a commencement date of 1 July 2012. 156. The direct
Slide 28: Speech notes: LTI proxies and vote
28 Slide 37: Proxies received – Long-term incentive award to MD 163. I would like to inform the meeting that the proxy position at the outset of the meeting is as shown on the screen. For personal use only 164. In accordance with the Notice of Meeting Mr Burns and his respective related parties are
Slide 29: Speech notes: questions and close
29 Slide 38: Agenda 172. I would now like to ask if there are any questions from shareholders present today that have not been addressed thus far. For personal use only <Pause> 173. Thank you Slide 39:Logo 174. That concludes the formal agenda items at today’s AGM 175. As mentioned at the beginning
Slide 30: 2012 Annual General Meeting
For personal use only 2012 Annual General Meeting 26th October 2012
Slide 31: Board of Directors
Board of Directors For personal use only Mr JA (Tony) Killen OAM Mr Robin Burns Mr David Groves Non E xecutive Director C hairman Managing Director Non E xecutive Director Deputy C hairman Ms Alice Williams The Hon Jeffrey Ms Anne O’Donnell Mr Kevin Eley Non Executive Director Kennett AC Non Executi
Slide 32: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns 3. Items of business Mr Tony Killen 4. Questions 3
Slide 33: 2012 Shareholder Review and Annual Report
2012 Shareholder Review and Annual Report For personal use only Equity Trustee s Limited (EQ Full Year Resul ts to 30 June 201 2 T) To obtain an electronic file of the Review and Annual Report, a copy of the presentation pack submitted to the ASX or a copy of this presentation go to… http://www.eqt.
Slide 34: Sharemarket performance
Sharemarket performance. S&P/ASX200 Accum. Index vs. RBA Cash Rate For personal use only 5
Slide 35: Overview – FY2012
Overview – FY2012 For personal use only • Profit growth during challenging business conditions. • Organic revenue growth in both business units. • Acquisition and integration of aged care advisory business completed – EPS positive. • Significant business re-organisation implemented, to intensify foc
Slide 36: Profitability
Profitability For personal use only Net profit after tax up at $8.4m (includes profit on sale of investments) $10.6m $8.1m $8.0m $8.2m $8.4m $8.0m $5.2m 2006 2007 2008 2009 2010 2011 2012 7
Slide 37: Shareholder dividends
Shareholder dividends For personal use only Full year, fully franked dividend 110 110 110 Interim (cps) 100 Final (cps) 85 50 50 50 75 50 40 30 50 20 60 60 60 50 45 45 30 2006 2007 2008 2009 2010 2011 2012 8
Slide 38: Dividend payout ratio
Dividend payout ratio For personal use only Note, change of policy to 70-90% of NPAT (from 60-80%) 120% 113.9% 111.7% 103.1% 100% 87.9% 82.5% 80% 71.5% 71.3% 60% 40% 20% 0% 2006 2007 2008 2009 2010 2011 2012 9 Dividend payout policy range
Slide 39: Annual dividend paid (cents per share)
Annual dividend paid (cents per share) For personal use only Annual dividend paid (cents per share) cents per share 2008 to 2012 120 100 21.40 23.06 12.69 80 60 88.61 86.94 87.31 85.00 40 20 0 2009 2010 2011 2012 10 Maximum dividend possible within payout policy range Dividend paid in excess of maxi
Slide 40: Relative share price performance
Relative share price performance For personal use only 250% S&P/ASX 200 Index S&P/ASX 200 Diversified Financials EQT 200% 150% 100% 25th October 2012 50% 0% -50% -100% 06/2005 06/2006 06/2007 06/2008 06/2009 06/2010 06/2011 06/2012 11
Slide 41: The Board
The Board For personal use only • Kevin Eley joined Board in November – planned step in Board renewal/succession process – and became a member of Audit & Compliance Committee. • Formal responsibility for future director nominations process assigned to the re-named Remuneration, Human Resources & Nom
Slide 42: Looking ahead
Looking ahead For personal use only The business • Business conditions remain subdued: uncertain economic circumstances in major blocs affecting confidence and depressing investor activity. Investment markets still appear volatile and interest rates falling. • Although Australian economy has perform
Slide 43: Mr Robin Burns, Managing Director
For personal use only Mr Robin Burns Managing Director Equity Trustees Limited 14
Slide 44: FY2012 in review
FY2012 in review For personal use only • Organic revenue growth 6% in corporate business unit, 3% in private wealth unit, plus acquisition revenue – total revenue growth of 10%. • Recurring expense growth 7%, plus one-offs and acquired expenses – total expense growth 13%. • Operating margin at 25.6%
Slide 45: FY2012 in review (cont.)
FY2012 in review (cont.) For personal use only • Creation of Private Wealth Services business unit to consolidate all retail client services, including superannuation master trusts. • Creation of single, group-wide structure for all support business units, particularly back-offices and IT. • In July
Slide 46: Equity Trustees organisational structure
Equity Trustees organisational structure For personal use only Managing Director Robin Burns Corporate Private Wealth Chief Financial Operations & Fiduciary & Services Officer & Company Technology Financial Services Geoff Rimmer Secretary Ryan Bessemer Harvey Kalman Terry Ryan Strategic Chief Invest
Slide 47: Business update
Business update For personal use only The business • Three regulatory matters to monitor – ASIC Class Order 11/1140, CAMAC review of philanthropy pricing and trustee ‘portability’, ACNC powers. • Implementation of efficiency project – “Foundation”. • Net inflows strong, new RE appointments, but some
Slide 48: Summary
Summary For personal use only • Business now organised by client type rather than product, with centralised support services. • “Wealth management” sector viewed as major growth opportunity, but subject to continuing regulatory reform impacts and probability of increased competition in some of our l
Slide 49: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns Items of business Mr Tony Killen 4. Questions 20
Slide 50: Items of business
Items of business For personal use only Item 1 To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2012. Item 2 To adopt the remuneration report for year ended 30 June 2012. Item 3 To consider the election of directors. Item 4 To c
Slide 51: Items of ordinary business – Item 1
Items of ordinary business – Item 1 For personal use only Item 1 To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2012. 22
Slide 52: Items of ordinary business – Item 2
Items of ordinary business – Item 2 For personal use only Item 2 To adopt the remuneration report for year ended 30 June 2012. 23
Slide 53: Remuneration
Remuneration For personal use only • Short Term Incentives - 31% of maximum pool paid in 2012 (38% in 2011). • Company-wide pay freeze – no pay reviews in July 2012. • Long Term Incentive allocations each year: Series 1 Earned (ended 30/6/08) Series 2 Partially Earned (ended 30/6/09) Series 3
Slide 54: Tracking remuneration vs DPS
Tracking remuneration vs DPS For personal use only 25 Cumulative growth in Non-Executive Director remuneration Cumulative growth in Top 5 Executive plus MD remuneration Cumulative growth in Dividend per Share (DPS) 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 25
Slide 55: Item 2 – proxies received
Item 2 – proxies received For personal use only To adopt the remuneration report for year ended 30 June 2012 In respect of item 2 of ordinary business, the following proxies have been received: F or Agains t 240,684 2,305,318 (8.58%) Open (held by EQT directors and exercisable) = 220,132 26
Slide 56: Items of ordinary business – Item 3
Items of ordinary business – Item 3 For personal use only Item 3 To consider the election of directors. 27
Slide 57: Item 3(a): re-election of Ms Alice Williams
Items of ordinary business – Item 3 For personal use only Item 3(a): To consider the re-election of Ms Alice Williams 28
Slide 58: Item 3(a) – proxies received
Item 3(a) – proxies received For personal use only To consider the re-election of Ms Alice Williams In respect of item 3(a) of ordinary business, the following proxies have been received: F or Agains t Ms Alic e Williams 3,219,282 5,878 Open (held by EQT directors and exercisable) = 240,032 29
Slide 59: Item 3(b): election of Mr Kevin Eley
Items of ordinary business – Item 3 For personal use only Item 3(b): To consider the election of Mr Kevin Eley 30
Slide 60: Item 3(b) – proxies received
Item 3(b) – proxies received For personal use only To consider the election of Mr Kevin Eley In respect of item 3(b) of ordinary business, the following proxies have been received: F or Agains t Mr K evin E ley 3,191,851 33,309 Open (held by EQT directors and exercisable) = 240,032 31
Slide 61: Items of ordinary business – Item 4
Items of ordinary business – Item 4 For personal use only Item 4: To consider an increase in the maximum aggregate remuneration for non-executive directors from $750,000 to $900,000. 32
Slide 62: Item 4: non-executive director remuneration cap
Item of ordinary business – Item 4 For personal use only • Aggregate non-executive directors remuneration last increased in 2008. • Total remuneration now just under cap, following fee increase in 2011 and appointment of Anne O’Donnell to a subsidiary board. • Therefore no capacity to increase fees
Slide 63: Item 4 – proxies received
Item 4 – proxies received For personal use only To consider an increase in the maximum aggregate remuneration for non-executive directors In respect of item 4 of ordinary business, the following proxies have been received: F or Agains t To consider an increase in the maximum aggregate 2,167,246 443,
Slide 64: Items of special business – Item 5
Items of special business – Item 5 For personal use only Item 5: To consider the grant of a long-term incentive award to Managing Director. 35
Slide 65: Managing Director's LTI 2012/2013 Series
Managing Director’s LTI. 2012/2013 Series For personal use only • Quantum: 60% of TEC ($450k) = $270k • Measures: 50% TSR / 50% EPS • Vesting Scales over 3 years: TSR Less than 50th percentile Nil 50th percentile 50% 75th percentile and above 100% EPS Less than 5% (15% over 3 years) Nil 5%
Slide 66: Item 5 – proxies received
Item 5 – proxies received For personal use only To consider the grant of a long-term incentive award to Managing Director. In respect of item 5 of special business, the following proxies have been received: F or Agains t 2,857,726 394,674 Open (held by EQT directors and exercisable) = 228,557 37
Slide 67: Agenda
Agenda For personal use only 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Robin Burns 3. Items of business Mr Tony Killen • Questions 38
Slide 68: Thank you
For personal use only 39 Thank you