Slide 1: EQT Holdings improved half-year result as business transition nears completion
EQT Holdings Limited 1a UILTY ASX Announcement Anistees 24 February 2017 EQT Holdings Limited — improved half-year result as business transition nears completion ¢ Net profit after tax $7.2m, up 3%* ¢ Strong momentum with underlying revenue growth up 7%* e Funds under management, administration, adv
Slide 2: ASX Announcement: outlook and Equity Trustees Foundation
EQT Holdings Limited 1a EQUITY ASX Announcement nistees Mr O'Brien said EQT seeks to be the leading specialist trustee company in Australia and is well positioned for future consolidation in the industry. “Our independence and clear focus means we can offer financial institutions the opportunity to
Slide 3: EQT Holdings Limited (Equity Trustees) Half-Year Results to 31 December 2016
For personal use only EQT Holdings Limited (Equity Trustees) Investor Presentation Half-Year Results to 31 December 2016 Mick O’Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer 24 February 2017
Slide 4: Agenda
Agenda For personal use only Overview Financials Sandhurst Trustees Estates Acquisition Update Strategy and Outlook Q&A 2
Slide 5: Overview
Overview For personal use only • Solid underlying result # – Underlying revenue growth 6.8% – Net profit after tax (NPAT) up 2.9% to $7.2m – FUMAS* up 26% to $72.5b – Dividend up 3.0% to 35 cents per share • Result reflects business transition – Exit from non-core activities, i.e. funds distribution
Slide 6: Building the platform for growth
Building the platform for growth For personal use only • Equity Trustees undertook a restructure and other initiatives in FY16 to streamline and reposition the business for growth: – Corporate restructure – new holding company – Repricing of superannuation and outsourcing of superannuation administr
Slide 7: Equity Trustees strategy
Equity Trustees strategy For personal use only • Pursuing attractive market opportunities • Clear growth drivers in each business • Equity Trustees aims to be the market leader in chosen parts of the wealth value chain – Corporate Trustee Services • Responsible entity services – Trustee & Wealth Ser
Slide 8: CTS growth highlights
CTS growth highlights For personal use only New fund manager clients include Mittleman, Pentalpha, Mirae, Wellington, Pzena, APSEC, Colonial First State (Infrastructure), GESB, Loftus Peak and Viburnum No. Managers No. Funds CTS FUS* 120 250 70 $b 60 100 200 50 80 150 40 60 30 100 40 20 50 20 10 - 0
Slide 9: TWS growth highlights
TWS growth highlights For personal use only Improving momentum in both traditional and emerging trustee services Traditional Trustee Services Emerging Trustee Services (FUMAS*) (FUMAS*) 1.8 $b 1.6 0.25 $b 1.4 0.20 1.2 1.0 0.15 0.8 0.10 0.6 0.4 0.05 0.2 0.00 0.0 Indigenous Trusts Living Donors Compen
Slide 10: Financials
For personal use only Financials Philip Gentry Chief Financial Officer and Chief Operating Officer
Slide 11: Group financial performance
Group financial performance For personal use only 1H17 1H16 1H17 v 1H16 $m $m % • Transition year with solid Revenue 39.5 42.6 (7.3) underlying revenue growth Operating Expenses 27.0 28.5 (5.3) offset by exit from funds OPBT 12.5 14.1 (11.3) distribution and upgrade of Projects 1.2 3.1 (61.3) supera
Slide 12: Solid underlying revenue growth
Solid underlying revenue growth For personal use only Organic growth partially offsetting exit of funds distribution and superannuation upgrade Revenue $m 45 40 42.6 2.4 0.5 39.5 35 37.0 3.7 30 25 20 15 10 5 0 1H16 Impact of Exiting Superannuation TWS ASX 200 Adjusted Revenue 1H17 CTS Funds Upgrade
Slide 13: Continuing strong growth in funds
Continuing strong growth in funds For personal use only Strong growth in funds under management, administration, advice and supervision TWS FUMAS* CTS FUS** Total EQT FUMAS* 10 70 80 $b $b $b 9 60 70 8 60 7 50 6 50 40 5 40 30 4 30 3 20 20 2 10 10 1 - - - 1H15 1H16 1H17 1H15 1H16 1H17 1H15 1H16 1H17
Slide 14: TWS performance
TWS performance For personal use only Organic growth to offset superannuation restructure and repricing over next 6 – 12 months TWS OPBT* TWS FUMAS** $m 8 7 $b 10 7.2 9.0 9 8.2 1.2 6 6.1 8 0.5 0.5 7 3.1 3.0 5 5.1 2.6 6 4 5 3 4 1.1 1.2 3 1.2 1.3 2 2 2.3 2.3 1 1 0 0 1H16 1H17 1H16 Super ASX 200 Adjust
Slide 15: CTS performance
CTS performance For personal use only Strong organic growth largely offsets exit of funds distribution CTS OPBT* CTS FUS* $m 7 70 $b 63.5 6 6.3 60 12.2 $62.1 6.1 50 49.4 5 15.8 9.4 $49.4 40 1.8 4.5 10.9 4 25.2 30 3 21.7 20 2 10 3.7 3.0 4.4 6.6 1 - 1H16 1H17 0 Other (Property, Multi-Strategy, Alterna
Slide 16: Consistent growth track record
Consistent growth track record For personal use only Expect growth momentum to replace PIMCO revenue within 6 – 12 months CTS FUS 70 63.5 • $63.5b FUS* 27% CAGR (34% excl PIMCO) 60 • Focus on core fiduciary 49.4 50 • FUS* 40 40.3 – RE / Trustee $62.6b 32.5 53.2 30 – Corporate Trust $0.9b 40.0 24.7 2
Slide 17: Balance sheet strength provides security and flexibility
Balance sheet strength provides security and flexibility For personal use only Consolidated Balance Sheet Summary 31-Dec-16 30-Jun-16 31-Dec-15 • Low gearing $m $m $m (Debt to Equity 5%) Assets Cash and cash equivalents 52.2 48.7 26.4 Trade receivables and accrued income • Surplus borrowing 20.4 16.
Slide 18: Strong capital position
Strong capital position For personal use only • Comfortably meets regulatory capital requirements • Capital requirement to be held 50% in cash and 100% liquid assets (ASIC requirement) – Buffer also held in liquid assets • Additional streamlining of structures and consolidation of licences has the p
Slide 19: Key initiatives on track
Key initiatives on track For personal use only Projects Costs ($m) 1H17 2H16 1H16 • Corporate Restructure and Business Assurance Project 0.7 0.7 1.2 Superannuation - - Operating Model Review 1.3 Upgrade complete - • Business Assurance Corporate Restructure 0.2 0.7 Project complete - Superannuation R
Slide 20: Operating Model Review exceeding expectations
Operating Model Review exceeding expectations For personal use only • Group wide Operating Model Review announced in June 2016 is delivering – Annualised productivity gains of $2.7m, to be realised by FY18 – One-off costs of ~$1.3m offset by benefits generated in FY17 – Phase 2 now underway – expect
Slide 21: Summary
Summary For personal use only • One-off key initiatives completed ‒ Strengthening corporate structure, risk management framework and upgrading superannuation business • Strong organic growth momentum • Expect organic growth and productivity improvements over FY17 to significantly offset earnings imp
Slide 22: Sandhurst Trustees' Estates Acquisition Update
For personal use only Sandhurst Trustees’ Estates Acquisition Update Mick O’Brien Managing Director
Slide 23: Growing Equity Trustees Trusts and Estates business
Growing Equity Trustees Trusts and Estates business For personal use only • Acquisition of Sandhurst Trustees’ Estates business announced on 19 December • Equity Trustees’ second acquisition of a bank-owned trustee business • Equity Trustees commitment to the values of customer service and care mean
Slide 24: Overview of Sandhurst Trustees' Estates
Overview of Sandhurst Trustees’ Estates For personal use only Estate Planning 141 Perpetual and Deceased Estates Ongoing Trust Clients Ongoing and 25,000 Perpetual Trusts WILLS Agency and Power of Attorney $140m Common Fund FUM 22
Slide 25: Key terms of acquisition
Key terms of acquisition For personal use only • Purchase price $5.0m • Conditional on ASIC approval - targeting March 2017 • 4 month transition plan post-completion • Low execution risk – Utilising EQT’s internal expertise to integrate – Familiarity with Sandhurst Trustees’ estates legacy systems –
Slide 26: Earnings per share accretive in FY18
Earnings per share accretive in FY18 For personal use only • Purchase price will be funded out of existing liquidity and funding arrangements • No material impact on capital requirements • Impact in FY18: – Expected Revenue ~$2m+ p.a. – Increased EBITDA ~$1m+ p.a. 24
Slide 27: Strategy update and outlook
For personal use only Strategy update and outlook Mick O’Brien Managing Director
Slide 28: Equity Trustees strategy
Equity Trustees strategy For personal use only • Equity Trustees aims to be the market leader in key parts of the wealth value chain – Wealth protection – acting as responsible entity, superannuation trustee, executor, powers of attorney and services in funds management advice and custody – Wealth t
Slide 29: Attractive market opportunities
Attractive market opportunities For personal use only TWS Corporate TWS Private Clients Superannuation Trustee Services Demographic changes due to ageing Growth in mandated superannuation population “~500,000 currently over age 85 “1.1x GDP to peak at 1.6x GDP in 20 years”3 - will double in 20 years
Slide 30: Independent, unconflicted model offers significant business opportunities
Independent, unconflicted model offers significant business opportunities For personal use only • Equity Trustees’ model is to Key distribution relationships provide specialist trustee and related services to other financial institutions • We offer financial institutions the opportunity to provide t
Slide 31: TWS growth focus
TWS growth focus For personal use only • Preferred choice by advisers for their best clients requiring the highest level of trust • The delivery of client centric services that enable cross referrals to all parts of our business • Grow our long-term, enduring revenue base through targeted initiative
Slide 32: Superannuation growth initiatives
Superannuation growth initiatives For personal use only • Consolidate our position as the leading brand for independent superannuation trustee services • Increase our market share of the Trustee–for–Partner market • Successfully won and signed a new fund (~ $500m) subject to conditions • Further pro
Slide 33: CTS continues to have substantial growth opportunities
CTS continues to have substantial growth opportunities For personal use only Growth opportunity Strategy • Attribution Managed Investment Trust (AMIT) Collective New product Investment Vehicle (CIV): provide new fund structuring designs opportunities in the Australian market for existing clients • L
Slide 34: Six key drivers
Six key drivers For personal use only T1 Increase total FUMAS* $72.5b at 31 Dec 16 T2 Growing sales value Under development EPS T3 Enhancing operating margin 31.6% at 31 Dec 16 growth and T4 Improve customer satisfaction Surveying in Q2 ROE T5 Lifting employee engagement 55% at Jan 17 T6 Deepening c
Slide 35: Conclusion and outlook
Conclusion and outlook For personal use only • Attractive industry fundamentals • Good organic growth in underlying revenue • Capitalising on recent investments – One-off Corporate Restructure, Superannuation Upgrade – Risk and Assurance Upgrade – Operating Model Review achieved $2.7m in annualised
Slide 36: Q&A
O&A Ajuo esn jeuosied 1¢ n Fer. oO =) A eo = -
Slide 37: Disclaimer
Disclaimer For personal use only 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 thi