Australian Ethical Investment Ltd · ASX:AEF
Australian Ethical Investment — Investor Presentation (February 2025)
42 slides from Australian Ethical Investment's investor presentation, Feb 27, 2025
Slide 1: Australian Ethical Investment Ltd FY25 Half Year Results
Australian Ethical Investment Ltd FY25 Halt Year Results John McMurdo (Managing Direc
Slide 2: Overview, Financial Results, Business update, Appendices
01 Overview 1H25 highlights 33 02 Financial Results 1515 03 Business update 2424 04 Appendices 3030
Slide 3: Overview & 1H25 highlights
Overview & 1H25 highlights
Slide 4: Our authenticity
Our authenticity We are an authentic purpose-driven investment manager, focused on investor returns and positive influence. The opportunity The momentum towards a lower carbon world is set to drive global demand for Australia’s renewable energy*. This is an opportunity for our investors and the incr
Slide 5: We have been executing our growth strategy across key pillars
We have been executing our growth strategy across 4 key pillars... Ss 1. Principled investment leadership Deliver superior risk adjusted returns over the long term, and be a powerful influence in ethical investing aN 2. Advocates for a better world Foster a coalition of co-investors in the cause for
Slide 6: 1H25 financial results
1H25 financial results demonstrating strong growth across key metrics... * — Strong revenue growth - organic and inorganic * — Improving operating leverage whilst continuing to strengthen business platform + — Record half-year UPAT: 1H25 uplift of 35% on 1H24, and 14% on 2H24 $11.5m UPAT* up 35% $9.
Slide 7: Our strategy has delivered strong results
Our strategy has delivered strong results... We have grown FUM, revenue and profit both organically and inorganically; we have improved operating leverage whilst also strengthening our business platform for future growth. The quality of our business is being recognised across all areas.... Custodian
Slide 8: Sustainability highlights - Ethical stewardship
Sustainability highlights - Ethical stewardship Promoting Human Rights Paris-Aligned Lending + 30 of our 140 proactive* engagements™ in FY24 As part of our sustained focused on turning off the funding of fossil fuel expansion, we continued to put related to people priorities. pressure on the banks i
Slide 9: And our success is underpinned by our people
And our success is underpinned by our people w\ Purpose-driven, high performance culture Attracts top talent and is led from the top [-“< Workplace Gender Equality (WEGA) Report 2024 Report submitted. Our practices reflected in our current results so aN Gender diversity 50% female representation on
Slide 10: Financial Results
Financial Results
Slide 11: 1H25 Financial Results
1H25 Financial Results Growth strategy has delivered a strong financial result in 1H25, driven by both organic and inorganic growth Key financials ($'000) 1H25 1H24 Movement % Operating Revenue 58,174 48,493 20% Other Income 629 Total Revenue 58,803 48,493 21% Operating expenses (41,504) (36,277) 14
Slide 12: Record FUM of $13.26 billion, up 27% from June 2024
Record FUM of $13.26 billion, up 27% from June 2024, boosted by Altius acquisition, as well as continuing positive organic net flows and investment performance FUM (Sbn) Funds under management (Sbn) Change & Customers 1H25 1H24 (YoY %) Opening FUM 10.44 9.20 14.00 43.26 Super net flows 0.19 0.27 Inv
Slide 13: Positive net flows continue through challenging market cycles
Positive net flows continue through challenging market cycles Net Flows (Sm) 600 500 400 300 200 1H23 2H23 1H24 2H24 © Retail & Wholesale Institutiona| 1H25 Key themes * Over 40 quarters of positive net flows through various market cycles * 1H25 retail and wholesale net flows of $269m driven by supe
Slide 14: 1H25 average revenue margin reflects the change in mix
1H25 average revenue margin reflects the change in mix of underlying funds Revenue margin Average Average revenue FUM (Sbn) margin* 14.0 1.80% 42.0 1.60% 1.40% 10.0 1.20% a © | 400% 60 0.80% 0.60% 4.0 0.40% : } - a _ 0.0 : | 0.00% FYI6 FYI7 FYI8 FYI9 FY20 Fy21 FY24 1H25 j= Average FUM (LHS) =Total a
Slide 15: Revenue of $58.8m, up 21% on 1H24
Revenue of $58.8m, up 21% on 1H24 Revenue ($m) $m 60.0 55.0 50.0 45.0 40.0 35.0 30.0 25.0 20.0 1H24 99 04 FUM Based fees Other TH25, Key themes + 1H25 total revenue increased to $58.8m, up 21% on 1H24 and 13% on 2H24 + Revenue increase driven by: o higher average FUM of 29% on 1H24 o consistent posi
Slide 16: Operating expense growth of 14%
Operating expense growth of 14% Operating Expenses* ($m) Key themes Employee expenses increased 21% mainly due to: o enhanced investment team capability through addition of the Altius team © runrate of prior period hires and inflationary salary increases an 140 FTE** at 31 December 2024, including 1
Slide 17: We retain a strong capital position with no debt
We retain a strong capital position with no debt With $8.9m surplus above regulatory capital Net Tangible Assets* ($m) 25.0 Group Capital Position 1H25 2H24 200 Cash & term deposits 32.6 36.4 Net cash from operating activities** 11.8 15.4 Cashflow conversion %*** 100% >100% 15.0 Debt . . aD Net Asse
Slide 18: Shareholder metrics
Shareholder metrics * Delivering value to shareholders * — Strong growth in key metrics reflecting success of the growth strategy * Record 1H Dividend of 5c * Diluted UPAT EPS attributable to shareholders of 10.11 cps, up 34% on 1H24, * Diluted NPAT EPS attributable to shareholders of 8.22 cps, up 4
Slide 19: Business update
Business update ana | AS se
Slide 20: Strong execution against strategy is delivering results
Strong execution against strategy is delivering results... 1. Principled investment leadership Completed the acquisition of Altius Asset Management providing enhanced fixed income capability and $1.93 billion of FUM Increase in Private Markets investments across technology, housing and aged care, di
Slide 21: Strong momentum to continue into 2H25
Strong momentum to continue into 2H25 Factors impacting underlying 2H25 include: 2H revenue margin expected at ~90bp (subject to product mix) January FUM at $13.54bn increased marketing spend expected in 2H following 1H scale back of campaigns as a result of super administration transition. Full yea
Slide 22: Q&A
Slide 23: Appendices
Appendices Australian Ethical Ay 2
Slide 24: Appendix 1: UPAT and Cost to Income (CTI) reconciliation
Appendix 1: UPAT and Cost to Income (CTI) reconciliation
Slide 25: Appendix 1: UPAT and CTI reconciliation
Appendix 1: UPAT and CTI reconciliation Key financials ($'000) 1H25, 1H24__ Movement % Statutory net profit after tax 9,606 6,316 52% Less: Net Profit attributable to The Foundation Qn) (7) Net profit after tax attributable to shareholders 9,335 6,219 50% Adjustments Other income 7 (629) (cost recov
Slide 26: Appendix 2: Investment Performance
Appendix 2: Investment Performance
Slide 27: 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 .
16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 .
Slide 28: Balanced Accumulation Option (MySuper)
( ~~ Balanced Accumulation Option (MySuper) 1H25 Commentary Since FYTD W 3Y (%pa) 5Y (%pa) 7Y (%pa) 10Y(%pa) inception* + With 2024 bringing political change in (%pa) many countries, major economies Absolute Performance ~ 67% 11.0% 3.5% 6.2% 6.8% 8.9% 61% continued to grow, and Central Banks were ab
Slide 29: Australian Shares Fund
Q ° Australian Shares Fund 1H25 Commentary + The Australian Shares Fund (Retail) reached a milestone in 2024, celebrating its 30th year anniversary. Since inception, the Fund has delivered positive net returns of 9.7% compared to the benchmark of 7.4%. + Ata Fund level, our investments in the Techno
Slide 30: Emerging Companies Fund
an Emerging Companies Fund 1H25 Commentary * The Fund has a small-cap strategy with investments spread across small and microcap companies in Australia and New Zealand. Stock selection in information technology drove most of the Funds’ outperformance over the last 12 months. + We hold overweight in
Slide 31: Australian Shares Fund rolling returns
Australian Shares Fund Rolling 1 Year Net Return 60% 50% 40% 10% -20% Dec: 12 Dec- 13, Dec: 14 Dec-15 Dec: 16 Dec-17 Dec: 18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 ——Australian Share Fund (Wholesale) ——Australian Share Fund - Blended Benchmark Rolling 3 Year Net Return* 24% 20% 16% 12% 8% 4M Dec-
Slide 32: Emerging Companies Fund rolling returns
Emerging Companies Fund Rolling 1 Year Net Return 100% 80% Po -20% we -40% Jun-I6 Dec-16 Jun-I7 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Emerging Companies Fund (Wholesale) = S&P/ASX Small Industrials Rolling 3 Year Net Return* 35% 30%
Slide 33: Appendix 3: Additional FUM & Financial details
Appendix 3: Additional FUM & Financial details
Slide 34: FUM overview
FUM overview Superannuation FUM of $8.96 billion represents 68% of the total AEI Group FUM Total FUM by product = Superannuation ™ Managed Funds - Retail ™ Managed Funds - Wholesale © Mezz = Institutional Total FUM by Asset Class = Domestic Equities (incl NZ) ® International Equity ™Cash = Fixed Inc
Slide 35: FUM by channel
FUM by channel Super FUM by channel Investment Products FUM by channel = Direct © Advised ™ Employer ana | AS ‘Appendices 35
Slide 36: FUM summary - Asset Class & Strategy
FUM summary - Asset Class & Strategy FUM at 31Dec 24 = FUMat 30 Jun 24 Asset Class (Sbn) (bn) Domestic Equities (incl NZ) 455 445 International Equity 3.20 2.50 Cash 0.31 0.20 Fixed Income (domestic) 354 157 Fixed Income (global) 0.53 0.62 Alternatives: 0.52 0.59 Unlisted Property 0.52 0.52 Total 13
Slide 37: FUM summary - Superannuation
FUM summary —- Superannuation 1H25 Market . Current FUM at 30 Jun 24 1H25 Net flows FUM at 31 Dec 24 Fund/option movement / Other Management Fee (Sbn) (Sbn) (Sbn) ($bn) Superannuation Defensive 0.20% 0.18 (0.01) 0.01 0.18 Conservative 0.54% 0.33 0.00 0.02 0.35 Balanced (Accumulation/Pension) 0.64%,
Slide 38: FUM summary - Investment Products
FUM summary - Investment Products A Current Management FUM at 30 June 24 Market movement/ — FUM at 31 Dec 24 Fund/option Net flows ($bn) Fee (Sbn) Other (Sbn) (Sbn) Wholesale Income Fund 0.20% 0.01 0.00 0.00 0.01 Fixed Interest 0.30% 0.03 (0.00) 0.00 0.03 International Sheres 059% 012 0.00 0.02 O14
Slide 39: Growth metrics
Growth metrics Additional metrics AE growth metrics FY24FY23 FY22 1H25-2H241H24 223 4H23 2H22 41H22 FUM - investments ~ ‘etail/wsale (Son) 219 2.00 178 255 219 2.04 2.00 1.87 1.78 210 Average age of current FUM - investments ~ insto (bn) 0.00 0.00, a9 4 0.00 9.00 0.00 0.00 019 0.38 super members is
Slide 40: Financial metrics
Financial metrics Financial metrics FY24 FY23 FY22 1H25 2H24 1H24 2H23 1H23, 2H22 4H22 FUM based revenue (ex performance fee) ($m) 929 75 65.6 547 48.1 44.8 414 33.9 32.8 329 Performance fee ($m) 0.2 : 04 0.0 0.2 : : : 04 : Member based revenue ($m)* 6.0 54 47 27 3.0 3.0 27 2.4 24 23 Other ($m) 13 1
Slide 41: Disclaimer
Disclaimer Australian Ethical Investment Ltd (ABN 47 003 188 930; AFSL No. 229949) (AEl) is the Responsible Entity and Investment Manager of the Australian Ethical Managed Funds. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743) are offered by Australian Ethical Inv
Slide 42: Australian Ethical Investment Ltd
Australian Ethical Investment Ltd FY25 Halt Year Results John McMurdo (Managing Direc
Australian Ethical Investment — Investor Presentation (February 2025) on 6ix