Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — Shareholder Meeting (October 2008)
46 slides from Eqt's shareholder meeting presentation, Oct 31, 2008
Slide 1: Equity Trustees Limited 153rd General Meeting
1 Equity Trustees Limited 153rd General Meeting 31 October 2008
Slide 2: Equity Trustees' 120th year
Equity Trustees’ 120th year 2
Slide 3: Board of Directors
Board of Directors Mr JA (Tony) Killen Mr Peter Williams Mr David Groves Non Executive Director Managing Director Non Executive Director Chairman Vice Chairman Mr John McConnell Mr Barry Jackson Ms Alice Williams The Hon Jeffrey Non Executive Director Non Executive Director Non Executive Director Ke
Slide 4: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen 5. Questions Trusted since 1888 4
Slide 5: Overview – group results
Overview – group results 2008 2007 Net profit (after-tax) $10.6m $8.1m + 29.7% Earnings per share (basic) 133.35¢ 105.18¢ + 26.8% Dividend per share (full-year, fully franked) 110¢ 75¢ + 46.7% Operating margin (pre-tax, excluding gains on the sale of investments) 36.5% 34.3% + 6.2% EQT’s operating m
Slide 6: A strong track record of growth
A strong track record of growth 1 C.A.G.R. 2008 result (2004-2008) Operating revenue $39.2m 23.7% Net profit after tax $10.6m 38.9% Earnings per share 133.35¢ 30.8% Net Assets $52.0m 33.2% 1 C.A.G.R. = Compound Annual Growth Rate. It refers to the annual (year-on-year) growth rate for the 5- year pe
Slide 7: Returns to shareholders
Returns to shareholders Full-year, fully-franked dividend Dividend payout ratio is within the range of 70-90% of operating profit after tax up 46.7% to 110¢ per share 110¢ (including gains on the sale of investments). Final Interim Franking credit balance ($’000) 75¢ 60 7,402 CAGR since 2004 = 38.4%
Slide 8: Total shareholder return
1- Ju l- 2 0 100 200 300 400 500 600 700 800 8- 00 A ug 3 19 -20 -S 0 ep 3 31 -200 -O 3 ct 12 -20 -D 03 ec - 23 200 -Ja 3 EQT n- 20 5- M 0 4 ar 16 -20 -A 04 p 28 r-20 -M 0 ay 4 -2 9- 0 0 Ju 4 20 l-20 -A 0 ug 4 -2 1- 00 O 4 c S&P/ASX 200 Accum 12 t-20 -N 04 ov 24 -20 S&P/ASX 200 Fin Accum -D 04 ec -2
Slide 9: Market impact and volatility
Ju 100 120 140 160 180 200 220 240 l-0 A 3 ug -0 Se 3 p- N 03 ov -0 D 3 ec -0 3 Ja n- 04 M ar -0 A 4 pr -0 Ju 4 n- 04 Ju l-0 A 4 ug -0 O 4 ct -0 Volatility (ASX200) N 4 ov -0 D 4 ec -0 Fe 4 b- 0 M 5 ar -0 M 5 S&P/ASX All Ordinaries Index ay Trusted since 1888 -0 Ju 5 n- 05 Ju MSCI World Index (excl
Slide 10: EQT co-branded fund managers
EQT co-branded fund managers Trusted since 1888 10
Slide 11: Current trading & outlook
Current trading & outlook • Modest increase in revenue in 1st quarter despite depressed market conditions – however revenue is under pressure • Margin contraction as we continue to make responsible investment in our business (people, processes and systems) • Cost control critical (especially discret
Slide 12: Historical market returns
3/ 07 / 3/ 19 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 10 98 / 3/ 19 01 98 / 3/ 19 04 99 / 3/ 19 07 99 / 3/ 19 10 99 / 3/ 19 01 99 / 3/ 20 04 00 / 3/ 20 07 00 1 / 3/ 20 5 year 3 year 1 year 10 00 10 year / 6 month 3 month 3/ 20 01 00 / 3/ 20 04 01 / 3/ 20 07 01 / 3/ 20 10 01 / 3/ 20 0
Slide 13: Strong growth in Australian investments
Strong growth in Australian investments Australia’s investment market has grown at a compound rate of 12.7% per annum since 1990 and is projected to grow by another 66% by 2015: Projected growth of 66% to 2015 2015: Compound annual growth in $1,979b Australian investment funds of 12.7% per annum sin
Slide 14: Australia has the largest investment market in Asia
Australia has the largest investment market in Asia Australia’s investment market is over 45% bigger than the next largest market in the Asian region Australia Hong $1,193b Kong $818b Singapore $814b Japan $714b China $434b South Korea India $330b NZ Taiwan $109b $15b $58b Source: Austrade 2008 Benc
Slide 15: Australia has the 4th largest investment market in the world
Australia has the 4th largest investment market in the world Australia’s retirement income system (compulsory superannuation) is a strong driver of the attractiveness of the Australian market to global investors USA Luxembourg $12,021b $2,685b France $1,990b Australia Ireland $1,193b UK $951b $945b
Slide 16: EQT remains well placed
EQT remains well placed EQT retains a broad exposure to the financial services industry and diverse revenue streams: Institutional Fiduciary Advisor Services Services Services • RE • Trusts • Platforms • RSE • Estates • Financial Planners • Corporate Trust • Philanthropy Super- Wealth Asset annuatio
Slide 17: Looking ahead
Looking ahead Our run has been checked, it has not ended: • Financial services remains a lucrative market in which to compete • EQT remains well placed relative to our competitors • Expenses are being carefully monitored however we will maintain a prudent level of investment in people, processes and
Slide 18: Mr Peter Williams, Managing Director
Mr Peter Williams Managing Director Equity Trustees Limited Trusted since 1888 18
Slide 19: Four business units – sources of revenue
Four business units – sources of revenue Corporate superannuation: Sales & marketing + product management for • Wealthpac EQT co-branded funds • Templetons managed by external • www.super.com.au Super specialists • Freedom of -annuation 21% Funds Choice Management 26% Fund Services 25% Private Clien
Slide 20: Business unit summary (2007/08)
Business unit summary (2007/08) A good spread of operating revenue $38.0m 21% Superannuation $31.3m Revenue growth from all business units Fund Services Funds Management 17% Revenue Private Clients 2008 vs 2007 $23.5m 25% Private Clients +12.0% 25% 19% Funds Mgt +11.6% $18.8m Fund Services +24.6% $1
Slide 21: Private Clients
Private Clients Operating revenue up 12.0% to $10.4m CAGR since 2004 = 19.3% 10.4 9.3 5.9 6.1 5.2 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Strong 2H in Trusts & Estates • Ongoing sales focus • Increase in Portfolio Manager client numbers • Expansion of service offering to Eastern Seab
Slide 22: In-house asset management capability
In-house asset management capability EQT Flagship Fund EQT Charitable Balanced Fund Australian equities team incubated in In-house fund of funds model for tax- 2003. exempt investors Concentrated large cap fund generating a Invests predominantly in EQT co- tax effective income stream branded funds M
Slide 23: Funds Management
Funds Management Operating revenue up 11.6% to $10.0m CAGR since 2004 = 14.1% 10.0 9.0 7.5 5.9 6.4 2004 2005 2006 2007 2008 2008 highlights 2009 Outlook • Positive net inflows in 2H despite market volatility. Total • Leverage market volatility with breadth of investment FUM = $2.37b offering • Incre
Slide 24: Funds Management
Funds Management Increasing share from platform (IDPS) source Retail (external) 11.0% Retail (internal) IDPS 12.4% 21.1% 25.9% 18.0% 67.9% of FUM 33.8% sourced 22.5% 67.9% via IDPS 31.9% 42.7% 61.7% channel vs 12.7% Net inflows lower in 2H but 55.4% 48.2% in 2004 positive (+$17.2m) 34.8% 12.7% +$533
Slide 25: Fund Services
Fund Services Operating revenue up 24.6% to $9.6m Growth in managers and funds Managers Funds CAGR since 2004 = 46.2% 2004 8 ≈ 30 2005 14 ≈ 50 9.6 7.7 2006 19 > 75 5.6 2007 27 > 100 3.1 2.1 2008 32 > 150 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Scalability of model enabling ongoing ex
Slide 26: Superannuation
Superannuation Operating revenue up 50.6% to $7.9m CAGR since 2004 = 29.2% 7.9 5.3 4.4 2.9 3.4 2004 2005 2006 2007 2008 2008 highlights 2009 outlook • Integration of acquired businesses while still growing • Improving distribution for Freedom of Choice model revenue from existing businesses • Ongoin
Slide 27: Information technology upgrade
Information technology upgrade • Contract signed to upgrade to Garradin system • Further integrates key services – asset management, unit registry, fiduciary accounting and tax • Builds on provision for specialised trust & estate requirements • Improvement to on-line component for clients • Expected
Slide 28: Acquisitions update
Acquisitions update • Recent acquisitions successfully integrated • Exploratory merger discussions initiated with Trust Company ceased in May 2008. • EQT remains open to opportunities that are in the best interests of shareholders • Continuing to seek bolt-on acquisitions – focus on fit with superan
Slide 29: Summary
Summary • Record profitability achieved in 2008 • Contribution from all business units • Ongoing improvement in operational efficiency • Will continue to assess acquisitions / strategic opportunities • Impact of market volatility evident in 2H and into 2009 • Business on solid platform - cautious ab
Slide 30: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen 5. Questions Trusted since 1888 30
Slide 31: Items of ordinary business – item 1
Items of ordinary business – item 1 Item 1: To receive and consider the financial statements and the reports of the directors and auditor for the year ended 30 June 2008. Trusted since 1888 31
Slide 32: Items of ordinary business – item 2
Items of ordinary business – item 2 Item 2: To adopt the remuneration report for year ended 30 June 2008. Trusted since 1888 32
Slide 33: Item 2 – proxies received
Item 2 – proxies received To adopt the remuneration report for year ended 30 June 2008 In respect of item 2 of ordinary business, the following proxies have been received: For Against 2,232,130 66,478 Open = 252,094 Trusted since 1888 33
Slide 34: Items of ordinary business – item 3(a)
Items of ordinary business – item 3(a) Item 3(a) – to consider the election of directors Mr David F Groves retires in accordance with Rule 73(1) of the company’s Constitution and, being an eligible person, offers himself for re-election. Trusted since 1888 34
Slide 35: Item 3(a) – proxies received
Item 3(a) – proxies received To consider the re-election of Mr David F Groves In respect of item 3(a) of ordinary business, the following proxies have been received: For Against 2,403,894 989 Open = 251,842 Trusted since 1888 35
Slide 36: Items of ordinary business – item 3(b)
Items of ordinary business – item 3(b) Item 3(b) – to consider the election of directors Mr John R McConnell retires in accordance with Rule 73(1) of the company’s Constitution and, being an eligible person, offers himself for re-election. Trusted since 1888 36
Slide 37: Item 3(b) – proxies received
Item 3(b) – proxies received To consider the re-election of Mr John R McConnell In respect of item 3(b) of ordinary business, the following proxies have been received: For Against 2,383,334 989 Open = 252,842 Trusted since 1888 37
Slide 38: Items of ordinary business – item 3(c)
Items of ordinary business – item 3(c) Item 3(c) – to consider the election of directors The Hon Jeffrey G Kennett AC having been appointed in accordance with Rule 60 of the company’s Constitution since the last Annual General Meeting, retires in accordance with that Rule and, being eligible, offers
Slide 39: Item 3(c) – proxies received
Item 3(c) – proxies received To consider the election of The Hon Jeffrey G Kennett AC In respect of item 3(c) of ordinary business, the following proxies have been received: For Against 2,305,925 15,630 Open = 271,929 Trusted since 1888 39
Slide 40: Items of ordinary business – item 4
Items of ordinary business – item 4 Item 4 To approve an increase in the maximum aggregate remuneration which may be paid to non-executive directors of the Company under Rule 61 of the Constitution from $450,000 per annum to $750,000 per annum, with effect from 1 January 2009. Trusted since 1888 40
Slide 41: Item 4 – proxies received
Item 4 – proxies received To approve an increase in the maximum aggregate remuneration which may be paid to non-executive directors of the company In respect of item 4 of ordinary business, the following proxies have been received: For Against 1,561,821 271,287 Trusted since 1888 41
Slide 42: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen Items of special business Mr Tony Killen 5. Questions Trusted since 1888 42
Slide 43: Items of special business – item 5
Items of special business – item 5 Item 5 – adoption of new Constitution To consider and, if thought fit, to pass the following resolution as a special resolution: “That, the new Constitution contained in the document submitted to this meeting and signed by the Chairman of this meeting for identific
Slide 44: Item 5 – proxies received
Item 5 – proxies received To consider and, if thought fit, pass the adoption of a new Constitution In respect of item 5 of ordinary business, the following proxies have been received: For Against 2,388,098 1,180 Open = 257,165 Trusted since 1888 44
Slide 45: Agenda
Agenda 1. Overview and highlights Mr Tony Killen 2. Operational performance Mr Peter Williams 3. Items of ordinary business Mr Tony Killen 4. Items of special business Mr Tony Killen Questions Trusted since 1888 45
Slide 46: [Trustees
EO [Trustees Trusted since 1888