Australian Ethical Investment Ltd · ASX:AEF
Australian Ethical Investment — Investor Presentation (February 2020)
24 slides from Australian Ethical Investment's investor presentation, Feb 26, 2020
Slide 1: FY20 Half Year Results
FY20 Half Year Results Steve Gibbs| Chair Should this be Steve and John’s names here? Mark Simons| CFO
Slide 2: Highlights
Highlights
Slide 3: Continuing to invest in growth and sustainability
Continuing to invest in growth Strong investment performance Growth and sustainability Strong growth across the business^ • Operating expenses up 13% Multi award winning investment portfolio Over 43,000 funded super • New website & content management system members 13% launched in October 2019 Manag
Slide 4: Winner of Financial Standard Investment Leadership Awards 2020
Winner of 2 Financial Standard Investment Leadership Awards 2020 ➢ AE Australian Shares Fund was only fund to win in two categories ➢ AE Australian Shares fund won Australian Equities High Performance Award ➢ AE Australian Shares fund won ESG Australian Equities Award ➢ Awards recognises Australian
Slide 5: Financials
australianethical a australianethical
Slide 6: Key themes
Key themes • Increase in revenue driven by continued Revenue 23,322 19,753 18% FUM and member growth partially offset Operating expenses (17,049) (15,154) 13% by full impact of October ‘18 fee Non-operating expenses 66 - - reductions and PYS legislation (3% fee Total expenses (16,983) (15,154) 12% c
Slide 7: FUM ($bn) $3.87bn as at 31 December 2019
FUM ($bn) 3.87 36% 0.25 10% 2.85 1.07 41% 2.60 0.16 0.16 32% 0.81 1.84 0.74 0.01 1.40 $3.87bn as at 31 December 2019 0.01 0.57 2.56 0.48 1.70 1.89 1.26 0.91 2015 2016 2017 2018 2019 Superannuation Managed Funds Institutional Managed Funds As at 31 December of each year wholesale Superannuation 20% 6
Slide 8: Key themes
Key themes • Super membership continues to grow, primarily in the direct channel • 45,946 super members at 31 December Funded super members up 13% 2019 – comprising 43,264 funded members and 2,682 yet to be funded 13% • Funded super members grew 13% since 43,264 8% December 2018 38,338 • Increasing
Slide 9: Key themes
Key themes • Net inflows double that of corresponding period • Super net inflows up 82%* to $199.4m primarily due to higher rollovers, driven by both increased member numbers and increased $341.4 m rollovers per member $295.8 m • SG contributions increased 19%* $208.2 m driven by membership growth a
Slide 10: Key themes
Key themes • Strong FUM based revenue growth underpinned by strong super and managed fund FUM Revenue ($m) growth, partially offset by full impact of October ‘18 fee (0.1) reductions (0.2) • Removal of exit fees and 3% fee 0.6 capping (PYS legislation) has reduced super member based revenue 3.2 23.3
Slide 11: Key themes
Key themes • Increase in operating expenses driven by focused investment in the business as we build a sustainable platform to take advantage of growth opportunities, as well as responding to ongoing regulatory change: ➢ increased employment costs due to new hires, full year impact of FY19 hires and
Slide 12: Key themes
Key themes • Long track record of fee reductions • Continued growth has allowed FUM ($m) ARM % further fee reductions during Average revenue margin the period with super fee reductions implemented for $4,500 m 1.80% three options on 1 December $4,000 m 1.60% • Average revenue margin across products
Slide 13: Key themes
Key themes • Strong balance sheet with 17.7 no debt • Strong cash position 14.8 • Parent holds surplus 12.3 regulatory capital of $5.7m 11.4 10.0 17.4 15.0 13.6 11.9 11.7 2015 2016 2017 2018 2019 Net Assets Cash and cash equivalents * Represents total assets less total liabilities attributable to sh
Slide 14: ** CAGR based on calendar 12 month over 4 years
30.0 3.87 25.0 23.3 2.85 19.8 2.60 20.0 17.4 1.84 15.0 13.3 10.9 1.40 10.0 5.0 0.0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 As at 31 December of each year ^before distributions As at 31 December of each year 4.4 4.4 3.2 3.2 2.3 2.2 2.2 1.5 1.5 0.6 2015 2016 2017 2018 2019 2015 2016 2017 201
Slide 15: Interim Dividend / Final Dividend
3.95 6 5.0 5 2.84 4.0 4 1.93 3.0 3 2.6 2.5 1.36 2 0.51 1 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 *attributable to shareholders for six months ending 31 December Interim Dividend Final Dividend Six months ending 31 December. Historic data restated for share split. ** CAGR based on calenda
Slide 16: Annualised return
Australian Ethical Australian Shares Fund Benchmark* S&P/ASX 300 – Total Return Annualised return Annualised standard deviation (risk) As at 31 December of each period. * Benchmark is composite S&P/ASX Small Industrials Accumulations Index till 12 August 2019 and S&P/ASX 300 Source: Morningstar Dece
Slide 17: Balanced Accumulation Option has achieved its 5-year investment objective
Our default MySuper option, the Balanced Accumulation Option has achieved its 5-year investment objective of meeting CPI +3.5% p.a., whilst also outperforming its peer based benchmark for the medium term Since 6mths 1Y 3Y 5Y 7Y 10Y 20Y Inception* Balanced Accumulation Option ~ 4.0% 16.6% 8.5% 7.5% 8
Slide 18: Award winning Australian Shares Fund continues to outperform the market
Award winning Australian Shares Fund continues to outperform the market over the short, medium, long and very long term. 8.3ppts above the benchmark for the 6 months** 6mths 1Y 3Y 5Y 7Y 10Y 20Y Since Inception Retail* 11.0% 27.0% 9.9% 11.4% 12.9% 10.1% 9.3% 10.1% Benchmark ^^ 3.2% 22.5% 9.8% 10.1% 1
Slide 19: Emerging Companies Fund continuing to show strong outperformance
Emerging Companies Fund continuing to show strong outperformance; 14.0ppts above the benchmark for the 6 months ** 6mths 1Y 3Y Since Inception Retail* 18.4% 44.7% 16.3% 16.8% S&P/ASX Small Industrials Accum Index 4.8% 24.5% 10.4% 11.1% Relative Performance 13.6% 20.2% 5.8% 5.8% Wholesale* 18.8% 45.6
Slide 20: Outlook: strong start to second half
• Strong start to 2nd half with record January net inflows of $112m, and FUM reaching $4.14bn • Strong growth expected to continue as ethical investment moves into the mainstream and more people realise that our approach is achieving excellent returns and delivering social good • Continuing investme
Slide 21: Brand campaign
Brand campaign CLICK ON THE LINK BELOW TO VIEW OUR RECENTLY LAUNCHED BRAND CAMPAIGN
Slide 22: Contacts
Steve Gibbs Chairman sgibbs@australianethical.com.au 0418 102 310 Mark Simons Chief Financial Officer msimons@australianethical.com.au (02) 8276 6274 Melanie Hill Head of Business Performance mhill@australianethical.com.au (02) 8276 6287 Camilla Herring Head of Communications cherring@australianethi
Slide 23: Important information and disclaimer
Australian Ethical Investment Ltd (ABN 47 003 188 930; AFSL No. 229949) (Australian Certain statements in this presentation relate to the future. Such statements involve Ethical) is the Responsible Entity and Investment Manager of the Australian Ethical known and unknown risks and uncertainties and
Slide 24: australianethical
australianethical i a
Australian Ethical Investment — Investor Presentation (February 2020) on 6ix