Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — Shareholder Meeting (October 2014)
69 slides from Eqt's shareholder meeting presentation, Oct 31, 2014
Slide 1: 2014 AGM Address to Shareholders
1 Equity Trustees Limited 2014 AGM Chairman and Managing Director For personal use only Address to Shareholders Slide 1: 2014 Annual General Meeting 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 direct
Slide 2: Board of Directors and Agenda
2 10. Ms Anne O’Donnell joined the Board in September 2010. Anne is a member of the Audit & Compliance Committee. 11. Mr Kevin Eley joined the Board in November 2011. Kevin is Chair of the Board For personal use only Investment Committee and a member of the Audit & Compliance Committee. 12. Mr Mick
Slide 3: Overview FY2014
3 Slide 4: Overview – FY 2014 16. The 2014 year was a very significant and active one for your company. There are three major matters that lead me to say that: the ultimately unsuccessful bid for The For personal use only Trust Company; the successful bid for ANZ Trustees; and continuing strong grow
Slide 4: Acquisition Well Supported by the Market
4 Slide 5: Acquisition Well Supported by the Market 19. As you can see from this chart, Equity Trustees’ share price has performed relatively well this calendar year and since the raising, compared to the broader market For personal use only movement. Although the market is at a similar level since
Slide 5: Shareholder Dividends
5 Slide 8: Shareholder Dividends 23. As a result of the good lift in operating performance, strong balance sheet and our confidence in the company’s prospects, the Board declared a final dividend of 48 cents per share (cps), taking the total for the year to 94 cps, compared to 92 cps for For persona
Slide 6: The Board
6 Slide 10: The Board 27. I mentioned earlier that Mick O’Brien joined the board in August this year. This means that we have now appointed new directors in each of the years 2007, 2008, For personal use only 2010, 2011 and 2014, as part of a planned orderly board renewal process. This process was p
Slide 7: Looking Ahead
7 Slide 12: Looking Ahead 30. Locally, our industry sector is also facing some challenges. The financial planning and life insurance sectors have each been the subject of considerable negative For personal use only media or regulatory attention in recent months, and this undoubtedly also affects inv
Slide 8: Managing Director Presentation
8 Slide 14: Mr. Robin Burns, Managing Director Equity Trustees 2014 AGM Managing Director Presentation Mr Robin Burns takes the lectern. For personal use only Slide 15: Agenda 36. Thank you Chairman. Slide 16: Overview FY2014 – Building for Long Term Success 37. The Shareholder Review, the Annual Re
Slide 9: Operating margin and efficiency
9 41. The operating margin declined slightly, from 27.7% to 27.1%, reflecting the increased costs of doing business in a heavily regulated environment and our investment in growth projects and initiatives. For personal use only 42. The large project to pursue increased business efficiency through ra
Slide 10: Management and Business Update
10 45. Three of these names are new. Amanda Noble joined in May this year to head up the Enterprise Risk unit. Sonya Clancy joined just a few weeks ago as Executive General Manager, Human Resources. Both Amanda and Sonya have extensive For personal use only prior experience in financial services and
Slide 11: ANZ Trustees integration
11 50. This strategic focus remains in place and we are in discussion with, or have actually received referrals from other external partners in recent months. We believe that there is the opportunity to expand this distribution initiative to our aged care advisory For personal use only business as w
Slide 12: Summary
12 53. A change in direction from when I spoke to you at this time last year is that we have wound back, for the present, the initiative to develop Equity Trustees as an institutional funds management business in its own right in the Australian equities For personal use only asset class. The transit
Slide 13: Items of Business
13 57. We are now positioning the company in the market as the largest independent listed company with a trustee focus. The current and likely future developments in the broad wealth services or wealth management sector will, I believe, only reinforce the For personal use only value of that market p
Slide 14: Item 1 Financial Statements
14 63. I therefore invite questions from shareholders, proxy holders and authorised representatives of shareholders. 64. 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 a
Slide 15: Remuneration
15 Slide 24: Remuneration 71. In addition to the strategically significant acquisition and capital raising successes, the company’s operating performance improved substantially during 2014. As a For personal use only result a number of incentive targets and objectives were achieved and triggered the
Slide 16: Tracking Remuneration vs Dividends
16 Slide 25: Tracking Remuneration vs Dividends 75. I have used this chart before to illustrate the relationship between remuneration paid to the top executives in the company, the fees paid to directors and dividends paid For personal use only to shareholders, using 2004 as the base year. The chart
Slide 17: Remuneration report vote
17 83. In relation to Open votes, the Directors of Equity Trustees hold exercisable proxies totalling 85,331 shares which we intend to vote in favour of the resolution. For personal use only <Pause> 84. I would now like to put this resolution to a vote. Please note this is a non-binding vote, howeve
Slide 18: Item 3 Election of Directors
18 92. The Board has also endorsed the election of Mick O’Brien at this AGM. We invited Mick to join the Equity Trustees Board a few months ago as part of our process of Board renewal and planning for the future. He has stepped into the role quickly and For personal use only effectively. His extensi
Slide 19: Re-election of Mr Groves
19 <Pause> 101. I would now like to put this resolution to a vote. 102. This will be determined by a show of hands. Therefore, if you wish to vote, when For personal use only asked to do so, please raise your hand showing your blue card. Note that visitors with a white card or joint holders with a y
Slide 20: Re-election of Mr Kennett
20 113. In relation to the Open votes, the directors of Equity Trustees hold proxies totalling 316,416 shares, which we intend to vote in favour of the re-election of Mr Kennett. For personal use only <Pause> 114. I would now like to put this resolution to a vote. 115. This will be determined by a s
Slide 21: Election of Mr O'Brien
21 125. Are there any questions or comments? <Pause> For personal use only 126. Thank you Slide 33: Proxies Received – Election of Mr M O’Brien 127. I would like to inform the meeting that the proxy position at the outset of the meeting is as shown on the screen. 128. In relation to the Open votes,
Slide 22: Item 4 Director fee cap
22 Slide 34: Items of Special Business – Item 4 134. Item 4 is the resolution to increase the maximum aggregate remuneration of Non- Executive Directors from $900,000 per annum to $1,250,000 per annum, to take For personal use only effect from 1 January next year. This is under Rule 50 of the compan
Slide 23: Item 4 vote
23 <Pause> 142. I would now like to put this resolution to a vote. For personal use only 143. This will be determined by a show of hands. Therefore, if you wish to vote, when asked to do so, please raise your hand showing your blue card. Note that visitors with a white card or joint holders with a y
Slide 24: Managing Director's LTI 2014/15 Series
24 Slide 37: Managing Director’s LTI 2014/15 Series 149. The quantum of the award is the same, viz a possible 60% of TEC. The performance measures – 50% relative TSR and 50% EPS – and the qualifying criteria, are also For personal use only the same as last year. This means that the maximum number of
Slide 25: LTI vote
25 <Pause> 158. I would now like to put this resolution to a vote. 159. This will be determined by a show of hands. Therefore, if you wish to vote, when For personal use only asked to do so, please raise your hand showing your blue card. Note that visitors with a white card or joint holders with a y
Slide 26: Item 6 Placement ratification
26 <Pause> 168. Thank you Slide 40: Proxies Received – Item 6 For personal use only 169. I would like to inform the meeting that the proxy position at the outset of the meeting is as shown on the screen. 170. In relation to the Open votes, the directors of Equity Trustees hold exercisable proxies to
Slide 27: Thank you
27 Slide 42: Thank you 178. That concludes the formal agenda items at today’s AGM. 179. There is one final item I’d like to mention, and that is to encourage our shareholders For personal use only who take an active interest in the company to also become clients. To that end I’d like to invite any i
Slide 28: 2014 Annual General Meeting October 2014
For personal use only 2014 Annual General Meeting 31 October 2014
Slide 29: Board of Directors
Board of Directors For personal use only Mr JA (Tony) Killen OAM Mr Robin Burns Mr David Groves Ms Alice Williams Non-Executive Director, Chairman Managing Director Non-Executive Director, Non-Executive Director Deputy Chairman The Hon Jeffrey Kennett AC Ms Anne O’Donnell Mr Kevin Eley Mr Michael J
Slide 30: 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 31: Overview – FY2014
Overview – FY2014 For personal use only • Net Profit After Tax (NPAT) up 12% (inclusive of acquisition expenses) • Organic revenue growth in both business units – total revenue up 14% • Operating margin maintained in excess of 27%. Ungeared RoE 14.6% • Successful bid for ANZ Trustees (ANZT) – a tran
Slide 32: Acquisition Well Supported by the Market
Acquisition Well Supported by the Market For personal use only $22.50 $21.50 $20.50 $19.50 $18.50 $17.50 $16.50 $15.50 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 EQT ASX 200 Offer Price ($17.00) TERP ($19.83) *TERP – Theoretical Ex-Rights Price 5
Slide 33: Change in Composition of the Register
Change in Composition of the Register For personal use only Equity Trustees register Equity Trustees register pre-equity raising post-equity raising 6
Slide 34: Profitability
Profitability For personal use only NPAT up at $9.7m, net of takeover costs of $2.6m (includes profit on sale of investments) $9.7m $8.4m $8.7m $8.0m $8.2m 2010 2011 2012 2013 2014 7
Slide 35: Dividends
Dividends For personal use only Full year, fully franked dividend Interim (cps) Final (cps) 110 100 92 94 85 50 50 42 46 40 60 50 45 50 48 2010 2011 2012 2013 2014 8
Slide 36: Equity Trustees' Role in Philanthropy
Equity Trustees’ Role in Philanthropy For personal use only • Both Equity Trustees and ANZT have a long history in supporting the philanthropic sector • Approximately $1.8b in philanthropic assets managed or guided by the merged businesses, distributing around $80m per annum • Equity Trustees now su
Slide 37: The Board
The Board For personal use only • Mr Mick O’Brien, FIAA, CFA, appointed in August as a Non-Executive Director (NED), part of planned orderly renewal process • New NED’s appointed in each of 2007, 2008, 2010, 2011 and 2014 • Intention to appoint another NED in the coming year, ahead of likely retirem
Slide 38: ASX Index July to Current Date
ASX 200 Index 1 July to Current Date For personal use only 106 S&P/ASX 200 Index 104 102 100 98 96 94 92 90 06/14 07/14 08/14 09/14 11
Slide 39: Looking Ahead
Looking Ahead For personal use only • Global economic conditions and confidence still far from strong – US showing some positive signs but Europe weak and local conditions subdued • Recent reverses in ASX reflect risk expectations, poor growth and market sensitivity • Although there is overall net g
Slide 40: ANZ Trustees – Acquisition Goals
ANZ Trustees – Acquisition Goals For personal use only Transaction rationale: • Benefits from increased scale, combining operations, distribution networks The acquisition supports Equity Trustees’ strategic objectives in Trustee & Wealth Services through: • Realising cost savings from combining oper
Slide 41: Mr Robin Burns, Managing Director
For personal use only Mr Robin Burns Managing Director Equity Trustees Limited 14
Slide 42: 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 15
Slide 43: FY2014 – Building for Long Term Success
FY2014 – Building for Long Term Success For personal use only • Organic revenue growth 15% in corporate business unit (CTS), 13% in private unit (TWS) • Operating margin 27.1%, slight decline from 27.7% • Total Funds Under Management / Administration (FUM/A) grew to $39.5b, up from $32.3b • Net infl
Slide 44: Equity Trustees Organisation Structure
Equity Trustees Organisation Structure For personal use only Robin Burns Managing Director & Chief Executive Officer Dr Paul Kasian Terry Ryan Amanda Noble Head of Asset Management Chief Financial Officer Chief Risk Officer Head of Equities Corporate Services Enterprise Risk Harvey Kalman Lisa Barp
Slide 45: Business Update
Business Update For personal use only • Net inflows to Equity Trustees’ co-branded funds at 121% of 2013 level for Q1 • Two new manager relationships in Q1. Number of funds remain at 184 • CTS FUM/A $36.56b at end Q1 • TWS FUM/A $7.33b at end Q1 (includes $2.67b from ANZT) • Priorities for 2015: − I
Slide 46: Summary
Summary For personal use only • Company is financially strong, performing well • Acquisition of ANZT builds scale and capability in strategic growth channels. Brings: − Large will bank − Focus on core fiduciary services − Long term FUM − Skilled team, complementary values − Continuing relationship w
Slide 47: 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 48: 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 2014. Item 2 To adopt the remuneration report for year ended 30 June 2014. Item 3 To consider the election of Directors. Item 4 To c
Slide 49: 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 2014. 22
Slide 50: 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 2014. 23
Slide 51: Remuneration
Remuneration For personal use only • Short Term Incentives – 40% of maximum pool paid in 2014 (59% in 2013). • Long Term Incentive allocations each year: − Series 7 Partially Earned (EPS 53.53% / *TSR 100%) (ends 30/6/14) − Series 8 Under Assessment (ends 30/6/15) − Series 9 Under Assessment (ends 3
Slide 52: Tracking Remuneration vs Dividends
Tracking Remuneration vs Dividends For personal use only Cumulative growth in Non-Executive Director remuneration 35 Cumulative growth in Top 5 Executive plus MD remuneration Cumulative growth in Dividend per Share (DPS) 30 25 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 25
Slide 53: Item 2 – Proxies Received
Item 2 – Proxies Received For personal use only To adopt the remuneration report for year ended 30 June 2014 In respect of Item 2 of ordinary business, the following proxies have been received: For Against 7,484,306 307,551 (3.77%) Open (held by Equity Trustees Directors) = 85,331 26
Slide 54: 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 55: Item 3(a): Re-election of Mr David Groves
Items of Ordinary Business – Item 3 For personal use only Item 3(a): To consider the re-election of Mr David Groves 28
Slide 56: Item 3(a) – Proxies Received
Item 3(a) – Proxies Received For personal use only To consider the re-election of Mr David Groves In respect of Item 3(a) of ordinary business, the following proxies have been received: For Against Mr David Groves 8,227,880 49,208 Open (held by Equity Trustees Directors) = 316,416 29
Slide 57: Item 3(b): Re-election of Mr Jeff Kennett
Items of Ordinary Business – Item 3 For personal use only Item 3(b): To consider the re-election of Mr Jeff Kennett 30
Slide 58: Item 3(b) – Proxies Received
Item 3(b) – Proxies Received For personal use only To consider the re-election of Mr Jeff Kennett In respect of Item 3(b) of ordinary business, the following proxies have been received: For Against Mr Jeff Kennett 8,199,151 66,134 Open (held by Equity Trustees Directors) = 316,416 31
Slide 59: Item 3(c): Election of Mr Mick O'Brien
Items of Ordinary Business – Item 3 For personal use only Item 3(c): To consider the election of Mr Mick O’Brien 32
Slide 60: Item 3(c) – Proxies Received
Item 3(c) – Proxies Received For personal use only To consider the election of Mr Mick O’Brien In respect of Item 3(c) of ordinary business, the following proxies have been received: For Against Mr Mick O’Brien 8,188,115 88,973 Open (held by Equity Trustees Directors) = 316,416 33
Slide 61: Items of Special Business – Item 4
Items of Special Business – Item 4 For personal use only Item 4: To consider an increase in the maximum aggregate remuneration of Non-Executive Directors 34
Slide 62: Item 4 – Proxies Received
Item 4 – Proxies Received For personal use only To consider an increase in the maximum aggregate remuneration of Non-Executive Directors In respect of Item 4 of ordinary business, the following proxies have been received: For Against 7,503,095 395,340 Open (held by Equity Trustees Directors) = 107,1
Slide 63: 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 36
Slide 64: Managing Director's LTI, 2014/2015 Series
Managing Director’s LTI, 2014/2015 Series For personal use only • Quantum: 60% of TEC ($580k) = $348k. Maximum potential issue is 19,194 shares. • Measures: 50% TSR / 50% EPS • Vesting Scales over three years: TSR Less than 50th percentile Nil 50th percentile 50% 75th percentile and above 100%
Slide 65: 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: For Against 7,860,739 379,673 Open (held by Equity Trustees Directors) = 172,521 38
Slide 66: Items of Special Business – Item 6
Items of Special Business – Item 6 For personal use only Item 6: To consider and ratify a placement of shares 39
Slide 67: Item 6 – Proxies Received
Item 6 – Proxies Received For personal use only To consider and ratify a placement of shares In respect of Item 6 of special business, the following proxies have been received: For Against 1,195,217 183,415 Open (held by Equity Trustees Directors) = 280,622 40
Slide 68: 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 41
Slide 69: Thank you
For personal use only Thank you