Netwealth Group Ltd. · ASX:NWL
Netwealth — H1 2024 Earnings Presentation
36 slides from Netwealth's earnings presentation, Feb 20, 2024
Slide 1: Results Presentation 1H2024
See wealth differently Results Presentation 1H2024 20 February 2024 Disclaimer: This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.
Slide 2: Important notice and disclaimer
Important notice and disclaimer General Information only No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved, or that there is a reasonable basis for any of these Information provided is general information presented in a
Slide 3: Our purpose is to see wealth differently
Our purpose is To enable people to see wealth differently and discover a brighter future 3 NWL Results Presentation 1H2024 20 Feb 2024
Slide 4: Today’s presenters and agenda
Today’s presenters and agenda Meet Discover 1. 1H2024 business and financial highlights 2. Strategy and product update 3. Corporate sustainability Matt Heine CEO & Managing Director 4. 1H2024 financial performance 5. Outlook 6. Questions Grant Boyle 7. Appendix and additional information Chief Finan
Slide 5: Acknowledgement of Country
Acknowledgement of Country We acknowledge the traditional owners of the lands that we work and live on. Our office here in Sydney is on the lands of the traditional owners of the Gadigal people of the Eora Nation. We celebrate the stories, culture and traditions of the Aboriginal and Torres Strait I
Slide 6: 1H2024 Business & financial highlights
1H2024 Business & financial highlights 6 NWL Results Presentation 1H2024 20 Feb 2024
Slide 7: Business and financial highlights 1H2024
Business and financial highlights 1H2024 $123.3M Total Income 1H2024 $78.0B FUA $228M FUA Non-Custodial Current FUA $80.8B1 Growth $20.5M (+20.0%) Current $265M1 $58.8M EBITDA 1H2024 $4.7B $6.7B Domestic trading volume + FUA net inflows 1H2024 Growth $12.6M (+27.2%) $0.7B International trading volum
Slide 8: Business growth and composition
Business growth and composition Growth in FUA, FUM and Accounts Composition of FUA Super -Retail, Wrap - Retail 34.1% 28.4% 132,826 UHNW, Family Office Non-Custodial, 121,032 & Institutional, 5.8% 0.3% $77.8B 107,103 Custodial FUA $78.0B 88,189 Wrap - 75,512 Wholesale $62.4B HNW Retail, 37.5% $56.7B
Slide 9: Transition pipeline remains strong
Transition pipeline remains strong FUA net inflows analysis Both existing and new Financial Intermediaries contribute to yearly % New Financial Intermediaries FUA net inflows FUA net inflows 14.2% 15.9% 12.1% 20.2% 5.8% $7.6B 1H2024 FUA net inflows analysis $1.1 B $5.4B $5.0B $4.7B $4.6B • New Finan
Slide 10: Strategy and product update
Strategy and product update 10 NWL Results Presentation 1H2024 20 Feb 2024
Slide 11: Trends & opportunities
Trends & opportunities Netwealth’s focus on data and technology positions us to benefit from accelerating change Technology, AI & data Market landscape Customers Advisers & licensees Investment vehicles, options Rapid advancements in Successful providers will be Contestable segments are Increasing c
Slide 12: Structural shift continues and shows no signs of slowing down
Structural shift continues and shows no signs of slowing down Netwealth remains a significant beneficiary of structural change increasing market share against the legacy platforms Quarterly market share analysis from September 2016 to September 2023 Netwealth market share increased to 7.4% Market sh
Slide 13: Netwealth is the leading specialist investment platform
Netwealth is the leading specialist investment platform Netwealth has an expanding market share and the fastest growth by net funds flow Netwealth is the fastest growing platform by net funds flow and Legacy platforms (with 59.0% of the market) are losing market share increased market share to 7.4%
Slide 14: See wealth differently | Netwealth’s advantage
See wealth differently | Netwealth’s advantage We seek to drive change that matters by delivering innovative products and service that leverage data, technology and connectivity • Data and technology is at the heart of what we do, supporting WEALTHTECH INSIGHTS & ANALYTICS an AI-driven future Powerf
Slide 15: Netwealth’s advantage | Wealth solutions
Netwealth’s advantage | Wealth solutions Our value proposition supports key market segments and levels of sophistication Maintain & invest in Exclusive investment opportunities market-leading position & deal flow Award winning platform* Non-custodial Wealth Accelerator MAPS SOPHISTICALTON OF NEEDS W
Slide 16: Netwealth’s Advantage | WealthTech
Netwealth’s Advantage | WealthTech Our tech stack provides powerful transaction tools and efficient and engaging adviser & client solutions *Rated by Investment Trends as number 1 in Overall Satisfaction by users for the eleventh consecutive 16 NWL Results Presentation 1H2024 20 February 2024 year a
Slide 17: Netwealth’s advantage | Partners & integrations
Netwealth’s advantage | Partners & integrations Netwealth integrates deeply with a broad and growing range of specialist technology providers DATA, TECHNOLOGY & INVESTMENT, RESEARCH WEALTHTECH PLATFORM FUNCTIONALITY & PORTFLIO TOOLS PIMS Class Financial Simplicity Xeppo InvestmentLink Zenith Morning
Slide 18: Netwealth’s advantage | Insights & analytics
Netwealth’s advantage | Insights & analytics Powerful insights & analytical tools help licensees, advisers & their clients better understand their business & investments 50+ practice reports Practice & licensee management dashboard 19 client reports 30+ COMING SOON: Sophisticated practice-level port
Slide 19: Netwealth development roadmap
Netwealth development roadmap We are enhancing our digital wealth offering to address emerging opportunities. AI is already being deployed and will be a core component of internal efficiencies, enhancing existing services and supporting advisers in new ways What we’ve delivered… What’s coming next…
Slide 20: Netwealth development roadmap
Netwealth development roadmap What we’ve delivered… What’s coming next… • Significantly enhanced our reporting solution and Report • Further development of our reporting tools including Builder tools customised report packs • 2023 Advisable Australian and 2023 AdviceTech research and • Netwealth AI
Slide 21: Corporate Sustainability
Corporate Sustainability 21 NWL Results Presentation 1H2024 20 Feb 2024
Slide 22: Netwealth’s corporate sustainability
. Netwealth’s corporate sustainability Ongoing development of our core business will have the biggest impact and it is supported by a genuine and transparent approach Foster diversity, talent and wellbeing Be genuine and transparent in our dealings • Achieved 80% employee engagement score, top • Add
Slide 23: 1H2024 Financial performance
1H2024 Financial performance 23 NWL Results Presentation 1H2024 20 Feb 2024
Slide 24: Sustained growth and profitability
Sustained growth and profitability Total income and EBITDA 1H2022 to 1H2024 • Continued total income growth momentum attributed to overall high levels of recurring revenue and enhancing our product offering • Continuing investment in talent and technology to increase capacity for sustained growth an
Slide 25: Robust financial performance
Robust financial performance Financials 1H2024 1H2023 Change % Change Increasing returns to investor Platform Revenue 117.8 99.8 18.0 18.1% Other Income 5.5 3.0 2.5 84.1% 1H2024 16.1 Total Income 123.3 102.8 20.5 20.0% 2H2023 14.9 Employee Benefits Expenses (44.6) (38.1) 6.5 17.2% (1.5) (1.2) 0.3 24
Slide 26: Strong operating performance
Strong operating performance Platform statistics 1H2024 1H2023 Change % Change 1H2024 commentary (increased to 1H2023) Funds Under Administration (FUA) FUA - Custodial 77,772 62,414 15,358 24.6% FUA - Non-custodial 228 33 195 591.7% Total FUA 78,000 62,447 15,553 24.9% • FUA of $78.0 billion at 31 D
Slide 27: Focus on profitable growth
Average FUA/average No. of Accounts ($'000) Focus on profitable growth 560 535 Delivering a market leading digital whole of wealth platform is 508 506 506 driving increases in both FUA per account and annualised platform revenue per account 1H2022 2H2022 1H2023 2H2023 1H2024 Key performance statisti
Slide 28: Core components of platform revenue
Core components of platform revenue A high level of recurring revenue and a focus on revenue diversification has delivered strong growth across different economic environments Platform revenue split 1H2022 to 1H2024 Administration fees Transaction fees Wrap Brokerage Super Share settlement 6% Manage
Slide 29: A disciplined approach to long term investment
A disciplined approach to long term investment Total operating expenses* 1H2024 commentary (comparison to 1H2023) • Operating expenses of $63.1 million, increased by $7.7 million, 13.9% increase to 1H2023 ($55.4 million). Excluding share-based payments expense. $63.1M • Employee benefits expenses of
Slide 30: Investing in people to support growth
Investing in people to support growth 35 additional roles to support growth, innovation, service and technology A team of 588 at 31 December 2023 Headcount by function 31 December 2023 1% Technology 2% 3% 7 6% 7 4 Investor services 10 -1 2 -1 7 588 4 11 19 -2 6 11% Investment operations & 553 +35 54
Slide 31: Summary | Strong financial and market position
Summary | Strong financial and market position Highly profitable, with An extremely high Strong balance sheet strong EBITDA margin correlation between EBITDA and operating cash • Low capital expenditure • Revenue growth flow, resulting in strong • Debt free • High level of predictable cash generatio
Slide 32: Outlook
Outlook 32 NWL Results Presentation 1H2024 20 Feb 2024
Slide 33: Outlook
Outlook Commentary • Our roadmap is focused on enhancing and extending our current • As reported in our quarterly update, inflows for Calendar Year 2023 product and technology capabilities to address the substantial number were at record levels. We are confident that the range of new initiatives of
Slide 34: Thank you
Thank you See wealth differently Discover the possibilities
Slide 35: 1H2024 Appendix and additional information
1H2024 Appendix and additional information 35 NWL Results Presentation 1H2024 20 Feb 2024
Slide 36: Cash Flow
Cash Flow The table below sets out the summary of the consolidated statement of cash flows for 1H2024 and 1H2023 Consolidated Group for Period Ended 31 Dec 2023 31 Dec 2022 Variance Variance $’M $’M $’M % Receipts from customers 122.9 104.2 18.7 18.0% Other operating cash flows (63.1) (53.0) (10.1)