2018 Full Year Results Twelve months to 30 September 2018 Emilio Gonzalez CFA, Group Chief Executive Officer Cameron Williamson CA, Group Chief Financial Officer 8 November 2018 The Company has changed its name from BT Investment Management to Pendal Group (ASX: PDL) effective 4 May 2018
Welcome to Pendal Group’s Full Year Results for 2018 2 FY18 Results Presentation, 8 November 2018
Agenda Item Presenter FY18 Highlights Emilio Gonzalez Business Strength Emilio Gonzalez FUM and Flows Emilio Gonzalez Financials Cameron Williamson Strategy Emilio Gonzalez Q & A Emilio Gonzalez & Cameron Williamson 3 FY18 Results Presentation, 8 November 2018
Highlights FY18 Results Presentation, 8 November 2018
FY18 highlights Average FUM up 10% to Cash NPAT 17% higher to Business strength $ 99.5 billion $ 201.6 million • Diversified business balances exposure to any one market, distribution channel or asset class • Growing international presence • Global distribution channels Base management fees 12% higher to Performance fees up 44% to • Ongoing investment in new strategies $ 501.1 million $ 54.5 million • Independent • Strong balance sheet Cash EPS increase of 15% to 6 th consecutive increase in dividend up 16% to FY18 milestones 52.0 cents per share 63.7 cents per share • 10 years listed on the ASX – December 2017 • Name and brand change – May 2018 • $100 billion in FUM achieved Note: All comparative numbers to prior corresponding period (pcp) FY17 5 FY18 Results Presentation, 8 November 2018
Financial highlights FY17 FY18 Change Fee reven enue ue $491.0m $558.5m +14% Base management fees $447.2m $501.1m +12% Base management fee margin 50 bps 51 bps +1 bps Performance fees $37.9m $54.5m +44% Operating ng expens nses es $281.9m $316.9m +12% Cash Ca sh NPAT $173.1m $201.6m +17% Statutor ory NPAT $147.5m $191.0m +30% Operating ng profit margin 43% 43% - Cas ash EPS EPS 55.3 cps 63.7 cps +15% Total al divide dend nds 45.0 cps 52.0 cps +16% Averag age F e FUM $90.4b $99.5b +10% 6 FY18 Results Presentation, 8 November 2018
Macroeconomic drivers Markets and currency both supportive of FY18 FUM growth World markets Major currencies v AUD Pendal Group equities FUM 1 Average levels FY18 v FY17 Average levels FY18 v FY17 by currency +17% +8% +16% Other 2 +6% +13% 15% A$ 27% ¥ 9% +6% +4% +3% € +1% US$ 16% +0.3% 13% MSCI S&P500 FTSE MSCI AC Nikkei ASX300 USD GBP EUR JPY £ ACWI 100 Europe 225 20% (local (EUR) currency) 1. Includes Multi Asset allocation to equities 2. Other includes c. 25 other currencies, largely across emerging markets 7 FY18 Results Presentation, 8 November 2018
Business strength FY18 Results Presentation, 8 November 2018
Pendal Group (PDL) A successful and growing global asset manager • A global and diversified business which delivers both resilience and increasing growth opportunities • Diversified exposure across regions, channels, currency and investment styles • Independent, wholly owned multi-boutique model attracts and retains high-quality investment talent • Client-centric and performance-led culture • Disciplined capacity management • Ongoing investment in seed funds provide for future growth • Strong cash flow business which rewards shareholders 9 FY18 Results Presentation, 8 November 2018
Benefiting from global scale and 25 12 11 13 diversification 4 2 Investment personnel Established in markets Sales personnel representing 90% of 38 16 investible assets 1 Australasia 2 UK/Europe US Regional equity strategies Regional equity strategies Regional equity strategies Global equity strategies Income & fixed interest Global equity strategies Global equity strategies Multi asset Multi asset 48.5 FUM (A$b) FUM (US$b) 46.1 FUM (£b) 45.0 19.3 17.4 15.7 41.0 12.7 39.2 15.6 11.5 13.1 5.0 9.4 6.8 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 10 1. BCG Global Asset Management Market Sizing Database 2018 2. Includes Australia, New Zealand and Asia FY18 Results Presentation, 8 November 2018 Note: FUM by client domicile; Investment teams and sales personnel by location
FUM growth supported by diversity of business Closing FUM ($b) FUM movements ($b) 20 120 5.6 101.6 15 95.8 12.0 100 11.7 11.8 84.0 5.8 8.1 10 78.4 80 66.4 5 58.3 60 - 40 (5) 20 (10) (15) 0 FY13 FY14 FY15 FY16 FY17 FY18 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Flows Alpha / markets FX 11 FY18 Results Presentation, 8 November 2018
FUM diversification by asset class by geography by channel 2 Closing FUM (client domicile) 8% 3% 7% 16% FY18 21% 7% 13% 34% $101.6b 10% 48% 15% 7% 28% 31% 8% 21% 23% Australian equities Global equities Institutional Wholesale - Australia Australasia¹ UK & Euro equities Asia & EM equities Wholesale - OEICs Wholesale - US Pooled UK & Europe Cash Fixed Income Westpac - Other Westpac - Legacy US Multi asset Other 3% 7% 16% 19% 20% 31% FY13 28% $58.3b 7% 15% 24% 65% 8% 11% 5% 20% 21% 1. Includes Australia, New Zealand and Asia 2. FUM from certain Westpac directed mandates previously shown as Institutional have been reclassified to Westpac - Other 12 FY18 Results Presentation, 8 November 2018
Continued long-term growth Average FUM ($b) Base management Cash net profit Cash earnings per share fee revenue ($m) after tax ($m) (cps) 501.1 99.5 201.6 63.7 90.4 447.2 173.1 55.3 80.2 399.8 50.8 75.2 156.0 371.1 44.0 42.6 132.5 63.1 127.0 289.7 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 13 FY18 Results Presentation, 8 November 2018
Fee margin trends • Overall fee margin trending higher despite downward fee pressure across industry • Uptick in fee margin driven by revenue growth in wholesale channel • Westpac book of business being replaced in higher margin channels • Fee margin growing due to change in channel mix Base management fee by channel (%) Base management fee by channel (bps) 71 71 71 71 71 22% 24% 25% 25% 27% 51 50 50 49 46 52% 58% 44 43 59% 41 41 59% 63% 40 30 28 27 25 25 23% 20% 17% 14% 12% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Westpac¹ Wholesale Institutional Institutional Wholesale Westpac¹ Total 1. Westpac base management fees represent all Westpac directed mandates covering corporate and retail superannuation, legacy retail, multi-manager portfolios, managed accounts and Westpac capital. Westpac mandates previously classified as Institutional FUM have been reclassified from Institutional to Westpac 14 FY18 Results Presentation, 8 November 2018
FUM and flows FY18 Results Presentation, 8 November 2018
FY18 FUM growth of $5.8b • FUM as at 30 September 2018 of $101.6b • FUM growth due to positive investment experience and favourable FX movements 30-Sep-17 FX 30-Sep-18 Breakdown of Net Flows Fee Margin (bps) Other 1 Net Flows $b Closing FUM Impact Closing FUM Pendal JOHCM Pendal JOHCM tional 2 Institu titutio 29.2 1.5 2.0 1.2 33.9 3.2 (1.7) 28 52 Whol olesal ale Australia 6.4 0.9 0.6 - 7.9 0.9 - 70 - OEICs 23.9 (2.3) 0.6 1.3 23.5 - (2.3) - 65 US pooled 11.5 1.7 0.9 1.2 15.3 - 1.7 - 84 Pend endal G Group oup core f e funds ds 71.0 .0 1.8 .8 4.1 .1 3.7 .7 80.6 .6 4.1 .1 (2.3 .3) 41 41 66 66 her 3 Westpa pac – other 17.2 (4.7) 1.0 - 13.5 (4.7) - 22 - Westpa pac - legac egacy 7.6 (0.8) 0.7 - 7.5 (0.8) - 31 - Total al P Pend endal G Group F oup FUM 95.8 .8 (3.7 .7) 5.8 .8 3.7 .7 101. 01.6 (1.4 .4) (2.3 .3) 33 33 66 66 1. Other: includes market movement, investment performance and distributions 2. $6.6b of Westpac mandates previously classified in Institutional FUM as at 30 September 2017 has been reclassified to Westpac – Other 3. Westpac Other: represents all Westpac directed mandates covering corporate and retail superannuation, multi-manager portfolios, managed accounts and Westpac capital 16 FY18 Results Presentation, 8 November 2018
FUM and flows by channel • Growing institutional and wholesale books • FY18 outflows largely due to BT Financial Group’s MySuper portfolio reconfiguration FUM by channel 1 ($b) Flows by channel 1 ($b) 5.7 4.7 101.6 4.4 95.8 2.5 84.0 78.4 33.9 29.2 FY14 FY15 FY16 FY17 FY18 (3.7) 66.4 24.6 20.5 18.7 41.8 46.7 34.8 33.9 24.3 24.6 24.8 23.4 24.0 21.0 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Westpac Wholesale Institutional 1. FUM and flows from certain Westpac directed mandates previously shown as Institutional have been reclassified to Westpac 17 FY18 Results Presentation, 8 November 2018
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