BT Investment Management Limited Annual General Meeting Tuesday 7 December 2010
Board of Directors Emilio Gonzalez Brian Scullin Carolyn Hewson James Evans Brad Cooper CEO Chairman 2
Senior Management Team Geraldine Bouquet Martin Franc Phil Stockwell Cameron Williamson Brian Wright Head of Human Head of Sales & Chief Financial Head of M&A and Chief Operating Resources Marketing Officer Strategy Officer 3
Agenda 1. Introduction 2. Chairman’s Address 3. Chief Executive Officer’s Address 4. Consideration of Financial Report 5. Questions 6. Re-election and election of Directors 7. Approval of the Remuneration Report 8. Close Meeting 4
Admission Cards Shareholder Non-Voting Visitor Card Voting Card Shareholder Card Not entitled to Entitled to vote Not entitled to vote, but may and address the vote or address address the meeting the meeting meeting 5
Proxies � To be valid, Proxies must have been lodged with Link Market Services at least 48 hours prior to the meeting � Valid Proxies received will be displayed prior to the resolution being considered by the meeting � The Chairman will vote undirected proxies in favour of each resolution 6
Chairman’s Address Brian Scullin 7
Strong increase in full year profit $ pcp % Cash NPAT $30.9m +15% Statutory NPAT $21.8m +72% Average FUM $35.3bn +9% Cash earnings per share 19.3 cps +15% 8
Quarterly retail net flow trends over past 5 years Net flow trends – All Retail Funds Under Administration $ billions – June 2006 to June 2010 Annual net flows = $49.8 billion Annual net flows Annual net 26.0 = $32.1 billion flows = $15.6 billion Annual net flows Annual net = -$4.1 billion flows 14.0 = $1.7 billion 10.3 8.7 8.7 6.8 6.5 6.0 5.3 2.7 2.1 1.5 1.7 1.5 0.8 -2.6 -3.7 -0.8 0.2 -0.4 S-05 D-05 M-06 J-06 S-06 D-06 M-07 J-07 S-07 D-07 M-08 J-08 S-08 D-08 M-09 J-09 S-09 D-09 M-10 J-10 Source: Plan for Life - All Retail Funds (Admin) 9
Dividends and capital management � Final fully franked dividend of cps pcp % 10.0 cps � Target payout for FY08 and Interim dividend 5.5cps +83% FY09 made up through special dividend of 12.5 cps paid in Final dividend 10.0cps +104% August 2010 Special dividend 12.5cps n/a � Target payout ratio of 80-90% of cash NPAT confirmed � Balance sheet debt free 10 10
Board changes New CEO Emilio Gonzalez New Directors: Brad Cooper James Evans 11
CEO’s Address Emilio Gonzalez 12
Growth from improved markets & performance fees ($m) FY09 FY10 Movement Average FUM ($bn) 32.3 35.3 3.0 Margin 0.34% 0.36% 0.02% Base Management Fees ($mln) 105.8 118.4 12.6 Performance Fees ($mln) 4.0 8.2 4.2 Other Revenue ($mln) 2.6 2.6 0.0 Total Revenue 112.4 129.2 16.8 Employee Expenses ($mln) (40.4) (51.2) (10.8) Operating Expenses ($mln) (33.9) (33.7) 0.2 Total Expenses ($mln) (74.3) (84.9) (10.6) Tax ($mln) (11.2) (13.4) (2.2) Cash NPAT ($mln) 26.9 30.9 4.0 Cost to income ratio (CNPAT basis) 66% 66% 13 13
Long term performance remains strong Performance Relative to Benchmark Flagship Product 1 Year (pa) 3 years (pa) 5 years (pa) S&P Rating ����� Core Australian Share Fund -1.20% +2.21% +1.80% ����� Focus Australian Share Fund -0.22% +1.29% +2.60% ����� Imputation Fund -2.45% +0.73% +2.26% ���� Smaller Companies Fund +8.41% +6.51% +5.17% ���� Property Fund : A-REIT +0.28% +4.75% +3.57% ���� Property Fund : Global-REIT +1.25% +1.89% +2.31% ���� Core Global Share Fund +2.21% +1.43% +0.29% Fixed Interest Fund +0.64% +0.14% +0.10% N/A � Strong FY10 fund performance from niche funds including: – BT Wholesale Microcap Opportunities Fund (alpha of +31.92%) – BT Wholesale MidCap Fund (alpha of +5.93%) – BT Global Macro Fund (alpha of +3.97%) Note – performance is pre-fee, pre-tax for the period ending 30 September 2010 14 14
Strategic Focus � Grow our exposure to the retail channel through financial planners and intermediaries � Leverage our competitive advantage from being part of The Westpac Group � Build out our multi-boutique model to attract and expand into other investment capabilities 15 15
Strategic Focus: Grow exposure to retail through financial planners and intermediaries � Platform set for growth: – Strength of BT brand – Existing presence on administration platforms – Strong product ratings � Strategically invest in brand, marketing and sales � Ensure product suite continually meets client needs 16 16
Strategic Focus: The Westpac Group � BT Financial Group is a significant player in the Australian wealth management market � Master Relationship Agreement signed for further 5 years � Specialised niche product (eg Microcap fund) distributed through BTFG � BTIM required to deliver on investment performance, client service and competitive product offerings 17 17
Strategic Focus: Build out our multi-boutique model � BTIM multi-boutique value proposition � Income and Macro Boutiques to progress to business share arrangements � Retain watching brief on other opportunities to broaden capabilities 18 18
Outlook � Wealth management fundamentals remain strong � Industry growing at 9-12% pa � Compulsory superannuation underpinning growth � Not without its challenges: – Shift in investor sentiment to defensive asset classes – Index based funds � Regulatory environment reshaping industry 19 19
Item 1 – Financial statements and reports Consider the Financial Report, Director’s Report and Auditor’s Report 20
Questions If you have a question, please: � Proceed to one of the microphones � Show your voting card to the attendant � Tell the attendant your name 21
Item 2(a) – Re-election of a Director To re-elect Brian Scullin as a Director 22
Item 2(a) – Proxy Votes To re-elect Brian Scullin as a Director The following proxies have been received for this resolution: For: 106,582,141 99.2% Open: 721,478 0.7% Against: 125,207 0.1% Total: 107,428,826 100.0% Abstain: 50,763 23
Item 2(b) – Election of a Director To elect Brad Cooper as a Director 24
Item 2(b) – Proxy Votes To elect Brad Cooper as a Director The following proxies have been received for this resolution: For: 106,526,526 99.1% Open: 722,832 0.7% Against: 185,026 0.2% Total: 107,434,384 100.0% Abstain: 45,205 25
Item 2(c) – Election of a Director To elect James Evans as a Director 26
Item 2(c) – Proxy Votes To elect James Evans as a Director The following proxies have been received for this resolution: For: 106,529,518 99.2% Open: 722,832 0.6% Against: 160,495 0.2% Total: 107,412,845 100.0% Abstain: 66,744 27
Item 3 – Remuneration Report Adoption of the 2010 Remuneration Report Non-binding resolution 28
Item 3 – Proxy Votes Adoption of the 2010 Remuneration Report The following proxies have been received for this resolution: For: 105,589,402 98.4% Open: 691,521 0.6% Against: 1,049,071 1.0% Total: 107,329,994 100.0% Abstain: 149,595 29
Meeting Closed The formal part of the meeting is now closed. Please remain for presentations by Crispin Murray, Head of Equities and Vimal Gor, Head of Income & Fixed Interest 30
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