Pendal Group Limited Level 14, The Chifley Tower 2 Chifley Square Sydney NSW 2000 Australia ABN 28 126 385 822 11 May 2020 Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 Penda endal Group Li oup Limited I ed Int nter erim P Prof ofit A Announc nnouncem ement nt f for or t the s he six m mont onths ended 3 ended 31 M 1 Mar arch h 2020 2020 The following documents are attached for lodgement: Interim Financial Report and Appendix 4D ASX Announcement • Ana nalyst P Pres esent entat ation on Chairman’s Letter Yours sincerely Authorising Officer Joanne Hawkins Group Company Secretary Pendal Group Limited Tel: +61 2 9220 2000 pendalgroup.com {00020262.docx}
2020 Half Year Results Six months to 31 March 2020 Emilio Gonzalez CFA, Group Chief Executive Officer Cameron Williamson CA, Group Chief Financial Officer 11 May 2020
Agenda Ite Item Present nter er 1H20 Overview Emilio Gonzalez • 1H20 Highlights • COVID–19 • Business Strength Robust Business Model Emilio Gonzalez • Diversification, FUM, Flows and Investment Performance Financial Strength Cameron Williamson • 1H20 Financial Highlights Positioned for Growth Emilio Gonzalez • Strategy • Outlook Q&A Emilio Gonzalez & Cameron Williamson 2 1H20 Results Presentation, 11 May 2020
1H20 Overview 1H20 Results Presentation, 11 May 2020
1H20 Highlights Diversification underpins Improved investment Investing for business resilience performance long-term growth • Average FUM up 2% to $98.9 billion • 70% of FUM outperformed over one-year • Appointed Global Equity Impact team • Annuity style base management fees, • Strong performance of defensive up 1% to $240.9 million strategies over COVID-19 period • Launched first specialist impact product — Regnan Credit Impact • Closing FUM down 14% for the half Strategy compared to key equity indices 1 which declined 25% • JOHCM CEO, US commenced in December quarter with growth • Favourable currency contribution of $3.7 mandate billion on Closing FUM for the half Average FUM Cash NPAT Base management FUM outperformed Closing FUM up 2% up 2% fees up 1% over one-year down 14% to $ 98.9 B $ 86.6 M $ 240.9 M 70 % $ 86.0 B 1 ASX All Ordinaries and FTSE 100 declined 25% over the period 30 September 2019 to 31 March 2020 Note: Numbers versus prior corresponding period (pcp) 1H19 4 1H20 Results Presentation, 11 May 2020
1H20 Financial Results 1H19 1H20 Change Averag age F e FUM $97.4b $98.9b 2% 2% Base managem ement fee margi gin 49 bps 49 bps 49 49 bps bps - Base management fees $237.6m $240.9m 1% Performance fees $4.4m $0.6m (86%) Fee reven enue ue $243. 3.0m 0m $243. 3.3m 3m - Operating ng e expen enses ($140. 0.0) 0)m ($143. 3.1) 1)m 2% 2% Cash Ca sh NPAT $84.5m $86.6m 2% 2% Statutor ory NPAT $69.6m $54.8m (21%) Operating ng p profit $103. 3.0m 0m $100. 0.2m 2m (3%) %) Operating ng profit margin 42% 42% 41% 41% (2%) %) Cas ash EPS EPS 26.6 cps 26.8 cps 1% 1% Interim dividend 20.0 cps 15.0 cps (25%) 5 1H20 Results Presentation, 11 May 2020
Interim Dividend Pendal recognises the importance of dividends for shareholders Dividends (cps) • Dividend lower than normal circumstances due to 52.0 uncertainty of future potential impact on markets and 45.0 45.0 client sentiment 42.0 • Interim dividend of 15.0 cps to be 10% franked 30.0 • Dividend represents a payout ratio of 56% 25.0 26.0 24.0 • Pendal stress-tested its business against a range of financial scenarios, and while the Board is confident in the company’s ability to weather the impacts of the COVID-19 pandemic, it believes it is prudent and 22.0 20.0 19.0 sensible to reduce the interim dividend 18.0 15.0 [ ] FY16 FY17 FY18 FY19 FY20 Interim dividend Final dividend 6 1H20 Results Presentation, 11 May 2020
COVID-19 Focused on employee health and welfare, business continuity and client service Priority Actions Outcomes • Health and welfare of employees • Activated Global Business • WFH – seamless delivery of client services Continuity Plans (BCPs) • Business continuity • Increased client support and communication • Oversight of COVID-19 response • Ensure no disruption to ongoing • Reassured by stress tests conducted: team led by CRO management of client funds – Prudent reduction in interim dividend • Investment in enhanced remote • Continue excellence in client service – Discretionary spend curtailed working capabilities • Maintain capabilities to actively – Variable remuneration aligned to revenue • Seamless transition to secure remote position portfolios – Continuing commitment to investment working capability • Meet fund liquidity at all times in strategic initiatives for growth • Stress-testing range of business and Positioning for the recovery • financial scenarios 7 1H20 Results Presentation, 11 May 2020
Business strength Robust business model Strong financial position Positioned for growth • Investment-led boutique culture • No debt • Flexibility to enhance product leadership in differentiated areas • Diversified product offerings • Financial discipline • Creating a more flexible and scalable • Global distribution network • Seed capital to support global platform newer strategies • Structured to align interests on • Experienced global leadership and performance and costs • Variable costs flexed through investment expertise business model • Margins reflect strong alpha generators • Well positioned to take advantage of with capacity management opportunities • Stable annuity style cash flows • Fee model provides opportunity to earn performance fees on relative basis 8 1H20 Results Presentation, 11 May 2020
Robust Business Model Diversification, FUM, Flows & Investment Performance 1H20 Results Presentation, 11 May 2020
Robust Business Model FUM diversification supports resilience and growth¹ by currency by geography by channel by asset class (equities only) (client domicile) 1% 1% 5% 5% 5% 5% 13% 13% 16% 6% 10% 10% 13% 13% 25% 25% 26% 26% 11% 11% 13% 13% 40% 40% 47% 7% 18% 18% 14% 14% 6% 6% 34% 34% 20% 0% 28% 28% 15% 15% 16% 16% 8% 8% 16% 16% Institutional A$ Australia² Australian equities Cash Wholesale - Australia US$ UK, Europe and Asia Global equities Fixed Income US Wholesale - OEICs £ UK & European equities Multi-Asset Wholesale - US Pooled € Asian & EM equities Other Westpac - Other ¥ Westpac - Legacy Other 3 1 As at 31 March 2020 2 Includes Australia, New Zealand 3 Other includes c. 30 other currencies, largely across emerging markets 10 1H20 Results Presentation, 11 May 2020
Robust Business Model FUM and flows by channel • Closing FUM impacted by significant market decline in March • Positive FX contribution due to lower AUD • OEIC outflows predominantly from European strategies partly offset by positive flows into UK strategies • Redemptions of $2B from Westpac book primarily due to ongoing consolidation of superannuation platform Breakdown of net flows Fee margin (bps) 30-Sep-19 Net FX 31-Mar-20 Other 2 Closing FUM flows impact Closing FUM $b Pendal JOHCM Pendal JOHCM Institu titutio tional 38.0 0.2 (4.6) 1.2 34.8 (0.9) 1.1 24 49 Whol olesal ale Australia 8.2 (0.5) (1.1) - 6.6 (0.5) - 67 - OEICs 19.1 (2.5) (4.3) 1.4 13.7 - (2.5) - 64 US Pooled 16.3 (0.4) (1.5) 1.1 15.5 - (0.4) - 81 Pend endal G Group C oup Core F Fund nds 81.6 .6 (3.2 .2) (11.5) 5) 3.7 .7 70.6 .6 (1.4 .4) (1.8 .8) 35 35 65 65 her 1 Westpa pac – Other 13.8 (1.8) (0.6) - 11.4 (1.8) - 20 - Westpa pac - Lega egacy 5.0 (0.2) (0.8) - 4.0 (0.2) - 32 - Total al P Pend endal G Group F oup FUM 100. 00.4 (5.2 .2) (12.9) 9) 3.7 .7 86.0 .0 (3.4 .4) (1.8 .8) 31 31 65 65 1 Westpac - Other: represents all Westpac directed mandates covering corporate and retail superannuation, multi-manager portfolios, managed accounts and Westpac Capital 2 Other: includes market movement, investment performance and distributions 11 1H20 Results Presentation, 11 May 2020
Robust Business Model Improved investment performance Strong outperformance achieved relative to benchmarks across: • Global/International strategies • Australian Equities strategies • Cash and Fixed Income • Property % FUM % FUM % FUM FUM 1H20 outperformed outperformed outperformed ($b) 1 Yr 3 Yr 5 Yr Global/In l/Inte ternatio tional E l Equitie ities 29.0 87% 96% 78% Austr tralia ian E Equitie ities 12.8 98% 97% 93% Cash sh 11.5 96% 100% 100% UK E Equitie ities 7% 7% 7% 8.7 Fixed I d Incom ome 97% 85% 44% 8.3 Multi lti-Asse sset 2% 2% 2% 4.6 Europ opean E ean Equities 3.9 0% 0% 40% Emerging M ng Market et E Equities es 3.9 32% 47% 100% Asia ian E Equitie ities 1.5 78% 2% 3% Prop oper erty 100% 100% 100% 1.3 Other her 19% 92% 91% 0.5 Tota tal F l FUM 86.0 .0 70% 0% 71% 1% 65% 5% 1 Fund performance is based on pre-fee, pre-tax and relative to the fund benchmark; % of FUM outperforming relates to FUM with sufficient track record only 12 1H20 Results Presentation, 11 May 2020
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