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Results Presentation 1H25 20 February 2025 See wealth differently Disclaimer: This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent. 20 February 2025NWL Results Presentation 1H251
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Important notice and disclaimer General Information only Information provided is general information presented in a summary format as at 20 February 2025, and is therefore not necessarily complete. This presentation is for informational purposes only and is not to be relied upon as advice to investors or potential investors. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Investors should not rely on this presentation to make any investment decision, and should make their own assessment, conduct their own research of Netwealth and the Netwealth Group and consider these factors with their legal, tax, business and/or financial adviser before making any investment decision. Forward-looking statements This presentation may contain certain forward -looking statements with respect to the financial condition, operations and business of the Netwealth Group and certain plans and objectives of the management of Netwealth. Forward -looking statements can be identified by the use of forward - looking terminology, including, without limitation, the terms “believes”, “estimates”, “anticipates”, “expects, “predicts”, “intends”, “plans”, “goals”, “targets”, “aims”, “outlook”, “guidance”, “forecasts”, “may”, “will”, “would”, “could” or “should” or, in each case, their negative or other variations or comparable terminology. These forward -looking statements include all matters that are not historical facts. Such forward -looking statements involve known and unknown risks, uncertainties and other factors which because of their nature may cause the actual results or performance of the Netwealth Group to be materially different from the results or performance expressed or implied by such forward -looking statements. Such forward -looking statements are based on numerous assumptions regarding the Netwealth Group’s present and future business strategies, the political and economic environment in which the Netwealth Group will operate in the future and financial market conditions, which may not be reasonable, and are not guarantees or predictions of future performance. 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 statements or forecasts. Forward -looking statements speak only as at the date of this presentation and to the full extent permitted by law, Netwealth, the Netwealth Group, and their respective affiliates and related bodies corporate and each of their respective related parties and intermediaries disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, but not limited to, any assumptions or expectations set out in the presentation). Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Financial data All figures in the presentation are provided in Australian dollars. Financial data may be subject to rounding. This document has been authorised for release by the Board. For further information please contact: Hayden Stockdale, Chief Financial Officer Hayden@netwealth.com.au T:+61 435 461 630 20 February 2025NWL Results Presentation 1H252
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T o enable people to see wealth differently and discover a brighter future Our purpose is 20 February 2025 NWL Results Presentation 1H253
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20 February 2025 T oday’s presenters and agenda Matt Heine CEO & Managing Director Hayden Stockdale Chief Financial Officer Meet Discover 1. 1H25 business and financial highlights 2. Strategy and product update 3. Corporate sustainability 4. 1H25 financial performance 5. Outlook 6. Questions 7. Appendix and additional information NWL Results Presentation 1H254
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Acknowledgement of Country We acknowledge the traditional owners of the lands that we work and live on. Our office here in Melbourne is on the lands of the traditional owners, the Wurundjeri people of the Kulin Nation. We celebrate the stories, culture and traditions of the Aboriginal and Torres Strait Islander people of all nations, and pay our respects to Elders past and present. This statement is made by Netwealth Group Limited (Netwealth) on behalf of its reporting entities for 1H25 20 February 2025NWL Results Presentation 1H255
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1H25 Business & financial highlights 20 February 2025NWL Results Presentation 1H256
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Record growth across key metrics including net flows, income, and profit. Total FUA as at 18 February 2025 was $105.4B, with net inflows for 3Q25 to date of $1.5B 1H25 Highlights $155.4M +$32.0M $78.0M +$19.3M 50.2% 20 February 2025NWL Results Presentation 1H257 + Changes compared to 1H24 +26.0% +32.8% +5.4% Total income EBITDA EBITDA Margin +260bps $101.6B +$23.6B $8.5B +$3.8B +30.2% +80.2% FUA FUA net flows
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1H25 Highlights $5.7B $24.0B 151,437 20 February 2025NWL Results Presentation 1H258 +22.6% +32.9% +14.0% Cash transaction account - average FUM No. of accounts +$1.1B +$5.9B +18,611 $57.6M +46.6%NPAT +$18.3M + Changes compared to 1H24
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Conversion of FUA to EBITDA Consistent growth and operational efficiency +30.2% +26.0% 20 February 2025NWL Results Presentation 1H259 50.2% FUA growth EBITDA marginIncome growth 1H25 1H24 1H23 +32.8% EBITDA growth +24.9% +20.0% 47.6% +27.2% +10.2% +18.9% 44.9% +10.0% + Changes compared to prior year 1H
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$74.2M $86.4M $102.8M $123.3M $155.4M Total income $38.8B $56.7B $62.4B $78.0B $101.6B $9.3B $13.8B $14.4B $18.1B $24.0B Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 FUA FUM FUA 4 - year CAGR of 29.3% Consistent track record of growth 20 February 2025NWL Results Presentation 1H2510 Growth in FUA, FUM and Income
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94.7% 4.6% 0.7% Accelerator Plus Accelerator Core Non-custodial 4.1% 0.3% Growth in new products targeting Emerging and Mass Affluent and UHNW customers Client type 11 Broad-based growth across customer tiers 25.9% 40.5% 33.6% Investment Retail Investment Wholesale Super Retail Successful strong expansion in key high-value segments Strong expansion of high- value customer tiers Source: Netwealth, FUA as at 31 Dec 24, comparisons to 31 Dec 23. PCP – Prior corresponding period being 31 Dec 23 HNW: high net worth, UHNW: Ultra high net worth, HNW – clients holdings generally between $2.5M & $10M, UHNW & Family office - client holdings generally between $10M & $100M, Institutional – client holdings generally greater than $100M 58.9% 23.1% 10.9% 7.1% Retail HNW UHNW & Family Office Institutional $101.6B FUA $101.6B FUA $101.6B FUA 20 February 2025NWL Results Presentation 1H25 10.1% 5.8% +2.1 to PCP +0.9 to PCP
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12 Platform providers net funds flows 12 months to Sep 24 Consistent track record of growth and market share gains Platform providers by FUA and market share % at 30 Sep 24 and market share movement Sep 23 to Sep 24 Source: Plan For Life, Analysis of Wrap, Platform and Master Trust Managed Funds as at Sep 24. Total net fund flows of +$21.9B. Not included above: Others circa $2.0B. Netwealth is a leading specialist investment platform, increasing market share by 13.9% (100 bps) to 8.2%. Legacy platforms (with 56.1% of the market) are losing market share Source: Plan For Life, Analysis of Wrap, Platform and Master Trust Managed Funds as at Sep 24 Total industry retail FUA of $1.2T (as at 30 Sep 24). Legacy platforms include Insignia, CBA/Colonial, BT/Westpac & AMP. $17.0 B $12.8 B $2.5 B $0.8 B -$0.1 B -$0.2 B -$1.4 B -$3.6 B -$3.6 B -$4.4 B HUB24 Macquarie DASH Centric Praemium AMP Insignia CBA / Colonial BT / Westpac 19.2% 13.2% 13.2% 12.2% 11.4% 8.2% 7.9% 2.5% -0.7% -0.3% +0.7% -0.6% -0.3% +1.0% +1.4% +0.3% $223B $153B $152B $141B $132B $95B $92B $29B $9B $5B Insignia CBA/Colonial Macquarie BT/Westpac AMP HUB24 Praemium Centric DASH 0.8% -0.0% 0.4% +0.0% 20 February 2025NWL Results Presentation 1H25 FUA Market share change Market share
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Significant beneficiary of structural change leading to increased market share; +13.9% (100 bps) in 1 year; +183% (530 bps) in 5 years. Structural shift continues and shows no signs of slowing down NWL Results Presentation 1H2513 Quarterly market share analysis (Sep 19 to Sep 24) Source: Plan For Life, Analysis of Wrap, Platform and Master Trust Managed Funds. Legacy platforms include Insignia, CBA/Colonial, BT/Westpac & AMP. Included in Legacy platforms is BT’s reduction in market share for circa $35B relating to the transition of BT's Master Trust business to Mercer’s Platform. 2.9% 4.1% 5.2% 6.3% 7.2% 8.2% 2.3% 4.6% 5.7% 6.5% 7.9% 1.8% 1.8% 2.0% 2.2% 2.2% 2.5% 10.4% 10.5% 11.6% 12.0% 12.5% 13.2%74.0% 71.2% 68.0% 65.8% 57.9% 56.1% NWL HUB PPS Macquarie Legacy platforms (RHS) Rotation from legacy platforms Technology change & AI • Adoption of rapid technology advancements, including AI. Changing customer needs • Extensive data integrations for whole of wealth solutions. Shifting advice landscape • Efficient technologies and ingrained service culture. Sophisticated investment needs • Wide array of investment options, partners, and integration solutions. 20 February 2025
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20 February 2025NWL Results Presentation 1H2514 Transition pipeline underpins continued growth FUA net flows in CY24 by cohort year of Financial Intermediary (FI) Track record of growing FUA from existing and new financial intermediaries, over multiple years FIs with a 4+ year relationship delivered 67% of total FUA net flows In CY24, new FIs represented only 10% of total FUA net flows $10.0B $0.9B $2.6B $1.5B >CY22 CY22 CY23 CY24 $15.0B FUA net flows by cohort year of new FIs (CY22 – 24) Source: Netwealth $1.5B $1.1B $2.6B $0.7B $0.9B $0.9B Year 1 Year 2 Year 3 New FI CY24 New FI CY23 New FI CY22 FUA net flows stronger in Years 2 & 3 of a new FI relationship, than in Year 1 Consistently grown FUA net flows delivered in Year 1 of an FI relationship Source: Netwealth
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Strategy and product update 20 February 2025NWL Results Presentation 1H2515
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16 Our advantage is that we drive change that matters by delivering innovative products and services that leverage data, technology and connectivity • Data is at the heart of what we do, supporting an AI-driven future • Our people are empowered to innovate and deliver a high- quality and responsive service • Solutions are predominantly developed in-house but we will look to acquire or partner where it makes sense We seek to drive change that matters by delivering innovative products and service that leverage data, technology and connectivity Our strategic advantage WEAL THTECH Powerful transaction, advice enablement, admin and client engagement and management tools INSIGHTS & ANAL YTICS Advanced business, & client reporting and a programme of publications & insights WEAL TH SOLUTIONS A range of investment products, options and solutions PARTNERS & INTEGRA TIONS An extensive, growing range of integrations with specialist providers NWL Results Presentation 1H25 20 February 2025
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Netwealth’s advantage | Wealth solutions Our value proposition supports key market segments and levels of sophistication 20 February 2025NWL Results Presentation 1H2517 Maintain & invest in market-leading position Develop future product opportunities Retail advised HNW advised UHNW & Family office Institutional Non-custodial Wealth Accelerator MAPS Wealth Accelerator Plus Super Accelerator Plus Accelerator Core SOPHISTICATION OF NEEDS SMSF administration Exclusive investment opportunities & deal flow Managed accounts GSS funds
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Netwealth’s Advantage | WealthT ech Our tech stack provides powerful transaction tools and efficient and engaging adviser & client solutions 20 February 2025NWL Results Presentation 1H2518 ENGAGE TRANSACT Adviser Portal Client App & Portal Licensee Portal Third-Party Professional Portal Model Manager Portal Investment Manager Portal Listed Securities Unlisted Assets Managed Accounts Corporate Actions Cash Management Rebalancing
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Netwealth’s advantage | Partners & integrations Netwealth integrates deeply with a broad and growing range of specialist technology providers DATA, TECHNOLOGY & PLATFORM FUNCTIONALITY INVESTMENT, RESEARCH & PORTFLIO TOOLS WEALTHTECH Xeppo Microsoft Domain/APM Illion OSKO InvestmentLink IAM iCapital Investsense SS&C Zenith MSCI IRESS Xplan BGL Class Plutosoft Myprosperity Adviser Logic Complii Fin365 Financial Simplicity Intelliflo Platformplus WealthConnect SuperMate Just released Iguana2 Coming soon Refinitiv Factset Citi Philo PIMS Morningstar Asora Hero360 Lumiant m2Wealth Masttro Captegra 19 ProductRex Basiq LumiantCaptegra 20 February 2025NWL Results Presentation 1H25 Swissquant Briefcase
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Netwealth’s advantage | Insights & analytics Powerful insights & analytical tools help licensees, advisers & their clients better understand their business & investments COMING SOON: Sophisticated practice-level portfolio insights Practice & licensee management dashboard In development: AI tools for advisers 50+ practice reports 19 client reports 30+ annual publications, podcasts, webinars and events Daily business & market updates 20 February 2025NWL Results Presentation 1H2520
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Delivering on our strategic roadmap Netwealth continues to extend our strategic advantage, building on our leading capabilities and addressing emerging opportunities Netwealth | See wealth differently (General use)21 Advisable Australian research 2024 Bulk client reporting enhancements Wealth solutions WealthTech Partner & integrations Insights & analytics June 2024 Expansion of our investment menu New super onboarding Bulk equities trading GenAI portfolio commentary report Portfolio risk analytics Accelerate Summit 2024 AdviceTech research coming soon Managed account models added last year: 97 private labels, and 15 retail (inc. 5 ESG themed) Secure document sharing with integrated chat Workflow tracker Mobile digital consent & push notification Further API enhancements 690+ non- custodial assets been administered September 2024 Netwealth data solutions Client portfolio summaries Managed account uplift, inc. report enhancements
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Netwealth’s advice enablement strategy Growing numbers of pre-retirees and a persistent advice gap mean demand will continue to outstrip supply. Netwealth’s advice enablement strategy multiplies the efforts of our advisers, allowing them to serve more clients 20 February 2025NWL Results Presentation 1H2522 129 Number of clients advisers see1 1:5 For every 1 Australian receiving advice, 5 have unmet advice needs1 7.2m Australians with more complex financial circumstances & increased advice needs by 20502 Source: 1 . 2024 A ustral i an Fi nanci al A dvi ce L andscape 2. A new framework for regulating Choice products, NMG for FSC, 2024
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Corporate Sustainability 20 February 2025NWL Results Presentation 1H2523
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Netwealth’s corporate sustainability Core business supported by a genuine and transparent commitment 20 February 2025NWL Results Presentation 1H2524 Foster diversity, talent and wellbeing • Employee engagement score = 7.9, top half of our industry peers • Met Board 40/40/20 gender diversity target in FY24 • Rolled out our inaugural three-year inclusion and diversity roadmap Be genuine and transparent in our dealings • SOC 2 reasonable assurance from our Auditors • Remuneration framework aligns with APRA Prudential Standard CPS511 • On track for the incoming Financial Accountability Regime • Internal training on human rights and modern slavery Create a positive social and environmental impact • 99 ESG themed funds • 192 funds with Sustainability Rating of ‘Above Average’ or ‘High’* • Committed carbon neutrality for operational emissions by 2030 and net zero by 2050 • Inaugural reporting of scope 1 and scope 2 emissions, total of 69.26 tCO2e for FY24 • Granted $151,000 to Australian not-for-profit organisations since 2021 *Sustainability Rating by Morningstar available: https://www.netwealth.com.au/web/resources -and-tools/esg-investments/
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1H25 Financial performance 20 February 2025NWL Results Presentation 1H2525
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$78.0B $101.6B FUA (EOP) 1H24 1H25 +30.2% 47.6% 50.2% EBITDA margin 1H24 1H25 $59.8M $75.3M Operating net cash flow before tax 1H24 1H25 $58.8M $78.0M EBITDA 1H24 1H25 $39.3M $57.6M NPAT 1H24 1H25 $123.3M $155.4M Total Income 1H24 1H25 $4.7B $8.5B FUA net flows 1H24 1H25 +26.0% Record half of FUA net flows, revenue growth and profit growth Improving growth and efficiency driving profit 20 February 2025NWL Results Presentation 1H2526 Growth percentage increase in FUA net flows, FUA, total income, EBITDA margin, EBITDA, operating net cash flow before tax and NPAT 1H24 to 1H25 Source: Netwealth +80.2% +5.4% +46.6% +26.0% • Achieved a Rule of 40 score1 of 76.2 1 Total income growth percentage of 26.0% plus EBITDA margin percentage of 50.2% +32.8%
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20 February 2025NWL Results Presentation 1H2527 Substantial callouts: Other Income includes a gain on revaluation of investment of $1.2M related to Netwealth’s pre-existing 25% investment in Xeppo, that was revalued on the date the remaining 75% was acquired, 12 Aug 24. Xeppo and Flux combined total operating costs of $1.2M. Tax credits, reducing effective tax rate to 23.6% in 1H25, including a $2.8M tax credit relating to the establishment of an employee share scheme trust and a FY23 R&D tax incentive of $1.6M. Financials 1H25 1H24 Change % Change Platform Revenue 150.8 120.7 30.1 24.9% Other Income 4.6 2.6 2.0 76.2% Total Income 155.4 123.3 32.0 26.0% Employee Benefits Expenses 52.3 44.6 7.7 17.3% Share Based Payment Expenses 1.0 1.5 (0.5) (35.4%) Other Costs & Expenses 24.1 18.5 5.6 30.3% Total Operating Expenses 77.4 64.6 12.8 19.8% EBITDA 78.0 58.8 19.3 32.8% EBITDA Margin % 50.2% 47.6% 260bps 5.4% EBITDA excluding non -cash share-based payments 79.0 60.3 18.7 31.1% EBITDA Margin excluding non -cash share-based payments % 50.9% 48.9% 200bps 4.1% NPAT 57.6 39.3 18.3 46.6% NPAT margin % 37.1% 31.9% 520bps 16.3% Operating net cash flow before tax 75.3 59.8 15.5 26.0% Earnings per share (EPS) –fully diluted (cents) 23.4 16.1 7.3 45.6% Dividend per share (DPS) (cents) 17.5 14.0 3.5 25.0% Capitalised software 2.5 2.0 0.5 23.9% Strong financial performance $M unless otherwise stated Note: Cost of capital recovery on Operational Risk Financial Requirement (ORFR) classification and disclosure has been revise d and presented as platform revenue. Prior periods have been reclassified to be consistent with current period disclosure and all key metrics include this classification for platform revenue. PCP prior year corresponding period, 1H24 EPS is fully diluted (end of period) 12.5 14.9 16.1 17.9 23.4 1H23 2H23 1H24 2H24 1H25 EPS (cents) 11.0 13.0 14.0 14.0 17.5 1H23 2H23 1H24 2H24 1H25 DPS (cents) $EPS is fully diluted (end of period)
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Platform revenue is diversified in its nature and sources 20 February 2025NWL Results Presentation 1H2528 Platform revenue split 1H23 to 1H25 47% 45% 42% 35% 37% 38%12% 12% 14% 6% 6% 6% 1H23 1H24 1H25 Administration fees Ancillary fees Transaction fees Management fees $150.8M $120.7M$101.7M Source: Netwealth. Note: Cost of capital recovery on Operational Risk Financial Requirement classification and disclosure has been revised and presented as Platform revenue – Ancillary fees. Prior periods have been reclassified to be consistent with current period disclosure. • Further improved the diversification of revenue base to 1H24 • Transaction fee income increased by 48.2% to represent 14.1%, up 220 bps • Management fee income increase to 6.1%, up 40 bps • Predominately recurring revenue • Increase annualised platform revenue per account to $2,032, up 9.9% to 1H24 Platform revenue $M’s Platform revenue of $150.8M, up 24.9%, with a 2-year CAGR of 21.8%
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Operating leverage delivered 20 February 2025 Total operating expenses for 1H23 to 1H25 Source: Netwealth $39.3M $46.1M $53.3M $10.6M $10.9M $13.5M $6.7M $7.6M $10.6M 1H23 1H24 1H25 Employee benefits expenses incl SBP Other operating expenses Technology and communications $64.6M Operational leverage delivered with expenses up 19.8% (620 bps less than total income). Main. source of operational leverage was headcount scale efficiencies across our delivery, general and administrative, and technology functions. • Employee benefits expenses including SBP, increased by 15.5% to $53.3M • Other operating expenses grew by 23.6% to $13.5M • Technology and communication expenses grew by 40.0% to $10.6M as we invested in our platform enhancement, data integration, and AI technologies plus above inflation cost increases $56.6M $77.4M +$12.8M 19.8% NWL Results Presentation 1H2529 While continuing to invest in our people, product, security and technology capabilities. +$8.0M 14.1%
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20 February 2025 Operational headcount of 664 people at 31 Dec 24 Investing in people to support growth Headcount by function 31 Dec 24 Source: Netwealth Source: Netwealth 38% 21% 16% 11% 5% 3% 3% 3% Technology Service, Administration & Support Investment Operations & Custody Distribution, Product & Marketing Finance, P&C & Office Services Executive & Directors Risk, Legal and Governance Xeppo & Flux 51 additional roles to support growth, service, innovation and technology, including 22 from the acquisitions of Xeppo and Flux. NWL Results Presentation 1H2530 553 588 613 664 7 10 7 4 7 8 7 5 5 5 5 5 13 22 1 +35 1H24 +51 1H25 +25 2H24 Xeppo and Flux acquisition
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20 February 2025NWL Results Presentation 1H2531 Platform metrics and highlights 1H25 (increase to 1H24) • Record FUA net flows of $8.5B, up 80.2% and both quarters were a record • Record FUA inflows of $15.0B • FUA $101.6B, up $23.6B or 30.2% • 151,437 client accounts, up 14.0% • Cash transaction account balance was 5.5% of custodial FUA at 31 Dec 24 • FUM of $24.0, up $5.9 billion, or 32.9% Strong operational performance $M unless otherwise stated EOP – End of Period net flows exclude market movement Platform statistics 1H25 1H24 Change % Change Funds Under Administration (FUA) FUA - Custodial 100,878 77,772 23,106 29.7% FUA - Non-custodial 694 228 466 204.2% Total FUA 101,572 78,000 23,572 30.2% FUA – Custodial fee paying FUA (EOP) 61.1% 63.1% (200bps) - FUA Inflows - Custodial 14,783 9,636 5,147 53.4% FUA Outflows - Custodial (6,486) (5,020) (1,466) (29.2%) FUA Net flows Custodial 8,297 4,616 3,681 79.7% FUA Net flows - Non-custodial 187 91 96 105.2% Total FUA Net flows 8,484 4,707 3,777 80.2% Funds Under Management (FUM) Managed Account 20,771 15,513 5,258 33.9% Managed Funds 3,243 2,560 683 26.7% Total FUM 24,014 18,073 5,941 32.9% Net flows – Managed Account 2,362 1,341 1,021 76.1% Net flows - Managed Funds 258 168 90 53.7% Total FUM net flows 2,619 1,509 1,110 73.6% Accounts EOP (number) 151,437 132,826 18,611 14.0% Financial Intermediaries EOP (number) 3,811 3,633 178 4.9% Cash transaction account as a % of custodial FUA (EOP) 5.5% 5.6% (10bps) - Market Movement Market movement FUA - Custodial 5,027 3,010 2,017 67.0% Market movement FUA - Non-custodial 59 11 2948 437.6% Total FUA market movement 5,086 3,021 2,065 68.4% Total FUM market movement 910 604 305 50.5%
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Annualised platform Revenue/average no. of accounts ($) Annualised platform Revenue/average FUA (bps) 20 February 2025NWL Results Presentation 1H2532 Key performance metrics • Earn rate relatively flat overall • Earn rate on admin fees contracted, muted impact of fee tiers and caps, market movement and institutional flows • Earn rates on cash and transactions improved to 2H24 • Annualised platform revenue per account grew 9.9% from 1H24 Focused on delivering a market leading innovative platform is delivering growth in the size and value of customer accounts Average FUA/average no. of accounts ($'000) Source; Netwealth • Average account size grew 15.5% from 1H24 to $647,000 of FUA 1,705 1,789 1,849 1,880 2,032 1H23 2H23 1H24 2H24 1H25 506 535 560 604 647 1H23 2H23 1H24 2H24 1H25 33.7 33.4 33.0 31.1 31.4 1H23 2H23 1H24 2H24 1H25
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Summary | Strong financial and market position Strong FUA growth and momentum • Two consecutive record quarters of FUA net inflows • Total FUA growth of +30% • Installed base of advisers driving vast majority of FUA net flows Strong operating leverage • Expenses growing at 620 bps lower than revenue • EBITDA margin expanding to >50% • EBITDA growing 33% Investing for the future • Ongoing strategic investment across technology infrastructure, people and software High quality revenue • Total income growth of 26% • Total income is broad -based, highly recurring, and expanding into growth and high-value segments Extremely high conversion of EBITDA to cash • Expensing of most tech spend • Highly cash generative High growth and highly efficient • Rule of 40 score of 76.2 (26.0% revenue growth, 50.2% EBITDA margin) 20 February 2025NWL Results Presentation 1H2533
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Outlook 20 February 2025NWL Results Presentation 1H2534
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AI @ Netwealth Back office • Automation of repetitive and routine Tasks • Document Automation and Data extraction • Data Processing and Analysis • Risk Management Customer service • Call transcription, monitoring and summarisation • Knowledge base management • Sentiment analysis and quality control • Self Service and Automated responses Client products and services • Portfolio reporting and analysis Engineering and developer efficiency • Code writing (human review) • Add to and improve quality of automated tests Cybersecurity 20 February 2025NWL Results Presentation 1H2535 Leverage the capabilities of AI to create innovative solutions and optimise processes across the following key areas
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Outlook Our advice enablement strategy multiplies the efforts of our advisers, allowing them to serve more clients as demand continues to outstrip supply. Strong growth in new accounts and advisers for 1H25 Conversion rates remained very strong and diversified across all customer tiers New adviser and licensee relationships have expanded our new business pipeline Provide greater practice management, business management tools and access to data for advisers and licensees. FUA inflows for the remainder of FY25 are also supported by a transition pipeline of recent and new customer wins Advanced several planned initiatives and continue to invest in our people, product, security and technology capabilities. 20 February 2025NWL Results Presentation 1H2536 Invest to capitalise on both existing and emerging market opportunities, to drive sustainable profit growth and benefits to our customers and members Total FUA as at 18 February 2025 was $105.4B, with net inflows for 3Q25 to date of $1.5B
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Outlook 20 February 2025NWL Results Presentation 1H2537 Invest to capitalise on both existing and emerging market opportunities, to drive sustainable profit growth and benefits to our customers and members We continue to broaden the functionality of our platform, reduce reliance on 3rd party systems for core platform functionality, and refresh our technology infrastructure. Consequently, in 2H25 compared to 1H25, we expect: • Headcount growth to increase; • Total operational expenses (inclusive of Xeppo and Flux headcount and costs as noted earlier) to grow by approximately 5%; and • Investment in capitalised software to increase by approximately $2M. On 1 March 2025 there will be an update to product disclosure documents which will include the following: • For Netwealth Super Accelerator, the introduction of a $300 annual cap per account on the operational risk financial requirement (ORFR) cost. This will reduce costs for certain members, with negligible impact to revenue; and • For Netwealth Super Accelerator and Wealth Accelerator, a reduction in the interest rate paid on funds held in the Cash transaction account from RBA Cash Rate Target less up to 65 bps, to RBA Cash Target Rate less up to 80 bps (at current RBA rates, 3.30%). From 1 July 2025, changes to APRA’s superannuation ORFR requirements will reduce Netwealth’s target reserve from 25 bps to 20 bps. • Based on our current superannuation fund size, this will reduce the level of regulatory capital required to be held by approximately $17M.
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Outlook 20 February 2025NWL Results Presentation 1H2538 Invest to capitalise on both existing and emerging market opportunities, to drive sustainable profit growth and benefits to our customers and members • Netwealth remains in an excellent financial position: • Highly profitable, with strong EBITDA margin; • An exceptional correlation between EBITDA and operating cash flow, resulting in strong cash generation; • Very high levels of predictable recurring revenue; and • Significant cash reserve, debt free and low levels of capital expenditure.
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Questions 20 February 2025NWL Results Presentation 1H2539
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1H25 Appendix and additional information 20 February 2025NWL Results Presentation 1H2540
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Cash Flow 20 February 2025 The table below sets out the summary of the consolidated statement of cash flows for 1H25 and 1H24 Consolidated Group for Period Ended 1H25 $’M 1H24 $’M Change $’M Change % Receipts from customers 156.5 122.9 33.6 27.3% Payments to suppliers and employees (84.4) (65.7) (18.7) (28.4%) Dividends and interest received 3.2 2.6 0.6 22.4% Operating net cash flows before tax 75.3 59.8 15.5 26.0% Investing activities (excluding acquisition of subsidiaries) (3.1) (2.3) (0.8) (35.4%) Payments and Interest on lease (1.2) (1.0) (0.2) (19.6%) Free cash flows before tax 70.9 56.4 14.5 25.7% NWL Results Presentation 1H2541
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Operational Risk Financial Requirement (ORFR) 20 February 2025 Cost of capital recovery on ORFR classification and disclosure has been revised and presented as Platform revenue. Prior periods have been reclassified to be consistent with current period disclosure; Consolidated Group for Period Ended Cost of capital recovery on ORFR 1H25 $’M 1H24 $’M 1H23 $’M Platform revenue as reported previously 147.2 117.8 99.8 Add back: cost of capital recovery on ORFR 3.6 2.9 1.9 Revised Platform revenuedisclosure 150.8 120.7 101.7 NWL Results Presentation 1H2542