Annual%20General%20Meeting%202006

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Annual General Meeting 2006
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Annual General Meeting 2006

• Chairmans Speech
• Ian Blair

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Agenda

• Chairmans Address
• Chief Executive Officers Report
• Formal Resolutions
• General Business
• Questions
• Close of Meeting and Afternoon Tea

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Chairmans Address

• 2005/06 excellent financial year
• Delivered on commitment to shareholders
• Service First
• Community focus
• Going forward
• Board matters

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2005/06 Excellent financial year

• Net profit after tax 23.3 million
• Cash earnings 44.4 million
• Fully franked dividends of 27 cents per share
• Total assets under management 29 billion
• Total shareholder return of 32.4

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Our commitment to shareholders

• Strong profit, higher dividend, solid capital
  position
• Continued strong growth in FUMA
• Delivered on strategic initiatives
• Perennial Real Estate Investments
• Perennial Investment Partners acquisition
• A solid year in transition

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Service First

• 160 years old
• 230,000 Australian investors
• Top quartile service provider over next 3 years
• Customer Care team
• Constantly improve client service offering
• Aim to be efficient, responsive, easy to deal
  with

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Community Focus

• IOOF Foundation
• Established 2002 to perpetuate our history
• Disadvantaged families, aged care, disadvantaged
  children and youth
• Total grants now over 1.4 million

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Going forward

• The industry and the sharemarket
• Changes to superannuation
• Foundations of the last two years
• Restructuring for growth

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Board matters

• Change and renewal
• Governance
• Strengthen industry knowledge
• New director

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Annual General Meeting 2006
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2006 Annual General Meeting

• CEOs Speech Mr Ron Dewhurst

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Outline

• Overview
• 2005/06 in review
• Perennial acquisition
• Strategic direction

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Overview

• Strong growth in underlying Funds under
  Management and Administration (FUMA)
• Net profit growth of 54 for the year ending June
  2006
• Perennial Investment Partners Ltd (PIPL)
  acquisition
• Organisational restructure geared towards
  improving business accountability and
  transparency

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2005/06 in review
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2005/06 in review

• FUMA (bn)

29.0b
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W/Sale FUM
Retail FUMA
82 growth in FUMA since 2004
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2005/06 in review
Capitalising on operating leverage
Note Cash earnings is equivalent to Earnings
before tax, net market value excess, depreciation
and amortisation Excludes consolidation of
benefit funds
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2005/06 in review

• Objectives for 2005/06 Achievements
• Best of breed alpha generator
• Best Practice Services and Solutions
• Commitment to depth as well as
• breadth of relationships

Perennial Real Estate Investments
Development of Pursuit
Service First Initiative
Consultum Financial Advisers
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2005/06 in review

• Retail Funds Management Highlights
• Launch of IOOF / Perennial Global Property Trust
• Investment Grade rating by Morningstar
• IOOF / Perennial International shares
• Rainmaker Marketing Excellence award nomination
• Best Website of the Year - Superannuation
• Creation of Consultum Financial Advisers
• Merger between Winchcombe Carson and Financial
  Partnership

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2005/06 in review

• Perennial Wholesale FUM Growth

Diversification is successfully reducing
volatility in growth
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2005/06 in review
Cash Earnings

• Continued growth in Gross Margin
• Increasing economic relevance from Perennial
  (including PVM)
• Continued cost control

Management of both revenue and costs are
contributing to growth
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2005/06 in review

• Operating Efficiency

Cash operating expenses to Gross Profit
Note Gross Profit is inclusive of other
operating income and the Groups share of PVM.
Excludes the impact of Benefit fund consolidation
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Acquisition of PIPL minorities
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Acquisition of PIPL minorities

• IOOF has announced the acquisition of PIPL
  minorities shareholding
• This will make PIPL a wholly-owned subsidiary of
  IOOF
• 100 ownership significantly improves the growth
  potential of IOOFs investment in PIPL
• Increases IOOFs exposure to one of its core
  businesses
• More closely aligns Perennials growth
  opportunities with IOOFs access to capital
• Improved clarity and understanding of Perennials
  value proposition

PIPLs relationship with underlying boutiques
remains unchanged
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Acquisition of PIPL minorities

• Perennial success factors
• Operational independence
• Alignment of interests with investment
  professionals
• Best of breed talent, both front and back office
• Scalable business model
• Cultural fit

IOOF seeks to support these fundamental principles
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Acquisition of PIPL minorities

• Minority shareholders to receive an initial
  payment of 67.9m
• Based on 100 valuation of PIPL of 320m
  (Initial Valuation)
• IOOF will compensate certain other key PIPL
  executives in exchange for them relinquishing
  their claims to PIPL equity (9.4m)
• Both shareholders and key executives eligible for
  a potential deferred payment based on PIPLs
  2008/09 audited financial performance

Represents a final acquisition multiple of 25
times NPAT with an initial payment based on a
PIPL valuation of 320m
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Acquisition of PIPL minorities

• Voting on Resolutions 4 and 5
• Details outlined in Explanatory Memorandum
• Independent Expert considers the terms of the
  transaction fair and reasonable
• Amendment to original terms of the transaction
• As a result of unintended accounting implications
• Payment based on actual 2008/09 NPAT if Michael
  Crivelli or Anthony Patterson resign in the
  intervening period
• Significant incentives exist for continued
  involvement in the business

Independent Directors unanimously recommend that
shareholders vote in favour of the resolutions
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Strategic direction
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Strategic direction
Strategic Cornerstones

• Expand scope of asset management capabilities
• Re-invigorate client-centric culture
• Focused approach to platforms
• Deeper more meaningful relationships
• Client Segmentation

Best of breed asset management
Product innovation
Commitment to relationships
Creator of valuenot simply gatherer of assets
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Strategic direction
Progress since 2004
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Strategic direction

• Transforming IOOF - Creating end-to-end
  accountability

• Asset Management
• Perennial
• Value
• Growth
• Real Estate
• Fixed Interest
• International
• Asia

• Adviser Services
• Platforms
• Pursuit
• Strategic alliances
• Employer Sponsored Superannuation
• Multi-Investment Manager Solutions
• Dealer Group Services
• Consultum Financial Advisers
• Strategic Alliances

Understanding advisers needs Making Service
First
Create, package and market investment performance
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Guidance on 2006/07

• Adviser Services - Re-energising IOOFs offerings
  to advisers
• Pursuit A flexible approach to investment
  administration
• Consultum Maximising the value of advisers
  practices
• Asset Management
• Best of breed asset management
• Intellectual property and cultural fit
• Capability gaps

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Guidance on 2006/07

• Financial outlook
• Funds under Management and Administration
• 30bn in FUMA at the end of September 2006
• FY07 earnings
• 15 growth in normalised earnings (after
  minorities)
• Assuming modest investment market returns
• Excludes acquisition and restructuring related
  costs (after tax)
• PIPL acquisition - 3.5m
• Organisational restructure up to 3.0m

On track to meet earnings guidance on a
normalised basis
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Annual General Meeting 2006
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Annual General Meeting 2006Resolutions
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IOOF Holdings Ltd - 2006 AGM
Resolution 2a - To re-elect Ian Blair to the
Board Votes
FOR 10,839,545 52.77 AGAINST
100,701 .49 DISCRETIONARY
9,599,649 46.74 The number of the Chairmans
discretionary proxy votes are 43.12 Note These
figures relate to the proxies lodged 48 hours
prior to the meeting
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Annual General Meeting 2006Resolutions
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IOOF Holdings Ltd - 2006 AGM
Resolution 2b - To re-elect Michael Crivelli to
the Board Votes
FOR 10,748,949 52.35 AGAI
NST 171,518 .84 DISCRETIONARY
9,611,691 46.81 The number of the Chairmans
discretionary proxy votes are 43.21 Note These
figures relate to the proxies lodged 48 hours
prior to the meeting
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Annual General Meeting 2006Resolutions
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IOOF Holdings Ltd - 2006 AGM
Resolution 2c - To re-elect Roger Sexton to the
Board Votes
FOR 10,810,556 52.62 AGAINST
119,547 .58 DISCRETIONARY
9,614,081 46.80 The number of the Chairmans
discretionary proxy votes are 43.19 Note These
figures relate to the proxies lodged 48 hours
prior to the meeting
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Annual General Meeting 2006Resolutions
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Remuneration Report

• What is covered in the Remuneration Report?
• The boards philosophy and approach to rewarding
  our employees, executives and directors
• Largely set by the Corporations law, accounting
  standards and ASX Corporate Governance
  Guidelines

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Remuneration Report

• Why have a Remuneration Report?
• To make it as clear as possible to shareholders
• how senior members of the company are paid
• and on what basis

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Remuneration Report

• What is our approach to rewarding people at IOOF?
• an approach to attract, recruit, motivate and
  keep high quality people
• to give the desired performance outcome for
  shareholders

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Remuneration Report

• For executives
• a fixed amount, a short term incentive amount and
  a long term incentive amount
• conditional on the executives meeting a series of
  performance hurdles

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Sample scorecard
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Remuneration Report

• For non executive directors
• A single fee

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Remuneration Report

• Regular independent reviews .
• to understand the marketplace

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Remuneration Report

• A few changes .
• a more scaled method for rewarding performance in
  excess of the hurdle rates
• increased focus on achieving the total operating
  cost target for executives
• a simple, single fee, for all non executive
  directors

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Remuneration Report

• So what about the vote?
• The IOOF Board takes notice of what our
  shareholders tell us

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Remuneration Report

• Some have voted against the report .
• and we should understand why

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Remuneration Report

• So let me put this in context .
• the ASX Guidelines
• flexible not prescriptive

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Remuneration Report

• We recommend the Remuneration Report to you

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IOOF Holdings Ltd - 2006 AGM
Resolution 3 Adoption of Directors
Remuneration Report for the financial year ended
30 June 2006 Votes
FOR 8,157,158 40.45 AGAIN
ST 2,324,837 11.53 DISCRETIONARY 9,685,390
48.03 The number of the Chairmans
discretionary proxy votes are 43.64 Note These
figures relate to the proxies lodged 48 hours
prior to the meeting
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Annual General Meeting 2006Resolutions
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IOOF Holdings Ltd - 2006 AGM
Resolution 4 Approval of the acquisition of
shares in PIPL from entities associated with
Michael Crivelli and Anthony Patterson
Votes
FOR 10,444,369 51.11 AGAINST
488,531 2.39 DISCRETIONARY 9,501,333
46.50 The number of the Chairmans
discretionary proxy votes are 42.56 Note These
figures relate to the proxies lodged 48 hours
prior to the meeting
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Annual General Meeting 2006Resolutions
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IOOF Holdings Ltd - 2006 AGM
Resolution 5 Approval of Accelerated Deferred
Payment Provisions Votes
FOR 10,130,234 49.
88 AGAINST 622,572
3.07 DISCRETIONARY 9,557,443 47.06 The
number of the Chairmans discretionary proxy
votes are 42.89 Note These figures relate to
the proxies lodged 48 hours prior to the meeting
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Questions?
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Disclaimer

• Issued by IOOF Holdings Ltd ABN 49 100 103 722.
  The information contained in this presentation is
  given in good faith and has been prepared from
  information believed to be accurate and reliable.
  The information presented does not take into
  account your individual financial circumstances
  and it is not designed to be a substitute for
  specific financial or investment advice or
  recommendations and should not be relied upon as
  such. You should consider talking to your
  financial adviser before making an investment
  decision. So far as the law allows, IOOF
  excludes all liability for any loss or damage
  whether direct, indirect or consequential.
• Whole numbers have been rounded for presentation
  purposes. However, percentages have been
  calculated on numbers prior to rounding.

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Annual General Meeting 2006