45
Presented by Annual results 30 June 2013 Christopher Kelaher, Managing Director David Coulter, Chief Financial Officer 23 August 2013
Presented by
Annual results
30 June 2013
Christopher Kelaher, Managing Director
David Coulter, Chief Financial Officer
23 August 2013
2
Result highlights
Financial
Operating
Strategic
• Strong fund flows across the business – FUMAS now $120.2b
• Strong platform net flows
• Total platform net flows $262m
• Flagship platform flows $872m up 28%
• Average gross margin* increased to 0.42% (FY12: 0.41%)
• Delivering shareholder value
• UNPAT pre-amortisation $108.8m, up 13% on pcp
• Return on equity now 13.2%, up 19% on pcp
• Final dividend 22.5 cps^, up 25% on pcp
• Solid balance sheet with debt / equity of 13%
• Growth in market share a result of integrated business model
• Acquisition strategy continuing to deliver
• Plan B: immediately accretive; $6.1m annualised pre-tax
synergies
• DKN: fully integrated
Regulation • Regulatory implementation on-track and on-budget
* Gross Margin has been restated due to separately identifying Stockbroking Service Fees, see Appendix A for further details
^ Record date 24 September 2013, Payment date 16 October 2013
3
$48.7m $47.7m $50.9m$57.9m
$96.4m$108.8m
1H 11/12 2H 11/12 1H 12/13 2H 12/13 2011/12 2012/13
Statutory NPAT / UNPAT
UNPAT pre-amortisation
$19.4m
StatNPAT:
$79.8m19.0 18.0 19.5
22.5
37.0
42.0
1H 11/12 2H 11/12 1H 12/13 2H 12/13 2011/12 2012/13
Dividend (cps)
Continuing focus on delivering
shareholder value
- TSR 21% CAGR since June 2009
+7% +21%
+8% +25%
• Continuing to grow Underlying NPAT
• Consistently focussed on returning capital to shareholders with 90%
payout ratio
+14% +13%
4
Financial highlights
2012/13 2011/12 % Change
Underlying NPAT (pre-amortisation) $108.8m $96.4m +13%
Statutory NPAT $79.8m $19.4m +312%
Gross Margin* $346.3m $307.5m +13%
Other Revenue $47.0m $45.5m +3%
Operating Expenditure $242.2m $219.7m +10%
Cost to Income Ratio^ 58.7% 58.7% -
Underlying EPS 46.9c 41.6c +13%
Final Dividend 22.5c 18.0c +25%
FUMAS $120.2b $107.3b +11%
FUMA $87.6b $76.7b +14%
Average FUMA $84.8b $77.4b +10%
* Gross Margin restated due to separately identifying Stockbroking Service Fees, see Appendix A
^ Cost to Income ratio is exclusive of Ord Minnett Ltd and the benefit funds and is calculated on an underlying basis
5
• Vertically integrated model delivers strong results
Business highlights
The Corporate segment recorded an UNPAT pre-amortisation of ($18.8m) 12/13, ($15.8m) 11/12 ^ Source: Super Ratings (net of fees) July 13
• Underlying NPAT (pre-amortisation) $16.8m
• Average FUA up $4.6b to $29.0b
• Result underpinned by recent acquisitions
• Underlying NPAT (pre-amortisation) $71.4m
• Average FUA up $3.3b to $26.7b
• Another strong result in IOOF’s core segment
• Underlying NPAT (pre-amortisation) $33.7m
• Average FUM down $0.5b to $29.1b impacted by wholesale asset
management trends
• 90% Multimix FUM ranked above median FY13^
• Underlying NPAT (pre-amortisation) $5.6m
• Average FUS up $1.6b to $31.7b
• Addition of Plan B strengthens segment and expands opportunities
Wealt
h M
an
ag
em
en
t
Financial Advice
and Distribution
Tru
ste
e
Platform
Management and
Administration
Investment
Management
Perennial Investment
Partners, IOOF Investments
Estate and
Trustee Services
6
Strategic initiatives drive growth
momentum
Organic
Growth
Acquisition
Integration
Acquisition
Growth
• Successfully integrate new acquisitions
• Deliver on synergy benefits
• Leverage IT and back-office scale across
Group
• Leverage vertically integrated service offering
• Build brand awareness to attract net flows
• Build on adviser relationships within Group
• Scale, financial strength and experience
• Experienced consolidator – track record of
success
• Market dynamics providing opportunities
7
Organic initiatives deliver growth
Source: Morningstar Market Share Data at 31/03/2013, Flagship flows net of pension payments
4.9%
5.4%
6.0%
$400m
$450m
$500m
$550m
$600m
$650m
$700m
Mar-11 Mar-12 Mar-13
Flagship net flows
Flagship 12mth netflow (LHS) Flagship netflow marketshare
($132m)
($239m)
($75m)
$262m
($300m)
($200m)
($100m)
$0m
$100m
$200m
$300m
2009/10 2010/11 2011/12 2012/13
Total Platform net flows
• Integrated service offering and strong brand awareness generate net flows
• FUMAS up $12.9b to $120.2b
• Total Platform net flows of $262m
• Average FUMA ex-acquisitions $82.5b (up 7% v FY12)
8
Investing in our brand
Continuing to build brand awareness
• National advertising campaign
• Television
• Radio
• Outdoor
• Online
Partnering with the community
• The IOOF Foundation
• Murdoch Childrens Research Institute – Step-a-thon
• Sponsorships – Sydney Football Stadium
9
Successful integration – extracting
value
• Plan B acquisition immediately accretive
• $6.7m UNPAT contribution for 9 months to June 2013
• $6.1m pre tax synergies ($5m in 2H 2012/13), implies $10m* in 2013/14 relative
to a pre-acquisition cost base of $32m
• Annualised Underlying EPS contribution 3.2 cps in 2012/13^
• Plan B product rationalisation to drive further gains
• DKN fully integrated, result $10.4m
• $7.9m contribution net of financing costs
• 3.4 cps contribution to 2012/13 Underlying EPS
• recurring synergies $4.6m pa pre-tax
• FUMA added via acquisitions totals $10.2b in the last two years
* Excludes potential future product integration ^ net of finance costs
10
Strong market share growth in
competitive market
Source: Credit Suisse July 2013. Plan for Life. Retail FUM administrator view
ANZWBC
MQGSUN
MercerCGFCBAPPTNAB
netwealthState Super
IFLAMP
-0.60% -0.40% -0.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20%
Change in Market Share (YoY) Dec '12 v Dec '11
Change in retail FUM market share (%)
11
Platform margins are stable
* Source: Comparator® - Benchmarking for Platform Businesses 2012/13, 2010/11
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
2009 2010 2011 2012 2013
Gross Margin as % of FUA
IOOF Peer group Median*
• IOOF platform margins relatively stable over 5 years
12
Regulatory implementation on track
Subject to change
FoFA
MySuper
SuperStream
April 2013 July 2013
MySuper application
SuperStream
platform changes
- rollovers
FoFA changes
phase 2
Super 123 to
Transact
FoFA changes
phase 3
SuperStream
contributions
1H 2013/14
MySuper approval, development
and launch
2H 2013/14
13
• Up to $10m spent on regulatory change implementation
− Expense embedded within operational cost base
• Effective use of internal resources reduces implementation cost
− Compares highly favourably to peers
• Major political parties committed to stability in superannuation
Achieving regulatory change in a
cost effective and timely manner
14
Growth supported by positive
industry dynamics
^ Source: Adapted from Credit Suisse – Australian Funds Management Annual Review 2013
• Superannuation Guarantee Charge (SGC) increase to drive net inflows for industry
• IOOF’s focus will be to continue to increase our market share of this growing pool
2%
4%
6%
8%
10%
12%
-
20,000
40,000
60,000
80,000
100,000
1995
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
% t
ota
l wag
es
Su
pe
ran
nu
ati
on
ne
t fl
ow
s (A
$m
)
Net Contribution Flows Benefit from new changes SGC rate (%)
15
Financials
David Coulter
Chief Financial Officer
16
Financial overview
* Gross margin has been restated due to separately identifying Stockbroking Service Fees , see Appendix A for further details
Statutory NPAT $79.8m $19.4m
Statutory Basic EPS (cents) 34.4cps 8.4cps
Underlying NPAT (pre-amort) $103.3m $(1.2m) $6.7m $108.8m $96.4m
Underlying EPS (cents) 44.5cps (0.5cps) 2.9cps 46.9cps 41.6cps
FUMA $84.7b - $2.9b $87.6b $76.7b
Gross Margin % * 0.41% - 1.05% 0.42% 0.41%
Total dividend per share (cents) 42.0cps 37.0cps
13%
13%
14%
2%
14%
312%
312%
2012/13 2011/12 VARIANCE (%)IFL
(ex-Plan B)
Financing
CostsPlan B
17
P&L breakdown
* Gross Margin restated due to separately identifying Stockbroking Service Fees, see Appendix A
Financing Costs: Other Revenue - $1.4m borrowing costs, Operating Expenditure - $0.3m loan line fees
^ A reconciliation of IFL segments excluding Plan B and DKN is provided in Appendix B
• IFL Underlying NPAT pre-amortisation excluding impact of acquisitions of Plan B and
DKN of $95.4m (2011/12 $91.5m)^
$M IFL
(ex-Plan B)
Financing
Costs
Plan B 2012/13 2011/12 Change
on pcp
(%)
Gross Margin* 319.9 - 26.4 346.3 307.5 13%
Other Revenue 48.2 (1.4) 0.1 47.0 45.5 3%
Operating Expenditure (225.2) (0.3) (16.8) (242.2) (219.7) -10%
Equity Accounted Profits 7.7 - - 7.7 8.2 -6%
Net non cash (Ex. Amortisation) (9.9) - (0.2) (10.1) (7.4) -37%
Underlying Profit Before Tax, Amortisation 140.9 (1.7) 9.5 148.7 134.1 11%
Income Tax & NCI (37.6) 0.5 (2.9) (40.0) (37.7) -6%
Underlying NPAT (pre-amortisation) 103.3 (1.2) 6.7 108.8 96.4 13%
Significant Items/Amortisation (29.0) (77.0) 62%
Reported NPAT 79.8 19.4 312%
18
Statutory NPAT reconciliation
Detailed explanation of each reconciling line item provided in Appendix L
• Impairment, deferred tax and Plan B have had a material non cash impact on
statutory NPAT
• Statutory v Underlying EPS calculations use the respective profit amounts above with
the same average number of shares
$'M 2012/13 2011/12
Statutory NPAT 79.8 19.4
Amortisation of intangible assets 23.6 20.4
Impairment 4.6 9.2
Acquisition transition costs 0.8 3.1
Termination and retention incentive payments 6.5 3.7
Recognition of Plan B onerous lease contracts 3.0 -
Recognition of deferred taxes on intangible assets - 62.7
Unwind of deferred taxes on intangible assets (5.4) (1.9)
Reinstatement of Perennial non-controlling interests (1.0) (2.4)
Income tax attributable (3.1) (1.2)
Fair value gain on investment in DKN - (9.6)
Recognition of previously uncertain tax position - (7.0)
Underlying NPAT (pre-amortisation) 108.8 96.4
19
$219.7
m $242.2
m
$28.3m($8.4m)
$3.1m
($1.3m)
$0.8m
Base Opex 2011/12 Synergies realised Plan B/DKN
FTE IT Marketing/Other Opex 2012/13
~$10m
Expenditure well constrained
• Mandatory investment in regulatory compliance
• Realised significant operating synergies with Plan B
• Labour cost increases below wage inflation
Had Plan B operated without IOOF
efficiencies, i.e normalised 9 months
Plan B, add 3 months DKN
Embedded cost of regulatory
change implementation
20
$1
13
.3m
$184.9
m
$138.7
m
$98.3
m
$139.8m
($15.1m)
($53.0m)
$0.4m
($87.0m)
June 12 Corp Cash Operating cashflows
Other Investing andFinance
Tax payments Cash preAcq'n/Div
Plan B(net of borrowings)^
Dividends Paid June 13 Corp Cash
Cash flows to shareholders
^ Plan B Acquisition: $50.0m net borrowings, ($46.6m) acquisition price paid, $6.6m cash balances acquired, ($0.8m) acquisition costs, ($6.4m)
termination and retention incentive payments, ($2.5m) dividend paid to Plan B Group shareholders
21
Strong organic funds flow
momentum continues
2012/13 2011/12 % Change
Opening FUMA $76,691m $76,032m
Flagship Platform net flows $872m $679m +28%
Platform (Transition) net flows ($258m) ($329m) +22%
IOOF Global One net flows ($352m) ($425m) +17%
Total Platform net flows $262m ($75m) +449%
Investment Management net flows ($2,987m) ($4,594m) +35%
Funds Under Advice net flows $464m $428m +8%
Acquired FUMA $3,225m* $7,082m^ -54%
Investment returns / Other $9,902m ($2,183m) 554%
Closing FUMA $87,557m $76,691m +14%
Average FUMA $84,834m $77,337m +10%
* 2013 acquired FUMA: Plan B $3,244m, Avenue $477m, disposal of SFM ($496m) ^ 2012 acquired FUMA : DKN $6,805m, Kingston $277m
22
Segment performance - Platform
• Total Platform net flows $262m
• Flagship platforms increasing
market share of net flows^
• 66% contribution to group
UNPAT
$32.3m
$27.4m
$33.0m
$38.4m
0.74%0.70% 0.72% 0.71%
1H 11/12 2H 11/12 1H 12/13 2H 12/13
UNPAT Gross Margin %
Australian Equities
38% (PCP: 37%)
InternationalEquities
14% (PCP: 14%)
Property6% (PCP: 5%)
Fixed Interest/Cash
38% (PCP: 41%)
Other4% (PCP: 3%)
^Source: Morningstar Market Share Data at 31/03/2013
2012/13 2011/12 CHANGEGross Margin ($'M) 190.1 167.4 14%
Gross Margin % 0.71% 0.72% (0.01%)
UNPAT ($'M) 71.4 59.6 20%
Reported NPBT ($'M) 88.9 74.9 19%
AVG FUA ($'B) 26.7 23.4 14%
23
Australian Equities
41% (PCP: 44%)
International Equities
7% (PCP: 5%)Property
5% (PCP: 7%)
FixedInterest/Cash
45% (PCP: 44%)
Other2% (PCP: 0%)
Segment performance – Investment
Management
• Strong Multimix performance
• 90% FUM ranked above
median FY13^
• Balanced Growth fund
ranked top 10 FY13*
• UNPAT and asset allocation
impacted by Perennial outflows
^ SuperRatings (net of fees) - July 2013 * Chant West - July 2013
2012/13 2011/12 CHANGEGross Margin ($'M) 76.7 77.9 (1%)
Gross Margin % 0.26% 0.26% 0.00%
UNPAT ($'M) 33.7 35.5 (5%)
Reported NPBT ($'M) 39.2 40.9 (4%)
AVG FUM ($'B) 29.1 29.6 (1%)
$17.4m $18.1m$16.1m
$17.6m
0.25%
0.28%0.26% 0.26%
1H 11/12 2H 11/12 1H 12/13 2H 12/13
UNPAT Gross Margin %
24
Australian Equities
46% (PCP: 45%)
International Equities
9% (PCP: 7%)Property
3% (PCP: 2%)
Fixed Interest/Cash
41% (PCP: 46%)
Other1% (PCP: 1%)
Segment performance – Financial
Advice & Distribution
• Over 900 aligned advisers^
• Our major groups have
increased adviser numbers^
• Largest distribution network
outside banks and AMP^
*Gross margin has been restated due to separately identifying Stockbroking Service Fees , see Appendix A for more details
^ Source: Money Management July 2013
2012/13 2011/12 CHANGEGross Margin ($'M)* 55.6 40.8 36%
Gross Margin % * 0.19% 0.17% 0.02%
UNPAT ($'M) 16.8 12.5 35%
Reported NPBT ($'M) 15.5 9.0 73%
AVG FUA ($'B) 29.0 24.4 19%
$3.7m
$8.8m $9.2m
$7.6m
0.14%0.19% 0.18% 0.20%
1H 11/12 2H 11/12 1H 12/13 2H 12/13
UNPAT Gross Margin %
25
Segment performance – Estate and
Trustee Services
• Non cyclical businesses
provide stability in volatile
markets
• Plan B’s complementary
business presents further
growth opportunities
$2.7m
$2.1m
$2.6m
$3.0m
0.07% 0.07% 0.07% 0.08%
1H 11/12 2H 11/12 1H 12/13 2H 12/13
UNPAT Gross Margin %
2012/13 2011/12 CHANGEGross Margin ($'M) 23.4 21.3 10%
Gross Margin % 0.07% 0.07% 0.00%
UNPAT ($'M) 5.6 4.8 18%
Reported NPBT ($'M) 7.8 6.7 17%
AVG FUS ($'B) 31.7 30.1 5%
26
Strategy & Outlook
Christopher Kelaher
Managing Director
27
IOOF strategy focus
ORGANIC GROWTH
• Vertically integrated model
• Focus on client service a differentiator
• Growing market share
• Organic growth underpinned by growth in
superannuation
PRODUCTIVITY
• Disciplined cost control
• Efficiencies through scale, synergies and
continuing technology developments &
enhancements
GROWTH BY ACQUISITION
• Track record of success
• 25+ acquisitions over last 15 years
• Demonstrated ability to successfully
integrate and extract meaningful synergies
• Consistent delivery of timely value accretion
2012/13 Progress
Market share gains
Total Platform net flows increased $337m
to $262m
Plan B successfully integrated and value
accretive in the first year and achieved
synergy benefits of $6.1m
Plan B recurring synergies
expected to be $10m pa in 2013/14
DKN fully integrated and providing
recurring synergies of $4.6m pa pre-tax
Underlying opex well constrained
Regulatory changes achieved on time
and on budget
MySuper application lodged and
on track for approval
Leading SuperStream provider
selected
28
Outlook
• Well placed to continue strategic momentum with successful integration of
acquisitions and extraction of synergy benefits
• Acquisitions are building out the vertically integrated model and delivering
efficiencies of scale which offers greater opportunity to grow market share
• With regulatory repositioning largely behind us, and superannuation
legislated for continuing growth, we will:
• be well positioned to continue to gain greater market share; and
• shift focus back to value-adding initiatives for our advisers and their clients
• Higher FUMA starting base provides a solid platform for continued growth in
2013/14
29
Questions?
30
Appendices
31
Appendix A: Stockbroking
Service Fees reclassification
IOOF Group Financial Advice & Distribution
$'M 2012/13
pre-adj
Adj 2012/13
restated
2011/12
pre-adj
Adj 2011/12
restated
2012/13
pre-adj
Adj 2012/13
restated
2011/12
pre-adj
Adj 2011/12
restated
Revenue 610.5 - 610.5 545.8 - 545.8 176.7 - 176.7 143.5 - 143.5
Direct Costs (288.4) 24.2 (264.2) (259.6) 21.3 (238.3) (145.3) 24.2 (121.1) (124.0) 21.3 (102.7)
Gross Margin (GM) 322.2 24.2 346.3 286.2 21.3 307.5 31.4 24.2 55.6 19.5 21.3 40.8
GM % 0.39% 0.03% 0.42% 0.38% 0.03% 0.41% 0.11% 0.08% 0.19% 0.08% 0.09% 0.17%
Other Revenue 71.2 (24.2) 47.0 66.8 (21.3) 45.5 68.6 (24.2) 44.4 60.0 (21.3) 38.7
Share of Equity profit/loss 7.7 - 7.7 8.2 - 8.2 1.0 - 1.0 0.6 - 0.6
Operating Expenditure (242.2) - (242.2) (219.7) - (219.7) (71.3) - (71.3) (59.5) - (59.5)
Net Non Cash (10.1) - (10.1) (7.4) - (7.4) (4.3) - (4.3) (2.9) - (2.9)
Income Tax Expense/N.C.I (40.0) - (40.0) (37.7) - (37.7) (8.6) - (8.6) (5.2) - (5.2)
UNPAT pre-amortisation 108.8 - 108.8 96.4 - 96.4 16.8 - 16.8 12.5 - 12.5
Significant Items/Amortisation (29.0) - (29.0) (77.0) - (77.0) (7.8) - (7.8) (8.7) - (8.7)
Reported NPAT 79.8 - 79.8 19.4 - 19.4 9.0 - 9.0 3.8 - 3.8
32
Appendix B: Segment summary
^ Plan B Group 2012/13 and DKN Group 2011/12 result for 9 months post acquisition only
$M 2012/13 2011/12 CHANGE
Platform (ex Plan B) 65.5 59.6 10%
Investment Management (ex Plan B) 32.7 35.5 (8%)
Financial Advice & Distribution (ex DKN, Plan B) 5.9 5.9 0%
Trustee (ex Plan B) 5.5 4.8 14%
Corporate (ex Plan B) (14.2) (14.0) (1%)
IFL Group UNPAT (ex Acquisitions) 95.4 91.5 4%
DKN Group^ 10.4 7.5 38%
Financing costs - DKN (2.5) (2.7) 5%
Plan B Group^ 6.7 - -
Financing costs - Plan B (1.2) - -
UNPAT pre amortisation 108.8 96.4 13%
Amortisation of Intangibles (23.6) (20.4) (16%)
Acquisition related significant items (1.8) 5.8 (131%)
Other significant items (3.6) (62.5) 94%
Reported NPAT 79.8 19.4 312%
33
Appendix C: Platform
Management and Administration
$'MPlatform
(ex Plan B)Plan B 2012/13 2011/12
Change on pcp
(%)
Revenue 341.6 13.6 355.2 323.5 10%
Direct Costs (163.4) (1.7) (165.1) (156.1) -6%
Gross Margin (GM) 178.3 11.9 190.1 167.4 14%
GM % 0.70% 0.95% 0.71% 0.72%
Other Revenue 0.0 - 0.0 0.1 -100%
Share of Equity profit/loss (0.0) - (0.0) (0.0) -
Operating Expenditure (81.5) (3.3) (84.8) (78.8) -8%
Net Non Cash (2.7) (0.1) (2.7) (2.2) -23%
Income Tax Expense/N.C.I (28.6) (2.5) (31.2) (27.0) -15%
UNPAT pre-amortisation 65.5 5.9 71.4 59.6 20%
Significant Items (0.5) (0.0) (0.6) (0.1)
Amortisation (11.8) (1.3) (13.1) (11.5)
Income Tax Expense/N.C.I 28.6 2.5 31.2 27.0
Reported NPBT 81.8 7.1 88.9 74.9
Average FUA ($'b) 25.5 1.7 26.7 23.4
34
Appendix D: Investment
Management
$'MInv. Mgmt
(ex Plan B)Plan B 2012/13 2011/12
Change on pcp
(%)
Revenue 126.0 3.3 129.3 125.9 3%
Direct Costs (52.6) (0.0) (52.6) (48.1) -10%
Gross Margin (GM) 73.4 3.3 76.7 77.9 -1%
GM % 0.26% 0.35% 0.26% 0.26%
Other Revenue 2.5 - 2.5 2.8 -12%
Share of Equity profit/loss 6.7 - 6.7 7.6 -12%
Operating Expenditure (35.4) (1.8) (37.3) (35.4) -5%
Net Non Cash (1.5) (0.1) (1.6) (1.4) -11%
Income Tax Expense/N.C.I (13.0) (0.4) (13.4) (16.0) 16%
UNPAT pre-amortisation 32.7 0.9 33.7 35.5 -5%
Significant Items (5.7) 0.0 (5.7) (8.5)
Amortisation (2.1) - (2.1) (2.1)
Income Tax Expense/N.C.I 13.0 0.4 13.4 16.0
Reported NPBT 37.8 1.4 39.2 40.9
Average FUM ($'b) 28.3 1.3 29.1 29.6
35
Appendix E: Financial Advice
and Distribution
$'MFAD
(ex Plan B)Plan B 2012/13 2011/12
Change on pcp
(%)
Revenue 159.7 17.0 176.7 143.5 23%
Direct Costs (114.1) (7.1) (121.1) (102.7) -18%
Gross Margin (GM) 45.7 10.0 55.6 40.8 36%
GM % 0.16% 2.69% 0.19% 0.17%
Other Revenue 44.4 0.0 44.4 38.7 15%
Share of Equity profit/loss 1.0 - 1.0 0.6 82%
Operating Expenditure (62.1) (9.2) (71.3) (59.5) -20%
Net Non Cash (4.3) (0.1) (4.3) (2.9) -50%
Income Tax Expense/N.C.I (8.4) (0.2) (8.6) (5.2) -65%
UNPAT pre-amortisation 16.3 0.5 16.8 12.5 35%
Significant Items (1.0) (1.0) (2.0) (2.3)
Amortisation (7.9) (0.0) (7.9) (6.4)
Income Tax Expense/N.C.I 8.4 0.2 8.6 5.2
Reported NPBT 15.7 (0.2) 15.5 9.0
Average FUA ($'b) 28.7 0.5 29.0 24.4
36
Appendix F: Estate and Trustee
Services
$'M
Trustee
Services
(ex Plan B)
Plan B 2012/13 2011/12Change on pcp
(%)
Revenue 22.2 1.3 23.4 21.3 10%
Direct Costs (0.0) - (0.0) (0.0) -8%
Gross Margin (GM) 22.1 1.3 23.4 21.3 10%
GM % 0.14% - 0.07% 0.07%
Other Revenue - - - 0.0 -
Share of Equity profit/loss - - - - -
Operating Expenditure (14.2) (1.0) (15.2) (14.1) -7%
Net Non Cash (0.1) (0.0) (0.1) (0.2) 58%
Income Tax Expense/N.C.I (2.4) (0.1) (2.5) (2.1) -18%
UNPAT pre-amortisation 5.5 0.2 5.6 4.8 18%
Significant Items (0.3) - (0.3) (0.1)
Amortisation - - - (0.1)
Income Tax Expense/N.C.I 2.4 0.1 2.5 2.1
Reported NPBT 7.6 0.2 7.8 6.7
Average FUS ($'b) 31.7 - 31.7 30.1
37
Appendix G: Corporate and other
$'MCorporate
(ex Plan B)
Financing
CostsPlan B 2012/13 2011/12
Change on pcp
(%)
Revenue 0.5 - - 0.5 0.0 LARGE
Direct Costs 0.0 - (0.0) 0.0 0.1 -49%
Gross Margin (GM) 0.5 - (0.0) 0.5 0.1 654%
Other Revenue 1.4 (1.4) 0.1 0.1 3.9 -97%
Share of Equity profit/loss - - - - - -
Operating Expenditure (32.0) (0.3) (1.4) (33.7) (31.7) -6%
Net Non Cash (1.4) - 0.0 (1.4) (0.7) -115%
Income Tax Expense/N.C.I 14.8 0.5 0.4 15.6 12.6 24%
UNPAT pre-amortisation (16.7) (1.2) (0.9) (18.8) (15.8) 19%
Significant Items (1.4) - (4.9) (6.3) 4.6
Amortisation (0.4) - (0.0) (0.4) (0.3)
Income Tax Expense/N.C.I (14.8) (0.5) (0.4) (15.6) (12.6)
Reported NPBT (33.3) (1.7) (6.2) (41.2) (24.1)
38
Appendix H: Segment UNPAT
reconciliation to statutory note 6
$'M
Platform
Management and
Administration
Investment
Management
Financial
Advice and
Distribution
Trustee
Services
Corporate
and other
Revenue 355.2 129.3 176.7 23.4 0.5
Direct Costs (165.1) (52.6) (121.1) (0.0) 0.0
Gross Margin (GM) 190.1 76.7 55.6 23.4 0.5
Other Revenue - 2.5 44.4 - 0.1
Share of Equity profit/loss (0.0) 6.7 1.0 - -
Operating Expenditure (84.8) (37.3) (71.3) (15.2) (33.7)
Net Non Cash (2.7) (1.6) (4.3) (0.1) (1.4)
Income Tax Expense/N.C.I (31.2) (13.4) (8.6) (2.5) 15.6
UNPAT pre-amortisation 71.4 33.7 16.8 5.6 (18.8)
Significant Items
Impairment - (4.6) - - -
Acquisition transition costs - - (0.0) - (0.8)
Termination and retention incentive payments (0.6) (1.1) (2.0) (0.3) (2.5)
Recognition of Plan B onerous lease contracts - - - - (3.0)
Amortisation (13.1) (2.1) (7.9) - (0.4)
Reverse out:
Income Tax Expense/Non Controlling Interests 31.2 13.4 8.6 2.5 (15.6)
Reported segment profit before income tax 88.9 39.2 15.5 7.8 (41.2)
APPENDIX I
RECONCILIATION OF SEGMENTS TO STATUTORY FINANCIALS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
2013 2012
Statutory
Note Ref. Platform Inv. Mgmt
Trustee
Services
Corporate and
other
$'m $'m $'m $'m $'m $'m $'m
Gross Margin
Management and Service fees revenue 7 346.4 123.3 167.4 20.3 - 582.9 524.3
Other Fee Revenue 7 8.9 6.1 9.4 3.1 0.5 27.6 21.5
Service and Marketing fees expense 8 (156.9) (45.9) (117.5) (0.0) 0.0 (246.0) (220.5)
Other Direct Costs 8 (5.1) (6.7) (0.6) (0.0) 0.0 (12.4) (11.2)
Amortisation of deferred acquisition costs 8 (3.1) - (3.1) - - (5.8) (6.6)
Total Gross Margin 190.1 76.7 55.6 23.4 0.5 346.3 307.5
Other Revenue
Stockbroking revenue 7 - - 64.4 - - 64.4 56.7
Stockbroking service fees expense 8 - - (24.2) - - (24.2) (21.3)
Interest income on loans to directors of controlled and
associated entities 7- 0.4 0.2 - 0.0 0.4 0.6
Interest income from non-related entities 7 - 0.4 1.2 - 2.8 4.4 6.4
Dividends and distributions received 7 - - 0.0 - 0.6 0.6 1.4
Other revenue (incl. Fair Value Gains) 7 - 2.1 2.6 - 0.4 5.0 3.7
Profit on sale of financial assets 7 - 0.0 0.3 - - 0.3 0.7
Fair value gain on investment in DKN 7 - - - - - - 9.6
Finance Costs 9 - (0.4) (0.1) - (3.7) (4.0) (2.6)
Other Revenue adjustments Below - - - - - - (9.6)
Total Other Revenue - 2.5 44.4 - 0.1 47.0 45.5
Equity Accounted Profits
Share of profits of associates and jointly controlled entities
accounted for using the equity method SOCI*(0.0) 6.7 1.0 - - 7.7 8.2
Total Equity Accounted Profits (0.0) 6.7 1.0 - - 7.7 8.2
Operating Expenditure
Salaries and related employee expenses 8 (12.4) (21.2) (36.5) (9.3) (65.3) (144.7) (128.3)
Employee defined contribution plan expense 8 (0.8) (1.1) (2.5) (0.7) (4.7) (9.8) (9.4)
Information technology costs 8 (0.4) (1.5) (11.4) (0.2) (22.3) (35.9) (34.9)
Professional fees 8 (0.3) (0.6) (1.1) (0.0) (3.3) (5.3) (4.9)
Marketing 8 (1.1) (0.7) (4.5) (0.1) (3.3) (9.8) (9.5)
Office support and administration 8 (0.2) (0.6) (5.1) (0.5) (8.7) (15.1) (13.8)
Occupancy related expenses 8 (0.0) (1.1) (6.0) (0.1) (8.2) (15.6) (13.4)
Travel and entertainment 8 (1.0) (1.1) (1.4) (0.3) (1.7) (5.6) (5.2)
Corporate recharge N/A (68.6) (9.4) (2.5) (3.8) 84.3 - -
Other 8 - (0.0) (0.0) (0.0) 0.0 (0.1) (0.1)
Total Operating Expenditure (84.8) (37.3) (71.2) (15.2) (33.3) (241.7) (219.5)
Loss on disposal of non-current assets 8 - - (0.1) - (0.4) (0.5) (0.1)
Total Operating Expenditure (84.8) (37.3) (71.3) (15.2) (33.7) (242.2) (219.7)
Net non cash (Ex. Amortisation)
Share based payments expense 8 (1.3) (0.9) (2.1) 0.0 (1.4) (5.7) (3.0)
Depreciation of property, plant and equipment 8 (1.5) (0.7) (2.2) (0.1) 0.0 (4.5) (4.4)
Net non cash (Ex. Amortisation) (2.7) (1.6) (4.3) (0.1) (1.4) (10.1) (7.4)
Income Tax & NCI
Non-controlling Interest SOCI* - - (0.7) - (0.0) (0.7) (0.3)
Income tax expense SOCI* (31.0) (12.1) (5.8) (2.4) 21.5 (29.8) (87.7)
Income tax expense/NCI adjustments Below (0.1) (1.3) (2.2) (0.1) (5.8) (9.5) 50.3
Total Income Tax & NCI (31.2) (13.4) (8.6) (2.5) 15.6 (40.0) (37.7)
Underlying NPAT (pre-amortisation) 71.4 33.7 16.8 5.6 (18.8) 108.8 96.4
Significant Items .
Impairment 8 - (4.6) - - - (4.6) (9.2)
Acquisition transition costs 8 - - (0.0) - (0.8) (0.8) (3.1)
Termination and retention incentive payments 8 (0.6) (1.1) (2.0) (0.3) (2.5) (6.5) (3.7)
Recognition of Plan B onerous lease contracts 8 - - - - (3.0) (3.0) -
Fair value gain on investment in DKN 7 - - - - - - 9.6
Income tax expense/NCI adjustments
Recognition of deferred taxes on intangible assets - - - - - - (62.7)
Unwind of deferred taxes on intangible assets N/A - - 1.2 - 4.2 5.4 1.9
Reinstatement of Perennial non-controlling interests N/A - 1.0 - - - 1.0 2.4
Recognition of previously uncertain tax position - - - - - - 7.0
Income tax attributable N/A 0.1 0.3 0.9 0.1 1.6 3.1 1.2
Total Significant Items - Net of Tax (0.4) (4.4) 0.2 (0.2) (0.5) (5.4) (56.7)
Amortisation of intangible assets 8 (13.1) (2.1) (7.9) - (0.4) (23.6) (20.4)
Reported Profit/(Loss) per financial statements 57.9 27.1 9.0 5.4 (19.7) 79.8 19.4
* SOCI = Statement of Comprehensive Income
Note: Segment results include inter-segment revenues and expenses eliminated on consolidation
Financial
Advice &
Distribution
39
APPENDIX J
RECONCILIATION TO STATUTORY FINANCIALS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
2013 2012
Statutory
Note Ref.
IFL
(ex-Plan B)
Financing
Costs
$'m $'m $'m $'m $'m
Gross Margin
Management and Service fees revenue 7 549.5 - 33.4 582.9 524.3
Other Fee Revenue 7 25.8 - 1.8 27.6 21.5
Service and Marketing fees expense 8 (237.8) - (8.2) (246.0) (220.5)
Other Direct Costs 8 (11.8) - (0.6) (12.4) (11.2)
Amortisation of deferred acquisition costs 8 (5.8) - - (5.8) (6.6)
Total Gross Margin 319.9 - 26.4 346.3 307.5
Other Revenue
Stockbroking revenue 7 64.4 - - 64.4 56.7
Stockbroking service fees expense 8 (24.2) - - (24.2) (21.3)
Interest income on loans to directors of controlled and
associated entities 70.5 - (0.1) 0.4 0.6
Interest income from non-related entities 7 4.2 - 0.2 4.4 6.4
Dividends and distributions received 7 0.6 - - 0.6 1.4
Other revenue (incl. Fair Value Gains) 7 4.9 - 0.1 5.0 3.7
Profit on sale of financial assets 7 0.3 - - 0.3 0.7
Fair value gain on investment in DKN 7 - - - - 9.6
Finance Costs 9 (2.6) (1.4) (0.0) (4.0) (2.6)
Other Revenue adjustments Below - - - - (9.6)
Total Other Revenue 48.2 (1.4) 0.1 47.0 45.5
Equity Accounted Profits
Share of profits of associates and jointly controlled entities
accounted for using the equity method SOCI*7.7 - - 7.7 8.2
Total Equity Accounted Profits 7.7 - - 7.7 8.2
Operating Expenditure
Salaries and related employee expenses 8 (133.6) - (11.1) (144.7) (128.3)
Employee defined contribution plan expense 8 (8.9) - (0.8) (9.8) (9.4)
Information technology costs 8 (34.0) - (1.9) (35.9) (34.9)
Professional fees 8 (5.0) - (0.3) (5.3) (4.9)
Marketing 8 (9.6) - (0.1) (9.8) (9.5)
Office support and administration 8 (13.8) (0.3) (0.9) (15.1) (13.8)
Occupancy related expenses 8 (14.2) - (1.3) (15.6) (13.4)
Travel and entertainment 8 (5.4) - (0.2) (5.6) (5.2)
Corporate recharge N/A - - - - -
Other 8 (0.1) - 0.0 (0.1) (0.1)
Total Operating Expenditure (224.7) (0.3) (16.8) (241.7) (219.5)
Loss on disposal of non-current assets 8 (0.5) - - (0.5) (0.1)
Total Operating Expenditure (225.2) (0.3) (16.8) (242.2) (219.7)
Net non cash (Ex. Amortisation)
Share based payments expense 8 (5.7) - - (5.7) (3.0)
Depreciation of property, plant and equipment 8 (4.2) - (0.2) (4.5) (4.4)
Net non cash (Ex. Amortisation) (9.9) - (0.2) (10.1) (7.4)
Income Tax & NCI
Non-controlling Interest SOCI* (0.7) - (0.0) (0.7) (0.3)
Income tax expense SOCI* (29.4) 0.5 (0.8) (29.8) (87.7)
Income tax expense/NCI adjustments Below (7.5) - (2.0) (9.5) 50.3
Total Income Tax & NCI (37.6) 0.5 (2.9) (40.0) (37.7)
Underlying NPAT (pre-amortisation) 103.3 (1.2) 6.7 108.8 96.4
Significant Items .
Impairment 8 (4.6) - - (4.6) (9.2)
Acquisition transition costs 8 (0.8) - (0.0) (0.8) (3.1)
Termination and retention incentive payments 8 (3.5) - (3.0) (6.5) (3.7)
Recognition of Plan B onerous lease contracts 8 - - (3.0) (3.0) -
Fair value gain on investment in DKN 7 - - - - 9.6
Income tax expense/NCI adjustments -
Recognition of deferred taxes on intangible assets - - - - (62.7)
Unwind of deferred taxes on intangible assets N/A 5.2 - 0.2 5.4 1.9
Reinstatement of Perennial non-controlling interests N/A 1.0 - - 1.0 2.4
Recognition of previously uncertain tax position - - - - 7.0
Income tax attributable N/A 1.3 - 1.8 3.1 1.2
Total Significant Items - Net of Tax (1.4) - (4.0) (5.4) (56.7)
Amortisation of intangible assets 8 (22.3) - (1.3) (23.6) (20.4)
Reported Profit/(Loss) per financial statements 79.6 (1.2) 1.4 79.8 19.4
* SOCI = Statement of Comprehensive Income
Note: Segment results include inter-segment revenues and expenses eliminated on consolidation
Plan B
40
41
Appendix K
19.5c
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
Jun-09 Nov-09 Apr-10 Sep-10 Jan-11 Jun-11 Nov-11 Apr-12 Aug-12 Jan-13 Jun-13
(cen
ts)
Underlying EPS (cents) DPS (cents) ASX200 (RHS Base 100) IFL (RHS Base 100)
TSR = 123% April 2009 - June 2013 (21% annualised)
21.0c
22.5c
20.6c
19c
21.8c21.8c
23.7c
24.7c
21.0c
17c
22.0c
21c
18c
18c
22c
20.5c
21.8c23.7c
24.7c
21.0c
24.9c24.7c
23.7c
APPENDIX L
Explanation of items removed from UNPAT
Amortisation of intangible assets: Non-cash entry reflective of declining intangible asset values over their useful lives. Intangible assets
are continuously generated within the IOOF Group, but are only able to be recognised when acquired. The absence of a corresponding entry
for intangible asset creation results in a conservative one sided decrement to profit only. It is reversed to ensure the operational result is not
impacted. The reversal of amortisation of intangibles is routinely employed when performing company valuations.
Impairment: Non-cash entry which reflects a point in time valuation of assets which is unable to be reversed to profit in future periods should
the original value prove to be restored. The entry is not related to the conventional recurring operations of the IOOF Group.
Acquisition transition costs: One-off payments to external advisers by both Plan B and the IOOF Group in pursuit of a successful
acquisition which are not reflective of conventional recurring operations. These costs relate to the acquisition of DKN in the prior comparative
period.
Income tax attributable: This represents the income tax applicable to certain of the adjustment items outlined above.
Reinstatement of Perennial non-controlling interests: Embedded derivatives exist given the IOOF Group’s obligation to buy-back
shareholdings in certain Perennial subsidiaries if put under the terms of their shareholders’ agreements. IFRS deems the interests of these
non-controlling holders to have been acquired. Those interests must therefore be held on balance sheet as a liability to be revalued to a
reserve each reporting period. In calculating UNPAT, the non-controlling interest holders share of the profit of these subsidiaries is
subtracted from the IOOF Group result as though there were no embedded derivatives to better reflect the current economic interests of
Company shareholders in the activities of these subsidiaries.
Fair value gain on investment in DKN: An initial 18.5% holding in DKN prior to its acquisition means this is a business combination
achieved in stages under AASB 3. The IOOF Group is therefore required to measure this previously held equity interest in DKN at acquisition-
date fair value and recognise the resulting gain in P&L. The initial entry ensures the assets acquired are held on balance sheet at fair value,
however the impact on profit is reversed as it is regarded as highly unlikely to be realised due to the IOOF Group's intention to hold its
investment in DKN long term.
Recognition of previously uncertain tax position: On the 27 June 2012, Tax Laws Amendment (2012 Measures No. 2) Act 2012 (“The
2012 Act”) was substantially enacted. It sought to limit the availability of deductions previously made available by the passing of Tax Laws
Amendment (2010 Measures No. 1) Act 2010 (“The 2010 Act”). Both Acts contain a number of amendments to the tax consolidation regime
which deal with rights to future income assets acquired upon an entity joining a tax consolidated group.
The 2012 Act limits deductions that were available under the 2010 Act in respect to the tax cost setting amount of those assets, and under
the business related expenditure provisions. The 2012 Act also expressly protects certain deductions claimed under the 2010 Act where an
assessment notice was received prior to 30 March 2011. As such the IOOF Group has reclassified some of its tax positions relating to
deductions claimed under the 2010 Act. Consequently, the amount received in respect to deductions claimed in the IOOF Group's 2010
Income Tax Return was credited to profit as an income tax benefit in the 2012 year.
The impact of the above reclassifications resulted in an increase to current tax liability of $23.5m, a reduction to income tax expense of
$6.9m, and a decrease in deferred tax liability of $30.4m in the 2012 year. These are non-operational adjustments relating to the 2010
financial year which, subject to the outcome of ongoing legal action, may be non-recurring.
In calculating its Underlying Net Profit After Tax (UNPAT) pre-amortisation, the Group reverses the impact on profit of certain, predominantly non cash,
items to enable a better understanding of its operational result. A detailed explanation for all such items is provided below.
Recognition and unwind of deferred tax liability recorded on intangible assets: Acquired intangible asset valuations for AASB 3
Business Combinations accounting are higher than the required cost base as set under legislated tax consolidation rules implemented during
2012. A deferred tax liability ("DTL") is required to be recognised as there is an embedded capital gain should the assets be disposed of at
their accounting values. This DTL reduces in future periods at 30% of the amortisation applicable to those assets which have different
accounting values and tax cost bases. The recognition of DTL and subsequent period reductions are not reflective of conventional recurring
operations and are regarded as highly unlikely to be realised due to the IOOF Group's intention to hold these assets long term.
Termination and retention incentive payments: Facilitation of restructuring to ensure long term efficiency gains, predominantly Plan B
related in the current period and DKN related in the prior comparative period, which are not reflective of conventional recurring operations.
Recognition of Plan B onerous lease contracts: Non-cash entry to record the estimated present value of expected costs of meeting the
obligations under contracts where the costs exceed the economic benefits expected to be received pursuant to the contracts.
42
43
Appendix M: Asset allocation
44% 42%43% 42%
42% 44%
41% 41%
$28.8b
5% 5%
5% 5%
$30.2b
8% 8%
9%10%
$28.5b
1% 1%
2%2%
$32.6b $32.6b
Asset Allocation 1H 11/12 Asset Allocation 11/12 Asset Allocation 1H 12/13 Asset Allocation 12/13 FUMAS by Segment 30/6/13
Australian Equities Fixed Interest / Cash Property International Equities Other
Funds Under Supervision
Financial Advice and Distribution
Investment Management
Platform Management and Administration
FUMA $85.5b
FUMA $76.9bFUMA $76.7b
FUMA $87.6b
44
Important notice
This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Certain statements in the presentation relate to the future. Such statements involve known and unknown risks and uncertainties and other important factors that could cause the actual results, performance or achievements to be materially different from expected future results, performance or achievements expressed or implied by those statements. IOOF does not give any representation, assurance or guarantee that the events expressed or implied in any forward looking statements in this presentation will actually occur and you are cautioned not to place undue reliance on such forward looking statements.
This presentation has not been subject to auditor review.
Creating financial independence since 1846
