HUB24 Limited

Good morning everyone and welcome today to our results presentation. Very pleased to present a very positive result and talk to you about our outlook and our strategy and of course leave plenty of time for questions as well. With me today is Katrina Shanahan as always, our Chief Financial Officer and let's begin with some high notes for the business for FY25. Once again, and we're very pleased to say that we are Australia's leading platform as rated by investment trends in their platform competitive benchmark report for the third year running. We also have the highest NPS score and the one for satisfaction voted by advisors and above managed accounts capability. And for this year, talking about how those awards and how our business has delivered strong advisor advocacy, for FY25 we've actually hit an industry record with $19.8 billion worth of net inflows We've been number one for net inflows of platforms for six consecutive quarters. We've been number one for platform market share gains over the last two years on an organic basis. And we continue to have the highest propensity for superannuation members who switch their super. We are the benefactor of that choice with the highest number of inflows from those who choose to switch arising from the delivery of good advice to consumers in the marketplace where people take control their future and want to invest in the products that suit their needs. I want to pause quickly though. We've led with this slide deliberately about where we stand in the market. It has been a great year and I wanted to recognise and thank both our customers and our team for helping us to deliver in that way. Surely our customers inspire us to do better and to empower better financial futures and it drives our team really to find a better way. So thank you for support from customers. Thank you very much for our team who've helped us deliver in this way. and are continuing to look forward to delivering and unlocking value in the future more and more for customers and shareholders. Here's a quick look at some of our overall platform recognition for the year, and many of you will have seen this before, so I won't labour the point, but we have been recognised in multiple surveys across the industry for customer service and product leadership. On the right-hand side in the top corner, in the last week, advisor ratings have rated us the best platform overall for satisfaction, There's super fun satisfaction, advisor experience, client experience, ease of onboarding, overall functionality, and best investment options, which is some accolades we received last week, I believe. So great to see that happening and recognizing the efforts we're taking in the business to create great solutions for our customers. We turn on some of our results highlights. They're moving straight into the financial results. What a great year, $136.4 billion of FUA, up 30% on last year, with platform FUA up 34% to 112.7. And we'll have some questions later about the $118 billion, I'm sure, as it falls in the books. We had a fast start to the year. We look forward to unpacking that as best we can during our question session. And our portfolio admin reporting service, FUA, also up 16%. On a revenue basis, the numbers are equally healthy. with the total group revenue over 400 mil at 406.6, which is up 24%, platform up 28%, and tech solutions, pleasingly, up 9% to $77.1 million. So all our operating segments up with healthy percentages in terms of revenue. Of course, translating into underlying EBITDA gains as well for the total group being at 162.4, which is 38% up, platform up 39% as well, And Tech Solutions up 23% year-on-year at $27.2 million, a pleasing result there. On the MPAT front, the underlying and statutory MPATs are up 68%, 79.5% and just shy of $80 million. We've got our final dividend fully freighted, determined at $0.32 per share, bringing the full-year dividends to $0.57. And that $0.32 is up 64% on the prior corresponding period. And then underlying EPS for the year diluted is also up 45%. So a really great set of results arising from how we run the business and our clients and our strategy and the good execution we've got in the marketplace. In terms of some other highlights for the year, in terms of our leadership and growth, we've had very strong growth in the business and very strong leadership in the industry. Having had as a great lead indicator for the future another 572 advisors choosing to start using Hub24, in the last year, and that's the largest increase in advisors we've had since FY21. $5.3 billion of transitions finished for EQT over this year and the year before, and another one for Clearview, $1.3 billion. So to complete those large migrations at the same time as having record-breaking organic flows for us, a great result. Discovery is up at $1.9 billion, which is great, having launched only just over a year and a half ago. And we have the leading platform, according to investment trends across multiple client segments, including the high net wealth segment, mass affluent and mass market segments. And we'll talk a bit more about high net worth later on in the pack. Class is also growing at the highest level it has since FY20. In terms of executing our strategy at the same time, I'll spend some time later talking about Engage, which we've launched, which is leveraging our HubConnect technology. We now have seven by Prosperity Enterprise Agreements on foot with large national licensees. We'll talk about the high net wealth and the reach piece a little bit later in the pack. And of course, we're doing lots of enhancements to both Class, now Infinity, and the platform. And whilst we're doing that, we're also conscious of building for the future with increasing our quality, our service, and our efficiency to automation, upgrading our infrastructure, leveraging AI and emerging technologies to create customer value and shareholder value in productivity and efficiency for both of us, as well as investing, of course, in our people and our culture. Some highlights there. All that results to we've had a consistent approach to investing in the business and delivering profits over time. And if you look at this slide here on slide eight, in terms of our consistent delivery of growth and profitability, the revenue CAGR for the business over four years is 38%. And the underlying EBITDA CAGR is 46%. And the chart there has that broken down across our segments and our corporate revenue. And our funds under administration for UK GAR is a 24% growth rate. As you can see, it's been fairly consistent, reliable growth, and we hope and we intend to keep delivering that moving forward as well. This full growth translates into changes in market share. We're ranked number seven in market share, but we're at the same level give or take to our nearest competitor. And in the marketplace, Hub24 has once again had the number one market share gain over 12 months, having gained 1.4% overall market share. with the next participant gaining only 1.1%. And our share has increased. So that's over the last 12 months. And the market itself is growing, having had $36 billion of net inflows into the market. It's the highest industry annual net inflow since 2008. And the corresponding period had $7 billion of net inflows. So the market's growing, and our share in the market is growing as well. As I said earlier, there's 572 advisors who've chosen to start using Hub24 this year. And having a deeper look at some of the trends in advisors, 33% of advisors in Australia now use Hub24, and that's a four-year CAGR of 14%. In June 21, there was 16% of advisors, now 33% at the end of FY25. The average balance for those advisors has gone up from right about $14 million to about $21, $22 million per advisor in that period of time as well. So we have more advisors using the platform and the penetration or the share of their book and their clients has increased over that time as well. Translating that to overall market share, we've grown from 4% to 9% over the last four years. And as I said a little bit earlier, number one in terms of market share gains over the last 12 months. Having said that, our growth continues to arise from existing and new advisors. On this slide here, you can see some of the details of that. For this year, 81% of our flows have come from existing relationships. And we talk about how existing relationships typically give us positive net flows, perhaps after six years of being on the platform. So there's reliable ongoing flows from existing clients. 16% of flows in FY25 came from new advisors with existing licensees and 3% from new relationships. HUB24 has access through relationships to more than 70% of the advisor market. even though only 33% are actively using it. So we have an opportunity to gather support from more and more advisors as we continue to execute. In terms of the FUA overall, as I said, the FUA per advisor is up to 22 million, up from 14 million in FY21. But with an industry average of $76 million per advisor, you can see there's a runway to go in terms of extending our reach and servicing more of the advisors' book of clients, with an average of 22, but an industry average of 76. 11% of the advisors on our platform have more than $50 million of Foo and Hub24, illustrating the levels of penetration we can get to and the long runway we have with those existing relationships as well. So still a great opportunity for us to continue to grow from existing and new advisors moving forward. Having a quick look at our technology solutions and my prosperity businesses, Class is maintaining its market share at about 30.5%. The system itself is growing on an accelerated basis. And Class has had the largest increase of accounts in FY25 since FY20. The corporate messenger part of the Now Infinity business is growing at 1.4 times system. So great results there in terms of growth moving forward. And also in MyProsperity. We're seeing results there as well with increased customer engagement. You can see the number of logins per firm, logins per customer. So people are using the tool more and more for its rich capability. We've got seven enterprise agreements signed with large licensees. Those licensees have 1,700 practices across the industry, which we hope to, over time, have quite a few of those sign up to using the service. And interestingly, since we bought MyProsperity, 65 MyProsperity practices or customers have become Hub24 customers And those customers have delivered over a billion dollars of fuel to the platform. So you've seen the reciprocity and the sales synergies, if you like, from us building an ecosystem with platform class, now Infinity, and micro-sperity starting to play out in our results. Our people are wonderful and I'm very, very thankful and pleased and proud to be able to lead our business. They're very dedicated and very passionate about delivering on the promise we make to our customers. We've got just shy of 1,000 people in our businesses. Our staff engagement is up year on year to 78% in the top quartile. We're endorsed as an employer of choice for women by Work 180. We're certainly purpose-led and values-driven, embedding our values into our culture that are on the slide there. We're investing in career growth at all levels and improving our employee value proposition. We have a graduate program. We've extended and scaled up an intern program. In fact, we have been named in the top 20 of the 25 best small intern programs in Australia. It's a delight seeing young people come into our business with their ideas and passion, the ability to start a career with us. We've had some external recognition of our people and culture this year as well, with finalists in the Seek Star Awards, multiple finalists in the Women in Wealth Awards and Women in Security Awards, that's technology security, and three Excellence Awards in the Australian HR Awards as well. So people are a very big focus of our business and absolutely supporting our sustainability objectives, which I'll quickly talk about on the next slide before I hand over to Katrina. So quick update, we've made some ground on our sustainability objectives with our key focus areas, made significant progress towards our 2030 net zero goal for scope one and two emissions. We've renewed our commitment to United Nations Global Compact. We've certainly invested in cybersecurity capability and digital initiatives supporting industry scalability and security as well. And we've certainly delivered on our customer promises with strong NPS results as well. So continuing to focus on how we make Hub24 a sustainable business for our shareholders, our customers, and for the community at large. Thank you. I'll just hand over to Katrina Shanahan, our CFO, to talk about our financial results.

Thank you, Andrew. So here we have the group platform and the tech solutions snapshot of the revenue underlying EBITDA and the customer numbers. So the group revenue was close to $407 million for this year and underlying EBITDA of just over $162 million. platform being the largest segment and the largest driver with $323 million worth of revenue and just under $143 million worth of underlying EBITDA. And as Andrew mentioned, just over 5,000, 5,097 active advisors using the platform as of 30 June. Tech Solutions revenue was up to $77 million this year and underlying EBITDA of $27 million with, again, 6,500 accounting practices using the class solutions. So moving on to the next slide, we have the group financial results. And here you can see the growth year on year with the underlying EBITDA margin for the group up 3.8% to 39.9% in full year 25. Underlying NPAP was up 44% to just under $100 million at $97.8 million for the year, and statutory NPAP was up 68% to $79.5 million for the year. Full-year dividends for the year were $0.56 per share, up 47% on last year, and the underlying diluted earnings per share of $117.8 per share, up 45% year-on-year. And on the right-hand side, you can see the contributions for operating revenue and underlying EBITDA from the platform tech solutions in the corporate segments. So moving on to the next slide, we have the platform segment. And here we have the custody FUA growth of 34%, with the platform FUA of just under $113 billion, at $112.7 billion for the year, and non-custody FUA up 16% year-on-year at $23.7 billion. This brings the total FUA at the 30th of June to $136.4 billion, up 30% year on year. And again, as Andrew mentioned, we had record net inflows for this year, record for Hub 24 of $19.8 billion, which also included $4 billion of large migrations. And it was a record for us including and excluding the large migrations. On this slide, you can also see the platform underlying EBITDA margin of 44.2%. which was up 3.5%. You can see on the right-hand side in the graph on the right, you can also see the 8.5 billion of positive market movements into the custody for us. So moving on to the next slide, we have the platform custody revenue and margin. And on the graph on the right-hand side, you can see the revenue margin was consistent throughout the year at 32 bits, first half, second half, and full year 25. This was down one BIP on second half 24 and down two BIPs on full year 24. This is driven by positive markets, average balances increasing and accounts moving into higher tiers or reaching a fee cap. And there was one BIP margin compression during the year with cash balances reducing as a percentage of referrer. For full year 25, the average cash balance was 6.9% and for full year 24, the average cash balance was 7.4%. There's more details of this in our analyst and investor pack. Okay, so continuing with the platform composition of FOA and revenue and the revenue margins, you can see the retail has increased as a percentage of our total custody FOA, and it's up to 87% of the portfolio is now sitting in the retail portfolio. It was 84% in full year 24. This is due to a high proportion of the net flows coming into the retail portfolio. And in the chart on the bottom right-hand side, you can see the mix of the custody revenue margin with the retail revenue margin coming down year-on-year 2 bps, consistent with my previous commentary on the previous page, and the institutional revenue margin coming down last year for year 24 at 13 bps, coming down to 10 bps average across the year. In the analyst and investor pack, you can see that the second half 25 institutional margin was down to 7 bps. and this is due to a mix of the portfolio. We completed the five billion of migrations from EQT in the year, and so now EQT and private bank clients are the largest component of the institutional fewer, and their wholesale rates reflecting the scale and the lower cost to serve for these portfolios. Okay, so moving on to the next slide, we have the platform underlying EBITDA and margins, and on the right-hand side, you can see the trend with the continued growth in the underlying EBITDA margin, with operating leverage and growth delivering a margin of 44.2% this year for the platform. And we've also got the four-year platform underlying EBITDA CAGR of 39% there. Okay, so now moving on to the tech solutions part of the business. And as Andrew called out, Class has had one of the best years in, I think, since full year 20. Class number of accounts grew 4%. to over 215,000 accounts. Now Infinity business is growing incredibly well. We've got 12% growth in the Now Infinity document orders, just over 214,000 documents produced in the year. And companies on Class Corporate Messenger, over 852,000, up 7% year-on-year. And the Class underlying EBITDA grew 23% to $27.2 million. with an increase in the underlying EBITDA margin of 4% to 35.3%. Okay, so now moving on to the group expenses. So we have total expenses have grown 13% to $307 million. This includes operating expenses, depreciation and amortization, and interest expenses. The largest driver of the increase comes from employee-related expenses, with RFTE growing 8% year-on-year. And at the 30th of June, we had 962 full-time employees. The growth has been seen in the operations area, which has grown in line with the FUA growth and is linked to the number of accounts and the size of the FUA that we're servicing. We've also had employee growth in the technology and the product teams, and again, to support the growth that we're seeing across the business. Moving on to the next slide. Here we have a walk of the group's underlying EBITDA, underlying MPAT, and stat MPAT. So we have group underlying EBITDA of just over $162 million. Then we do a walk down to the underlying MPAT with share-based payments of just under $14 million, which is consistent with last year, which was $13.5 million. Depreciation and amortization has ticked up year on year and is now $19.4 million. which is tracking and aligning with the CAPEX levels, capitalisation across both the platform and the tech solutions business with $19.1 million in full year 25 and C2C depreciation and AMOR is tracked in line with that. Interest expenses has increased year on year with a large part of that to do with the property moves that we've done and the interest on the leases increasing. And then the last call out that I'll raise is the effective tax rate is just under 20%. and that's consistent year-on-year. The main reason it's below the corporate 30% level is because we have R&D tax claims and we also have the purchase of treasury shares that also impacts the tax rate. Then, moving on, just a couple more slides. We've got the group cash flow and the balance sheet. The group had $115 million of cash on the balance sheet at the 30th of June. There's also borrowings. We have a loan facility with CBA of $30 million, so a net cash balance of $85 million. The CBA loan matures in June 26, but we have the flexibility to either repay that loan or to roll it over depending on the uses of the cash. And we've called out a couple of the uses of the cash on this slide with an increased loan with the Superfund trustee. The loan's up to $100 million. with 5 million drawn at the 30th of June. But you can expect to see that increase in the first quarter. There'll be a drawdown at the 30th of September to align with the new APRA SPS 114 standard. Another use of the group's cash is the employee share scheme and purchasing treasury shares on market to service those employee share schemes. And so then moving to the last slide before I hand back to Andrew to talk about strategy and outlook. Here we have the fully franked final dividend for the year of 32 cents per share, which is up 64% year-on-year, taking the total dividend for full year 25 to 56 cents per share, up 47% year-on-year. And then on the right-hand side, you can see the group KGARs for the dividend of 54%, underlying EPS of 52%, and a total shareholder return over the last four years of 34%. And with that, I will hand back to Andrew. Thank you.

Thank you, Katrina. Talking about our strategy and outlook, our strategy has two main focus areas, growing our market leadership at the same time as continuing to transform our industry and look for opportunities to create value in new ways. So the left-hand side of the slide, and we've talked about this before, it's about having a strong growth outlook and us continuing to lead in our chosen businesses for Hub24 platform, Class and now Infinity, certainly well-positioned. to increase our market share from the current 9% in the platform and to continue to benefit from industry transformation and be a leader in that space. We certainly tend to keep doing that. And in class and now in Infinity, they're also accelerating their growth and great results there in terms of their market share. So those two businesses in themselves, those business models and leading that is part of our strategy for creating shareholder value to keep ourselves at the forefront in those business lines at the same time as looking for how we can create additional shareholder value through our technology solutions, which is leveraging our group capabilities to look for efficiencies for financial professionals and their clients with HubConnect, MyProsperity and portals and so forth. And in itself, having those two prongs to our strategy, creating growth synergies for each other. So our technology and data solutions innovation, creating growth opportunities for the platform and class and vice versa. So we have a great opportunity to do that. And the world in which we operate on the market, we continue to operate, is certainly structurally growing and it's creating opportunities for us and we're uniquely positioned to take advantage of that. In terms of demand for advice, that's increasing in Australia with 2.7 million Australians seeking advice. There are 3.5 or 3.6 million Australians looking to transition from accumulation to retirement, which is a trigger for needing advice and needing platform solutions. Of course, there's an intergenerational wealth transfer movement I expect over the next two decades up to $5.4 trillion. And so it's increasing demand for the services that platforms and advice business offer to the marketplace. The industry is undergoing transformation, continuing to undergo transformation in terms of not only participants in the platform space but also in the advice space. 90% of advisors now privately owned or privately owned licensees. But 36% of advisors saying that... They intend to over time use a single platform, up from 13% four years ago. And so the business models of advice practices are thinking about how do they lock in with a model that helps them with their business and productivity, and particularly in a business like ours where we offer solutions across all customer segments and all different life stages. With efficiency and compliance still being the two top challenges rated by advice firms, and certainly a focus here of our technology and our business in terms of how we help with efficiency, productivity, and compliance management. And the market opportunity, 98% of industry net inflows by the last, are captured by two platforms over the last year with Hub24 having 54% of that. And industry, or specialist platforms over the last four years gaining 10% market share with Hub gaining 5% of that. So the trends are there, our strategy, our technology position, our footprint, and our capability has us uniquely positioned to continue to benefit from these trends in the market and the industry. We'll do this, and you've seen the next slide before. The way we do this is through the four pillars in our strategy by leading today, helping to create tomorrow, building together. That's part of our overall purpose, to empower better financial futures together with advice, with fund managers, with technology providers, with customers, and how we build a better outcome. And thinking about our future, leveraging the businesses we have today, to get outcomes for financial professionals about one way of doing business, single viewer wealth, efficient access to our ecosystem, and flexibility in reporting insights. I mentioned our footprint across different client segments. We'll skip over this slide, but it talks about the different product ranges we have for different life stages from all of our business brands and over different segments. The only addition on there in that footprint is Hub24 Private Invest, which we launched in the last few months, which I'll talk about on our next slide. So some examples of how we bring our strategy to life, and we've got some innovative solutions behind it for clients. We launched Hub24 Private Invest, which is an innovative product with a unique design, easier access for wholesale investments for wholesale clients with different or streamlined disclosure documentation and onboarding processes, accessing a broader range of investments, including some alternatives. We do the administration of custody and non-custody assets in that product, flexibility for advising on their fees and whole of wealth reporting through engage which i'll talk about on the next slide but it is about expanding our addressable market so i said earlier investment trends rate us as having the best offer in the high net wealth space uh there's 3.4 trillion dollars worth of assets and high well uh 28 of advisors are focused on pilot world and wholesale clients and there's 690 000 investors and growing Only 22% of those investors are advised that we can build products and solutions and work with advice businesses to increase that penetration. It will certainly expand our addressable market for ourselves and our key customers. And improving productivity is the goal as well with these tools and solutions we're launching. So extending that, and that's an example of us thinking about our strategy and cutting across different segments. Another example on the next page is Engage, which is an evolution of our present market-leading reporting capability. We've launched that recently. It's a transformation in technology that advisors can use to have engaging discussions with their clients using their own terminology to build reports real-time that change based on different types of data, delivering advisors efficiency and advocacy and allows them to tailor this reporting for their own business. In the future, we'll allow them to publish these reports and also extract data for these reports for their clients and it leverages our hub connect capability which is integrated data that sits outside of the platform but allows performance reporting and reporting from multiple sources hence you can get the university of investments even if it's on another platform over time that's the plan here engage will run it currently runs inside the hub platform but it will also be a cornerstone of my prosperity for customers to use my prosperity to see engage running across all of the assets safe feeding to my prosperity regardless of whether they're held by Hub24 or administered by Hub24. We've had some great feedback from that, also being recognised in some surveys about Engage before we even launched it to the marketplace. And as always, we're leveraging emerging technology, so there's a scale and customer value to enhance our customer proposition and to also enhance the productivity and efficiency of business to get benefits for our shareholders. Our Innovation Lab has been established since 2018. We continue to use AI machine learning and low-code and robotic process automation to increase our productivity. We're having a phased rollout of AI tools across our business. It is helping us with our servicing model. We use it with IT development. We use it to deliver services for our clients. An example is our advice fee consent, award-winning, that used AI to do that in the marketplace. a virtual mail room we have to streamline the collection of data and documents and storage for customers. Of course, our focus with these technologies is certainly strong around governance and security and the responsible use of the technology, having good procedures and policies in place and a great robust cybersecurity framework with tools that allow us to ensure privacy, For example, safeguarding customers' documentation through using the Vault in MyProsperity, using data redaction tools, when we're communicating with information, certainly underpinning our innovation in those areas to implement our strategy and create value, as I said, for customers and shareholders. So that's just some examples of bringing to life our strategy and what we're doing. In the market, there's many more. We're certainly focused on extending that lead in our current marketplace and continuing to reshape how the industry works. And so moving forward, we've updated our FUA guidance to FY27. You might remember that at the end of FY24, we had guidance at $115 to $123 billion of FUA at the end of FY26. Rolling out one year ahead of that or one year beyond that, there's a $33 billion increase in the lower end of that to $148 billion by FY27. And a $39 billion increase at the top end of the range, $162 billion. That's based, and Kit can talk about it, it's based on continued net flow, momentum and market movements and a range of growth assumptions. It is a broad range as the business gets bigger. And we certainly aspire to hit towards the top end of that or to exceed that as we have in the past. But giving you some guidance, so that's the range we think we can hit moving forward given our current plans. We're in a great position to leverage structurally growing markets as usual, unlock value and capitalise on these opportunities for customers and shareholders. Strong and reliable growth, we expect that to continue from existing and new customers. Our operations are scalable, we're seeing even down margin, we're able to invest in the business at the same time as enhancing margin, and we're in a great position to continue to grow market share. Of course, with a strong balance sheet, great cash flows that support our ongoing investment and delivery of shareholder returns. So thank you very much. That ends the formal part of our presentation. Very happy to open up for questions from those of you who have dialed in.