Perpetual : AGM Addresses

2019 ANNUAL GENERAL MEETING

Addresses to Shareholders

17 October 2019

Perpetual Limited

ABN 86 000 431 827

PPT FY19 ANNUAL GENERAL MEETING

Chairman

Tony D'Aloisio AM

In a moment, I will ask our CEO Rob Adams to deliver his address. Before I do, I would like to pick up a couple of themes in my letter to shareholders in the Annual Report.

A strong diversified business

Shareholders would have noted that our financial results are down this year - revenue decreased 4% and net profit after tax (NPAT) was down 17%. For shareholders, this translated into dividends being 9% lower (at $2.50 per share) than the previous year. For our Executives, this meant variable incentive outcomes were on average 43% below the financial year's target. For our asset management teams, variable incentive outcomes were impacted by a number of factors. In the case of our Equities asset management team, total variable reward outcomes were down approximately 20% on FY18.

Our total shareholder returns (TSR) do however remain solid - on a three year rolling basis TSR is 7% and one year (last year) 8%.

While the results were down, in what have been challenging market conditions, your Board remains confident with the underlying strength of Perpetual's business. And in the diversified nature of that business. Both Perpetual Private and Perpetual Corporate Trust, on a rolling three year basis, continue to increase their overall contribution to profit.

More specifically, for Perpetual Investments, your Board considers our value approach continues to be the right one for us and our investors. We will stay true to our disciplined investment approach and we continue to strive for improvement. For example, we were pleased with the successful launch and listing of the Perpetual Credit Income Trust (ASX: PCI), raising the maximum $440 million including over subscriptions, demonstrating strong investor demand for our investment expertise.

For Perpetual Private, we are pleased with its growth and the opportunities for us following the Royal Commission. The business is well positioned following the dislocation within the financial advice industry, as we continue to deliver quality advice and services to clients while attracting high quality advisers as well.

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Our Perpetual Corporate Trust business delivered strong revenue and profit growth in 2019. In particular, we saw growth in the Data and Analytics Solutions business, reflecting longer- term planning and investment.

Our Brand and the Royal Commission

We have a stellar brand. While we were not directly impacted by the Royal Commission findings, we have examined the final report and recommendations and reviewed our compliance which remains robust. The other side of the Royal Commission fallout are the opportunities created for our strong brand. As just mentioned, we are taking those opportunities where we can (particularly in the Perpetual Private business).

Our Share Register

Our share register continues to be stable although there was one notable addition of BlackRock coming onto our register through its exchange traded funds during the second half of FY19 and becoming a substantial shareholder in the company. That holding (around 11%) remains dependent on the dividend yield criteria which is applied by BlackRock each year.

Our Board of Directors

I would like to take a moment to acknowledge some of the changes to our Board of Directors. Two of our long serving Non-Executive Directors Philip Bullock and Sylvia Falzon are not seeking re-election and their terms will come to an end at the close of this AGM.

I would like (on behalf of the Board and Shareholders) to express our sincere gratitude and thank them for their dedicated service and valuable contribution to Perpetual throughout the years and wish them well in their future endeavours.

I would also like to welcome Greg Cooper who was appointed as a Non-Executive Director last month. Greg will come up for election at this meeting.

We are well advanced in appointing an additional Non-Executive Director and we hope that she will be in a position to accept our offer shortly.

I also congratulate Nancy Fox who will take over from Sylvia as Chair of the People and Remuneration committee from tomorrow.

Senior Management

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The Board is pleased and would like to thank our CEO, Rob Adams and his Executive Committee in the way they are managing our business. I introduced Rob's leadership team earlier.

I would also like to take the opportunity to thank Rebecca Nash, who leaves tomorrow, and Kylie Smith, who has left Perpetual, for their hard work and commitment in their previous respective roles as Group Executive of People and Culture and Group Executive of Marketing and Communications.

Our People

I would also like to recognise the hard work and dedication of all our people at Perpetual who put the client first in everything they do. This is evidenced by our excellent client advocacy or Net Promoter Score from our annual client survey.

Our employee engagement levels remain amongst the best in the Australian financial services sector and I truly believe this is reflected in the high standard of service which we offer our clients.

Our Shareholders

Finally, on behalf of the Board, I would like to thank you, our shareholders, for your ongoing support and interest in Perpetual.

I will now hand over to Rob for the CEO's address.

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PPT FY19 ANNUAL GENERAL MEETING

CEO and Managing Director

Rob Adams

Good morning ladies and gentlemen and thank you Chairman. It is a privilege to be addressing you today at my second Perpetual AGM as your CEO and Managing Director. I have been in this role now for 12 months and I have had the pleasure of fully immersing myself in the business, engaging with clients and shareholders and interacting every day with our people.

I have experienced firsthand how our people continue to stay true to our brand, and continue to earn the trust of our clients and shareholders in everything they do.

Results overview

Like other value-style investment managers, and many of our peers in financial services, the 2019 financial year was a challenging one for Perpetual.

Despite that, our business remains well positioned and it is important to highlight that Perpetual continued to see client demand for quality investment management expertise, financial advice, and corporate trustee services.

Firstly, I'd like to take you through a quick recap of our headline numbers for the full year.

We delivered total revenue of $514.1 million, 4% down on FY18. The decline in revenue was driven by lower average funds under management (FUM) as a result of net outflows from Perpetual Investments, as well as lower performance fees earned during the year.

Our expenses were up 4% over the period, within our stated 2-4% range, representing additional investment into the business, and expenses associated with the evaluation of inorganic opportunities.

Net Profit after Tax was $115.9 million, 17% lower than the prior corresponding period. Our Board declared a dividend of $1.25 per share for the second half, bringing us to a full year dividend of $2.50, down 9% on the prior year.

We achieved our people and client goals during the year. Our refreshed brand positioning highlights the importance of earning trust in all that we do. We've prospered over decades because we never take our clients for granted.

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