Pendal : Chairman and CEO Addresses including Business Update

For personal use only

Pendal Group Limited

Level 14, The Chifley Tower

2 Chifley Square

Sydney NSW 2000

Australia

ABN 28 126 385 822

10 December 2021

Company Announcements Office

ASX Limited

20 Bridge Street

SYDNEY NSW 2000

Pendal Group Limited Annual General Meeting (AGM)

The following documents are attached for lodgement:

•	Chairman's and Group Chief Executive Officer's AGM
Addresses including Business Update.

Yours sincerely

Authorising Officer

Joanne Hawkins

Group Company Secretary

Pendal Group Limited

Tel: [phone]

pendalgroup.com

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AGM 2021 Chairman's address

Date: 10 December 2021

Good morning, ladies and gentlemen.

It is my pleasure to welcome you to our 14th Annual General Meeting.

I am James Evans, the Chairman of Pendal Group.

I would like to acknowledge the Traditional Custodians of the land on which we meet today, the Gadigal people of the Eora Nation. We pay our respect to their Elders past, present and emerging, and extend that respect to all Aboriginal and Torres Strait Islander peoples here today.

It is a particular pleasure to be able to gather with many of you in person today, a sure sign of progression out of the lockdowns that have played such a part in our lives over the past two years.

I am sure many of you have heard the famous quote: "The only thing that is constant, is change."

I am sure that we can all attest to that wisdom - for 2021 has been a year of change, both in society at large and at Pendal. And not just change per se, but the rate of change. Companies have needed to be nimble. Anticipate change. Embrace it. Or be left behind.

It's been a year of a lot of things happening. We've lived it each and every day, and sometimes we do not fully comprehend the progress as we take the journey. And progress we have made at Pendal in 2021.

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We have successfully executed on our key growth-oriented initiatives and positively managed the internal and external change that has confronted us.

Our long-standing Group CEO Emilio Gonzalez stepped down in March this year. The Board executed its long-term succession plan with Nick Good, the CEO of the Pendal US business, seamlessly transitioning him into the Group CEO role. In May 2021 we made a compelling and strategic acquisition to facilitate growth opportunities, particularly in the US market.

I will talk more about this important acquisition, and you will hear from Nick Good, our new Group CEO shortly.

At this point, it is timely to acknowledge and sincerely thank our former Group CEO, Emilio Gonzalez, for his contribution and dedication to the company for over 11 years.

Many of you will have heard Emilio's CEO addresses, and shared a cup of tea with him, at our AGMs for over a decade. Under Emilio's leadership the business underwent a defining change in FUM, scale, distribution, product offerings to clients, and importantly, shareholder returns.

He oversaw the transformation of Pendal from an Australian only fund manager into a global asset management business. Emilio led from the front with passion and sound judgement. I am sure you will all join me in thanking him most sincerely.

Change is not confined to business initiatives and events. It granulates to every aspect of Pendal. So again, for another year, we need to mention the impacts of the COVID- 19 environment on our people and our clients. It has required significant extra time, input and enduring flexibility, from all our people - including the Board.

Ours is a business of people - of relationships. Our currency is trust - between our clients and our people. We are a global company with our leadership and investment

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teams spread across four continents. Our inability to meet in person with our clients and colleagues has undoubtedly had an impact during the year.

But we are seeing positive change. Nick Good is now travelling freely in the US and to the UK to meet our teams and our clients, and he will be coming to Australia just as soon as the borders open for him here.

We have made arrangements to hold our February 2022 Board meeting in London and will then recommence our omnibus global Board meetings for the year, hoping that Omicron does not result in more travel bans. Being 'on the ground' so to speak, allows the Board and management team to gain the required insights and exposures to the environment of different markets, as we collaborate and strive to achieve the best outcomes for our clients and our shareholders.

As a global fund manager this is very important, particularly as we see an accelerated rate of change in global macroeconomic conditions.

Let me turn now to an overview of the performance of the business and financial results.

Statutory Net Profit After Tax (Statutory NPAT) was $164.7 million, an increase of 42 per cent on the previous year reflecting a step change in funds under management from the acquisition of TSW, strong investment performance and positive mark-to- market and currency contributions.

Underlying Profit After Tax (UPAT) was up 25 per cent to $165.3 million, compared to last year, as a result of a substantial uplift in annuity income from base management fees and a four-fold increase in performance fees to $57.5 million.

Underlying Earnings Per Share increased by 17 per cent to 48.2 cents per share.

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The total dividend for the 2021 Financial Year was 41 cps, up 11 per cent compared to FY20. The dividend payout ratio of 89 per cent is above the mid-point of the Board's policy of a payout ratio of between 80-95 per cent. We remain committed to a dividend policy that sees shareholders supported.

The strong results for the year demonstrate the continued successful execution of our strategy for growth, the strength of our diversified business model and our ability to embrace change.

Total Shareholder Return, since listing in December 2007 to 30 September 2021, is

247.8 per cent, compared to the 99.9 per cent return of the Standard and Poor's ASX200 Accumulation Index over the same period.

In May 2021 we made the acquisition of Thompson, Siegel & Walmsley based in the US. The acquisition price represented 7.6x 1H21 EBITDA and is expected to be double-digit EPS accretive in the first full-year post completion.

This acquisition creates immediate value, doubles our addressable market in the US and delivers a step-change in Pendal Group's diversification, scale and client offering

- and importantly, expands our global distribution capabilities.

The acquisition of TSW was compelling and strategic. It expands our successful diversified business model in the largest equity market in the world. It delivers both scale and diversification benefits across investment capabilities, asset classes and channels.

The Board believes that the acquisition will strengthen the diversity of earnings and accelerate growth and shareholder returns.