annual general meeting 2006

Annual General Meeting 2006

Annual General Meeting 2006 Chairman’s SpeechIan Blair

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Agenda

• Chairman’s Address

• Chief Executive Officer’s Report

• Formal Resolutions

• General Business

• Questions

• Close of Meeting and Afternoon Tea

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Chairman’s 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

2006 Annual General MeetingCEO’s 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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$2.6b $3.2b

$8.8b $10.5b

$3.0b

$5.4b

$2.9b

$13.5b*$12.1b

$15.4b

$10.3b

$22.4b

$3.9b

$11.8b

$15.9b

Jun-2001 Jun-2002 Jun-2003 Jun-2004 Jun-2005 Jun-2006

Wholesale FUM

Retail FUMA

82% growth in FUMA since 2004

2005/06 in review

FUMA ($bn)

30%W/Sale FUM

Retail FUMA

$29.0b

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2005/06 in review

Note: Cash earnings is equivalent to Earnings before tax, net market value excess, depreciation and amortisation* Excludes consolidation of benefit funds

Capitalising on operating leverage

7%71%64%Operating efficiency*

23%22.027.0DPS (cents)

54%23.936.7EPS (cents)

54%$15.1m$23.3mNPAT (post minorities)

40%$31.7m$44.4mCash earnings*

Change (%)FY2005FY2006

7%71%64%Operating efficiency*

23%22.027.0DPS (cents)

54%23.936.7EPS (cents)

54%$15.1m$23.3mNPAT (post minorities)

40%$31.7m$44.4mCash earnings*

Change (%)FY2005FY2006

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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 asbreadth 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

$10.3b

$15.4b$387m

$1,578m

$919m $66m$422m

$1,788m

Jun-2005 Value FixedInterest

Growth Int'l / Asia Real Estate MarketGrowth

Jun-2006

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2005/06 in review

• Continued growth in Gross Margin

• Increasing economic relevance from Perennial (including PVM)

• Continued cost control

Cash Earnings

Management of both revenue and costs are contributing to growth

40%31.744.4Cash earnings

4%(77.4)(80.3)Operating expenses

40%5.17.1Share of net profits from PVM

50%5.78.6Non operating income

11%98.3109.0Gross margin

Change (%)FY2005FY2006Year ending June

40%31.744.4Cash earnings

4%(77.4)(80.3)Operating expenses

40%5.17.1Share of net profits from PVM

50%5.78.6Non operating income

11%98.3109.0Gross margin

Change (%)FY2005FY2006Year ending June

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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 Group’s share of PVM.* Excludes the impact of Benefit fund consolidation

80%

96%

109%

64%71%

2002 2003 2004 2005 2006

Operating efficiency (IFRS)

Operating efficiency (AGAAP)

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Acquisition of PIPL minorities

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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 IOOF’s investment in PIPL

• Increases IOOF’s exposure to one of its core businesses

• More closely aligns Perennial’s growth opportunities with IOOF’s access to capital

• Improved clarity and understanding of Perennial’s value proposition

PIPL’s relationship with underlying boutiques remains unchanged

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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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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 PIPL’s 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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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

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 value…not simply gatherer of assets

Strategic Cornerstones

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Strategic direction

Progress since 2004…

2004/05

Setting the foundations

2005/06

Transitionary year

2006/07

Building momentum

IOOF’s brand ‘DNA’

Communicating and decision-making framework

Developing and engaging talent

Establish Perennial Real Estate Investments

Development of Consultum value proposition

Reinvigorate product range


Launch of ‘Pursuit’ platform

Establishment of Perennial Retail business model

More closely aligning IOOF’s business offerings to stakeholder needs

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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

Create, package and market investment

performance

Understanding advisers’ needs

Making ‘Service First’

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Guidance on 2006/07

Adviser Services - Re-energising IOOF’s offerings to advisers• ‘Pursuit’ – A flexible approach to investment administration

• Consultum – Maximising the value of adviser’s 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

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 Chairman’s discretionary proxy votes are 43.12%Note: These figures relate to the proxies lodged 48 hours prior to the meeting

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Resolution 2b - To re-elect Michael Crivelli to the Board Votes %

FOR 10,748,949 52.35%

AGAINST 171,518 .84%



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Resolution 2c - To re-elect Roger Sexton to the Board Votes %

FOR 10,810,556 52.62%

AGAINST 119,547 .58%



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Remuneration Report

What is covered in the Remuneration Report?

• The board’s 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

Objectives Weighting

Category: Team Financial Achievement of Cash Earnings per share objective ("on-plan") 20% Achievement of Growth in shareholder value objective ("on-plan") 20%

Category: Personal Financial

Ensure that the Strategy, Investment & Property cost centres are managed efficiently and within budget & forecast 10% Category: Personal Strategic Strategy 20%

· Develop and maintain an agreed corporate strategy for the IOOF Group. · Pursue & deliver a significant business opportunity for the IOOF Group (eg alliance, acquisition). · Develop and maintain an appropriate and agreed defence manual and strategy.

Major Relationships 10% · Identify & develop significant alliances and relationships which can materially enhance IOOF’s

business base, either through product, market or client extension. Investor Relations 5%

Maintain a high standard of shareholder presentations to support the offices of CEO & CFO MIM Investment Performance

Maintain above average investment perfromance and achieve 'investment' grade status 5% Category: People and Governance Retention & development of direct reports 5%

Maintain a high standard of conduct as an executive director of IOOF companies, particularly prudentially regulated entities, IIML, IOOF Ltd & IOOF Life Ltd.

5%

Total: 100%

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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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Resolution 3 – Adoption of Director’s Remuneration Report for the

financial year ended 30 June 2006 Votes %

FOR 8,157,158 40.45%

AGAINST 2,324,837 11.53%



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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%



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Resolution 5 – Approval of Accelerated Deferred Payment Provisions Votes %

FOR 10,130,234 49.88%

AGAINST 622,572 3.07%



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.

annual general meeting 2006

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