Insignia Financial : Analyst and Investor Pack Comparative Information

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Insignia	Financial Ltd	GPO Box 264
ABN 49	100 103 722	Melbourne VIC 3001
Level 1, 800 Bourke Street	Phone 13 13 69
Docklands VIC 3008

ASX Release - 11 February 2022

Analyst and Investor Pack Comparative Information

Insignia Financial today releases the attached Analyst and Investor Pack historical comparative information. In the first full reporting period since the acquisition of MLC Wealth (MLC), Insignia Financial has taken the opportunity to make a number of changes to its financial reporting to provide simpler, more consistent and more insightful information for the new combined Group. The historical comparative information covers the FY19 - FY21 periods and incorporates historical segment restatements made to reflect these changes in reporting.

1H22 financial information will be provided as part of Insignia Financial's FY22 half year results announcement on Thursday, 24 February 2022.

An excel version of the Analyst and Investor Pack Comparative information will be available online at https://www.ioof.com.au/shareholders/asx-announcements.

Changes to Operating Segments

As previously disclosed, Insignia Financial will transition from seven operating segments to four, effective from 1H22 results. This change reflects the new integrated operating structure and strategy of the combined Group. The following chart broadly illustrates the changes in operating segments:

The financial performance relating to MLC investment options bundled into platform offerings which were previously included in MLC Asset Management will now be reflected in the Platforms segment. This aligns with changes made to FUMA reporting methodology in the Q1 FY2022 business update1.

1 Available here

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Expense Allocation and Policy Harmonisation

As part of the updated operating segment reporting, the expense allocation methodology has been reviewed and updated as necessary. The resultant changes to each segment are minor and are consistent with the 1H21 and 2H21 comparative segment and pro forma results.

Pro Forma Financial Information

In addition to the restated historical financial information, Insignia Financial has provided pro forma financial information, by operating segment, for 1H21 and 2H21. The pro forma information fully incorporates the financial performance of MLC for each half, presented on a basis consistent with 1H22. The acquisition of MLC was completed on 31 May 2021, and 1H21 pro forma information includes the financial performance of MLC prior to its acquisition.

Minor accounting treatment changes have been made as a result of harmonising MLC accounting with the remainder of the Group. These have been reflected within historical comparative and pro forma information, as appropriate.

Other Items Restated

The Comparative Information also contains changes to historical amounts resulting from the following:

• FUMA methodology changes as disclosed in the Q1 FY2022 business update
• Amendments to the acquired MLC balance sheet
• Change of presentation to include equity accounted profits and other revenue within gross margin
• Completion of Wealth Central purchase price allocation

This announcement was approved for release by the Insignia Financial Ltd Board.

Investor Enquiries:

Andrew Ehlich

GM Capital Markets

Insignia Financial

M: [phone]

1. [e-mail]

About Insignia Financial Ltd

Media Enquiries:

Kristen Allen

GM Corporate Affairs

Insignia Financial

M: [phone]

1. [e-mail]

For

Insignia Financial has been helping Australians secure their financial future since 1846. During that time, we have grown substantially to become one of the largest groups in the financial services industry.

Insignia Financial provides advisers and their clients with the following services:

• Platforms for advisers, their clients and hundreds of employers in Australia;
• Advice services via our extensive network of financial advisers; and
• Asset Management products that are designed to suit any investor's needs.

Further information about Insignia Financial can be found at www.ioof.com.au

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Insignia Financial Limited

Insignia Financial Investor and Analyst Pack - Important Disclaimer

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Important information

This analyst pack has been prepared by Insignia Financial Ltd ABN 49 100 103 722 (Insignia Financial). It is general information on Insignia Financial and its subsidiaries (Insignia Financial Group) current as at 11 February 2022.

It is in summary form and is not necessarily complete. It should be read together with the company's consolidated financial statements lodged with the ASX on 26 August 2021. Information and statements in this pack do not constitute investment advice or a recommendation in relation to Insignia Financial or any product or service offered by Insignia Financial or any of its subsidiaries and should not be relied upon for this purpose. Prior to making a decision in relation to Insignia Financial's securities, products or services, investors or clients and potential investors or clients should consider their own investment objectives, financial situation and needs and obtain professional advice.

The information in this presentation may include information contributed by third parties. Insignia Financial Group does not warrant the accuracy or completeness of any information contributed by a third party. No representation or warranty is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information contained in the presentation (any of which may change without notice). To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this presentation. Past performance is not indicative of future performance.

This presentation contains forward looking statements, including statements regarding Insignia Financial's intent, objective, belief or current expectation relating to Insignia Financial's businesses and operations, market conditions or results of operations and financial condition, including any statements related to or affected by the ongoing impact of the COVID-19 pandemic and remediation programs. These are based on Insignia Financial's current expectations about future events and is subject to known and unknown risks and uncertainties, many of which are beyond the control of the Insignia Financial Group. Actual events may differ materially from those contemplated in such forward looking statements and could cause actual results, performance or events to differ materially from those express or implied. Forward looking statements are not guarantees or representations about future performance and should not be relied upon as such.

Insignia Financial does not undertake to update any forward-looking statement to reflect events or circumstances after the date of this presentation, subject to its regulatory and disclosure requirements.

Underlying net profit after tax pre amortisation (UNPAT) attributable to equity holders of Insignia Financial reflect an assessment of the result for the ongoing business of the Insignia Financial Group as determined by the Board and management. UNPAT has been calculated with regard to ASIC's Regulatory Guide 230 Disclosing non-IFRS financial information and the adjustments to NPAT are set out on pages 6 and 7 of the 30 June 2021 Annual Financial Report. UNPAT attributable to equity holders of Insignia Financial has not been reviewed or audited by the Group's external auditors, however the adjustments to NPAT attributable to equity holders of Insignia Financial have been extracted from the books and records that have been reviewed by the external auditor. UNPAT is disclosed as it is useful for investors to gain a better understanding of Insignia Financial's financial results from normal operating activities.

Nothing in this presentation should be construed as either an offer to sell or solicitation of an offer to buy or sell Insignia Financial Group securities or units in any fund referred to in this presentation in any jurisdiction. The Product Disclosure Statement (PDS) for these funds are issued by the applicable members of the Insignia Financial Group. The applicable PDS should be considered before deciding whether to acquire or hold units in a fund and can be obtained by calling 1800 913 118 or visiting our website www.ioof.com.au

All references to currency in this presentation are to Australian currency, unless otherwise stated. Certain figures may be subject to rounding differences.

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Insignia Financial Limited

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Group Result - Key Measures

Historical period restatements shown in italics - restatements relate to:

• Update to FUMA methodology (FUMA section)
• Inclusion of equity accounted profits and other revenue in gross margin (cost to income ratio)
• Restatement of 1H21 NPAT for completion of Wealth Central purchase price allocation (NPAT & EPS sections)

Average FUMA is now calculated on a six month rolling average basis and has been applied for the periods of historical restatements

Historical error in 2H20 dividend corrected

Totals subject to rounding

	1H19	2H19	1H20	2H20	1H21	2H21
NPAT
UNPAT ($m)	99.9	98.1	61.4	67.5	65.9	81.9
UNPAT (Continuing Operations) ($m)	92.5	90.8	56.5	67.5	65.9	81.9
Statutory NPAT ($m)	135.4	(106.9)	115.0	26.2	53.8	(197.3)
Statutory NPAT (Continuing Operations) ($m)	69.6	(99.4)	27.8	25.2	53.8	(197.3)
FUMA
Closing FUMA ($b)	60.8	66.6	69.1	107.6	111.6	318.7
Closing FUMA (Continuing Operations) ($b)	60.2	66.0	68.5	107.6	111.6	318.7
Average FUMA (Continuing Operations) ($b)	53.4	63.4	67.5	106.5	109.3	163.4
Net Flows (Continuing Operations) ($b)	0.4	0.4	0.5	(0.2)	(2.9)	(0.4)
EPS
UNPAT EPS (cents per share)	28.5	28.0	17.5	19.3	12.4	12.6
UNPAT EPS (Continuing Operations) (cents per share)	26.4	25.9	16.1	19.3	12.4	12.6
Basic EPS (cents per share)	38.6	(30.5)	32.8	7.5	10.1	(30.4)
Diluted EPS (cents per share)	38.5	(30.4)	32.8	7.5	10.1	(30.3)
Basic EPS (Continuing Operations) (cents per share)	19.9	(28.4)	7.9	7.2	10.1	(30.4)
Dividends
Ordinary dividends declared ($m)	89.4	42.2	56.2	40.4	51.9	61.7
Ordinary dividends declared (cents per share)	25.5	12.0	16.0	11.5	8.0	9.5
Special dividends declared ($m)	-	-	24.6	-	22.7	13.0
Special dividends declared (cents per share)	-	-	7.0	-	3.5	2.0
Payout ratio	89.6%	43.0%	91.5%	59.9%	78.8%	75.3%
Share Price
Opening share price	$8.99	$5.17	$5.17	$7.86	$4.92	$3.52
Closing share price	$5.17	$5.17	$7.86	$4.92	$3.52	$4.27
Total shareholder return	($3.57)	$0.12	$2.92	($2.83)	($1.29)	$0.87
Total shareholder return (%)	(39.7%)	2.3%	56.5%	(35.9%)	(26.1%)	24.6%
Ratios
Cost to income	51.6%	53.5%	62.4%	65.6%	68.3%	68.4%
Return on equity	10.9%	10.9%	7.2%	7.9%	5.7%	6.1%

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Insignia Financial Limited

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Underlying Group Result - P&L Summary (Continuing Operations)

Revenue shown inclusive of Other Revenue and Equity Accounted Profits

Totals subject to rounding

	1H19	2H19	1H20	2H20	1H21	2H21
	$m	$m	$m	$m	$m	$m
Revenue	469.7	510.7	487.2	577.1	597.5	667.0
Direct Costs	(209.0)	(259.3)	(233.0)	(242.8)	(246.7)	(247.8)
Gross Margin	260.7	251.4	254.2	334.2	350.8	419.2
Operating Expenditure	(149.3)	(157.6)	(163.7)	(220.7)	(239.8)	(286.8)
Net Non-cash	(8.9)	(5.0)	(12.4)	(14.6)	(14.9)	(17.2)
Net Interest	27.7	36.5	1.0	(3.9)	(3.4)	(3.8)
Income Tax Expense/Non-controlling Interest	(37.7)	(34.5)	(22.6)	(27.4)	(26.7)	(29.6)
UNPAT	92.5	90.8	56.5	67.5	65.9	81.9

Underlying Group Result - P&L Detail

Totals subject to rounding
	1H19	2H19	1H20	2H20	1H21	2H21
	$m	$m	$m	$m	$m	$m
Gross Margin
Management and Service fees revenue	445.6	480.9	458.2	543.9	570.3	637.5
Other Fee Revenue	17.4	21.1	23.1	28.2	25.8	23.7
Service and Marketing fees expense	(196.5)	(246.3)	(219.0)	(220.6)	(224.9)	(219.7)
Other Direct Costs	(12.4)	(12.9)	(14.0)	(22.2)	(21.8)	(28.0)
Amortisation of deferred acquisition costs	(0.1)	(0.1)	(0.0)	(0.0)	(0.0)	(0.1)
Stockbroking revenue	2.3	2.3	1.7	1.6	1.7	1.7
Stockbroking service fees	(0.6)	(0.7)	(0.7)	(0.6)	(0.5)	(0.5)
Dividends and distributions received	0.7	0.6	0.8	0.6	0.3	0.4
Net fair value gains/(losses) on other financial assets at fair value through	-	0.1	0.0	(0.1)	0.0	0.2
profit or loss
Other revenue	4.3	6.3	4.2	3.7	0.7	4.3
Share of profits of associates and jointly controlled entities accounted for	0.0	0.0	(0.1)	(0.4)	(0.7)	(0.3)
using the equity method
Total Gross Margin	260.7	251.4	254.2	334.2	350.8	419.2

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