INSIGNIA FINANCIAL LTD — Interim / Quarterly Report 2016

Feb 23, 2016

==> picture [683 x 394] intentionally omitted <==

----- Start of picture text -----

Interim results
31 December 2015
----- End of picture text -----

Presented by Christopher Kelaher, Managing Director David Coulter, Chief Financial Officer

24 February 2016

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Record performance
----- End of picture text -----

Underlying EPS

UNPAT

==> picture [350 x 120] intentionally omitted <==

----- Start of picture text -----

+ 18% + 11%
$80.6m $95.4m 28.7c 31.8c
1H 14/15 1H 15/16 1H 14/15 1H 15/16
----- End of picture text -----

• Record 1H UNPAT of $95.4m

• Broadened earnings base has offset volatile market conditions

• Shadforth fully integrated

• Investment Management business reshaped

Operating Cashflow* + 10%

Dividend per share + 14%

==> picture [371 x 108] intentionally omitted <==

----- Start of picture text -----

$104.0m $114.6m 25.0c 28.5c
1H 14/15 1H 15/16 1H 14/15 1H 15/16
----- End of picture text -----

• Low net debt

• Well positioned to pursue future opportunities

2

*Pre-tax operating cash flow

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Creating shareholder value
----- End of picture text -----

==> picture [156 x 333] intentionally omitted <==

----- Start of picture text -----

Organic
Growth
Net funds flow
$932m
Advice: $741m
Platform: $147m
Inv Mgmt $44m
----- End of picture text -----

==> picture [157 x 333] intentionally omitted <==

----- Start of picture text -----

Productivity
& efficiency
Cost to income
ratio 55.5%
Reinvesting
productivity
savings in IT
and member
experience
----- End of picture text -----

==> picture [157 x 333] intentionally omitted <==

----- Start of picture text -----

Accretive
acquisitions
Acquisition of
Shadforth
materially
accretive -
4.1 cps
$13m pre-tax
cost synergies
realised
----- End of picture text -----

==> picture [157 x 333] intentionally omitted <==

----- Start of picture text -----

Shareholder
value
Fully franked
28.5cps
interim
dividend
7% dividend
yield
----- End of picture text -----*

3

• Based on 20 day VWAP to 22 February 2016

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Funds and flows performance
----- End of picture text -----

	1H 15/16	2H 14/15	1H 14/15
Opening FUMA	$104,707m	$100,353m	$77,110m
Flagship Platform net flows	$291m	$856m	$860m
Platform (Transition) net flows	($144m)	$0m	($42m)
Total Platform net flows	$147m	$856m	$818m
Investment Management net flows*	$44m	$371m	$403m
Funds Under Advice net flows^	$741m	$1,270m	$884m
Acquired FUMA	-	-	$19,542m
Investment returns / Other	($2,200m)	$1,858m	$1,596m
Closing FUMA	$103,439m	$104,707m	$100,353m
Average FUMA	$104,887m	$104,786m	$95,586m

• Twelfth consecutive quarter positive net flows

• Financial Advice now has similar scale to Platform business

• Flows to flagship platforms impacted by outflows from large, low margin corporate super account

• Platform consolidation on track

• *Shadforth Investment Management 1H 15/16 net flows $166m ^Shadforth Advice 1H 15/16 net flows $241m

4

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Shadforth embedded and accretive
----- End of picture text -----

Shadforth is a leading client focused advice and wealth management firm

Exceeded targeted annual $15m pretax recurring cost synergies

==> picture [452 x 364] intentionally omitted <==

----- Start of picture text -----

Financial 4.1cps accretive in 1H 15/16
UNPAT up 57% on PCP
$13m pre-tax cost synergies
realised in the half
Strong net advice flow of
Operating $241m
New CEO and stable
management team
Enhanced scale
Strategic
Diversified earnings base
Best Advice adopted across
group
----- End of picture text -----

5

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Resilience across all businesses
----- End of picture text -----

UNPAT $40.6m  52%

Financial advice Benefiting from completed integration and full realisation of synergies and distribution Resilient and sustainable business model in the face of market volatility

Platform UNPAT $42.7m  1% management and Gross margin stable, net operating margin up on 2H15 administration Reinvesting in the customer experience, including enhanced IT

UNPAT $16.4m  3%

Investment management

Focusing on a strong multi-manager offering, including Shadforth Reduced exposure to volatile institutional funds flow

UNPAT $3.4m  8%

Trustee services Investment in organic strategy paying dividends Strong long term sector growth prospects

6

The Corporate segment recorded an UNPAT of ( $9.8m ) 1H 15/16 , ( $10.2m ) 1H 14/15

==> picture [683 x 394] intentionally omitted <==

----- Start of picture text -----

Financials
David Coulter
Chief Financial Officer
----- End of picture text -----

7

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Financial overview
----- End of picture text -----

==> picture [615 x 357] intentionally omitted <==

^Shadforth July 2014 Underlying EBITA $4.9m , Underlying NPAT $3.2m (Shadforth acquired 1 August 2014). *FUMA and margin calculations exclude Perennial FUM and associated revenue & expenditure (see ASX announcement on 27/01/2016).

8

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

P&L Breakdown
----- End of picture text -----

	1H 15/16^ $'m	1H 14/15 $'m*	$'m % Change on pcp	$'m % Change on pcp
Gross Margin	275.1	257.4	17.7	7%
Other Revenue	22.1	21.4	0.7	3%
Operating Expenditure	(165.2)	(166.5)	1.2	1%
Equity Accounted Profits	2.8	3.3	(0.5)	-15%
Net Non Cash	(6.1)	(5.5)	(0.6)	-11%
Underlying EBITA	128.7	110.2	18.6	17%
Net Interest	(1.3)	(2.2)	0.9	40%
Income Tax & NCI	(34.1)	(28.4)	(5.7)	-20%
UNPAT excl. Divested Perennial Business	93.3	79.5	13.7	17%
Divested Perennial Business	2.1	1.0	1.1	104%
Underlying NPAT	95.4	80.6	14.8	18%
Significant Items/Amortisation	38.6	(19.1)	57.7	302%
Statutory NPAT	134.0	61.5	72.5	118%

• Gross margin growth of $17.7m driven by an additional month of Shadforth revenue in the current period plus accretive growth in the existing business.

• Prudent and disciplined cost management remains a key feature

^Exclusive of divested Perennial business

Shadforth July 2014 Underlying EBITA $4.9m , Underlying NPAT $3.2m* (Shadforth acquired 1 August 2014). Detailed list and explanation of reconciling items provided in Appendix B and Appendix O

9

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Debt position and ratios
----- End of picture text -----

	1H 15/16	1H 14/15
Gross Borrowings ($’M)	207.4	208.3
Net Debt ($’M)	29.0	73.9
Return on Equity(%)	13.6%	12.8%
Debt to Equity(%)	12.8%	13.3%
Net Debt to Underlying EBITDA (times)	0.1	0.3
Net Interest Cover (times)	97	38

• Borrowings primarily used to fund acquisitions (DKN, Plan B and Shadforth)

• Surplus borrowing facility and substantial headroom in covenants

• Strength provides security and ability to capitalise on opportunities

• RoE improving with growth and synergy realisation

10

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Segment performance
----- End of picture text -----

Financial Advice Platform + 52% ~~- 1%~~

+ 52% $26.7m $40.6m 1H 14/15 1H 15/16 Avg. FUA $50.5b + 13% Net Operating Margin 0.24% + 6bps

==> picture [169 x 108] intentionally omitted <==

----- Start of picture text -----

$43.0m $42.7m
1H 14/15 1H 15/16
----- End of picture text -----

Avg. FUA $34.6b + 6% Net Operating Margin 0.37% - 2bps

Inv. Management* - 3%

Trustee + 8%

==> picture [235 x 128] intentionally omitted <==

----- Start of picture text -----

$16.8m $16.4m
1H 14/15 1H 15/16
----- End of picture text -----

==> picture [212 x 128] intentionally omitted <==

----- Start of picture text -----

$3.2m $3.4m
1H 14/15 1H 15/16
----- End of picture text -----

Avg. FUS $29.3b + 14% Net Operating Margin 0.03% - 1bps

Avg. FUM $19.8b + 10% Net Operating Margin 0.21% - 2bps

• Enhanced performance in advice attributable to synergies extracted from the Shadforth acquisition combined with strong net inflows

• Timely acquisitions have broadened and diversified our earnings, building resilience for periods of market volatility

• Reinvesting in core businesses

• *Investment Management segment results are shown exclusive of the divested Perennial business

11

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Growing and diversifying earnings
----- End of picture text -----

==> picture [663 x 415] intentionally omitted <==

----- Start of picture text -----

5%
Key benefits of this shift
Higher quality earnings
Improved operating model
39%
Strengthened balance sheet
45%
Net Operating
Revenue
$292m
7% Strengthened
recurring
revenue base
22%
11%
Shadforth
Net Operating
Revenue 1H 15/16
$155m 58%
Platform
13%
Investment Management
Financial Advice
1H 09/10 Trustee
----- End of picture text -----

12

• Synergies realised through increased scale and removal of duplicated functions

==> picture [679 x 375] intentionally omitted <==

----- Start of picture text -----

Total recurring cost synergies of $13.0m = $11.3m
$11.3m incremental synergies + $1.7m
synergies achieved 1H 14/15
$4.5m
$29.1m
$4.9m - SFG Underlying
EBITA Jul 14 (pre-acquisition)
$1.1m
$1.1m
($2.6m) ($0.7m) $24.2m - SFG Underlying
EBITA Aug – Dec 14
Underlying Divested Gross Margin Opex Other Underlying SFG SFG Revenue SFG Underlying
EBITA Perennial Underlying EBITA Underlying Increase Cost Savings EBITA
ex SFG Business EBITA ex SFG EBITA 1H 15/16
1H 14/15 1H 15/16 1H 14/15
$132.9m
$89.0m $87.9m
----- End of picture text -----

13

Operating costs

• Targeting organic growth through IT investment

• Labour cost increase below inflation

==> picture [613 x 347] intentionally omitted <==

----- Start of picture text -----

SFG Opex Jul 14
Total recurring cost synergies of $13.0m =
$11.3m incremental synergies + $1.7m
$7.5m synergies achieved 1H 14/15
($3.6m)
$1.1m
$1.1m
$0.5m
($11.3m)
Base Opex Divested SFG Cost Savings Labour I.T. Other Opex
1H 14/15 Perennial 1H 15/16
Business
$171.9m
$167.1m
----- End of picture text -----

14

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Generating strong free cash flow
----- End of picture text -----

• Pre-tax operating cash flows up 10% on 1H 14/15

==> picture [649 x 389] intentionally omitted <==

----- Start of picture text -----

$54.0m
$114.6m
$5.3m
($16.9m)
($45.2m)
($83.9m)
Jun 15 Pre-tax operating Income tax paid Perennial Other Investing and Reclassified from Dividends Dec 15
Corp Cash cash flows divestment (incl Finance held for sale Paid Corp Cash
transaction costs)
$178.4m
$150.5m
----- End of picture text -----

15

Platform profitability growth continues

==> picture [511 x 322] intentionally omitted <==

----- Start of picture text -----

0.69% 0.68%
0.67%
0.65% 0.65%
$43.0m $42.7m
$41.0m $41.3m
$39.5m
0.39% 0.39% 0.39%
0.37%
0.36%
1H 13/14 2H 13/14 1H 14/15 2H 14/15 1H 15/16
UNPAT Gross Margin % Net Operating Margin %
----- End of picture text -----

• Profitability reinvested in IT to build a platform for future organic growth

• Margin is not simply about competition – newer products are more cost efficient

16

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Group asset allocation
----- End of picture text -----

==> picture [652 x 354] intentionally omitted <==

----- Start of picture text -----

FUMA $104.7b
FUMA $103.4b
FUMA $100.4b 2% 2%
3%
16%
16%
15% Platform
Management and
$34.5b
6% Administration
6%
6%
37%
37%
37%
Financial Advice
$49.4b
and Distribution
39% 40% 39%
Investment
$19.6b
Management
Asset Allocation 1H 14/15 Asset Allocation 2H 14/15 Asset Allocation 1H 15/16 FUMA by Segment 31/12/15
----- End of picture text -----

Australian Equities Fixed Interest / Cash Property International Equities Other

17

==> picture [683 x 394] intentionally omitted <==

----- Start of picture text -----

Strategy and outlook
Christopher Kelaher
Managing Director
----- End of picture text -----

18

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Resilient business model
----- End of picture text -----

Increased contribution from Financial Advice and Distribution balances Diversified exposure to Platform Management and Administration earnings base Reduced exposure to volatile institutional funds flow

Reliable cost

Cost to income ratio has reduced to 55.5%, down 4% Net operating margin improvement

Predictable cash

Strong cash flow conversion Consistently high dividend payout ratio

Underlying growth in superannuation assets Positive long term Aging population, high per capita growth fundamentals Complexity drives need for advice

19

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Positive industry fundamentals
----- End of picture text -----

Industry fundamentals underpinned by growing superannuation system

Total superannuation assets*

==> picture [340 x 282] intentionally omitted <==

----- Start of picture text -----

$3,500b
$3,000b
$2,500b
$2,000b
$1,500b
$1,000b
$500b
$0b
Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2018 2021 2025
----- End of picture text -----

==> picture [288 x 304] intentionally omitted <==

----- Start of picture text -----

•
Strong bi-partisan political support and
increasing economic imperative for
financial independence
•
Compulsory superannuation regime has
underpinned CAGR of 9.4% in Australian
superannuation assets over past decade
•
Ageing population
•
High per capita wealth
•
Increasing complexity drives need for
advice
•
Significant intergenerational wealth
transfers occurring
----- End of picture text -----

• Source: KPMG Supertrends, May 2015 and APRA statistics

20

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Industry consolidation is lifting standards
----- End of picture text -----

==> picture [217 x 392] intentionally omitted <==

----- Start of picture text -----

Industry
Member Benefits
• Cost transparency
• Quality of advice increasing
• Improved client engagement
• Enhanced regulatory oversight
Participant Benefits
• Higher standards lift consumer
confidence
• Scale enables reinvestment in
members and governance
----- End of picture text -----

==> picture [229 x 392] intentionally omitted <==

----- Start of picture text -----

IOOF
Reinvestment in member service
• Best Advice
• Functionality and choice
IT capability and delivery
• Improved functionality, flexibility
Scale to attract best advisors
• Education standards, compliance
support, practice development
Governance
• Centralised control environment,
risk management and reporting
framework
Increased returns to shareholders
----- End of picture text -----

• Consolidation delivers benefits to all industry participants

• IOOF has consistently adopted best of breed in its acquisition integrations which is pivotal to benefits realisation across the sector

• Consolidation has been transformational for IOOF and fundamental to our success

21

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Systems and governance
----- End of picture text -----

• Not a static environment – has evolved significantly and will continue to evolve

• Ongoing commitment to proactively achieving the highest standards of compliance

• PwC’s recommendations adopted

• PwC’s testing confirms recommendations fully designed and implemented, save for a very small number which will soon be completed

2009: IOOF/AWM/Skandia merger

Today

• Decentralised control • Centralised control environment environment

• 16 corporate offices • Tailored risk • Standardisation of policies and procedures

• 8 IT platforms management frameworks • Web-based risk management

• 8 administration • Manual consolidation and reporting framework

• systems of risk reporting

==> picture [82 x 10] intentionally omitted <==

----- Start of picture text -----

3 RSE licenses
----- End of picture text -----

Series of reviews (e.g. FoFA)

22

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Generating growth through insights
----- End of picture text -----

Meeting client needs through an open architecture model

• Creating a modular value chain

• Differentiated capabilities - Managed Accounts, SMSF / SAF

Developing integrated client insights to improve the value of advice

• Driven by client centric design

Supported through market-leading service delivery

• Transformation of service delivery strategy and functions

Consumer shift toward value over price

==> picture [145 x 112] intentionally omitted <==

----- Start of picture text -----

43
37
20
EXPERIENCE PRODUCTS PRICE
----- End of picture text -----

==> picture [145 x 112] intentionally omitted <==

----- Start of picture text -----

50
34
16
EXPERIENCE PRODUCTS PRICE
----- End of picture text -----

==> picture [262 x 128] intentionally omitted <==

----- Start of picture text -----

Experience is the differentiator
•
Top quartile service
•
Relevance and immediacy
•
Easy to deal with
----- End of picture text -----

23

TODAY

2020

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Supported by the right technology
----- End of picture text -----

• 146 FTE staff & contractors augmented by consultant developers

• Building leading-edge technology that enables us to effectively participate in a digitally-focused environment

  • Development initiatives focus on simplifying the experience for our members

==> picture [236 x 184] intentionally omitted <==

----- Start of picture text -----

Opportunity
----- End of picture text -----

• Increasing activity and enhancement of our cyber-security capability

• Exploring potential opportunities in the disruptive fintech space e.g. robo-advice

24

==> picture [684 x 77] intentionally omitted <==

----- Start of picture text -----

Summary
----- End of picture text -----

IOOF continues to deliver

• Recurring EPS growth

• Strong cash flows

• Consistently strong dividend yield

• Low gearing

Well positioned for short term volatility Long term fundamentals remain strong Attractive M&A environment

==> picture [256 x 360] intentionally omitted <==

25

==> picture [683 x 394] intentionally omitted <==

----- Start of picture text -----

Appendices
----- End of picture text -----

26

Appendix A: TSR

==> picture [84 x 77] intentionally omitted <==

==> picture [636 x 379] intentionally omitted <==

----- Start of picture text -----

35cps
TSR = 210% April 2009 – 31 December 2015 (18% annualised )
24.7c 24.7c
23.7c
30cps
21.8c
21.8c
21.0c
20.5c
25cps
20cps
15cps
10cps
Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15
Underlying EPS (cents) DPS (cents) ASX200 (RHS Base 100) IFL (RHS Base 100)
----- End of picture text -----

27

Appendix B: Statutory NPAT reconciliation

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16	1H 14/15
Statutory NPAT	134.0	61.5
Amortisation of intangible assets	20.0	18.7
Acquisition and divestment transaction costs	0.5	5.7
Termination and retention incentive payments	4.1	2.7
Gain on disposal of subsidiaries	(72.0)	(0.5)
Profit on sale of assets	(3.0)	-
Non-recurring professional fees	3.1	-
Unwind of deferred tax liability recorded on intangible assets	(5.0)	(4.6)
Reinstatement of Perennial non-controlling interests	(0.8)	(0.6)
Income tax attributable	14.5	(2.2)
UNPAT	95.4	80.6

• Amortisation, Perennial divestment and Shadforth integration have had a material impact on statutory NPAT

Detailed explanation of each reconciling line item provided in Appendix O

28

==> picture [84 x 77] intentionally omitted <==

Appendix C: Segment performance - Platform

==> picture [274 x 185] intentionally omitted <==

==> picture [386 x 272] intentionally omitted <==

==> picture [237 x 199] intentionally omitted <==

29

==> picture [84 x 77] intentionally omitted <==

Appendix D: Segment performance - Investment Management

==> picture [288 x 196] intentionally omitted <==

==> picture [384 x 272] intentionally omitted <==

==> picture [238 x 202] intentionally omitted <==

Investment Management segment results are shown exclusive of the divested Perennial business

30

Appendix E: Shadforth contribution to segments - Investment Management

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16 2H 14/15 1H 14/15 Shadforth	1H 15/16 2H 14/15 1H 14/15 Other Investment Management
Revenue Direct Costs	10.5 10.1 7.8 (5.1) (5.8) (4.1)	43.1 46.5 45.4 (17.8) (19.2) (18.8)
Gross Margin (GM)	5.4 4.3 3.7	25.3 27.2 26.6
GM %	0.16% 0.13% 0.15%	0.38% 0.41% 0.41%
Other Revenue Share of Equity profit/loss	- 0.0 - - - -	1.9 3.2 3.0 2.2 2.4 2.6
Operating Expenditure Net Non Cash Net Interest Income Tax Expense/N.C.I UNPAT Average FUM ($'b)	(1.0) (1.3) (1.4) (0.0) (0.0) (0.0) - - - (1.3) (0.9) (0.7)	(10.8) (10.7) (10.6) (0.7) (0.6) (0.5) 0.4 0.2 0.1 (4.9) (5.5) (6.1)
	3.1 2.1 1.6 6.7 6.5 5.9	13.4 16.3 15.2 13.2 13.5 13.0
Net Operating Margin %	0.13% 0.09% 0.09%	0.25% 0.30% 0.29%

31

==> picture [84 x 77] intentionally omitted <==

Appendix F: Segment performance - Financial Advice & Distribution

==> picture [267 x 199] intentionally omitted <==

==> picture [386 x 272] intentionally omitted <==

==> picture [235 x 205] intentionally omitted <==

32

Appendix G: Shadforth contribution to segments - Financial Advice & Distribution

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16 2H 14/15 1H 14/15 Shadforth	1H 15/16 2H 14/15 1H 14/15 Other Financial Advice and Distribution
Revenue Direct Costs Gross Margin (GM) GM % Other Revenue Share of Equity profit/loss Operating Expenditure Net Non Cash Net Interest Income Tax Expense/N.C.I UNPAT Average FUA ($'b) Net Operating Margin %	82.7 82.1 67.6 (5.9) (5.6) (4.9)	98.2 98.7 97.1 (58.5) (56.5) (57.1)
	76.8 76.4 62.7 1.04% 1.05% 1.09% 0.7 1.9 0.6 0.1 0.1 0.1 (37.6) (41.5) (41.0) (0.5) (0.6) (0.5) 0.0 0.0 (0.1) (11.9) (11.2) (6.1)	39.8 42.2 40.0 0.22% 0.24% 0.24% 18.0 16.4 17.5 0.5 0.6 0.6 (36.8) (36.5) (39.0) (1.6) (1.6) (2.2) 0.3 0.4 0.5 (7.3) (7.5) (6.3)
	27.7 25.2 15.6 14.6 14.6 13.7 0.54% 0.51% 0.39%	12.9 13.9 11.1 35.8 35.1 33.2 0.12% 0.13% 0.11%

33

Appendix H: Segment performance - Trustee Services

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16 1H 14/15 Change on pcp (%)
Revenue Direct Costs Gross Margin (GM) GM % Other Revenue Share of Equity profit/loss Operating Expenditure Net Non Cash Net Interest Income Tax Expense/N.C.I UNPAT Average FUS ($'b)	14.9 13.1 13% (0.8) (0.0) LARGE
	14.1 13.1 8% 0.10% 0.10% - - - - - - (9.1) (8.5) -7% (0.1) (0.1) -62% 0.0 - - (1.5) (1.3) -9%
	3.4 3.2 8% 29.3 25.7
Net Operating Margin%	0.03% 0.04%

==> picture [236 x 209] intentionally omitted <==

----- Start of picture text -----

0.11%
0.10%
0.10%
0.04%
0.04% 0.03%
$3.8m
$3.4m
$3.2m
1H 14/15 2H 14/15 1H 15/16
UNPAT G.M% N.O.M%
----- End of picture text -----

34

Appendix I: Corporate and other

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16 1H 14/15 Change on pcp (%)
Revenue Direct Costs Gross Margin (GM)	0.4 0.4 -2% 0.2 0.2 -16%
	0.6 0.6 -7%
Other Revenue	1.3 0.7 97%
Share of Equity profit/loss	- - -
Operating Expenditure Net Non Cash	(20.9) (19.7) -6% (0.5) (0.4) -19%
Net Interest	(2.0) (2.7) 25%
Income Tax Expense/N.C.I	11.7 11.3 4%
UNPAT	(9.8) (10.2) 4%

35

Appendix J: Shadforth contribution to segments - Corporate and other

==> picture [84 x 77] intentionally omitted <==

$'M	1H 15/16 2H 14/15 1H 14/15 Shadforth	1H 15/16 2H 14/15 1H 14/15 Other Corporate
Revenue Direct Costs Gross Margin (GM) Other Revenue Share of Equity profit/loss Operating Expenditure Net Non Cash Net Interest Income Tax Expense/N.C.I UNPAT	0.0 - (0.0) - 0.4 (0.0)	0.4 0.4 0.4 0.2 (0.2) 0.2
	0.0 0.4 (0.0) 1.1 0.1 0.1 - - - 0.0 0.1 (0.0) (0.1) 0.1 (0.1) 0.0 (0.4) (0.3) 0.3 0.2 0.2	0.6 0.2 0.6 0.2 (0.3) 0.6 - - - (20.9) (19.7) (19.7) (0.3) (0.5) (0.3) (2.0) (2.2) (2.4) 11.4 10.1 11.0
	1.4 0.4 (0.1)	(11.2) (12.4) (10.1)

36

==> picture [84 x 77] intentionally omitted <==

Appendix K: Shadforth

Please note that the Shadforth results detailed below are now shown as part of our Financial Advice & Distribution, Investment Management and Corporate and Other segments

$'M	1H 15/16 1H 14/15 Change on pcp (%)*
Revenue Direct Costs Gross Margin (GM) GM % Other Revenue Share of Equity profit/loss Operating Expenditure Net Non Cash Net Interest Income Tax Expense/N.C.I UNPAT	93.2 89.8 4% (11.0) (11.1) 1%
	82.2 78.7 5% 0.77% 0.79% 1.8 0.8 117% 0.1 0.1 18% (38.6) (49.9) 23% (0.7) (0.6) -20% 0.1 (0.5) 111% (12.8) (8.2) -56%
	32.1 20.4 57%
Average FUMA ($'b)	21.3 19.6
Net Operating Margin%	0.43% 0.30%

*Comparative amounts include the July 2014 Shadforth result to provide a 6 month comparison. IOOF acquired Shadforth in August 2014.

37

APPENDIX L RECONCILIATION OF SEGMENTS TO STATUTORY FINANCIALS STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER	2015
Statutory Note Ref. Gross Margin Management and Service fees revenue 2-3 Other Fee Revenue 2-3 Service and Marketing fees expense 2-4 Other Direct Costs 2-4 Amortisation of deferred acquisition costs 2-4 Total Gross Margin Other Revenue Stockbroking revenue 2-3 Stockbroking service fees expense 2-4 Dividends and distributions received 2-3 Net fair value gains/(losses) on other financial assets at fair value through profit or loss 2-3 Profit on sale of financial assets 2-3 Other revenue 2-3 Other Revenue adjustments Below Total Other Revenue Equity Accounted Profits Share of profits of associates and jointly controlled entities accounted for using the equity method SOCI Total Equity Accounted Profits Operating Expenditure Salaries and related employee expenses 2-4 Employee defined contribution plan expense 2-4 Information technology costs 2-4 Professional fees 2-4 Marketing 2-4 Office support and administration 2-4 Occupancy related expenses 2-4 Travel and entertainment 2-4 Corporate recharge N/A Other 2-4 Total Operating Expenditure Loss on disposal of non-current assets 2-4 Total Operating Expenditure Net non cash (Ex. Amortisation from acquisitions) Share based payments expense 2-4 Depreciation of property, plant and equipment 2-4 Amortisation of intangible assets - IT development 2-4 Total Net non cash (Ex. Amortisation from acquisitions) Net Interest Interest income on loans to directors of controlled and associated entities 2-3 Interest income from non-related entities 2-3 Finance Costs SOCI Total Net Interest Income Tax & NCI Non-controlling Interest SOCI Income tax expense SOCI Income tax expense/NCI adjustments Below Total Income Tax & NCI Discontinued Operations 2-2 Underlying UNPAT (pre-amortisation of intangible assets) Significant Items Acquisition and divestment transaction costs 2-2, 2-4 Termination and retention incentive payments 2-4 Recognition of Shadforth onerous lease contracts N/A Impairment of Plan B brand name N/A Gain on disposal of subsidiaries 2-2 Profit on sale of assets 2-3 Non-recurring professional fees 2-4 Income tax expense/NCI adjustments Unwind of deferred tax liability recorded on intangible assets N/A Reinstatement of Perennial non-controlling interests N/A Income tax attributable N/A Total Significant Items - Net of Tax Amortisation of intangible assets 2-4 Reported Profit/(Loss) per financial statements SOCI = Statement of Comprehensive Income Underlying NPAT excl. Discontinued Operations*	Platform $'m	Investment Management $'m	$'m Financial Advice & Distribution	Trustee Services $'m	Corporate and other $'m	1H 15/16 $'m		2H 14/15 $'m
	203.5 3.3 (90.7) (2.3) (0.7)	52.7 0.9 (19.4) (3.6) -	168.7 12.3 (57.7) (6.4) (0.3)	12.9 1.9 (0.0) (0.8) -	- 0.4 0.2 (0.0) -	401.0 18.8 (131.0) (13.1) (0.6)		401.9 20.5 (136.3) (7.3) (0.8)
	113.1 - - - - - 0.4 -	30.6 - - (0.0) - 72.4 1.9 (72.4)	116.6 38.1 (21.5) 0.0 - 2.4 2.1 (2.4)	14.1 - - - - - - -	0.5 - - 0.4 0.0 0.3 0.9 (0.3)	275.1		278.0
						38.0 (21.5) 0.4 0.0 75.0 5.2 (75.0)		36.3 (20.2) 0.3 (0.1) 1.9 4.1 (1.6)
	0.4 -	1.9 2.2	18.8 0.6	- -	1.3 -	22.1 2.8		20.9 3.2
	- (5.7) (0.5) (0.9) (0.2) (0.6) (0.1) (0.0) (0.4) (40.7) -	2.2 (4.5) (0.3) (0.5) (0.3) (0.1) (0.3) (0.5) (0.1) (5.2) -	0.6 (40.8) (3.2) (7.2) (1.3) (2.8) (3.9) (5.4) (1.1) (8.6) (0.0)	- (5.5) (0.5) (0.3) (0.1) (0.1) (0.2) (0.1) (0.2) (2.3) -	- (43.4) (3.3) (16.5) (1.4) (1.7) (5.1) (5.1) (1.4) 56.9 -	2.8 (100.0) (7.7) (25.3) (3.1) (5.3) (9.5) (11.0) (3.2) (0.0) (0.0)		3.2 (104.3) (7.1) (26.2) (3.2) (4.7) (8.4) (11.7) (2.8) (0.0) (0.1)
	(49.0) -	(11.8) (0.0)	(74.3) (0.1)	(9.1) -	(20.9) (0.0)	(165.1)		(168.4)
						(0.2)		(0.1)
	(49.0) (0.3) (1.5) (0.9)	(11.8) (0.1) (0.5) -	(74.4) (0.4) (1.8) -	(9.1) (0.0) (0.1) -	(20.9) (0.5) 0.0 -	(165.2)		(168.5)
						(1.3) (4.0) (0.9)		(1.4) (3.6) (0.9)
	(2.7) - 0.0 -	(0.7) 0.2 0.3 -	(2.2) - 0.4 (0.0)	(0.1) - 0.0 -	(0.5) 0.1 1.6 (3.7)	(6.1) 0.2 2.2 (3.7)		(5.8) 0.2 2.0 (4.3)
	0.0 - (19.0) (0.0)	0.4 - (21.5) 15.3	0.4 (1.3) (17.8) 0.0	0.0 - (1.4) (0.1)	(2.0) - 17.5 (5.8)	(1.3) (1.3) (42.3) 9.5		(2.1) (1.1) (23.4) (10.6)
	(19.1)	(6.2)	(19.2)	(1.5)	11.7	(34.1)		(35.2)
	42.7	16.4	40.6	3.4	(9.8)	93.3		90.5
						2.1		2.7
						95.4		93.2
						(0.5) (4.1) - - 72.0 3.0 (3.1) 5.0 0.8 (14.5)		(0.6) (3.3) (2.1) (1.4) 1.0 - - 6.9 1.2 3.8
						58.6 (20.0)		5.5 (19.9)
						134.0		78.9

Note: Segment results include inter-segment revenues and expenses eliminated on consolidation

38

APPENDIX M DETAILED BREAKDOWN OF DISCONTINUED OPERATIONS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

39 Gross Margin Management and Service fees revenue Other Fee Revenue Service and Marketing fees expense Other Direct Costs Amortisation of deferred acquisition costs Total Gross Margin Other Revenue Stockbroking revenue Stockbroking service fees expense Dividends and distributions received Net fair value gains/(losses) on other financial assets at fair value through profit or loss Profit on sale of financial assets Other revenue Other Revenue adjustments Total Other Revenue Equity Accounted Profits Share of profits of associates and jointly controlled entities accounted for using the equity method Total Equity Accounted Profits Operating Expenditure Salaries and related employee expenses Employee defined contribution plan expense Information technology costs Professional fees Marketing Office support and administration Occupancy related expenses Travel and entertainment Corporate recharge Other Total Operating Expenditure Loss on disposal of non-current assets Total Operating Expenditure Net non cash (Ex. Amortisation from acquisitions) Share based payments expense Depreciation of property, plant and equipment Amortisation of intangible assets - IT development Total Net non cash (Ex. Amortisation from acquisitions) Net Interest Interest income on loans to directors of controlled and associated entities Interest income from non-related entities Finance Costs Total Net Interest Income Tax & NCI Non-controlling Interest Income tax expense Income tax expense/NCI adjustments Total Income Tax & NCI Underlying UNPAT (pre-amortisation of intangible assets)	1H 15/16 $'m		2H 14/15 $'m		1H 14/15 $'m
	10.4 0.2 (3.1) (0.3) -		15.0 0.0 (4.3) (0.2) -		16.6 0.1 (5.6) (0.5) -
	7.2		10.5		10.5
	- - - - - (1.1) -		- - - - - (2.0) -		- - - - - (2.0) -
	(1.1) -		(2.0) -		(2.0) -
	- (1.4) (0.1) (0.2) (0.1) (0.0) (0.0) - (0.0) - (0.0)		- (2.3) (0.1) (0.3) (0.1) (0.0) (0.0) 0.1 (0.1) - 0.1		- (4.2) (0.2) (0.5) (0.1) (0.0) (0.0) (0.4) (0.1) - 0.0
	(1.9)		(2.8)		(5.5)
	-		-		-
	(1.9)		(2.8)		(5.5)
	(0.0) - -		(0.0) 0.0 -		(0.0) (0.0) -
	(0.0) - 0.0 -		(0.0) - 0.1 -		(0.0) - 0.1 -
	0.0 - (1.2) (0.8)		0.1 - (1.7) (1.2)		0.1 - (1.5) (0.6)
	(2.0)		(3.0)		(2.1)
	2.1		2.7		1.0

Appendix N: Earnings per share

==> picture [84 x 77] intentionally omitted <==

IFL - Averaged Weighted Number of Shares on Issue	IFL - Averaged Weighted Number of Shares on Issue
EARNINGS PER SHARE CALCULATION
Half-Year ended 31 December 2015
Ordinary Shares - Opening Balance 300,133,752 From To Days Share Issue Shares on Issue Weighted average 01-Jul-15 31-Dec-15 184 - 300,133,752 300,133,752 Weighted Average Treasury shares (420,521) Ordinary Shares - Closing Balance 300,133,752 Weighted Average shares on issue 299,713,231 Statutory Underlying
Net Profit Attributable to Members of the parent entity	133,986,000 $ 95,376,000 $
Basic Earnings Per Share	44.7 31.8

40

Appendix O: Explanation of items removed from UNPAT

==> picture [84 x 77] intentionally omitted <==

In calculating its Underlying Net Profit After Tax pre-amortisation (UNPAT), the Group reverses the impact on profit of certain, predominantly non cash, items to enable a better understanding of its operational result. A detailed explanation for all such items is provided below.

Amortisation of intangible assets: Non-cash entry reflective of declining intangible asset values over their useful lives. Intangible assets are continuously generated within the IOOF Group, but are only able to be recognised when acquired. The absence of a corresponding entry for intangible asset creation results in a conservative one sided decrement to profit only. It is reversed to ensure the operational result is not impacted. The reversal of amortisation of intangibles is routinely employed when performing company valuations. The amortisation of software development costs is not reversed in this manner however.

Acquisition and divestment transaction costs: One off payments to external advisers in pursuit of corporate transactions, such as the acquisition of Shadforth and divestment of certain Perennial subsidiaries, which were not reflective of conventional recurring operations. Termination and retention incentive payments: Facilitation of restructuring to ensure long term efficiency gains which are not reflective of conventional recurring operations.

Gain on disposal of subsidiaries: During the period, the IOOF Group divested its interests in Perennial Fixed Interest and Perennial Growth Management to Henderson.

Profit on sale of assets: Divestments of non-core businesses, client lists and associates. This was not recognised in 2015 due to low scale activity and immateriality.

Non-recurring professional fees: Costs relating to specialist service and advice providers enlisted to assist the Group in better informing key stakeholders. These services were required following negative media allegations. In particular, but not limited to, process review, senate inquiry support, government relations, litigation defence and communications advice. It is not anticipated that this type and level of support will be required on a recurrent basis.

Unwind of deferred tax liability recorded on intangible assets: Acquired intangible asset valuations for AASB 3 Business Combinations accounting are higher than the required cost base as set under newly legislated tax consolidation rules implemented during 2012. A deferred tax liability (DTL) is required to be recognised as there is an embedded capital gain should the assets be disposed of at their accounting values. This DTL reduces in future periods at 30% of the amortisation applicable to those assets which have different accounting values and tax cost bases. The recognition of DTL and subsequent period reductions are not reflective of conventional recurring operations and are regarded as highly unlikely to be realised due to the IOOF Group's intention to hold these assets long term.

Reinstatement of Perennial non-controlling interests: Embedded derivatives exist given the IOOF Group’s obligation to buy-back shareholdings in certain Perennial subsidiaries if put under the terms of their shareholders’ agreements. International Financial Reporting Standards deems the interests of these non-controlling holders to have been acquired. Those interests must therefore be held on balance sheet as a liability to be revalued to a reserve each reporting period. In calculating UNPAT, the non-controlling interest holders share of the profit of these subsidiaries is subtracted from the IOOF Group result as though there were no embedded derivatives to better reflect the current economic interests of Company shareholders in the activities of these subsidiaries.

Income tax attributable: This represents the income tax applicable to certain adjustment items outlined above.

41

Appendix P: Definitions

==> picture [84 x 77] intentionally omitted <==

Term	Definition
Cost to Income Ratio	Ratio of underlying expenses relative to underlying operating revenues exclusive of the benefit funds and discontinued operations
Flagship Platforms	IOOF Employer Super, The Portfolio Service, IOOF Pursuit
FUMA	Funds Under Management, Administration and Advice
FUMAS	FUMA plus Funds Under Supervision, primarily Corporate Trust clients
Net Interest Cover	Ratio of Earnings Before Interest, Tax, Depreciation and Amortisation relative to the sum of Interest Received and Interest and Other Costs of Finance Paid per the Consolidated Statement of Comprehensive Income
Net Operating Margin	Ratio of underlying revenues including share of associate profits, excluding net interest less underlying operating expenses relative to FUMA
PCP	Prior Comparative Period – Half-year to 31 December 2014
Return on Equity	Calculated by dividing annualised UNPAT by average equity during the period
TSR	Total Shareholder Return – change in share price plus dividends paid per share in a given period
UNPAT	Underlying Net Profit After Tax Pre Amortisation, see Appendix O for a detailed explanation of reconciling line items
Underlying EBITA	Underlying Earnings Before Interest, Tax and Amortisation
Underlying EPS	Calculated with the same average number of shares on issues as the statutory EPS calculation utilising UNPAT as the numerator, a detailed calculation is provided in Appendix N.
VWAP	Volume Weighted Average Price

42

Important disclaimer

==> picture [84 x 77] intentionally omitted <==

Forward-looking statements in this presentation are based on IOOF’s current views and assumptions and involve known and unknown risks and uncertainties, many of which are beyond IOOF’s control and could cause actual results, performance or events to differ materially from those expressed or implied. These forward-looking statements are not guarantees or representations of future performance and should not be relied upon as such.

IOOF undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this presentation, subject to disclosure requirements applicable to IOOF.

Information and statements in this presentation do not constitute investment advice or a recommendation in relation to IOOF or any product or service offered by IOOF or any of its subsidiaries and should not be relied upon for this purpose. Prior to making a decision in relation to IOOF’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.

43

==> picture [345 x 259] intentionally omitted <==

Creating financial independence since 1846