PRAEMIUM LIMITED — Investor Presentation 2012

Sep 17, 2012

Præmium Limited

Investor Presentation

Michael Ohanessian

18 September 2012

Disclaimer

The material contained in this document is a presentation of general information about the Præmium Group's activities current as at the date of this presentation (18 September 2012). It is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment purposes as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with or without professional advice when deciding if an investment is appropriate.

To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of this material is accepted by the Præmium Group or any of its related bodies corporate.

Executive Summary

Praemium has delivered a significantly improved financial result, especially in the second half of FY2012

Praemium is:

• A market leader in non-custodial portfolio administration in Australia.
• A major player in the Separately Managed Account (SMA) space in Australia, the UK and now internationally.

Praemium has two important upcoming transactions:

• To take over from BlackRock as the Operator of the Australia SMA.
• To acquire WealthCraft Systems Limited.

These transactions will transform the company by:

• Increasing earnings from the Australia SMA by taking over as Scheme Operator.
• Accelerating our existing SMA distribution into Asia with the acquisition of a Hong Kong-based presence (via WealthCraft).
• Pulling through sales by expanding the product suite with a cloud-based CRM and financial planning system (via WealthCraft).

Product Overview

FY2012 Financial Overview

Strategic Acquisitions

Revenue profile

Products

V-Wrap — Non-custodial portfolio administration

CPS — SMA operated by BlackRock

UK SMA — Discretionary Portfolio Service (dps) and SMARTfunds

Other — Includes Powerwrap and E*Trade

What we do now

Post the transactions

Product Overview

FY2012 Financial Overview

Strategic Acquisitions

Key FY12 Highlights

Group

• Significantly reduced prior year's cash burn
• Breakeven EBITDA for second half of FY2012 ($32k profit)
• Annualised cost savings of $3m+ (20% of FY11 cost base)

Australia

• Consistent underlying revenue growth
• Enhanced sales & marketing focus
• R&D investment to strengthen our core V-Wrap service

UK

• Revenue growth of 50%
• Discretionary Portfolio Service (dps) growing strongly
• Expanding distribution through Jersey offshore platform, now operational

Financial Summary

Præmium Group	FY2012$000	FY2011$000	Change%
Revenue	13,045	13,037	0%
Expenses	15,041	18,623	(19%)
EBIT*	(1,996)	(5,586)	64%
Net Loss after Tax	(3,945)	(5,536)	29%
Cash at Reporting Date	4,713	4,644	1%
Net Assets	6,592	5,494	20%
Operating Cashflow*	(3,082)	(5,854)	47%
Earningsper Share	(1.4)	(2.5)	44%

*Excludes organisational restructure costs.

Significant improvement in EBIT

Note: Excludes organisational restructure costs.

Operating cash flow: positive last quarter

$4.3 million cash with no debt as at August 2012

Growth in underlying revenue

Divisional Breakdown

Præmium Group	AUSFY12$m	UKFY12$m	CorporateFY12$m	GroupFY12$m
ExternalRevenue	11.1	1.9		13.0
Employee Expenses	(5.1)	(4.6)	(0.1)	(9.8)
OperatingExpenses	(2.5)	(1.7)	(0.6)	(4.8)
Total Expenses	(7.6)	(6.3)	(0.7)	(14.6)
EBITDA	3.5	(4.4)	(0.7)	(1.6)
EBITDA%	32%
RestructureCosts	(1.2)	(0.2)		(1.4)
Depreciation	(0.3)	(0.1)		(0.4)
EBIT	2.1	(4.7)	(0.7)	(3.3)
NPBT	2.1	(5.3)	(0.7)	(3.9)

AUS – strong underlying earnings

Continued focus on profitable growth

*EBITDA to revenue %

UK Growing

• FUM up 45% in the past year
• 90% increase in client base
• Driven by Praemium's uniquely scalable and transparent solution
• Stable cost base, with targeted investment in sales & operations
• Focus on incremental profit from revenue growth
• Jersey fully operational at end FY2012

Product Overview

FY2012 Financial Overview

Strategic Acquisitions

Praemium to execute two acquisitions

Acquisitions*

• Take over from BlackRock as Operator of the SMA in Australia.
• Acquire WealthCraft Systems Limited in Hong Kong.

Financial impact

• Total cash expenses (including consideration and transaction-related costs) of approximately $1.1 million plus two million ordinary shares.
• Revenue increase of 20% relative to FY2012.
• Expected to be accretive in year one.

Capital implications

• Praemium Australia becomes the Responsible Entity (RE) for the BlackRock SMA.
• At current FUM of $0.6 billion, prudential capital of $3 million is required.
• At $1 billion the maximum prudential capital requirement would be capped at $5 million.

Acquisition 1: BlackRock/Praemium SMA

Launched in late 2005 as a revenue share partnership with Praemium receiving 20%.

• Following a strategic review, BlackRock determined that a company that focusses on portfolio administration would be better placed to develop the product.
• Praemium to take over as the RE for the SMA scheme, which is marketed as the Customised Portfolio Service (CPS).
• The BlackRock administration team that operates the CPS will transition to Praemium upon completion.
• Completion is subject to various conditions precedent such as investor approval in the SMA representing at least 50% of the scheme funds.

Praemium will be an SMA Operator in Australia, the UK and Jersey.

Key Statistics:

• $600 million in FUA
• 100 model portfolios
• Over 20 model portfolio managers

Well placed as the leading SMA brand

Source: Investment Trends – March 2012 Planner Direct Equities & SMA Report Note: Top 11 out of 30 shown

SMA has many inherent benefits

Benefits of investing in an SMA

	SMA	ManagedFunds	Direct Shares
Tax efficient	✔	X	✔
Transparent	✔	X	✔
Lowerbrokerage costs	✔	N/A	X
Customisable/flexible	✔	X	✔
Accessto professional managers	✔	✔	X
Beneficialownership	✔	X	✔

After 40 years the US SMA market is over $900 billion; after 10 years Australia's market is less than $2 billion.

According to market research*, Australian advisors plan to increase use of SMA significantly over the next three years.

*Investment Trends – March 2012 Planner Direct Equities & SMA Report

Acquisition 2: WealthCraft

Praemium acquires 100% of the shares in WealthCraft Systems Limited from WealthCraft System Inc. WealthCraft was founded in 2003 and is based in Hong Kong.

Consideration of $625,000 in cash plus 2 million Praemium Limited shares:

• Target completion date of October.
• Includes $400,000 that has already been provided as a secured loan.
• Subject to completion of conditions precedent as specified in the sale agreement.

Key product is the Wealthcraft Adviser 5.0:

• Customer relationship management (CRM) based on Microsoft Dynamics
• Financial planning
• Investment research
• Portfolio management
• Unit trust trade automation

The WealthCraft CRM integrates seamlessly into Microsoft Office:

• Uniquely integrates CRM into the Outlook environment.
• On-going support and development from Microsoft.

Expected benefits

• 1. Acquire a rapidly growing CRM+planning software business addressing the English-speaking ex-pat market in Asia.
• 1. Provide a sales and distribution capability for Praemium's International investment platform targeting the same client base.
• 1. Bolt onto the V-Wrap offering to provide clients a more complete and fully integrated solution.
• 1. Integrate into the SMA investment platform to enable planners to link client risk tolerance with appropriate strategic asset allocation.
• 1. Provide clients with a low-cost way to easily customise their proposition.
• 1. Leverage Microsoft's core CRM.

Praemium to become a global SMA platform operator

• 1. Will be vertically integrated as the leading SMA Operator in Australia.
• 2. An emerging leader in the UK platform market with a scalable SMA-based solution.
• 3. WealthCraft provides an Asian footprint to drive our international SMA platform.
• 4. Will enhance our investment platform with CRM and financial planning capabilities.