New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>PPH</h2>
<h3>Key highlights from PPH Investor Day</h3>
<ul>
<li>ChurchStaq launched in September has been received positively by customers and ‘gone well’ in October</li>
<li>CEO replacement update: currently actively interviewing, should hear by the end of the calendar year, or latest early next year</li>
<li>Growth going forward will be organic and inorganic, but a limited number of quality assets in the market</li>
<li>PPH sees opportunities in Catholic denominations, now bringing in Spanish offering, could target Catholic schools and parishes</li>
<li>First time giver behaviour has been positive – rush of new donors in March &amp; April which has been more sticky than pre COVID</li>
<li>Recurring giving has also increased from March to October</li>
<li>PPH internal forecasts set by 3 key drivers: 1) total giving 2) % of customers 3) % digital penetration</li>
<li>PPH use GDP/giving correlation as macro forecast, used Deloittes latest October forecast for GDP</li>
<li>Assumption currently: continue to see macro headwind/GDP although built up savings may see a rebound in giving</li>
<li>Total giving estimated to be down 5% this year and believes there may be donor fatigue in H2, offset by digital increases seen in 1H</li>
<li>However digital penetration expecting some reversion in 2H21</li>
<li>Assumption that US will return to ‘normal’ mid way through FY21</li>
<li>Forward strategy seems likely to include Catholic channels as PPH see this as an untapped opportunity</li>
<li>PPH wont be splitting disclosures into segments going forward (does not want to report ‘excessive detail’)</li>
<li>Not likely to see dividend any time soon as looking to invest back into the business</li>
<li>Pre COVID share of wallet PPH 40% to low 60s% 1H21, CCB 20 to 40s%</li>
<li>Current digital penetration by size/platform PPH: L 65%, M 55%, S 55%, CCB: L: 55%-50%, M/S 45%-40%</li>
<li>Believes that medium churches (500-1,100) have similar needs to large churches</li>
<li>Believes that penetration of the mid church market is around 10% market share currently</li>
<li>M&amp;A would be most likely if looked to go down small churches for off the shelf, self-serviced product</li>
</ul>
<p><strong>Jamie Foulkes&nbsp;</strong><br>Analyst, Equities</p>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1682927786002633835&amp;th=175af5e7a352546b&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8Kx2b-UCFcUTv4amRm4Qn3thJvckiEI_luK02mkS5Ojo_3vpzZjRnHzDqWNhNL8ZP1nIpBIsg8NHDLdASzzw0mx08v1tjHFJIPtLS3ZfJTgaH6cLbRgD8EuiQ&amp;disp=emb" class="editor-image img-responsive"></figure>
<p><br>M: +64 20 4196 2993 |P: +64 4 914 2217 | TF: 0800 367 227&nbsp;<br>Level 22, NTT Tower, 157 Lambton Quay, Wellington</p>

PPH
Key highlights from PPH Investor Day

ChurchStaq launched in September has been received positively by customers and ‘gone well’ in October
CEO replacement update: currently actively interviewing, should hear by the end of the calendar year, or latest early next year
Growth going forward will be organic and inorganic, but a limited number of quality assets in the market
PPH sees opportunities in Catholic denominations, now bringing in Spanish offering, could target Catholic schools and parishes
First time giver behaviour has been positive – rush of new donors in March &amp; April which has been more sticky than pre COVID
Recurring giving has also increased from March to October
PPH internal forecasts set by 3 key drivers: 1) total giving 2) % of customers 3) % digital penetration
PPH use GDP/giving correlation as macro forecast, used Deloittes latest October forecast for GDP
Assumption currently: continue to see macro headwind/GDP although built up savings may see a rebound in giving
Total giving estimated to be down 5% this year and believes there may be donor fatigue in H2, offset by digital increases seen in 1H
However digital penetration expecting some reversion in 2H21
Assumption that US will return to ‘normal’ mid way through FY21
Forward strategy seems likely to include Catholic channels as PPH see this as an untapped opportunity
PPH wont be splitting disclosures into segments going forward (does not want to report ‘excessive detail’)
Not likely to see dividend any time soon as looking to invest back into the business
Pre COVID share of wallet PPH 40% to low 60s% 1H21, CCB 20 to 40s%
Current digital penetration by size/platform PPH: L 65%, M 55%, S 55%, CCB: L: 55%-50%, M/S 45%-40%
Believes that medium churches (500-1,100) have similar needs to large churches
Believes that penetration of the mid church market is around 10% market share currently
M&amp;A would be most likely if looked to go down small churches for off the shelf, self-serviced product

Jamie Foulkes&nbsp; Analyst, Equities

 M: +64 20 4196 2993 |P: +64 4 914 2217 | TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

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PPH: Investor Day Key Highlights