Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — H1 FY2024 Earnings Presentation
31 slides from Magellan Financial's earnings presentation, Feb 15, 2024
Slide 1: Interim Results Briefing
Magellan Financial Group For personal use only Interim Results Briefing Half year ended 31 December 2023 Andrew Formica | Executive Chairman Kirsten Morton | Chief Financial Officer & Chief Operating Officer
Slide 2: Agenda
Agenda For personal use only 1. 1H24 Overview Andrew Formica 3 2. Magellan Asset Management Andrew Formica 7 3. Group Financials Kirsten Morton 13 4. Strategic Update Andrew Formica 18 5. 2H24 Priorities + Summary Andrew Formica 27 Magellan| 2
Slide 3: 1H24 Overview
For personal use only 1H24 Overview Andrew Formica, Executive Chairman Magellan| 3
Slide 4: 1H24 Overview
1H24 Overview For personal use only Resolve Legacy Issues Renewed Corporate Stability Profitable and Rebuilding Addressed outstanding Employee Share Funds Under Management (FUM) of Enhanced and refocused US Distribution Purchase Plan (ESPP) loans for current A$36.3 billion as at 31 January 2024 plat
Slide 5: Financial Performance Overview
Financial Performance Overview For personal use only Group: Funds Management Business: Group: Adjusted Revenue & Other Income1 Operating Expenses Adjusted Net Profit After Tax1,2 (12%) $208.8m $4.5m $182.8m (5%) $37.8m $98.3m $93.5m $3.2m (18%) $26.5m $204.3m $144.9m $95.2m $62.4m $67.0m $51.3m 1H23
Slide 6: Financial Strength
Financial Strength For personal use only $830.5 million $837.2 million No debt Net Tangible Assets (NTA) Cash, financial assets & Total liabilities of $117.9 million, ($4.59 per share) investments in associates down from $236.5 million1, with Group’s commitments to potentially fund the MGF Options d
Slide 7: Magellan Asset Management (MAM)
For personal use only Magellan Asset Management (MAM) Andrew Formica, Executive Chairman Magellan| 7
Slide 8: Funds Under Management
Funds Under Management For personal use only Funds Under Management1 (FUM) (A$ billion) ▪ Represented the majority of net outflows in 1H24 with ~$4.5 billion Global Equities ▪ Investment returns added ~$0.5 billion in FUM $39.7bn ▪ Institutional FUM of ~$3 billion ($2.7bn) $35.8bn $4.5bn $1.0bn ($1.
Slide 9: Quarterly Net Flows
Quarterly Net Flows For personal use only - ▪ Quarterly retail net (0.5) outflows at lowest level in two years (1.0) (0.9) Retail Flows (1.0) ▪ Majority of net outflows (A$ billion) (1.5) (1.4) (1.4) (1.3) coming from Global (1.6) Equities (1.7) (2.0) (1.9) 1H24 ▪ Airlie recording monthly (2.5) net
Slide 10: Fund Performance (as at Dec 2023)
Fund Performance (as at 31 Dec 2023) For personal use only 6 months 1 year 3 years 5 Years Since Inception As at 31 December 2023 (%) (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund 3.32% 22.05% 7.05% 9.45% 10.65% MSCI World NTR Index ($A) 4.93% 23.03% 11.76% 13.51% 7.67% Excess (1.61%) (0.98%)
Slide 11: Fund Performance (as at Jan 2024)
Fund Performance (as at 31 Jan 2024) For personal use only 6 months 1 year 2 years Since Inception1 As at 31 January 2023 (%) (%) (% p.a.) (% p.a.) Magellan Global Fund 10.02% 26.16% 6.10% 11.01% MSCI World NTR Index ($A) 7.35% 24.71% 7.42% 7.91% Excess 2.67% 1.45% (1.32%) 3.10% Investment Magellan
Slide 12: Distribution Update
Distribution Update For personal use only ✓ Team maintains deep stakeholder relationships across: ― financial advisers and brokers, Deep ― dealer groups, platforms, Relationships ― researchers and consultants ✓ Strong client engagement ✓ Significant global and local brand awareness across Magellan G
Slide 13: Group Financials
For personal use only Group Financials Kirsten Morton CFO + COO Magellan| 13
Slide 14: Reported Earnings
Reported Earnings For personal use only $ million 31 Dec 2023 31 Dec 2022 % change Management and services fees 130.3 181.1 (28%) Performance fees 0.1 0.1 (14%) • Management and services fees decreased by 28%, Other revenue and income 52.4 27.6 90% reflecting the 31% reduction in average FUM Adjuste
Slide 15: Funds Management Business – MAM
Funds Management Business – MAM For personal use only $ million 31 Dec 2023 31 Dec 2022 % change 1 Revenue Management fees 129.7 179.1 (28%) Performance fees 0.1 0.1 (14%) • Funds Management segment represents the core business Services fees 0.6 2.0 (70%) that drives profits and dividends Other reve
Slide 16: Funds Management Business – MAM (cont.)
Funds Management Business – MAM (cont.) For personal use only ✓ Cost to income ratio (excluding performance fees) of 39.1% during the period ✓ 1H24 Funds Management business operating expenses of $51.3 million tracking to guidance range of $97.5-102.5 million ✓ During the period, announced additiona
Slide 17: Fund Investments
Fund Investments For personal use only Magellan has set a pre-tax hurdle of 10% p.a. over the business cycle for the Fund Investments portfolio FUND INVESTMENTS PORTFOLIO INVESTMENT RETURNS Investment ($ million) 31 December 2023 30 June 2023 Time Period (to 31 December 2023) Return Cash 0.2 0.4 1 Y
Slide 18: Strategic Update
For personal use only Strategic Update Andrew Formica, Executive Chairman Magellan| 18
Slide 19: Delivering on Strategic Priorities
Delivering on Strategic Priorities For personal use only ✓ Transitional leadership structure announced with Executive Chairman role to remain during transitional period ✓ Announced appointment of Sophia Rahmani as Managing Director of main operating subsidiary, Magellan Asset Management Limited (MAM
Slide 20: Delivering on Strategic Priorities
Delivering on Strategic Priorities For personal use only ✓ Continued signs of investment performance improvement in Global Equities and Infrastructure ✓ Airlie continues its strong level of outperformance ✓ Program of proactive engagement with clients ✓ Announced intention to convert Magellan Global
Slide 21: Delivering on Strategic Priorities
Delivering on Strategic Priorities For personal use only Products & Distribution ✓ Strategic Product Committee established, comprising senior leaders from distribution, investment and corporate teams, with meetings held in December 2023 and February 2024 ✓ Global distribution footprint enhanced with
Slide 22: Capital Management
Capital Management For personal use only Balance Sheet as at 31 Dec 2023 How we view capital requirements ~A$813m ▪ Strong balance sheet at 31 ~A$813m December 2023 provides strategic Associates A$152m flexibility and optionality Strategic / A$311m Buffer ― Balance sheet consists of a mix of liquid
Slide 23: Capital Management Framework
Capital Management Framework For personal use only ▪ Dividend policy unchanged Dividend ▪ 90-95% of Funds Management business profit1 ▪ 90-95% of crystallised performance fees after tax ▪ Investment in organic growth opportunities whilst Reinvestment maintaining overall cost discipline ▪ Seed new fu
Slide 24: Magellan Financial Group
Magellan Financial Group For personal use only Magellan Financial Group 36% economic interest1 Magellan Asset Barrenjoey Capital Partners Management Deep Dive: Page 26 US Distribution Deep Dive: Page 25 [1] Economic interest (4.99% voting interest) Magellan| 24
Slide 25: Deep Dive: US Distribution
Deep Dive: US Distribution For personal use only Changes to US Distribution Strategic Rationale Refocus and enhance US Distribution Platform US remains an attractive market for Magellan 1 with appointment of new leadership 1 to undertake a revitalised distribution strategy for existing and new produ
Slide 26: Deep Dive: Barrenjoey Capital Partners
Deep Dive: Barrenjoey Capital Partners For personal use only 1H24 Highlights ― Barrenjoey saw record revenue (up 35%) ― Revenue growth across all its businesses in 1H24 as it continues to capture 1 Growing Revenues market share ― Fixed Income Derivatives and Equity Financing businesses live during t
Slide 27: 2H24 Priorities + Summary
For personal use only 2H24 Priorities + Summary Andrew Formica, Executive Chairman Magellan| 27
Slide 28: 2H24 Priorities & Summary
2H24 Priorities & Summary For personal use only 2H24 Priorities Summary Colleagues ✓ Corporate stability restored to business ✓ Launch Employee Equity Plans ✓ Gaining momentum on strategic priorities ✓ Targeted training and development of staff ✓ Regular Employee Pulse Survey ✓ Profitable business a
Slide 29: Q&A
For personal use only Q&A Magellan| 29
Slide 30: Important Information
Important Information This presentation has been prepared by Magellan Financial Group Limited ACN 108 437 592 (‘Magellan’). For personal use only This presentation contains summary information about Magellan and its related bodies corporate and is current as at 15 February 2024. While the informatio
Slide 31: For personal use only
For personal use only www.magellangroup.com.au Phone: +61 2 9235 4888
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