Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — FY2017 Earnings Presentation
20 slides from Magellan Financial's earnings presentation, Aug 10, 2017
Slide 1: Final Results for the year ended 30 June 2017
For personal use only Magellan Financial Group Limited Final Results For the year ended 30 June 2017 Hamish Douglass | CEO & Chief Investment Officer | 10th August 2017
Slide 2: Magellan Financial Group Final Results
Magellan Financial Group Final Results [2] $ million 30 June 2017 30 June 2016 % change Management and services fees 307.2 266.6 15% For personal use only Performance fees 21.7 48.0 (55%) Other revenue 9.4 19.2 (51%) Revenue 338.3 333.8 1% Expenses (82.1) (74.1) 11% Profit before tax expense 256.1 2
Slide 3: 2017 Highlights
2017 Highlights [3] • Strong growth in funds under management and management and services fees: For personal use only – Average funds under management up 16% to $45.7 billion1 – Management and services fee revenue up 15% to $307.2 million1 – Underlying profitability before tax and performance fees o
Slide 4: Business Update
Business Update [4] For personal use only • Cricket Australia – Domestic Test Series Sponsorship – 3 year sponsorship with 2 year option – Significant brand building opportunity – Attractive target demographics – Supports our adviser business and aligns with our self-directed investor strategy – Con
Slide 5: Magellan Financial Group Overview
Magellan Financial Group Overview [5] • Two business activities: For personal use only – Magellan Asset Management (Funds Management Business) – Principal Investments • Effective tax rate for the 12 months to 30 June 2017 is 23.4% (23.6% for 2016) (Offshore Banking Unit) • Dividend policy 75%-80% of
Slide 6: Funds Management Business
Funds Management Business [6] $ million 30 June 2017 30 June 2016 % change Revenue Management fees 300.5 258.4 16% For personal use only Performance fees 21.7 48.0 (55%) Services fees 6.7 8.2 (19%) Interest/other income 0.3 0.6 (50%) 329.2 315.3 4% Expenses Employee expense 47.3 42.0 13% 1 US market
Slide 7: Employee Summary
Employee Summary [7] Staff 30 June 2017 30 June 2016 For personal use only Investment team Portfolio Managers/Analysts 33 32 Traders 3 3 36 35 Governance & Advisory 5 4 Distribution 35 30 Risk, Compliance, Legal & Company Secretarial 8 7 Business Support & Control 17 17 Administration 7 7 Total 108
Slide 8: Funds Under Management Summary
Funds Under Management Summary [8] 30 June 2017 30 June 2016 30 June 2015 $ million Retail 15,159 12,041 9,809 For personal use only Institutional - Australia/NZ 4,939 4,415 3,871 - North America 10,919 9,145 8,462 - UK 16,231 12,382 12,331 - Rest of World 3,349 2,512 1,908 35,438 28,454 26,572 Tota
Slide 9: Well-balanced Business
Well-balanced Business [9] For personal use only Funds Under Management1 Base Fees2 30% 44% 56% 70% Retail FUM Institutional FUM Retail Fees Institutional Fees 1. FUM split is as at 30 June 2017. 2. Base Fees are Management and Services fees for the 12 months to 30 June 2017 and exclude Performance
Slide 10: Institutional Client Diversity
Institutional Client Diversity [10] For personal use only 10.0% % of Total Management & Services Fees 8.0% 6.0% 4.0% 2.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Top 30 Institutional Clients Cumulative Total Management and Services Fees1 Top Institutiona
Slide 11: Retail Business – Three Channels to Market
Retail Business – Three Channels to Market [11] For personal use only Independent • Relationships with over 500 independent advice firms1 financial advisers / • ~40 stockbroking firms across Australia are using our Active ETFs broker advised • Strong relationships and representation with 4 of the to
Slide 12: Magellan Global Trust
Magellan Global Trust [12] For personal use only • Launching a new global equities strategy with a targeted cash distribution yield of 4% p.a. • Creating a closed ended vehicle of scale through a Priority Offer to shareholders and investors in Magellan’s retail strategies – Priority Offer to 250,000
Slide 13: Building Brand Awareness
Building Brand Awareness [13] For personal use only • Magellan brand awareness is low amongst self-directed investors • Australian retail investors are materially underweight global equities • Need to educate retail investors on the importance of global investing and build broad awareness of our bra
Slide 14: Retail Business
Retail Business [14] Funds Under Management and Net Inflows For personal use only • Retail FUM of $15.2 billion at 30 June 2017 (30 June 2016: $12.0 billion) • Net Retail Inflows for 12 months to 30 June 2017: $1.7 billion ($2.3 billion in 2016) • Average Monthly Retail Net Inflows: Retail Global Li
Slide 15: Institutional Business
Institutional Business [15] • Institutional FUM of $35.4 billion at 30 June 2017 (30 June 2016: $28.5 billion) For personal use only – Global equities $28.9 billion – Global listed infrastructure $6.5 billion • More than 120 institutional clients1 at 30 June 2017 • Total net institutional inflows fo
Slide 16: Institutional Business (cont.)
Institutional Business (cont.) [16] For personal use only FUM ($ billion) 30 June 2017 30 June 2016 % change Australia/NZ 4.9 4.4 12% North America 10.9 9.1 19% UK 16.2 12.4 31% Rest of World 3.4 2.5 33% Total 35.4 28.5 25%
Slide 17: Investment Performance
Investment Performance [17] For the periods to 30 June 2017 For personal use only Since 1 Year 3 Years 5 Years Inception (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund ($A) 15.4 14.3 18.4 11.0 MSCI World NTR Index ($A) 14.7 12.8 18.0 5.0 Magellan Infrastructure Fund ($A) 8.6 12.9 15.6 8.6 Glob
Slide 18: Principal Investments
Principal Investments [18] For personal use only • Principal Investments include investments in Magellan Funds, listed shares, a small number of unlisted investments and surplus cash after allowing for the Group’s working capital requirements Investment ($ million) 30 June 2017 30 June 2016 Cash 3.4
Slide 19: Principal Investments (cont.)
Principal Investments (cont.) [19] For personal use only • Board has set a pre-tax hurdle 10% p.a. (over business cycle) for the Principal Investments Investment Returns: Time Period Return 1 Year to 30 June 2017 16.0% 3 Years to 30 June 2017 p.a. 14.8% 5 Years to 30 June 2017 p.a. 19.7% 10 Years to
Slide 20: Important Information
Important Information [20] This presentation has been prepared by Magellan Financial Group Limited (‘MFG’). For personal use only While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the
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