Washington H. Soul Pattinson And Company Limited · ASX:SOL
Washington H. Soul Pattinson And — H1 FY2021 Earnings Presentation
27 slides from Washington H. Soul Pattinson And's earnings presentation, Mar 25, 2021
Slide 1: Financial Results Half Year FY2021
Financial Results Half Year FY2021
Slide 2: Half year Performance
Half year Performance Period ending 31 January 2021 Half Year Results January 2021 2
Slide 3: Overview – half year ended 31 January 2021
Overview – half year ended 31 January 2021 Profit for the year Key performance indicators Net cash from Group Regular NPAT1 Group Statutory NPAT2 WHSP portfolio value investments3 $90.2m $68.9m $5.2b $85.3m down 27.7% on pcp up 35.2% on pcp up 1.3% in 1H21 down 8.0% on pcp Statutory NPAT up WHSP i
Slide 4: Regular NPAT – 1H20 to 1H21 reconciliation
Regular NPAT – 1H20 to 1H21 reconciliation Regular NPAT down, but would have been higher if not for the change in accounting treatment of TPG $125m TPG deconsolidated post merger with Vodafone (June ($43m) 2020) and start up losses at $1m $90m Tuas New Hope revenue down ($43m) $50m due to lower
Slide 5: Dividends
Dividends Over 20 years of Interim Dividend growth WHSP has declared an FY21 Interim Dividend of 26cps, fully franked Compounded annual 23rd consecutive increase in Interim Dividend growth rate of 8.0% Over the last 20 years, the Interim Dividend has grown at 8% CAGR 25 26 23 24 21 22 19 20 17
Slide 6: Portfolio performance
Portfolio performance Net Asset Value of WHSP (pre-tax) as at 31 January 2021 was $5.2 billion Value of 6 month Pre-tax value of the portfolio increased by As at 31 January 2021 Holding Movement 1.3% during the half: $m $m % Telecommunications Portfolio1 1,822 (145) -7.4% — Growth in Brickworks, F
Slide 7: Total shareholder returns
Total shareholder returns An investment in WHSP over the last 20 years has increased 1,189% Annualised TSRs 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year +1,189% WHSP 29.5% 19.3% 13.2% 11.4% 10.5% 13.6% All Ordinaries Accumulation (0.7%) 7.7% 10.5% 7.9% 6.6% 8.1% Index Relative performance 30.2% 11.7
Slide 8: Long-term total shareholder returns
Long-term total shareholder returns WHSP has provided strong equity returns over the last 40 years $1,000 invested in 1981 worth $200,103 a Compound annual return of 14.2% for 50 years All Ords Accum Index 1981 1986 1991 1996 2001 2006 2011 2016 2021 Source: Capital IQ Cumulative performance to 31 J
Slide 9: Capital Preservation – last 20 years
Capital Preservation – last 20 years Over the last 20 years, SOL has outperformed in months where the All Ordinaries Accumulation Index is negative Average Performance in Average Performance in market “Down months” market “Up months” Over the last 20 years, the All Ordinaries 3.0% Accumulation Ind
Slide 10: Capital Preservation – last 12 months
Capital Preservation – last 12 months In the last 12 months, SOL has outperformed in both “Down” and “Up” months Average Performance in Average Performance in Over the 12 months to 31 January 2021 SOL’s market “Down months” market “Up months” outperformance has been even greater with the share pri
Slide 11: Capital management
Capital management WHSP has continued to lower its cost of capital and position itself with liquidity for new opportunities During January, WHSP raised $225 million in convertible bonds: — 5 year duration (with a right for investors to put the CB back after 3 years) — Annual coupon of 0.625% fixed
Slide 12: Portfolio themes
Portfolio themes Half Year Results January 2021 12
Slide 13: Telecommunications portfolio
Telecommunications portfolio Continuing NBN headwinds, however migration is in its final year Ongoing Covid-19 impact on roaming and visitor revenue until international tourism resumes NBN margins headwinds: $83m in lost EBITDA in last 12 months from: — $73m from migration to NBN due to 356k decli
Slide 14: Telecommunications portfolio
Telecommunications portfolio Merger integration on track and synergies being extracted Well positioned to capture growth Targeting $70m in merger synergies in 2021 through opex savings Medium term cost synergies of $125-150m annually by 2023 Fixed broadband opportunities (to reverse NBN margin
Slide 15: Tuas owns TPG Mobile in Singapore
Telecommunications portfolio Tuas owns TPG Mobile in Singapore Mobile network largely built and commenced offering services in March 2020 Mobile Subscribers WHSP owns 25.3% 833,700 Approximately A$500m of assets -cash and network infrastructure (current market capitalisation c.$300m) In first
Slide 16: Brickworks Limited
Brickworks Limited Despite Covid-19, detached housing in Australia is up across all states Lower exposure to single family housing in America, but long term dynamics are positive Demand steadily increasing as consumer confidence rebounds, Australian North American supported by government stimulus
Slide 17: Brickworks Limited
Brickworks Limited Industrial property is benefiting from growth in online consumption and lower interest rates Industrial real estate resilient and benefiting from online consumption Revaluation profit driven by 25 to 50 basis points reduction in cap rates. Total value of leased assets in Trust
Slide 18: New Hope Corporation Limited
New Hope Corporation Limited Low thermal coal prices for 1Q but recovery in 2Q Lower volumes and higher costs associated with mining end of Acland Stage 2 resulting in losses 320 $m 171 270 220 A$86.8/t1 82 170 131 120 81 207 87 70 A$70.7/t1 9 20 NSW Revenue Q1 NSW Revenue Q2 NSW Costs QLD Revenue Q
Slide 19: New Hope Corporation Limited
New Hope Corporation Limited Coal prices have recovered strongly from the Covid-19 disruptions to energy markets NEWC Thermal Coal Price since 1 Jan 2020 $/tonne 130 Half year period 120 110 100 90 80 70 60 50 40 01-Jan-20 01-Apr-20 01-Jul-20 01-Oct-20 01-Jan-21 23-Mar-20 Thermal Coal (USD/t) Therma
Slide 20: New Hope Corporation Limited
New Hope Corporation Limited Demand remains strong in Asian markets Set for strong second half Revenue by Destination (A$m) 46.8 New Hope sells to a diverse range of markets and customers 14.0 8.3 Coal prices stabilising 6.4 154.4 Volumes at Bengalla should pick up after completion of planned
Slide 21: Round Oak Minerals
Round Oak Minerals ROM has three producing mines and one long-life development asset Asset Barbara Development Asset Location 60km north-east of Mt Isa Production Asset Commodities Copper Ownership 100% ROM Asset Mt Colin Location 60km west of Cloncurry Commodities Copper, Gold Ownership 100% ROM As
Slide 22: Round Oak Minerals
Round Oak Minerals Commodity prices have increased substantially after COVID-19 impact Outlook remains positive with strong demand for base metals Price Performance since 1 Jan 2020 Copper is a key ingredient required for the 60% Zinc (USD) Copper (USD) electrification of vehicles and growing urba
Slide 23: Financial Services Portfolio
Financial Services Portfolio Half year ended 31 January 2021 Value of portfolio* $364 million Contribution to WHSP’s regular NPAT $5.8 million Assets include LICs, funds management and financial advice Dividends paid to WHSP $10.6 million Financial Services portfolio represents 7% of WHSP’s tota
Slide 24: Pharmaceutical Portfolio
Pharmaceutical Portfolio Half year ended 31 January 2021 Value of portfolio $292 million Contribution to WHSP’s regular NPAT $2.4 million Value of the portfolio as at 31 Jan 2021 $292m, up 2.5% through the half Dividends paid to WHSP $2.6 million Dividends received from the portfolio totalled $2
Slide 25: Agriculture Portfolio
Agriculture Portfolio WHSP has built a diverse exposure to agricultural assets (by geography and product) Overview of Farmland Assets WHSP has been adding to its investments in Australian agricultural assets. Value of the portfolio as at 31 Jan 2021 $139m Focus on food production due to Austra
Slide 26: Terms and Definitions
Terms and Definitions Regular profit after tax is a non-statutory profit measure and represents profit from continuing operations before non-regular items. A reconciliation to 1 Group Regular NPAT statutory profit is included in the 2021 Half Year Financial Report – Alternative Performance Measures.
Slide 27: Disclaimer
Disclaimer Disclaimer This document has been prepared by Washington H. Soul Pattinson and Company Limited (‘WHSP’). All information contained in this document (including this notice) Any forward looking statements included in the Information This Information does not constitute an offer, invitation,
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