NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q3 FY24 Earnings Presentation
44 slides from NAOS Ex-50 Opportunities's earnings presentation, Apr 30, 2024
Slide 1: Q3 FY24 Investor Update and Q&A - Presentation Materials
NAOS Ex-50 OPPORTUNITIES COMPANY LIMITED (ASX: NAC) ABN 49 169 448 837 30 April 2024 ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 Q3 FY24 Investor Update and Q&A - Presentation Materials For personal use only Please find attached the presentation materials for the Q3 FY24 Inv
Slide 2: Q3 FY24 Investor Update and Q&A
For personal use only Tuesday 30 April 2024 | 10:30am (AEST) Q3 FY24 Investor Update and Q&A Click Here to Register
Slide 3: Important Information
Important Information This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. It does not constitute an offer to purchase any security or financial product or servi
Slide 4: Acknowledgement of Country
Acknowledgement of Country For personal use only We acknowledge the Traditional Owners of Country throughout Australia and recognise their continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures; and to Elders past and present. CON
Slide 5: We are NAOS
We are NAOS We are active, long-term investors in emerging companies. Our aim is to compound For personal use only shareholders’ capital and deliver dividend growth over the long term and we have a resolute commitment to investing our capital alongside our shareholders. With a focus on quality over
Slide 6: Portfolio Composition – Emerging Companies
Portfolio Composition – Emerging Companies The NAOS LICs have exposure to emerging companies with unique moats, often benefiting from structural industry changes. For personal use only Industry Exposure Market Capitalisation Investment type Buckets Financial Services Building Materials <$50m $50-$25
Slide 7: Get to Know NAOS
Get to Know NAOS For personal use only CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 6
Slide 8: How We Invest & Why We Are Different
How We Invest & Why We Are Different For personal use only *Portfolio Weighted Average Calculations as at 31 March 2024 CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 7
Slide 9: Investment Portfolio Performance Summary
Investment Portfolio Performance Summary For personal use only 1 Year 3 Year 5 Year Inception Q3 FY24 Performance Performance Performance (p.a.) Performance (p.a.) Performance (p.a.) NAOS LIC Benchmark^ NAOS LIC Benchmark^ NAOS LIC Benchmark^ NAOS LIC Benchmark^ NAOS LIC Benchmark^ NCC Investment Po
Slide 10: Q3 FY24 – Market Summary
Q3 FY24 – Market Summary A very strong quarter with the S&P/ASX Small Ordinaries Accumulation Index (XSOAI) and the For personal use only S&P/ASX-100 Accumulation Index (XJOAI) returning +7.55% and +5.33% respectively. In our opinion this has been driven by expectations surrounding near-term int
Slide 11: Commonwealth Bank – Share Price Vs EPS Expectations
Commonwealth Bank – Share Price Vs EPS Expectations CBA - Price Vs EPS Expectations 125.0 6.1 For personal use only 120.0 6.0 5.9 115.0 5.8 110.0 5.7 105.0 Price ($) EPS ($) 5.6 100.0 5.5 95.0 5.4 90.0 5.3 85.0 5.2 80.0 5.1 Apr 2022 Jul 2022 Oct 2022 Jan 2023 Apr 2023 Jul 2023 Oct 2023 Jan 2024 Apr
Slide 12: Q3 FY24 – Macroeconomic Environment
Q3 FY24 – Macroeconomic Environment If interest rates remain higher for longer, we believe the economic effect will be significant. The impact is already being felt, with some examples being: For personal use only Amazon Web Services cutting several hundred jobs; 1 Tesla eliminating >10% of gl
Slide 13: S&P/ASX Small Ordinaries & S&P/ASX 200 - Price Return CYTD
For personal use only Price Return (%) -4% -2% 0% 2% 4% 6% 8% Source - FactSet 01 January 2024 08 January 2024 15 January 2024 22 January 2024 29 January 2024 05 February 2024 12 February 2024 CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 19 February 2024 26 February
Slide 14: Q3 FY24 – NAOS Performance
Q3 FY24 – NAOS Performance Q3 FY24 performance across all LICs was very poor on both a relative and absolute basis and not up to the standards to which we hold ourselves. For personal use only With ~15 core investments across the NAOS group the return profile will always bear very little resembl
Slide 15: Core Holdings – Progress not Reflected in Share Prices
Core Holdings – Progress not Reflected in Share Prices Due to the smaller and more illiquid nature of many of our investments, we firmly believe that current share prices are not a fair reflection of the value of these businesses today, let alone their future earnings For personal use only potenti
Slide 16: Saunders International – Earnings and Share Price Dislocation
Saunders International Ltd (ASX: SND) – Earnings and Share Price Dislocation SND - Share price VS NPAT For personal use only 1.40 $12.0 SND EPS CAGR FY18 – FY23 of ~47.1% $10.0 1.20 SND Share Price CAGR Jul 18 – Mar 24 of ~14.1% $8.0 1.00 NPAT ($ millions) $6.0 Share Price 0.80 $4.0 0.60 $2.0 0.40 $
Slide 17: Core Holdings – Progress not Reflected in Share Prices
Core Holdings – Progress not Reflected in Share Prices COG Financial Services (ASX: COG) EPS expected to grow from ~$0.13cps in FY22 to >$0.14cps in FY24. For personal use only Quality of the earnings has significantly improved with finance & broking and novated leasing now over 2/3 of NPATA.
Slide 18: COG Financial Services – Shifting Peer Comparables
COG Financial Services (ASX: COG) – Shifting Peer Comparables Novated Leasing Companies – P/E Multiples 22.00 For personal use only 20.00 18.00 Novated Leasing/Salary Packaging companies have 16.00 typically enjoyed healthy P/E multiples as earnings are P/E Multiple perceived to be predictable 14.00
Slide 19: Peer Valuation Gap Widening – MaxiPARTS
Peer Valuation Gap Widening–MaxiPARTS (ASX: MXI) MXI vs SNL - P/E Multiple For personal use only 28 26 FY24 Consensus Estimates: Revenue ~$300m 24 NPAT ~$31.5m NPAT margin ~10.5% 22 P/E Multiple 20 SNL – further valuation re-rate. 18 MXI – valuation remains stagnant. 16 FY24 Consensus Estimates: Rev
Slide 20: We Remain Very Optimistic on Long Term Value Creation
We Remain Very Optimistic on Long Term Value Creation Based on current share prices, we remain very optimistic on the ability of our current holdings to generate total returns >50% over the next 3-5 years. For personal use only In Q3 alone there were a number of notable “green shoots” that occur
Slide 21: Challenging our Investment Theses
Challenging our Investment Theses We remain laser focused on continually challenging our investment thesis on each investee company and seek to obtain as many viewpoints on each business as possible. For personal use only The following are examples of the people we have met with, or events we ha
Slide 22: Recent Site Tours
Recent Site Tours For personal use only MaxiPARTS Wetherill Park Branch Piping Solutions Manufacturing Plant New fuel facility at Western Sydney Airport CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 21
Slide 23: Recent Site Tours
Recent Site Tours For personal use only Sydney Caravan & Camping Expo COG Asset Finance Broker Conference CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 22
Slide 24: Andrew Bennett, Chief Executive Officer and Managing Director
For personal use only Andrew Bennett Chief Executive Officer and Managing Director CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 23
Slide 25: Executing with Excellence
Executing with Excellence COG has a successful history of acquisition and integration Growth through more verticals Broking and Novated Asset Financial For personal use only 11 4 3 1 Aggregation Leasing Management Advisory & Lending Linx beCarWise Westlawn CAF (20%) Heritage Fleet Network Equity-One
Slide 26: Executing with Excellence
Executing with Excellence Record volumes in the face of a higher interest rate environment and tight supply +27% vs PCP For personal use only $ millions $4.3bn net assets financed 3,405 4,274 in 1H 2024 2,917 2,154 2,198 1,604 1,720 4,321 2H 1,403 3,284 3,404 2,041 2,365 2,242 1H 1,344 1,524 1,631 2
Slide 27: Population Projection
Population Projection – 18 months later 29.8m 29,500,000 29,063,400 For personal use only 29,000,000 28,500,000 28,000,000 Population at end of year 27,500,000 27,000,000 26.6m 26,500,000 25,913,100 26,000,000 25,500,000 25,000,000 24,500,000 24,000,000 2021-22 2022-23 2023-24 2024-25 2025-26 2026-2
Slide 28: Transition of the electricity grid to renewables
Transition of the electricity grid to renewables For personal use only 2022 2024
Slide 29: NAOS Investee Companies - Key Events Q3 FY24
NAOS Investee Companies - Key Events Q3 FY24 HOLDING INDUSTRY Q3 UPDATE For personal use only Specialised Laminators, a well-established timber panels business in QLD was acquired for $10m. First acquisition under new CEO. 1H FY24 results saw volume & margin declines in certain residential-focus
Slide 30: NAOS Investee Companies - Key Events Q3 FY24
NAOS Investee Companies - Key Events Q3 FY24 HOLDING INDUSTRY Q3 UPDATE For personal use only Board renewal completed. New Chairman appointed with strong software and listed company experience, and non-executive Director appointment with enterprise SaaS experience. Ongoing contractual negotiatio
Slide 31: NAOS Investee Companies - Key Events Q3 FY24
NAOS Investee Companies - Key Events Q3 FY24 HOLDING INDUSTRY Q3 UPDATE For personal use only CY23 results generated ~35% organic growth in annualised recurring revenue (ARR). Similar growth rates have continued into Q1 CY24. Industry tailwinds remain very strong with DSE continuing to take mark
Slide 32: Q4 FY24 – Outlook
Q4 FY24 – Outlook Could be an eventful end to the financial year due to: For personal use only Q3 Quarterly updates provided in April i.e., BSA, UBN, COG Trading update if businesses are +/-10% of consensus profit forecasts i.e. BRI Macro backdrop starting to impact business activity. Apri
Slide 33: Dividends
Dividends NCC Dividend History NAC Dividend History 8.0 7.50 8.0 7.50 For personal use only 7.00 7.25 7.25 7.25 7.0 6.75 6.25 5.75 5.90 6.00 5.75 Cents per Share 6.0 6.0 5.25 5.25 5.25 3.75 5.00 4.75 Cents per Share 5.0 4.50 4.0 3.75 4.0 3.0 2.50 2.0 3.75 2.00 2.0 1.0 0.0 2H FY13 FY14 FY15 FY16 FY17
Slide 34: Q&A
Q&A Thank you for your continued support. For personal use only “Selling out at the bottom – and thus failing to participate in the subsequent recovery – is the cardinal sin of investing. The ability to persevere requires consistent adherence to a well- thought-out approach; control over emotion; an
Slide 35: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge For personal use only CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 34
Slide 36: Appendix
For personal use only Appendix
Slide 37: Why Invest via a Listed Investment Company?
Why Invest via a Listed Investment Company? We strongly believe LICs are a highly effective structure to give investors the highest quality exposure to specific asset classes, which in the case of NAOS is emerging businesses. For personal use only A Listed Investment Company structure: Allows the
Slide 38: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS For personal use only OUR TEAM CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 37
Slide 39: NAOS LICs Director Alignment
NAOS LICs Director Alignment Directors' shareholdings have significantly increased since the inception of each LIC For personal use only Inception Directors Shareholding 31 March 2024 Directors Shareholding 10,000,000 9,000,000 8,633,667 8,000,000 7,000,000 NUMBER OF SHARES 6,000,000 5,489,705 5,000
Slide 40: Capital Management Initiatives
Capital Management Initiatives Performance • Maintain a focus on long term performance without deviating from the NAOS investment philosophy. For personal use only • Continue to focus on a growing stream of dividends, franked to the maximum extent possible, whilst maintaining Dividends an adequate r
Slide 41: NAOS ESG Framework
NAOS ESG Framework For personal use only CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 40
Slide 42: What Qualitative Information Sources Does NAOS Use?
What Qualitative Information Sources Does NAOS Use? The NAOS Investment Team undertakes fundamental analysis on potential and current investments. Some examples of our key focus areas include: For personal use only CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 41
Slide 43: Reasons Not to Invest with NAOS
Reasons Not to Invest with NAOS Our LICs are not for everyone. Some reasons why you may not choose to invest with NAOS include: For personal use only Concentrated portfolios (0-15 investments & shareholdings often >20%) Long-term investment philosophy (5+ years) Focus on emerging companies ($2
Slide 44: Investor Awareness and Communication
Investor Awareness and Communication For personal use only FOLLOW NAOS Subscribe Now: www.naos.com.au/subscribe CONVICTION. LONG TERM. ALIGNED | Copyright 2024 NAOS Asset Management Limited 43
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