Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Investor Presentation (February 2005)
22 slides from Australian Foundation Investment's investor presentation, Feb 28, 2005
Slide 1: 2005 Shareholder Information Meetings Chairman's Presentation
m4 Australian Foundation - INVESTMENT COMPANY 28 February 2005 Australian Stock Exchange Limited Company Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 Australian Foundation Investment Company Limited 2005 Shareholder Information Meetings Chairman’s Presetation Australian Foun
Slide 2: Welcome
Welcome a Australian Foundation INVESTMENT COMPARE A sound track record
Slide 3: Financial Highlights — Six Months to 31 December
Financial Highlights — Six Months to 31 December 2003 2004 Profit After Tax $59.3m | $75.8m Earnings Per Share 7.0¢ 8.4 ¢ Total dividends per share (inc special) 5.5¢ 6.0 ¢ Special dividends per share 1.0¢ 0.0¢ Net Asset Backing (cum dividend) $3.28 | $3.93 Total Return (net asset backing + dividend
Slide 4: Profit Analysis - 2004 Half Year vs. 2003 Half Year
Profit Analysis - 2004 Half Year vs. 2003 Half Year Major Factors 8 | $75.8m + $10.8m in dividends 70 - + $4.6m in special dividends/distributions 60 4 foal 2 + $1.8m in trading = 50 4 a ~ $1.4m in interest 0 - received 30 + 20 4 2003 Half 2004 Half Year Profit Year Profit
Slide 5: AFIC Earnings and Dividends
AFIC Earnings and Dividends 2004 2003 % © Half Year | Half Year | Change Earnings Per Share 8.4 7.0* 19.3% Underlying Dividend 6.0 4.5 33.0% Per Share Special Dividend - 1.0 - Per Share Total Dividend Per 6.0 5.5 9.0% Share *diluted eps adjusted for ordinary shares issued in the 1 for 8 rights issue
Slide 6: Income Contribution of Trading Portfolio
Income Contribution of Trading Portfolio $ Million Contribution to Total Income 11% 16% 5% 1% -2% -17% 8% 12% 9% 22% 23% 15% 25%
Slide 7: Major Acquisitions (above $10m)
Major Acquisitions (above $10m) Acquisitions $million Commonwealth Bank 37.1 Telstra 33.0 Westpac Bank 20.6 BHP Billiton 20.1 Bradken 12.2 National Foods 11.9
Slide 8: Major Disposals (above $10m)
Major Disposals (above $10m) Disposals $mil NAB Income Securities 10.1
Slide 9: Top Ordinary Securities — December 2004
Top 20 Ordinary Securities — 31 December 2004 Shares Dec 2004 June 2004 Rank $m Rank $m CBA 1 261.6 1 227.3 Westpac 2 245.3 2 206.8 NAB 3 199.9 3 204.1 Wesfarmers 4 195.3 4 144.2 BHP Billiton 5 181.4 5 131.4
Slide 10: Top Ordinary Securities — December 2004
Top 20 Ordinary Securities — 31 December 2004 Shares Dec 2004 June 2004 Rank $m Rank $m Telstra 6 146.8 6 117.5 ANZ Bank 7 108.8 7 99.9 Toll Holdings 8 102.3 8 85.8 Coles Myer 9 80.7 10 3 71.3 Alumina 10 73.0 13 56.7
Slide 11: Top Ordinary Securities — December 2004
Top 20 Ordinary Securities — 31 December 2004 Shares Dec 2004 June 2004 Rank $m Rank $m The News Corp 11 72.1 11 66.4 Amcor 12 68.5 9 71.5 Woolworths 13 68.3 14 56.6 Rinker 14 66.5 15 50.3 WA Newspapers 15 65.1 16 49.4
Slide 12: Top Ordinary Securities — December 2004
Top 20 Ordinary Securities — 31 December 2004 Shares Dec 2004 June 2004 Rank $m Rank $m Westfield (consolidated group) 16 60.3 12 57.2 AGL 17 59.0 17 46.2 Rio Tinto 18 55.5 18 43.8 AMP 19 47.7 19 39.9 Computershare 20 46.2 57 11.1
Slide 13: Ins and Outs of the Top
Ins and Outs of the Top 20 Ins: Computershare Outs: Milton Corporation
Slide 14: Half Year Ended December 2004 Portfolio Attribution Analysis
Half Year Ended 31 December 2004 Portfolio Attribution Analysis $million Total (%) Investment & Trading Portfolios Increase +493.9 Top 5 Contributors Wesfarmers + 55.5 + 11.2% BHP Billiton + 31.8 + 6.4% Westpac Bank + 27.4 + 5.5% Woolworths + 18.1 + 3.7% Toll Holdings + 17.5 + 3.5%
Slide 15: Share Price to Net Asset Backing - Premium/Discount
Share Price to Net Asset Backing - Premium/Discount Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05
Slide 16: AFIC NTA Performance in Bull and Bear Markets
AFIC NTA Performance in Bull and Bear Markets Periods of Market FELL By: Market DECLINE 10%+ 8-10% 6-8% 4-6% Occurrences 2 6 5 6 AFIC Outperformed 2 6 3 6 Average Outperformance 4.82% 3.36% 1.66% 3.17% Periods of Market ROSE By: Market APPRECIATION 10%+ 8-10% 6-8% 4-6% Occurrences 17 11 16 19 AFIC O
Slide 17: Outlook
Outlook = Encouraging outlook for the global economy with Australia expected to experience solid growth = On the whole corporate earnings and balance sheets are strong = However guarded about the market given current valuations and built in earnings expectations — particularly small to mid cap secto
Slide 18: All Industrials Prospective PER - Rolling Month
All Industrials Prospective PER - Rolling 12 Month PER Forward Earnings 21 19 17 ——« High: 17.1 (+1 Std Dev) 15 ' Average: 14.0 pel Low: 10.8 (-1 Std Dev) 7 Feb-88 Feb-90 Feb-92 Feb-94 Feb-96 Feb-98 Feb-00 Feb-02 Feb-04 Source: GSJBW Research estimates
Slide 19: Outlook
Outlook « In this environment AFIC will continue to look very selectively at companies which represent specific long term value: > More difficult to find given the market is trading at record highs >» Close to fully invested - lines of credit available if necessary >» Trading portfolio currently at
Slide 20: Australian Foundation Investment Company - A sound track record
a Australian Foundation INVESTMENT COMPARE A sound track record
Slide 21: Portfolio Management Performance — % Per Year
Portfolio Management Performance — % Per Year to 31 December 30.00% - 25.00% + 20.00% 5 15.00% | 10.00% | 5.00% 5 0.00% + 1 year 3 years 5 years 10 years WAFIC Net Asset per share growth plus dividends jj CPI I S&P/ASX 200 Accumulation Index
Slide 22: Asset Allocation Within Portfolio as at December 2004
Asset Allocation Within Portfolio as at 31 December 2004 Other Healthcare and Utilities 2.59% Telecommunications 4.14% Energy 3.23% Other Financials 12.76% Materials 19.98% AANA Banks 25.26% —— Lo industrials 15.36% Consumer Discretionary 7.54% Consumer Staples 9.15%
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