NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q3 FY23 Earnings Presentation
49 slides from NAOS Ex-50 Opportunities's earnings presentation, Apr 26, 2023
Slide 1: Q3 FY23 Investor Update and Q&A
Wednesday 26 April 2023 | 10:30 am (AEST) Audio Dial In: +61 3 8488 8990 Q3 FY23 Investor Update and Q&A Audio Access Code: 267-776-619
Slide 2: 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 3: Acknowledgement of Country
Acknowledgement of Country NAOS Asset Management acknowledges Traditional Owners of Country throughout Australia and recognises the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures; and to Elders past and present. 2
Slide 4: Get to Know NAOS
S| list fi 2004 - G et to K Nn OW N AO S aba Sen ee, focus YNO>Z 3 Listed Investment Companies Gives Back 1% of recurring revenue + 1 Private Investment Fund 5+ Year investment horizon Team of 9 in a highly concentrated portfolio structure Alignment with investors — Directors & staff are major share
Slide 5: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS OUR TEAM 4
Slide 6: Our Investment Beliefs and Differentiation
Our Investment Beliefs and Differentiation 5
Slide 7: 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: 6
Slide 8: 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: Concentrated portfolios (0-15 investments & shareholdings often >20%) Long-term investment philosophy (5+ years) Focus on emerging companies ($20 million - $500 milli
Slide 9: Investment Portfolio Performance Summary
Investment Portfolio Performance Summary 3 Year 5 Year Inception Q3 Performance FY23 Performance (p.a.) Performance (p.a.) Performance (p.a.) NAOS LIC Benchmark NAOS LIC Benchmark NAOS LIC Benchmark NAOS LIC Benchmark NCC Investment Portfolio Performance* +3.71% +1.88% +15.31% +13.16% +2.21% +3.89%
Slide 10: NAOS LIC Franked Dividend History and Profit Reserves
NAOS LIC Franked Dividend History and Profit Reserves Each LIC has consistently paid dividends and holds healthy profit reserves 94.40 90 80 68.75 70 59.9 CENTS PER SHARE 60 50 47.1 41.95 40 37.8 37.10 30 26 18.2 20 10 0 NCC (Feb 2013) NAC (Nov 2014) NSC (Dec 2017) Total Dividends Paid (Since Incept
Slide 11: Q3 FY23 Summary
Q3 FY23 Summary Fears of contagion in financial markets dominated as Silicon Valley Bank collapsed and UBS takeover of Credit Suisse. Equity markets arguably viewed this as a positive event due to another “put” being issued by central banks to stave off further fears of contagion. Markets expe
Slide 12: Australian 10 Year Bond Yields
Australian 10 Year Bond Yields Australian Government Bond 10 Year - Yield 4.5% 4.0% 3.5% 3.0% 2.5% Yield 2.0% 1.5% 1.0% 0.5% 0.0% Source: Factset 11
Slide 13: Q3 FY23 Summary Cont.
Q3 FY23 Summary Cont. Notable increase in M&A activity especially in depressed industrial names including: Target Company Acquirer Premium Invocare (ASX: IVC) TPG Global, LLC 40% United Malt Group (ASX: UMG) Malteries Soufflet SAS 45% Estia Health (ASX: EHE) Bain Capital 41% Notable decrease in
Slide 14: Bias Towards More Liquid Investments
Bias Towards More Liquid Investments Top 10 Constituents of S&P/ASX Small Ordinaries Index (XSO) by Market Cap 120.0% $14,000 100.0% $12,000 95.5% Quarterly Share Price Performance 80.0% $10,000 Market Cap ($m) 60.0% $8,000 40.0% $6,000 20.0% $4,000 15.6% 10.4% 10.2% 11.0% XSO Average Price 6.5% 5.0
Slide 15: Technology Companies are Focused on Achieving Short-Term Profitability
Technology Companies are Focused on Achieving Short-Term Profitability (Generally via Cost Cutting) Changing Tech Sector Since COVID-19 600 450,000 413,694 400,000 500 350,000 400 300,000 Companies Employees 250,000 300 200,000 200 150,000 100,000 100 50,000 0 - Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 20
Slide 16: Not All Inflation is Equal
Not All Inflation is Equal Global Inflationary Snapshot - Big Mac Index 130 127 125 125 124 Relative Change in Big Mac Price 120 115 113 110 106 106 105 103 104 99 100 97 95 92 93 90 85 80 Source: The Economist, NAOS Jan-22 Jul-22 Jan-23 EXPLAINER: The Big Mac Index was created by The Economist to m
Slide 17: We Believe The Deflation Thematic is Real
We Believe The Deflation Thematic is Real The First 6 Months - Tesla Model X Price Per Vehicle (USD) $170,000 $160,000 $150,000 Average Vehicle Price (USD) $140,000 $130,000 $120,000 $110,000 $100,000 Start Price End Month 1 End Month 2 End Month 3 End Month 4 End Month 5 End Month 6 2023 Model X 20
Slide 18: Will Gross US Debt Levels Cap Interest Rates?
Will Gross US Debt Levels Cap Interest Rates? US debt levels vs US 10 year bond yield 9.0 35 8.0 30 7.0 Debt Outstanding ($Trillions) 25 6.0 Bond Yield % 5.0 20 4.0 15 3.0 10 2.0 5 1.0 0.0 0 US 10 Year Bond Yield (LHS) US Total Debt Outstanding (RHS) Source - FactSet 17
Slide 19: Adam Theobald
Adam Theobald Founder & CEO 18
Slide 20: Creating a more sustainable food and beverage industry
Creating a more sustainable food and beverage industry by helping suppliers and venues trade smarter
Slide 21: The Problems
The Problems Venues Suppliers ➔ 10+ suppliers each with a different ➔ Pressure to digitise, but technology way to order and a different way to is hard, expensive and scary pay ➔ Increasing cost of acquiring new ➔ Supplier sales calls are a hassle customers ➔ Easy to forget orders and lose ➔ Order ma
Slide 22: Enter Ordermentum
Enter Ordermentum Our purpose is to create a more sustainable food and beverage industry by helping suppliers and venues trade smarter Ordermentum connects 38,000+ venues with their food & beverage suppliers, through ordering, payments, data insights, and discovery
Slide 23: Ordermentum for Venues
Ordermentum for Venues An ordering app venues love (and order more with!) Smart Ordering Payments Spend insights Chat Discovery Key benefits: ➔ Everything in one place ➔ Fastest and easiest way to order - anytime, anywhere ➔ Continuity through staff turnover ➔ Discover new suppliers without the hass
Slide 24: Ordermentum for Suppliers
Ordermentum for Suppliers Helping the very best suppliers streamline, then grow their business Digital Fulfilment Docs Payments Sales Insights New catalogue & POD Business Key benefits: ➔ Increase revenue per customer (up to 40% over 2 years) ➔ Get paid 5 times faster ➔ A digital sales rep that neve
Slide 25: Tailwinds
Tailwinds We are leading the digital transformation The Payments of how hospitality Marketplace and Finance Disruption business happens Thank you for making a smooth operating process, the reminders, and well designed Smarter layout. User friendly, oh so helpful, and not Data -Driven one mistake, or
Slide 26: The Endgame
The Endgame We will build a >$1bn business by becoming the preferred, indispensable tool for food and beverage suppliers and venues to run their business Operating system for hospitality - how all venues and suppliers trade/communicate Hospitality Venues Running the industry’s liquidity - via digita
Slide 27: Thank you
Thank you
Slide 28: NAOS Investee Companies - Key Events Q3 FY23
NAOS Investee Companies - Key Events Q3 FY23 HOLDING INDUSTRY Q3 UPDATE Further upgrade to FY23 revenue at AGM in Feb (Sep year-end). Incremental upgrade largely ‘one-off’ in nature, related to Bulb customer administration process. Further customer wins including the Energy Australia solar/bat
Slide 29: NAOS Investee Companies - Key Events Q3 FY23
NAOS Investee Companies - Key Events Q3 FY23 HOLDING INDUSTRY Q3 UPDATE 1H FY23 was first ‘clean result’ released since corporate restructure post MaxiTrans trailer division divestment. Interim dividends resumed due to excellent FCF generation. Dispute with ATSG (trailer acquirers) continues t
Slide 30: Gentrack Ltd – The New World of Energy
Gentrack Ltd – The New World of Energy The GTK software solution allows utility companies to handle the substantial complexities and operate effectively and efficiently within the new world of energy created by the global energy transition. A Virtual Power Plant (VPP) is a distributed network of ene
Slide 31: NCC Overview as at March 2023
NCC Overview as at 31 March 2023 $0.87 $0.89 $0.750 10.0% 10 $163.7m Pre-Tax NTA Post-Tax NTA Share Price Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FRANKED DIVIDEND HISTORY 8.0 7.50 7.50 80 7.00 7.25 7.25 7.25 6.75 68.75 7.0 70 6.25 6.0 5.75
Slide 32: NAC Overview as at March 2023
NAC Overview as at 31 March 2023 $0.87 $0.92 $0.835 6.59% 9 $198.3m Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the FULLY FRANKED DIVIDEND HISTORY Investments Fully Franked Dividends Cumulative Dividends 5.75 5.90 6.0
Slide 33: NSC Overview as at March 2023
NSC Overview as at 31 March 2023 $0.84 $0.84 $0.67 7.31% 11 $199.98m Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FULLY FRANKED DIVIDEND HISTORY Fully Franked Dividends Cumulative Dividends 6.0 5.50 30
Slide 34: Overview & Outlook Q4 FY23
Overview & Outlook Q4 FY23 • Underlying company performance is playing second fiddle to the dynamic macro economic environment and driving investor hesitation over optimism in some cases. • We remain concerned that any negative surprises on the economic front could have significant consequences for
Slide 35: Overview & Outlook Q4 FY23
Overview & Outlook Q4 FY23 We are firmly focused on investing in businesses that exhibit the following characteristics: Aligned (and proven) management teams Efficient allocators of capital Strong balance sheets and FCF generation Exposed to industries that are conducive to long term earni
Slide 36: Long Term Investing Comes With Volatility
Long Term Investing Comes With Volatility Short Term Reversal in Share Prices are Often the Wrong Time to Sell a High-Quality Business Mainfreight - Shareprice vs EPS 120.0 5.00 100.0 4.00 80.0 3.00 EPS ($ per share) Share Price NZD 60.0 2.00 40.0 1.00 20.0 0.00 0.0 -1.00 2003 2004 2005 2006 2007 20
Slide 37: Q&A
Q&A Thank you for your continued support. “Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard.” Warren Buffett 36
Slide 38: Appendix
Appendix
Slide 39: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge 37
Slide 40: NAOS LICs Director Alignment
NAOS LICs Director Alignment Directors' shareholdings have significantly increased since the inception of each LIC Inception Directors Shareholding 31 March 2023 Directors Shareholding 9,500,000 8,565,750 8,500,000 7,500,000 6,500,000 5,371,775 NUMBER OF SHARES 5,500,000 4,500,000 3,500,000 2,529,48
Slide 41: The Case for Concentrated Investing
The Case for Concentrated Investing Holding too many stocks in a portfolio can lead to poor risk adjusted performance Source: NAOS Asset Management 39
Slide 42: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics 15% 15% 9.68% 9.72% 10% 10% 6.55% 4.86% 5% 5% 3.12% 3.61% 2.66% 2.39% 0% 0% -1.33% -1.46% -3.09% -3.59% -5% -5% Performance Since Monthly Average
Slide 43: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * NSC Investment Portfolio Risk and Performance Metrics 10% 5% 3.99% 3.68% 3.71% 2.27% 0% -1.85% -3.90% -5% Performance Since Monthly Average Monthly Average Inception p.a. Performance when the Performance when the Market is up Market is Down NSC Investmen
Slide 44: Capital Management Initiatives
Capital Management Initiatives Performance • Maintain a focus on long term performance without deviating from the NAOS investment philosophy. • Continue to focus on a growing stream of dividends, franked to the maximum extent possible, whilst maintaining an Dividends adequate reserve balance. • Cont
Slide 45: Historical Shareholder Numbers
Historical Shareholder Numbers 8000 6000 4000 2000 0 NCC Shareholders NAC Shareholders NSC Shareholders 43
Slide 46: NAOS ESG Framework
NAOS ESG Framework Asan investment manager, NAOS ‘excludes investing in epecific controversa soon Ol 02 caveune eee ay OUR COMMITMENT TO N RESPONSIBLE INVESTMENT A NEGATIVE SCREENS: ° NAOS systematically. Ss ‘recognises and acoepts its duty to act responsibly and in the best interests of shareholder
Slide 47: Key Business & Industry Traits for Maximising Long-term Performance
Key Business & Industry Traits for Maximising Long-term Performance and Reducing the Risk of Permanent Capital Loss Events Industry Tailwinds Supporting A growing revenue base provides companies with a number of competitive advantages such as the ability to scale Long-Term Revenue Growth their fixed
Slide 48: 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. A Listed Investment Company structure: Allows the investment manager to
Slide 49: Investor Awareness and Communication
Investor Awareness and Communication FOLLOW NAOS 47
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