Australian Foundation Investment Co. Ltd. · ASX:AFI

Australian Foundation Investment — Investor Presentation (October 2006)

24 slides from Australian Foundation Investment's investor presentation, Oct 13, 2006

  1. Slide 1: Shareholder Meeting Presentation

    Australian Foundation INVESTMENT COMPANY 13 October 2006 The Manager Company Announcements Office Australian Stock Exchange Limited Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited Shareholder Meeting Presentation Dear Sir

  2. Slide 2: Australian Foundation Investment Company

    wA Australian Foundation INVESTMENT COMPANY

  3. Slide 3: All Ordinaries Price Index - Monthly

    a All Ordinaries Price Index - Monthly Index was 5113 at 30 September 2006 5500 5000 July 05 to June 06 4500 increase of 19.0% Value SP PD PDK A VPM MIM VM VG SO PVgeXY 2262 2 & © © F Ff dS Ss SH SS Sh SP SS PSS SP SSS SS SS FF PH PK PF PH yw ew 9

  4. Slide 4: AFIC’s Investment Structure — September 2006

    AFIC’s Investment Structure — 30 September 2006 = Long Term Investment portfolio: > A$4.5 billion > Approximately 100 securities >» Focus on S&P/ASX 200 = Trading portfolio: > Up to 10% of total portfolio - A$146 million or 3.3% > Short term positions > Options writing strategies * Borrowings of $10

  5. Slide 5: Operating Profit Analysis

    Operating Profit Analysis ie — 2006 Full Year vs. 2005 Full Year $179.6m $ million 180 - 160 - 140 120 + 100 - 60 - Major Differences + $29.7m in dividends/distributions - $2.6m in trading ~ $1.3m income tax 2005 2006 Operating Operating Profit Profit

  6. Slide 6: AIFRS Profit Analysis

    AIFRS Profit Analysis —2006 Full Year vs. 2005 Full Year 220 180 160 140 $ million 120 100 80 Major Differences $214.1m + $29.3m in realised gains largely from takeovers of Foodland, National Foods and Western Mining 2006 AIFRS Profit Profit

  7. Slide 7: Operating Earnings Per Share, Dividends Per Share and the Payout Ratio

    oa Operating Earnings Per Share*, Dividends Per Share and the Payout Ratio 25.0 ~ + 140% 120% 20.0 +. @ - 100% g < +4 ° 15.0 80% § a F ~ 10.0 - 60% = ° 40% 5.0 + 20% 0.0 0% 2001 2002 2003 2004 2005 2006 l@mm Earnings Per Share *Before 2005, under AGAAP the figure was Earnings Per Share ' Dividends P

  8. Slide 8: Annualised Returns - Year Ended September 2006

    Annualised Returns - Year Ended 30 September 2006 25% 4 20.1% 20% 15% 4 14.1% een 14-871 4.2%13.19% 10% 5% 0% 1 year return 5 year return 10 year return i Net Asset per share growth plus dividends @ Share Price growth plus dividends m S&P/ASX 200 Accumulation Index

  9. Slide 9: Net Asset Backing — Share Price

    175. “ | PEPEPEPPELELPEPE LE PEL EG Net Asset Backing — Share Price

  10. Slide 10: Net Asset Backing Premium/Discount

    Sep-98 Sep-00 a to Ne Sep-02 # t Asset Backing Premium Discount Sep-04 Sep-06

  11. Slide 11: Analysis of Costs 2005 2006

    : Analysis of Costs 2005 2006 Non-Executive Directors 489 436 Staff Costs 2,014 2,615 Premises & IT 419 905 Shareholder costs (incl. Registry) 1,490 1,695 Professional Fees 474 513 Sundry 97 90 Total 4,983 6,254 Recoveries (992) (1,212) Net 3,991 5,042 " Staff costs are impacted by full year cost of

  12. Slide 12: AFIC’s Administration Fees Received

    AFIC’s Administration Fees Received ($000) Admin Fee (Incl. GST) Djerriwarrh : 621 (683) AMCIL : 204 (224) Mirrabooka : 225 (248) Total 1,050 MD’s Reimbursed Total Director’s Expenses Fees 50 15 686 35 10 249 40 12 277 125 37 1,212 Directors Fees appear in the Financial Statements of Djerriwarrh, AM

  13. Slide 13: Outlook

    Outlook Margins are under some pressure as a result of increasing input costs Companies becoming cautious about earnings outlook Slowdown in the US economy causing some market commentators concern about outlook for global growth Australia remains well positioned to benefit from resource demand from

  14. Slide 14: Australian Foundation Investment Company

    wA Australian Foundation INVESTMENT COMPANY

  15. Slide 15: Top Ordinary Securities — September 2006

    Top 25 Ordinary Securities — 30 September 2006 Smillion 1 Commonwealth Bank of Australia 369.7 2 BHP Billiton 333.4 3 Westpac Banking Corporation 289.7 4 National Australia Bank 251.0 5 Wesfarmers 173.0 6 Coles Myer 141.7 7 Rio Tinto 140.4 8 Australia and New Zealand Banking Group 131.0 9 Toll Holdi

  16. Slide 16: Top Ordinary Securities — September 2006 (cont.)

    Top 25 Ordinary Securities — 30 September 2006 con't. Smillion 11 Telstra Corporation 122.2 12 Rinker Group 102.8 13 Woodside Petroleum 86.3 14 The Australian Gas Light Company 84.6 15 AMP 82.5 16 Alumina 81.2 17 St George Bank 78.4 18 Brambles Industries 74.6 19 West Australian Newspapers Holdings

  17. Slide 17: Top Ordinary Securities — September 2006 (cont.)

    Top 25 Ordinary Securities — 30 September 2006 con't. Smillion 21 Amcor 68.5 22 Transurban Group 64.2 23 Computershare 62.9 24 QBE Insurance Group 60.3 25 Milton Corporation 57.3 Total 3,249.1 As % of Total Portfolio Value 70.4% (excludes Cash & Bank Bills)

  18. Slide 18: Movements in the Top 25 from September 2005 to 2006

    Movements in the Top 25 from September 2005 to 2006 Movements In $m Rank QBE Insurance (value) 60.3 24

  19. Slide 19: Movements in the Top 25 from September 2005 to 2006

    Movements in the Top 25 from September 2005 to 2006 Previous Movements Out Rank James Hardie 25

  20. Slide 20: Major Acquisitions

    Major Acquisitions mY (above $10m) investment Portfolio from 2005 to 2006 Coles Myer (Conversion from CMLPA’s) Oil Search Woolworths AMP ConnectEast Group Rio Tinto BHP Billiton Promina Group Insurance Australia Group Rural Press Preferred Ord $million 49.6 29.0 27.7 22.7 21.3 21.3 15.9 14.8 12.2 11

  21. Slide 21: Major Disposals (above $10m)

    Major Disposals (above $10m) Investment Portfolio from 2005 to 2006 Coles Myer 6.5% Pref Coles Myer Foodland Associated National Foods WMC Resources Smorgon Steel 8% Pref Djerriwarrh 6.5% Conv Note Smillion 49.6 37.2 29.5 20.3 13.8 10.0 10.0 Reason Conversion to Ordinary Shares Reduced following con

  22. Slide 22: Major Acquisitions in the Investment Portfolio

    Major Acquisitions in the Investment Portfolio (above $1m) since 1 July 2006 to 30 September Djerriwarrh Investments (Rights Issue) Rio Tinto Australian Infrastructure Fund Metcash Baxter BHP Billiton Rural Press Preferred Ord $million 5.7 3.1 2.1 2.0 1.8 1.7 1.1

  23. Slide 23: New Stocks in the Investment Portfolio for the Year

    ee! i a New Stocks in the Investment Portfolio for the Year Baxter Cedar Woods DCA Group Dyno Nobel Metcash Sonic Healthcare

  24. Slide 24: Australian Foundation Investment Company

    wA Australian Foundation INVESTMENT COMPANY

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