Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (May 2013)
29 slides from Macquarie's investor presentation, May 14, 2013
Slide 1: Macquarie Group Capital Notes Offer Investor Presentation
MACQUARIE GROUP CAPITAL NOTES OFFER For personal use only INVESTOR PRESENTATION 1
Slide 2: Important Notice
IMPORTANT NOTICE For personal use only This document has been prepared by Macquarie Group Limited ABN 94 122 169 279 (“MGL”) in relation to its proposed offer of mandatorily convertible notes (“MCN”) as described in this document. A Prospectus in respect of MCN was lodged with ASIC on 14 May 2013. T
Slide 3: Macquarie Group Overview
For personal use only MACQUARIE GROUP OVERVIEW 3
Slide 4: About Macquarie Group
ABOUT MACQUARIE GROUP For personal use only Top 50 global asset manager with $A343.5b1 of assets under management Macquarie Provides clients with access to a diverse range of capabilities and products, including infrastructure and real asset Funds management, securities investment management and
Slide 5: Macquarie Has a Long History of Profitability
MACQUARIE HAS A LONG HISTORY OF PROFITABILITY For personal use only 2.0 Hill Samuel UK opens branch 1.6 office in Sydney 1.2 Recession Currency 0.8 Crisis 100 Hills Motorway 0.4 Mortgage Global real securitisation 80 0.0 estate crash 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Recession 6
Slide 6: Overview of FY13 Result
OVERVIEW OF FY13 RESULT For personal use only Net profit of $A851m, up $A121m (or 17%) on FY12 Operating income $A6.7b, down $A263m (or 4%) on FY12 As foreshadowed: − MGL’s annuity-style businesses (Macquarie Funds, Corporate and Asset Finance, Banking and Financial Services) continued to perf
Slide 7: Overview of FY13 vs FY12
OVERVIEW OF FY13 VS FY12 For personal use only 2H13 1H13 Mar 13 Mar 12 $Am $Am $Am $Am Net operating income 3,631 3,069 6,700 6,963 Total operating expenses (2,743) (2,552) (5,295) (5,914) Operating profit before income tax 888 517 1,405 1,049 Income tax expense (377) (156) (533) (287) Profit attrib
Slide 8: Diversified Income
DIVERSIFIED INCOME For personal use only Net operating income by source 12 months to 31 Mar 12 12 months to 31 Mar 13 $A7.0b $A6.7b Institutional and retail cash equities 14% 13% Equity 24% derivatives 4% 25% 5% Securities funds management and administration 21% M&A and advisory 24% income 19% 17% A
Slide 9: Diversified by Region
DIVERSIFIED BY REGION For personal use only International income1 63% of total Total staff 13,663 International staff 55% of total EUROPE, MIDDLE EAST ASIA AMERICAS & AFRICA2 Income: $A1,221m Income: $A743m Income: $A2,199m (19% of total) (11% of total) (33% of total) Staff: 1,193 Staff: 3,093
Slide 10: Low Earnings Volatility
LOW EARNINGS VOLATILITY For personal use only MGL’s earnings volatility is closer to that of a fund manager rather than an investment bank (5 year horizon) 5 year P&L volatility1 5 year P&L volatility1 (MGL vs fund managers) (MGL vs investment banks) AllianceBernstein Schroders UBS Credit Suisse J
Slide 11: Strong Funding and Balance Sheet Position
STRONG FUNDING AND BALANCE SHEET POSITION For personal use only Balance sheet remains strong and conservative − Term assets covered by term funding, stable deposits and equity − Minimal reliance on short term wholesale funding markets Surplus funding continues to be deployed whilst maintaining c
Slide 12: Funded Balance Sheet Remains Strong
FUNDED BALANCE SHEET REMAINS STRONG For personal use only $Ab 31 March 2012 $Ab 30 September 2012 $Ab 31 March 2013 90 90 90 ST wholesale ST wholesale ST wholesale issued paper (6%) issued paper (6%) issued paper (7%) 80 80 Other debt1 maturing in the next 12 mths (6%) 80 Other debt1 maturing in Cas
Slide 13: Well Diversified Funding Sources
WELL DIVERSIFIED FUNDING SOURCES For personal use only Diversity of MGL funding sources MGL term funding (drawn and undrawn1) Wholesale maturing beyond one year (including equity issued paper Deposits - Equity & hybrids corporate & and hybrids) wholesale Loan capital $Ab Equity & hybrids Loan capita
Slide 14: Basel III Capital Surplus
BASEL III CAPITAL SURPLUS For personal use only Harmonised Basel III Group capital of $A12.9b, Group surplus of $A3.4b at Mar 131 $Ab Group regulatory surplus: Basel III (Mar 13) 5.0 4.5 4.0 0.3 (0.2) 4.4 4.3 (1.3) 3.5 3.0 2.5 3.1 Based on 8.5% 2.0 (minimum Tier 1 3.4 ratio + CCB), which 3.4 1.5 i
Slide 15: Macquarie Group Capital Notes Terms
For personal use only MACQUARIE GROUP CAPITAL NOTES TERMS 15
Slide 16: Offer Summary
OFFER SUMMARY For personal use only Issuer Macquarie Group Limited (“MGL”) Offer size $400 million, with the ability to raise more or less Type of security Fully-paid, subordinated, non-cumulative, unsecured, mandatorily convertible notes (“MCN”) MCN will constitute regulatory capital of Mac
Slide 17: Distributions
DISTRIBUTIONS For personal use only Floating rate distributions are scheduled to be paid semi-annually in arrears First Distribution is scheduled to be paid on 19 December 2013 MGL currently franks dividends on Ordinary Shares at 40% and Distributions will be franked at the same rate as Ordina
Slide 18: Mandatory Exchange
MANDATORY EXCHANGE For personal use only On the Mandatory Exchange Date, MCN Holders will receive a variable number of Ordinary Shares for each MCN they hold, provided the Exchange Conditions are satisfied Mandatory The Mandatory Exchange Date will be the earlier of: Exchange − The Mandatory Exc
Slide 19: Exchange, Redemption or Resale Events
EXCHANGE, REDEMPTION OR RESALE EVENTS For personal use only MGL may elect to Exchange or, with the prior written approval of APRA, Redeem or Resell all or Optional some MCN on any of the Optional Exchange Dates Exchange, The three Optional Exchange Dates are: Redemption or − The 5 year anniversa
Slide 20: Non-Viability Event
NON-VIABILITY EVENT For personal use only A Non-Viability Event means APRA has provided a written determination to MGL that the conversion into Ordinary Shares or write-off of Relevant Tier 1 Securities in accordance with Non-Viability their terms or by operation of law is necessary because Event
Slide 21: Summary of Events That May Occur During the Term of MCN
SUMMARY OF EVENTS THAT MAY OCCUR DURING THE TERM OF MCN For personal use only Is APRA Do In what form will the value When could approval conditions What value will a MCN be provided to MCN Event this occur? Consequences required? apply? Holder receive? Holders? Exchange all or some MCN Variable numb
Slide 22: Subordination and Ranking of MCN
SUBORDINATION AND RANKING OF MCN For personal use only In a Winding Up of MGL, MCN (if they are on issue at the time) rank for payment: − ahead of Ordinary Shares − equally with Equal Ranking Obligations (including all other MCN and 2008 CPS) − behind claims of Senior Creditors In a Winding Up o
Slide 23: Comparison Between MCN and Other Securities
COMPARISON BETWEEN MCN AND OTHER SECURITIES For personal use only Feature Term deposit 2008 CPS MCN Ordinary Shares Bank, credit union or Responsible entity of Issuer building society a special purpose MGL MGL (e.g. MBL) trust Guarantee under the Australian government Yes1 No No No Financial Claims
Slide 24: MCN Offer Process
For personal use only MCN OFFER PROCESS 24
Slide 25: Offer Structure
OFFER STRUCTURE For personal use only Reinvestment Offer An offer to Eligible 2008 CPS Holders to reinvest all or some of their 2008 CPS in MCN An offer to holders of Ordinary Shares or Macquarie Income Securities, who are resident in Securityholder Offer Australia An offer to retail and high
Slide 26: Options for Eligible 2008 CPS Holders
OPTIONS FOR ELIGIBLE 2008 CPS HOLDERS For personal use only A 2008 CPS Holder who is − A registered holder of 2008 CPS at 7.00pm (Sydney time) on 13 May 2013 Eligible 2008 CPS − Shown on the 2008 CPS register as having an address in Australia; and Holders − Not in the United States nor acting as a
Slide 27: Key Dates for the Offer
KEY DATES FOR THE OFFER For personal use only Key dates for the Offer Date Record date for determining Eligible 2008 CPS Holders and 7.00pm (Sydney time) Monday, Eligible Securityholders 13 May 2013 Lodgement of the Prospectus with ASIC Tuesday, 14 May 2013 Bookbuild period Tuesday, 14 May 2013 – Tu
Slide 28: Key Risks
KEY RISKS For personal use only The following is a summary of key risks only. You should read Section 5 “Investment risks” of the Prospectus in full before deciding to invest (including “Risks associated with MGL and the Macquarie Group”) MCN are subordinated perpetual obligations of MGL and ran
Slide 29: Contact Information
CONTACT INFORMATION For personal use only Issuer Arranger and Joint Lead Manager Patrick Upfold Brad Milson Macquarie Capital (Australia) Limited Chief Financial Officer Division Director - Financial Scott Favaloro Phone: + 61 414 517 667 Management Group Phone: +61 402 578 979 Phone: +61 413 667 75