Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — FY2021 Earnings Presentation
35 slides from Omni Bridgeway's earnings presentation, Aug 20, 2021
Slide 1: FY21 Results
rsonal use only FY21 Results 20 August 2021
Slide 2: Agenda
FY21 RESULTS | AUGUST 2021 Agenda rsonal use only 1 Highlights 2 Financial results 3 Portfolio performance 4 Strategy 5 Annexure 2
Slide 3: Highlights
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Slide 4: Result reflects the benefits of our diversification strategy
FY21 RESULTS | AUGUST 2021 Highlights Result reflects the benefits of our diversification strategy For the 12 months ended 30 June 2021 rsonal use only Financial results Income Record commitments2 Funds under management $286.4m $412.6m up 32% $2.4bn Income yet to be recognised1 On track to meet $1bn
Slide 5: Portfolio growth will drive future income generation
FY21 RESULTS | AUGUST 2021 Highlights Portfolio growth will drive future income generation Increasing commitments and EPV improve operational efficiency rsonal use only Financial results Investments carrying value1 EPV1,2 Commitments1,2 CAGR >35% over 5 years CAGR >42% over 5 years CAGR >38% over 5
Slide 6: Benefits of merger delivered
FY21 RESULTS | AUGUST 2021 Highlights Benefits of merger delivered • Omni Bridgeway is the global leader in financing and managing legal risks • We manage a diverse portfolio of over 300 global investments across four legal asset classes: dispute resolution finance, rsonal use only Financial results
Slide 7: rsonal use only
rsonal use only Financial results
Slide 8: Financials summary
FY21 RESULTS | AUGUST 2021 Highlights FY21 summary Financials Wivenhoe1 rsonal use only Financial results • Earnings before provision for impairments was $88.2m • $95.3m income recognised from 50% of the investment with an additional $18m • 2H21 completions were strong generating $227.7m in income,
Slide 9: Financial results
FY21 RESULTS | AUGUST 2021 Highlights Financial results Change $m FY20 1H21 2H21 FY21 from FY20 Investment income 288.9 43.9 227.7 271.6 6% ▼ rsonal use only Financial results Investment cost derecognised/realised (167.1) (34.8) (75.3) (110.1) 34% ▼ Net gain from investments 121.8 9.1 152.4 161.5 33
Slide 10: Non-IFRS analysis
FY21 RESULTS | AUGUST 2021 Highlights Non-IFRS analysis IFRS Adjustments Non-IFRS $m FY20 FY21 $m FY20 1H21 2H21 FY21 FY21 FY21 Proceeds from litigation funding 171.0 183.5 rsonal use only Proceeds from claims portfolio investments 15.0 11.0 Financial results Investment income 288.9 43.9 227.7 271.6
Slide 11: Net operational cash expenditure
FY21 RESULTS | AUGUST 2021 Highlights Net operational cash expenditure $m FY20 FY21 • Operational cash expenditure has remained relatively flat despite 27% growth in EPV Per Profit and Loss statement • Operational efficiencies achieved rsonal use only Amortisation of claims portfolio (14.5) (1.6) Fi
Slide 12: Strong capital position to support corporate initiatives
FY21 RESULTS | AUGUST 2021 Highlights Strong capital position to support corporate initiatives Cash and receivables1 rsonal use only Financial results $m Strong capital position to support corporate initiatives including: 359.8 • the transition towards a funds management model 19.5 324.7 • organical
Slide 13: Portfolio performance
rsonal use only Portfolio performance
Slide 14: Balanced portfolio created by diversified EPV
FY21 RESULTS | AUGUST 2021 Highlights Balanced portfolio created by diversified EPV • EPV grew to $20.1 billion1 in FY21 in line with the net increase in investments offsetting completions • Diversification provides mitigation to risk of competition and regulatory intervention and portfolio concentr
Slide 15: Portfolio performance review
FY21 RESULTS | AUGUST 2021 Highlights Portfolio performance review1 Amounts attributable Amounts attributable Current investments Completed investments to investors to Omni Bridgeway rsonal use only Success rate Financial results Launch EPV Fund Average Average Fund Committed Capital Returns2 Capita
Slide 16: OBL value > first generation funds (Fund 1, Funds 2&3)
FY21 RESULTS | AUGUST 2021 Highlights OBL value > first generation funds (Fund 1, Funds 2&3) Indicative analysis1 of the first generation funds’ return to OBL parent entity based on their current portfolio rsonal use only Financial results IEV attribution Estimated portfolio value and implied embedd
Slide 17: OBL value > second generation funds (Fund 4, Fund 5)
FY21 RESULTS | AUGUST 2021 Highlights OBL value > second generation funds (Fund 4, Fund 5) Indicative analysis1 of the second generation funds’ return to OBL parent entity based on illustrative example rsonal use only Financial results Example investment return Estimated portfolio value and implied
Slide 18: OBL value > purchased funds (Fund 6, Fund 7)
FY21 RESULTS | AUGUST 2021 Highlights OBL value > purchased funds (Fund 6, Fund 7) Indicative analysis of the fund return value to OBL parent entity based on based on their current portfolio rsonal use only Financial results Return profile $m Estimated portfolio value and implied embedded value Cons
Slide 19: Strategy
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Slide 20: Creating value through our diversified model
FY21 RESULTS | AUGUST 2021 Fund 5 and Fund 7 are not consolidated within the group financial statements and are disclosed at 100%. Highlights Creating value through our diversified model rsonal use only Goal Strategy Status at 30 June 2021 Financial results FY25 target1 • US team growth, office expa
Slide 21: Strategic focus on US growth
FY21 RESULTS | AUGUST 2021 Highlights Strategic focus on US growth The US market is the largest market, globally, and represents the greatest potential for growth and penetration rsonal use only Financial results Our strategic priorities are to: • Grow our FY22 US commitment target to • Expand headc
Slide 22: Annexure
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Slide 23: Industry pioneer and best-in-class operator with global scale
FY21 RESULTS | AUGUST 2021 Highlights Industry pioneer and best-in-class operator with global scale Omni Bridgeway is the world’s most experienced litigation funder ... with an unmatched global reach and origination framework … rsonal use only Financial results Global pioneer and innovator in the de
Slide 24: Worldwide sourcing network and enforcement capabilities
FY21 RESULTS | AUGUST 2021 Highlights Worldwide sourcing network and enforcement capabilities rsonal use only Financial results We have a signficant global sourcing network and capability for the execution of enforcement strategies and investments Our network supports the sourcing and Portfolio perf
Slide 25: The investment process
FY21 RESULTS | AUGUST 2021 Highlights The investment process In FY21, of the 1,727 applications received, 545 were reviewed. A total of 77 investments were funded. rsonal use only Financial results 1. Origination • Opportunities are primarily originated through potential clients, advisors, other thi
Slide 26: Funding pipeline
FY21 RESULTS | AUGUST 2021 Highlights Funding pipeline rsonal use only Applications1 Financial results 2,000 • Record 1,727 funding applications received in FY21 1,800 • Funding applications continue to grow as we achieve 1,726 1,727 our geographic expansion 1,600 • We maintained the conversion rate
Slide 27: Funding structure overview
FY21 RESULTS | AUGUST 2021 Highlights Funding structure overview Our funding strategy has evolved over time to diversify investment risk, from initially investing on balance sheet to bringing in third party capital while maintaining a meaningful minority stake in each of our Funds rsonal use only Fi
Slide 28: Distribution of Fund proceeds
FY21 RESULTS | AUGUST 2021 Highlights Distribution of Fund proceeds • If an investment is successful, the defendant will pay an agreed amount to the claimant's lawyers trust account • The lawyer will deduct the fees owing to the Group and pay the balance of funds to the client rsonal use only Financ
Slide 29: Non-controlling interests (NCI)
FY21 RESULTS | AUGUST 2021 Highlights Non-controlling interests (NCI) $m Fund 1 Funds 2&3 Fund 4 Fund 6 Total • First generation funds remain within the 100% rsonal use only Financial results Opening (168.2) (68.3) (94.1) (100.6) (431.2) proceeds and profit distribution to NCI stage of the distribut
Slide 30: Westgem and Fund Impairments
FY21 RESULTS | AUGUST 2021 Highlights Westgem and Fund 4 Impairments Two key investments have been impaired to comply with accounting standards, even though the legal processes (via appeals) continue. rsonal use only Financial results As both investments have positive prospects of success on appeal,
Slide 31: Regulatory reforms
FY21 RESULTS | AUGUST 2021 Highlights Regulatory reforms • Continued push for regulatory reform for litigation finance industry in Australia, Europe and US • We have consistently been and will continue to be an advocate for fit for purpose regulation of the industry rsonal use only Financial results
Slide 32: Risk mitigation
FY21 RESULTS | AUGUST 2021 Highlights Risk mitigation Risk Potential impact Strategic response POOR INVESTMENT Financial impact of loss of investment, and in relevant • Investment in experienced investment managers with litigation experience rsonal use only Financial results DECISIONS jurisdiction a
Slide 33: Glossary of terms and notes
FY21 RESULTS | AUGUST 2021 Highlights Glossary of terms and notes EPV Estimated portfolio value for an investment where the funding entity earns: (i) a percentage of the resolution proceeds as a funding commission, is OBL’s current estimate of the investment’s recoverable amount after considering th
Slide 34: Disclaimer
FY21 RESULTS | AUGUST 2021 Highlights Disclaimer • The material in this presentation has been prepared by Omni Bridgeway (OBL) and is general background information about Omni Bridgeway's activities. The information is given in summary form and does not purport to be complete. rsonal use only Financ
Slide 35: rsonal use only
FY21 RESULTS | AUGUST 2021 This is presentation is authorised for release to the market by the Disclosure Committee. rsonal use only 35