Heartland Group Holdings Ltd. · NZX:HGH
Heartland — Shareholder Meeting (November 2013)
27 slides from Heartland's shareholder meeting presentation, Nov 1, 2013
Slide 1: Annual Meeting, 1 November 2013
Annual Meeting, 1 November 2013 Addington Events Centre, Christchurch Annual Meeting 1 Nov 2013 Addington Events Annual Meeting 1 November 2013 | PageCentre, 1 Christchurch 1
Slide 2: Agenda
Agenda • Welcome • Administrative Matters • Annual Report • Chairman’s Overview • CEO’s Performance Overview • Looking Forward • Election of Directors • Auditor • General Business Annual Meeting 1 November 2013 | Page 2 2
Slide 3: Chairman's Overview
Chairman’s Overview Geoff Ricketts Annual Meeting 1 November 2013 | Page 3
Slide 4: Chairman's Overview
Chairman’s Overview Geoff Ricketts - Chairman • Notable Milestones • Board Structure and Overview • Dividend • Heartland Trust Annual Meeting 1 November 2013 | Page 4 4
Slide 5: Notable Milestones
Notable Milestones • Bank registration • Dividend policy set, interim dividend paid • Final dividend announced • Investment grade credit rating affirmed • Implementation of new strategy for non-core property • RECL agreement terminated • Board strengthened • First quarter figures for 2013/2014 are e
Slide 6: Board Structure and Overview
Board Structure and Overview Separation of boards – 27 August 2013 HNZ HBL Bruce Irvine (chair) Geoff Ricketts (chair) Geoff Ricketts Graham Kennedy Graham Kennedy Jeff Greenslade (Managing Director) Jeff Greenslade (Managing Director) Gary Leech Nicola Greer Chris Mace John Harvey Greg Tomlinson Mi
Slide 7: Dividend
Dividend Dividend Policy Set • A key objective is to ensure an appropriate balance between maximising shareholder returns, and protecting the interests of depositors through prudent capital management • Dividend Reinvestment Plan established • Share Sale Plan launched Special 1.5c Interim 2.0c Final
Slide 8: Heartland Trust
Heartland Trust Supporting Our Communities • Heartland Trust deconsolidated on 1 July 2012 • $200,000 of grants and sponsorships for FY 2013 • Continues to support over 80 organisations across the country • Supporting our communities at grass-roots level Annual Meeting 1 November 2013 | Page 8 8
Slide 9: CEO's Performance Overview
CEO’s Performance Overview Jeff Greenslade Annual Meeting 1 November 2013 | Page 9
Slide 10: CEO overview agenda: financial overview and pathway
1. Financial Overview 30 June 2013 2. Pathway to Forecast Range of $34m-$37m 3. Market Position 4. Pathway to Next Level of Financial Performance Annual Meeting 1 November 2013 | Page 10 10
Slide 11: 1. Financial Overview
1. Financial Overview On track with profit guidance 12 months to 12 months to 3 months to • June 2013 NPAT $24.4m after Jun 2012 Jun 2013 Sep 2013 (NZ$m) (NZ$m) (NZ$m) adjusting for $17.5m post tax Net interest income 83.6 95.5 26.0 one-offs re change in strategy Net other income Net operating incom
Slide 12: Balance Sheet Summary
Balance Sheet Summary Exiting non-core receivables • Net finance receivables fell by $68m: – Rural -$22m (PGW Guarantee Loans) – Business +$9m – Consumer +$89m – Property -$56m – Residential Mortgages -$88m • At Q1 2014 Equity is $379.5m, Equity ratio is 15.7% and NTA is $0.88 per share 30 Jun 2012
Slide 13: Net Finance Receivables
Net Finance Receivables Improving portfolio mix Annual Meeting 1 November 2013 | Page 13 13
Slide 14: Asset Quality Trends
Asset Quality Trends Continued trend improvement in underlying asset quality • Asset quality improving overall • Non-Core Property remains driver of elevated impairment levels • Core business impairment is very low Annual Meeting 1 November 2013 | Page 14 14
Slide 15: Funding and Liquidity
Funding and Liquidity Stable liquidity position • Improved liquidity mix – higher levels of on balance sheet liquid assets and reduced reliance on securitisation facilities • Strong positive cash flows from asset base • No material maturity concentrations • Liquidity built up ahead of retail bond re
Slide 16: Non-Core Property Strategy
Non-Core Property Strategy Realisation strategy on track • The Non-Core Property portfolio has been split into three buckets: - Performing: loans or assets that are performing and will continue to be held - Acceleration: loans and assets to be exited within a 12-18 month timeline - Extend: loans tha
Slide 17: 2. Pathway to Forecast Range of $34m-$37m FY14
2. Pathway to Forecast Range of $34m-$37m FY14 Operational Performance Key Drivers: • Cost of Funds – ongoing trend • Product Mix – improving • Lending Volume – challenging • Costs – final phase of synergies • Impairments – “normalisation” Annual Meeting 1 November 2013 | Page 17 17
Slide 18: 3. Market Position
3. Market Position • Our focus is three sectors: Household (Families); Rural (“Farmers”) and Business (“SME’s”) • We aim to identify niches within these sectors where we create a No 1 and No 2 market position while achieving a better Risk/Return than the mainstream • This means our success will be d
Slide 19: High Value Product Growth
High Value Product Growth Our strong bias is towards the productive sector and the development of a range of products that support essential needs of productive New Zealanders Annual Meeting 1 November 2013 | Page 19 19
Slide 20: Looking Forward
Looking Forward Jeff Greenslade Annual Meeting 1 November 2013 | Page 20
Slide 21: 4. Pathway to Next Level of Financial Performance
4. Pathway to Next Level of Financial Performance • FY2014 is sensitive to ongoing Cost of Funds reduction, Opex and Impairment improvement alongside growth • Beyond FY2014, growth becomes more important – how will this be achieved in environment of low credit growth • There are two strategies that
Slide 22: Play Video Here
PLACE MARKER PLAY VIDEO HERE Annual Meeting 1 November 2013 | Page 22 22
Slide 23: Questions
Questions Questions Annual Meeting 1 November 2013 | Page 23 23
Slide 24: Annual Report
Annual Report Geoff Ricketts To receive and consider the Annual Report for the year ended 30 June 2013 Annual Meeting 1 November 2013 | Page 24 24
Slide 25: Election of Directors
Election of Directors Geoff Ricketts To consider and, if agreed, pass the following resolutions as ordinary resolutions (each as a separate ordinary resolution): • That Gary Leech be re-elected as a director of the Company. • That Christopher Mace be re-elected as a director of the Company. • That G
Slide 26: Auditor
Auditor Geoff Ricketts To record the automatic reappointment of KPMG as the Company’s auditor and, if agreed, pass the following resolution as an ordinary resolution: • That the Directors are authorised to fix the auditor’s remuneration. Annual Meeting 1 November 2013 | Page 26 26
Slide 27: General Business
General Business Geoff Ricketts To consider any other matters that may properly be brought before the Meeting. Following the formal part of the Meeting, the Directors invite shareholders to join them for light refreshments. Annual Meeting 1 November 2013 | Page 27 27
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