NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q4 FY22 Earnings Presentation
43 slides from NAOS Ex-50 Opportunities's earnings presentation, Jul 28, 2022
Slide 1: Q4 FY22 Investor Update and Q&A
Thursday 28 July 2022 | 10:30 am (AEST) Audio Dial In: +61 2 9087 3602 Audio Access Code: 909-805-002 Q4 FY22 Investor Update and Q&A
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: NAOS Asset Management
NAOS Asset Management To provide investors genuine long-term, concentrated exposure to Australian undervalued emerging companies with an industrial focus. NAOS established its first Listed Investment NAOS was originally founded in 2004 and Company (LIC) in 2013 with 400 shareholders, today has 10 st
Slide 4: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS Sebastian Evans Warwick Evans Sarah Williams David Rickards OAM Matthew Hyder Trevor Carroll Mark Bennett Managing Director, NAOS Chairman, NAOS Asset Independent Director, Independent Chairman & Director, NAOS Asset Independent Chairman Director, NAOS Asset Ass
Slide 5: Our Investment Beliefs and Differentiation
Our Investment Beliefs and Differentiation 4
Slide 6: 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 7: NAOS Investment Portfolio Financial Year Returns
NAOS Investment Portfolio Financial Year Returns* 60% 50% 40% 30% 20% 10% -14.72% 0% -10% -20% -15.14% -28.36% -30% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 NAOS Emerging Opportunities Company Limited (ASX: NCC) NAOS Ex-50 Opportunities Company Limited (ASX: NAC) NAOS Small Cap Opportunitie
Slide 8: NAOS LIC Fully Franked Dividend History and Profit Reserves
NAOS LIC Fully Franked Dividend History and Profit Reserves Each LIC has consistently paid dividends and holds healthy profit reserves 90 85.70 80 70 61.25 60 54.36 CENTS PER SHARE 50.6 50 45.3 40 38.05 32.07 30 22.45 21.1 20 10 0 NCC (Feb 2013) NAC (Nov 2014) NSC (Dec 2017) Total Dividends Paid (Si
Slide 9: Investment Portfolio Performance Summary
Investment Portfolio Performance Summary BENCHMARK Q4 FY22 INCEPTION Q4 FY22 1 YEAR 1 YEAR INCEPTION Investment Portfolio PERFORMANCE BENCHMARK PERFORMANCE BENCHMARK PERFORMANCE PERFORMANCE PERFORMANCE (p.a.) PERFORMANCE (p.a.) NCC Investment Portfolio -13.95% -12.91%^ -15.14% -19.52%^ +9.97% +4.29%
Slide 10: 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: 9
Slide 11: NAOS Management Alignment
NAOS Management Alignment NAOS Director’s shareholdings have significantly increased since the inception of each LIC Inception Directors Shareholding 30 June 2022 Directors Shareholding 9,000,000 8,394,479 8,000,000 7,000,000 6,000,000 5,332,207 NUMBER OF SHARES 5,000,000 4,000,000 3,000,000 2,444,4
Slide 12: 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 11
Slide 13: Q4 FY22 Summary
Q4 FY22 Summary Inflationary impacts have finally hit home during Q4 with central banks playing catch-up and raising rates at record paces. The current geopolitical issues are having widespread & significant negative effects on the macro environment. Many impacts are difficult to solve through s
Slide 14: Q4 FY22 Summary Cont.
Q4 FY22 Summary Cont. Total Returns (%) Breakdown - 2HFY22 30 20 10 0 3.8 % Return -10 -9.9 -20 -23.7 -30 -40 -36.4 -50 31-Dec-21 31-Jan-22 28-Feb-22 31-Mar-22 30-Apr-22 31-May-22 30-Jun-22 ASX200 Acc. Index ASX Small Ordinaries Acc. Index ASX All Technology Index ASX200 Resources Acc. Index Source:
Slide 15: Australian IPO Market - 2021 Exuberance Vs. 2022 Almost 'Closed'
Q4 FY22 Summary Cont. Australian IPO Market - 2021 Exuberance Vs. 2022 Almost 'Closed' $4,500 80 $4,000 70 Aggregate Transaction Value (AU$M) $3,500 60 Number of Transactions $3,000 50 $2,500 40 $2,000 30 $1,500 20 $1,000 $500 10 $0 0 06/2020 Q 09/2020 Q 12/2020 Q 03/2021 Q 06/2021 Q 09/2021 Q 12/20
Slide 16: Australian Yield Curve Changes During FY22
Q4 FY22 Summary Cont. Australian Yield Curve Changes During FY22 4.00 3.74 3.50 3.48 3.31 3.15 What a difference 12 3.00 2.96 2.96 months can make… 2.76 Interest rate expectations 2.57 2.50 2.41 2.54 now playing catch-up to inflation. 2.14 2.10 2.00 Yield (%) 1.50 1.36 1.32 1.00 0.74 0.50 0.35 (0.01
Slide 17: Consumer Confidence Index by Geography
Q4 FY22 Summary Cont. Consumer Confidence Index by Geography 106 104 102 Consumer Confidence Index 100 98 96 94 92 90 01-Jul-19 01-Nov-19 01-Mar-20 01-Jul-20 01-Nov-20 01-Mar-21 01-Jul-21 01-Nov-21 01-Mar-22 Australia United Kingdom USA New Zealand China Europe Source: OECD, NAOS EXPLAINER: An indic
Slide 18: Welcome Simon Lee
Welcome Simon Lee Chief Executive Officer and Executive Director 17
Slide 19: About Urbanise
About Urbanise FM Combined Strata • Urbanise (ASX: UBN) is a cloud-based proptech business that provides software solutions for strata and facilities managers • Our main markets are Australia, New Zealand, Asia and the UAE • We have around 75 people across 6 countries in sales & marketing, implement
Slide 20: Strata Management
Strata Management A key role in community living • Strata legislation introduced in NSW in 1961 • Replicated around the world (including Canada, Dubai, Singapore, New Zealand, Singapore and Malaysia) • Strata scheme handles the legal ownership of a portion of a building, where you own your ‘lot’ and
Slide 21: Strata Market
Strata Market Segmentation of strata managers Strata Management Only Part of wider business Key Players Small & Medium Large Developers Real Estate • Australia: PICA, Smarter Start-ups (1k – 40k lots) (40k + lots) Regions Communities, Bright and Duggan, Whittles, SSKB Australia Strata Managers,
Slide 22: Facilities Management
Facilities Management A broad role in the management of facilities assets • “Facilities” is any structure or area (assets) that can accommodate commercial, residential, industrial and mixed-use activities • Facilities managers support the functionality, safety, maintenance and sustainability of thos
Slide 23: Facilities Market
Facilities Market Key Players Sectors Educatio Aged Utilities Mining Council Other Australia: n care / NDIS s/ LGAs • Spotless, Programmed, Ventia, Sodexo, ISS Facilities Services, JLL, CBRE, BGIS • 400 plus FM Outsourcers Tier 1 FM Outsourcer Middle East: • 5 Major players dominate Tier 2 FM Outsou
Slide 24: Technology Challenges
Technology Challenges Challenges Strata Facilities Urbanise Engagement of customers (being Tenants & Owners Users of facilities, trades & Communication apps & sticky) customer portals Co-ordination with other services Building services Space/booking management, Integrations (integrated offering) bui
Slide 25: NAOS Investee Companies - Key Events Q4 FY22
NAOS Investee Companies - Key Events Q4 FY22 HOLDING INDUSTRY Q4 UPDATE FY22 result confirmed at upper end of previously stated guidance. BRI published long term financial targets around margins, ROFE and a dividend Building Supplies payout ratio target for the first time. Provided clarity aro
Slide 26: NAOS Investee Companies - Key Events Q4 FY22
NAOS Investee Companies - Key Events Q4 FY22 HOLDING INDUSTRY Q4 UPDATE Appointment of Simon Lee as CEO. Positive commentary regarding upskilling to occur on the Board of Directors. Software & Services Trading update negatively impacted by material customer loss which we view as ‘one off’. Col
Slide 27: NCC Overview as at June 2022
NCC Overview as at 30 June 2022 $0.90 $0.93 $0.83 9.04% 14 $147m 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 Paid Cumulative Dividends Paid 8.0 7.
Slide 28: NAC Overview as at June 2022
NAC Overview as at 30 June 2022 $0.90 $0.96 $0.875 7.26% 13 $146m 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 Paid Cumulative Dividends Paid 6.0 5
Slide 29: NSC Overview as at June 2022
NSC Overview as at 30 June 2022 $0.84 $0.84 $0.73 7.12% 14 $198.3m 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 Paid Cumulative Dividends Paid 6.0
Slide 30: Capital Management Initiatives
Capital Management Initiatives 29
Slide 31: Overview & Outlook Q1 FY23
Overview & Outlook Q1 FY23 Companies continue to adjust to the post COVID environment which will benefit some industries and weigh on others. We expect this to be a continued theme in outlook commentary during August reporting season. Will the recent interest rate increases start to influence co
Slide 32: Outlook Q1 FY23 - continued
Outlook Q1 FY23 - continued Updates from almost all portfolio companies expected in the August reporting season. As with the previous year we believe the focus will not be so much on the FY22 result but on the immediate outlook and the first couple of months of trading. In the case of some of
Slide 33: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge 32
Slide 34: 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 33
Slide 35: Appendix
Appendix
Slide 36: Investment Portfolio Performance vs. Benchmark
Investment Portfolio Performance vs. Benchmark 1 Year 3 Year Performance 5 Year Performance Inception Investment Portfolio Performance (P.A) (P.A) Inception (P.A.) (Total Return) NAC -28.36% +9.16% +6.86% +10.30% +111.32% NAC Benchmark -9.56% +2.20% +4.98% +5.97% +55.68% NCC -15.14% +7.78% +3.25% +9
Slide 37: 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% 10.30% 9.97% 10% 10% 5.97% 4.29% 5% 5% 2.90% 3.43% 2.62% 2.30% 0% 0% -1.23% -1.36% -3.10% -3.49% -5% -5% Performance Since Monthly Average
Slide 38: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * NSC Investment Portfolio Risk and Performance Metrics 10% 5% 3.30% 3.66% 2.38% 2.24% 0% -1.88% -3.74% -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 39: Historical Shareholder Numbers
Historical Shareholder Numbers Jun-22 8000 6000 4000 2000 0 NCC Shareholders NAC Shareholders NSC Shareholders 37
Slide 40: 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 41: 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 42: 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 43: Investor Awareness and Communication
Investor Awareness and Communication FOLLOW NAOS 41
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