Argo Global Listed Infrastructure Ltd. · ASX:ALI
Argo Global Listed Infrastructure — Non-Deal Roadshow (May 2023)
52 slides from Argo Global Listed Infrastructure's roadshow presentation, May 2023
Slide 1: Shareholder Information Meeting May 2023
Shareholder Information Meeting May May2023 2023
Slide 2: Meeting details
Meeting details Melbourne Monday 22 May 10am Grand Hyatt Hotel 123 Collins Street, Melbourne Adelaide Tuesday 23 May 10am Adelaide Convention Centre North Terrace, Adelaide Brisbane Wednesday 24 May 10am Sofitel Brisbane Central 249 Turbot Street, Brisbane Sydney Thursday 25 May 2pm Amora Hotel 11 J
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Argo Service Company Pty Ltd (ASCO) (ACN 603 367 479) (Australian Financial Services Licence 470477), on behalf of Argo Investments Limited (ACN 007 519 520) and Argo Global Listed Infrastructure Limited (ACN 604 986 914). ASCO’s Financial Services G
Slide 4: Your presenters
Your presenters Jason Beddow Andy Forster Brydie Lloyd-Roberts Managing Director Senior Investment Officer Investment Analyst BEng, GdipAppFin(SecInst) BComm (Hons), CFA BComm Colin Whitehead Ben Morton Investment Analyst Senior Portfolio Manager at Cohen & Steers 4 BA (Hons) Accounting and Finance,
Slide 5: Share market performance
Share market performance S&P/ASX 200 & Accumulation Index 140 Before, during and post-pandemic 130 120 110 100 90 US Fed First rate rise RBA rate vaccine 80 rise released 70 60 5
Slide 6: Overview
Overview Half year profit Half year earnings Interim dividend, fully per share franked per share $137.0 m 18.2c 16.5c Up +6.2% Up +2.2% Up +3.1% Dividend yield LIC capital gain MER 3.8% 15.0c 0.16% 5.4% grossed up For FY2022 per share Management expense ratio 6
Slide 7: Inflation remains persistently high
Inflation remains persistently high Australian Consumer Price Index (quarterly and annual movement) Source: Australian Bureau of Statistics 7
Slide 8: Sharp interest rate increases beginning to impact sentiment
Sharp interest rate increases beginning to impact sentiment Australia’s official cash rate Source: RBA 8
Slide 9: …while unemployment is at historic lows
…while unemployment is at historic lows Australia Unemployment Rate vs Pauses in RBA Hiking Cycle Source: Macquarie 9
Slide 10: Australian banks in good shape
Australian banks in good shape Half year profit Half year profit Half year profit Half year profit Full year profit $4.0 billion $4.0 billion $5.2 billion $3.5 billion $5.2 billion up 22.0% up 11.7% up 10.0% flat 0.0% up 10.1% Interim dividend Interim dividend Interim dividend Interim dividend Full
Slide 11: Banks reporting season: key themes
Banks reporting season: key themes Net interest margin Strong strong, but peaking capital position Bad debts Higher remain low dividends 11
Slide 12: Diversified portfolio
Diversified portfolio Materials 15.7% Other Financials 12.8% Banks 12.4% Health Care 10.9% Consumer Staples 8.5% Telcos & I.T. 8.2% Energy 8.0% Industrials 7.5% Consumer Discret. 6.9% Property 2.9% LICs 2.5% Utilities 1.9% Cash 1.8% Figures above are to 30 April 2023. 12
Slide 13: Top 20 holdings
Top 20 holdings Figures above are to 30 April 2023. 13
Slide 14: Recent portfolio movements
Recent portfolio movements Purchases Sales For the financial year to date. 14
Slide 15: Stock in focus: IDP Education
Stock in focus: IDP Education Growth in international or foreign enrolment in tertiary education worldwide (in millions of students) Source: OECD 15
Slide 16: Stock in focus: IDP Education
Stock in focus: IDP Education Indicative graduate average salary per institution / nation (‘000,US$) Source: RedSeer, Credit Suisse 16
Slide 17: Structural drivers generating battery demand
Structural drivers generating battery demand Decarbonisation & Government incentives & electrification regulations 17
Slide 18: Battery demand forecast to surge
Battery demand forecast to surge Battery demand (Gwh) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - 2020 2022 2024 2026 2028 2040 2016 2018 2030 2032 2034 2036 2038 EV Vehicle Demand Energy Storage Other Batteries (Portable devices, tools etc) Source: Barrenjoey 18
Slide 19: Australia dominates global lithium mine supply
Australia dominates global lithium mine supply Lithium production by country Top 10 countries with largest lithium reserves* Other 7% Argentina 6% Australia 40% Chile 22% China 25% Source: Barrenjoey * Million metric tons. 19 Source: United States Geological Survey, Minespans, McKinsey & Company
Slide 20: Australian lithium projects hit boom time!
Australian lithium projects hit boom time! 20 Source: Goldman Sachs
Slide 21: Argo's exposure to lithium
Argo’s exposure to lithium 21
Slide 22: Looking ahead
Looking ahead 22
Slide 23: Outlook: various possible scenarios
Outlook: various possible scenarios Potential Paths of ASX 300 Total Returns After Pause in RBA Hiking Cycle Source: Macquarie. Data is based on past cycles and is not a forecast. 23
Slide 24: Outlook: PE forecasts
Outlook: PE forecasts 12 month Price to Earnings ratio 35 12mf Price-to-Earnings (x) 30 25 23.0x 20 15 13.1x 10 10.1x 5 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 ASX 200 Resources Ind x Fin Financials Source: Morgan Stanley 24
Slide 25: Overview ALI
Overview ASX code Manager Portfolio Manager Argo Cohen & ALI Investments Steers Dividend yield Consecutive fully Market franked dividends capitalisation 3.8% 10 $400m 5.4% grossed up 25
Slide 26: Key considerations for investors
Key considerations for investors 26
Slide 27: Infrastructure is essential for economic growth
Infrastructure is essential for economic growth Characteristics of Global Listed Infrastructure • Long-lived real assets • Often regulated or concession-based • High barriers to entry • Inflation-linked pricing Communications Midstream Energy Transportation Utilities Wireless towers, Energy transpor
Slide 28: Differentiated behavior in growth and inflation regimes
Differentiated behavior in growth and inflation regimes Relative real return by category vs. long-term average (1978–2022) 28
Slide 29: Defensive in times of market stress
Defensive in times of market stress Scenario analysis of large drawdowns in global equity markets Global Listed Infrastructure(1) Global Equities(2) Rel Return Start Date End Date (%) (%) (%) Note 1 2/23/2007 3/5/2007 -3.46 -5.90 2.44 February Correction. 2 10/11/2007 1/22/2008 -6.17 -16.65 10.48 4t
Slide 30: Global Listed Infrastructure has historically benefitted from unexpected inflation
Global Listed Infrastructure has historically benefitted from unexpected inflation % Outperformance vs long-term average for every 1% Y/Y inflation surprise May 1991 – March 2023 Bonds Stocks Infrastructure 2.0 0 inflation beta indicates expected return for asset class equal to long-term average 0.9
Slide 31: Why infrastructure now
Why infrastructure now Supportive secular drivers Differentiated performance profile Supported valuations Key sub-sector themes
Slide 32: Global Listed Infrastructure outlook
Global Listed Infrastructure outlook Utilities Midstream Energy Transportation Telecommunications 32
Slide 33: Record dry powder creating a valuation floor
Record dry powder creating a valuation floor 400 Private infrastructure dry powder(1) 347 350 318 289 298 300 250 234 ($Billions) 194 200 169 152 150 108 106 108 100 86 77 66 67 68 71 50 37 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD Over $318B in asset
Slide 34: Cohen & Steers Global Listed Infrastructure Strategy
Cohen & Steers Global Listed Infrastructure Strategy 34
Slide 35: Global Listed Infrastructure top holdings
Global Listed Infrastructure top holdings Portfolio Top ten holdings % NextEra Energy Inc. 6.43 CSX Corporation 3.81 Sempra Energy 3.72 Grupo Aeroportuario De Sur-B 3.56 Transurban Group 3.48 Canadian Pacific Kansas City 3.16 National Grid PLC 3.09 Exelon Corporation 2.84 PPL Corporation 2.71 Union
Slide 36: Key holding: Towers
Key holding: Towers SBA Communications Corporation • SBA is an owner of wireless infrastructure globally. 85% of its cash flows are in the US. The company leases space in its macro cell towers to carriers under L/T contracts. A decade long Overview investment cycle to deploy 5G drives leasing growth
Slide 37: Key holding: Railways
Key holding: Railways Canadian Pacific Kansas City • Transports primarily agricultural and energy commodities alongside growing automotive volumes. • Operates over 20,000 route miles and serves eleven container ports across the pacific and gulf and Overview provides direct access to the growing Mexi
Slide 38: Key holding: Utilities
Key holding: Utilities NextEra Energy Inc. • NextEra generates electricity through wind, solar, and natural gas as well as nuclear power units and provides distribution services. Overview • Provides retail and wholesale electric services to more than 5 million customers. • $90 billion of capital dep
Slide 39: Key holding: Airports
Key holding: Airports Asur • ASUR is a Mexico-based company which holds concessions to operate, maintain and develop nine airports, including Cancún. Overview • The company benefits from attractive traffic growth, opportunities to grow commercial revenues and invest in its regulated business to impr
Slide 40: Infrastructure performance remains strong following significant downside protection
Infrastructure performance remains strong following significant downside protection in 2022 to now Infrastructure performance vs. Global Equities At April 30, 2023 in A$. 40 Infrastructure represented by FTSE Global Core Infra 50/50 NR AUD . Global Equities represented by the MSCI World NR AUD.
Slide 41: Global Listed Infrastructure performance attribution
Global Listed Infrastructure performance attribution Relative to the FTSE Global Core Infrastructure 50/50 Index, 1 Year 41
Slide 42: Global listed infrastructure team
Global listed infrastructure team Portfolio managers Ben Morton Head of Global Listed Infrastructure, Senior Portfolio Manager New York 20/25 Thuy Quynh Dang Tyler Rosenlicht Portfolio Manager Portfolio Manager London New York 12/23 11/14 Research analysts & associates Portfolio specialists Christop
Slide 43: Cohen & Steers' competitive advantages
Cohen & Steers’ competitive advantages 43
Slide 44: Summary
Summary Why Invest in global listed infrastructure Why Cohen & Steers * Massive infrastructure investments are needed * Cohen & Steers is a pioneer and leader in the globally listed real assets space; listed infrastructure . . . . . is core strategy for firm * Historically compelling risk-adjusted r
Slide 45: Portfolio Manager
Portfolio Manager Ben Morton Executive Vice President, Cohen & Steers Benjamin Morton, Executive Vice President, is Head of Global Infrastructure and a senior portfolio manager for Cohen & Steers' infrastructure portfolios. He has 24 years of infrastructure-related investment experience. Prior to jo
Slide 46: Footnotes
Footnotes Slide titled ‘Differentiated behavior in growth and inflation regimes’ At December 31, 2022. Source: Cohen & Steers proprietary analysis, Survey of Professional Forecasters, University of Michigan Survey of Consumers. Returns represent annualized average, categorized according to whether U
Slide 47: Questions & Answers
Questions & Answers 47
Slide 48: Find out more
Find out more argoinvestments.com.au argoinfrastructure.com.au
Slide 49: Appendices
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Slide 50: Shareholder returns $10,000 invested
Shareholder returns $10,000 invested Figures above are since to 30 April 2023. 50
Slide 51: Shareholder returns $10,000 invested
Shareholder returns $10,000 invested Figures above are to 30 April 2023. 51
Slide 52: Cohen & Steers Global Listed Infrastructure performance
Cohen & Steers Global Listed Infrastructure performance Argo Global Listed Infrastructure Limited (Gross) Argo Global Listed Infrastructure Limited (Net) 12% Linked Benchmark (1) 10.26 10% 9.62 8.72 8.11 8% 7.62 7.48 7.00 7.02 7.19 6% 4.83 4.23 4% 3.41 2.38 2.23 2.47 1.81 1.88 1.99 2% 0% YTD 2023 20
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