Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — H1 FY2018 Earnings Presentation
20 slides from Magellan Financial's earnings presentation, Feb 6, 2018
Slide 1: Interim Results for the half year ended 31 December 2017
Magellan Financial Group Limited For personal use only Interim Results For the half year ended 31 December 2017 Hamish Douglass | CEO & Chief Investment Officer
Slide 2: Magellan Financial Group Interim Results
Magellan Financial Group Interim Results $ million 31 Dec 2017 31 Dec 2016 % change For personal use only Management and services fees 178.9 146.1 22% Performance fees 9.6 3.6 167% Other revenue 7.3 3.8 90% Revenue 195.8 153.5 28% 1 Expenses before MGG net offer costs (53.0) (40.4) 31% Profit before
Slide 3: Interim Highlights
Interim Highlights For personal use only • Strong growth in funds under management and management and services fees: – Average funds under management up 25% to $53.6 billion1 – Management and services fee revenue up 22% to $178.9 million1 – Profit before tax and performance fees of the Funds Managem
Slide 4: Strategic Acquisitions
Strategic Acquisitions Expect these transactions to be modestly EPS accretive and provide an attractive return on capital For personal use only Acquisition of Frontier Partners • Important step to strengthen our distribution efforts in North America • Bill Forsyth, Frontier’s founder and principal,
Slide 5: Tax and Dividends
Tax and Dividends For personal use only • Underlying effective tax rate for the 6 months to 31 December 2017 is 23.5% (23.0% for 6 months to 31 December 2016) (Offshore Banking Unit) – Excludes the impact of deductible MGG offer costs • Dividends: – Interim dividend up 16% to 44.5 cents per share (f
Slide 6: Funds Management Business
Funds Management Business $ million 31 Dec 2017 31 Dec 2016 % change Revenue For personal use only Management fees 176.6 141.8 25% Performance fees 9.6 3.6 167% Services fees 2.4 4.3 (45%) Interest/other income 0.5 0.5 13% 189.0 150.2 26% Expenses Employee expense 25.4 23.5 8% Marketing expense 6.7
Slide 7: Employee Summary
Employee Summary For personal use only Staff 31 Dec 2017 30 June 2017 Investment team Portfolio Managers/Analysts 29 33 Traders 3 3 32 36 Governance & Advisory 6 5 Distribution 34 35 Risk, Compliance, Legal & Company Secretarial 8 8 Business Support & Control 17 17 Administration 7 7 Total 104 108 •
Slide 8: Funds Under Management Summary
Funds Under Management Summary 31 Dec 2017 30 June 2017 31 Dec 2016 $ million For personal use only Retail 18,026 15,159 13,650 Institutional - Australia/NZ 5,054 4,939 4,617 - North America 12,560 10,919 10,117 - UK 18,312 16,231 15,024 - Rest of World 3,918 3,349 3,107 39,844 35,438 32,865 Total F
Slide 9: Well-balanced Business
Well-balanced Business For personal use only Funds Under Management1 Base Fees2 31% 42% 58% 69% Retail FUM Institutional FUM Retail Fees Institutional Fees 1. FUM split is as at 31 December 2017. 2. Base Fees are Management and Services fees for the six months to 31 December 2017 and exclude Perform
Slide 10: Institutional Client Diversity
Institutional Client Diversity For personal use only Cumulative Total Management and Services Fees1 Top Institutional Clients 5 10 20 30 % 17 23 29 33 1. Management and Services fees for the six months to 31 December 2017 for separately managed accounts and institutional investors in local and offsh
Slide 11: Retail Business – Three Channels to Market
Retail Business – Three Channels to Market For personal use only Independent • Relationships with over 500 independent advice firms1 financial advisers / • >40 stockbroking firms across Australia are using our Active ETFs broker advised • Strong relationships and representation with 4 of the top 5 m
Slide 12: Update on brand awareness program
Update on brand awareness program For personal use only • Cricket Australia domestic test series sponsorship provides a highly scalable platform with very appealing demographics • Supported with television advertising campaign to grow awareness in global equities and our brand • Pleased with engagem
Slide 13: Retail Business: Funds Under Management and Net Inflows
Retail Business Funds Under Management and Net Inflows For personal use only • Retail FUM of $18.0 billion at 31 December 2017 (30 June 2017: $15.2 billion) • Net Retail Inflows for 6 months to 31 December 2017: $1.9 billion (6 months to 31 December 2016 was $1.2 billion) – Includes the MGG $1.57 bi
Slide 14: Institutional Business
Institutional Business For personal use only • Institutional FUM of $39.8 billion at 31 December 2017 (30 June 2017: $35.4 billion) – Global equities $32.2 billion – Global listed infrastructure $7.6 billion • More than 120 institutional clients1 at 31 December 2017 • Total net institutional inflows
Slide 15: Institutional Business (cont.)
Institutional Business (cont.) For personal use only FUM ($ billion) 31 Dec 2017 30 June 2017 % change Australia/NZ 5.1 4.9 2% North America 12.6 10.9 15% UK 18.3 16.2 13% Rest of World 3.9 3.4 17% Total 39.8 35.4 12% Magellan| 15
Slide 16: Investment Performance
Investment Performance For the periods to 31 December 2017 For personal use only Since 1 Year 3 Years 5 Years Inception (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund ($A) 14.2 10.9 18.4 11.3 MSCI World NTR Index ($A) 13.3 10.9 18.1 5.6 MSCI World Minimum Volatility NTR Index (A$) 8.6 11.5 18.
Slide 17: Principal Investments
Principal Investments For personal use only • Principal Investments include investments in Magellan Funds, listed shares, a small number of unlisted investments and surplus cash after allowing for the Group’s working capital requirements Investment ($ million) 31 December 2017 30 June 2017 Cash 0.3
Slide 18: Principal Investments (cont.)
Principal Investments (cont.) For personal use only • Board has set a pre-tax hurdle 10% p.a. (over business cycle) for the Principal Investments • Investment in MGG highlights philosophy on capital management: – Flexibility to deploy capital which now earns an estimated post tax return of 21% per a
Slide 19: Important Information
Important Information This presentation has been prepared by Magellan Financial Group Limited (‘MFG’). For personal use only While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accur
Slide 20: For personal use only
For personal use only www.magellangroup.com.au Phone: +61 2 9235 4888
Magellan Financial Group — H1 FY2018 Earnings Presentation on 6ix