Heartland Group Holdings Ltd. · NZX:HGH
Heartland — Shareholder Meeting (December 2015)
39 slides from Heartland's shareholder meeting presentation, Dec 11, 2015
Slide 1: Annual Meeting
Annual Meeting 11 December 2015 Annual Meeting 1 November 2013 | Page 1
Slide 2: Agenda
Agenda • Welcome and formalities • Chairman’s address • Managing Director’s address • Shareholder discussion • Voting and conduct of poll • Other business 2015 Annual Meeting | Page 2
Slide 3: Introduction of Directors
Introduction of Directors Heartland New Zealand Limited Heartland Bank Limited • Geoff Ricketts (Chairman) • Geoff Ricketts • Jeff Greenslade • Jeff Greenslade • Graham Kennedy • Graham Kennedy • Chris Mace • Bruce Irvine (Chairman) • Jane Taylor • Nicola Greer • Greg Tomlinson • John Harvey • Richa
Slide 4: Introduction of Senior Management
Introduction of Senior Management • Laura Byrne - Chief Strategy Adviser • Simon Owen - Chief Financial Officer • Chris Flood - Head of Banking • Chris Cowell - Head of Business • Ben Russell - Head of Rural • Richard Lorraway - Chief Risk Officer • Sarah Selwood – Head of Human Resources • Michael
Slide 5: Other Formalities
Other Formalities • Proxies and postal votes received • Meeting procedures • Voting procedures and declaration of poll • Notice of meeting • Minutes of last Annual Meeting 2015 Annual Meeting | Page 5
Slide 6: Chairman’s Address
Chairman’s Address Geoff Ricketts Annual Meeting 1 November 2013 | Page 6 2015 Annual Meeting
Slide 7: Key Milestones for FY15
Key Milestones for FY15 • Credit rating upgrade for Heartland Bank to BBB (outlook stable) • Credit rating of BBB affirmed in October 2015 • Fitch expects Heartland Bank to continue its solid performance • Confirmation received that amalgamation will not affect credit rating • Reserve Bank of New Ze
Slide 8: Strong Financial Results for FY15
Strong Financial Results for FY15 • Net profit after tax of $48.2m (↑ 34%) • Growth in net finance receivables of $255m (↑ 10%) • Net operating income of $144.7m (↑ 18%) Net Profit After Tax ($m) • Cost to income ratio of 47% 48.2 (↓ from 53%) 36.0 • Asset quality sound 23.6 24.4 • Growth in deposit
Slide 9: Shareholder Returns for FY15
Shareholder Returns for FY15 • Total dividend of 7.5c (↑ 25%) • Total shareholder return of 31.8% 1.75 Total Shareholder Return 5 Dividends 1.50 TSR +31.8% 4 Share Price (NZ$) 1.25 CENTS Share Price +23.2% 3 1.00 0.75 2 0.50 1 0.25 0 - Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 2013 2014 2015 Share Price TS
Slide 10: Amalgamation of Heartland New Zealand and Heartland Bank
Amalgamation of Heartland New Zealand and Heartland Bank • Effective 31 December 2015 • Your shares will be held in Heartland Bank Limited • Simplification of Heartland’s group structure • Your investment will not be affected • Heartland Bank Limited will be the first NZ registered bank that is list
Slide 11: Issue of Tier 2 Capital
Issue of Tier 2 Capital • Proposal to issue up to $75 million of Tier 2 Capital • $50 million plus up to $25 million of oversubscriptions • Expected timing April 2016 • Take advantage of the Reserve Bank’s decision to ‘normalise’ Heartland Bank’s regulatory capital ratios • Will create a more effici
Slide 12: Proposed Return of Capital
Proposed Return of Capital Your total value = $12,000 Your total value = $12,000 Your % of total shares = 0.002% Your % of total shares = 0.002% *Assuming $75 million of capital is returned to shareholders and the market price is $1.20 per share 2015 Annual Meeting | Page 12
Slide 13: Heartland Trust
Heartland Trust 2015 Annual Meeting | Page 13
Slide 14: Managing Director’s Address
Managing Director’s Address Jeff Greenslade Annual Meeting 1 November 2013 | Page 14 2015 Annual Meeting
Slide 15: Business Snapshot
Business Snapshot Division FY15 Net Finance Receivables Household 55% Business 28% Rural 17% 2015 Annual Meeting | Page 15
Slide 16: Business Snapshot (continued)
Business Snapshot (continued) Realignment of asset mix towards specialised, market-leading products 30 June 2011 30 June 2015 Total net finance receivables Total net finance receivables = $1.7 billion = $2.9 billion Non-core Non-core property2, property2, $187.1m $27.0m Bank overlap1, $513.0m Bank o
Slide 17: Household Division
Household Division Performance Strategic Priorities Consumer Online distribution in Consumer • Strong performance through intermediated model for motor Continued growth in vehicle finance intermediated motor vehicle finance • Growth in personal lending through Harmoney and i-finance Expand b
Slide 18: Business Division
Business Division Performance Strategic Priorities Strong growth achieved Reposition lending to smaller • Growth in net finance receivables value business loans of 18% • Intermediated strategy Compete on ease and simplicity (positioning at point of sale) • Product and service excellence Onli
Slide 19: Rural Division
Rural Division Performance Strategic Priorities Strong growth achieved Development of innovative • Growth in net finance receivables products to service niche markets of 19% within agri-sector • Delivery of specialist products Deepen understanding of micro and macro-economic factors in Dairy
Slide 20: Strategic Priorities across Heartland
Strategic Priorities across Heartland Align resources, distribution and marketing capabilities to exploit technologies that are disrupting the traditional banking market Continue to differentiate ourselves from the major banks and use our small size and agility to our advantage Increase scale
Slide 21: Acquisition Opportunities
Acquisition Opportunities • Acquisitions remain a part of Heartland’s growth strategy, particularly in the Consumer market • Financial criteria • Distribution capability or innovative technology • Potential acquisition of Motor Trade Finance (MTF) • Would increase market share of market vehicle fina
Slide 22: Looking forward to FY16
Looking forward to FY16 • Expect underlying asset growth to continue across Heartland’s three core business divisions; Household, Business and Rural • Amalgamation of Heartland New Zealand and Heartland Bank on 31 December 2015 • Proposed issue of Tier 2 capital in April 2016 • Proposed return of ca
Slide 23: Shareholder Discussion
Shareholder Discussion Annual Meeting 1 November 2013 | Page 23 2015 Annual Meeting
Slide 24: Voting
Voting Annual Meeting 1 November 2013 | Page 24 2015 Annual Meeting
Slide 25: Resolution 1: Auditor’s Remuneration
Resolution 1: Auditor’s Remuneration To record the automatic reappointment of KPMG as Heartland’s auditor and, if agreed, pass the following resolution as an ordinary resolution: That the directors of Heartland New Zealand Limited are authorised to fix the auditor’s remuneration. 2015 Annual Meeting
Slide 26: Resolutions 2 to 9: Election of Directors
Resolutions 2 to 9: Election of Directors To re-elect the following persons as directors of Heartland: • Geoffrey Ricketts • Jeffrey Greenslade • Graham Kennedy • Christopher Mace • Gregory Tomlinson To elect the following additional persons as directors of Heartland: • Bruce Irvine • Nicola Greer •
Slide 27: Resolution 2: Re-election of Geoff Ricketts
Resolution 2: Re-election of Geoff Ricketts To consider and, if agreed, pass the following resolution as an ordinary resolution: That Geoffrey Ricketts be re-elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 27
Slide 28: Resolution 3: Re-election of Jeff Greenslade
Resolution 3: Re-election of Jeff Greenslade To consider and, if agreed, pass the following resolution as an ordinary resolution: That Jeffrey Greenslade be re-elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 28
Slide 29: Resolution 4: Re-election of Graham Kennedy
Resolution 4: Re-election of Graham Kennedy To consider and, if agreed, pass the following resolution as an ordinary resolution: That Graham Kennedy be re-elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 29
Slide 30: Resolution 5: Re-election of Chris Mace
Resolution 5: Re-election of Chris Mace To consider and, if agreed, pass the following resolution as an ordinary resolution: That Christopher Mace be re-elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 30
Slide 31: Resolution 6: Re-election of Greg Tomlinson
Resolution 6: Re-election of Greg Tomlinson To consider and, if agreed, pass the following resolution as an ordinary resolution: That Gregory Tomlinson be re-elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 31
Slide 32: Resolution 7: Election of Bruce Irvine
Resolution 7: Election of Bruce Irvine To consider and, if agreed, pass the following resolution as an ordinary resolution: That Bruce Irvine be elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 32
Slide 33: Resolution 8: Election of Nicola Greer
Resolution 8: Election of Nicola Greer To consider and, if agreed, pass the following resolution as an ordinary resolution: That Nicola Greer be elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 33
Slide 34: Resolution 9: Election of Edward (John) Harvey
Resolution 9: Election of Edward (John) Harvey To consider and, if agreed, pass the following resolution as an ordinary resolution: That Edward (John) Harvey be elected as a director of Heartland New Zealand Limited effective 31 December 2015. 2015 Annual Meeting | Page 34
Slide 35: Resolution 10: Return of Capital
Resolution 10: Return of Capital To consider and, if agreed, pass the following resolution as a special resolution: That the arrangement relating to the return of capital to shareholders, as described in the Arrangement Plan included in the Notice of Meeting, be approved. 2015 Annual Meeting | Page
Slide 36: Resolution 11: Revocation of Existing Constitution and Adoption of New Constitution
Resolution 11: Revocation of Existing Constitution and Adoption of New Constitution To consider and, if agreed, pass the following resolution as a special resolution: That, effective 31 December 2015, the existing constitution of Heartland be revoked and a new constitution, in the form presented at
Slide 37: Conduct of Poll
Conduct of Poll Voting Cards are now being collected. Please place your Voting Card in the ballot boxes as they are passed around. If you require assistance, please raise your hand. 2015 Annual Meeting | Page 37
Slide 38: General Business
General Business To consider any other matters that may be properly brought before the meeting. Following the formal part of the meeting, you are invited to join the Directors and Senior Management team for refreshments. 2015 Annual Meeting | Page 38
Slide 39: Annual Meeting
Annual Meeting 11 December 2015 Annual Meeting 1 November 2013 | Page 39
Heartland Group Holdings — Shareholder Meeting (December 2015) on 6ix