Ma Financial Group Limited · ASX:MAF
Ma Financial — FY2022 Earnings Presentation
59 slides from Ma Financial's earnings presentation, Feb 23, 2023
Slide 1: FY22 Results Presentation
FY22 Results Presentation February 2023 38.3c $302m Record Underlying EPS Record Underlying (+29%) Revenue (+41%) 20cps $8b Increased Full Year AUM reached in dividend (+18%) February 2023
Slide 2: Acknowledgement of Traditional Owners
We respectfully acknowledge the Traditional Owners of lands across Australia and pay our respects to their Elders, past, present and emerging. Our head office is located on Gadigal land.
Slide 3: Contents
CONTENTS SECTION HEADING PAGE NO. 01 FY22 Results & Highlights 6 02 Post Balance Date Activity & FY23 Outlook 12 03 Asset Management 15 04 Lending & Technology 22 05 Corporate Advisory & Equities 30 06 FY22 Financials 34 07 Strategic Outlook 38 08 Appendices 41 3
Slide 4: Explanation of Underlying measures in this presentation
Explanation of Underlying measures in this presentation MA Financial Group Limited (MA Financial or the Company) (ACN 142 008 428) Differences in classification arise because the Group chooses to classify some IFRS and its subsidiaries (Group) utilise non-IFRS Underlying financial information in its
Slide 5: MA Financial Group at a glance
MA Financial Group at a glance Thirteen years of progress with a focus on delivering results and investing in growth A financial services firm specialising in the management of alternative assets, with global 1 strength in corporate advisory having partnered with Moelis & Company since 2009 $7.8b $3
Slide 6: FY22 Results & Highlights
O1 FY22 Results & Highlights MA Financial Group
Slide 7: FY22 Result Highlights
FY22 Result Highlights Diversified business model delivering strong growth through market cycles Underlying revenue Underlying EPS Dividend $302m 38.3cps 20.0cps ⬆ 41% on FY21 ⬆ 29% on FY21 ⬆ 18% on FY21 Assets Under Mgt Gross fund inflows Residential & Specialty Finsure managed loans Corporate Advi
Slide 8: FY22 Results
FY22 Results UNDERLYING RESULTS1 FY22 FY21 GROWTH STATUTORY RESULTS1 FY22 FY21 GROWTH Revenue $301.8m $214.8m 41% Revenue2 $332.9m $228.7m 46% EBITDA $106.7m $70.9m 51% EBITDA3 $118.9m $72.2m 65% Net profit after tax $61.4m $42.6m 44% Net profit after tax $44.9m $32.0m 40% Earnings per share 38.3¢ 2
Slide 9: Financial performance
Financial performance Diversified platform delivers a record result and EPS growth over an extended timeframe UNDER LYING R EVENUE ($ M ) UNDER L YING EBITDA ($ M ) 350 120 1H 2H 1H 2H 300 100 250 80 57 156 200 60 150 120 41 40 35 37 33 100 90 87 78 20 50 146 25 30 50 95 20 24 54 65 71 0 - FY18 FY19
Slide 10: Business unit highlights
Business unit highlights Strong result driven by 78% EBITDA growth in Asset Management EBITDA CONTR IBUTION BY BUS INES S DIVIS ION ASSET MANAGEMENT EBITDA contribution1 78% (EX. COR POR ATE) 1 • Gross inflows of $1.5b, driven by strong flows into credit funds $m 140 133.0 • Recurring revenue up 36%
Slide 11: FY22 strategic outcomes
FY22 strategic outcomes Delivering on key priorities despite challenging market conditions Asset Management recurring revenue run rate was $138m p.a. at end FY22, up 22% from $113m in FY21 Grow recurring revenue base Finsure generated $19m of recurring fee-based revenue since acquisition with a FY22
Slide 12: Post Balance Date Activity & FY23 Outlook
02 Post Balance Date Activity & FY23 Outlook
Slide 13: Key business activity since December 2022
Key business activity since 31 December 2022 Record inflows into Asset Management funds in first 6 weeks of the year ASSET MANAGEMENT • Positive momentum in AUM and client fund flows continues − $252m of gross fund inflows received over the first 6 weeks of 1H23. ($111m gross inflows in the first 6
Slide 14: FY23 outlook commentary
FY23 outlook commentary Positive business momentum continuing with increasing contribution from recurring revenue lines ASSET MANAGEMENT • Strong embedded and anticipated growth in recurring revenues arising from AUM momentum • Expected continued growth in fund inflows • Performance fees expected to
Slide 15: Asset Management
O 3 Asset Management MA Financial Group
Slide 16: Focus on being an active manager of alternative asset classes
MA Financial's focus is to be an active manager of alternative asset classes Active management involves more operational expertise and infrastructure than financial management of tradeable securities. The management of longer duration alternative assets presents a strong economic proposition for our
Slide 17: Asset Management Performance
Asset Management Performance UNDERLYING FINANCIALS ($M) FY22 FY21 GROWTH Includes PIF income of $13.1m (FY21 $6.4m) and Base management fees 92.4 72.0 28% Real Estate Credit (REC) loan arranger fees of $12.6m (FY21 $7.8m) Credit Funds income 25.7 14.2 81% Principal investments income 7.6 6.2 23% Tot
Slide 18: Assets Under Management
Assets Under Management AUM at $7.8 billion with a focus on alternative asset classes $7.8b 0.3 $6.9b 0.7 0.3 +20% CAGR 0.9 $5.4b 2.5 $4.9b 1.6 $3.7b 1.5 1.8 2.6 2.5 FY18 FY19 FY20 FY21 FY22 Real Estate Hotels Credit Equities PE/VC 18
Slide 19: FY22 Fund Flows
FY22 Fund Flows Strong growth in fund flows with Non-Migration related flows up 70% on FY21 FLOWS BY ASSET CLASS1 ($M) FY22 FY21 Gross Net Gross Net Strong flows into Credit products from domestic, international and institutional clients - 94% growth Credit 1,077 877 554 431 Hospitality 163 119 74 6
Slide 20: Asset Management client base
Asset Management client base Domestic and International Non-Migration clients increasing as a proportion of total AUM FY2 2 AUM BY INVES TOR CHANNEL FY2 1 AUM BY INVES TOR CHANNEL $1.3b $1.3b $2.1b $2.7b $7.8b $6.9b $1.1b $0.7b $2.7b $2.9b Institutional International HNW (Non-Migration) Institutiona
Slide 21: Differentiators
Credit Investing + Lending & Technology = Powerful driver of growth Sourcing credit assets directly through our proprietary relationships and in-house platforms is a significant strategic advantage. Over 75% of our $2.5bn in credit investment funds have been directly originated in our proprietary ch
Slide 22: Lending & Technology
O A Lending & Technology MA Financial Group
Slide 23: Strategic ambition in Lending & Technology
Strategic ambition in Lending & Technology Continued significant investment during FY22 in building a tech-enabled and highly scalable lending ecosystem Strategy Creation of a tech-enabled highly scalable lending ecosystem that generates fee-based income, spread income and primary investment product
Slide 24: Case study: Residential Lending Marketplace
Case study: Residential Lending Marketplace We are building an ecosystem focused on the $2 trillion mortgage market. This is enabled by the unique combination of our Asset Management business and complementary Lending & Technology Platforms Revenue Generation Fund management fees Asset Management Tr
Slide 25: Lending & Technology Divisional Performance
Lending & Technology Divisional Performance Emerging Division with acquisition of MA Money and Finsure complementing existing Specialist Finance platform UNDERLYING FINANCIALS ($M) FY22 FY21 Growth Represents Finsure acquisition from February Financial Technology 30.1 - - 2022 Lending Platforms 11.0
Slide 26: Financial Technology Performance
Financial Technology Performance Includes acquisition of Finsure in February 2022 and emerging Middle technology platform UNDERLYING FINANCIALS1 FY22 FY21 Growth Fees & commissions Increase of 40% on prior comparable period reflecting shift of brokers to recurring fee model Subscription fees and tra
Slide 27: Finsure Platform Growth
Finsure Platform Growth Finsure continues to grow its market position with a differentiated proposition for brokers focused on value-add service innovation and technology BR OKER S ON PL ATFOR M FINS UR E’S BR OKER MARKET S HARE 1 M ANAGED L OANS 14.2% $91bn 2,640 +24% +37% 2,127 11.6% $67bn 1,088 $
Slide 28: Lending Platforms Performance
Lending Platforms Performance Includes Specialty Finance and MA Money with material repositioning occurring in 2022 and 2023 UNDERLYING FINANCIALS ($M) FY22 FY21 Growth Reduction of income as balance sheet credit asset recycled Spread income through a MA managed fund – creating Credit investment pro
Slide 29: Loan Book Growth and Invested Capital
Loan Book Growth and Invested Capital Manufacturing loan assets facilitates growth in managed funds whilst concurrently facilitating loan book growth in a capital light manner LOAN BOOK GR OWTH (A$ M AT YEAR END) INVES TED CAPITAL 1 (A$ M AT YEAR END) 400 $393m 100 MA Money MA Money Specialty Financ
Slide 30: Corporate Advisory & Equities
05 Corporate Advisory & Equities
Slide 31: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance UNDERLYING FINANCIALS FY22 FY21 GROWTH Corporate Advisory fees $m 56.9 61.3 (7%) Equities commissions $m 4.6 7.4 (38%) Total Underlying revenue $m 61.5 68.7 (10%) Expenses $m 47.6 46.7 2% Underlying EBITDA $m 13.9 22.0 (37%) Advisory headcount avg. FTEs 58 5
Slide 32: Positive year despite challenging market conditions
Positive year despite challenging market conditions Advised on $13.9 billion of transactions, up from $5.8 billion in FY21. Diversity of transactions highlights increasing breadth of capability across industry segments. 2022 2022 2022 2022 2022 2022 A$9.8bn A$1.4bn Acquisition of Acquisition of A$20
Slide 33: Corporate Advisory – consistency across the cycle
Corporate Advisory – consistency across the cycle Corporate Advisory has a consistent overall revenue productivity performance • Our target productivity range of $1.1m - $1.3m per executive is supported by over a decade of operations • FY22 revenue per executive of $1.0m slightly under target range
Slide 34: FY22 Financials
O 6 FY22 Financials MA Financial Group
Slide 35: Group Underlying Profit and Loss
Group Underlying Profit and Loss SUMMARY UNDERLYING PROFIT OR LOSS STATEMENT ($M) FY22 FY21 GROWTH Underlying Revenue Asset Management1 197.8 132.2 50% Lending & Technology 41.1 13.5 204% Corporate Advisory & Equities 61.5 68.7 (10%) Corporate 1.4 0.4 N.A. Total Underlying Revenue 301.8 214.8 41% Ex
Slide 36: Group Operating Balance Sheet
Group Operating Balance Sheet1 OPERATING BALANCE SHEET ($M) 31 DEC 2022 31 DEC 2021 Cash and cash equivalents 98.8 237.2 Loans receivable 9.0 50.5 Refer to following slide for detail Investments 210.5 171.3 Net trail book asset 35.9 - Goodwill and other intangibles 185.0 27.9 Increase due to acquisi
Slide 37: Group Investments
Group Investments Ability to recycle capital and maintain a dynamic investment portfolio underpins balance sheet strength SUMMARY OF INVESTMENTS ($M) 31 DEC 2022 31 DEC 2021 Cash 98.8 237.2 Lending (MA Money & Specialty Invested Capital) 8.2 43.1 Co-investments 72.9 43.7 Priority Income Funds (PIF)
Slide 38: Strategic Outlook
O / Strategic Outlook MA Financial Group
Slide 39: Leveraging deep expertise to scale business verticals
Leveraging deep expertise to scale business verticals Our strategy is to develop deep financial and operational expertise in the businesses we choose to scale The value of time and investment in capability delivers strong investment performance and AUM growth over time COM POUND ANNUAL GR OWTH IN KE
Slide 40: Well positioned for medium term growth
Well positioned for medium term growth Focus on building sustainable earnings growth 01. 02. 03. Builder of valuable businesses in Scalable business powered by Diversified capital sources and large addressable markets unique distribution client investor base 04. 05. 06. Strong balance sheet to suppo
Slide 41: Appendices
O 8 Appendices MA Financial Group
Slide 42: Appendix Financials
Appendix Financials MA Financial Group
Slide 43: FY22 Financials - Statutory to Underlying Profit Reconciliation
FY22 Financials - Statutory to Underlying Profit Reconciliation NOTE REVENUE1 EBITDA NPAT CI1 FY22 Statutory Results ($m) 332.9 118.9 44.9 45.8 Differences in measurement Business acquisition adjustments (a) - 3.7 9.8 9.8 Net losses on investment (c) (0.2) (0.2) (0.2) 2.6 Adjustments relating to ass
Slide 44: FY21 Financials – Statutory to Underlying Profit Reconciliation
FY21 Financials – Statutory to Underlying Profit Reconciliation NOTE REVENUE1 EBITDA NPAT CI1 FY21 Statutory Results ($m) 228.7 72.2 32.0 48.1 Differences in measurement Business acquisition adjustments (a) - 8.0 12.1 12.1 Equity issued to staff (b) - (2.0) (2.0) (2.0) Net gains on investments (c) 2
Slide 45: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement Differences in Classification a) The acquisition of Armada Funds Management in 2017, RetPro in 2021 and Finsure on 7 g) The Underlying treatment records the net distributions received from the Lending Trusts in Februar
Slide 46: FY22 Balance Sheet – Operating to Statutory Reconciliation
FY22 Balance Sheet – Operating to Statutory Reconciliation 31 DEC 2022 31 DEC 2022 31 DEC 2022 31 DEC 2022 SUMMARY CONSOLIDATED BALANCE SHEET ($M) OPERATING LENDING TRUSTS1 RECLASSIFICATIONS STATUTORY Cash and cash equivalents 98.8 45.8 - 144.6 Loans receivable 9.0 846.5 - 855.5 Investments 210.6 (3
Slide 47: FY21 Balance Sheet – Operating to Statutory Reconciliation
FY21 Balance Sheet – Operating to Statutory Reconciliation 31 DEC 2021 31 DEC 2021 31 DEC 2021 SUMMARY CONSOLIDATED BALANCE SHEET ($M) OPERATING LENDING TRUSTS1 STATUTORY Cash and cash equivalents 237.2 5.7 242.9 Loans receivable 50.5 291.9 342.4 Investments 171.3 18.9 190.2 Goodwill and other intan
Slide 48: Notes to Operating Balance Sheet Reconciliation
Notes to Operating Balance Sheet Reconciliation Lending Trust Adjustments Reclassifications • The Group utilises non-recourse funding vehicles (Lending Trusts) typically in • The reclassification adjustments seek to present the balance sheet on a net the form of securitisation trusts and bank wareho
Slide 49: Group Underlying Profit & Loss – Divisional Summary
Group Underlying Profit & Loss – Divisional Summary New View Old View UNDERLYING PROFIT & LOSS FY22 FY21 FY22 FY21 Revenue (A$m) Asset Management 197.8 132.2 184.7 125.8 Lending & Technology 41.1 13.5 54.2 19.9 Corporate Advisory and Equities 61.5 68.7 61.5 68.7 Corporate 1.4 0.4 1.4 0.4 Total Reven
Slide 50: Borrowings - Operating
Borrowings - Operating BORROWINGS ($M) MATURITY DATE COUPON 31 DEC 2022 31 DEC 2021 MA Bond II Unsecured note 14 Sep 2022 5.75% - 25.0 MA Bond IV Unsecured note 30 Sep 2024 5.85% 40.0 40.0 MA Bond VI Unsecured note 14 Aug 2027 5.75% 25.0 - MACI Bond Unsecured note – limited recourse 16 May 2024 4.35
Slide 51: Shares on issue
Shares on issue SUMMARY OF SHARES ON ISSUE 31 DEC 2022 31 DEC 2021 Total shares on issue 175,073,933 169,591,372 Less: Treasury shares 15,346,005 13,066,811 Net shares on issue 159,727,928 156,524,561 Weighted average number of shares on issue 174,769,686 155,279,033 Less: Weighted average number of
Slide 52: Financial performance - Unrealised View
Financial performance - Unrealised View UNDER LYING R EVENUE ($ M ) UNDER L YING EBITDA ($ M ) 350 120 1H 2H 1H 2H 300 100 250 80 52 150 200 60 50 150 130 40 38 37 39 100 90 93 58 80 155 20 38 50 103 22 27 22 56 68 67 0 - FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 UNDER LYING EAR NINGS PER S
Slide 53: Appendix Assets Under Management
Appendix Assets Under Management
Slide 54: Real Estate AUM
Real Estate AUM Real Estate AUM of $2.5 billion with acquisitions and flows offsetting realisations and capital returns in FY22 $2.6b $2.5b $0.7b acquisition of $2.2b $2.2b 0.7 Marion shopping centre 0.8 $0.8b acquisition of Armada Funds Management $1.5b $1.4b 1.9 1.7 $0.5b FY16 FY17 FY18 FY19 FY20
Slide 55: Hospitality AUM
Hospitality AUM AUM benefited from Redcape NAV increases in FY22, highlighting strong performance in high-quality real estate backed portfolios $1.8b $1.6b 0.3 Acquisition of Redcape 0.3 Hotel Group ($677m) $1.3b in July 2017 $1.2b $1.2b $0.9b 1.5 1.3 $0.1b 1 FY16 FY17 FY18 FY19 FY20 FY21 FY22 RDC S
Slide 56: Credit AUM
Credit AUM Credit AUM continues to grow strongly driven by growth in Real Estate Credit funds and Asset Backed Lending (including Priority Income Funds) $2.5b 1.1 $1.6b 0.7 $1.1b $0.9b 0.9 $0.6b 0.4 $0.3b $0.4b 0.5 0.5 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Bonds & Cash Diversified Credit Real Estate Cr
Slide 57: Listed Equities AUM
Listed Equities AUM Equities AUM impacted by market performance cycle $0.9b 0.1 0.1 $0.7b 0.1 $0.5b 0.1 $0.3b 0.6 $0.2b 0.5 $0.1b $0.1b FY16 FY17 FY18 FY19 FY20 FY21 FY22 Small Caps Fund Other Equities Funds Equity Opportunities Fund 57
Slide 58: PE/VC AUM
PE/VC AUM PE/VC successfully divested investments and returned capital to investors in FY22 $331m $315m $285m $250m $235m $180m $65m FY16 FY17 FY18 FY19 FY20 FY21 FY22 58
Slide 59: Disclaimer
Disclaimer The material in this presentation has been prepared by MA Financial Group Limited ACN 68 This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any 142 008 428 (MA Financial) and is general background information about MA Financial Group securities i