Macquarie Group, Ltd. · ASX:MQG
Macquarie — H1 FY2009 Earnings Presentation
104 slides from Macquarie's earnings presentation, Nov 18, 2008
Slide 1: Result Announcement for the half year ended 30 September 2008
For personal use only Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 Presentation to Investors and Analysts 18 November 2008 Nicholas Moore, Managing Director and Chief Executive Officer Greg Ward, Chief Financial Officer
Slide 2: Disclaimer
For personal use only Disclaimer This material has been prepared for professional investors. The firm preparing this report has not taken into account any customer’s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations herein are
Slide 3: Agenda
Agenda For personal use only 1. Overview and outlook – Nicholas Moore 2. Result analysis and financial management – Greg Ward Appendices – Additional information: A. Funding B. Capital C. Operating group results D. Specialist funds E. Glossary Unless otherwise specified all information is for the ha
Slide 4: 1. Overview and Outlook
For personal use only 1. OVERVIEW AND OUTLOOK Nicholas Moore – Chief Executive Officer Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 5: About Macquarie
About Macquarie For personal use only Global provider of banking, financial, advisory, investment and funds management services Main business focus is providing products and services to clients Listed on Australian Securities Exchange (ASX:MQG) Regulated by APRA, Australian banking regulator
Slide 6: Sound result in unprecedented global markets
Sound result in unprecedented global markets Profit of $A604m For personal use only Sound profit of $A604m Profit achieved after substantial write-downs (refer slide 12): — Write-downs stem from sharply deteriorating markets and in part, long-term investor alignment — Underlying assets are gener
Slide 7: Sound result in unprecedented global markets
Sound result in unprecedented global markets For personal use only Interim dividend of $A1.45 per share (80% franked), in line with pcp ROE of 13.9% p.a. Employment expenses down 48% driven by significantly lower profit share reflecting shareholder alignment (refer slide 49) — Compensation rat
Slide 8: Financial Performance
Financial Performance Half year ended 30 September 2008 For personal use only $Am Operating income of $2,970m $Am Profit of $A604m 10,000 16% decrease on 2H08; 37% decrease on pcp 1H 2,000 19% decrease on 2H08; 43% decrease on pcp 8,000 2H 1,600 6,000 1,200 4,000 800 2,000 400 0 0 2005 2006 2007 200
Slide 9: Assets under management of $A239 billion
Assets under management of $A239 billion Up 3% since March 2008 For personal use only Recent movement in $A exchange rate had a positive effect while impact of declining equity values was negative New equity raisings affected by financial market disruption, particularly during September quarter.
Slide 10: Unprecedented global market turmoil
Unprecedented global market turmoil For personal use only Extraordinary financial markets during the period: — Crisis of confidence has continued and sharply intensified since mid-September — Systemic falls in global liquidity led to stress and failure of major financial institutions — Significant
Slide 11: Sound profit despite one-off costs and provisions
Sound profit despite one-off costs and provisions For personal use only Conservative policy. Where provisions taken on listed funds, have been written down to market value at 30 September 2008 Gross one-off costs and provisions $A1,143m (NPAT impact $A395m, refer slide 12) partly mitigated by pr
Slide 12: One-off costs and provisions of $A1,143m
Extreme market conditions resulted in one-off costs and provisions of $A1,143m For personal use only $Am One-off costs relating to Mortgages Italy exit Loss on loan portfolio and write off of capitalised acquisition costs 197 Closure / redundancies costs (included in operating expenses) 13 Loan impa
Slide 13: Asset impairment methodology
Asset impairment methodology For personal use only Impairment consideration required by Accounting Standards at each reporting date when triggered by significant changes in market, economic or legal environment Asset Impairment Methodology Co-investment in Listed investments: Significant or prol
Slide 14: Infrastructure asset values demonstrating resilience
Infrastructure asset values demonstrating resilience For personal use only Date Asset Proportionate EV Transaction Metrics Oct 08 Brisbane Airport (12.4% interest) $A490m 18.9x (historic) EV/EBITDA Sep 08 London City Airport (50% interest) £468m 25.5x (historic) EV/EBITDA Sep 08 Chicago Midway Airpo
Slide 15: Assets continue to perform well
Assets continue to perform well For personal use only Macquarie Capital Funds’ ten largest businesses1 have experienced consistent improvement in operating performance Less than 4%2 of the debt of all Macquarie Capital Funds’ managed businesses requires refinancing in the next 12 months with 98%
Slide 16: Unlevered asset yields attractive relative to bonds
Unlevered asset yields attractive relative to bonds and provide increasing cashflows For personal use only EBITDA growth rate Unlevered Asset yield Nominal Bond7 Real Bond7 rates EBITDA growth rate for the 3 months to (EBITDA / Adjusted rates as at 30 as at 30 September for the 12 months to 30 Septe
Slide 17: Resilient operating performance
Resilient operating performance For personal use only Infrastructure has demonstrated resilience to economic and political shocks Passengers, GDP and Airfares Sydney Harbour Bridge and Tunnel Average Daily Traffic 9/11, SARS + 1,200 9/11, SARS + 300,000 Iraq War Iraq War Recession + (2001-03) (2001-
Slide 18: Macquarie model
Macquarie model For personal use only Managing for the long term — Client driven business — Main business focus is providing products and services to clients — Trading businesses focussed on client transactions — Minimal proprietary trading — Alignment of interests with shareholders, investors, st
Slide 19: History of sustained growth through the cycle
History of sustained growth through the cycle For personal use only Profit ($Am) 120 Boston Australia Chemical Ltd acquired 100 Australia Ltd acquired Security 0.8 Pacific First listed property acquired Hill Samuel 80 0.6 UK opens trust branch office Global real estate Enter stockbroking in Sydney c
Slide 20: History of sustained growth through the cycle
History of sustained growth through the cycle For personal use only Profit ($Am) Orion Securities 2,000 CIT Systems Leasing Group restructure 1,800 Giuliani 1,600 Capital Russian debt SARS 1,400 crisis 9/11 Thames Asian financial US recession Water 1,200 crisis Dot com ING 1,000 crash Sydney acquire
Slide 21: Active across the business: wholesale
Active across the business Macquarie model - wholesale For personal use only Treasury & Commodities Mac Cap Funds Macquarie Securities Macquarie Capital Macquarie Capital Macquarie Funds Group Macquarie Capital Macquarie Securities Funds Balance Cash Equities Underwriting Advisory Management Sheet A
Slide 22: Active across the business: retail
Active across the business Macquarie model - retail For personal use only Banking and Financial Services Funds Balance Private Wealth Intermediary Management Sheet Australia’s largest Client numbers Macquarie Cash Total retail deposits full service stock approximately Management Trust up 71
Slide 23: Adapting – growth initiatives: wholesale
Adapting – growth initiatives Wholesale For personal use only Treasury & Commodities Mac Cap Funds Macquarie Securities Macquarie Capital Macquarie Capital Macquarie Funds Group Macquarie Capital Macquarie Securities Funds Balance Cash Equities Underwriting Advisory Management Sheet Reviewing seve
Slide 24: Adapting – growth initiatives: retail
Adapting – growth initiatives Retail For personal use only Banking and Financial Services Funds Balance Private Wealth Intermediary Management Sheet Growth in Asia – Develop Continue to acquire New deposit and HK and Singapore opportunities for agricultural cash products private wealth Wrap
Slide 25: Adapting – balance sheet initiatives
Adapting – balance sheet initiatives For personal use only Exiting or winding back least profitable and competitive businesses impacted by higher funding costs Initiatives already announced: — March 2008: wind-back of Australian mortgages — September 2008: announced intention to sell Investment
Slide 26: Diversified income
Diversified income Operating income by source For personal use only Operating income of $A4,012m (excluding loan Operating income of $A2,970m (including loan provisions and impairment write-downs) provisions and impairment write-downs) 12% 17% 11% 17% 10% 13% 17% 13% 16% 7% 15% 11% 7% 14% 10% 10% Le
Slide 27: Diversified by region
Diversified by region International income1 49% of total Total staff over 13,800; international staff 43% of total For personal use only EUROPE, MIDDLE EAST & ASIA PACIFIC AMERICAS AFRICA3 Income: $A563m Income: $A483m Income: $A210m (22% of total) (19% of total) (8% of total) Beijing Seoul Tianjin
Slide 28: Consistently strong capital base
Consistently strong capital base For personal use only Well capitalised – surplus over minimum regulatory requirements of $A3.3b Raised capital in 2006 and 2007 ahead of market turmoil $Ab 12 CPS MIS $A10.3b MIPS 10 $A9.3b Core equity 8 $A7.2b 6 $A4.8b $A3.7b 4 2 0 2005 2006 2007 2008 1H09 Pre-r
Slide 29: Strong funding and balance sheet position
Strong funding and balance sheet position For personal use only Cash and liquid assets of $A26.3b exceed short-term wholesale issued paper of $A18.9b Well matched balance sheet (refer slide 30) Conservative gearing (refer slides 57-58) Increased deposits from $A13.2b at 31 March 2008 to $A16
Slide 30: Well matched balance sheet September 2008
Well matched balance sheet 30 September 2008 For personal use only Term funding maturing beyond 1 year exceeds term assets. In addition, Macquarie has access to $A1.7b of term credit and warehouse facilities which remain available and undrawn $Ab 80 70 ST wholesale issued paper (25%) Cash and li
Slide 31: Improved term funding profile
Improved term funding profile For personal use only Excluding equity, the weighted average term to maturity increased from 3.5 years at 31 March 2008 to 3.6 years at 30 September 2008 $Ab 14 31 March 2008 12 30 September 2008 10 Term Funding 8 6 4 2 0 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs >5 yrs 31
Slide 32: Outlook – operating groups
Outlook – operating groups Refer to Appendix C for further detail For personal use only Macquarie Capital: — Reasonable pipeline, though challenging markets reducing the number of successful transactions and increasing time to completion (see Appendix C for mandates awarded post 30 Sept 08) — Expe
Slide 33: Outlook – operating groups
Outlook – operating groups Refer to Appendix C for further detail For personal use only Banking and Financial Services: — Expect 2H09 to be up on 1H09 — Expect FY09 result to be down on pcp Macquarie Funds Group: — Expect market conditions for second half to remain volatile — Expect investors to
Slide 34: Outlook
Outlook For personal use only Conditions have continued to deteriorate since our last update (AGM, July 08) and significantly from mid-September We continue to maintain a cautious stance with a conservative approach to funding and capital Unprecedented market conditions make short-term forecas
Slide 35: 2. Result Analysis and Financial Management
For personal use only 2. RESULT ANALYSIS AND FINANCIAL MANAGEMENT Greg Ward – Chief Financial Officer Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 36: Key drivers of half
Key drivers of half For personal use only Unprecedented global market disruption over the course of the half Most operating group results lower than record results achieved in exceptional pcp Reasonable corporate finance and advisory deal flow Record volumes in foreign exchange, good volumes
Slide 37: Income Statement
Income Statement For personal use only Sep 2008 Mar 2008 Sep 2007 Sep 2007 $Am $Am $Am Movement Key drivers Net interest income 520 294 523 (1)% Loan product rates increased to offset funding cost increase Fee & commission income 2,155 2,167 2,478 (13%) Good M&A deal flow; EUM down 5%; brokerage
Slide 38: Net profit contribution by operating group
Net profit contribution by operating group For personal use only Sep 2008 Mar 2008 Sep 2007 Sep 2007 $Am $Am $Am Movement Macquarie Capital 896 819 1,559 (43%) Macquarie Securities 443 512 705 (37%) Treasury & Commodities 317 342 282 12% Banking & Financial Services1 109 103 153 (29%) (excluding Mor
Slide 39: Macquarie Capital
Macquarie Capital Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 Significant contribution despite extremely challenging $Am $Am $Am market conditions. Well down on record pcp Net interest income / (expense)1 (120) (111) (77) Funds management income:
Slide 40: Macquarie Securities Group
Macquarie Securities Group Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 Result down in weaker equity markets $Am $Am $Am Brokerage, commission and other fee income – Net interest income / (expense)1 52 (214) 24 slightly down on strong pcp: Broker
Slide 41: Treasury and Commodities Group
Treasury and Commodities Group Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 Good contribution with commodity and foreign $Am $Am $Am exchange markets volatility key driver of result Net interest income / (expense)1 (26) (80) (4) Commodities tradi
Slide 42: Banking and Financial Services Group
Banking and Financial Services Group Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 $Am $Am $Am Retail deposits up 71% from March 2008 Net interest income1 196 158 166 CMT down 9% from Mar 2008 to $A16.1b - client Funds management income 120 129 11
Slide 43: Macquarie Funds Group
Macquarie Funds Group Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 Result impacted by challenging market conditions - $Am $Am $Am well down on strong pcp which included profit on Net interest income1 32 35 35 sale of Macquarie-IMM (59% down on pcp
Slide 44: Real Estate Group
Real Estate Group Result Refer to Appendix C for further detail For personal use only Sep 2008 Mar 2008 Sep 2007 Difficult market conditions have resulted in further $Am $Am $Am write downs / provisions including: Net interest income / (expense)1 (31) 4 (1) — MCW,MOF: ($A31m) Funds management: — R
Slide 45: Investments of $A6.7b
Investments of $A6.7b For personal use only Substantial co-investments held in Macquarie-managed funds and listed fund managers: $A3.8b at 30 September 2008 — Listed funds and listed fund managers: $A2.7b — Unlisted funds: $A1.1b $A2.9b of other investments, no material concerns with carrying va
Slide 46: Investments of $A6.7b
Investments of $A6.7b For personal use only $Ab 7.0 Transport, industrial Includes investment in Japan Airport. Underlying operating businesses operating well. Some impairment and infrastructure charges taken Telecommunications, Includes investment in European Directories. Underlying operating busin
Slide 47: Positions in listed co-investment funds / fund managers
Positions in listed co-investment funds / fund managers at 30 September 2008 For personal use only Market Unrealised Book value value gain/(loss) $Am $Am $Am DUET Group (DUE) 27 22 (5) Macquarie Airports (MAp) 893 960 67 Macquarie Communications Infrastructure Group (MCG) 242 242 - Macquarie Infrast
Slide 48: Diverse well secured loan asset portfolio
Diverse well secured loan asset portfolio For personal use only Loan category Sep 2008 $Ab Mortgages Secured by residential mortgages and supported by mortgage insurance - Australia 1.8 — Aust: arrears1 = 0.9%, most loans are fully mortgage insured - US 1.2 — US: arrears1 = 2.1%, majority of loans w
Slide 49: Expenses
Expenses For personal use only Expenses down 33% on pcp driven by significantly lower profit share (employment expenses down 48%) Headcount growth slowed significantly over the period Expense to income ratio 75.5% (March 2008: 76.5%; Sep 2007: 70.8%) Compensation ratio 40.1% (March 2008: 45.
Slide 50: Taxation
Taxation For personal use only Sep 08 Mar 08 Sep 07 % % % Corporate tax rate 30.0 30.0 30.0 Rate differential on offshore income (17.3) (19.9) (11.0) Non-deductible distribution paid/provided on MIS 0.8 0.7 0.4 Non-deductible options expense 2.8 2.5 1.4 Other (4.7) (7.7) (0.3) Effective tax rate 11.
Slide 51: Financial Management
For personal use only FINANCIAL MANAGEMENT Greg Ward – Chief Financial Officer Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 52: Funded balance sheet reconciliation
Funded balance sheet reconciliation For personal use only The Group’s statutory balance sheet is prepared based on generally accepted accounting principles which do not represent actual funding requirements A funded balance sheet reconciliation has been prepared to reconcile the reported assets
Slide 53: Funded balance sheet September 2008
Funded balance sheet 30 September 2008 For personal use only 31 Mar 2008 30 Sept 2008 $Ab $Ab Well diversified funding sources Funding sources Wholesale issued paper: Cash and liquid assets exceed short- Negotiable certificates of deposit 12.2 11.6 term wholesale issued paper Commercial paper 7.
Slide 54: Government guarantee
Government guarantee For personal use only On 12 October 2008, the Prime Minister announced a Government guarantee of the deposits and wholesale funding of Australian ADIs From 28 November 2008, deposits over $A1 million and wholesale funding will only be guaranteed if a fee is paid by the ADI t
Slide 55: Balance Sheet Initiatives
Balance Sheet Initiatives For personal use only Good progress has been made on key initiatives totalling $A15b vs funded balance sheet (excluding cash) of $A50.1b at 30 Sept 2008 $A4.0b of initiatives completed during Oct 2008. Sale of Italian mortgages and Real Estate investments, $A0.2b of war
Slide 56: Term funding profile
Term funding profile For personal use only Term funding (including undrawn facilities1) maturing beyond 1 year of $A31.9b exceeds term assets of $A27.9b Excluding equity, the weighted average term to maturity increased from 3.5 years at 31 March 2008 to 3.6 years at 30 September 2008 $Ab Equity
Slide 57: Balance sheet leverage ratio
Balance sheet leverage ratio For personal use only Equity Assets Leverage As at 30 September 2008 $Ab $Ab Ratio Based on IFRS Statutory Balance Sheet 10.3 167.4 16.3 x Adjustments for comparability with US entities: SPEs 1 - (22.2) Derivatives 2 - (10.2) Adjusted3 US GAAP Balance Sheet 10.3 135.0 13
Slide 58: Macquarie is conservatively geared
Macquarie is conservatively geared For personal use only Macquarie vs IFRS reporting Macquarie1 vs USGAAP reporting Gross Leverage financial institutions financial institutions 50 Other Euro banks4 41.5 Euro 40 bank 35.77 UK US 30 banks3 securities5 24.6 25.9 Australian banks2 19.7 20 Macquarie US 1
Slide 59: Regulatory capital position
Regulatory capital position For personal use only Macquarie Group Limited – Regulatory Capital Position (30 Sept 2008) Banking Group Non-Banking Group Minimum Regulatory Capital Requirement Capital Surplus Buffer for Volatility, Growth and Strategic Flexibility Regulatory Capital Position as at 30 S
Slide 60: Changes in capital position since March 2008
Changes in capital position since March 2008 For personal use only Group (MGL) Banking Group (MBL) Capital surplus has remained stable Tier 1 ratio has decreased from 12.4% as at 31 March 2008 to 11.0% as at 30 Capital growth was approximately September 2008 $A1.2b — $A0.6b CPS issue Much of
Slide 61: Summary
Summary For personal use only Notwithstanding difficult market conditions, Macquarie remains: — Profitable — Well funded — Well capitalised — Conservatively geared Further initiatives continue to reduce balance sheet 61
Slide 62: Result Announcement for the half year ended 30 September 2008
For personal use only Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 Presentation to Investors and Analysts 18 November 2008 Nicholas Moore, Managing Director and Chief Executive Officer Greg Ward, Chief Financial Officer
Slide 63: Appendix A: Additional information – Funding
For personal use only APPENDIX A Additional information – Funding Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 64: Group Funding Structure
Group Funding Structure For personal use only MGL and MBL are the Group’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements MBL provides funding to the Bank Group and intra-group funding to MGL MGL provides funding pre
Slide 65: Funding for the Non-Bank Group September 2008
Funding for the Non-Bank Group 30 September 2008 For personal use only 31 Mar 2008 30 Sept 2008 Non-Banking Group is predominantly term $Ab $Ab funded Funding sources MBL intra-group loan to MGL 8.8 6.3 Term funding beyond 1 year (excluding Net trade creditors 0.7 0.5 equity) has a weighted aver
Slide 66: Funding for the Bank Group September 2008
Funding for the Bank Group 30 September 2008 For personal use only 31 Mar 2008 30 Sept 2008 Diversity of funding sources in the Bank Group $Ab $Ab Funding sources Term funding beyond 1 year (excluding equity) Negotiable certificates of deposit 12.2 11.6 has a weighted average term to maturity of
Slide 67: Explanation of Funded Balance Sheet
Explanation of Funded Balance Sheet Reconciling Items For personal use only Self funded trading assets: There are a number of entries on the balance sheet that arise from the normal course of trading activity we conduct on behalf of our clients. They typically represent both sides of a transaction
Slide 68: Appendix B: Additional information – Capital
For personal use only APPENDIX B Additional information – Capital Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 69: Macquarie Group regulatory capital: surplus calculation
Macquarie Group regulatory capital Surplus calculation For personal use only $Am Banking Group Gross Tier 1 Capital 5,908 Non-Banking Group Eligible Capital 4,415 Group Eligible Capital 10,323 (a) Capital requirement - Banking Group: Risk-weighted assets (excluding exposure to Non-Bank) 37,874 Inter
Slide 70: Macquarie Group regulatory capital: Banking Group contribution
Macquarie Group regulatory capital Banking Group contribution For personal use only Risk weighted Deductions Capital assets $Am Requirement $Am $Am Credit Risk On Balance Sheet 19,876 1,391 Off Balance Sheet 8,242 577 Credit Risk subtotal 28,118 1,968 Market Risk 2,291 160 Operational Risk 6,720 470
Slide 71: Macquarie Group regulatory capital: Non-Banking Group framework
Macquarie Group regulatory capital Non-Banking Group framework For personal use only APRA has specified a regulatory capital framework for MGL A dollar capital surplus is produced; no capital ratio calculation is specified APRA has approved Macquarie’s Economic Capital Adequacy Model (ECAM) fo
Slide 72: Macquarie Group regulatory capital: Non-Banking Group contribution
Macquarie Group regulatory capital Non-Banking Group contribution For personal use only Capital Equivalent Assets Requirement Risk Weight $Ab $Am % Funded assets Cash and liquid securities 4.3 41 12% Loan assets1 3.3 224 85% Assets held for sale 0.4 161 503% Debt investment securities 0.6 21 44% Co-
Slide 73: Appendix C: Operating group results in detail
For personal use only APPENDIX C Additional information – Operating group results in detail Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 74: Results: Macquarie Capital
Results Macquarie Capital For personal use only Internal restructure – Macquarie Capital no longer includes Macquarie Capital Securities Income by region and retail arm of Macquarie Capital Products. Will include former Real Estate Group 1,000 (excl. Real Estate Structured Finance) and exclude Mac
Slide 75: Results: Macquarie Capital
Results Macquarie Capital For personal use only Macquarie Capital Finance Result up on pcp Total assets increased 5% from $A7.3b at 31 March 2008 to $A7.6b at 30 September 2008 (net funded assets of $A3.6b) Separated from Macquarie Capital in September 2008 to form Corporate & Asset Finance (w
Slide 76: Results: Macquarie Capital
Results Macquarie Capital For personal use only Current operating environment (contd.) — Arranger and Joint Lead Manager to the PaperlinX entitlement offer — Buy side Adviser to Hyde Park Acquisition Corp on the acquisition of Essex Crane Rental Corp. — Joint lead Manager on Goodman Group placement
Slide 77: Results: Macquarie Securities Group
Results Macquarie Securities Group For personal use only Internal restructure – Merger between Equity Markets Group Income by region (excluding Funds Products) and Macquarie Capital Securities Division of Macquarie Capital formed new group $Am 1,000 Combined client base offered full range of equ
Slide 78: Results: Macquarie Securities Group
Results Macquarie Securities Group For personal use only Derivatives (formerly Equity Products) Result 59% down on pcp primarily due to lower demand for equity-linked products and volatile market conditions which impacted hedging efficiency Structured product volumes across Asia, Australia and t
Slide 79: Results: Treasury and Commodities Group
Results Treasury and Commodities Group For personal use only All divisions operating profitably Income by region $Am Key drivers of half : 500 400 Metals & Energy Capital – strong contribution from oil and gas mezzanine facility and metals financing but down on strong pcp due to provisions on 30
Slide 80: Results: Treasury and Commodities Group
Results Treasury and Commodities Group For personal use only Current operating environment: High levels of volatility across all markets General market turmoil presenting business opportunities Outlook: Expect FY09 result to be slightly down on the strong prior year result, subject to market c
Slide 81: Results: Banking and Financial Services Group
Results Banking and Financial Services Group For personal use only Key drivers of half: Income by region Strong growth in deposits; up 71% from March 2008 and launched new cash internet product, Cash XL $Am 700 Down on pcp due to loss on sale of the Italian mortgages portfolio, write downs of so
Slide 82: Results: Banking and Financial Services Group
Results Banking and Financial Services Group For personal use only Current operating environment: Equity markets remain volatile Continued demand for cash products but highly competitive market Reduced investor confidence resulting in some client outflows Outlook: Announced intention to sell
Slide 83: Results: Macquarie Funds Group
Results Macquarie Funds Group For personal use only Internal restructure – Merger of Funds Management Group, EMG’s Income by region Funds Products Division and Macquarie Capital Products Division formed new group $Am 200 150 Key drivers of half : 100 Contribution substantially down on strong pcp
Slide 84: Results: Macquarie Funds Group
Results Macquarie Funds Group For personal use only Current operating environment: Current market conditions generally difficult. Liquidity has dropped sharply, volatility has increased to record levels High levels of volatility across asset classes have negatively impacted performance of many o
Slide 85: Results: Real Estate Group
Results Real Estate Group For personal use only Internal restructure – Most Real Estate Group activities to become part of Income by region Macquarie Capital from 1 January 2009 $Am 50 Key drivers of half : 0 Loss for the period due to provisions, predominantly against assets with US residential
Slide 86: Results: Real Estate Group
Results Real Estate Group For personal use only Current operating environment: Continued exceptionally challenging environment with credit crisis significantly impacting real estate markets globally Asset price reductions seen in most markets, with reduced transaction levels Outlook: Continued
Slide 87: Appendix D: Additional information – Specialist funds
For personal use only APPENDIX D Additional information – Specialist funds Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 88: Specialist funds – key facts
Specialist funds – key facts For personal use only Income1 from specialist funds — Contribution from management agreements and transactions with Macquarie Capital and Real Estate funds or managed asset agreements approximately 21% of total MQG operating income: — Approx 16% of operating income der
Slide 89: Specialist funds – key facts: debt maturity profile
Specialist funds – key facts For personal use only Debt maturity profile — Business and fund debt is non-recourse to Macquarie — Macquarie Capital Funds: — Less than 4% of the debt of Macquarie Capital Funds’ managed businesses requires refinancing in the next 12 months1 — Real Estate Funds: — Les
Slide 90: Specialist funds – key facts: alignment of interests
Specialist funds – key facts For personal use only Alignment of interests between manager and fund — Significant Macquarie and staff investment in funds — Performance fee only payable where fund performance exceeds a benchmark (stock market indices or agreed rate of return) 90
Slide 91: Specialist funds – key facts: track record
Specialist funds – key facts For personal use only Track Record — Macquarie Capital Funds has generated a compound annual return of 11%1 for investors since inception — $A21b2 has been returned to investors through distributions, returns of capital and security buy backs — Distributions are funded
Slide 92: Macquarie's listed specialist fund performance
Macquarie’s listed specialist fund performance For personal use only Listed Funds Accumulated Performance vs MSCI World Accumulation Index Index 800 Macquarie Listed Specialist Funds 700 MSCI World ($A) 600 500 400 300 200 100 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 S
Slide 93: Specialist funds – key facts: governance framework
Specialist funds – key facts For personal use only Robust governance framework — Each listed vehicle has its own Board with a majority of directors independent of Macquarie — MIG, MAp and MCG recently announced that security holders will have the right to nominate and vote on the appointment of al
Slide 94: MacCap & Real Estate fund raisings
MacCap & Real Estate fund raisings For personal use only $A3.8b raised over the 6 months to 30 Sep 2008 79% from international investors and 95% into unlisted funds or syndicates Lower raisings in 2Q09 as result of volatility in global markets $Ab 14 12 10 8 Raising1 Funds ($Ab) 6 Unlisted Macqu
Slide 95: Key points on infrastructure
Key points on infrastructure For personal use only Infrastructure businesses have many attractive characteristics HIGH BARRIERS TO PREDICTABLE CONSISTENT ESSENTIAL SERVICES ENTRY CASHFLOWS GROWTH Daily usage, high volume Long life, high value physical Concession arrangements Long term growth
Slide 96: Macro factors
Macro factors For personal use only Large need for infrastructure in both developing and developed markets — Global investment needs for new infrastructure of $US370b p.a.* — Global investment needs for maintenance of infrastructure of $US480b p.a.* Shortage of public sector funding options — Ec
Slide 97: Initiatives in developing countries
Initiatives in developing countries For personal use only India Strong economic growth expected to continue next 5 to 10 years Clear government initiatives to develop infrastructure — Over $US500b to be invested over next 5 years1 $US2b fund being launched, pending regulatory approval — Signif
Slide 98: Key points on real estate
Key points on real estate For personal use only Markets Real Estate markets extremely difficult globally, particularly listed REIT markets Expected softening of asset capitalisation rates – but limited examples of public transactions to support changes to asset valuations Macquarie managed REITS
Slide 99: A broad range of Assets under Management
A broad range of Assets under Management For personal use only Retail Real Estate 5% Other 19% Commercial Real Estate 7% Communications Tourism/Leisure & Infrastructure Residential Real Estate 11% 2% Roads 22% Energy & Utilities 22% Airports 12% Total Macquarie Capital and Real Estate assets under m
Slide 100: Over 80% of assets located outside Australia
Over 80% of assets located outside Australia For personal use only Australia Americas 18% 23% Asia-Pacific 9% Europe, Africa & Middle East 50% Comprises of Macquarie Capital and Real Estate assets under management at 30 September 2008 100
Slide 101: Managing important assets across the globe
Managing important assets across the globe Macquarie Capital Funds: over 110 assets; Real Estate Funds: over 700 assets For personal use only UK Poland Canada USA Waste Industries Japan South Korea M6 Toll DCT Gdansk (container Edmonton Ring Road South Bay Expressway American Consolidate
Slide 102: Appendix E: Glossary
For personal use only APPENDIX E Glossary Macquarie Group Limited Result Announcement for the half year ended 30 September 2008 18 November 2008 – Presentation to Investors and Analysts
Slide 103: Glossary
Glossary For personal use only $US/USD US Dollar DUET/DUE Diversified Utility and Energy Trusts 1H First Half EBITDA Earnings before Interest, Tax, Depreciation and Amortisation 1H09 Half year ended 30 September 2008 2H Second Half ECAM Economic Capital Adequacy Model 2H08 Half year ended 31 March 2
Slide 104: Glossary
Glossary For personal use only MAP/MAp Macquarie Airports OTC Over the Counter MBL Macquarie Bank Limited P&L Profit and Loss MCG Macquarie Communications Infrastructure p.a. Per Annum Group pcp Prior Corresponding Period MCW Macquarie CountryWide Trust REG Real Estate Group MDT Macquarie DDR Trust