Foresight Group Holdings Ltd. · LSE:FSG
Foresight — H1 2022 Earnings Presentation
33 slides from Foresight's earnings presentation, Dec 9, 2021
Slide 1: Results presentation
Results presentation Half-year ended 30 September 2021 9 December 2021
Slide 2: Agenda
Agenda Bernard Fairman 1. Operational highlights Executive Chairman & Co-Founder ▪ Co-founded Foresight Group in 1984 2. Financial results ▪ 40 years of private equity experience ▪ Responsible for strategic direction and management 3. Business review ▪ Prior to founding Foresight, he was an Investme
Slide 3: Operational highlights
Operational highlights 35+ year track record of successful investment in specialist, difficult-to-access markets ▪ Strong organic growth from a diversified investor base delivering high-quality recurring revenue ▪ AUM to £8.1 billion +13%(1), FUM £6.1 billion + 18%(1) ▪ Significant pipeline of new f
Slide 4: Financial results
Financial results Gary Fraser |4
Slide 5: Key financial metrics
Key financial metrics Strong performance across all metrics 30 September 30 September YoY Change 2021 2020 Period-end AUM (£m) 8,133 6,766 +20.2% Period-end FUM (£m) 6,067 4,761 +27.4% Total Revenue (£m) 39.7 32.4 +22.5% Recurring Revenue (% of Total) 89.5% 91.0% -1.5 pts Core EBITDA pre SBP(1) (£m)
Slide 6: AUM bridge
AUM bridge Strong organic growth continued across diversified investor strategies 8.5 Retail Institutional 0.5 (0.1) 0.1 8.1 8.0 0.6 (0.3) 0.1 7.5 7.2 £bn 7.0 6.5 6.0 5.5 31 March 2021 Inflow Outflow Market Inflow2 Outflow2 Market 30 Sep 2021 AUM movement (1) movement2(1) AUM ▪ £0.7 billion net infl
Slide 7: Revenue analysis
Revenue analysis Continued momentum in revenue driven by FUM growth Revenue Contribution by fee type Total Revenue £32.4m £39.7m ▪ Delivered another consecutive £4.2m period of significant revenue £2.9m growth 91.0% 89.5% recurring ▪ High-quality recurring revenue £35.5m recurring £29.5m stream main
Slide 8: Cost analysis
Cost analysis Maintained good cost discipline delivering operational leverage Administrative Expenses Total £21.5m £24.1m ▪ Continued cost discipline delivering £1.4m improved operating margins £1.3m £4.5m £2.6m £2.1m £1.6m Staff costs £15.5m £16.6m Legal & Professional Costs Other admin costs D&A H
Slide 9: EBITDA progression
EBITDA progression On track to deliver medium-term margin target of c.43% Core EBITDA pre SBP £16 .0m £14 .0m £12 .0m ▪ Strong improvement as we build £10 .0m scale £15.2m £8. 0m £6. 0m £10.6m £4. 0m £2. 0m £0. 0m H1 FY21 H1 FY22 Core EBITDA pre SBP Margin ▪ EBITDA margin +5.5 points vs H1 FY21 32.8
Slide 10: Cash flow summary
Cash flow summary Strong financial position Cash Flow: For the six months ended 30 September 2021 £15.2m £(5.4)m ▪ Strong operational cash flow supports the Company’s dividend policy of a 60% £(0.5)m £(1.6)m payout ratio £(0.4)m £(1.8)m £(2.1)m ▪ Robust cash balance to support growth opportunities £
Slide 11: Business Review
Business Review Bernard Fairman | 11
Slide 12: Strategic progress
Strategic progress Continuing to deliver on our strategic goals H1 FY22 Ability to raise funds consistently from diversified £0.7bn 43.5% Net organic inflows investor base AUM CAGR(1) across Retail and Institutional Low capital intensity and high levels of operational 89.5% 38.3% gearing Recurring R
Slide 13: Infrastructure summary
Infrastructure summary Proven ability to capture opportunities in growing markets AUM growth Key facts ▪ + 13% to £6.0 billion in six months ending 30 September 2021 338 assets Deployment 16 asset classes ▪ 25 transactions in the period, aggregate value of £254 million ▪ Final close of Foresight Ene
Slide 14: Infrastructure strategy evolution
Infrastructure strategy evolution Leveraging existing capability into contiguous asset classes and geographies Phase 1: Phase 2: Phase 3: Initial power transition Systematic power transition Wider sustainable transition c2005 c2018 c2022 2050 Phase 1 Phase 2 Phase 3 ▪ Initial waves of renewables ▪ U
Slide 15: Foresight Sustainable Forestry Company (FSFC)
Foresight Sustainable Forestry Company (FSFC) Early identification and swift execution – First mover advantage Strategic opportunity To date ▪ Land and food identified as the next mega-trend sustainable investment themes x36 transactions ▪ Recognition that UK forestry was the ideal entry point (2018
Slide 16: Foresight Sustainable Forestry Company (FSFC)
Foresight Sustainable Forestry Company (FSFC) Successfully listed on 24 November 2021 £130m LSE main market premium segment ▪ First natural capital focused investment trust on the LSE ▪ Direct ‘pure-play’ liquid access to UK forestry real assets ▪ Scalable platform for new universe of retail and mul
Slide 17: Foresight Sustainable Forestry Company (FSFC)
Foresight Sustainable Forestry Company (FSFC) Executing strategy to build a scalable platform from which to grow exposure Why now? UK Forested Area Forecast (1)(2) ▪ At COP26 100+ world leaders promised to end and reverse deforestation by 2030 ▪ Changes in farming subsidies delivering afforestation
Slide 18: Private Equity summary
Private Equity summary Excellently positioned to deliver growth AUM growth Example realisation ▪ +13% to £810 million in six months ending 30 September 2021 Performance and deployment 3.1x in three years for health diagnostics ▪ £41.5 million invested across 26 transactions to support 22 UK SMEs com
Slide 19: FCM overview
FCM overview Newly defined business unit with high growth potential Growing UK OEIC market likely to be a key driver of retail fundraising and FUM in the near to medium term 2017 2018 2019 2019 2020 2021 FCM established FCM named FCM launches FP FCM reaches FIIF three year total REF named a finalist
Slide 20: FCM summary
FCM summary Diversified funds delivering growth AUM growth UK OEIC performance since launch(1) ▪ +20% to £1.4 billion in six months ending 30 September 2021 FP Foresight UK infrastructure Income Fund Performance and deployment +35.29% (Inception date: 4 December 2017) ▪ UK OEICS delivered positive t
Slide 21: Sustainability lies at the heart of Foresight's business
Sustainability lies at the heart of Foresight’s business We nurture a culture, relationships and behaviours that reflect this Sustainable investor Responsible business ▪ ESG Champion of the Year from the Growth Investor ▪ Corporate carbon foot-printing exercise completed that Awards 2021 will inform
Slide 22: Strategy and Outlook
Strategy and Outlook Bernard Fairman | 22
Slide 23: Medium term strategy: On track
Medium term strategy: On track DELIVERED IN H1 FY22 Outlook +25% 20-25% ▪ Favourable macro conditions across target markets annualised growth Targeted yearly growth in Fundraising ▪ 20-25% growth target AUM over the medium term, achieved organically ▪ Acquisitions incremental to 20-25% target in lin
Slide 24: Current trading and outlook
Current trading and outlook ▪ Strong fundraising in FY22 to date at the top end of the 20-25% annual AUM growth target range ▪ Investor sentiment remains robust. Momentum continues to build on the £0.7 billion net inflows in H1 FY22 with over £0.5 billion funds deployed(1) ▪ Post period end; ▪ Succe
Slide 25: Q&A
Q&A Foresight
Slide 26: Appendices
For a Smarter Future Results presentation to 30 September 2021 Appendices
Slide 27: Appendix 1: Revenue analysis by business segment
Appendix 1: Revenue analysis by business segment(1) Infrastructure Private Equity FCM Group Sep-21 Sep-20 Sep-21 Sep-20 Sep-21 Sep-20 Sep-21 Sep-20 Total AUM £bn 6.0 5.3 0.8 0.7 1.4 0.8 8.1 6.8 Revenue / average AUM% 0.77% 0.78% 1.91% 2.05% 0.82% 0.98% 0.89% 0.93% Retail FUM £bn 1.2 1 0.5 0.4 1.4 0.
Slide 28: Appendix 2: FUM movement by business segment and investor type
Appendix 2: FUM movement by business segment and investor type (£m) Infrastructure retail Foresight capital management retail (1) Private equity retail 1,200 105 (14) 1,169 1,600 417 500 (209) 109 (54) 28 (9) 3 1,500 480 (14) 1,100 448 456 1,023 23 1,361 460 1,400 1,000 440 1,300 420 900 1,200 1,130
Slide 29: Appendix 3: Summary H1 FY22 Income Statement
Appendix 3: Summary H1 FY22 Income Statement Income Statement (£m) Sep-21 Sep-20 Revenue 39.7 32.4 Cost of sales (2.5) (2.3) Gross profit 37.2 30.1 Administrative expenses (24.0) (21.5) Other operating income 0.2 — Operating profit 13.4 8.6 Finance income — — Finance expense (0.4) (0.4) Fair value g
Slide 30: Appendix 4: Core EBITDA pre-SBP reconciliation
Appendix 4: Core EBITDA pre-SBP reconciliation (£m) Core EBITDA pre-SBP Calculation £m Sep-21 Sep-20 Total comprehensive income 11.5 8.0 Adjustments: Non-operational staff costs 0.3 0.7 Non-operational legal costs — 0.5 Profit on disposal of fixed assets and gain on bargain purchase — (0.2) Other op
Slide 31: Appendix 5: Summary Statement of Financial Position
Appendix 5: Summary Statement of Financial Position as at 30 September 2021 (£m) Summary Statement of Financial Position 30-Sep-21 31-Mar-21 Assets Property, plant and equipment 2.8 3.0 Right of use assets 8.8 9.1 Intangible assets 3.0 3.0 Investments 2.5 2.4 Deferred tax asset 0.8 1.0 Contract cost
Slide 32: Appendix 6: Restated FY20 and FY21
Appendix 6: Restated FY20 and FY21 FY21 (Adjusted) FY20 (Adjusted) ▪ Restated to £m PE Infra FCM Central PE Infra FCM Central report FCM as a Management fees 11.3 32.2 6.8 10.2 22.0 3.3 separate Secretarial fees 1.8 7.5 0.5 2.3 8.5 0.7 business unit Directors fee 2.1 0.2 0.0 1.7 0.2 0.0 Marketing fe
Slide 33: Disclaimer
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