NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q4 FY21 Earnings Presentation
39 slides from NAOS Ex-50 Opportunities's earnings presentation, Jul 29, 2021
Slide 1: Q4 FY21 Investor Update & Q&A
Q4 FY21 INVESTOR UPDATE & Q&A Thursday 29 July 2021 | 10:30 am (AEST) Audio Dial In: +61 2 8355 1054 Audio Access Code: 215-452-238 PRESENTED BY NAOS ASSET MANAGEMENT CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 1
Slide 2: Important information
Important information This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. It does not constitute an offer to purchase any security or financial product or servi
Slide 3: NAOS Asset Management
NAOS Asset Management Our Mission To provide investors genuine long-term, concentrated exposure to Australian undervalued emerging companies with an industrial focus. NAOS established its first Listed Investment Company (LIC) in 2013 with 400 shareholders, today NAOS manages ~$400 million across thr
Slide 4: NAOS investment beliefs provide a competitive advantage
NAOS investment beliefs provide a competitive advantage Value with Long Quality over Invest for the Term Growth Quantity Long Term 5+ years Performance v Ignore the Pure Exposure Liquidity Focus Index to Industrials The closed end LIC structure removes application and redemption risk. Environmental,
Slide 5: Reasons not to invest with NAOS
Reasons not to invest with NAOS Our LICs are not for everyone. Some reasons why you may not choose to invest with NAOS include: Concentrated portfolios (0-15 investments) Long-term investment philosophy (5+ years) Focus on smaller companies ($20 million - $500 million) Benchmark unaware (No
Slide 6: NAOS LICs investment portfolio financial year returns
NAOS LICs investment portfolio financial year returns* 60% 50% 40% 30% 20% 10% 0% -10% -20% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 NAOS Emerging Opportunities Company Limited (ASX: NCC) NAOS Ex-50 Opportunities Company Limited (ASX: NAC) NAOS Small Cap Opportunities Company Limited (ASX: NSC)
Slide 7: NAOS LIC Fully Franked Dividend History and Profit Reserves
NAOS LIC Fully Franked Dividend History and Profit Reserves Each LIC has consistently paid dividends and holds healthy profit reserves 80 75.70 70 60 56.00 53.75 48.00 Cents per share (CPS) 50 45.29 40 31.70 30 24.64 21.40 20 17.25 10 0 NCC NAC NSC Total Dividends Declared (Since Inception) Total Gr
Slide 8: Investment portfolio performance summary
Investment portfolio performance summary BENCHMARK Investment Portfolio 1 YEAR 1 YEAR BENCHMARK INCEPTION (P.A.) INCEPTION PERFORMANCE PERFORMANCE (P.A) NAC Investment Portfolio Performance* +63.36% +27.93%^ +17.72% +8.53%^ NCC Investment Portfolio Performance* +48.34% +33.23%^ +13.44% +7.58%^ NSC I
Slide 9: What research does NAOS apply to the Investment Process?
What research does NAOS apply to the Investment Process? The NAOS Investment Team undertakes fundamental analysis on potential and current investments. Some examples of our key focus areas include: Internal Engagement External Engagement Hands On Research Executive Team including CEO, Company announ
Slide 10: Summary of Q4 FY21
Summary of Q4 FY21 Q4 FY21 performance was strong across all of the NAOS LICs with NCC +13.78%, NSC +13.62% and NAC +15.92%. Capital management initiatives during Q4 FY21 included: NSC conducted a 1 for 3 bonus options issue NCC convertible notes offer completed NCC, NSC & NAC paid fully f
Slide 11: Summary of Q4 FY21 continued
Summary of Q4 FY21 continued Global Index Returns as at June 30, 2021 NASDAQ MSCI Emerging Markets S&P 500 MSCI World Index S&P Europe 350 (USD) Nikkei 225 ASX 200 Shanghai Composite FTSE 100 -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 3 month % Return 12 month
Slide 12: Summary of Q4 FY21 continued
Summary of Q4 FY21 continued Removal of some short-term stimulus measures (JobKeeper and JobSeeker programs ended in March) resulted in Q4 being the most ‘normal’ quarter since the impact of COVID-19. Whilst the larger stimulus measures have been tapered or removed, smaller, more targeted stimul
Slide 13: Summary of Q4 FY21 continued
Summary of Q4 FY21 continued 52 Week High/Low % Price Change Lumber (IOM) Iron Ore 62% FE (NYMEX) Butter - Grade AA (CME) Crude Oil - WTI (ICE) Copper - High Grade (COMEX) Coffee (NYMEX) Cotton #2 (ICE) Silver (COMEX) Wheat (CBOT) Rubber - Natural (SHFE) Plastics - Polyethylene (NYMEX) Gold (COMEX)
Slide 14: Welcome Jim Bindon, Managing Director, Big River
Welcome Jim Bindon Jim Bindon Managing Director, Big River Industries Ltd CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 14
Slide 15: Big River is today
Big River • Big istoday River one of Australia’s leading manufacturers and distributors of specialty timber and building products, diversified by geography, industry segment, construction type and customers with >8,500 active trading accounts 21 Sales and distribution sites Big River manufacturing f
Slide 16: Positive construction cycle metrics
Positive construction cycle metrics 250 $b total construction activity 200 150 100 50 0 2008 Peak 2017 Peak 2021 actual 2024 (f) Peak • Population grew 16% between 2008 and 2017 cycle peaks. • Australian population is forecast to be 10% higher than 2017 by the next expected (2024) cyclical peak. • H
Slide 17: Supply constraints affecting the industry
Supply constraints affecting the industry Detached housing trends Volumes (‘000m3) of key structural 160 timber 140 4000 3500 120 3000 100 2500 80 2000 60 1500 40 1000 500 20 0 0 2019/20 2020/21 2021/22 2022/23 2019/20 2020/21 2021/22 2022/23 Manufactured imported Approvals Starts • Detached housing
Slide 18: NCC key portfolio events Q4 FY21
NCC key portfolio events Q4 FY21 HOLDING INDUSTRY Q4 UPDATE Quarterly results saw milestone achieved of >$1bn FUM and is cash flow positive. Financial Services Outsourced the last of their internally managed investment products. Transition to pure play distribution platform now achieved. (ASX:
Slide 19: NCC overview: Cumulative Dividends
NCC overview as at 30 June 2021 $1.23 7.00% $1.035 14 13.44% 48.34% $134.8m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Performance ^ Average Market Inception^ p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SHARE
Slide 20: NSC key portfolio events Q4 FY21
NSC key portfolio events Q4 FY21 HOLDING INDUSTRY Q4 UPDATE Q3 trading update released with strong momentum continuing despite being a seasonally quiet period. Financial Federal government instant asset write off announcement to continue to Services provide tailwinds along with infrastructure sp
Slide 21: NSC overview: Cumulative Dividends
NSC overview as at 30 June 2021 $1.10 4.85% $0.98 15 8.98% 58.40% $206.2m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Performance ^ Average Market Inception^ p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SHARE)
Slide 22: NAC key portfolio events Q4 FY21
NAC key portfolio events Q4 FY21 HOLDING INDUSTRY Q4 UPDATE Became a substantial holding within the quarter. Exited position in Peet Ltd (ASX: PPC) at a profit. Real Estate TOT/TGP continued to increase stake in Irongate (ASX:IAP) from ~9% to >19% (ASX: TOT) Buoyant market conditions underpi
Slide 23: NAC overview: Cumulative Dividends
NAC overview as at 30 June 2021 $1.59 4.58% $1.18 14 17.72% 63.36% $541.4m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Performance ^ Average Market Inception^ p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SHARE)
Slide 24: Capital Management Initiatives
Capital Management Initiatives Performance • Maintain a focus on long term performance without deviating from the NAOS investment philosophy. • Continue to focus on a growing stream of dividends, franked to the maximum extent possible, whilst maintaining an Dividends adequate reserve balance. Alignm
Slide 25: Key business & industry traits for maximising long-term performance
Key business & industry traits for maximising long-term performance and reducing the risk of permanent capital loss events A growing revenue base provides companies with a number of competitive advantages such as the Industry Tailwinds Supporting Long Term ability to scale their fixed cost base and
Slide 26: Overview and Outlook Q1 FY22
Overview and Outlook Q1 FY22 Updates from almost all portfolio companies in August reporting season. Reporting season will provide excellent insights into the level of resilience and quality of earnings for core investments during the COVID recovery to date. We expect that some portfolio compani
Slide 27: Overview and Outlook Q1 FY22 continued
Overview and Outlook Q1 FY22 continued Aside from reporting season, we believe there are numerous significant catalysts that may occur for investments held within the portfolios, examples include: SND – Potential contract wins following decision on which developments will receive government gran
Slide 28: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge As a company, we commit to Pledge 1% of revenue, time and intellect to movements and missions that matter. 1% Revenue 1% Time 1% Intellect Each year NAOS donates 1% of its annual Our people have an incredible range of skills NAOS sees the value in supporting revenue t
Slide 29: Q&A
Q&A Thank you for your continued support. “Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard.” Warren Buffett CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 29
Slide 30: Appendix
APPENDIX CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 30
Slide 31: NAOS strong long term risk-adjusted returns
NAOS strong long term (5 years+) risk-adjusted returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics 15% 20% 13.44% 17.72% 15% 10% 7.58% 10% 8.53% 5% 3.49% 2.77% 5% 2.96% 2.70% 0% 0% -1.12% -0.63% -3.28% -2.94% -5% -5% Performance Since
Slide 32: The features of a NAOS LIC
The features of a NAOS LIC Closed-end structure Long-term Intra-day Liquidity No applications or Investment decisions Trades on the ASX redemptions Corporate Governance Dividends Opportunity Public companies provide A growing stream of May trade at a discount or accountability of Directors dividends
Slide 33: NAOS Listed Investment Companies
NAOS Listed Investment Companies Each of our LICs target a concentrated portfolio of 0-20 companies CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 33
Slide 34: NAOS management alignment
NAOS management alignment NAOS Director’s shareholdings have significantly increased since the inception of each LIC Inception Directors Shareholding (Ordinary Shares) 30 June 2021 Directors Shareholding (Ordinary Shares) 9,000,000 8,123,267 8,000,000 7,000,000 6,000,000 5,057,323 5,000,000 4,000,00
Slide 35: NAOS investment process
NAOS investment process CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 35
Slide 36: NAOS ESG framework
NAOS ESG framework CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 36
Slide 37: Historical shareholder numbers
Historical shareholder numbers 7500 5000 2500 0 NCC Shareholders NAC Shareholders NSC Shareholders CONVICTION. LONG TERM. ALIGNED | Copyright 2021 2019 NAOS Asset Management Limited 37
Slide 38: Investor awareness and communication
Investor awareness and communication CEO Insights, NAOS Quarterly Monthly Investment The news and media Newsletter, Webinars Report & NTA email section of our website subscribe via our updates, subscribe via is updated regularly website our website naos.com.au naos.com.au/ naos.com.au/ subscribe sub
Slide 39: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS Sebastian Evans Warwick Evans Matthew Hyder David Rickards Sarah Williams Mark Bennett Trevor Carroll Managing Director, NAOS Chairman, NAOS Asset Director, NAOS Asset Independent Chairman & Independent Director, Director, NAOS Asset Independent Chairman Asset M
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