Macquarie Group, Ltd. · ASX:MQG
Macquarie — Merger or Acquisition (October 2015)
30 slides from Macquarie's merger presentation, Oct 8, 2015
Slide 1: Esanda Dealer Finance Portfolio Acquisition and Capital Raising
Esanda Dealer Finance Portfolio Acquisition and Capital Raising Presentation to Investors and Analysts 8 October 2015 Nicholas Moore, Managing Director and Chief Executive Officer Patrick Upfold, Chief Financial Officer NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer The material in this presentation has been prepared by Macquarie Group Limited (ABN 94 122 169 279) (“Company”) and includes information about an institutional private placement (“Offer”) of ordinary shares in the Company (“Securities”). This presentation is not a prospectus under Austral
Slide 3: Acquisition of Esanda dealer finance portfolio
Acquisition of Esanda dealer finance portfolio • Macquarie has entered into an agreement to acquire the Esanda dealer finance portfolio (the Portfolio) from Australia and New Zealand Banking Group Limited (ANZ) for approx. $A8.2 billion • The Portfolio has net lending assets with a book value of $A7
Slide 4: Acquisition of Esanda dealer finance portfolio
Acquisition of Esanda dealer finance portfolio • The purchase price of the transaction is approx. $A8.2 billion reflecting the fair value of the loan and lease assets acquired • Macquarie expects to fund the acquisition from existing funding sources, third-party financing arrangements and a capital
Slide 5: Key details of Institutional Placement and SPP
Key details of Institutional Placement and SPP NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • $A400 million institutional placement (Offer) Institutional Placement • Approx. 5.1 million New Shares representing 1.5% of market capitalisation1 • All New Shares will rank pari-passu with existing
Slide 6: Outlook update
Outlook update
Slide 7: Short term outlook
Short term outlook • Summarised below are the outlook statements for each Operating Group • FY16 results will vary with market conditions, particularly the capital markets facing businesses Net profit contribution FY08–FY15 FY08–FY15 FY16 outlook as announced historical range average at CLSA Investo
Slide 8: Short term outlook
Short term outlook • While the impact of future market conditions makes forecasting difficult, Macquarie currently expects the FY16 combined net profit contribution1 from operating groups to be up on FY15 • The FY16 tax rate is currently expected to be broadly in line with 2H15 and down on FY15 • Ma
Slide 9: Short term outlook
Short term outlook • Our short term outlook remains subject to a range of challenges including: – Market conditions – The impact of foreign exchange – The cost of our continued conservative approach to funding and capital; and – Potential regulatory changes and tax uncertainties PAGE 9
Slide 10: Medium term
Medium term Macquarie remains well positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions – Annuity-style income is provided by three significant busi
Slide 11: Medium term
Medium term • Annuity-style business that is diversified across regions, products, asset classes and investor types • Diversification of capabilities allows for the business to be well placed to grow assets under management in different market MAM conditions • Well positioned for organic growth with
Slide 12: Appendix A: Select slides from the Annual General Meeting
Appendix A Select slides from the Annual General Meeting Held on 23 July 2015
Slide 13: 1Q16 overview
1Q16 overview • Both Annuity-style businesses’ and Capital markets facing businesses’ contributions1 up significantly on pcp and broadly in line with the prior quarter (4Q15): – Annuity-style businesses2 – driven by the underlying growth of the businesses, a weaker AUD, as well as increased performa
Slide 14: Annuity-Style Businesses
Annuity-Style Businesses 1Q16 Update Macquarie • AUM of $A477.4b, broadly in line with Mar 15 - positive net flows in MIM offset by FX, market movements and net Asset divestments in MIRA Management • Performance fees of $A208m, predominantly from Macquarie Infrastructure Company and Macquarie Atlas
Slide 15: Capital Markets Facing Businesses
Capital Markets Facing Businesses 1Q16 Update Macquarie • Market conditions characterised by increased volumes and volatility, particularly in Asia where the liberalisation of Securities China’s capital markets and credit easing resulted in significant increases in client activity in the region Grou
Slide 16: Funded balance sheet remains strong
Funded balance sheet remains strong $Ab 31 March 2014 $Ab 31 March 2015 $Ab 30 June 2015 120 14 120 120 110 ST wholesale issued paper 110 ST wholesale issued paper 110 (11% ) (11% ) 100 100 100 Other debt maturing in the next 12 Cash, liquids and self securitised Other debt maturing in the next mths
Slide 17: Basel III capital position
Basel III capital position • APRA Basel III Group capital at Jun 15 of $A15.8b, Group surplus of $A2.4b (1 Jan 16 requirements1) • Bank Group APRA Basel III CET1 ratio: 9.9%; Tier 1 ratio: 11.2% • Bank Group Harmonised Basel III CET1 ratio: 11.5%; Tier 1 ratio: 12.7%2 • As previously announced, APRA
Slide 18: Approximate business Basel III Capital & ROE
Approximate business Basel III Capital & ROE As at 31 Mar 15 1 APRA Basel III Capital Approx. FY15 Return Approx. 9-Year average Return 2 Operating Group @ 8.5% ($Ab) on Ordinary Equity2 on Ordinary Equity Annuity-style businesses 7.5 Macquarie Asset Management 2.0 Corporate and Asset Finance 3.6 23
Slide 19: Appendix B: Key risks
Appendix B Key risks
Slide 20: Appendix B: Key risks
Appendix B: Key risks Risks Investors should be aware that there are risks associated with an investment in Macquarie. Some of the principal factors which may, either individually or in combination, affect the future operating performance of Macquarie are set out below. Some are specific to an inves
Slide 21: Appendix B: Key risks
Appendix B: Key risks 1. Risks associated with participating in the Offer Risk Description of risk Offer is not underwritten The Joint Lead Managers have entered into an Offer Management Agreement with Macquarie to provide settlement support for the Offer but the Offer is not underwritten. According
Slide 22: Appendix B: Key risks
Appendix B: Key risks 3. Risks associated with Macquarie’s business that may affect ordinary shares of Macquarie (Ordinary Shares) The factors described below represent the key risks relating to an investment in Macquarie Group Limited (MGL) and each of its subsidiaries (together with MGL, the Macqu
Slide 23: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Liquidity risk The Macquarie Group is exposed to the risk that it may become unable to meet its financial commitments when they fall due, which could arise due to mismatches in cashflows. Liquidity is essential to the Macquarie Group’s businesses. Liqui
Slide 24: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Increased governmental and Governmental scrutiny from regulators, legislative bodies and law enforcement agencies with respect to matters relating to the financial services sector generally, and the Macquarie Group’s business operations, regulatory scru
Slide 25: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Market and asset risk Certain financial instruments that members of the Macquarie Group hold and contracts to which they are a party are increasingly complex, as the Macquarie Group employs structured products to benefit its clients (cont.) and itself,
Slide 26: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Capital adequacy risk The Macquarie Group seeks to maintain capital levels to ensure it can achieve strategic plans and objectives, manage the risks to which it is exposed, absorb unexpected losses and meet market expectations of capital levels. The Mac
Slide 27: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Information security risks It is possible that the Macquarie Group may not be able to anticipate or to implement effective measures to prevent or minimi se damage that may be caused by all information security threats, because the (cont.) techniques use
Slide 28: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Risks relating to funds • Conflicts of interest: the Macquarie Group manages and advises a large number of funds, many of which compete for assets and investors. The Macquarie Group has policies in place designed to manage management conflicts of intere
Slide 29: Appendix B: Key risks
Appendix B: Key risks Risk Description of risk Shareholders may be subject In order to comply with FATCA, it is possible that Macquarie (or, if Ordinary Shares are held through another financial insti tution, such other financial institution) may be required (pursuant to an agreement with the to For
Slide 30: Esanda Dealer Finance Portfolio Acquisition and Capital Raising
Esanda Dealer Finance Portfolio Acquisition and Capital Raising Presentation to Investors and Analysts 8 October 2015 Nicholas Moore, Managing Director and Chief Executive Officer Patrick Upfold, Chief Financial Officer NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Macquarie Group — Merger or Acquisition (October 2015) on 6ix