Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Shareholder Meeting (October 2022)
31 slides from Australian Foundation Investment's shareholder meeting presentation, Oct 4, 2022
Slide 1: 2022 Annual General Meeting Presentation
4 October 2022 The Manager ASX Market Announcements For personal use only Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited 2022 Annual General Meeting Presentation Dear Sir / Madam The follow
Slide 2: Annual General Meeting 2022
For personal use only Annual General Meeting 2022
Slide 3: Board Members
Board Members For personal use only John Paterson Mark Freeman Rebecca Dee-Bradbury Chairman and Independent Managing Director Independent Non-Executive Non-Executive Director Director Craig Drummond Julie Fahey Graeme R Liebelt Independent Non-Executive Independent Non-Executive Independent Non-Exe
Slide 4: How to ask a question
How to ask a question For personal use only • To ask a written question select the Q & A icon • Select the topic your question relates to from the drop-down list • Type your question in the text box and press the send button • To ask a verbal question follow the instructions below the broadcast wind
Slide 5: How to vote
How to vote For personal use only • When the poll is open, select the vote icon at the top of the screen • To vote, select either For, Against or Abstain • You will see a vote confirmation • To change or cancel your vote “click here to change your vote” at any time until the poll is closed AFIC Annu
Slide 6: Annual General Meeting – Presentation 2022
For personal use only Annual General Meeting – Presentation 2022
Slide 7: Disclaimer
Disclaimer For personal use only Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good fai
Slide 8: Agenda
Agenda For personal use only Investment Objectives Mark Freeman Financial Results Andrew Porter Markets and the Portfolio David Grace and Nga Lucas Outlook Mark Freeman AFIC Annual General Meeting 2022 2 7
Slide 9: Investment Objectives and Investment Team
For personal use only Investment Objectives and Investment Team AFIC Annual General Meeting 2022
Slide 10: Investment Objectives
For personal use only Investment Objectives The Company’s primary investment goals are: The Company aims to provide shareholders with attractive investment • to pay dividends which, over time, grow returns through access to a growing faster than the rate of inflation; and stream of fully franked div
Slide 11: Investment Team
Investment Team For personal use only David Grace Kieran Kennedy Brett McNeill Portfolio Manager Portfolio Manager Portfolio Manager Nga Lucas Rosie Malcolm Andrew Sutherland Investment Analyst Portfolio Manager Portfolio Manager Olga Kosciuczyk Stuart Low Jaye Guy Investment Analyst Investment Anal
Slide 12: Financial Results
For personal use only Financial Results Full Year Results 2022
Slide 13: Results to June 2022
Results to 30 June 2022 For personal use only * Assumes a shareholder can take full advantage of the franking credits. AFIC Annual General Meeting 2022 12
Slide 14: Relationship between full year dividends per share and earnings per share
Relationship between full year dividends per share and earnings per share For personal use only AFIC Annual General Meeting 2022 13
Slide 15: Share Price Relative to NTA
Share Price Relative to NTA For personal use only AFIC Annual General Meeting 2022 14
Slide 16: Markets and the Portfolio
For personal use only Markets and the Portfolio AFIC Annual General Meeting 2022
Slide 17: Our investment process – focus on long term quality
Our investment process – focus on long term quality For personal use only Long term investor in companies, not traders of share prices Identify quality companies with sound growth prospects that we can buy at a reasonable price This supports our belief in the power of compounding returns from great
Slide 18: ESG considerations are integrated into our Investment Framework
ESG considerations are integrated into our Investment Framework For personal use only Approach to Environmental, Social and Engagement with companies Governance (ESG) factors • Long term sustainability of a company’s • We conduct our own evaluation of the merits business model is a key focus in our
Slide 19: Performance
Performance Returns to 31 August 2022 – per annum* Sector Performance - annual return to 31 August 2022 For personal use only Source: FactSet AFIC Annual General Meeting 2022 18
Slide 20: Portfolio Set to Perform in a variety of Economic Settings
Portfolio Set to Perform in a variety of Economic Settings For personal use only Growth Companies Stalwarts 33% 29% AFIC Cyclicals Income 16% 22% AFIC Annual General Meeting 2022 19
Slide 21: Market Conditions
Market Conditions • Equity markets lacking direction as investors weigh up global economic challenges For personal use only Inflation and rising interest rates Slowing outlook for consumer spending Softening economic growth in China Escalating war in Ukraine The ongoing Coronavirus pandemi
Slide 22: Valuation in a Long Term Context
Valuation in a Long Term Context Price to Book – S&P/ASX 200 Index Price to Sales – S&P/ASX 200 Index For personal use only Average Average 1.9 1.9 Source: FactSet At closing 26 September 2022 - S&P/ASX Index at 6469 AFIC Annual General Meeting 2022 21
Slide 23: Market Sell Offs Create Excellent Long-term Buying Opportunities
Market Sell Offs Create Excellent Long-term Buying Opportunities ASX All Ordinaries – Price Index For personal use only Inflation shock/ rising rates -13% Source: FactSet AFIC Annual General Meeting 2022 22
Slide 24: Active Portfolio Management – Recent Transactions
Active Portfolio Management – Recent Transactions For personal use only Additions to Sales New Purchases Existing Holdings * * * Takeover AFIC Annual General Meeting 2022 23
Slide 25: Mainfreight continued expansion in the US
Mainfreight continued expansion in the US For personal use only Source: Mainfreight • Logistics company specialising in Less Than Truckload segment with an extensive global network. • Founded in NZ in1978 by current Chairman Bruce Plested. • Owner driver business, experienced and focused management
Slide 26: Carsales acquisition of Trader Interactive USA
Carsales acquisition of Trader Interactive USA • Dominant market position in used car classifieds in For personal use only Australia. • Recent acquisition of the remaining 51% of Trader Interactive in the US (non-automotive classifieds) significantly expands International presence. • Ability to leve
Slide 27: James Hardie continuing to capture market share
James Hardie continuing to capture market share For personal use only Fibre cement gaining market share 100% 90% 80% Source: James Hardie 70% 60% • Market leadership in fibre cement cladding for US 50% homes 40% • Fibre cement has grown from 9% wall share in 2005 to 22% today. All other competing ma
Slide 28: ResMed – excellent long-term opportunity
ResMed – excellent long-term opportunity For personal use only • Market leader in the treatment of Obstructive Sleep Apnoea (OSA). • Founded in Sydney in 1989 by current Chairman, Peter Farrell. His son Mick is the current CEO • Today, the business has over 8,000 employees and operates in over 140 c
Slide 29: Outlook
For personal use only Outlook AFIC Annual General Meeting 2022
Slide 30: Outlook
Outlook For personal use only • Uncertain operating environment with persistent inflation and rising interest rates. • The valuation of the market has significantly retraced this year with some risk of further downside. • The portfolio is well positioned to perform in a wide range of operating envir
Slide 31: International Portfolio
International Portfolio • Consistent with the existing AFIC portfolio, the International portfolio invests in quality companies with: For personal use only Strong management teams Solid balance sheets Competitive advantages that we view as sustainable Often underpinned by long term secular g
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