Washington H. Soul Pattinson And Company Limited · ASX:SOL
Washington H. Soul Pattinson And — FY2020 Earnings Presentation
31 slides from Washington H. Soul Pattinson And's earnings presentation, Sep 24, 2020
Slide 1: Financial Results Year ended 31 July 2020
Financial Results Year ended 31 July 2020
Slide 2: Business overview
Business overview DIVERSIFIED & LONG-TERM INVESTOR VALUE FOCUSED AND UNCORELLATED PORTFOLIO WITH BROAD MANDATE TRUSTED PARTNER Look-through portfolio composition A$5.2 billion Diversified portfolio of uncorrelated investments across listed equities, private equity / venture capital, property, corp
Slide 3: Experienced Board of Directors
Experienced Board of Directors Majority Independent Directors Robert Millner Todd Barlow Tiffany Fuller Michael Hawker AM Thomas Millner Warwick Negus Josephine Sukkar AM Robert Westphal Chairman of Board Managing Director since Non-Executive Director Non-Executive Director Non-Executive Director No
Slide 4: FY20 performance
FY20 performance As at 31 July 2020 Full Year Results year ended 31 July 2020 4
Slide 5: Overview - year ended 31 July 2020
Overview - year ended 31 July 2020 Profit for the year Key performance indicators Net cash from Group Regular NPAT1 Group Statutory NPAT WHSP portfolio value investments2 $169.8m $953.0m $5.2b $252.3m down 44.7% up 284.3% 6.9% outperformance* up 48.8% Large non-regular gain from TPG uplift to mark
Slide 6: Dividends
Dividends WHSP is the only company in the All Ordinaries Index to have increased its dividend every year since 2000 20 year Total Ordinary Dividend history Compounded annual WHSP has resolved to pay an FY20 Final growth rate of 9.2% p.a. Dividend of 35cps, fully franked Total dividends for FY20
Slide 7: Portfolio performance
Portfolio performance Net Asset Value of WHSP (pre-tax) as at 31 July 2020 was $5.2 billion, outperformed the All Ordinaries by 6.9% Value of As at 31 July 2020 WHSP’s 12 month Portfolio Holding Movement Weighting $m $m % % Strong growth in telecommunications Telecommunications Portfolio1 1,967 33
Slide 8: Total shareholder returns
Total shareholder returns An investment in WHSP over the last 20 years has increased 987% Annualised TSRs 1 Year 5 Year 10 Year 15 Year 20 Year WHSP (11.4%) 10.6% 7.5% 8.5% 12.7% All Ordinaries Accumulation Index (9.0%) 5.5% 7.4% 6.6% 7.5% +987% Relative performance (2.4%) 5.1% 0.1% 1.9% 5.2% WHSP +
Slide 9: Long-term total shareholder returns
Long-term total shareholder returns WHSP has provided strong equity returns over the last 40 years $1,000 invested in 1980 worth $155,938 a Compound annual return of 13.5% for 50 years WHSP All Ords Accum Index All Ordinaries Accumulation Index 1980 1985 1990 1995 2000 2005 2010 2015 2020 Cumulative
Slide 10: Covid-19
Covid-19 Full Year Results year ended 31 July 2020 10
Slide 11: Managing safe and continuous operations
Managing safe and continuous operations WHSP’s business model and operations showed resilience through COVID-19 Quickly responded with policies and practices to ensure health and safety of our staff Maintained productivity by implementing effective working from home procedures WHSP did not app
Slide 12: Investing through volatility
Investing through volatility Many key business drivers continue to exhibit volatility and require careful consideration Exchange Rate Australian International Travel US$ per 1 A$ since 31 July 2019 Monthly (#’000) 0.75 1,500 Inbound (visitor arrivals) 0.70 Outbound (AU resident returns) 1,000 0.65 5
Slide 13: Resilience through volatility
Resilience through volatility WHSP has performed better than the All Ordinaries Index through COVID affected period Performance of WHSP v All Ords 1 Feb to 23 Sep 2020 15.0% Since the start of 2H20 (1 February 2020), 10.0% WHSP’s share price is up 9.0%. During this 5.0% period, the All Ordinaries
Slide 14: Portfolio overview
Portfolio overview Full Year Results year ended 31 July 2020 14
Slide 15: Telecommunications portfolio
Telecommunications portfolio Year ended 31 July 2020 Value of portfolio $1,967 million TPG Group Limited (ASX:TPG) Portfolio performance (total return) 27.6% Dividends paid to WHSP (excl. Tuas) $132.6 million Vodafone Hutchison Australia “TPG GROUP” FY20 portfolio performance Merger of equals crea
Slide 16: Telecommunications portfolio
Telecommunications portfolio TPG Special dividend Tuas Limited (ASX:TUA) TPG reduced its dividend in FY18 to preserve cash for a Tuas is the TPG Mobile business in Singapore potential mobile rollout. Once the merger was agreed, Prior to the merger, TPG demerged Tuas Limited to its TPG was able
Slide 17: Telecommunications portfolio
Telecommunications portfolio TPG Group first half 2020 Impact of COVID-19 TPG Group has a 31 December year end ~80% reduction in margin contribution from roaming (inbound and outbound tourists) Results for 1H were almost exclusively Vodafone Hutchison Australia numbers (only 4 days contributio
Slide 18: Brickworks Limited
Brickworks Limited Year ended 31 July 2020 Business overview Associated entity 43.8% shareholding Brickworks has now established a business of significant Value of WHSP’s shareholding $1.07 billion scale in the US (two further bolt-ons during the year) Contribution to WHSP’s regular NPAT $42.0 mil
Slide 19: Brickworks Limited
Brickworks Limited BKW has a diversified portfolio of assets, with an inferred value of more than $3 billion Asset Exposure Inferred Asset Value Split by BKW Operating Division $million Building Products NA, 7% Building Products AU, 15% Investments, 55% Property, 23% Full Year Results year ended 31
Slide 20: Brickworks Limited
Brickworks Limited Building products Building products demand remained resilient. COVID-19 disruption greater in US than Australia 2H earnings higher despite COVID-19 headwinds Property division Industrial real estate resilient through COVID-19 Net trust income higher on rent reviews and add
Slide 21: New Hope Corporation Limited
New Hope Corporation Limited Year ended 31 July 2020 Business overview Controlled entity 50.0% shareholding Operating cash surplus of $298m (before acquisition Value of WHSP’s shareholding $545 million costs, interest and tax) down 42% on the FY19 result of $509.8m Contribution to WHSP’s regular N
Slide 22: New Hope Corporation Limited
New Hope Corporation Limited COVID-19 has had a significant impact on energy production and thermal coal demand OECD electricity generation reduced by 4.5% YoY in H1 2020 Coal has fallen more than other sources, down 22% YoY From highs of over US$100/t in late 2018, thermal coal prices were st
Slide 23: New Hope Corporation Limited
New Hope Corporation Limited New Hope has high-quality coal assets in the lowest quartile on the global cost curve Bengalla New Acland Source: Cru Full Year Results year ended 31 July 2020 23
Slide 24: Financial Services Portfolio
Financial Services Portfolio Year ended 31 July 2020 Value of portfolio* $311 million Contribution to WHSP’s regular NPAT $20.1 million Portfolio overview Dividends paid to WHSP $19.1 million Assets include LICs, funds management and financial advice * Market value, cost or directors’ valuation
Slide 25: Pharmaceutical Portfolio
Pharmaceutical Portfolio Year ended 31 July 2020 Value of portfolio $285 million Contribution to WHSP’s regular NPAT $12.5 million Value of the portfolio as at 31 July 2020 $285m, Dividends paid to WHSP $5.6 million up 7.7% After deducting further investment made in Palla Pharma, the portfolio i
Slide 26: Round Oak Minerals
Round Oak Minerals Year ended 31 July 2020 Controlled entity 100% held Operations Value of WHSP’s holding $161 million Material improvement in commodity prices and Contribution to WHSP’s Regular NPAT ($42.5 million) treatment charges in 2H20 Strong cashflow generation from Queensland copper FY20
Slide 27: Property Portfolio
Property Portfolio Year ended 31 July 2020 Value of WHSP’s holdings $90 million Contribution to WHSP’s regular profit $7.7 million In July 2020 contracts exchanged to sell Penrith shopping centre (WHSP 50.1% interest) at book value (WHSP share $13.7m) Pennant Hills office building Maintained own
Slide 28: Private Equity Portfolio
Private Equity Portfolio Year ended 31 July 2020 The Private Equity Portfolio increased by $136m (101%) during the year primarily as a result of new investment in Agricultural investments (managed by Argyle Capital Partners) • Citrus, macadamias, avocados, stone fruit and table grapes • Defensive
Slide 29: Equities Portfolios
Equities Portfolios Year ended 31 July 2020 WHSP Large Caps Portfolio Value of WHSP’s holdings $511 million Portfolio managed by Contact Asset Management Dividends paid to WHSP $15.5 million The objective is to provide WHSP with long-term capital preservation and an attractive income stream thro
Slide 30: Terms and Definitions
Terms and Definitions Regular profit after tax is a non-statutory profit measure and represents profit from continuing operations before non-regular items. A reconciliation to 1 Group Regular NPAT statutory profit is included in the Preliminary Final Report, page 25. Net cash flows from investments
Slide 31: Disclaimer
Disclaimer Disclaimer This document has been prepared by Washington H. Soul Pattinson and Company Limited (‘WHSP’). All information contained in this document (including this notice) Any forward looking statements included in the Information This Information does not constitute an offer, invitation,
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