Ma Financial Group Limited · ASX:MAF
Ma Financial — FY2023 Earnings Presentation
65 slides from Ma Financial's earnings presentation, Feb 22, 2024
Slide 1: FY23 results presentation
FY23 results presentation February 2024 For personal use only
Slide 2: Acknowledgement of Traditional Owners
For personal use only We respectfully acknowledge the Traditional Owners of lands across Australia and pay our respects to their Elders, past, present and emerging. Our head office is located on Gadigal land.
Slide 3: Contents
Contents FY23 results & highlights 7 For personal use only Post balance date activity & outlook 17 Asset Management 20 Lending & Technology 30 Corporate Advisory & Equities 37 FY23 financials 41 What we do 45 Appendices 48 3
Slide 4: Explanation of Underlying measures in this presentation
Explanation of Underlying measures in this presentation MA Financial Group Limited (MA Financial or the Company) (ACN 142 008 428) and its Differences in classification arise because the Group chooses to classify some IFRS For personal use only subsidiaries (Group) utilise non-IFRS Underlying financ
Slide 5: MA Financial Group – We invest. We lend. We advise.
MA Financial Group – We invest. We lend. We advise. Our purpose is to create sustainable, long-term value for all of our stakeholders For personal use only $9.2b $270m We are a global alternative asset manager specialising in private credit, real estate and alternative real 1 estate. We lend to real
Slide 6: Evolution of MA Financial
Evolution of MA Financial Scaling established businesses alongside investing in growth opportunities CAGR 2013 – 2023 For personal use only Underlying revenue 21% Assets under Management 81% 2009 2010 2013 2014 2016 2017 2018 2021 2022 2023 Corporate Advisory Est. Asset Asset Management First office
Slide 7: FY23 results & highlights
FY23 results & highlights For personal use only
Slide 8: FY23 result – key themes
FY23 result – key themes Strong underlying business momentum despite challenging economic conditions For personal use only Record inflows into Asset Management funds – $1.9 billion gross inflows were 27% higher than FY22 1 $262 million of additional inflows post balance date up 4% on same period in
Slide 9: Focused on medium-term growth targets
Focused on medium-term growth targets Confidence in ongoing growth derived from our history of successful strategic investment in platform to build highly scalable businesses. Management targets for growth in major business metrics consistent with historic track-record For personal use only Historic
Slide 10: FY23 result highlights
FY23 result highlights Strong platform growth across Asset Management and Lending & Technology. Material investment in business platform and brand poised to deliver future growth but impacted FY23 EPS by 5 cents For personal use only $178m 26.0cps 20.0cps Recurring revenue1 Underlying EPS Fully Fran
Slide 11: We continue to invest in growth and improved revenue quality
We continue to invest in growth and improved revenue quality Since IPO year of 2017, the Group’s recurring revenue has grown 10x and Group underlying revenue 3.7x. This growth has been driven by ongoing targeted strategic investment Underlying revenue $270m For personal use only Underlying revenue $
Slide 12: FY23 results
FY23 results 1 1 Underlying Results FY23 FY22 FY23 v FY22 Statutory Results FY23 FY22 FY23 v FY22 Revenue $269.9m $301.8m (11%) Revenue2 $392.8m $335.0m 17% For personal use only 3 Expenses $188.3m $195.1m (3%) Expenses $218.6m $216.1m 1% EBITDA $81.6m $106.7m (24%) EBITDA4 $174.2m $118.9m 47% Net p
Slide 13: Material investment made in FY23 to deliver future growth
Material investment made in FY23 to deliver future growth Short term earnings are impacted (~5cps in FY23 and similar expected in FY24) by strategically investing in future growth opportunities. We have a proven track record of delivering a high return on strategic investments. For personal use only
Slide 14: Financial performance
Financial performance Improved earnings composition following exceptionally large performance fee contribution in the prior corresponding period Underlying revenue ($m) Underlying EBITDA ($m) For personal use only 350 1H 2H 1H 2H 300 100 250 80 57 156 200 142 36 60 150 120 41 40 37 33 100 90 86 146
Slide 15: Business Unit Highlights
Business Unit Highlights 80% of EBITDA derived from Asset Management. Complementary business segments provide a valuable ecosystem with diversification. Asset Management EBITDA contribution1 80% EBITDA contribution by business division For personal use only • Gross inflows of $1.9b, driven by strong
Slide 16: FY23 strategic outcomes
FY23 strategic outcomes Delivering on key priorities despite challenging market conditions For personal use only Asset Management recurring revenue was $153m in FY23, up 22% from $126m in FY22 Grow recurring revenue base Finsure generated $25m of recurring fee-based revenue in FY23, up 33% from $19m
Slide 17: Post balance date activity & outlook
Post balance date activity & outlook For personal use only
Slide 18: Key business activity since December 2023
Key business activity since 31 December 2023 Strong fund inflows and loan settlements to start 2024 Asset Management • Positive momentum in AUM and client fund flows continues For personal use only − $262 million of gross fund inflows (net inflows: $194 million) received in the first six weeks of 1H
Slide 19: FY24 outlook commentary
FY24 outlook commentary Positive business momentum continuing with increasing contribution from recurring revenue lines Asset Management • Expectation for continued growth in fund inflows For personal use only • Recurring revenue margin expected to be lower in FY24 due to impact of rising interest r
Slide 20: Asset Management
For personal use only Asset Management
Slide 21: MA Financial is an active manager of alternative asset classes
MA Financial is an active manager of alternative asset classes The active management of longer duration alternative assets presents a strong proposition for our clients. Adding value with operational expertise requires hands-on management capability. We are more than just financial managers of asset
Slide 22: Asset Management Performance
Asset Management Performance Underlying Financials ($M) FY23 FY22 FY23 v FY22 Base management fees 104.2 92.4 13% For personal use only Recurring revenue up strongly underpinned by strong Credit funds income 42.4 25.7 65% demand for credit funds Principal investments income 6.8 7.6 (11%) Total recur
Slide 23: Continued growth in recurring revenue
Continued growth in recurring revenue 25% CAGR in recurring revenue since FY20 For personal use only +25% 197.8 CAGR 176.1 72.1 22.7 132.2 101.5 39.7 23.7 153.4 125.7 92.5 77.8 FY20 FY21 FY22 FY23 Recurring revenue Transaction/Performance revenue & realised gains 23
Slide 24: Assets Under Management
Assets Under Management AUM up 18% to $9.2 billion with a focus on alternative asset classes $9.2b 9 0.4 For personal use only 0.6 $7.8b 8 0.3 $6.9b 0.7 1.9 7 6 1.8 +42% $5.4b CAGR $4.9b 5 2.3 4 $3.7b 2.5 $2.9b 3 2 4.0 $1.1b $0.8b 2.5 1 $0.4b 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Credi
Slide 25: FY23 Fund Flows
FY23 Fund Flows Strong growth in fund flows with Domestic flows up 81% on FY22 For personal use only Flows by Asset Class1 ($M) FY23 FY22 Gross Net Gross Net Strong flows into Credit products from domestic, international and institutional clients, 57% growth Credit 1,694 1,162 1,077 877 Core Real Es
Slide 26: Investor Flows
Investor Flows Distribution channels continue to grow and diversify – only 1% of flows in FY23 from Migration related sources Investor channel gross inflows by proportion (%) Investor channel gross inflows ($) For personal use only 1,941 5% 9% 9% 1% 173 19 18% 1,532 43% 33% 141 1,306 647 57% 273 33%
Slide 27: Asset Management client base
Asset Management client base Domestic and International Non-Migration clients increasing as a proportion of total AUM FY23 AUM by investor channel FY22 AUM by investor channel For personal use only $1.3b $1.3b $2.7b $3.5b $2.6b $9.2b $7.8b $2.7b $1.1b $1.8b Domestic HNW & Retail International HNW (N
Slide 28: Focus is to be an active manager of alternative asset classes
MA Financial's focus is to be an active manager of alternative asset classes Diversity of fund strategies delivers continued AUM growth Private Credit & Fixed Income Real Estate For personal use only AUM: $4.0 billion AUM: $4.2 billion • Increased participation in platforms and model portfolios cont
Slide 29: Credit Investing + Lending & Technology = Powerful driver of growth
Credit Investing + Lending & Technology = Powerful driver of growth Sourcing credit assets directly through our proprietary relationships and in-house platforms is a significant strategic advantage. Over 75% of our $4.0b in credit investment funds have been directly originated in our proprietary cha
Slide 30: Lending & Technology
For personal use only Lending & Technology
Slide 31: We are building a tech-enabled highly scalable Lending ecosystem
We are building a tech-enabled highly scalable Lending ecosystem Creation of a tech-enabled highly scalable lending ecosystem that generates fee-based income, spread income and investment product for our managed funds For personal use only Lending Financial Technology Spread income Fees and commissi
Slide 32: Lending & Technology Divisional Performance
Lending & Technology Divisional Performance Emerging Division with acquisition of Finsure and MA Money complementing existing Specialist Finance platform Underlying Financials ($M) FY23 FY22 FY23 v FY22 For personal use only Represents growth in Finsure managed loans and total Financial Technology 3
Slide 33: Financial Technology Performance
Financial Technology Performance Includes acquisition of Finsure in February 2022 and emerging Middle technology platform 1 Underlying Financials ($M) FY23 FY22 FY23 v FY22 For personal use only Fees & commissions Organic growth of loan book and brokers coupled with fee model shift Subscription fees
Slide 34: Finsure Platform Growth
Finsure Platform Growth Finsure continues to grow its market position with a differentiated proposition for brokers focused on value-add service innovation and technology For personal use only Brokers on Platform Finsure’s Broker market share1 Managed Loans $110b 3,129 16.3% +19% +21% 2,640 $91b 14.
Slide 35: Lending Platforms Performance
Lending Platforms Performance Includes Specialty Finance and MA Money residential lending business. Significant investment in platform during FY23 Underlying Financials ($M) FY23 FY22 FY23 v FY22 Strong business growth offset by competitive pricing and For personal use only product mix changes MA Mo
Slide 36: Loan Book Growth and Invested Capital
Loan Book Growth and Invested Capital New and competitive MA Money product offering drives higher loan settlements facilitating loan book growth in a capital light manner Loan Book growth (A$m at year end) Invested capital1 (A$m / % at year end) For personal use only 100 Specialty Finance MA Money $
Slide 37: Corporate Advisory & Equities
Corporate Advisory & Equities For personal use only
Slide 38: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance Underlying Financials ($M) FY23 FY22 FY23 v FY22 For personal use only Corporate Advisory fees 43.1 56.9 (24%) Equities commissions 5.2 4.6 13% Total Underlying Revenue 48.3 61.5 (21%) Expenses 41.4 47.6 (13%) Underlying EBITDA 6.9 13.9 (50%) EBITDA margin 1
Slide 39: Revenue seasonality
Revenue seasonality Corporate Advisory revenue typically weighted to second half • Corporate Advisory & Equities revenue is typically seasonal with, on average, second half weighting of approximately 60% For personal use only • Seasonality was below the historical average in FY23 as uncertain market
Slide 40: Corporate Advisory – relatively consistent across cycles
Corporate Advisory – relatively consistent across cycles Corporate Advisory has a consistent overall revenue productivity performance • Our target productivity range of $1.1m – $1.3m per executive is supported by over a decade of operation. Market uncertainty, and particularly a lack of ECM revenue,
Slide 41: FY23 Financials
For personal use only FY23 Financials
Slide 42: Group Underlying Profit and Loss
Group Underlying Profit and Loss1 Summary Underlying Profit & Loss Statement ($M) FY23 FY22 FY23 v FY22 Strong growth in recurring revenue, offset by cycling of strong performance fees in FY22 Asset Management 176.1 197.8 (11%) For personal use only Lending & Technology 44.7 41.1 9% Corporate Adviso
Slide 43: Group Operating Balance Sheet
Group Operating Balance Sheet1 Operating Balance Sheet ($M) 31 Dec 2023 31 Dec 2022 Reduced from US Private Credit platform acquisition, MA Cash and cash equivalents 43.1 98.8 Money warehouse funding and share buy back For personal use only Loans receivable 6.2 9.0 Refer to following slide for detai
Slide 44: Group Investments
Group Investments Ability to recycle capital and maintain a dynamic investment portfolio underpins balance sheet strength For personal use only Summary of Investments ($M) 31 Dec 2023 31 Dec 2022 Lending (MA Money & Specialty Invested Capital) 17.1 8.2 Co-investments 51.4 66.7 Private Credit funds 8
Slide 45: What we do
For personal use only What we do
Slide 46: Our core capabilities position us well for medium term growth
Our core capabilities position us well for medium term growth Focus on building sustainable earnings growth For personal use only 01. 02. 03. Builder of valuable businesses in Scalable business powered by Diversified capital sources and large addressable markets unique distribution client investor b
Slide 47: MA in the community
MA in the community • Established in 2018, the MA Foundation has three long-term community partners: For personal use only GO Foundation, BackTrack, and the Mirabel Foundation. • It also supports charities and community causes that hold significant importance to our staff. To date, the Foundation ha
Slide 48: Appendices
For personal use only Appendices
Slide 49: Appendix – Financials
For personal use only Appendix – Financials
Slide 50: FY23 Financials - Statutory to Underlying Profit Reconciliation
FY23 Financials - Statutory to Underlying Profit Reconciliation For personal use only Note Revenue1 EBITDA NPAT CI1 FY23 Statutory Results ($m) 392.8 174.2 31.1 21.6 Differences in measurement Business acquisition adjustments (a) - 5.5 11.0 11.0 Net losses on investment (b) - - - 2.4 Adjustments rel
Slide 51: FY22 Financials - Statutory to Underlying Profit Reconciliation
FY22 Financials - Statutory to Underlying Profit Reconciliation For personal use only Note Revenue1 EBITDA NPAT CI1 FY22 Statutory Results ($m) 335.0 118.9 44.9 45.8 Differences in measurement Business acquisition adjustments (a) - 3.7 9.8 9.8 Net losses on investment (b) (0.2) (0.2) (0.2) 2.6 Adjus
Slide 52: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement Differences in Classification For personal use only a) The Underlying treatment removes one-off transaction costs related to the acquisition e) The Underlying treatment records the net distributions received from the L
Slide 53: FY23 Balance Sheet – Operating to Statutory Reconciliation
FY23 Balance Sheet – Operating to Statutory Reconciliation 31 Dec 2023 31 Dec 2023 31 Dec 2023 31 Dec 2023 For personal use only Summary Consolidated Balance Sheet ($M) Operating Lending Trusts1 Reclassifications Statutory Cash and cash equivalents 43.1 137.2 - 180.3 Loans receivable 6.2 2,073.5 - 2
Slide 54: FY22 Balance Sheet – Operating to Statutory Reconciliation
FY22 Balance Sheet – Operating to Statutory Reconciliation 31 Dec 2022 31 Dec 2022 31 Dec 2022 31 Dec 2022 For personal use only Summary Consolidated Balance Sheet ($M) Operating Lending Trusts1 Reclassifications Statutory Cash and cash equivalents 98.8 45.8 - 144.6 Loans receivable 9.0 846.5 - 855.
Slide 55: Notes to Operating Balance Sheet Reconciliation
Notes to Operating Balance Sheet Reconciliation Lending Trust Adjustments Reclassifications For personal use only • The Group utilises non-recourse funding vehicles (Lending Trusts) typically in the form • The reclassification adjustments seek to present the balance sheet on a net basis of securitis
Slide 56: Group Underlying Profit & Loss – Divisional Summary
Group Underlying Profit & Loss – Divisional Summary For personal use only Underlying Profit & Loss ($M) FY23 FY22 Revenue Asset Management 176.1 197.8 Lending & Technology 44.7 41.1 Corporate Advisory and Equities 48.3 61.5 Corporate 0.8 1.4 Total Revenue 269.9 301.8 Expenses Asset Management 93.9 9
Slide 57: Borrowings - Operating
Borrowings - Operating Borrowings ($M) Maturity date Coupon 31 Dec 2023 31 Dec 2022 For personal use only MA Bond IV Unsecured note Sep 2024 5.85% 40.0 40.0 MA Bond VI Unsecured note Sep 2027 5.75% 25.0 25.0 MACI Bond Unsecured note – limited recourse May 2024 4.35% + RBA cash rate 30.0 30.0 Total D
Slide 58: Shares on issue
Shares on issue For personal use only Summary of Shares on Issue 31 Dec 23 31 Dec 22 Total shares on issue 178,331,811 175,073,933 Less: Treasury shares 18,437,383 15,346,005 Net shares on issue 159,894,428 159,727,928 Weighted average number of shares on issue 177,658,634 174,769,686 Less: Weighted
Slide 59: Appendix – Assets under Management
For personal use only Appendix – Assets under Management
Slide 60: Core Real Estate AUM
Core Real Estate AUM Real Estate AUM of $2.3 billion following successful asset realisations For personal use only $2.6b $2.5b $2.3b $2.2b $2.2b 0.8 0.7 $1.5b $1.4b 1.7 1.6 $0.5b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Retail Real Estate Diversified Real Estate 60
Slide 61: Alternative Real Estate AUM
Alternative Real Estate AUM Launched MA Marina Fund as a new scalable alternative real estate strategy For personal use only $1.9b $1.8b 0.3 $1.6b $1.3b $1.2b $1.2b $0.9b 1.8 1.6 $0.1b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Hospitality Marinas 61
Slide 62: Credit AUM
Credit AUM Credit AUM continues to grow strongly driven by growth in Real Estate Credit funds and Asset Backed Lending (including Priority Income Funds) For personal use only $4.0b 1.7 $2.5b 1.1 $1.6b $1.1b 1.9 $0.9b 0.9 $0.6b $0.3b $0.4b 0.5 0.4 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Bonds & Cash
Slide 63: Listed Equities AUM
Listed Equities AUM Equities AUM impacted by market performance cycle For personal use only $0.9b $0.7b $0.6b 0.1 0.1 $0.5b 0.1 0.1 $0.3b $0.2b 0.5 0.4 $0.1b $0.1b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Small Caps Funds Index & REITs All Caps Funds 63
Slide 64: PE/VC AUM
PE/VC AUM Growth credit strategy established with MA Sustainable Future Fund For personal use only $0.4b 0.1 $0.3b $0.3b 0.0 $0.3b $0.2b $0.2b 0.2 $0.2b 0.2 $0.1b 0.2 0.1 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Private Equity Venture Capital Growth Credit 64
Slide 65: Disclaimer
Disclaimer The material in this presentation has been prepared by MA Financial Group Limited ACN This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any For personal use only 68 142 008 428 (MA Financial) and is general background information about MA Financ