Macquarie Group, Ltd. · ASX:MQG
Macquarie — Citi 5th Annual Australia & New Zealand Investment Conference London 2008
40 slides from Macquarie's conference presentation, Mar 10, 2008
Slide 1: Macquarie Group Limited – Citi Investment Conference London 2008
For personal use only Macquarie Group Limited Citi 5th Annual Australia & New Zealand Investment Conference London 2008 Richard Sheppard – Deputy Managing Director 10-11 March 2008
Slide 2: Disclaimer
For personal use only Disclaimer This material has been prepared for professional investors. The firm preparing this report has not taken into account any customer’s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations herein are
Slide 3: Agenda
For personal use only AGENDA 1. Macquarie Group overview 2. Global market conditions 3. Capital and funding 4. Update on Macquarie businesses 5. Current year outlook 6. Appendix I - Earnings drivers 7. Appendix II - Facts on specialist funds 8. Glossary 3
Slide 4: Macquarie Group overview
For personal use only Macquarie Group overview Diversified financial services institution Providing advisory, funds management, banking and investment services Consistent high growth rates since establishment in 1969 Over 12,000 staff operating in 25 countries Top 20 company on the Austral
Slide 5: 12,400 staff in 25 countries
12,400 staff in 25 countries 40% outside Australia For personal use only EUROPE & MIDDLE EAST ASIA NORTH AMERICA 1,254 staff 1,923 staff 1,678 staff Beijing Seoul Tianjin Tokyo Shanghai Calgary Taipei Vancouver Winnipeg Hong Kong Hsinchu Seattle Toronto Dublin Manchester New Delhi Manila San Francis
Slide 6: Diversified operating income
Diversified operating income Income by business segment – (Half-year to 30 Sep 2007) For personal use only Capital markets, advisory & Asset & wealth management: 27%1 securities: 41%1 Infrastructure, real estate and other specialist funds Mergers and acquisitions, advisory, underwriting and principa
Slide 7: Growth record
For personal use only Growth record Profit Earnings per share CAGR to 31 Mar 07: 1H08: +45% Ac CAGR to 31 Mar 07: 1H08: +34% $Am on pcp to $A1.06b 600 on pcp to $A4.02 1,600 — 5 year: 42% — 5 year: 35% 500 1,400 1,200 — 10 year: 29% 400 — 10 year: 23% 1,000 300 800 600 200 400 100 200 0 0 1997 1998
Slide 8: Income growth across regions
For personal use only Income growth across regions Australia 1H 2H Asia Pacific 5 year CAGR to 31 Mar 07: 23% $Am 5 year CAGR to 31 Mar 07: 59% $Am 2500 3,500 3,000 2000 +9% 2,500 +96% on pcp 1500 2,000 on pcp 1,500 1000 1,000 500 500 0 0 2003 2004 2005 2006 2007 1H08 2003 2004 2005 2006 2007 1H
Slide 9: Management update
For personal use only Management update Allan Moss will retire after 15 years as Managing Director and CEO and more than 30 years with Macquarie, effective 24 May 2008 (post FY08 results) Nicholas Moore appointed as Macquarie’s new Managing Director and CEO — With Macquarie for more than 20 year
Slide 10: Global market conditions
For personal use only Global market conditions
Slide 11: Global market conditions
For personal use only Global market conditions Credit markets — Investor sentiment still weak — International short term funding markets have improved in some areas — Australian short term markets continue to function normally — Global term funding markets, including the securitisation market, rem
Slide 12: Global market conditions
For personal use only Global market conditions Investment banking Asia — Continued growth in Asian M&A volumes — Credit crisis has impacted Asian debt markets through the operations of US and European banks — Strong ECM volumes in 2007, strong pipeline for 2008 though expect some delay in some dea
Slide 13: Global market conditions
For personal use only Global market conditions Global real estate — Credit squeeze has accelerated a repricing of risk in a number of markets — Refinancing risks in some markets — Sharp decline in almost all global listed real estate markets. Many now priced well below reported net asset values —
Slide 14: Capital and Funding
For personal use only Capital and Funding
Slide 15: Regulatory capital position
For personal use only Regulatory capital position Macquarie remains well positioned to fund growth and to capitalise on suitable strategic opportunities in the current environment Macquarie Group Limited – Regulatory Capital Position (31 December 2007) MBL Group Minimum Capital Requirement Non-ADI
Slide 16: Liquidity and funding
For personal use only Liquidity and funding Well funded Key principles: — Conservative approach — Diversity of funding sources is a key objective of the Group’s liquidity approach including diversity by product, geography, tenor and currency — Concentration limits to ensure a good spread of matu
Slide 17: Update on Macquarie businesses
For personal use only Update on Macquarie businesses
Slide 18: Key points
For personal use only Key points Macquarie remains: — Very profitable — Well capitalised, and — Well funded No unusual trading exposures No unusual concerns with credit quality Commitment to strategic alignment with investors through investments in Macquarie- managed funds — Total market val
Slide 19: Key points (contd.)
For personal use only Key points (contd.) Continued strong market shares Geographic diversity Funding costs have increased Dividend policy unchanged: 50-60% target annual payout ratio Remain well placed for growth in the medium term Identifying opportunities currently Taking strategic
Slide 20: Update on Macquarie businesses
For personal use only Update on Macquarie businesses All Groups operating profitably, although provision on investments in real estate funds to be assessed as part of year-end reporting process M&A – reasonable volumes and pipeline in Asia and Australia ECM – lower volumes in Australia, good v
Slide 21: Update on Macquarie businesses
For personal use only Update on Macquarie businesses Real Estate - challenging REIT market conditions but assets in funds operating soundly with high occupancy and strong lease profile Merger of Financial Services and Banking and Securitisation Groups – to enhance services to retail clients Wi
Slide 22: No unusual trading exposures
For personal use only No unusual trading exposures Main business focus is making returns by providing services to clients rather than by principal trading No material exposures not already known to investors No problem trading exposures No material problem credit exposures No exposure to S
Slide 23: Specialist fund raisings supported by international investors
Specialist fund raisings supported by international investors For personal use only $A5b raised over 3 months to 31 Dec 2007 62% from international investors and 99% into unlisted funds or syndicates Current funds available for investment: — MacCap Funds: $A6b — Real Estate Funds: $A3.3b New
Slide 24: Current year outlook
For personal use only outlook Current year
Slide 25: Current year outlook (Year to March 2008)
Current year outlook (Year to 31 March 2008) For personal use only Expect FY08 result of approximately $A1.8b which, if achieved, would be well up on the prior year result of $A1.46b and a record result — Achieving this result remains subject to market conditions which remain volatile. In particul
Slide 26: 2008 Investor Relations calendar
For personal use only 2008 Investor Relations calendar 20 May: Full-year result announcement for period ending 31 Mar 2008 Early June: US Operational Briefing 23 July: Annual General Meeting 18 November: Half-year result announcement for period ending 30 Sep 2008 26
Slide 27: Appendix I – Earnings drivers
For personal use only APPENDIX I Earnings drivers Extract from interim result announcement for half-year to 30 September 2007
Slide 28: Operating income
Operating income 38% increase on pcp to $A4.7b (Half-year to 30 Sep 07) For personal use only $Am Goodman Group gains 5,000 Asset & equity investment and other income 4,500 Interest income 4,000 Trading income Fee and commission income 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Sep-04 Mar-05 Sep-05 M
Slide 29: Fee and commission income
Fee and commission income 48% increase on pcp to $A2,478m (Half-year to 30 Sep 07) For personal use only $Am 1,000 900 800 Sep 2006 Mar 2007 Sep 2007 700 600 500 400 300 200 100 0 Base fees Performance M&A, Advisory Brokerage and Wrap and Financial Banking, Other fee and fees and Commissions Other P
Slide 30: Funds management income
For personal use only Funds management income AUM up 46% on pcp to $A224b; base fees up 49% on pcp to $A477m Performance fees significantly up on pcp to $A169m AUM & Base fees Performance fees AUM ($Ab) Base Fees ($Am) $Am Infrastructure 200 Infrastructure 250 Real estate 500 180 Real estate Oth
Slide 31: Net trading income
Net trading income 60% increase on pcp to $A895m (Half-year to 30 Sep 07) For personal use only Net trading income before adjusting for Sep 07 Mar 07 Sep 06 pcp accounting impacts up 60% on pcp $Am $Am $Am Ô Global equity markets indices reported strong growth, particularly in Asia Equity Markets
Slide 32: Net interest income
Net interest income 86% increase on pcp to $A468m (Half-year to 30 Sep 07) For personal use only Loan Assets (excluding securitised $Ab 30 mortgages) Sep 2007 FY2007 Real estate 25 Mortgages Average Average Interest Volume Spread Interest Volume Margin lending & $Am $Ab % $Am $Ab Spread % 20 equitie
Slide 33: Net income from asset & equity investments and other transactions
Net income from asset & equity investments and other transactions For personal use only Sep 07 Mar 07 Sep 06 $Am $Am $Am Asset & equity investment income Profit on disposal of assets and equity investments 687 664 434 (Boart Longyear, Macquarie New York Parking (Icon Parking), Taiwan Broadband Commu
Slide 34: Appendix II – Facts on specialist funds
For personal use only APPENDIX II Facts on specialist funds
Slide 35: Facts on specialist funds
For personal use only Facts on specialist funds Investment discipline — Macquarie Capital Funds has delivered a compound annual return of 19% since inception 13 years ago1 — Real Estate Funds listed property trusts have delivered a compound annual return of 15% over the past 10 years, outperformin
Slide 36: Facts on specialist funds
For personal use only Facts on specialist funds Sale of assets — Majority of funds - general policy to be long-term owners of assets — Asset prices on material sales to third parties have in all cases equalled or exceeded directors’ valuations — 11 Macquarie Capital Funds1 assets realised between
Slide 37: Facts on specialist funds
For personal use only Facts on specialist funds Gearing — All funds have their own sources of funding – asset and fund debt is non-recourse to Macquarie — Macquarie Capital Funds: — Predominantly essential or privileged assets with highly predictable, long term revenue streams — Appropriately gear
Slide 38: Glossary
For personal use only Glossary 1H08/1H2008 Half year ended 30 September 2007 1Q08 3 months ended June 2007 2H07/2H2007 Half year ended 31 March 2007 2H08/2H2008 Half year ending 31 March 2008 2Q08 3 months ended 30 Sept 2007 3Q08 3 months ending 31 Dec 07 ADCB Abu Dhabi Commercial Bank ADI Authorise
Slide 39: Glossary
For personal use only Glossary FY08 Full year ending 31 March 2008 HY Half year 1H First half M&A Mergers and Acquisitions MacCap Macquarie Capital MAp Macquarie Airports MBL Macquarie Bank Limited MCW Macquarie CountryWide Trust MEIF/MEIF II/MEIF III Macquarie European Infrastructure Fund /Macquari
Slide 40: Contacts
For personal use only Contacts Richard Nelson Head of Investor Relations Email: richard.nelson@macquarie.com Phone: +61-2-8232-5008 Jenny Kovacs Associate Director, Investor Relations Email: jenny.kovacs@macquarie.com Phone: +61-2-8232-3250 40
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