Ma Financial Group Limited · ASX:MAF
Ma Financial — FY2020 Earnings Presentation
49 slides from Ma Financial's earnings presentation, Feb 17, 2021
Slide 1: FY20 Results Presentation
FY20 RESULTS PRESENTATION FEBRUARY 2021 Page 0
Slide 2: Contents
Contents I. FY20 Results & Highlights 3 II. Post Balance Date Activity & FY21 Outlook 9 III. Asset Management 12 IV. Corporate Advisory & Equities 26 V. FY20 Financials 30 VI. Strategic Outlook 35 VII. Appendices 38 Page 1
Slide 3: Explanation of Underlying measures in this presentation
Explanation of Underlying measures in this presentation Moelis Australia Limited (Moelis Australia or the Company) and its Differences in classification arise because the Company chooses to subsidiaries (Group) utilise non-IFRS Underlying financial information in classify some IFRS measures in a dif
Slide 4: FY20 Results & Highlights
FY20 Results & Highlights MOELIS AUSTRALIA LIMITED Page 3
Slide 5: FY20 Results
FY20 Results Resilient performance in a challenging environment builds strong business momentum into FY21 Resilient result delivering Underlying EBITDA of $60.5 million Earnings Underpinned by strong 2H20 momentum in Asset Management AUM growth supported by a 70% increase in 2H20 net inflows relativ
Slide 6: FY20 Results
FY20 Results Underlying Results1 FY19 FY20 Growth Statutory Results1 FY19 FY20 Growth Revenue $158.3m $160.1m 1.1% Revenue2 $153.7m $161.1m 4.8% EBITDA $63.5m $60.5m -4.7% EBITDA3 $52.0m $61.4m 18.0% Net profit after tax $40.2m $36.0m -10.4% Net profit after tax $23.5m $26.5m 12.7% Earnings per shar
Slide 7: Financial performance
Financial performance 2H20 rebound provides momentum into FY21 Underlying Revenue ($m) Underlying EBITDA ($m) 160 70 1H 2H 1H 2H 60 120 50 90 93 37 80 40 38 39 80 71 30 29 40 20 56 68 67 27 10 22 22 36 12 0 0 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Underlying Earnings per share (cps) Dividend per sh
Slide 8: Business unit highlights
Business unit highlights Rebounding momentum following resilient performance through COVID-19 interruption Asset Management EBITDA contribution1 84% EBITDA contribution by business division (ex. corporate) • FY20 revenue supported by base and performance fee growth 80.0 90% • 11% AUM growth in FY20
Slide 9: FY20 strategic delivery
FY20 strategic delivery Scaling our strengths Asset Management Corporate Advisory & Equities (CA&E) Increase exposure to annuity like income streams − 3% growth in recurring revenue despite COVID-19 headwinds Leverage our specialised expertise − 70% of asset management income recurring in nature
Slide 10: Post balance date activity & FY21 outlook
Post balance date activity & FY21 outlook MOELIS AUSTRALIA LIMITED Page 9
Slide 11: Key business activity since December 2020
Key business activity since 31 December 2020 Strong start to FY21 with growing momentum • Positive momentum in client fund flows continues − Net client inflows and commitments of approximately $150m received over the first six weeks of FY21 • MA Hotel Management (MAHM) settling on pub acquisitions a
Slide 12: FY21 outlook
FY21 outlook Positive business momentum provides confidence in outlook FY21 Underlying EPS expected to increase between 10% and 20% on FY20 Forecasting remains difficult given the current environment, however a number of factors provide confidence in the outlook for FY21. • A strong start to FY21 ac
Slide 13: Asset Management
Asset Management MOELIS AUSTRALIA LIMITED Page 12
Slide 14: Asset Management Performance
Asset Management Performance Underlying financials ($m) FY191 FY20 Growth FY20 impacted by -$4.2m reduction in Base management fees 52.2 54.0 3.5% management fees on COVID-19 impacted assets Principal investments income 20.6 21.1 2.5% FY20 impacted by -$3.9m reduced or suspended distributions associ
Slide 15: Assets Under Management
Assets Under Management We manage assets of $5.4 billion with a core focus on Real Estate, Hospitality and Credit Diversified by asset class and investor base $5.4b 0.8 $4.9b 0.6 1.1 0.9 $3.7b 0.4 1.2 1.3 0.6 $2.8b 1.2 2.2 2.2 $1.1b 1.5 $0.9b $0.4b FY14 FY15 FY16 FY17 FY18 FY19 FY20 Real Estate Hosp
Slide 16: Highlights
Highlights Significant activity has laid foundations for strong growth Credit Hospitality Real Estate AUM: A$1.1 billion $210m on FY19 AUM: A$1.3 billion $160m on FY19 AUM: A$2.2 billion $30m on FY19 • AUM grew by 23%, despite net • Successfully managed all stakeholders • Launched $63m MA Prime Logi
Slide 17: Strong track record of growth
Strong track record of growth Strong track record in growing scale businesses requires ongoing investment in people and strategy AUM $b Real Estate Hospitality Lending Total AUM and Credit 6 $5.4b Equities 5 VC/PE 0.8 Credit 4 1.1 90% 3 CAGR1 Hotels 1.3 $2.2b 2 79% $1.3b CAGR1 77% $1.1b Real CAGR1 9
Slide 18: Asset Management – Clients
Asset Management – Clients We manage assets for institutional, HNW and retail clients1 We are focused on the growth and diversification of our existing distribution channels $1.3b • Strong existing partnerships with large offshore institutions • Completion of successful construction finance partners
Slide 19: Hospitality AUM Growth
Hospitality AUM Growth AUM growth driven by MA Beach Hotel Byron Bay Fund acquisition and increase in value of RDC assets Closing on MA Taylor Square Fund and 4 RDC acquired hotels in 1H21, adding over $165m of AUM 107% CAGR (FY16 - FY20) $1.3b $1.2b $1.2b Acquisition of Redcape Hotel Group $0.9b ($
Slide 20: Hospitality
Hospitality MA Hotel Management (MAHM) manages $1.3 billion of hospitality assets in New South Wales and Queensland • MAHM is a unique hospitality operating platform that applies strong sector expertise across its high-quality real estate backed portfolios • The platform is highly scalable and is we
Slide 21: Real Estate AUM Growth
Real Estate AUM Growth Stable AUM with new fund launch offsetting a small reduction in Retail real estate asset valuations 43% CAGR (FY16 – FY20) $0.7b acquisition of Marion $2.2b $2.2b via Moelis Australia managed vehicle, fully capitalised by SPH REIT $1.5b $1.4b $0.8b acquisition of Armada Funds
Slide 22: Real Estate
Real Estate Our Real Estate team manages $2.2 billion across a range of retail and commercial real estate assets • A scalable real estate platform driven by a team with deep experience across all market segments • Enhanced operating capabilities in retail shopping centre management following post ba
Slide 23: Credit AUM Growth
Credit AUM Growth Strong net client inflows offset the completion of construction finance partnership loans during the year 39% CAGR (FY16 - FY20) $1,125m $915m $580m $340m $300m FY16 FY17 FY18 FY19 FY20 Core Funds Bonds & Cash Secured Loan Series Institutional Partnership Fixed Income Fund Private
Slide 24: Credit
Credit Our Credit teams manage over $1.1 billion across various credit strategies $520m $140m on FY19 • Investments in corporate bonds and fixed income products for HNW clients • Benefited from strong foreign HNW client inflows in 2H20 Bonds and Cash • Appointed new internal fund manager to actively
Slide 25: Listed Equities and PE/VC AUM Growth
Listed Equities and PE/VC AUM Growth Strong growth in Equities AUM driven by increased client inflows and positive performance 58% CAGR (FY16 – FY20) $755m $540m $420m $295m $120m FY16 FY17 FY18 FY19 FY20 Listed Equities PE / VC Page 24
Slide 26: Listed Equities and PE/VC
Listed Equities and PE/VC Our specialist teams manage over $750m across Listed Equities, Private Equity and Venture Capital $470m $170m on FY19 • ASX Small Cap fund grew AUM by 56% to over $400m, driven by foreign HNW client inflows – returned 11.5% (after fees) over 12 months to 31 Dec 20 – strong
Slide 27: Corporate Advisory & Equities
Corporate Advisory & Equities MOELIS AUSTRALIA LIMITED Page 26
Slide 28: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance Underlying financials FY19 FY20 Growth Corporate Advisory fees [$m] 52.8 44.2 -16.3% Equities commissions [$m] 8.9 9.2 3.2% Total Underlying revenue [$m] 61.7 53.4 -13.5% Expenses [$m] 44.6 41.5 -6.8% Underlying EBITDA [$m] 17.1 11.9 -30.7% Advisory headcoun
Slide 29: Revenue Seasonality
Revenue Seasonality Seasonally weaker 2H20 after a record 1H20 Underlying revenue contribution • Corporate Advisory & Equities revenue didn’t exhibit typical seasonality, due to: − lower M&A activity in 2H20, after good start to FY20 − a pipeline weighting to restructuring mandates which have longer
Slide 30: Corporate Advisory – consistency across the cycle
Corporate Advisory – consistency across the cycle Corporate Advisory has a consistent overall revenue productivity performance • Our target productivity range of $1.1 to $1.3 million per executive is supported by over a decade of operations • FY20 revenue per executive of $1.0m below target range, d
Slide 31: FY20 Financials
FY20 Financials MOELIS AUSTRALIA LIMITED Page 30
Slide 32: Group Underlying profit or loss
Group Underlying profit or loss Summary Underlying profit or loss statement ($m)1 FY19 FY20 Growth Underlying Revenue Asset Management 96.7 106.8 10.4% Corporate Advisory & Equities 61.7 53.4 -13.5% Total Underlying Revenue 158.3 160.1 1.1% Reduced variable compensation offset by FY19 Expenses inves
Slide 33: Group Operating Balance Sheet
Group Operating Balance Sheet1 Operating Balance Sheet ($m) 31 Dec 2019 31 Dec 2020 Cash and cash equivalents 126.1 112.2 Refer to Group Investments detail on page 33 Loans receivable 92.7 63.2 Investments 113.5 136.8 Goodwill and other intangibles 32.6 30.9 Includes current fee receivables and plan
Slide 34: Group Investments
Group Investments Summary of investments ($m) 31 Dec 2019 31 Dec 2020 Cash 126.1 112.2 Credit 84.7 54.5 Redcape Hotel Group (ASX:RDC) 59.3 58.2 Japara Health Care Limited (ASX:JHC) 14.8 9.3 Co-investment1 44.6 75.3 Other 2.8 2.7 Total 332.3 312.2 Highlights • Successfully recycled short-term loan re
Slide 35: Borrowings
Borrowings Bond issuance ($m) Maturity Date Coupon 31 Dec 2019 31 Dec 2020 MOE Bond I (Repaid) Unsecured note 18 Sep 2020 5.25% 32.2 - MOE Bond II Unsecured note 14 Sep 2022 5.85% 25.0 25.0 MOE Bond III Unsecured note – limited recourse 16 May 2024 4.35% + RBA 35.0 30.0 MOE Bond IV Unsecured note 30
Slide 36: Strategic outlook
Strategic outlook MOELIS AUSTRALIA LIMITED Page 35
Slide 37: FY21 strategic priorities
FY21 strategic priorities Consistency of strategy Asset Management Corporate Advisory & Equities Grow • Scale existing asset management platforms • Leverage strength of real estate expertise recurring Leverage • Build on strong momentum in mid-cap ECM revenue • Broaden and scale lending business spe
Slide 38: Well positioned for medium term growth
Well positioned for medium term growth Focus on building long-term sustainable earnings growth 01. 02. 03. Builder of valuable Scalable asset Diversified capital sources businesses in large management business and client investor base addressable markets powered by unique distribution 04. 05. 06. St
Slide 39: Appendices
Appendices MOELIS AUSTRALIA LIMITED Page 38
Slide 40: FY20 Financials - Statutory to Underlying Profit Reconciliation
FY20 Financials - Statutory to Underlying Profit Reconciliation Note Revenue1 EBITDA NPAT CI1 FY20 Statutory Results ($m) 161.1 61.4 26.5 22.5 Differences in measurement Business acquisition adjustments (a) - 0.6 2.7 2.7 Equity issued to staff (b) - (0.6) (0.6) (0.6) Net unrealised (gains)/losses on
Slide 41: FY19 Financials – Statutory to Underlying Results Reconciliation
FY19 Financials – Statutory to Underlying Results Reconciliation Note Revenue1 EBITDA NPAT CI1 FY19 Statutory Results ($m) 153.7 52.0 23.5 25.0 Differences in measurement Business acquisition adjustments (a) - 2.7 4.6 4.6 Equity issued to staff (b) - (0.9) (0.9) (0.9) Net unrealised (gains)/losses o
Slide 42: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement Differences in Classification a) The acquisition of Armada Funds Management in 2017 for cash and h) The Underlying treatment records the distributions received from the shares gives rise to non-cash IFRS expenditure re
Slide 43: Group Consolidated Balance Sheet – Statutory
Group Consolidated Balance Sheet – Statutory 31 Dec 2019 31 Dec 2019 31 Dec 2019 31 Dec 2020 31 Dec 2020 31 Dec 2020 Summary consolidated balance sheet ($m) Operating MCT Statutory Operating MCT Statutory Cash and cash equivalents 126.1 2.7 128.8 112.2 25.8 138.0 Loans receivable 92.7 107.1 199.8 63
Slide 44: COVID-19 related financial impacts
COVID-19 related financial impacts Direct COVID-19 related impacts FY20 ($m) Relates to Hospitality and Aged Care sectors COVID-19 Impacted Assets Management fees -4.2 Co-investment income -3.9 Co-investment MTM -1.3 Revenue impact -9.4 Termination of new business initiatives due to New business dev
Slide 45: Moelis Australia – A Snapshot
Moelis Australia – A Snapshot • Founded in 2009 as a joint venture with NYSE listed global Investment Bank Moelis & Company to provide Investment Banking Advisory & Equities services in Australia and New Zealand History • In 2012 hired first Asset Management executives and launched its first managed
Slide 46: An integrated financial services business with a long track record of growth
An integrated financial services business with a long track record of growth Two complementary business units that have delivered significant growth over many years Net Revenue ($m) 160 • Assets under management of $5.4b • Largest specialist manager of Chinese HNW 14% CAGR 120 capital in Australia •
Slide 47: Significant Investor Visa (SIV) platform
Significant Investor Visa (SIV) platform Leading market access to Foreign High Net Worth Investors • Introduced by Federal Government in 2012 SIV investment rules • Program reviewed and reconfirmed in Complying investment framework December 2020 • A 4-year provisional visa, that can be extended SIV
Slide 48: Corporate Advisory Transactions
Corporate Advisory Transactions Select FY20 completed transactions Jan 2020 Feb 2020 Feb 2020 Apr 2020 Apr 2020 Apr 2020 Jun 2020 CNI CIP A$80m A$182m A$735m A$150m A$250m A$130m A$50m Institutional Placement Fuji Xerox’s Acquisition of CSG Sale of 36% interest in Institutional Placement Institution
Slide 49: Disclaimer
Disclaimer The material in this presentation has been prepared by Moelis Australia Forecasts and hypothetical examples are subject to uncertainty and Limited ABN 68 142 008 428 (Moelis Australia) and is general contingencies outside Moelis Australia’s control. Past performance is not background info