Macquarie Group, Ltd. · ASX:MQG
Macquarie — Shareholder Meeting (July 2012)
60 slides from Macquarie's shareholder meeting presentation, Jul 25, 2012
Slide 1: Macquarie Group Limited 2012 Annual General Meeting
For personal use only Macquarie Group Limited 2012 Annual General Meeting 25 July 2012
Slide 2: Disclaimer
Disclaimer For personal use only The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie’s activities current as at the date of this presentation. This information is given in summary form and
Slide 3: 2012 Annual General Meeting - Chairman
For personal use only 2012 Annual General Meeting Kevin McCann AM Chairman Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 3
Slide 4: Global financial market conditions
Global financial market conditions For personal use only This time last year we reflected on lower market confidence due to concerns over the European sovereign debt crisis, the strength of the US recovery and the ongoing impact of the Japanese tsunami Global uncertainty increased in FY12 with c
Slide 5: 1H12 saw particularly volatile market conditions
1H12 saw particularly volatile market conditions For personal use only GLOBAL INDICES1 VIX1 1. Indices data and VIX data to 31 March 2012. Source: Bloomberg. 5
Slide 6: 1H12 saw particularly volatile market conditions
1H12 saw particularly volatile market conditions For personal use only OECD LEADING INDICATORS1 US CREDIT SPREADS 1. Source: OECD. 6
Slide 7: Financial performance reflected broader market conditions
Financial performance reflected broader market conditions Weak 1H followed by stronger 2H For personal use only FY12 Operating income of $A6,963m FY12 Profit of $A730m FY12 down 9% on FY11 FY12 down 24% on FY11 2H12 up 15% on 1H12 2H12 up 39% on 1H12 FY12 EPS of $A2.10 FY12 DPS of $A1.40 FY12 down 2
Slide 8: Dividends
Dividends For personal use only FY12 dividend set at $A1.40, ~66% payout ratio, down on FY11 dividend of $A1.86 ⎯ 2H12 dividend $A0.75 up on 1H12 dividend of $A0.65 ⎯ Dividend remains unfranked Dividend policy remains 50 – 60% annual payout ratio 8
Slide 9: Macquarie total shareholder return continues to outperform international investment banks
Macquarie total shareholder return continues to outperform international investment banks For personal use only Macquarie’s 10 year average Return on Equity: 18.4% compared to industry average1: 10.5% 1. Industry return on equity (ROE) includes ROE of investment banks where this information is pub
Slide 10: Macquarie's total shareholder return continues to track global capital markets firms
Macquarie’s total shareholder return continues to track global capital markets firms For personal use only Since the GFC, Macquarie has outperformed the MSCI World Capital Markets Index by 14%1 1. Source: Factset. MSCI World Capital Markets and Macquarie Group information, presented on a total ret
Slide 11: Key management changes
Key management changes For personal use only Richard Sheppard retired as Deputy Managing Director of MQG and Managing Director and Chief Executive Officer of MBL after 36 years with the Group and its predecessor, Hill Samuel — Richard continues in the important role of Chairman of the Macquarie Gr
Slide 12: Supporting communities
Supporting communities for over 27 years For personal use only 1,300+ organisations 3,300 days contributed $A165m donated since inception Named as leading Australian Corporate Donor by Philanthropy Australia 12
Slide 13: Macquarie Group Limited 2012 Annual General Meeting
For personal use only Macquarie Group Limited 2012 Annual General Meeting 25 July 2012
Slide 14: Overview of the Result for the year ended March 2012
For personal use only Overview of the Result for the year ended 31 March 2012 Nicholas Moore Managing Director and Chief Executive Officer Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 14
Slide 15: Result reflected improved 2H12 market conditions
Result reflected improved 2H12 market conditions For personal use only FY12 vs FY11 2H12 vs 1H12 Operating income $A7.0b 9% $A3.7b 15% Operating expenses $A5.9b 8% $A3.1b 9% Tax expense $A287m 2% $A180m 68% Profit $A730m 24% $A425m 39% Earnings per share $A2.10 26% $A1.24 43% From from Return on equ
Slide 16: Diversified by region
Diversified by region International income1 60% of total Total staff 14,202; International staff 53% of total For personal use only EUROPE, MIDDLE EAST ASIA AMERICAS & AFRICA2 Income: $A1,229m (18% of total) Income: $A743m (11% of total) Income: $A2,044m (31% of total) Staff: 1,370 Staff: 2,795 Staf
Slide 17: FY12 Result by operating group
FY12 Result by operating group FY12 vs FY11 For personal use only Operating Income Net Profit Contribution Annuity-style Macquarie Funds Group $A1.4b 6% $A0.7b 36% Corporate and Asset Finance $A1.1b 23% $A0.7b 22% Banking and Financial $A1.4b 6% $A0.3b 4% Services From profit Market facing Macquarie
Slide 18: Macquarie Funds Group
Macquarie Funds Group Record $A324b AUM For personal use only Business Net profit: $A655m 36% Top 50 global asset manager New equity commitments: Over $A2.2b in MIRA #1 global infrastructure manager Net inflows: $A6.4b in a range of MIM products Capabilities: infrastructure and real Awards: Lipper,
Slide 19: Corporate and Asset Finance
Corporate and Asset Finance Net profit: $A146m to $A698m in 5 years For personal use only Business Net profit: 22% $A20.6b loan and asset portfolio Growth in corporate lending Corporate debt & asset finance Expanded white label programs including: aircraft, motor vehicles, technology, healthcare, Ac
Slide 20: Banking and Financial Services
Banking and Financial Services Deposits: $A4b to $A29b in 5 years For personal use only Business Net profit: $A265m 4% 1.14m clients $A118b FUM/FUA Australia’s #1 full-service retail Cash Management Account $A16.1b broker, leading wrap platform Management of Perpetual wrap platform #1 Independent Ca
Slide 21: Macquarie Securities Group
Macquarie Securities Group Well positioned for better market conditions For personal use only Business Net loss: $A194m Strong Asia-Pacific foundations Refocused derivatives activities Global institutional sales, research, ECM, Market confidence & activity levels down execution, derivatives Top rank
Slide 22: Macquarie Capital Group
Macquarie Capital Group Well positioned for better market conditions For personal use only Business Net profit: $A85m 60% Global M&A, capital markets, and principal Global lack of corporate confidence investing 435 deals, $A97b Specialities: infrastructure, utilities & renewables; resources; real es
Slide 23: Fixed Income, Currencies and Commodities
Fixed Income, Currencies and Commodities Record second half For personal use only Business Net profit: $A539m 6% Commodity markets (69%): Metals & Improved conditions & customer flow Energy Capital (MEC), Metals & Agriculture Sales and Trading, Energy Markets MEC up, increased asset realisations Fin
Slide 24: 1Q13 Update
For personal use only 1Q13 Update Nicholas Moore Managing Director and Chief Executive Officer Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 24
Slide 25: Global events continue to sap confidence
Global events continue to sap confidence For personal use only EUROPE Sovereign debt crisis UNITED STATES Strength of US recovery CHINA Concerns over slowing growth 25
Slide 26: 1Q13 weak market conditions
1Q13 weak market conditions For personal use only ASX RETAIL CONSIDERATION TRADED – STOCK1 US EQUITY AND BOND FUND FLOWS2 AUSTRALIAN IPO’S AND SECONDARY ISSUES3 DOW JONES UBS COMMODITY INDEX4 1. Source: IRESS. 2. Mutual funds flow: Shows the net inflow/outflow of money into long-term mutual funds. S
Slide 27: 1Q13 Macquarie Update
1Q13 Macquarie Update For personal use only 1Q13 operating groups’ contribution1 ahead of subdued pcp (1Q12) but down on prior quarter (4Q12) Annuity-style businesses2 broadly flat on pcp Capital markets businesses3 continue to be impacted by weak market conditions, but up on subdued pcp due t
Slide 28: Annuity-Style Businesses 1Q13 Update
Annuity-Style Businesses 1Q13 Update For personal use only Macquarie Funds AUM of $323b, broadly in line with 31 March 2012 Ranked first in Infrastructure Investor magazine's list of top infrastructure investors1 for the third Group consecutive year and received the "Best Infrastructure" and "Be
Slide 29: Market Facing Businesses 1Q13 Update
Market Facing Businesses 1Q13 Update For personal use only Macquarie Continued challenging macroeconomic environment and weak investor confidence due to European sovereign debt concerns and China growth concerns impacting commodity stocks Securities Group Reduced market volumes down on prior per
Slide 30: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only These charts represent Macquarie Group Limited’s funded balance sheets at the respective dates noted above. 1. Includes Structured Notes, Secured Funding, Bonds, Other Bank Loans maturing within the next 12 months and Net Trade Creditors. For
Slide 31: Stable Basel III surplus
Stable Basel III surplus For personal use only Harmonised Basel III Group capital of $A12.4 billion, Group surplus of $A3.5b at Jun 121 1. Calculated at 8.5% RWAs which includes the 2.5% capital conservation buffer (CCB) not required to be met by APRA until 2016 and by BIS until 2019. 2. ‘Harmonis
Slide 32: Strong capital position
Strong capital position For personal use only MBL Harmonised Basel III CET1 ratio is well above minimum CET1 + CCB and highest among peers MBL’s CET1 ratio of 11.7% compares favourably to the current estimated global average of 7.1% reported by BIS in a survey of 103 global banks1 1. “Results of
Slide 33: MBL long term ratings stability
MBL long term ratings stability Moody’s Ratings Movements from 1 May 2007 For personal use only 33
Slide 34: MBL has maintained its S&P rating
MBL has maintained its S&P rating for 21 years Standard & Poor’s Ratings Movements from 1 May 2007 For personal use only 34
Slide 35: Outlook
For personal use only Outlook Nicholas Moore Managing Director and Chief Executive Officer Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 35
Slide 36: Short term outlook
Short term outlook For personal use only Summarised below are the outlook statements for each operating group FY13 results will vary with market conditions, particularly the capital markets facing businesses which continue to experience volatility Net profit contribution FY07- FY12 FY07-FY12 FY1
Slide 37: Short term outlook
Short term outlook For personal use only Consistent with our statement at the FY12 result announcement on 27 April 2012, we continue to expect an improved result for FY13 on FY12 provided market conditions for FY13 are not worse than FY12 The FY13 result also remains subject to a range of other
Slide 38: Medium term
Medium term For personal use only Macquarie remains well positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions ⎯ Annuity-style income is provided by th
Slide 39: Approximate business Basel III ROE
Approximate business Basel III ROE For personal use only APRA Basel III Approx. FY12 Return Group Capital @ 8.5% ($Ab) on Ordinary Equity1 Approx. 6-Year Return on Annuity-style businesses (excluding legacy) Ordinary Equity1 Macquarie Funds Group 1.6 Corporate and Asset Finance 2.2 22% 20%2 Banking
Slide 40: Macquarie Group Limited 2012 Annual General Meeting
For personal use only Macquarie Group Limited 2012 Annual General Meeting 25 July 2012
Slide 41: Formal Business
For personal use only Formal Business Kevin McCann AM Chairman Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 41
Slide 42: Item 1: Financial Statements
Item 1: Financial Statements For personal use only To consider and receive the Financial Report, the Directors’ Report and the Auditor’s Report of Macquarie for the financial year ended 31 March 2012 42
Slide 43: Item 2: Re-election of Mr PH Warne as a Voting Director
Item 2: Re-election of Mr PH Warne as a Voting Director For personal use only To consider and, if thought fit, pass the following as an ordinary resolution: ⎯ That Mr PH Warne be re-elected as a Voting Director of Macquarie 43
Slide 44: Item 3: Remuneration Report
Item 3: Remuneration Report For personal use only To consider and, if thought fit, pass the following as an ordinary resolution: ⎯ To adopt the Remuneration Report of Macquarie for the year ended 31 March 2012 44
Slide 45: Macquarie's remuneration approach
Macquarie’s remuneration approach For personal use only Macquarie’s remuneration system is designed to balance risk and return Key elements of Macquarie’s remuneration framework: Align interests of staff and shareholders Drive long-term shareholder returns Attract and retain high quality people
Slide 46: Key features of Macquarie's remuneration system
Key features of Macquarie’s remuneration system For personal use only Key Area Executive Committee and Other Staff below Executive Designated Executive Executive Directors Director Directors Amount of profit 50-70% 40-70% 25% to 70% dependent on share deferred 70% for the Managing Director certain t
Slide 47: Item 4: Approval of MEREP participation
Item 4: Approval of Executive Voting Director’s participation in the Macquarie Group Employee Retained Equity Plan (MEREP) For personal use only To consider and, if thought fit, pass the following as an ordinary resolution: ⎯ That the following be approved for all purposes: a) participation in the
Slide 48: Item 5: Approval of issue of Macquarie Exchangeable Capital Securities
Item 5: Approval of the issue of Macquarie Exchangeable Capital Securities For personal use only To consider and, if thought fit, pass the following as an ordinary resolution: ⎯ That the issue of $US250 million of Macquarie Exchangeable Capital Securities by Macquarie Bank Limited, acting through
Slide 49: Item 6: Approval to extend the share buy-back
Item 6: Approval to extend the share buy-back For personal use only To consider and, if thought fit, pass the following as an ordinary resolution: ⎯ That, for the purposes of section 257C of the Corporations Act 2001 (Cth) and for all other purposes, the Company is authorised to conduct an on- mar
Slide 50: Macquarie Group Limited 2012 Annual General Meeting
For personal use only Macquarie Group Limited 2012 Annual General Meeting 25 July 2012
Slide 51: Appendix
For personal use only Appendix Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 51
Slide 52: Funded balance sheet reconciliation
Funded balance sheet reconciliation For personal use only The Group’s statutory balance sheet is prepared based on generally accepted accounting principles which do not represent actual funding requirements A funded balance sheet reconciliation has been prepared to reconcile the reported assets
Slide 53: References
For personal use only References Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 53
Slide 54: References
References For personal use only Slide 18 – Macquarie Funds Group Statistic Source 1 Top 50 global asset manager By assets under management 2. #1 global infrastructure manager Ranked first in Infrastructure Investor magazine's list of top infrastructure investors. Based on the amount of infrastructu
Slide 55: References
References For personal use only Slide 21 – Macquarie Securities Group Statistic Source 1. Top ranked Australian Institutional sales No.2 overall research and sales strength for Australian institutional investors. Peter Lee & research Associates Survey of Asian/Australian Institutional Investors – A
Slide 56: Glossary
For personal use only Glossary Macquarie Group Limited 2012 Annual General Meeting 25 July 2012 56
Slide 57: Glossary
Glossary For personal use only $A Australian Dollar ANZ Australia and New Zealand $US United States Dollar Approx. Approximately € Euro APRA Australian Prudential Regulation Authority 1H First Half ASX Australian Securities Exchange 1H11 Half Year ended 30 September 2010 AUM Assets Under Management
Slide 58: Glossary
Glossary For personal use only EMEA Europe, the Middle East and Africa M&A Mergers and Acquisitions EPS Earnings Per Share MEC Metals and Energy Capital FICC Fixed Income, Currencies and Commodities MEREP Macquarie Group Employee Retained Equity Plan FIG Financial Institutions Group MBL Macquarie Ba
Slide 59: Glossary
Glossary For personal use only Ppt Percentage Points RHS Right Hand Side ROE Return on Equity RWA Risk Weighted Asset Telecommunications, Media, Entertainment and TMET Technology UK United Kingdom US United States of America USD United States Dollar 59
Slide 60: Macquarie Group Limited 2012 Annual General Meeting
For personal use only Macquarie Group Limited 2012 Annual General Meeting 25 July 2012