Blackrock Smaller Companies Trust PLC · LSE:BRSC
Blackrock Smaller Companies Trust — Merrill Lynch European Investment Trust — Shareholder Meeting (June 2003)
24 slides from Blackrock Smaller Companies Trust's shareholder meeting presentation, Jun 24, 2003
Slide 1: Merrill Lynch European Investment Trust
Merrill Lynch European Investment - seb, — pic
Slide 2: Merrill Lynch European Investment Trust plc Annual General Meeting
Merrill Lynch European Investment Trust plc Annual General Meeting James Macmillan Tuesday 24 June 2003
Slide 3: Agenda
Agenda • Review of the financial year • Investment strategy • Why invest in Europe? • Conclusion MLEIT AGM - 24 June 2003 3
Slide 4: Performance – Year to March 2003
Performance – Year to March 2003 1 Year 3 Years (ann.) To end March 2003 % % Investment Performance -35.7 -19.5 Impact of Gearing -3.2 -2.0 Ordinary Share Price -41.4 -22.2 Benchmark* -34.4 -18.7 • Worst bear market since 1970s • Gearing unhelpful * FTSE Europe ex UK Sources: Merrill Lynch Investmen
Slide 5: Performance - Since March 2003
Performance - Since March 2003 End March 2003 to 20 June 2003 Investment Performance 21.6 Impact of Gearing 1.2 Ordinary Share Price 25.4 Benchmark* 23.6 • Markets have recovered since financial year-end * FTSE Europe ex UK Sources: Merrill Lynch Investment Managers, Datastream. Total return with ne
Slide 6: Increased Focus
Increased Focus • Number of stocks reduced from 83 to 49* • Concentration on best ideas End End March 2002 March 2003 Top 10 Holdings 30.5% 40.5% (as % of investments) *From 31 March 2002 to 31 March 2003 Source: Merrill Lynch Investment Managers MLEIT AGM - 24 June 2003 6
Slide 7: Top 10 Holdings
Top 10 Holdings Company % of Investments % Upside to Our Target TotalFinaElf 5.1 +18 Novartis 4.5 +15 Royal Dutch 4.0 +19 Nokia 3.7 +6 Nestlé 3.7 +25 Roche 3.7 +10 BNP Paribas 3.5 +12 Banca Intesa 3.2 +35 Telecom Italia 3.1 +17 Credit Suisse 2.9 +19 Total 37.4 As at 31 May 2003. Source: Merrill Lync
Slide 8: Largest Sector Changes
Largest Sector Changes Absolute Change in Portfolio Weight (%) End March 2002 to end March 2003 Non-Cyclical Consumer Goods Cyclical Consumer Goods Resources & Energy Basic Industries Financials Technology -6% -4% -2% 0% 2% 4% 6% Source: Merrill Lynch Investment Managers MLEIT AGM - 24 June 2003 8
Slide 9: Why Invest in Europe?
Why Invest in Europe? • Risks from Euro strength widely acknowledged • Europe should benefit from global recovery • Weak economy drives corporate and fiscal reform • EU enlargement will add 75m people next year • Germany is not the next Japan • Dividend yield exceeds 5 year bond yield MLEIT AGM - 24
Slide 10: How Will You Benefit From this Environment?
How Will You Benefit From this Environment? • Portfolio exposed to corporate restructuring • Concentration in financials, telecoms and industrial services • High degree of emphasis on management quality • Focused portfolio will drive performance MLEIT AGM - 24 June 2003 10
Slide 11: Appendix
Appendix
Slide 12: Investment Policy
Investment Policy The Company’s portfolio invests in: Continental European companies, with the ability to invest up to 10% in the UK and Eastern Europe Investment Objective: To achieve long-term capital growth MLEIT AGM - 24 June 2003 12
Slide 13: Key Facts
Key Facts Total assets: £467.2m Launch date: 11 March 1994 Historic net annual yield: 2.8% Dividends paid: January (interim), July (final) Year end: 31 March Annual charges: Management 0.55% Administration 0.15% Custody 0.10% Warrant life: Expire 31 July 2004 Source: Merrill Lynch Investment Manager
Slide 14: Performance to 31 May 2003
Performance to 31 May 2003 1 Year 2 Years 3 Years 5 Years Since Performance Inception (%) (%) (%) (%) (%) MLEIT Undiluted NAV -24.6 -33.6 -44.3 -31.3 66.1 MLEIT Diluted NAV -22.8 -31.1 -40.1 -26.6 62.2 MLEIT Share Price Performance -26.4 -36.6 -42.9 -29.3 42.3* Warrant Price Performance -61.3 -75.0
Slide 15: Breakdown of Performance - Year to 2003
Breakdown of Performance - Year to 2003 Underlying Share & Investment Warrant Warrant Diluted Share Performance Gearing Buybacks Dilution NAV Discount Price Benchmark 0 -5 -10 -15 -20 -25 -30 -35 +2.5 +0.2 -34.4 -35.7 -36.2 -40 -3.2 -45 -5.2 -41.4 Sources: Merrill Lynch Investment Managers, Datastre
Slide 16: Performance vs. Peers - Three Years
Performance vs. Peers - Three Years European Regional Developed Sector Diluted NAV Performance 3 Years (annualised) to 31 March 2003 Fidelity European Values -4.9 Fleming Continental Euro -17.7 Gartmore European -18.9 For & Col Eurotrust -19.1 ML European Investment Trust -19.4 Henderson Euro Trust
Slide 17: Portfolio Distribution Held by Market Cap
Portfolio Distribution Held by Market Cap. of Companies Held 59% 35% 6% >euro 10bn from euro 2bn to 10bn <euro 2bn As at 31 March 2003 Source: Merrill Lynch Investment Managers MLEIT AGM - 24 June 2003 17
Slide 18: Country Breakdown
Country Breakdown 35 30 25 20 % 15 10 5 0 s y nd ia ly n er ce nd an ai Ita av th rla an Sp la m O n e er di Fr er itz an th G Sw Ne Sc As at 31 May 2003 Source: Merrill Lynch Investment Managers MLEIT AGM - 24 June 2003 18
Slide 19: Sector Breakdown
% Fi 0 5 10 15 20 25 na Co n cia n s No ls um n- e r Cyc G lic o Re od al so s MLEIT AGM - 24 June 2003 ur En ces er & gy Te le Sector Breakdown co Cy m cli s ca lS er vic Cy es cli ca lG oo As at 31 May 2003. Source: Merrill Lynch Investment Managers ds Te ch no Ba lo sic gy In du st rie Ca s pi ta
Slide 20: Buyback Details
Buyback Details • Ongoing share and warrant buyback programme – 51% shares and 64% warrants purchased and cancelled up to 31/05/03 – 289m shares and 36.9m warrants outstanding Source: Merrill Lynch Investment Managers MLEIT AGM - 24 June 2003 20
Slide 21: MLIM's European Equity Team
MLIM’s European Equity Team • 19* Experienced professionals with diverse backgrounds • 9 Nationalities, 9 languages spoken • Average 11 years of investment experience • Appraisal system and remuneration aligned with clients’ interests • Extensive training *Over 50 Investment professionals including
Slide 22: Dividend Yield versus Bond Yield
Dividend Yield versus Bond Yield 10 8 6 4 2 0 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 89 90 91 92 93 94 95 96 97 98 99 00 01 02 FTSE Europe ex UK Dividend Yield 10 Yr Bond Yield Source: Datastream MLEIT AGM - 24 June 2003 22
Slide 23: Important notes
The following notes should be read in conjunction with the attached document: 1. Issued by Merrill Lynch Investment Managers Limited (authorised and regulated by the Financial Services Authority). Registered office: 33 King William Street, London, EC4R 9AS. Registered in England No. 2020394. MLIML i
Slide 24: Merrill Lynch Investment Managers
OS merrill Lynch = |nvestment Managers
Merrill Lynch European Investment Trust — Shareholder Meeting (June 2003) on 6ix