NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q2 FY23 Earnings Presentation
54 slides from NAOS Ex-50 Opportunities's earnings presentation, Feb 7, 2023
Slide 1: Q2 FY23 Investor Update and Q&A – Presentation Materials
NAOS Ex-50 Level 34 OPPORTUNITIES 25 Martin Place COMPANY LIMITED Sydney NSW 2000 (ASX: NAC) T (02) 9002 1576 ABN 49 169 448 837 F (02) 8215 0037 E enquiries@naos.com.au www.naos.com.au For personal use only 7 February 2023 ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 Q2 FY2
Slide 2: Q2 FY23 Investor Update and Q&A
For personal use only Tuesday 7 February 2023 | 10:30 am (AEDT) Audio Dial In: +61 3 8488 8990 Audio Access Code: 228-836-619 Q2 FY23 Investor Update and Q&A
Slide 3: Important Information
Important Information For personal use only This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. It does not constitute an offer to purchase any security or fina
Slide 4: NAOS Asset Management
NAOS Asset Management For personal use only NAOS Asset Management is a specialist fund manager providing concentrated exposure to quality private and public emerging companies. NAOS established its first Listed Investment NAOS was originally founded in 2004 and Company (LIC) in 2013 with 400 shareho
Slide 5: NAOS Directors and Team
NAOS Directors and Team OUR For personal use only DIRECTORS OUR TEAM 3
Slide 6: Our Investment Beliefs and Differentiation
Our Investment Beliefs and Differentiation For personal use only 4
Slide 7: Reasons Not to Invest with NAOS
Reasons Not to Invest with NAOS Our LICs are not for everyone. Some reasons why you may not choose to invest with NAOS For personal use only include: Concentrated portfolios (0-15 investments & shareholdings often >20%) Long-term investment philosophy (5+ years) Focus on emerging companies ($2
Slide 8: NAOS Investment Portfolio Financial Year Returns
NAOS Investment Portfolio Financial Year Returns* For personal use only 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 NAOS Emerging Opportunities Company Limited (ASX: NCC) NAOS Ex-50 Opportunities Company Limited (ASX: NAC) NAOS Small Cap Opportuni
Slide 9: NAOS LIC Franked Dividend History and Profit Reserves
NAOS LIC Franked Dividend History and Profit Reserves Each LIC has consistently paid dividends and holds healthy profit reserves For personal use only 90.06 90 80 70 65.00 57.93 CENTS PER SHARE 60 48.4 50 41.5 40.55 40 35.36 30 24.75 19.1 20 10 0 NCC (Feb 2013) NAC (Nov 2014) NSC (Dec 2017) Total Di
Slide 10: Investment Portfolio Performance Summary
Investment Portfolio Performance Summary For personal use only 3 YEAR Q2 FY23 3 YEAR INCEPTION BENCHMARK Q2 FY23 BENCHMARK Investment Portfolio PERFORMANCE BENCHMARK PERFORMANCE PERFORMANCE PERFORMANCE INCEPTION PERFORMANCE (p.a.) (p.a.) PERFORMANCE (p.a.) (p.a.) NCC Investment Portfolio +0.22% +7.5
Slide 11: What Qualitative Information Sources Does NAOS Use?
What Qualitative Information Sources Does NAOS Use? The NAOS Investment Team undertakes fundamental analysis on potential and current investments. Some For personal use only examples of our key focus areas include: 9
Slide 12: NAOS LICs Director Alignment
NAOS LICs Director Alignment Directors' shareholdings have significantly increased since the inception of each LIC For personal use only Inception Directors Shareholding 31 December 2022 Directors Shareholding 9,000,000 8,538,578 8,000,000 7,000,000 6,000,000 5,171,775 NUMBER OF SHARES 5,000,000 4,0
Slide 13: The Case for Concentrated Investing
The Case for Concentrated Investing Holding too many stocks in a portfolio can lead to poor risk adjusted performance For personal use only Source: NAOS Asset Management 11
Slide 14: What Has Changed Over the Past Months?
What Has Changed Over the Past 12 Months? For personal use only Measurement 31 December 2021 31 December 2022 RBA Cash Rate 0.10% 3.10% Australian 10-Year Bond Yield 1.58% 4.05% Australian CPI (YoY) 3.50% 7.30% AUD/USD $0.73 $0.68 ASX 200 Forward P/E (12-month) 18.05 14.42 ASX Small Ordinaries Accum
Slide 15: Q2 FY23 Summary
Q2 FY23 Summary For personal use only CY23 expectations are low. In our view this is due to the lag effect of CY22 interest rate rises, which certain sectors of the market have been factoring in, as shown by the -20% fall in the ASX Small Ordinaries Index. Significant dispersion in stock perform
Slide 16: Q2 FY23 Summary: Year Total Return - Australian Equity Indices
Q2 FY23 Summary 1 Year Total Return - Australian Equity Indicies For personal use only 120.0 110.0 Large caps & small resources… 100.0 Relative Return 90.0 …outperformed all other small cap indexes 80.0 70.0 60.0 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec
Slide 17: Q2 FY23 Summary: Australia's Labour Market
Q2 FY23 Summary Australia's Labour Market For personal use only 65% 25.0% 64% 63% 20.0% Employment-to-Population Ratio (%) 62% Underutilisation rate / Underemployment rate (%) 61% 15.0% 60% 59% 10.0% 58% 57% 5.0% 56% 55% 0.0% Employment-to-Population Ratio (LHS) Underemployment Rate (RHS) Underutili
Slide 18: Are Things As Bad As They Seem?
Are Things As Bad As They Seem? For personal use only Unlike many previous economic slowdowns this has been engineered by the Reserve Bank of Australia (RBA). Interest rates are now at their highest level for a decade, so there is meaningful scope to reduce rates in the short to medium term if e
Slide 19: Q2 FY23 Summary: Australian Annual Net Overseas Migration
Q2 FY23 Summary Australian Annual Net Overseas Migration For personal use only 1,400,000 1,153,117 1,200,000 981,662 1,000,000 Annual Net Overseas Migration 800,000 569,732 600,000 400,000 200,000 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -200,000 -400,00
Slide 20: Q2 FY23 Summary: Drewry World Container Index
Q2 FY23 Summary Drewy World Container Index ($US/40ft container) For personal use only $12,000 $10,130 Drewry World Container Index Price ($) $10,000 $8,000 $6,000 $4,000 $2,135 $2,000 $1,486 $0 Date Drewry World Container Index Price Source: Bloomberg, NAOS EXPLAINER: The Drewy World Container Inde
Slide 21: Is Market Timing as Important as Many are Led to Believe?
Is Market Timing as Important as Many are Led to Believe? For personal use only In our view not only is it impossible to predict market troughs and peaks but it also adds little value over the long term. To illustrate this, the basic analysis below shows the return if an individual had theoretic
Slide 22: Arno Becker and Richard Bartley
Arno Becker For personal use only CFO and Interim Chief Executive Officer Richard Bartley Executive GM 20
Slide 23: For personal use only
For personal use only 21
Slide 24: Our Business (BSA)
Our Business BSA is a publicly-listed company on the Australian Securities Exchange (ASX: BSA). It is BSA’s vision to be our clients’ indispensable partner for the design, delivery and management of innovative asset solutions. BSA’s services are structured under two strategic business units: For per
Slide 25: Core Capabilities
Core Capabilities For personal use only Communications & Utility Fixed-Line Wireless Customer Access Infrastructure (CUI) Network Technologies (Fibre, Microwave, Cellular, Small Cell, Connections & Assurance, Copper, HFC), Civil Works, Cabling, Critical Networks, SAED, EME Satellite, Lead-in, In-Bui
Slide 26: FY23 – Group Update
FY23 – Group Update Continuing Operations | Stabilise & Focus For personal use only Highlights: • On 23 November 22 BSA entered into an agreement with C UI CBRE for the sale of the APS Maintain business for $20m before costs and adjustments - completed on 3 February • Fixed line 23 ahead of schedule
Slide 27: FY23H1 – Financial Update
FY23H1 – Financial Update Material improvement on PCP For personal use only Financial Performance $’m Q2 FY2023 Q2 FY2022 Var H1 FY2023 H1 FY2022 Var Revenue CUI 62.7 63.8 (1.1) 123.0 122.5 0.5 Continuing Revenue 62.7 63.8 (1.1) 123.0 122.5 0.5 Gross Margin % 25% 18% 7% 23% 18% 5% EBITDA CUI 5.7 2.2
Slide 28: FY23 – Strategic Direction
FY23 – Strategic Direction Simplified approach with emphasis on stability, profitability and growth For personal use only Stabilise Focus Transform Target internal efficiencies and Prioritise cash backed results Protect and partner with clients system optimisation Focus on Telecommunications
Slide 29: CUI Highlights
For personal use only CUI Highlights 27
Slide 30: CUI Overview
CUI Overview For personal use only BSA’s Communication and Utility Infrastructure (CUI) division represents one of Australia’s Leading and National leading providers of diversified services to the telecommunications sector 1 Telco Services Platform ~3,800 jobs ~250 direct with Strong Brand Diver
Slide 31: CUI Platform
CUI Platform Four core platform categories For personal use only Smart Energy Residential NBN Wireless Solutions & Enterprise A unique long-term Over 5 years of Acquisition of Catalyst Group heritage services contract; experience One in 2020 to establish having designed and supporting Vector
Slide 32: CUI Growth Plan
CUI Growth Plan Clear opportunities expected to underpin continued growth over the medium and longer term For personal use only Maximise Opportunity with Innovation through Investment in Wireless Expansion Existing Clients Technology Maximise returns from significant Leverage initial wins in wir
Slide 33: Smart Energy Solutions Addressable Market and Growth
Smart Energy Solutions Addressable Market and Growth APAC Smart Meter Market set to grow at 6.2%, Australia set to grow at least x2 this rate For personal use only • Only 4m of 13.6m meters are smart representing a 30% penetration rate • Vector NZ recently sold 50% of business to QIC at NZ$2.5bn val
Slide 34: Case Study: nbn Unify Contract
Case Study nbn Unify Contract For personal use only Overview of Contract • Largest provider service Activations & Assurance VIC, NSW • 700 Technicians on project • Supervision across all key areas • BSA also support remediation/civils work and various projects Professional services • Program managem
Slide 35: Case Study: Wireless Experience
Case Study Wireless Experience For personal use only Optus • National Deployment - Over 500 Greenfield RAN and In Building Coverage Sites • Upgraded Over 250 RAN Sites and Transmission • Renewed or Amended Over 200 Lease / Licence Agreements • Acquired 20 nbn POI locations for Optus Wholesale (HFC P
Slide 36: NAOS Investee Companies - Key Events Q2 FY23
NAOS Investee Companies - Key Events Q2 FY23 HOLDING INDUSTRY Q2 UPDATE For personal use only AGM trading update sees strong FY22 conditions continuing into early FY23. Appointment of exec. GM John Lorente as CEO (effective 1st March) replacing Jim Bindon, providing consistency within operations
Slide 37: NAOS Investee Companies - Key Events Q2 FY23
NAOS Investee Companies - Key Events Q2 FY23 HOLDING INDUSTRY Q2 UPDATE For personal use only Awarded $44m tank construction, civil and electrical engineering project for Western Sydney Airport phase 1. Buoyant sector conditions continue with SND winning projects under State Govt. (NSW Bridge Re
Slide 38: MOVE Logistics Group
MOVE Logistics Group For personal use only EXPLAINER: In December 2022, Craig Evans was appointed CEO of MOVE Logistics Group effective 1st February 2023. Craig has an outstanding track record in the Logistics sector, having previously spent 35 years at Mainfreight (NZX: MFT), including the last six
Slide 39: NCC Overview as at December 2022
NCC Overview as at 31 December 2022 For personal use only $0.87 $0.90 $0.755 9.93% 12 $134.6m Pre-Tax NTA Post-Tax NTA Share Price Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FRANKED DIVIDEND HISTORY Fully Franked Dividends Paid 50% Franked Div
Slide 40: NAC Overview as at December 2022
NAC Overview as at 31 December 2022 $0.86 $0.92 $0.87 6.55% 12 $308.9m For personal use only Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FULLY FRANKED DIVIDEND HISTORY Fully Franked Dividends Paid Cumu
Slide 41: NSC Overview as at December 2022
NSC Overview as at 31 December 2022 $0.78 $0.80 $0.69 7.25% 10 $206.1m For personal use only Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FULLY FRANKED DIVIDEND HISTORY Fully Franked Dividends Paid Cumu
Slide 42: Capital Management Initiatives
Capital Management Initiatives For personal use only Performance • Maintain a focus on long term performance without deviating from the NAOS investment philosophy. • Continue to focus on a growing stream of dividends, franked to the maximum extent possible, whilst maintaining an Dividends adequate r
Slide 43: Overview & Outlook Q3 FY23
Overview & Outlook Q3 FY23 Expectations of slowing economic activity as impact of rate hikes take hold. The impact of ~23% of For personal use only home loans cycling onto higher variable rates throughout 2023 is a major unknown. Positive factors that may prove valuable in insulating against a m
Slide 44: Outlook Q3 FY23
Outlook Q3 FY23 • Updates from most portfolio companies expected in the February reporting season. For personal use only We have used the uncertainty to rotate out of investments that we believe offer inferior return profiles going forward and have added a number of new investments such as Smart
Slide 45: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge For personal use only 43
Slide 46: Q&A
Q&A For personal use only Thank you for your continued support. “Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard.” Warren Buffett 44
Slide 47: Appendix
For personal use only Appendix
Slide 48: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics For personal use only 15% 15% 9.67% 9.57% 10% 10% 6.45% 4.79% 5% 5% 3.08% 3.57% 2.65% 2.40% 0% 0% -1.42% -1.53% -3.17% -3.65% -5% -5% Performance
Slide 49: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * For personal use only NSC Investment Portfolio Risk and Performance Metrics 10% 5% 3.91% 3.51% 2.40% 2.16% 0% -2.05% -4.02% -5% Performance Since Monthly Average Monthly Average Inception p.a. Performance when the Performance when the Market is up Market
Slide 50: Historical Shareholder Numbers
Historical Shareholder Numbers For personal use only 8000 6000 4000 2000 0 NCC Shareholders NAC Shareholders NSC Shareholders 48
Slide 51: NAOS ESG Framework
For personal use only NAOS ESG Framework 49
Slide 52: Key Business & Industry Traits for Maximising Long-term Performance
Key Business & Industry Traits for Maximising Long-term Performance and Reducing the Risk of Permanent Capital Loss Events For personal use only Industry Tailwinds Supporting A growing revenue base provides companies with a number of competitive advantages such as the ability to scale Long-Term Reve
Slide 53: Why Invest via a Listed Investment Company?
Why Invest via a Listed Investment Company? We strongly believe LICs are a highly effective structure to give investors the highest quality For personal use only exposure to specific asset classes, which in the case of NAOS is emerging businesses. A Listed Investment Company structure: Allows the
Slide 54: Investor Awareness and Communication
Investor Awareness and Communication For personal use only FOLLOW NAOS 52
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