Macquarie Group, Ltd. · ASX:MQG
Macquarie — Morgan Stanley Australian Investment Conference 2008
33 slides from Macquarie's conference presentation, Sep 4, 2008
Slide 1: Macquarie Group Limited – Morgan Stanley Australian Investment Conference
For personal use only Macquarie Group Limited Morgan Stanley Australian Investment Conference London 4-5 September 2008 Richard Sheppard – Deputy Managing Director
Slide 2: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Macquarie Group Limited (Macquarie) ABN 94 122 169 279. This presentation is general advice only and does not take account of your objectives, financial situation or needs. Before acting on general advice you should consider the
Slide 3: About Macquarie
About Macquarie For personal use only Global provider of banking, financial, advisory, investment and funds management services Main business focus making returns by providing a diversified range of services to clients Listed on Australian Securities Exchange (ASX:MQG), top 20 company Regula
Slide 4: Growth record
Growth record For personal use only $Am $Am Operating Income Net Profit 9,000 $8.2b 2,000 $1.8b 1,800 8,000 1,600 7,000 1,400 6,000 1,200 5,000 1,000 4,000 800 3,000 600 2,000 400 1,000 200 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Acps Acps 700 EPS $6.71 400 Dividend 350 Special dividen
Slide 5: Major business activities
Major business activities For personal use only Treasury Treasury & & Macquarie Macquarie Capital Capital Macquarie Securities11 Macquarie Securities Commodities Commodities Corporate Corporate finance, finance, including including Institutional Institutional and and Metals Metals && energy
Slide 6: Assets under management of $A225 billion
Assets under management of $A225 billion For personal use only $Ab 250 Securities Wholesale Securities Retail $A225b Other Specialist 200 Real estate Infrastructure 150 100 50 0 2004 2005 2006 2007 Mar-08 Jun-08 Years ended 31 March. Note: Sale of Macquarie-IMM Investment Management and Macquarie Pr
Slide 7: Capital growth
Capital growth Return on equity: 23.7% For personal use only Consistently grown capital ahead of business requirements to allow for future growth $Ab $12 New Capital Macquarie Income Preferred Securities $A10.0b $10 Macquarie Income Securities Ordinary shareholders equity $8 $A7.5b $6 $A5.3b $A4.4
Slide 8: For personal use only
For personal use only Index 50 60 70 80 90 100 110 120 130 01-Jan-07 31-Jan-07 02-Mar-07 01-Apr-07 01-May-07 31-May-07 30-Jun-07 30-Jul-07 29-Aug-07 28-Sep-07 28-Oct-07 27-Nov-07 27-Dec-07 26-Jan-08 25-Feb-08 26-Mar-08 25-Apr-08 Macquarie Group 25-May-08 24-Jun-08 24-Jul-08 MSCI World Diversified Fi
Slide 9: What distinguishes Macquarie
For personal use only What distinguishes Macquarie
Slide 10: What distinguishes Macquarie
What distinguishes Macquarie For personal use only 1. Derives most operating income from provision of products and services to clients 2. Long-term record of successful risk management: — No problem trading exposures — No material problem credit exposures 3. Diversified by business mix and geography
Slide 11: Derive most income from provision of products and services to clients
Derive most income from provision of products and services to clients For personal use only Commodities, resources^ and Lending, leasing and margin foreign exchange, 13% related income, 11% Cash equities – institutional & retail, 13% Equity derivatives, 15% Asset & equity investments (excl. speciali
Slide 12: Long-term record of successful risk management
Long-term record of successful risk management For personal use only No problem trading exposures No material problem credit exposures No exposure to Structured Investment Vehicles (SIVs) No subprime lending Longstanding policy of granting very few standbys and warehouses No problems wit
Slide 13: Diversified mix of income
Diversified mix of income For personal use only Dividends & distributions, 1.0% Base funds management fees, specialist funds, 7.2% Share of net profits of associates, 1.9% Base funds management fees, other funds, 3.8% Net interest income, 8.1% Interest rate products, 1.2% Foreign exchange products,
Slide 14: Geographically diverse sources of income
Geographically diverse sources of income International income 57% of total1 For personal use only Australia $Am Asia-Pacific $Am 2500 3,500 3,000 2000 2,500 1500 2,000 1,500 1000 1,000 500 500 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Australia: 2007 included significant income from a nu
Slide 15: Growth through the cycle
Growth through the cycle For personal use only Profit ($Am) 120 100 0.8 Hill Samuel First listed 80 0.6 UK opens property trust branch Global real Enter office in estate crash stockbroking 0.4 Sydney London 60 office 0.2 opens Stock market 0 crash 40 1969 1970 1971 1972 1973 1974 1975 1976 MBL estab
Slide 16: Growth through the cycle
Growth through the cycle For personal use only Profit ($Am) Orion Securities Credit market 2000 CIT Systems Leasing disruption Group restructure 1800 1600 Giuliani Capital Russian debt SARS 1400 crisis 9/11 US recession Thames Asian financial 1200 Water crisis ING Dot com acquired crash Sydney 1000
Slide 17: Group funding requirements
Group funding requirements At 31 March 2008 For personal use only Significant difference between statutory balance sheet and actual funding requirement Mar 08 $Ab Total assets per Statutory Balance Sheet 167.2 Less accounting gross-ups and non-recourse funded assets: Self funded trading assets (28
Slide 18: Group funding
Group funding At 31 March 2008 For personal use only Balance sheet composition $Ab Diversity of funding sources ($Ab) Funding sources Secured Undrawn Senior funding, $A8.2 Issued paper (NCDs, commercial paper and other issued Bonds, $A8.1 25.8 credit facility, paper) $A4.1 Drawn Senior Secured fundi
Slide 19: Banking Group funding
Banking Group funding At 31 March 2008 For personal use only Balance sheet composition $Ab Diversity of funding sources ($Ab) Funding sources Secured funding, $A7.1 Issued paper (NCDs, commercial paper and other issued paper) 25.8 Subordinated Bonds, $A8.1 Secured funding 7.1 debt, $A2.3 Bonds 8.1 O
Slide 20: Non-Banking Group funding
Non-Banking Group funding At 31 March 2008 For personal use only Balance sheet composition $Ab Diversity of funding sources ($Ab) Funding sources Deposits, Other bank $A0.2 loans, $A0.3 Secured funding 1.1 Undrawn senior credit Equity, $A3.6 Other bank loans 0.3 facility, $A4.1 Secured Deposits 0.2
Slide 21: Term funding transactions since March 2008
Term funding transactions since 31 March 2008 For personal use only Funding source Category Amount Term Secured finance Term securitisations (PUMA and SMART A$4.5 billion Up to 15 years series)1 and other secured finance Issued paper Capital markets private placements A$1.1 billion 1-2 years Hybrid
Slide 22: Funding structure
Funding structure For personal use only MGL and MBL are the Group’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements MGL provides funding predominantly to the Non-Banking Group MBL provides funding to the Banking Grou
Slide 23: Regulatory capital position
Regulatory capital position For personal use only Macquarie Group Limited – Regulatory Capital Position (31 March 2008) Banking Group Non Banking Group Buffer for volatility, growth Minimum Capital Requirement and strategic flexibility Buffer for Volatility CPS Growth and Strategic Flexibility Regul
Slide 24: Current conditions and Outlook
For personal use only Current conditions and Outlook
Slide 25: Global market conditions
Global market conditions For personal use only Credit markets — Since August 2007, credit markets have been extremely difficult and funding has been more expensive — Funding costs at significantly higher levels than pre-August 2007 Equity markets — Volumes have dropped off from very high levels
Slide 26: Solid first quarter to June 2008 but down on record prior corresponding period
Solid first quarter to 30 June 2008 but down on record prior corresponding period For personal use only Conditions in many markets have deteriorated since this time last year. All groups operating profitably, but reported lower first quarter results than prior corresponding year’s record first qua
Slide 27: Some recent highlights
Some recent highlights For personal use only Large advisory transactions — BrisConnections consortium, Brisbane Airport Link tollroad — Adviser to BUPA on its $A2.4b merger with MBF — Takeover defence adviser to Dyno Nobel on $A3.8b acquisition of Dyno Nobel by Incitec Pivot — Joint Bookrunner and
Slide 28: Some recent highlights
Some recent highlights For personal use only Some current advisory roles (contd) — Adviser to Australand Capital Group on capital raising — Adviser on Leighton Holdings’ planned $500 million equity raising — Adviser to Telstra in its bid to roll-out and operate a national broadband network for Aus
Slide 29: Some new growth initiatives
Some new growth initiatives For personal use only Commodities, resources1 and foreign exchange, 13% Lending, leasing and margin related income, 11% Freight derivative services to Acquisition of US based shipping and freight industry CIT Systems Leasing Carbon trading initiatives New deposit
Slide 30: Specialist fund initiatives
Specialist fund initiatives For personal use only New funds: — Russian infrastructure fund (joint venture with Renaissance Capital) — Indian infrastructure fund (Memorandum of Understanding with State Bank of India) — Macquarie Special Situations Fund (co-investment opportunity fund) — MGPA Fund I
Slide 31: Specialist fund raising
Specialist fund raising For personal use only J $A2.9b raised over the 3 months to 30 June 2008 - 69% from international investors and 97% into unlisted funds or syndicates $Ab 15 12 9 Raising Fund ($Ab) Unlisted infrastructure 1.22 6 Listed Infrastructure 0.08 3 months to 30 Jun 08 Unlisted Real Es
Slide 32: Outlook – current year
Outlook Ó current year For personal use only Market conditions continue to make short-term forecasting more difficult than usual Solid start to the year, but current state of financial markets means that to repeat last year’s record performance is becoming increasingly challenging However, ove
Slide 33: Key investor documents
Key investor documents (www.macquarie.com.au/shareholdercentre) For personal use only Annual Reports, result announcements, and presentations: http://www.macquarie.com.au/au/about_macquarie/investor_information/annual_reports.htm Management Discussion & Analysis: http://www.macquarie.com.au/au/a
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