Litigation Capital Management Ltd · LSE:LIT
Litigation Capital Management — FY2023 Earnings Presentation
30 slides from Litigation Capital Management's earnings presentation, Sep 19, 2023
Slide 1: Full year results presentation 2023
Full year results ® 5 Presentation 2023 Zz
Slide 2: Governance and financial statements
G OV ER FIN NA AN NC CIA E L ST AT EM EN TS 2
Slide 3: Experience Counts
eT Lem EXPERIENCE COUNTS LIGHTS
Slide 4: Highlights
Highlights from resolutions of investments of A$i8im with A$e4 2m directly attributable to LCM sted profi LCM only adjusted profit for period of A’ 9m, of which A$16.2m related to unrealized FV gains during the before tax period. Statutory profit before tax on an LCM only basis of A$42.7m Transition
Slide 5: KPI snapshot
KPI snapshot Measures of sustained Maintenance of Increase in AUM (A$) growth (A$) investment standards Number of applications 434 vs 442 12 year cumulative ROIC 1.78x vs 1.63x Total assets under management $0.5bn Capital committed in year’ 12 year cumulative IRR A$176m vs A$104m 72% vs 79% Total as
Slide 6: Experience Counts
EXPERIENCE COUNTS
Slide 7: Full year results highlights
/ Full year results highlights -— exclusive of third-party fund ($A) Realisations from resolution of* investments. Realised gross profit* Adjusted profit before FV and tax! Unrealised FV gains Adjusted profit before tax Statutory profit before tax Cash? Total capital invested* Value of Litigation As
Slide 8: FY23 Financial position overview and consolidated AuM
FY23 Financial position overview and consolidated AuM — exclusive of third-party fund ($A) Assets Under Management($m)* Value of portfolio of investments ($m) 203 186 L FY21 FY22 FY23 Cash as at period end’ ($m) 83 : i 293 FY21 FY22 FY23 7 484 414 L FY21 FY22 FY23 Cash generation’ ($m) 96.8 375 [] 7
Slide 9: Financial review
Financial review FY23 cash movements — exclusive of third-party fund ($A) mm Litigation Investr (36.3) mm Operating expense ‘esting activiti 96.8 mm Financing activit (11.5) 83.0 || (0.2) (0.2) (6.0) Le 29.3 Cash balance Cash Capital Expenses Property, Exceptional__Interest__ Proceeds from Payments
Slide 10: Transition to Fair Value accounting
/ Transition to Fair Value accounting In consultation with our advisors LCM is adopting a valuation methodology which allows us to value each investment to determine its fair value at the relevant point in the financial period consistent with industry peers Transition to Fair Value accounting will p
Slide 11: Comet Group Limited and Carillion Arbitration valuation progression
11.49m 10.90m 32.00m 8.71m 29.94m 3.96m 10.49m 2.90m 3.01m 8.31m 2.56m 5.80m 0.93m 1.09m Close of pleadings Exchange of witness Appeal judgment in Resolution Close of pleadings Deliberation by Tribunal Award in favour of funded Resolution evidence favour of funded party (including award scrutiny par
Slide 12: Experience Counts
EXPERIENCE COUNTS
Slide 13: Favourable market conditions
Os =O Favourable market Uncorrelated returns Each and every investment whether the subject of a direct investment or as part of the fund portfolio is uncorrelated to each other Demand expanding rapidly The demand for litigation finance is steadily growing from year to year conditions Countercyclical
Slide 14: Portfolio breakdown by claim type and jurisdiction
¹ ¹ ¹ $25 15% 1% 31% 9 12 4 44% 32% 2 $95 2 56% 10% 9 3% 7% 1% 11 4 $34 14
Slide 15: Portfolio breakdown
¹ 2% 7% 19% 5 7 6% 6% 40% 4% 55% 24% 6 1% 3 19% 5% 2 6% 5% 1 1 15
Slide 16: LCM Global Alternative Returns
) 16 LCM Global Alternative Returns Balances as at 31 August 2023 (A$ millions) $148 million: Committed’ $12 million Deployed/invested ‘excluding operational expenses 2 Capital commitment denotes the total estimated oudget of the portfolio of investments as at 31 August 2022 converted to AUD as at t
Slide 17: Assets under management and opex as a % of portfolio
600 0.4 0.35 34% 500 0.3 400 0.25 Assets under management A$m 300 0.2 Opex 484 Opex as a % of current portfolio 415 0.15 13% 200 13% 13% 337 10% 262 0.1 9% 9% 8% 100 7% 5% 3% 124 3% 3% 0.05 39 51 32 29 2 6 13 18 - 1 2 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21* FY22* FY23* 17
Slide 18: 3 year rolling summary
3 year rolling summary 2.31 37 2.09 • 33 31 1.66 • 32 1.49 31 1.44 1.39 28 • 82.60% 76.20% 71.10% 65.60% 65.10% 59.10% FY16-18 FY17-19 FY18-20 FY19-21 FY20-22 FY21-23 Rolling IRR Rolling RoIC Time to recovery (months) 18
Slide 19: LCM Experience Counts
LCM EXPERIENCE COUNTS
Slide 20: Building Scale
Building Scale Underwriting Capital Origination * Utilise the experience and maintain discipline of investment selection * Continue to build experience over time * Enhancing systems and maintaining methodologies for effective due diligence and underwriting risk * The disciplined application of those
Slide 21: Outlook
») 21 Outlook Growing Fund management business. Anticipating closing Fund Il in the current financial period allowing the establishment of Fund |ll Continue consideration of new territories and jurisdictions in which to invest. Selected markets exhibiting favourable conditions for disciplined expans
Slide 22: Q&A
Q&A EXPERIENCE COUNTS
Slide 23: Appendices
endices EXPERIENCE COUNTS
Slide 24: Consolidated income statement
24 Consolidated income statement For the period ended 30 June 2023 Gains on financial assets at fair value through profit or loss Loss on financial liabilities related to thirc:party interests in consolidated entities, Total Income Other income Interest income Expenses Employee benefits expense Depr
Slide 25: Adjusted profit & EBITDA reconciliation
Adjusted profit & EBITDA reconciliation For the period ended 30 June 2023 LCM only Fund FY23 Fund Agm Asm A$Sm AgSm Statutory profit after tax 315 = Ein) 346 = 346 Add Depreciation & amortisation 0.2 - 0.2 Ol - Ol Finance costs 81 - 81 47 47 ‘Tax expense n3 - n3 m1 - m1 * Non operating costs include
Slide 26: Consolidated statement of financial position
Consolidated statement of financial position As at 30 June 2023 Consolidated LCM only Fund FY23. LCMonly A$m A$m A$m A$m Assets Cash and cash equivalents 830 a8 1045, 293 207 50.0 Trade and other receivables 22 : 22 23 : 23 * 32% increase in Financial assets at Fair Due from resolution of financial
Slide 27: Consolidated statement of cash flows
27 Consolidated statement of cash flows As at 30 June 2023 Cash flows from operating activities Profit/(loss) after income tax expense for the year Adjustments for: Fair value adjustments to financial assets Finance costs reclassified to financing activities, Depreciation, Amortisation, Tax paid, FX
Slide 28: Illustrative example of investment valuation over time
Allustrative example of investment valuation over time M Increase Ml Decrease ™ Total = = | suse 9 = | os | ‘L. | on il os) | gt ws ’ # = < ot .< aa oe a cae Bo aoe ot ot aw o call - al Oe Oe “ee Year 1 Year 2 Year 3 - Illustrative example only - Budget assumed $10,000 (deployed on straight-line bas
Slide 29: Important notices and disclaimer
») 29 Important notices and disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE R
Slide 30: Contact Information
Contact Information Offices sydney Brisbane Level 12, The Chifley Tower Level 38 2 Chifley Square, 7M Eagle Street NSW 2000 Brisbane QLD 4000 2 8098 1390 T +617 3218 7359 London Bridge House Melbourne 181 Queen Victoria Street Level 50, London EC4V 4EG 120 Collins Street T +44 203 955 5260 Melbourne
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