Investec plc · LSE:INVP
Investec — FY2007 Earnings Presentation
19 slides from Investec's earnings presentation, 2007
Slide 1: A distinctive specialist banking group – year ended 31 March 2007
A distinctive specialist banking group For the year-ended 31 March 2007 A distinctive specialist banking group
Slide 2: Favourable operating environment; Penetrating core markets
A distinctive specialist banking group Favourable operating environment 135 JSE All Sha re 125 Rebased to 100 115 FTSE All Share Volatile equity markets 105 Australia All 95 Ordina ries 85 Mar 06 May 06 Jul 06 Sep 06 Nov 06 Jan 07 Ma r 07 10 9 JIBAR (3 mo) 8 7 (%) LIBOR (3 mo) Rising interest rate e
Slide 3: Leveraging off our platforms
A distinctive specialist banking group Leveraging off our platforms Operating profit per employee* 175 155 148.5 135 121.7 115 103.6 92.1 91.3 91.5 92.3 £ 000 95 78.0 75 55 35 15 -5 Southern UK & Europe Australia Total group Africa Mar-06 Mar-07 *Before goodwill, non-operating items and taxation, ex
Slide 4: Resulted in a solid performance
A distinctive specialist banking group Resulted in a solid performance 31 Mar 31 Mar % (IFRS) 2007 2006 Change Operating profit before tax* (£’000) 466 585 388 767 20.0% Attributable earnings* (£’000) 300 704 230 017 30.7% Adjusted EPS* (pence) 53.3 41.9 27.2% DPS (pence) 23.0 18.2 26.4% Average loa
Slide 5: Adjusted EPS growth and ROE
A distinctive specialist banking group Adjusted EPS* growth Target: 60 UK RPI +10% 50 40 27.2% 30 20 (%) 10 0 -10 Attributable earnings Plc: 43.8% -20 Limited: 56.2% -30 Mar-97 Mar-99 Mar-01 Mar-03 Mar-05 Mar-07 *Before goodwill and non-operating items Note: Prior to 2005 the numbers are reported in
Slide 6: Cost to income ratio and Capital
A distinctive specialist banking group Cost to income ratio 90 59.0% 80 70 Target: <65% 60 50 (%) 40 30 UK & Europe: 66.7% 20 Southern Africa: 52.2% 10 Australia: 57.7% 0 Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- 00 01 02 03 04 05 06 07 Note: Prior to 2005 the numbers are reported in terms of UK GAAP
Slide 7: Divisional performance
A distinctive specialist banking group A distinctive specialist banking group Divisional performance Operating profit* Contribution to group 466.6 490 388.8 3.0% 14.1 ▼ 23.9% 68.1 14.6% 390 18.6 59.4 ▲ 14.7% 117.3 25.1% 290 66.9 ▲ 75.3% £ million 91.2 19.5% 190 100.9 ▼ 9.6% 37.8% 90 118.2 ▲ 49.3% 17
Slide 8: Private Client Portfolio Management and Stockbroking
Partner of choice – from wealth creation to wealth management Private Client Portfolio Management and Stockbroking Neutral Currency: ▲ 10.5% to £23.2 bn Overall Snapshot • Private Client business in South Operating profit* ▲ 32.7% to £22.1 mn Africa benefited from: ⁻ new product launches Funds under
Slide 9: Private Banking
Partner of choice – from wealth creation to wealth management Neutral Currency Private Banking Loans: ▲ 32% to £8.1 bn Deposits: ▲ 29% to £6.2 bn FUA: ▲ 56% to £2.9 bn Overall Snapshot • Strong performance driven by solid growth in advances and non- Operating profit* ▲ 52.1% to £154.4 mn interest in
Slide 10: Capital Markets
Specialist structuring and advisory business Capital Markets Neutral Currency: ▲ 18.7% to £3.5 bn Overall Snapshot • Strong growth supported by solid performance from advisory, Operating profit* ▲ 75.3% to £117.3 mn structuring, asset creation, trading and distribution activities Loan book ▲ 3.2% to
Slide 11: Investment Banking
Integrated business focused on local client delivery with international access Investment Banking Overall Snapshot • High level of activity from all Operating profit ▼ (9.6%) to £91.2 mn underlying businesses in all geographies Agency and Advisory • Improved quality of people, clients profit* ▲ 13.9
Slide 12: Asset Management
Investment specialist focused on performance and client needs Asset Management Neutral Currency: ▲ 11.7% to £ 35.3 bn Overall Snapshot • Strong momentum in the UK and international business Operating profit* ▲ 14.7% to £68.1 mn • Continued sound performance in Assets under management ▼ (5.6%) to £29
Slide 13: Property Activities
Leading fund management consolidator, seeking out selective trading opportunities Property Activities Neutral Currency: ▲ 31% to £2.4 bn Overall Snapshot • The SA business continued to perform well benefiting from: Operating profit* ▼ (23.9%) to £14.1 mn - Strong equity and property Funds under fund
Slide 14: Group Services and Other Activities; Asset quality
A distinctive specialist banking group Group Services and Other Activities Assurance Activities* ▼ from £11.5 mn to £1.6 mn International Trade Finance* ▲ 21.2% to £5.5 mn Central Funding* ▲ from £66.8 mn to £67.0 mn Central Services* ▲ from (£57.8 mn) to (£74.6 mn) *Before goodwill, non-operating i
Slide 15: General
A distinctive specialist banking group General Effective tax rate (excluding assurance activities) from 27.3% to 26.3% Weighted shares from 548.8 mn to 563.8 mn Earnings attributable to minority interests £9.1 mn Operating profits in relation to investments held in the Private Equity division £10.0
Slide 16: Balanced portfolio of businesses; Sustainable business model
A distinctive specialist banking group Balanced portfolio of businesses % contribution to operating profit* 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 Private Client Activities Asset Management Capital Markets Investment Banking Property Activities *Excluding Group Services and Other
Slide 17: Jaws ratio; Growth strategy
A distinctive specialist banking group Jaws ratio 1350 1200 CAGR: 1050 13.6% 900 £ million 750 CAGR: 600 11.2% 450 300 150 0 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Operating income Administrative expenses A distinctive specialist banking group Growth strategy UK and • Continue to pu
Slide 18: Outlook
A distinctive specialist banking group A distinctive specialist banking group Outlook • Good underlying momentum driving organic growth across businesses • Recent rating upgrades: – Solid understanding of and disciplined approach to credit – Effective capital management • Good expense control while
Slide 19: Outlook
A distinctive specialist banking group Outlook • The levels of activity and momentum have continued into the new financial year • The increase in scale and market penetration that we have achieved across all our geographies should continue to support the operating results of our businesses as expres