NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q3 FY22 Earnings Presentation
40 slides from NAOS Ex-50 Opportunities's earnings presentation, Apr 28, 2022
Slide 1: Q3 FY22 Investor Update & Q&A
Q3 FY22 INVESTOR UPDATE & Q&A Thursday 28 April 2022 | 11:00 am (AEST) Audio Dial In: +61 3 8488 8990 Audio Access Code: 135-061-812 PRESENTED BY NAOS ASSET MANAGEMENT CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 1
Slide 2: Important information
Important information 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 financial product or servi
Slide 3: NAOS Asset Management
NAOS Asset Management Our Mission To provide investors genuine long-term, concentrated exposure to growing Australian undervalued emerging companies with an industrial focus. NAOS established its first Listed Investment Company (LIC) in 2013 with 400 shareholders, today NAOS manages ~$400 million ac
Slide 4: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS Sebastian Evans Warwick Evans Sarah Williams Matthew Hyder David Rickards OAM Mark Bennett Trevor Carroll Managing Director, NAOS Chairman, NAOS Asset Independent Director, Director, NAOS Asset Independent Chairman & Director, NAOS Asset Independent Chairman Ass
Slide 5: NAOS investment beliefs provide a competitive advantage
NAOS investment beliefs provide a competitive advantage Value with Long Quality over Invest for the Term Growth Quantity Long Term 5+ years Performance v Ignore the Pure Exposure Liquidity Focus Index to Industrials The closed end LIC structure No NAOS holdings removes application and are part of ei
Slide 6: 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 include: Concentrated portfolios (0-15 investments) Long-term investment philosophy (5+ years) Focus on smaller companies ($20 million - $500 million market capitalisation)
Slide 7: NAOS LICs investment portfolio financial year returns
NAOS LICs investment portfolio financial year returns* 60% 50% 40% 30% 20% 10% -6.67% 0% -1.38% -10% -14.35% -20% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 YTD NAOS Emerging Opportunities Company Limited (ASX: NCC) NAOS Ex-50 Opportunities Company Limited (ASX: NAC) NAOS Small Cap Opportunit
Slide 8: NAOS LIC Fully Franked Dividend History and Profit Reserves
NAOS LIC Fully Franked Dividend History and Profit Reserves Each LIC has consistently paid dividends and holds healthy profit reserves 90 85.70 80 70 61.25 60 Cents per share (CPS) 52.07 51.7 50 45.3 40 36.45 30.14 30 21.1 22.0 20 10 0 NCC (Feb 2013) NAC (Nov 2014) NSC (Dec 2017) Total Dividends (Si
Slide 9: Investment portfolio performance summary
Investment portfolio performance summary BENCHMARK Q3 FY22 1 YEAR 1 YEAR INCEPTION INCEPTION Investment Portfolio PERFORMANCE PERFORMANCE BENCHMARK (P.A.) PERFORMANCE PERFORMANCE (P.A.) NAC Investment Portfolio Performance* -16.78% -0.71% +10.96%^ +13.38% +7.94%^ NCC Investment Portfolio Performance
Slide 10: What research does NAOS apply to the Investment Process?
What research does NAOS apply to the Investment Process? The NAOS Investment Team undertakes fundamental analysis on potential and current investments. Some examples of our key focus areas include: Internal Engagement External Engagement Hands On Research Executive Team including CEO, Company Announ
Slide 11: Q3 FY22 Summary
Q3 FY22 Summary The macroeconomic issues of 2021 became more acute i.e. Ukrainian war, sharp increase in inflationary pressures and short term interest rate expectations resulting in significant market volatility during early CY22. Arguably a long overdue dose of ‘valuation realism’ had a substa
Slide 12: Q3 FY22 Summary Cont.
Q3 FY22 Summary Cont. Many core portfolio companies are direct beneficiaries of the domestic economic rebound and will likely continue to be so for the medium to longer term i.e. Big River (ASX: BRI) and COG Financial Services (ASX: COG). Amongst the volatility, new investments have been identif
Slide 13: Domestic Real Wages Growth – Will it Return?
Domestic Real Wages Growth – Will it Return? 6.00% 5.00% 4.00% 3.00% 2.60% Inflation Rate 2.00% 2.29% 1.00% 0.00% -0.31% -1.00% -2.00% Nominal wages growth Underlying inflation Real wages growth Source: NAOS, AFR, Australian Bureau of Statistics CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 N
Slide 14: Declining Globalisation vs Increasing Australian Exports
Declining Globalisation vs Increasing Australian Exports 60.0% 5.00% 4.50% 40.0% 30.9% 4.00% 22.8% 3.50% 20.0% 17.6% 19.0% 18.4% ASX-200 CY Performance 14.7% 14.6% 15.1% 13.0% 11.8% 9.7% 3.00% 5.9% 6.7% 7.0% 7.0% 2.8% Inflation 1.1% 0.0% 2.50% -2.6% -2.1% -1.5% -6.9% 2.00% -12.1% -20.0% -14.5% 1.50%
Slide 15: Globalisation Declining Vs. Australian Exports Increasing
Globalisation Declining Vs. Australian Exports Increasing 70.0% 60 50 60.0% 40 50.0% 30 40.0% World GDP $US Billion 20 10 30.0% 0 20.0% -10 10.0% -20 0.0% -30 Australia Net Trade in Goods ($US bn) (RHS) Global Trade (% of world GDP) (LHS) Source: NAOS, World Bank CONVICTION. LONG TERM. ALIGNED | Cop
Slide 16: Australia's Inbound opportunity
Australia’s Inbound opportunity April 2022 CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 16
Slide 17: About Us
About Us Experience Co (ASX:EXP) is an adventure tourism company. We are all about helping you escape the ordinary, with safety and adventure at the core of what we do. Experience Co employs over 1,000 people and operates across 37 locations in Australia and New Zealand. Experience Co is also a lead
Slide 18: Australian Historic Inbound Growth
Australian Historic Inbound Growth Prior to COVID 19 the Australian tourism industry was leading economic performer Significant growth over the last 10 years driven by record levels of international visitation and expenditure Growth rate of tourism expenditure outstripped Australian Economy growth d
Slide 19: The Recovery Pathway
The Recovery Pathway Indicators are positive with regards to the ‘great reopening recovery’ Demand for OOR travel from key inbound markets is back to 54% of Pre-pandemic levels Aviation capacity been led by US carriers, closely followed by European and UK markets – Asian carriers will respond as mar
Slide 20: How does industry take advantage of 'reopening'
How does industry take advantage of ‘reopening’ Companies that balance their portfolio, invest in the customer and renew product will win Tourism operators have learnt being solely ‘international’ is no longer sustainable a balanced portfolio is a ‘must’ Investment during the ‘off season’ will be cr
Slide 21: Thank you
21 Thank you For more information: John O’Sullivan Chief Executive & Executive Director Experience Co CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 21
Slide 22: NCC key portfolio events Q3 FY22
NCC key portfolio events Q3 FY22 HOLDING INDUSTRY Q3 UPDATE 1H FY22 results saw substantial margin & cash balance improvements. Mobilisation of US Defence Dept. project in Darwin progressing to Construction/ expectations. Scope for expansion of works in medium term. Engineering Further infrast
Slide 23: Cumulative Dividends – NCC overview
NCC overview as at 31 March 2022 $1.11 7.25% $1.035 11 +12.10% +12.21% $145.4m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Inception^ Performance ^ Average Market p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SH
Slide 24: NSC key portfolio events Q3 FY22
NSC key portfolio events Q3 FY22 HOLDING INDUSTRY Q3 UPDATE COG subsidiary Westlawn utilising surplus cash for the accretive and strategic acquisition of funds management business Equity One. Establishment of $31m parent company debt facility for future acquisitions Financial Services in FB&A se
Slide 25: Cumulative Dividends – NSC overview
NSC overview as at 31 March 2022 $0.96 5.96% $0.855 8 +5.67% +6.05% $194.6m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Inception^ Performance ^ Average Market p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SHARE
Slide 26: NAC key portfolio events Q3 FY22
NAC key portfolio events Q3 FY22 HOLDING INDUSTRY Q3 UPDATE Detrimental impact of recent floods – Lismore substantially impacted. FY22 EBITDA guidance revised downwards driven by increased expenditure on people to ensure EGH can scale effectively. Real Estate Revenue profile hedged to inflatio
Slide 27: Cumulative Dividends – NAC overview
NAC overview as at 31 March 2022 $1.18 6.15% $1.00 9 +13.38% -0.71% $167.3m Pre-Tax Fully Franked Share Price Number of Performance 1 Year Weighted NTA Dividend Yield Holdings since Inception^ Performance ^ Average Market p.a. Capitalisation of the Investments FULLY FRANKED DIVIDEND (CENTS PER SHARE
Slide 28: Capital Management Initiatives
Capital Management Initiatives 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 reserve balance. Alignm
Slide 29: Overview and Outlook Q4 FY22
Overview and Outlook Q4 FY22 Market volatility likely to continue with numerous factors contributing to investor sentiment: Freight & logistics issues, widespread skill shortages, inflationary spike no longer appearing to be transitory. Domestic interest rates expectations of certain rate rises.
Slide 30: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge As a company, we commit to Pledge 1% of revenue, time and intellect to movements and missions that matter. 1% Revenue 1% Time 1% Intellect Each year NAOS donates 1% of its annual Our people have an incredible range of skills NAOS sees the value in supporting revenue t
Slide 31: Q&A
Q&A 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 CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 31
Slide 32: Appendix
APPENDIX CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 32
Slide 33: NAOS strong long term (5 years+) risk-adjusted returns
NAOS strong long term (5 years+) risk-adjusted returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics 15% 15% 13.38% 12.10% 10% 10% 7.94% 7.06% 5% 5% 3.43% 2.94% 2.62% 2.37% 0% 0% -0.84% -1.14% -3.24% -2.92% -5% -5% Performance Since Mon
Slide 34: The features of a NAOS LIC
The features of a NAOS LIC Closed-end structure Long-term Intra-day Liquidity No applications or Investment decisions Trades on the ASX redemptions Corporate Governance Dividends Opportunity Public companies provide A growing stream of May trade at a discount or accountability of Directors dividends
Slide 35: 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 A growing revenue base provides companies with a number of competitive advantages such as the ability to Industry Tailwinds Supporting Long Term scale their fixed cost base and
Slide 36: NAOS management alignment
NAOS management alignment NAOS Director’s shareholdings have significantly increased since the inception of each LIC Inception Directors Shareholding (Ordinary Shares) 31 March 2022 Directors Shareholding (Ordinary Shares) 9,000,000 8,384,109 8,000,000 7,000,000 6,000,000 5,331,624 5,000,000 4,000,0
Slide 37: NAOS investment process
NAOS investment process CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 37
Slide 38: NAOS ESG framework
NAOS ESG framework CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 38
Slide 39: Historical shareholder numbers
Historical shareholder numbers 8000 6000 4000 2000 0 NCC Shareholders NAC Shareholders NSC Shareholders CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 39
Slide 40: Investor awareness and communication
Investor awareness and communication CEO Insights, NAOS Quarterly Monthly Investment The news and media Newsletter, Webinars Report & NTA email section of our website subscribe via our updates, subscribe via is updated regularly website our website naos.com.au naos.com.au/ naos.com.au/ subscribe sub
NAOS Ex-50 Opportunities Company — Q3 FY22 Earnings Presentation on 6ix