NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Q2 FY22 Earnings Presentation
39 slides from NAOS Ex-50 Opportunities's earnings presentation, Feb 3, 2022
Slide 1: Q2 FY22 Investor Update & Q&A
Q2 FY22 INVESTOR UPDATE & Q&A Thursday 3 February 2022 | 10:30 am (AEDT) Audio Dial In: +61 2 9091 7604 Audio Access Code: 972-947-023 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) Benchmark unaware (No
Slide 7: NAOS LICs investment portfolio financial year returns
NAOS LICs investment portfolio financial year returns* 60% 50% 40% 30% 20% +2.92% +4.14% 10% +4.42% 0% -10% -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 Opportuniti
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 80.68 80 70 60 57.50 Cents per share (CPS) 52.30 49.00 49.79 50 40 34.85 30 28.21 23.10 19.75 20 10 0 NCC NAC NSC Total Dividends Declared (Since Inception) Total
Slide 9: Investment portfolio performance summary
Investment portfolio performance summary BENCHMARK Q2 FY22 1 YEAR 1 YEAR INCEPTION INCEPTION Investment Portfolio PERFORMANCE PERFORMANCE BENCHMARK (P.A.) PERFORMANCE PERFORMANCE (P.A) NAC Investment Portfolio Performance* -0.78% +31.63% +19.45%^ +16.84% +8.65%^ 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: Q2 FY22 Summary
Q2 FY22 Summary Q2 FY22 overall performance reasonable across the NAOS portfolios: NSC: +5.83% NCC: +2.63% NAC: -0.78% Heightened corporate activity occurred across the portfolios including companies undertaking placements, acquisitions/takeovers, management changes etc. (OTW, UBN, MOV, CO
Slide 12: Q2 FY22 Summary Continued
Q2 FY22 Summary Continued The trends we witnessed in 2021 have arguably become more pronounced, causing significant disruption from both a domestic & global macroeconomic standpoint: Already stretched labour & skills shortages now impacted by Omicron. Fatigue appears to be a factor in many poc
Slide 13: Freight & Logistics Challenges Causing Significant Issues
Freight & Logistics Challenges Causing Significant Issues 9 80 8 70 7 60 Index Movement (Rebased) 6 50 5 Days 40 4 30 3 20 2 1 10 0 0 Ave. Days Shipping LCL (Less than Container Load) China to USA (RHS) Baltic Dry Index (Shipping) (LHS) Global Container Freight Rate Index (LHS) Source: IRESS, Statis
Slide 14: Inflationary Impacts – Impacting Consumers & Businesses
Inflationary Impacts – Impacting Consumers & Businesses 6% 170 160 5% 150 4% 140 Commodity Price Inflation Rate 130 3% 120 2% 110 100 1% 90 0% 80 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Index of Commo
Slide 15: Profitability Not Necessary
Profitability Not Necessary 350 70% 300 60% 250 50% 200 40% % Profitable # of IPOs 150 30% 100 20% 50 10% 0 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total U.S. IPOs (LHS) % of which are Profitable (RHS) Source: University of Florida, Chartr, NAOS CONVICTION. LONG TERM. ALIGNED
Slide 16: Saunders International
Saunders International Mark Benson Managing Director & Chief Executive Officer 3rd February 2022
Slide 17: Company Profile
Company Profile Tank Construction Industrial Maintenance Oil & Gas Infrastructure With 70 years of & Maintenance & Shutdowns experience, Saunders uses in-house expertise to SERVICES SECTORS deliver a comprehensive range of projects including design, manufacture, construction, installation, maintenan
Slide 18: Fixing Country Bridges - NSW
Fixing Country Bridges - NSW The Fixing Country Bridges Program is a $500 million NSW Government program, enabling councils to replace hundreds of timber bridges in poor condition and better connect regional and rural communities. Some of these timber bridges were built during the 1940s and 1950s. R
Slide 19: Australian Government Fuel Security Initiative: Timeline
Australian Government Fuel Security Initiative: Timeline Source: Australian Government – Department of Industry, Science, Energy and Resources – Government Priorities
Slide 20: NCC key portfolio events Q2 FY22
NCC key portfolio events Q2 FY22 HOLDING INDUSTRY Q2 UPDATE Secured $165m contract to design, construct and manage a U.S. Defense fuel storage facility in Darwin. Construction/ The largest and most significant contract awarded to SND in its history. Engineering An excellent foundation for SND
Slide 21: NCC overview: Cumulative Dividends
NCC overview as at 31 December 2021 $1.24 6.94% $1.08 14 +13.18% +23.21% $139.5m 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
Slide 22: NSC key portfolio events Q2 FY22
NSC key portfolio events Q2 FY22 HOLDING INDUSTRY Q2 UPDATE Conducted a $40m raising for debt reduction and investments for future growth. Company rebrand, Board & management refresh, business restructure and Freight & Logistics improvements to capital structure have all now been completed. (NZX
Slide 23: NSC overview: Cumulative Dividends
NSC overview as at 31 December 2021 $1.12 5.65% $0.885 11 +8.90% +39.08% $197.4m 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
Slide 24: NAC key portfolio events Q2 FY22
NAC key portfolio events Q2 FY22 HOLDING INDUSTRY Q2 UPDATE Demonstrating a multifaceted approach to growth – acquisition of management rights portfolio & an additional QLD asset in complementary geographical area. Real Estate Two non-core asset sales conducted – recycling capital into higher qu
Slide 25: NAC overview: Cumulative Dividends
NAC overview as at 31 December 2021 $1.53 4.96% $1.20 11 +16.84% +31.63% $221.5m 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
Slide 26: 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 27: Overview and Outlook Q3 FY22
Overview and Outlook Q3 FY22 Omicron uncertainty/headwinds dictating terms both at a macroeconomic and microeconomic level – more of the same since 2020. Supply chain issues Staffing shortages & wage inflation Election impacts Interest rate expectations Immigration & travel Corporate a
Slide 28: 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 29: 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 29
Slide 30: Appendix
APPENDIX CONVICTION. LONG TERM. ALIGNED | Copyright 2019 NAOS Asset Management Limited 30
Slide 31: 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% 20% 13.18% 16.84% 15% 10% 7.79% 10% 8.65% 5% 3.40% 2.66% 5% 2.93% 2.63% 0% 0% -1.05% -0.59% -3.18% -2.75% -5% -5% Performance Since
Slide 32: 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 33: 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 34: NAOS Strategies
NAOS Strategies Our LICs target a concentrated portfolio of 0-20 companies CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 34
Slide 35: 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 December 2021 Directors Shareholding (Ordinary Shares) 9,000,000 8,160,357 8,000,000 7,000,000 6,000,000 5,312,774 5,000,000 4,00
Slide 36: NAOS investment process
NAOS investment process CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 36
Slide 37: NAOS ESG framework
NAOS ESG framework CONVICTION. LONG TERM. ALIGNED | Copyright 2022 2019 NAOS Asset Management Limited 37
Slide 38: 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 38
Slide 39: 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 — Q2 FY22 Earnings Presentation on 6ix