Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Shareholder Meeting (September 2025)
34 slides from Australian Foundation Investment's shareholder meeting presentation, September 2025
Slide 1: Annual General Meeting Presentation
Annual General Meeting Presentation September 2025
Slide 2: Disclaimer
Disclaimer Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warran
Slide 3: Agenda
Agenda Overview and Investment Objectives Mark Freeman Financial Results Andrew Porter Markets and the Portfolio David Grace Recent portfolio activity Winston Chong Outlook David Grace Annual General Meeting / September 2025 2 7
Slide 4: Overview and Investment Objectives
Overview and Investment Objectives Annual General Meeting / September 2025
Slide 5: Our Company
Our Company Predominantly invests in Australian and New Zealand companies Largest listed investment company on the ASX, 150k shareholders, independent Board of Directors Shareholders own the ‘management rights’ to the portfolio Management expense ratio of 0.16% with no performance fees Long term inv
Slide 6: Investment Objectives
Investment Objectives The Company’s primary investment goals are: • to pay stable to growing dividends over time; and • to provide attractive total returns over the medium to long term. Annual General Meeting / September 2025 10
Slide 7: Stable to Growing Dividend for Shareholders
Stable to Growing Dividend for Shareholders AFIC’s franking reserve balance ensures we can pay a consistent dividend even through volatile times – full year dividends for the last 7 financial years. Current franking credit balance sufficient to pay 55c Dividend Annual General Meeting / September 202
Slide 8: Attractive Total Returns Over the Long-Term
Attractive Total Returns Over the Long-Term AFIC NTA vs S&P ASX 200 Accumulation Index $10k in AFIC $178k $10k in the Index $146k Excludes the benefit of franking. Annual General Meeting / September 2025 12
Slide 9: Financial Results
Financial Results Annual General Meeting / September 2025
Slide 10: Summary Full Year Results
Summary Full Year Results Annual General Meeting / September 2025 14
Slide 11: Share Price Relative to Net Tangible Asset (NTA)
Share Price Relative to Net Tangible Asset (NTA) 31 August 2025 NTA: $8.34 Share price: $7.33 Annual General Meeting / September 2025 15
Slide 12: Markets and the Portfolio
Markets and the Portfolio Annual General Meeting / September 2025
Slide 13: Portfolio Performance to 31 August 2025
Portfolio Performance to 31 August 2025 Per annum returns. Assumes the full benefit of franking credits. Only includes franking that has been paid out. Past performance is not indicative of future performance. Annual General Meeting / September 2025 17
Slide 14: Factors Behind Recent AFIC Portfolio Performance
Factors Behind Recent AFIC Portfolio Performance Portfolio Factors Portfolio: Key Contributors +0.9% Portfolio: Key Detractors -4.0% Index Winners Missed: Gold -1.1% Non-Portfolio Factors CGT not yet paid out as franking -0.74% Management expenses -0.16% Annual General Meeting / September 2025 18
Slide 15: Despite Near Term Headwinds Long-Term Opportunity Remains Significant
Despite Near Term Headwinds Long-Term Opportunity Remains Significant. • Strong market position in all business units. • Demand for core IG product remains resilient and strong. •• The outlook for US healthcare funding remains highly uncertain • Highly cash generative business with a strong balance
Slide 16: Share Prices Have Diverged From Earnings Growth
Share Prices Have Diverged From Earnings Growth 800 200 800 250 160 200 600 600 120 150 400 400 80 100 200 200 40 50 - - - - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 EPS A
Slide 17: Valuation Metrics – Price to Earnings of CBA vs. CSL
Valuation Metrics – Price to Earnings of CBA vs. CSL 30x 50x 28x 45x 26x 26.3x 40x 24x 35x 22x 30x 20x 25x 18x 16x 20x 17.9x 14x 15x 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 Source: FactSet Annual General Meeting / September 2025 21
Slide 18: Mainfreight – Share Price Tracks Earnings
Mainfreight – Share Price Tracks Earnings 5.0 90 80 4.0 70 60 3.0 50 40 2.0 30 1.0 20 10 0.0 0 EPS NZD (LHS) Share Price NZD (RHS) Source: FactSet Annual General Meeting / September 2025 22
Slide 19: A Cyclical Downturn Causing Short-Term Headwinds
A Cyclical Downturn Causing Short-Term Headwinds • Market leader in a large, growing market • Founder led. Market leader in Australia • Debt-funded acquisition has weighed on the share price • Less established US business facing cyclical headwinds • Market opportunity remains unchanged • Long-term o
Slide 20: The Gold Price Has Run to All Time Highs
The Gold Price Has Run to All Time Highs 3,500 3,000 The gold price has reached record highs, driven by geopolitical uncertainty, Central 2,500 Bank Buying, rising Government debt, and Price (USD) easing monetary conditions (rate cuts) 2,000 History shows these moves are often extreme in both direct
Slide 21: Recent Portfolio Activity
Recent Portfolio Activity Annual General Meeting / September 2025
Slide 22: Active Portfolio Management – Recent Transactions
Active Portfolio Management – Recent Transactions Additions to Existing Holdings Trimmed Holdings New Purchases Complete Disposals Nil. Annual General Meeting / September 2025 26
Slide 23: Why Are We Trimming Wesfarmers?
Why Are We Trimming Wesfarmers? Price to Earnings Dividend yield 40x 36.3x 8.0% 35x 7.0% 30x 6.0% 25x 5.0% 20x 4.0% 15x 10x 3.0% 2.7% 5x 2.0% 2005 2010 2015 2020 2025 2005 2010 2015 2020 2025 Source: FactSet Annual General Meeting / September 2025 27
Slide 24: Goodman Group
Goodman Group The Long Term Opportunity Short Term Weakness Significant data centre development pipeline Concerns about slowing capex by hyperscalers Continental GMG Share Price (A$) Europe/UK 45 2.0 GW 40 GREATER LONDON AMSTERDAM TOKYO 35 Japan LOS ANGELES MARDID FRANKFURT OSAKA 1.3 GW 30 MILAN PAR
Slide 25: ARB Corporation
ARB Corporation The Long Term Opportunity Short Term Weakness Growing traction in US export sales Soft Australian vehicle market and US tariff concerns ARB Export Sales (A$m) ARB Share Price (A$) 350 60 300 50 250 40 200 30 150 100 20 50 10 0 0 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Source: ARB Sou
Slide 26: Outlook
Outlook Annual General Meeting / September 2025
Slide 27: Our Confidence in the Long-Term Portfolio Outlook Remains Strong
Our Confidence in the Long-Term Portfolio Outlook Remains Strong Growth Companies Stalwarts 24% 32% AFIC Cyclicals 27% Income 17% Excludes cash. Annual General Meeting / September 2025 31
Slide 28: US Market – Market Valuation Following Earnings Higher
US Market – Market Valuation Following Earnings Higher S&P 500 Price / Earnings NTM S&P 500 EPS (USD $/Share) 25x 300 22x 250 19x 200 16x 150 13x 100 10x 50 2005 2009 2013 2017 2021 2025 2005 2009 2013 2017 2021 2025 Source: FactSet Annual General Meeting / September 2025 32
Slide 29: Australian Market – Market Valuation and Earnings Disconnected
Australian Market – Market Valuation and Earnings Disconnected S&P/ASX 200 Price / Earnings NTM S&P/ASX 200 EPS (AUD $/Share) 21x 600 19x 550 17x 500 15x 450 13x 400 11x 350 9x 300 7x 250 2005 2009 2013 2017 2021 2025 2005 2009 2013 2017 2021 2025 Source: FactSet Annual General Meeting / September 2
Slide 30: Summary
Summary Performance has been disappointing the last 12 months. It’s not where we expect it to be. A small number of stocks have significantly underperformed. We have reviewed all portfolio holdings and believe the portfolio remains well positioned to deliver our investment objectives. We maintain in
Slide 31: Outlook
Outlook Low economic growth is providing an increasingly challenging environment for companies to grow earnings. Slowing revenue growth means cost out initiatives increasingly required. In many cases, the valuations of companies with perceived earnings certainty is now at extreme levels, driven more
Slide 32: International Portfolio
International Portfolio • Portfolio was first initiated in May 2021. At 30 June 2025 valued at $168.1 million (1.6% of the AFIC total portfolio). • Significant preparatory work has been done for establishing a separate global investment company in the future. • We are still considering the most appr
Slide 33: Snapshot of the International Portfolio
Snapshot of the International Portfolio which has 43 holdings Annual General Meeting / September 2025 37
Slide 34: Australian Foundation Investment Company
AUSTRALIAN FOUNDATION INVESTMENT COMPANY
Australian Foundation Investment Company — Shareholder Meeting (September 2025) on 6ix