Investec plc · LSE:INVP
Investec — H1 FY2007 Earnings Presentation
17 slides from Investec's earnings presentation, November 2006
Slide 1: Results presentation for the six months ended 30 September 2006
A distinctive specialist banking group Results presentation For the six months ended 30 September 2006 Operating environment
Slide 2: Volatile markets; Rising interest rate environment
A distinctive specialist banking group Volatile markets 115 110 Rebased to 100 105 100 95 90 85 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 JSE All Share FTSE All Share Australia All Ordinaries Source: Datastream A distinctive specialist banking group Rising interest rate environment 10 9 8 7 (
Slide 3: Currency
A distinctive specialist banking group Currency 135 130 125 120 Rebased to 100 115 110 105 100 95 90 85 Sep 05 Nov 05 Jan 06 Mar 06 May 06 Jul 06 Sep 06 ZAR/£ US$/£ A$/£ Source: Datastream Snapshot of results
Slide 4: Overall results; Adjusted EPS growth
A distinctive specialist banking group Overall results % 30 Sep 30 Sep Change 31 Mar (IFRS) 2006 2005 2006 Operating profit* (£’000) 205 291 152 771 34.4% 388 767 Attributable earnings* 128 676 93 357 37.8% 230 017 (£’000) Adjusted EPS* (pence) 23.3 17.0 37.1% 41.9 DPS (pence) 10.0 7.6 31.6% 18.2 *
Slide 5: ROE; Cost to income ratio
A distinctive specialist banking group ROE* Target: >20% 28 23.8% 24 20 target UK & Europe: 20.4% 16 (%) Southern Africa: 12 29.5% 8 Australia: 4 17.3% 0 Mar- Mar- Mar- Mar- Mar- Mar- Mar- Sep- 00 01 02 03 04 05 06 06 *Return on adjusted shareholders’ equity (including goodwill and CCD’s) Note: Prio
Slide 6: Leveraging off our platforms; Capital
A distinctive specialist banking group Leveraging off our platforms Operating profit per employee* 80 72.0 70 61.3 61.0 60 50 42.3 41.8 £ 000 40 35.233.5 36.5 36.3 30 20 11.1 10 0 Southern UK & Australia Other Total Africa Europe group Sep-05 Sep-06 *Before goodwill, non-operating items and taxation
Slide 7: Operational review: Divisional performance
Operational review Divisional performance Operating profit* 225 6.3 ▼ 35.6% 31.9 175 9.8 ▲ 46.3% 57.1 125 21.8 28.6 ▲ 99.2% 35.8 £ million 75 42.7 ▼ 16.3% 83.4 25 49.5 ▲ 68.4% 0.3 -9.1 -25 Sep-05 Sep-06 Group Services and Other Private Client Activities Investment Banking Treasury and Specialised Fi
Slide 8: Private Banking
Partner of choice – from wealth creation to wealth management Private Banking Actual Sep-Mar 06: ▼3% to £6.0 bn Neutral Currency: ▲16% to £7.1 bn Overall Snapshot • Strong performance from all geographies, in particular UK Operating profit* ▲ 76.3% to £73.6 mn • All specialisations performed well Lo
Slide 9: Private Client Portfolio Management and Stockbroking
Partner of choice – from wealth creation to wealth management Private Client Portfolio Management and Stockbroking Actual Sep-Mar 06 :▼ 8% to £19.2 bn Neutral Currency: ▲ 2% to £21.3 bn Overall Snapshot • Private Client business in South ▲ 26.1% to £9.7 mn Operating profit* Africa benefited from hig
Slide 10: Treasury and Specialised Finance
Specialist structuring and advisory business Treasury and Specialised Finance Actual Sep-Mar 06 ▲ 1 % to £3.0 bn Neutral Currency: ▲ 16% to £3.5 bn Overall Snapshot UK and Europe Operating profit* ▲ 99.2% to £57.1 mn • Very strong performance from majority of businesses as new Loan book^ ▲ 31.9% to
Slide 11: Investment Banking
Integrated business focused on local client delivery with international access Investment Banking Overall Snapshot Institutional Stockbroking Operating profit ▼ (16.3%) to £35.8 mn • Performed well against a backdrop of increased volumes Agency and Advisory profit* ▲ 47.5% to £16.9 mn Corporate Fina
Slide 12: Asset Management
Investment specialist focused on performance and client needs Asset Management Actual Sep-Mar 06 :▼ 16% to £26.5 bn Neutral Currency: ▼ 0.1% to £31.6 bn Overall Snapshot • Mutual fund sales driving earnings acceleration Operating profit* ▲ 46.3% to £31.9 mn Assets under • UK and international instit
Slide 13: Property Activities
Leading fund management consolidator, seeking out selective trading opportunities Property Activities Actual Sep-Mar 06 :▼ 36% to £1.2 bn Neutral Currency: ▼ 14% to £1.6 bn Overall Snapshot • Activity remains buoyant although this is not reflected in the current Operating profit* ▼ (35.6%) to £6.3 m
Slide 14: Group Services and Other Activities; Asset quality
Group Services and Other Activities Assurance Activities* ▼ from £1.5 mn to £0.7 mn International Trade Finance* ▲ 17.6% to £2.2 mn Central Funding* ▼ from £19.2 mn to £16.0 mn Central Services* ▲ from (£22.6 mn) to (£28.0 mn) *Before goodwill, non-operating items and taxation Asset quality 30 Sep 3
Slide 15: Outlook
General Effective tax rate from 26.9% to 28.3% Weighted shares from 548.1 mn to 552.8 mn Earnings attributable to minority interests £2.3 mn Operating profits in relation to investments held in the Private Equity division £3.8 mn Profit on sale of portfolio of investments in which minorities had a 2
Slide 16: Sustainable business model; Balanced portfolio of businesses
A distinctive specialist banking group Sustainable business model Third party Proprietary assets of risk capital of £266.8 mn £266.3 mn ▲ 41% ▲ 32% Net fees and Net interest commissions of income of (30% of (47% of total) total) £251.6 mn £162.4 mn Other Balance operational risk Principal businesses
Slide 17: Jaws ratio; Outlook
Jaws ratio 1200 1050 CAGR: 12.2% 900 750 CAGR: £ million 600 9.5% 450 300 150 0 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Sep-06 Annualised Operating income Administrative expenses Outlook • The high levels of activity and increase in scale and market penetration across all our geographies sh