Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — H1 FY2017 Earnings Presentation
21 slides from Magellan Financial's earnings presentation, Feb 16, 2017
Slide 1: Interim Results for the half year ended 31 December 2016
For personal use only Magellan Financial Group Limited Interim Results For the half year ended 31 December 2016 Hamish Douglass | CEO & Chief Investment Officer | 16th February 2017
Slide 2: Magellan Financial Group Interim Results
Magellan Financial Group Interim Results [2] For personal use only $ million 31 Dec 2016 31 Dec 2015 % change Management and services fees 146.1 132.7 10% Performance fees 3.6 42.8 (92%) Other revenue 3.8 6.7 (43%) Revenue 153.5 182.2 (16%) Expenses (40.4) (39.2) 3% Profit before tax expense 113.1 1
Slide 3: Interim highlights
Interim highlights [3] • Solid growth in funds under management and management and services fees: For personal use only – Average funds under management up 10% to $42.9 billion1 – Management and services fee revenue up 10% to $146.1 million1 – Underlying profit before tax and performance fees up 9%
Slide 4: Performance fee impact
Performance fee impact [4] For personal use only • Performance fees fell $39.2 million over the corresponding 6 month period • Reduction in performance fees resulted in: – Fully diluted EPS falling 21% to 50.6 cents per share – Cost to income ratio (including performance fees) rising from 21.1% to 2
Slide 5: Launch of Low Carbon Strategies
Launch of Low Carbon Strategies [5] For personal use only • Seeding complete for two of the three new institutional strategies which represent the next generation of global equities products for the Group • Leverage Magellan’s existing intellectual capital and investment processes • Low Carbon overl
Slide 6: Theoretical Firm Capacity
Theoretical Firm Capacity1 [6] For personal use only Strategy US$ billion A$ billion2 Global Equity 40 53 Global Listed Infrastructure Equity 15 20 Low Carbon Strategies 30 40 Total 85 113 • As at 31 December 2016, Magellan had total funds under management of A$46.5 billion (~US$33.7 billion) 1. Mag
Slide 7: Magellan Financial Group Overview
Magellan Financial Group Overview [7] • Two business activities: For personal use only – Magellan Asset Management (Funds Management Business) – Principal Investments • Continuing dividend policy 75%-80% of profit of funds management segment1 • Pay dividends promptly – 2 March 2017 (interim dividend
Slide 8: Funds Management Business
Funds Management Business [8] $ million 31 Dec 2016 31 Dec 2015 % change Revenue Management fees 141.8 128.3 11% For personal use only Performance fees 3.6 42.8 (92%) Services fees 4.3 4.4 (1%) Interest/other income 0.5 0.8 (45%) 150.2 176.3 (15%) Expenses Employee expense 23.5 21.5 9% 1 US Marketin
Slide 9: Employee Summary
Employee Summary [9] Staff 31 Dec 2016 30 June 2016 31 Dec 2015 For personal use only Investment team Portfolio Managers/Analysts 35 32 34 Traders 3 3 3 38 35 37 Governance & Advisory 5 4 4 Distribution 34 30 28 Risk, Compliance, Legal & Company Secretarial 8 7 7 Business Support & Control 16 17 17
Slide 10: Funds Under Management Summary
Funds Under Management Summary [10] 31 Dec 2016 30 June 2016 31 Dec 2015 $ million Retail 13,650 12,041 11,429 For personal use only Institutional - Australia/NZ 4,617 4,415 3,495 - North America 10,117 9,145 9,507 - Rest of World 18,131 14,894 15,222 32,865 28,454 28,224 Total FUM 46,515 40,495 39,
Slide 11: Well-balanced business
Well-balanced business [11] For personal use only Funds Under Management1 Base Fees2 29% 43% 57% 71% Retail FUM Institutional FUM Retail Fees Institutional Fees 1. FUM split is as at 31 December 2016. 2. Base Fees are Management and Services fees for the 6 months to 31 December 2016 and excludes Per
Slide 12: Institutional Client Diversity
Institutional Client Diversity [12] For personal use only Cumulative Total Management and Services Fees1 Top Institutional Clients 5 10 20 30 % 18 25 33 38 1. Management and Services fees for the 6 months to 31 December 2016 for separately managed accounts and institutional investors in local and of
Slide 13: Retail Business – well positioned to grow
Retail Business – well positioned to grow [13] Well positioned to benefit from compulsory superannuation trends: For personal use only • Independent Financial Advice firms – Relationships with over 500 firms1 • Bank/AMP aligned advice markets – Strong relationships and representation with 4 of the t
Slide 14: Retail Business – well positioned to grow (cont.)
Retail Business – well positioned to grow (cont.) [14] • ASX quoted funds For personal use only – Magellan Global Equities Fund (MGE) launched in March 2015 – Magellan Global Equities Fund (Currency Hedged) (MHG) launched in August 2015 – Magellan Infrastructure Fund (Currency Hedged) (MICH) launche
Slide 15: Retail Business
Retail Business [15] Funds Under Management and Net Inflows For personal use only • Total Retail FUM is $13.6 billion at 31 December 2016 (30 June 2016: $12.0 billion) • Total Net Retail Inflows for 6 months to 31 December 2016: $1.2 billion (6 months to 31 December 2015 was $1.3 billion) • Average
Slide 16: Institutional Business
Institutional Business [16] • Total institutional FUM is $32.9 billion at 31 December 2016 For personal use only (30 June 2016: $28.5 billion) – Global equities $27.3 billion – Global listed infrastructure $5.6 billion • More than 120 institutional clients1 at 31 December 2016 • Total net institutio
Slide 17: Institutional Business (cont.)
Institutional Business (cont.) [17] For personal use only FUM ($ billion) 31 December 2016 30 June 2016 % change Australia/NZ 4.6 4.4 5% North America 10.1 9.1 11% Rest of World 18.1 14.9 22% Total 32.9 28.5 16%
Slide 18: Investment Performance
Investment Performance [18] For the periods to 31 December 2016 For personal use only Since 1 Year 3 Years 5 Years Inception (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund ($A) 3.7 11.0 19.2 11.0 MSCI World NTR Index ($A) 8.0 11.4 18.4 4.8 Magellan Infrastructure Fund ($A) 6.7 13.1 14.4 7.8 Gl
Slide 19: Principal Investments
Principal Investments [19] For personal use only • Principal Investments include investments in Magellan Funds, listed shares, a small number of unlisted investments and surplus cash after allowing for the Group’s working capital requirements Investment ($ million) 31 December 2016 30 June 2016 Cash
Slide 20: Principal Investments (cont.)
Principal Investments (cont.) [20] For personal use only • Board has set a pre-tax hurdle 10% p.a. (over business cycle) for the Principal Investments Investment Returns: Time Period Return 1 Year to 31 December 2016 3.9% 3 Years to 31 December 2016 p.a. 11.5% 5 Years to 31 December 2016 p.a. 21.1%
Slide 21: Important Information
Important Information [21] This presentation has been prepared by Magellan Financial Group Limited (‘MFG’). For personal use only While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the
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