Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — H1 2022 Earnings Presentation
25 slides from Magellan Financial's earnings presentation, Feb 18, 2022
Slide 1: Magellan Financial Group Limited Interim Results
Magellan Financial Group Limited Interim Results For personal use only For the half year ended 31 December 2021
Slide 2: Group Update
For personal use only Group Update Hamish McLennan Magellan| 2
Slide 3: Board and governance
Group update Board and governance For personal use only • Strengthened independence and governance • Hamish McLennan appointed independent non-executive Chairman of Magellan Financial Group (“Magellan”) • Robert Fraser appointed Deputy Chairman of Magellan and continues as independent non-executive
Slide 4: CEO and management
Group update CEO and management For personal use only • Interim CEO, Kirsten Morton, is doing an outstanding job • Core business operations are stable and operating very effectively and profitably • Addition of Chris Mackay to senior management adds further depth of experience and support to Interim
Slide 5: Attractive capital management
Attractive capital management For personal use only • Intention to progress with a 1-for-8 bonus issue of options to Magellan shareholders – Exercise price $35 per option – 5 year term – exercisable at any time until expiry – Prospectus expected to be lodged in March 2022 – An application will be ma
Slide 6: Funds Management Update
For personal use only Funds Management Update Chris Mackay Magellan| 6
Slide 7: Funds Management update
Funds Management update For personal use only • Unchanged fundamental, proven investment discipline since inception – Strong, consistent investment results for clients with downside protection – Minimise risk of material permanent capital loss across market cycles – Help clients maintain quality inv
Slide 8: Interim Results
For personal use only Interim Results Kirsten Morton Magellan| 8
Slide 9: Reported earnings
Reported earnings $ million 31 Dec 2021 31 Dec 2020 % change For personal use only Management and services fees 352.3 311.4 13% • 13% increase in management and Performance fees 11.5 12.4 (8%) Other revenue and income 20.3 9.4 116% services fees, in line with 12% growth Adjusted revenue and other in
Slide 10: Overview of 1H22 results
Overview of 1H22 results For personal use only Funds Management business: Profit before tax and performance Adjusted net profit after tax Statutory net profit after tax fees $293.6m $256.2m +15% $254.1m $248.1m $251.6m -1% $213.1m $212.5m $216.0m +16% $202.3m +24% 0% +7% 1H21 1H22 1H22 ex SJP 1H21 1
Slide 11: Financial position
Financial position For personal use only $992.8 million 13% ____________________ $1,016.7 million 13% __________________________ Net tangible assets Cash, financial assets and investments No debt _______________ 110.1 cps Interim $238.5 million _____________ Total liabilities of $225.0 million, pred
Slide 12: Interim dividend up 13%
Interim dividend up 13% For personal use only 110.1 cps +13% 97.1 cps • Interim dividend of 110.1 cents per share (75% franked) • Record date of 24 February 2022 • Payment on 8 March 2022 • DRP suspended • Dividend policy1: – Interim and Final dividends based on 90%-95% of profit of Funds Management
Slide 13: Expenses: headroom to invest in the business
Expenses: headroom to invest in the business For personal use only • Cost to income ratio (excluding performance fees) of 17.4% (19.6% excluding SJP contribution) during the period • Significant headroom to continue to invest in the business • Expect Funds Management business expenses in 2022 financ
Slide 14: Funds Management Business
For personal use only Funds Management Business Kirsten Morton Magellan| 14
Slide 15: Funds Management business
Funds Management business For personal use only $ million 31 Dec 2021 31 Dec 2020 % change Revenue • Core business that drives profits and Management fees 350.3 309.4 13% dividends Performance fees 11.5 12.4 (8%) Services fees 2.0 2.0 2% • Profit before tax and performance Interest and other revenue
Slide 16: Well-balanced business
Well-balanced business Based on FUM of $87.1 billion as at 9 February 2022 For personal use only Funds Under Management Base Fees1 33% 38% 62% 67% Retail FUM Institutional FUM Retail Fees Institutional Fees 1. Base Fees are annualised Management and Services fees based on FUM of $87.1 billion as at
Slide 17: Institutional client diversity
Institutional client diversity For personal use only Based on FUM of $87.1 billion as at 9 February 2022 5% 1 % of Total Management & Services Fees 4% 3% 2% 1% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Top 30 Institutional Clients Cumulative Total Management
Slide 18: Magellan Capital Partners
For personal use only Magellan Capital Partners Kirsten Morton Magellan| 18
Slide 19: Magellan Capital Partners
Magellan Capital Partners For personal use only • Three financial investments which are separate, independently managed and not held for core Funds Management business synergies • Magellan supportive of all financial investments • No plans to make further investments • Barrenjoey is performing ahead
Slide 20: Looking Forward
For personal use only Looking Forward Kirsten Morton Magellan| 20
Slide 21: Our immediate priorities
Our immediate priorities For personal use only Client focus and engagement Staff engagement Sharpening investment processes to improve investment performance • Active staff engagement • Institutional – Significant engagement across our institutional client base globally • Employee retention a focus
Slide 22: Key messages
Key messages For personal use only • Strong financial results for the half year • Robust balance sheet • Governance and accountability across the business • Focused on core Funds Management business • Deeply experienced investment team, significant depth and talent – Delivered strong, consistent per
Slide 23: Q&A
For personal use only Q&A Magellan| 23
Slide 24: Important Information
Important Information This presentation has been prepared by Magellan Financial Group Limited ACN 108 437 592 (‘Magellan’). This presentation contains summary information about Magellan and its related bodies corporate and is current as at 18 February 2022. While the information in this presentation
Slide 25: For personal use only
For personal use only www.magellangroup.com.au Phone: +61 2 9235 4888
Magellan Financial Group — H1 2022 Earnings Presentation on 6ix