Macquarie Group, Ltd. · ASX:MQG
Macquarie — Shareholder Meeting (February 2018)
69 slides from Macquarie's shareholder meeting presentation, Feb 22, 2018
Slide 1: Macquarie Group Limited 2011 Annual General Meeting
Macquarie Group Limited 2011 Annual General Meeting 28 July 2011
Slide 2: Disclaimer
Disclaimer Disclaimer The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie’s activities current as at the date of this presentation. This information is given in summary form and does not p
Slide 3: Chairman's address: Kevin McCann AM
Macquarie Group Limited 2011 Annual General Meeting Kevin McCann AM, Chairman 28 July 2011
Slide 4: David Clarke
ro) David Clarke
Slide 5: Global financial market conditions
Global financial market conditions This time last year, we reflected on a general improvement in market conditions and sentiment post the extreme financial shocks of 2008 and 2009 However, uncertainty re-emerged in 1H11 due to concerns over European sovereign debt and the strength of the US reco
Slide 6: FY11 saw some improvement in market conditions
FY11 saw some improvement in market conditions PURCHASING MANAGERS INDEX1 GDP2 12-mth pro-rated GDP growth Index Index annual average % change 65 65 7 6 60 expansion 60 5 55 55 4 50 50 3 45 45 2 1 40 40 EU contraction 0 35 UK 35 -1 US 30 China 30 -2 US Asia-Pacific JP 25 25 -3 Mar 09 Mar 10 Mar 11 M
Slide 7: FY11 saw some improvement in market conditions
FY11 saw some improvement in market conditions MUTUAL FUNDS FLOW1 US CREDIT SPREADS $USb Index Bps Bps 40 1,500 2,000 US Credit Spreads (over 10 yr Treasuries) 2,000 Net cash flow into long term stock US mutual funds (3 month average) LHS S&P 500 (RHS) 1,400 30 AAA Spread 1,600 1,600 1,300 20 BBB Sp
Slide 8: Financial performance reflected improved market conditions in 2H11 compared to 1H11
Financial performance reflected improved market conditions in 2H11 compared to 1H11 FY11 Operating income of $A7,644m FY11 Profit of $A956m 2H11 up 9% on 1H11 2H11 up 37% on 1H11 $Am $Am 800 4,000 400 2,000 0 0 2H09 1H10 2H10 1H11 2H11 2H09 1H10 2H10 1H11 2H11 FY11 Earnings Per Share of $A2.83 FY11
Slide 9: Dividends
Dividends FY11 dividend set at $A1.86, in line with FY10 ~ 67% payout ratio – 2H11 dividend $A1.00, up from 1H11 dividend of $A0.86 – Dividends remain unfranked Dividend policy remains 50 – 60% annual payout ratio 9
Slide 10: Macquarie's 10 year average return on equity and total shareholder return continue to outperform
Macquarie’s 10 year average return on equity and total shareholder return continue to outperform industry average Macquarie’s 10 year average Return on Equity: 19.5% compared to industry average1: 10.7% Macquarie Group International investment banks3 1. Industry return on equity (ROE) includes ROE o
Slide 11: Macquarie's total shareholder return continues to track global financials
Macquarie’s total shareholder return continues to track global financials Since the GFC, Macquarie has outperformed the MSCI World Capital Markets Index by 10%1 Index 11 1. Source: Factset. MSCI World Capital Markets and Macquarie Group information, presented on a total return basis, quoted in USD a
Slide 12: Supporting communities for over 26 years
Supporting communities for over 26 years Staff driven initiatives supported by the Macquarie Group Foundation Volunteering Financial support Skills transfer 1,300+ community $A145 million+ over Leveraging our organisations 26 years expertise 12
Slide 13: Macquarie Group Limited 2011 Annual General Meeting
Macquarie Group Limited 2011 Annual General Meeting 28 July 2011
Slide 14: Overview of the Result Announcement for the year ended 31 March 2011
Macquarie Group Limited Overview of the Result Announcement for the year ended 31 March 2011 Nicholas Moore, Managing Director and Chief Executive Officer 28 July 2011
Slide 15: Result reflected improved 2H11 market conditions
Result reflected improved 2H11 market conditions FY11 vs FY10 2H11 vs 1H11 Operating income $A7.6b 15% $A4.0b 9% Operating expenses $A6.4b 19% $A3.2b Flat Tax expense $A282m 40% $A197m 132% Profit $A956m 9% $A553m 37% Earnings per share $A2.83 12% $A1.63 37% Dividend per share $A1.86 Flat $A1.00 16%
Slide 16: Diversified income
Diversified income Operating income1 by source Increase in income from annuity style businesses2 more than offset impact from subdued market conditions 12 months to 31 March 10 12 months to 31 March 11 $A7.0b $A7.6b Institutional and retail cash equities 16% Equity derivatives 22% 18% 27% Funds mana
Slide 17: Diversified by region
Diversified by region International income1 60% of total Total staff over 15,5002; international staff 53% of total EUROPE, MIDDLE EAST ASIA AMERICAS & AFRICA3 Income: $A1,009m (14% of total) Income: $A1,150m (16% of total) Income: $A2,229m (30% of total) Staff: 1,613 Staff: 2,834 Staff: 3,723 AUSTR
Slide 18: Diversified income: operating income by region
Diversified income Operating income by region 64% of operating income in 2H11 is generated offshore – FX translation estimated to have a negative impact of approx. 5% due to strengthening of AUD by an average of 10% against major currencies ome $Am1 Operating Inco 18 1. Operating income excludes ear
Slide 19: Macquarie Funds
Macquarie Funds FY11 Operating income1 of $A1,410m, down 2% on FY103 FY11 Net profit contribution2 of $A602m, down 26% on FY103 OPERATING INCOME BEFORE GAINS FROM LISTED FUND INITIATIVES UP 51% Fund performance Infrastructure Manager of the Year4, won 20 2011 Lipper Awards for superior performance5
Slide 20: Assets under management of $A310b
Assets under management of $A310b Decrease in AUM due to: – Impact of CMT transfer into CMA ($A9.6b in Jul 10) – Net fund inflows and equity movements of $A21b, more than offset by decrease due to FX of $A27b $Ab Fixed income Direct infrastructure 350 $A326b Equities Cash $A310b Direct real estate
Slide 21: Fixed Income, Currencies and Commodities
Fixed Income, Currencies and Commodities FY11 Operating income1 of $A1,416m, down 2% on FY10 FY11 Net profit contribution2 of $A575m, down 30% on FY10 WEAK MARKETS IN 1H11 FOLLOWED BY STRONG 2H11 Metals Increased equity realisations on strength in resource equity markets Agriculture Higher client ac
Slide 22: Corporate and Asset Finance
Corporate and Asset Finance FY11 Operating income1 of $A786m, up 69% on FY10 FY11 Net profit contribution2 of $A501m, up of 96% on FY10 ASSET AND LOAN PORTFOLIO OF $A17.3B, UP 22% ON FY10 240,000+ Total motor vehicle leasing contracts post $A1.0b GMAC acquisition $US1.6b Completed acquisition of ILF
Slide 23: Macquarie Capital
Macquarie Capital FY11 Operating income1 of $A1,001m, up 46% on FY10 FY11 Net profit contribution2 of $A281m, up significantly on FY10 547 ADVISORY DEALS, UP 22% DEAL VALUE $A159B, UP 31% Activity Australia/NZ: 83 deals at $A93b, Asia: 81 deals at $A21b EMEA: 57 deals at $A17b, Americas: 326 deals a
Slide 24: Banking and Financial Services
Banking and Financial Services FY11 Operating income1 of $A1,494m, up 19% on FY10 FY11 Net profit contribution2 of $A275m, up 5% on FY10 1 MILLION+ CLIENTS GLOBALLY #1 Retail full service broking Australia3 National Independent Canadian Advisory Firm4 S&P Fund manager of the Year: Macquarie Professi
Slide 25: Macquarie Securities
Macquarie Securities FY11 Operating income1 of $A1,299m, down 12% on FY10 FY11 Net profit contribution2 of $A175m, down 70% on FY10 FY11 RESULT IMPACTED BY SUBDUED EQUITY MARKET CONDITIONS Leading positions No.1 overall research & sales strength3 (Asian Inst. Investors - Australian Equities), No.1 e
Slide 26: Global Specialist
Global Specialist Examples Asia-Pacific Energy 40+ years of knowledge and experience Deep industry expertise Over the last 3 years: No.4 US physical gas marketer in North – M&A, ECM & Advisory: 533 deals, $A200b+ America4 – DCM: 77 deals, $A79b Our Acquisitions – Constellation gas trading,
Slide 27: Funded balance sheet remains strong
Funded balance sheet remains strong $Ab 31 March 2010 $Ab 30 September 2010 $Ab 31 March 2011 90 90 90 Short term paper Short term paper 80 Debt maturing1 80 Debt maturing1 80 < 1 year Cash and liquid < 1 year assets Short term paper Cash and liquid 70 70 assets 70 Debt maturing1 < 1 year Cash and l
Slide 28: Consistently strong capital base
Consistently strong capital base Well capitalised – surplus over Group’s minimum regulatory capital requirement of $A3.0b Core equity represents 88% of the Group’s capital base Capital increased in FY11 due to PMI issue, net of reductions from the MEREP on-market purchase and FX movements $Ab
Slide 29: 1Q12 Update
Macquarie Group Limited 1Q12 Update Nicholas Moore, Managing Director and Chief Executive Officer 28 July 2011
Slide 30: Global events sapping confidence
Global events sapping confidence China United States Concerns over Debt ceiling slowing economy and impasse increasing inflation Europe Japan Sovereign Earthquake debt crisis and tsunami 30
Slide 31: 1Q12 weak market conditions
1Q12 weak market conditions $Ab Monthly Australian retail broking value1 Mutual Funds Flow2 720 $USb 620 40 30 520 20 420 10 320 0 220 -10 120 -20 20 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 FY08 FY09 FY10 FY11 1Q12 Australia IPOs and Secondary Issues3 $US/troy ounce Gold Spot Price4 $USb 1,650 60
Slide 32: 1Q12 Macquarie update
1Q12 Macquarie update 1Q12 operating groups’ contribution1 ahead of subdued pcp (1Q11) but down on prior quarter (4Q11) due to subdued market conditions Compared to pcp (1Q11), increased contribution from the annuity style businesses2 more than offset the lower contribution from those impacted b
Slide 33: 1Q12 Update - Macquarie Funds
1Q12 Update - Macquarie Funds 1Q12 up on 1Q111 INFLOWS CONTINUE AS A RESULT OF STRONG INVESTMENT PERFORMANCE ACROSS ASSET CLASSES AND INVESTMENT STRATEGIES Inflows $A5.1b of net inflows in 1Q12, including $A4.6b in MIM strategies and over $A700m in MIRA funds Highest number of Australian institution
Slide 34: Assets under management of $A308b
Assets under management of $A308b Jun 11 broadly in line with Mar 11 – Net fund inflows and equity movements broadly offset by decrease due to FX movements $Ab 350 Fixed income Direct infrastructure $A326b Equities Cash $A310b $A308b Direct real estate Currency 300 Other 250 $A232b $A243b 200 $A19
Slide 35: 1Q12 Update - Corporate and Asset Finance
1Q12 Update - Corporate and Asset Finance 1Q12 up on 1Q111 PORTFOLIOS PERFORMING STRONGLY Asset and loan portfolio: Asset and loan portfolio growth - flat on prior quarter (4Q11)2 - up 11% on pcp2 (1Q11) Extending finance through the customer value chain – from manufacturer to end user: Business exp
Slide 36: 1Q12 Update - Banking and Financial Services
1Q12 Update - Banking and Financial Services 1Q12 in line with 1Q111 REMAINS NO.1 RANKED RETAIL FULL SERVICE BROKER2 Private Wealth/Direct Named ‘Outstanding Institution’ at Australian Private Banking Awards3 MPW ASX retail turnover up 5% on prior quarter (4Q11), down 4% on pcp (1Q11) Intermediary M
Slide 37: 1Q12 Update - Macquarie Securities
1Q12 Update - Macquarie Securities 1Q12 down on 1Q111 SUBDUED EQUITY MARKETS AND CHALLENGING ECM CONDITIONS Cash Australia: Market share marginally down on pcp (1Q11) No.1 equity research/advisory share for European and US institutional investors (Australian equities)2 Continued build out of US and
Slide 38: 1Q12 Update - Macquarie Capital
1Q12 Update - Macquarie Capital 1Q12 up on 1Q111 ACTIVITY LEVELS BROADLY IN LINE WITH PCP (1Q11) 1Q12 114 Deals $A24b (1Q11 118 Deals $A16b) 23 deals at $A12.8b (1Q11: 16 deals at $A2.6b) Australia/NZ Including: Royal Adelaide Hospital (Sponsor, Advisory); Fletcher Building (Advisory); Affinity Equi
Slide 39: 1Q12 Update - Fixed Income, Currencies and Commodities
1Q12 Update - Fixed Income, Currencies and Commodities 1 1Q12 down on 1Q11 REDUCED VOLUMES AND SUBDUED VOLATILITY IN MOST MARKETS Metals Modest client activity Low equity realisations Asian Markets Phase 1 build out complete MBL Singapore Branch Agriculture Geopolitical tensions and adverse weather
Slide 40: Funded balance sheet remains strong
Funded balance sheet remains strong $Ab 31 March 2010 31 March 2011 30 June 2011 90 Short term paper Short term paper 80 Debt maturing Debt maturing < 1 year1 Cash and liquid < 1 year1 Cash and liquid assets assets Short term paper 70 Debt maturing < 1 year1 Cash and liquid assets 60 Deposits Deposi
Slide 41: Group capital surplus of $A2.9b
Group capital surplus of $A2.9b Group capital of $A11.6b as at 30 Jun 11, a $A2.9b buffer of capital in excess of the Group’s minimum regulatory capital requirements Capital has been deployed across the Group to support business growth Strong Banking Group capital ratios - Tier 1: 11.5%; Total
Slide 42: Outlook
Macquarie Group Limited Outlook Nicholas Moore, Managing Director and Chief Executive Officer 28 July 2011
Slide 43: Short term outlook update
Short term outlook update Market uncertainty remains making forecasting difficult Summarised below are the outlook statements for each operating group, the FY12 results for which will vary with market conditions Net profit contribution FY07-FY11 FY07-FY11 FY12 outlook as announced at FY11 result
Slide 44: Short term outlook update
Short term outlook update Consistent with our statement at the FY11 result announcement on 29 April 2011, we continue to expect an improved result for FY12 on FY11 if market conditions for FY12 are not materially worse than FY11 Given subdued market conditions are likely to continue for the firs
Slide 45: Medium term
Medium term Macquarie is increasingly well positioned to deliver superior performance in the medium term Continue to adapt our portfolio mix to changing market conditions Annuity style income is provided by three significant businesses which are delivering superior returns following years of inv
Slide 46: Macquarie Group Limited 2011 Annual General Meeting
Macquarie Group Limited 2011 Annual General Meeting 28 July 2011
Slide 47: Formal Business
Macquarie Group Limited 2011 Annual General Meeting Formal Business 28 July 2011
Slide 48: Item 1: Financial Statements
Item 1: Financial Statements To consider and receive the Financial Report, the Directors’ Report and the Auditor’s Report of Macquarie for the financial year ended 31 March 2011 48
Slide 49: Item 2: Re-election of Mr PM Kirby as a Voting Director
Item 2: Re-election of Mr PM Kirby as a Voting Director To consider and, if thought fit, pass the following as an ordinary resolution: That Mr PM Kirby be re-elected as a Voting Director of Macquarie 49
Slide 50: Item 3: Re-election of Dr JR Niland as a Voting Director
Item 3: Re-election of Dr JR Niland as a Voting Director To consider and, if thought fit, pass the following as an ordinary resolution: That Dr JR Niland be re-elected as a Voting Director of Macquarie 50
Slide 51: Item 4: Re-election of Dr HM Nugent as a Voting Director
Item 4: Re-election of Dr HM Nugent as a Voting Director To consider and, if thought fit, pass the following as an ordinary resolution: That Dr HM Nugent be re-elected as a Voting Director of Macquarie 51
Slide 52: Item 5: Re-election of Mr HK McCann as a Voting Director
Item 5: Re-election of Mr HK McCann as a Voting Director To consider and, if thought fit, pass the following as an ordinary resolution: That Mr HK McCann be re-elected as a Voting Director of Macquarie 52
Slide 53: Item 6: Election of Ms DJ Grady as a Voting Director
Item 6: Election of Ms DJ Grady as a Voting Director To consider and, if thought fit, pass the following as an ordinary resolution: That Ms DJ Grady, having been appointed as a Voting Director since the last general meeting, be elected as a Voting Director of Macquarie 53
Slide 54: Item 7: Remuneration Report
Item 7: Remuneration Report To consider and, if thought fit, pass the following as an ordinary resolution: To adopt the Remuneration Report of Macquarie for the year ended 31 March 2011 54
Slide 55: Remuneration policy
Remuneration policy Key elements of Macquarie’s remuneration framework: Aligning the interests of staff and shareholders Driving long-term shareholder returns Attracting and retaining high quality people 55
Slide 56: Macquarie's remuneration approach - continuing to deliver results
Macquarie’s remuneration approach – continuing to deliver results Macquarie’s NPAT 10 year Macquarie’s 10 year average ROE of 19.5% is higher than compound annual growth rate its international peers (CAGR) has outperformed all but one peer1: 10 year ROE Macquarie versus peers1 : 56 1. Graphs reprodu
Slide 57: Macquarie's remuneration approach - incremental changes
Macquarie’s remuneration approach – incremental changes Macquarie is enhancing its remuneration arrangements while ensuring its overall remuneration approach remains in place. These changes: – Reflect global regulatory and competitive remuneration trends – Further align the interests of staff and
Slide 58: Macquarie's remuneration approach - return drivers
Macquarie’s remuneration approach – return drivers The key components of Macquarie’s remuneration approach: – NPAT and ROE are known to be drivers of shareholder returns over the long-term – The size of the annual profit share pool is determined by reference to Macquarie’s NPAT and its earnings ov
Slide 59: Macquarie's remuneration approach - performance based
Macquarie’s remuneration approach – performance based Individual employee remuneration is based on performance: – Performance is primarily, but not exclusively, assessed based on relative contributions to profits (not revenue) while taking into account capital usage – Other qualitative measures to
Slide 60: Macquarie's remuneration approach - equity and retention
Macquarie’s remuneration approach – equity and retention Current performance based remuneration arrangements: Key Area Executive Committee Members Other Executive Staff other than and Designated Executive Directors Executive Directors Directors Amount of profit 50-70% for Executive Committee 40-70
Slide 61: Macquarie's remuneration approach - Malus
Macquarie’s remuneration approach – Malus Malus is to be introduced for 2012 in line with regulatory requirements and to incentivise staff to maintain a long-term focus – For 2012, the Board will have discretion to reduce or eliminate unvested profit share amounts where an Employee’s action or ina
Slide 62: Remuneration approach managed through strong governance processes
Remuneration approach managed through strong governance processes The Board, supported by the Board Remuneration Committee, provides oversight of Macquarie’s remuneration approach – 2011 remuneration decisions reflect the Board’s evaluation of performance during the year – The Board is assisted in
Slide 63: Item 8: Approval of Executive Voting Director's participation in MEREP
Item 8: Approval of Executive Voting Director’s participation in the Macquarie Group Employee Retained Equity Plan (MEREP) To consider and, if thought fit, pass the following as an ordinary resolution That the following be approved for all purposes: (a) participation in the Macquarie Group Employe
Slide 64: Macquarie Group Limited 2011 Annual General Meeting
Macquarie Group Limited 2011 Annual General Meeting 28 July 2011
Slide 65: Glossary
Macquarie Group Limited Glossary 28 July 2011
Slide 66: Glossary
Glossary $A Australian Dollar 4Q Fourth Quarter $C Canadian Dollar 4Q11 Fourth Quarter ended 31 March 2011 $US United States Dollar Approx. Approximately € Euro ASX Australian Securities Exchange 1H10 Half Year ended 30 September 2009 AUD Australian Dollar 1H11 Half Year ended 30 September 2010 AUM
Slide 67: Glossary
Glossary CPS Convertible Preference Shares GFC Global Financial Crisis DCM Debt Capital Markets GMAC General Motors Acceptance Corporation ECM Equity Capital Markets HK Hong Kong EMEA Europe, the Middle East and Africa ILFC International Lease Finance Corporation EU Europe IPO Initial Public Offerin
Slide 68: Glossary
Glossary MBL Macquarie Bank Limited RHS Right Hand Side MIM Macquarie Investment Management ROE Return on Equity MIPS Macquarie Income Preferred Securities S&P Standard and Poor’s MIRA Macquarie Infrastructure and Real Assets TSR Total Shareholder Return MIS Macquarie Income Securities UK United Kin
Slide 69: Macquarie Group Limited 2011 Annual General Meeting
Macquarie Group Limited 2011 Annual General Meeting 28 July 2011
Macquarie Group — Shareholder Meeting (February 2018) on 6ix