Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — H1 FY2016 Earnings Presentation
21 slides from Magellan Financial's earnings presentation, Feb 18, 2016
Slide 1: Interim Results for the half year ended 31 December 2015
For personal use only Magellan Financial Group Limited Interim Results For the half year ended 31 December 2015 Hamish Douglass | CEO & Chief Investment Officer | 18th February 2016
Slide 2: Magellan Financial Group Interim Results
Magellan Financial Group Interim Results [2] • For the half year ended 31 December 2015: For personal use only – Average funds under management of $38.8 billion, 44% increase1 – Net profit after tax $109.3 million, 41% increase1 – EPS (diluted) of 63.7 cents per share, 41% increase1 – Dividend (inte
Slide 3: Interim highlights
Interim highlights [3] • Solid performance of the Magellan Global Fund For personal use only – Returned 15.3%, after fees, over 12 months to 31 December 2015 • Solid performance of the Magellan Infrastructure Fund – Returned 10.6%, after fees, over 12 months to 31 December 2015 • Record average mont
Slide 4: Magellan Financial Group Overview
Magellan Financial Group Overview [4] • Two business activities For personal use only – Magellan Asset Management (Funds Management Business) – Principal Investments • Continuing dividend policy 75%-80% of underlying profit of funds management segment1 • Pay dividends promptly – 4 March 2016 • Offsh
Slide 5: Funds Management Business
Funds Management Business [5] $ million 31 Dec 2015 31 Dec 2014 % change Revenue Management fees 128.3 89.6 43% For personal use only Performance fees 42.8 32.6 31% Services fees 4.4 3.4 27% Interest/other income 0.8 0.6 45% 176.3 126.3 40% Expenses Employee expense 21.5 14.7 47% 1 US Marketing/cons
Slide 6: Funds Management Business cont.
Funds Management Business cont. [6] • Marginal increase in the cost to income ratio (excluding performance fees) to For personal use only 27.8%, compared with 26.2% for the six months to 31 December 2014, driven by: – 47% increase in employee expense to $21.5 million – 62% increase in US marketing f
Slide 7: Employee Summary
Employee Summary [7] Staff 31-Dec-15 30-Jun-15 31-Dec-14 For personal use only Investment team Portfolio Managers/Analysts 34 29 29 Traders 3 3 2 37 32 31 Governance & Advisory 4 4 3 Distribution 23 21 18 Risk, Compliance & Company Secretarial 4 5 3 Business Support & Control 25 23 20 Administration
Slide 8: Funds Under Management Summary
Funds Under Management Summary [8] 31 Dec 2015 30 June 2015 31 Dec 2014 $ million Retail 11,429 9,809 8,354 For personal use only Institutional - Australia/NZ 3,495 3,871 3,652 - North America 9,507 8,462 6,777 - Rest of World 15,222 14,239 12,842 28,224 26,572 23,271 Total FUM 39,653 36,381 31,625
Slide 9: Well-balanced business
Well-balanced business [9] For personal use only Funds Under Management1 Base Fees2 29% 45% 55% 71% Retail FUM Institutional FUM Retail Fees Institutional Fees Notes 1. FUM split is as at 31 December 2015. 2. Base Fees are Management and Services fees for the six months to 31 December 2015 and exclu
Slide 10: Funds Management Revenue and Expense by Currency
Funds Management Revenue and Expense by Currency [10] • Majority of revenues are generated from USD investments For personal use only • Majority of operating expenses are incurred in AUD Funds Management Revenue Funds Management Expenses (excl. performance fees) $133 million Other, 3% GBP, 7% AUD, 7
Slide 11: Institutional Client Diversity
Institutional Client Diversity [11] 10.0% For personal use only % of Total Management & Services Fees1 8.0% 6.0% 4.0% 2.0% 0.0% 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 and Services Fees 1 Top Institutio
Slide 12: Retail Business – well positioned to grow
Retail Business – well positioned to grow [12] For personal use only Well positioned to benefit from compulsory superannuation trends: • Independent Financial Advice firms – Relationships with over 500 firms1 • Bank/AMP aligned advice markets – Strong relationships and representation with 4 of the t
Slide 13: Retail Business – well positioned to grow (cont.)
Retail Business – well positioned to grow (cont.) [13] For personal use only • ASX quoted funds – Magellan Global Equities Fund (MGE) launched in March 2015 – $439 million in FUM1 – 8,500 unitholders1 – >60% SMSFs1 – Magellan Global Equities Fund (Currency Hedged) (MHG) launched in August 2015 – See
Slide 14: Retail Business
Retail Business [14] Funds Under Management and Net Inflows • Total Retail FUM is $11.4 billion at 31 December 2015 (30 June 2015: $9.8 billion) For personal use only • Total Net Retail Inflows for 6 months to 31 December 2015: $1.3 billion (6 months to 31 December 2014 was $0.7 billion) • Average M
Slide 15: Institutional Business
Institutional Business [15] • Total institutional FUM is $28.2 billion at 31 December 2015 For personal use only (30 June 2015: $26.6 billion) – Global equities $23.2 billion – Global listed infrastructure $5.1 billion • More than 100 institutional clients1 at 31 December 2015 • Net inflows for 6 mo
Slide 16: Institutional Business cont.
Institutional Business cont. [16] • Asia-Pacific For personal use only – FUM is $4.4 billion at 31 December 2015 (30 June 2015: $4.5 billion) • United States: – FUM is $8.3 billion at 31 December 2015 (30 June 2015: $7.3 billion) • United Kingdom: – FUM is $12.1 billion at 31 December 2015 (30 June
Slide 17: Investment Performance
Investment Performance [17] For the periods to 31 December 2015 For personal use only Since 1 Year 3 Years 5 Years Inception (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund ($A) 15.3 25.2 20.6 11.9 MSCI World NTR Index ($A) 11.5 23.4 15.2 4.4 Magellan Infrastructure Fund ($A) 10.6 16.8 15.4 7.9
Slide 18: Global Equity Peer Comparison
Global Equity Peer Comparison [18] Investment Performance for the period to 31 December 2015 in USD For personal use only 1 year (%) 3 years (% p.a.) 5 years (% p.a.) Magellan Global Equity 4.2 13.3 14.6 Independent Franchise Partners Global Franchise 8.8 13.0 13.7 Cedar Rock Capital Partners1 9.2 1
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. • Board set a pre-tax hurdle 10% p.a. (over business cyc
Slide 20: Principal Investments cont.
Principal Investments cont. [20] For personal use only Investment ($ million) 31 Dec 2015 30 June 2015 Cash 2.2 2.1 Magellan Unlisted Funds1 146.8 127.6 Listed shares/funds2 80.5 61.8 Other3 0.3 12.4 Total 229.8 203.9 Deferred tax liability4 (17.5) (14.5) Net principal investments 212.3 189.4 Net pr
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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