Washington H. Soul Pattinson And Company Limited · ASX:SOL
Washington H. Soul Pattinson And — Investor Presentation (November 2022)
33 slides from Washington H. Soul Pattinson And's investor presentation, Nov 2, 2022
Slide 1: ASX Announcement: Shareholder Company Briefings
For personal use only ASX Announcement Shareholder Company Briefings 2 November 2022- Following the release of Washington H Soul Pattinson and Company Limited’s (ASX:SOL) FY22 Preliminary Final Report, shareholders were invited to Company Briefings in Sydney, Melbourne and Adelaide. Attached is the
Slide 2: Welcome to the WHSP Shareholder Briefing
For personal use only Welcome to the WHSP Shareholder Briefing November 2022
Slide 3: Presenters
Presenters For personal use only Robert Millner Todd Barlow David Grbin Brendan O’Dea Chairman CEO & Managing Director Chief Financial Officer Chief Investment Officer Shareholder Briefing November 2022 2
Slide 4: Overview
For personal use only Overview Shareholder Briefing November 2022 3
Slide 5: Our evolution
Our evolution WHSP is one of Australia’s oldest and most respected companies with a history of disciplined investing For personal use only — Founded in 1872 – Pitt Street Pharmacy — Listed in 1903 – second oldest listed company on ASX — Never missed paying a dividend — Now a diversified investment c
Slide 6: WHSP is a unique investment strategy in the Australian market
WHSP is a unique investment strategy in the Australian market For personal use only Through WHSP, an investor has the opportunity to gain exposure to: — A range of asset classes across sectors, including private equity, private credit and property — Investment strategies that have delivered above ma
Slide 7: FY22 highlights
FY22 highlights WHSP is focused on increasing the asset value of the portfolio and generating increasing cash from investments to fund For personal use only dividends while managing risk through appropriate portfolio construction PORTFOLIO OUTPERFORMANCE INCREASED CASH GENERATION MANAGING RISK NAV p
Slide 8: Dividends
Dividends FY22 ordinary dividends up 16.1% to 72 cents per share For personal use only Special dividend of 15 cents per share, fully franked 72 60 62 56 58 52 54 48 50 44 46 40 32 34 28.5 30 25 27 20 17 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 9: Total shareholder returns
Total shareholder returns Long-term outperformance against the Index For personal use only Annualised TSRs 1 Year 5 Year 10 Year 15 Year 20 Year WHSP (19.6%) 10.5% 10.0% 9.9% 12.2% All Ordinaries Accumulation Index (2.6%) 8.4% 9.6% 5.2% 8.8% +892% Relative performance (17.0%) 2.1% 0.4% 4.7% 3.4% WHS
Slide 10: Comparative long-term total shareholder returns
Comparative long-term total shareholder returns For personal use only 30 year return1 SOL shares1 $281,084 11.8% p.a Australian shares2 $131,413 9.0% p.a $10k invested 1 July 1992 International shares3 $94,184 7.8% p.a Australian listed property4 $90,243 7.6% p.a Australian Bonds5 $55,588 5.9% p.a S
Slide 11: Capital protection
Capital protection Challenging and volatile markets will favour profitable assets with robust cash flows For personal use only Average Average Performance in Performance in “Down months” “Up months” ▪ Over the last 20 years, the All 3.0% Ordinaries Accumulation Index 2.6% had a negative return 34% o
Slide 12: Recent share price performance
Recent share price performance The share price has not correlated with portfolio performance over the last 12 months For personal use only 12-Month Performance 20% Pre-tax NAV ▪ During FY22 the growth in pre-tax 15% 13.8% NAV outperformed the: 10% ‒ All Ords by 20.2%; and 5% 0% ‒ SOL share price by
Slide 13: How is WHSP different from listed investment companies?
How is WHSP different from listed investment companies? Increased diversification, steady dividends and greater outperformance For personal use only WHSP vs ASX Listed Investment Companies (Market Cap >$1bn) 25% ▪ Greater diversification and flexibility 20% Premium / (discount) to pre-tax NTA (31 Ju
Slide 14: Financial results
For personal use only Financial results 13
Slide 15: Understanding WHSP financials
Understanding WHSP financials For personal use only STATUTORY REPORTING KEY METRICS WE FOCUS ON Net Profit After Tax (NPAT) Net Cash Flow From Investments (NCFFI) and growth in NCFFI per share Earnings Per Share (EPS) growth Dividend growth Balance Sheet Net Asset Value (NAV) and growth in NAV per s
Slide 16: Full year ended July 2022 – Profit After Tax
Full year ended 31 July 2022 – Profit After Tax Group Regular profit excludes one-off events and better reflects underlying performance of major investments For personal use only Group Regular NPAT significantly increased Group Regular $834.6m ▪ Increased commodity prices (New Hope, Round Oak) NPAT2
Slide 17: Portfolio overview
For personal use only Portfolio overview 16
Slide 18: Portfolio overview
Portfolio overview Net Asset Value increased 72% in FY22 with improved liquidity for new investments For personal use only $10bn pre-tax NAV - Portfolio Composition at 31 July 2022 Private Equity2 $654m Large Cap1 ▪ Value of the portfolio increased by 72% $3,103m 7% 31% Emerging Companies1,2 $612m o
Slide 19: Strategic portfolio
Strategic portfolio WHSP has a portfolio of cornerstone shareholdings in diversified industries with low correlations For personal use only Value $4,837 million ▪ WHSP's Round Oak private equity investment merged % of portfolio 48.6% with Aeris Resources and is a new strategic equity position expose
Slide 20: Large caps
Large caps Aims to generate long-term capital and income growth For personal use only Value $3,103 million ▪ Portfolio rebalanced in the context of broader % of portfolio 31.2% WHSP exposures and to achieve a more defensive risk Net cash flow $116.9 million profile Portfolio Companies within the ASX
Slide 21: Large caps: Active period post Milton merger
Large caps Active period for the portfolio post Milton merger For personal use only Purchases Purchases Disposals Disposals Add New Reduce Exit Shareholder Briefing November 2022 20
Slide 22: Large caps: Top Investments
Large caps Top 30 Investments For personal use only # Stock % of Portfolio # Stock % of Portfolio 1 Macquarie Group Limited 11.7% 16 Coles Group Limited 2.2% 2 Commonwealth Bank of Australia 8.4% 17 Rio Tinto Group 2.1% 3 BHP Group Limited 6.6% 18 Ramsay Health Care Limited 2.0% 4 CSL Limited 6.0% 1
Slide 23: Private equity
Private equity WHSP has a growing portfolio of private companies which are platforms for further growth For personal use only Value $654 million ▪ Contribution to Net Cash flow from Investments increased 213% % of portfolio 6.6% on pcp Net cash flow $40.1 million ▪ Round Oak investment moved from pr
Slide 24: Emerging companies
Emerging companies WHSP is an active investor and partner in both listed and pre-IPO emerging companies For personal use only Value $612 million ▪ Delivered a total return of –3.4% over 12 months to 31 July % of portfolio 6.1% 2022 Net cash flow $27.6 million ▪ Outperformed the ASX Small Ordinaries
Slide 25: Structured yield
Structured yield Investing across the capital structure for improved risk adjusted returns on attractive opportunities For personal use only Value $250 million ▪ Net cash flow from investments of $19.7m, up 18.7% over pcp % of portfolio 2.5% Net cash flow $19.7 million ▪ Total return of 17.9% Portfo
Slide 26: Property
Property The property portfolio comprises actively managed direct property investments For personal use only Value $226 million ▪ Strong revaluations in 2022 with portfolio return of +47% % of portfolio 2.3% Net cash flow $1.6 million ▪ Net cash flow +14.3% Portfolio Direct property and equity accou
Slide 27: Net working capital
Net working capital WHSP has access to significant liquidity for new opportunities For personal use only Value $274 million ▪ Cash on hand as at 31 July of $486 million % of portfolio 2.8% ▪ $414m of interest-bearing debt with a current average cost Portfolio Cash, interest-bearing liabilities and o
Slide 28: Strategy and outlook
For personal use only Strategy and outlook Shareholder Briefing November 2022 27
Slide 29: Portfolio settings
Portfolio settings WHSP’s investment style is well-suited to the current environment For personal use only Defensive portfolio settings FOCUSED ON COST AND QUALITY FLEXIBLE AND OPPORTUNISTIC ▪ Increasing diversification of uncorrelated assets ▪ Increased cash levels and other liquidity to invest in
Slide 30: Why invest in WHSP?
Why invest in WHSP? For personal use only ▪ Long term approach to investing DISCIPLINED ▪ Conservative and cost conscious ▪ A history of outperformance over the long term DELIVER ▪ Lower volatility and risk ▪ A history of stable and growing dividends DIVIDENDS ▪ Diversified portfolio provides greate
Slide 31: Important dates for shareholders
Important dates for shareholders For personal use only Final Dividend Ex-Date: Friday, 18 November 2022 Final Dividend Record Date: Monday, 21 November 2022 Dividend Payment Date: Monday, 12 December 2022 Annual General Meeting: Friday, 9 December 2022 Commencing 12pm at the Wesley Conference Centre
Slide 32: Q&A
For personal use only Q&A 31
Slide 33: Disclaimer
Disclaimer Disclaimer This document has been prepared by Washington H. Soul Pattinson and Company Limited (‘WHSP’). For personal use only All information contained in this document (including this notice) Any forward looking statements included in the Information This Information does not constitute
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