Macquarie Group, Ltd. · ASX:MQG
Macquarie — September 2022 Conferences
78 slides from Macquarie's conference presentation, September 2022
Slide 1: September Conferences: Presentation to Investors and Analysts
September Conferences Presentation to Investors and Analysts September 2022 1
Slide 2: Disclaimer
Disclaimer The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (MGL) and is general background information about Macquarie’s (MGL and its subsidiaries) activities current as at the date of this presentation. This information is given in summary form and
Slide 3: Agenda
Agenda 01 02 03 Overview of Operating 1Q23 Update Macquarie Groups 04 05 Outlook Appendix 3
Slide 4: Overview of Macquarie
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Slide 5: About Macquarie
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix About Macquarie Annuity-style activities | Net Profit Contribution ~44% Markets-facing activities | Net Profit Contribution ~56% BFS MAM CGM MacCap Banking and Financial Services Macquarie Asset Management Commodities and Global Mar
Slide 6: Macquarie at a glance
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie at a glance Empowering people to innovate and invest for a better future Global financial group Diverse business mix ● Headquartered and listed in Australia Located in 33 markets, we conduct a mix of annuity-style and mark
Slide 7: Why Macquarie?
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Why Macquarie? Unbroken profitability Earnings growth Consistent dividend growth Average return on equity FY22 net profit: over last 15 years $A4,706m 14% 6% 14% up 56% on FY21 5yr EPS CAGR1 5yr DPS CAGR1 FY22: FY21 net profit: $A3,
Slide 8: Macquarie's evolution is driven by our people
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie’s evolution is driven by our people Our people are closest to client needs and markets We seek to identify From positions of deep We are accountable We act with integrity and We pursue opportunities opportunity and realise
Slide 9: Diversification by region
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Diversification by region Business mix1 International income2 AUM Annuity-style activities FY22 FY07 FY22 FY07 ~44% 25% 75% 53% MAM ~23% Americas 48% Americas $A371.0b BFS ~11% EMEA 20% EMEA $A137.7b CGM ~10% Asia 7% Asia $A40.0b Au
Slide 10: Over 50 years of unbroken profitability
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Over 50 years of unbroken profitability FY22 AMP Capital Public Investments CPG Staff: 18.1334 $Ab Performance Total shareholder Earnings per Dividends per ASX Diversified MSCI World MSCI World (ASX: MQG) return2 share CAGR share CA
Slide 11: Strong earnings growth
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Strong earnings growth FY22 EPS of $A12.72 FY22 Operating income of $A17,324m Up 51% on pcp Up 36% on pcp $A $A 15.00 20,000 12.00 16,000 9.00 12,000 6.00 8,000 3.00 4,000 - - FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY16 FY17 FY18 FY19 F
Slide 12: Stable earnings
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Stable earnings 5 year earnings volatility relative to Macquarie 15 year earnings volatility relative to Macquarie (includes GFC) Multiple to Macquarie Multiple to Macquarie 4.5 5.0 4.7x 4.0x 4.0 3.5 4.0 3.1x 3.0 3.0 2.6x 2.5 2.1x 2
Slide 13: Strong shareholder returns
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Strong shareholder returns For purchases made and held to sale Macquarie has generally outperformed the ASX 200, Diversified Financials and MSCI World Capital Markets Index Outperformance Outperformance Outperformance / (underperfor
Slide 14: Macquarie Bank Limited Long Term Ratings Stability
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Bank Limited Long Term Ratings Stability Standard & Poor’s Ratings Movements from 2007 AA+ AA Rating movement (notches) 5 6 5 AA- 3 4 6 5 A+ 1 1 A 8 A- BBB+ BBB Macquarie JPMorgan Chase Credit Suisse AG UBS AG Bank of Amer
Slide 15: Macquarie's approach to risk management
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie’s approach to risk management Strong focus on business accountability and risk ownership Stable and robust core risk management principles Our approach is consistent with the ‘three lines of defence’ Supported by our longs
Slide 16: Environmental, Social and Governance (ESG)
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Environmental, Social and Governance (ESG) Macquarie’s ESG commitment reflects our responsibility to clients, shareholders, communities, our people and the environment in which we operate Environmental Social Governance ● Aligning a
Slide 17: Environmental, Social and Governance
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Environmental, Social and Governance Environmental Climate Environmental and Sustainability Client People Business conduct Macquarie and social risk change social financing in direct experience and workplace and ethics Group Foundat
Slide 18: Our commitment to net zero
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Our commitment to net zero Macquarie committed to align our financing activities with the global goal of net zero by 2050 and we are on track to release our first Net Zero Plan by the end of 2022 01 We have been working on understan
Slide 19: Approximate business Basel III Capital and ROE
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Approximate business Basel III Capital and ROE 31 Mar 22 APRA Basel III Capital1 Approx. FY22 Return on Approx. 16-year Average Operating Group @ 8.5% ($Ab) Ordinary Equity2 Return on Ordinary Equity3 Annuity-style businesses 8.5 Ma
Slide 20: Operating Groups
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Slide 21: Macquarie Asset Management
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Asset Awards & rankings Private Public Management Markets Investments Global specialist asset manager investing to deliver positive impact for $A238.0b 22% on Mar 21 $A535.1b 46% on Mar 21 everyone #1 Infrastructure Assets
Slide 22: Macquarie Asset Management
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Asset Management Actively manages funds for investors across multiple asset classes Net Profit Contribution1 ($Am) Base Fees ($Am) AUM ($Ab) 2,400 2,800 2,771 800 2,177 773.1 773.9 2,150 2,074 2,100 750 2,400 1,872 1,800 1
Slide 23: Private Markets Historical Income
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Private Markets Historical Income % of EUM $Am Private Markets base fees (LHS) Closing Private Markets EUM $Ab 158 2,400 2.00% Private Markets performance fees and other income (LHS) 149 142 1.80% 2,000 128 1.60% 1.40% 1,600 86 1.20
Slide 24: Adding value throughout the investment lifecycle
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Adding value throughout the investment lifecycle ● Long-term investment approach, Our alternatives portfolio1 delivering positive outcomes for clients, portfolio companies and communities 3% 1% Acquisition 6% ● Boutique active publi
Slide 25: Green Investment Group
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Green Investment Group One of the leading renewable energy developers and investors in the world – with a team of 400 green energy experts1 committed to accelerating the green transition Developing & investing Platform companies Pow
Slide 26: Banking and Financial Services
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Banking and FY22 awards Financial Services A technology-driven Australian retail $A89.5b 34% on Mar 21 $A98.0b 21% on Mar 21 Home loan portfolio Total BFS deposits1 bank and wealth manager $A11.5b 13% on Mar 21 $A8.8b 23% on Mar 21
Slide 27: Banking and Financial Services
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Banking and Financial Services A technology-driven Australian retail bank and wealth manager Australian loan and Net Profit Contribution1 ($Am) BFS Deposits2 ($Ab) lease portfolio3 ($Ab) 120.0 120 117.1 1,200 110.2 106.4 1,001 98.0
Slide 28: Home loan portfolio composition
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix NT Home loan portfolio composition 0.2% 2% 2% 1% QLD 100% 4% 3% 3% WA 18.3% 90% 23% 5.4% 20% 80% 29% 70% 16% 19% NSW 60% 40.2% 50% 24% 24% 25% 40% 30% ACT 2.6% 20% 40% 35% 30% 10% SA 0% 2.4% VIC Jun-22 (Settlement Flow) Jun-22 (Port
Slide 29: Commodities and Global Markets
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Commodities and FY22 awards & Strong underlying client business Global Markets rankings Commodity Financial Markets Global business offering capital and financing, Markets Foreign exchange, interest rates and credit risk management,
Slide 30: Commodities and Global Markets
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Commodities and Global Markets Provides clients with access to markets, financing, financial hedging, research and market analysis and physical execution Net Profit Contribution1 ($Am) Net Operating Income2 4,000 3,911 2% 14% 3,500
Slide 31: Strong underlying client business
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Strong underlying client business Majority of income derived from underlying client business Operating Income Client numbers2 (excl. credit and other impairment charges) (excl. Asset Finance) Underlying client business1 • 40+ years
Slide 32: Underlying client activity driving regulatory capital and trading revenues
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Underlying client activity driving regulatory capital and trading revenues Regulatory capital (normalised)1 Group Daily trading profit and loss2 FY18 - FY22 ($Am) Days $Am • Majority of capital relates to credit risk reflecting clie
Slide 33: Macquarie Capital
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Capital FY22 rankings & Summary Transaction Activity Advises and invests alongside clients awards Maintained a leading market position in ANZ across M&A in Financial adviser to Sydney Aviation Alliance on its ~$A32b12 acqu
Slide 34: Macquarie Capital
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Capital Advises and invests alongside clients and partners to realise opportunity; develops and invests in infrastructure and energy projects Net Profit Contribution1 ($Am) Income by region2 Regulatory capital ($A4.9b)3 5%
Slide 35: We're building the future one project at a time
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix We’re building the future one project at a time The asset creation journey typically starts at development stage, through construction, and into operations Case study: Murra Warra wind farm Financial Commercial close operation date
Slide 36: We unlock opportunities by combining ideas and capital
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix We unlock opportunities by combining ideas and capital We evolve with our clients and areas of opportunity Advisory Capital Markets Focused on Extensive differentiated institutional Private capital Tech-enabled innovation Principal
Slide 37: 1Q23 Update
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Slide 38: 1Q23 Overview
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix 1Q23 Overview Favourable trading conditions with 1Q23 operating group contribution up on the prior corresponding period (pcp) (1Q22), although trading conditions did soften during the quarter ● Macquarie’s annuity-style businesses (
Slide 39: 1Q23 Overview: Annuity-style businesses
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix 1Q23 Overview Annuity-style businesses Macquarie Asset Management Banking and Financial Services ~32% FY22 contribution2 1 ~11% FY22 contribution2 ● AUM3 of $A773.9b at Jun 22, broadly in line with Mar 22 ● Home loan portfolio of $A
Slide 40: 1Q23 Overview: Markets-facing businesses
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix 1Q23 Overview Markets-facing businesses Commodities and Global Markets Macquarie Capital ~41% FY22 contribution2 ~16% FY22 contribution2 1 ● Elevated volatility and commodity prices contributed to strong results ● 76 transactions va
Slide 41: Funded balance sheet remains strong
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Funded balance sheet remains strong Term liabilities exceed term assets 31 Mar 22 30 Jun 22 $Ab $Ab 300 300 Total customer deposits6 270 270 $A110.4b ST wholesale issued paper 12% ST wholesale issued paper 13% 9% 240 240 Other debt
Slide 42: Basel III capital position
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Basel III capital position ● APRA Basel III Group capital at Jun 22 of $A34.1b; Group capital surplus of $A10.1b1,2 ● APRA Basel III Level 2 CET1 ratio at Jun 22: 12.3%; Harmonised Basel III Level 2 CET1 ratio: 15.6% Group regulator
Slide 43: Business capital requirements
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Business capital requirements1 1Q23 business capital requirement growth of $A0.4b excluding FX movements $Ab 25.0 0.8 $A24.1b 24.0 0.0 0.1 1Q23 key drivers 0.4 0.1 0.0 0.3 23.0 1.5 $A22.9b (0.1) MAM Broadly offset by (0.5) FCTR2 ● I
Slide 44: Capital management update
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Capital management update Dividend Reinvestment Plan (DRP) ● The Board determined that a 1.5% discount would apply to shares allocated under the DRP for the 2H22 dividend ● On 4 Jul 22, 2,736,737 ordinary shares were issued and allo
Slide 45: Strong regulatory ratios
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Strong regulatory ratios Bank Group Level 2 Ratios (Jun 22) 17.5% 220.0% 7.5% 130.0% 15.6% 1 203% 14.0% 180.0% 6.0% 5.7% 120.0% 12.3% 5.1% 114% 2 10.5% 4.5% 140.0% 110.0% 7.0% 3.0% 100.0% 100.0% 3.5% 1.5% 60.0% 90.0% 0.0% 0.0% 20.0%
Slide 46: Regulatory update
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Regulatory update Australia APRA has finalised or is in the process of implementing changes to a number of prudential standards1. Macquarie notes the following key updates: • On 27 Oct 21, APRA provided an update on the extended tim
Slide 47: Outlook
04 Outlook 47
Slide 48: Short-term outlook
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Short-term outlook Factors impacting short-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Base fees expected to be broadly in line, wit
Slide 49: Short-term outlook
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Short-term outlook The range of factors that may influence our short-term outlook include: ● Market conditions including: significant volatility events, global inflation and interest rates, and the impact of geopolitical events ● Co
Slide 50: Medium-term outlook
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Medium-term outlook Macquarie remains well-positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in business and geographic diversity and continue to adapt our portfolio
Slide 51: Medium term
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Medium term Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) ● Global specialist asset manager, well-positioned to respond to current market conditions
Slide 52: Appendix A
05 Appendix A Select slides from Macquarie’s result announcement for the full year ended 31 March 2022 52
Slide 53: Income statement key drivers
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Income statement key drivers Net interest and trading income of $A6,856m, up 21% on FY21 2H22 1H22 FY22 FY21 • Higher commodities income mainly driven by increased risk management income with gains across the $Am $Am $Am $Am platfor
Slide 54: Macquarie Asset Management key drivers
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Key drivers Macquarie Asset Management • Base fees up due to: – Investments made by Private Markets-managed funds and positive Increase driven by income related to the disposition of MIC assets and market movements in Public increas
Slide 55: MAM AUM movement
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix MAM AUM movement Increase due to acquisitions of Waddell & Reed Financial, AMP Capital’s public investments business and Central Park Group as well as investments made by Private Markets-managed funds and net inflows in Public Inves
Slide 56: Banking and Financial Services key drivers
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Banking and Financial Services Key drivers • Higher Personal Banking income driven by 27% Strong home loan and deposit growth; net credit impairment growth in average home loans volumes releases, partially offset by increased techno
Slide 57: Banking and Financial Services
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Banking and Financial Services Strong growth across home loans, deposits and funds on platform $Ab $Ab 31 Mar 19 31 Mar 20 31 Mar 21 31 Mar 22 Note: Data based on spot volumes at period end. © Macquarie Group Limited 57
Slide 58: Commodities and Global Markets key drivers
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Commodities and Global Markets Key drivers • Commodities up significantly on FY21 – Increased Risk Management revenue across platform Strong underlying client business which benefited from particularly Gas and Power businesses, Reso
Slide 59: Strong underlying client business
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Strong underlying client business Majority of income derived from underlying client business Operating Income Client numbers2 (excl. credit and other impairment charges) (excl. Asset Finance) Underlying client business1 • 40+ years
Slide 60: Underlying client activity driving regulatory capital and trading revenues
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Underlying client activity driving regulatory capital and trading revenues Regulatory capital (normalised)1 Group Daily trading profit and loss2 FY18 - FY22 ($Am) Days $Am • Majority of capital relates to credit risk reflecting clie
Slide 61: Macquarie Capital key drivers
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Capital Key drivers • Higher investment-related income primarily driven by: – Substantially higher revenue from material asset Result reflects higher investment-related income, higher fee realisations in the green energy,
Slide 62: Macquarie Capital: Movement in capital
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Capital Movement in capital $Ab $A2.5b ($A1.5b) $A4.9b $A3.9b Green Energy1 Note: Impact of foreign exchange immaterial to year ended 31 Mar 22. 1. Green Energy represents GIG. © Macquarie Group Limited 62
Slide 63: Costs of compliance
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Costs of compliance Total compliance spend1 $A785m in FY22, up 22% on FY21 • The industry continues to see an increase in regulatory initiatives, resulting in increased FY22 FY21 compliance requirements across all levels of the orga
Slide 64: Balance sheet highlights
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Balance sheet highlights • Balance sheet remains solid and conservative – Term assets covered by term funding, stable deposits, hybrids and equity – Short-term wholesale funding covered by cash, liquids and other short-term assets •
Slide 65: Diversified issuance strategy
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Diversified issuance strategy Term funding as at 31 Mar 22 – diversified by currency1, tenor2 and type Currency Tenor Type 5.1 years WAM6 of Term funding excluding TFF (4.7 years including TFF) 4 Term Issuance and Maturity Profile $
Slide 66: Continued customer deposit growth
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Continued customer deposit growth Macquarie has seen continued success in its long-term strategy of diversifying funding sources by growing its deposit base • Of approximately 1.7 million BFS clients, ~880,000 are depositors • Focus
Slide 67: Loan and lease portfolios – funded balance sheet
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Loan and lease portfolios1 – funded balance sheet Operating Mar 222 Mar 212 Group Category $Ab $Ab Description Home loans 89.9 66.9 Secured by residential property Business banking 11.8 10.5 Loan portfolio secured largely by working
Slide 68: Equity investments of $A8.3b
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Equity investments of $A8.3b1 Carrying value Carrying value Category Mar 22 $Ab Mar 21 $Ab Description Includes Macquarie Real Estate Partners Fund, Macquarie Macquarie Asset Management Private 1.5 1.5 Korea Infrastructure Fund, Mac
Slide 69: Approximate business Basel III Capital and ROE
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Approximate business Basel III Capital and ROE 31 Mar 22 APRA Basel III Capital1 Approx. FY22 Return on Approx. 16-year Average Operating Group @ 8.5% ($Ab) Ordinary Equity2 Return on Ordinary Equity3 Annuity-style businesses 8.5 Ma
Slide 70: Appendix B: Detailed result commentary
05 Appendix B Detailed result commentary 70
Slide 71: Macquarie Asset Management
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Asset Management Result • Base fees of $A2,771m, up on FY21 primarily driven by FY22 FY21 – Acquisition of Waddell & Reed in the current year $Am $Am – Investments by Private Markets–managed funds and mandates and Public I
Slide 72: Banking and Financial Services
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Banking and Financial Services Result • Net interest and trading income of $A1,972m, up 13% on FY21 FY22 FY21 – 23% growth in the average loan portfolio and 19% growth in the average BFS $Am $Am deposit volumes Net interest and trad
Slide 73: Commodities and Global Markets
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Commodities and Global Markets Result • Commodities income of $A3,324m, up 24% on FY21; FY22 FY21 – Risk management up 39% on a strong FY21 with gains across the platform, particularly in Gas and $Am $Am Power, Resources, Agricultur
Slide 74: Macquarie Capital
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Macquarie Capital Result • Higher net interest and trading income of $A327m, increased significantly compared FY22 FY21 to the prior year primarily due to higher net interest income driven by the growth in $Am $Am the private credit
Slide 75: Appendix C: Glossary
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix 05 Appendix C Glossary 75
Slide 76: Glossary
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Glossary $A / AUD Australian Dollar CLF Committed Liquidity Facility $US / USD United States Dollar CMA Cash Management Account £ / GBP Pound Sterling CRM Customer Relationship Management € Euro CY20 Calendar Year ending 31 December
Slide 77: Glossary
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix Glossary GIG Green Investment Group MPA Mortgage Professional Australia IPO Initial Public Offering MSCIF Macquarie Super Core Infrastructure Fund IRB Internal Ratings-Based MW Mega Watt IFRS International Financial Reporting Standa
Slide 78: September Conferences
Overview of Macquarie Operating Groups 1Q23 Update Outlook Appendix September Conferences Presentation to Investors and Analysts September 2022 78