Investec plc · LSE:INVP
Investec — FY2006 Earnings Presentation
24 slides from Investec's earnings presentation, Mar 31, 2006
Slide 1: Results presentation for the year ended 31 March 2006
Results presentation For the year-ended 31 March 2006 A distinctive specialist banking group Highlights
Slide 2: Strong results: Investec relative to FTSE 350
Constant pursuit of a sustainable, distinctive growth strategy Strong results Investec plc relative to the FTSE 350 205 185 165 Rebased to 100 145 125 105 85 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 05 05 05 05 05 05 05 05 05 06 06 06 Investec plc FTSE350 Source: Datastream Constant pursuit o
Slide 3: Increased brand recognition; favourable market conditions
Constant pursuit of a sustainable, distinctive growth strategy Increased brand recognition Constant pursuit of a sustainable, distinctive growth strategy Benefited from favourable market conditions 160 ▲ 53% 150 140 ▲ 25% Rebased to 100 130 120 ▲ 24% 110 100 90 Mar 05 May 05 Jul 05 Sep 05 Nov 05 Jan
Slide 4: Resulting in… Delivered on our targets
Constant pursuit of a sustainable, distinctive growth strategy Resulting in… Pro-forma % 31 Mar 31 Mar Change (IFRS) 2006 2005 Operating profit* (£’000) 388 767 224 124 73.5% Profit after tax (£’000) 329 368 113 259 190.8% Attributable earnings* (£’000) 230 017 149 510 53.8% Adjusted EPS* (pence) 20
Slide 5: Delivered on our targets: ROE and cost ratio
Constant pursuit of a sustainable, distinctive growth strategy Delivered on our targets ROE* target: >20% % 28 25.5% 24 20 target 16 12 8 4 0 2000 2001 2002 2003 2004 2005 2006 *Return on adjusted shareholders’ equity (including goodwill and CCD’s) Note: Prior to 2005 the numbers are reported in ter
Slide 6: Leveraging off our platforms; growing into our capital
Constant pursuit of a sustainable, distinctive growth strategy Leveraging off our platforms Operating profit per employee* £'000 115 103.6 91.5 92.1 91.3 87.6 95 75 55 51.4 48.6 43.8 35 16.8 15 -5 -3.4 Southern UK & Australia Other Total group Africa Europe 2005 2006 *Before goodwill impairment, non
Slide 7: Operational review: divisional performance
Operational review Divisional performance Operating profit* £'m n 145 125 118.2 100.9 105 85 80.3 66.9 59.4 65 46.4 49.3 45 36.3 18.6 18.2 24.8 25 5 -15 -6.3 -35 PC IB TSF AM PA Other 2005 2006 *Before goodwill impairment, non-operating items and taxation PC = Private Client Activities; TSF = Treasu
Slide 8: Private Banking
Partner of choice – from wealth creation to wealth management Private Banking Overall • Strong performance from all geographies • All specialisations performed well • Benefited from growth strategy and initiatives actioned in prior years • Building a quality business Partner of choice – from wealth
Slide 9: Private Banking outlook; Private Client Portfolio Management
Partner of choice – from wealth creation to wealth management Private Banking Outlook • Earnings visibility across all geographies is positive, with meaningful deal flow • Planned growth strategies include the expansion of distribution capability together with new strategic initiatives Operating pro
Slide 10: Private Client Portfolio Management and Stockbroking
Partner of choice – from wealth creation to wealth management Private Client Portfolio Management and Stockbroking Salient financials Operating profit*…………………... ▲ 20.6% to £16.6 million Funds under management…..….. ▲ 116.2% to £20.9 billion Cost to income……………..…….. ▼ 55.9% ROE (pre-tax)**………….……….
Slide 11: Treasury and Specialised Finance
Specialist structuring and advisory business Treasury and Specialised Finance Overall • Leveraged strong platform • Launched securitisation in SA and UK • Focused on structured derivatives • Increased capability in Australia Specialist structuring and advisory business Treasury and Specialised Finan
Slide 12: Treasury and Specialised Finance outlook; Investment Banking
Specialist structuring and advisory business Treasury and Specialised Finance Outlook • We have initiatives in place and are developing niche specialisations to ensure continued performance • Securitisation and specialist funds are key areas of focus Operating profit* £'mn 80 70 % of group total: 18
Slide 13: Investment Banking
Integrated business focused on local client delivery with international access Investment Banking Salient financials Operating profit*…………………... ▲ 104.8% to £100.9 million Agency and Advisory profit*…..… ▲ 111.1% to £26.6 million Direct Investments and Private Equity profit*….…………………... ▲ 102.6% to
Slide 14: Asset Management
Investment specialist focused on performance and client needs Asset Management Overall • Significant growth underpinned by favourable market conditions and net inflows • Attracted substantial inflows to a highly scaleable platform • Investment performance remains very good • Maintained cost control
Slide 15: Asset Management outlook; Property Activities
Investment specialist focused on performance and client needs Asset Management Outlook • Built a durable platform for growth based on • Competitive long term investment performance • Management continuity • Growing brand recognition Operating profit* £'mn 70 60 % of group total: 16.3% 50 40 30 20 10
Slide 16: Property Activities
Leading fund management consolidator, seeking out selective trading opportunities Property Activities Salient financials Operating profit*…………………... ▲ 2.1% to £18.6 million Funds under management…….… ▲ 34.4% to £1.8 billion Cost to income…………………..... ▲ 51.7% ROE (pre-tax)**……………..…….. ▼ 76.8% Profit
Slide 17: Balanced portfolio of businesses; Group Services and Other Activities
Balanced portfolio of businesses % contribution to operating profit* 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 Property Activities Investment Banking Treasury and Specialised Finance Asset Management Private Client Activities *Excluding Group Services and Other Activities Prior to 2005 th
Slide 18: Impairments and general
Impairments 31 Mar 1 Apr £’million 2006 2005 Total gross loans and advances to customers 9 646 6 445 Gross non-performing loans 72 57 Net non-performing loans 28 22 Portfolio impairments as a % of net loans and advances to customers 0.11% 0.14% Specific impairments as a % of net non- performing loan
Slide 19: Outlook; sub-division of shares
Sub-division of shares • The Board intends to ask shareholders to approve resolutions at the Annual General Meeting which will result in the subdivision of Investec plc and Investec Limited ordinary shares • An announcement will follow in due course Outlook
Slide 20: Strategy
Strategy • Our main strategic imperative is to build the business organically with bolt-on acquisitions where appropriate Sustainable business model Balance operational risk Pools of Pools of businesses with financial proprietary third party risk businesses to build a risk capital assets sustainable
Slide 21: Sustainable business model
Sustainable business model Third party assets under management up 60.8% to £54.4 billion £’bn 60 50 40 30 20 Pools of 10 proprietary 0 risk capital 1996 1998 2000 2002 2004 2006 Core advisory businesses Core banking businesses Securitisation Talent management Networking and distribution Sustainable
Slide 22: Sustainable business model
Sustainable business model Third party assets under management Loans and advances up 49.9% to up 60.8% to £54.4 billion £9.6 billion £’bn 60 £’bn 10 50 8 40 6 30 4 20 10 2 0 0 1996 1998 2000 2002 2004 2006 1996 1998 2000 2002 2004 2006 Pools of Pools of third party proprietary assets risk capital Co
Slide 23: Sustainable business model; Outlook
Sustainable business model £459.4 million £505.0 million Net fees and Net interest commissions of income of £436.9 million £259.0 million Other of Principal £22.5 million transactions of £246.0 million Balance operational risk Pools of Pools of businesses with financial proprietary third party risk
Slide 24: Results presentation
Results presentation For the year-ended 31 March 2006 A distinctive specialist banking group