Australian Finance Group Ltd. · ASX:AFG
Australian Finance — FY2015 Earnings Presentation
30 slides from Australian Finance's earnings presentation, Aug 27, 2015
Slide 1: FY2015 Annual Results
For personal use only FY2015 Annual Results August 27 2015 Brett McKeon -‐ CEO David Bailey -‐ CFO
Slide 2: FY2015 Financial Results – Highlights
FY2015 Financial Results – Highlights For personal use only Delivery on FY15 Prospectus forecasts l Pro forma NPAT – $19.3 million – up 8.4% against IPO forecast of $17.8 million l Record residential settlements – $31.24 billion – up 19% on FY14 – 1% higher than FY15 forecast l Record commercial
Slide 3: Residential Settlements
Residential Settlements For personal use only Consistent growth over five years Residential Settlements ($billions) 35 19% 30 26% 25 13% 20 18% 15 10 5 - FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 3
Slide 4: Settlements
Settlements For personal use only Strong growth in both Residential and Commercial Settlements Residential Settlements Commercial Settlements $12 $900 Billions Millions $800 $10 $700 $8 $600 $500 $6 $400 $4 $300 $200 $2 $100 $0 $0 NSW QLD SA VIC WA NSW QLD SA VIC WA 2014 2015 2014 2015 4
Slide 5: Portfolio Values June 2015
Portfolio Values June 2015 For personal use only Total loan book of $107 billion generating ongoing trail commission Residential Commercial 5
Slide 6: Broker Numbers
Broker Numbers For personal use only Consistent increase in broker numbers with good geographic diversity Broker Numbers Broker Location 700 600 500 400 300 200 100 0 NSW QLD SA VIC WA 2013 2014 2015 6
Slide 7: AFG Home Loans
AFG Home Loans For personal use only AFGHL Edge l Settlements of $460 million versus $150 million forecast l Assisted by very attractive introductory rate and fast turnaround times l Remains a book build process AFGHL ICON l Newly branded white label about to be launched l Similar margins to Ed
Slide 8: Financials
For personal use only Financials
Slide 9: 2015 results - actual
2015 results -‐ actual For personal use only Increased profit underpinned by bigger loan book and increased settlements 2015 Statutory 2014 Statutory $000’s $000’s Statutory NPAT 20,374 17,869 14% Represented by Continuing Operations 15,296 1 16,523 (-‐7 %) Discontinued Operations 5,078 1,346 275%
Slide 10: KPI's Actuals v Prospectus Forecasts
KPI’s Actuals v Prospectus Forecasts For personal use only Outperformed against Prospectus forecasts FY2015 Pro Forma FY2015 IPO Pro Forma $000’s $000’s Pro Forma NPAT 19,256 17,841 8% Loan Book 106,926,558 104,923,132 2% Settlements Residential 31,242,452 30,896,079 1% Commercial 2,392,418 2,094,94
Slide 11: Pro Forma 2015 Results v Prospectus Forecasts
Pro Forma 2015 Results v Prospectus Forecasts For personal use only Delivered on FY15 forecasts 2015 Pro Forma 2015 IPO Pro Forma $000’s $000’s Commissions 412,775 409,953 Interest on trail commission income receivable 48,536 48,509 Mortgage management services 713 725 Securitisation transaction fee
Slide 12: Reconciliation to Pro forma Forecast Results for FY2015
Reconciliation to Pro forma Forecast Results for FY2015 For personal use only $’000 Statutory Profit B efore Tax 27,180 Add/(Less) Pro F orma Adjustments: IPO Costs 5,636 Other (1) (5,262) Pro forma Net Profit B efore Tax 27,554 Statutory Taxation (6,806) Taxation on Pro F orma Adjustments (1,491) P
Slide 13: Other Income
Other Income For personal use only Consistent increase and ahead of FY2015 forecast Other Income: Actual and Comparison to F Y15 F orecast ($000's) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - FY2013 FY2014 FY2015A FY2015F l Relates to fees for services provided to brokers, sponsorship and incen
Slide 14: Payout Ratios – Upfront and Trail
Payout Ratios – Upfront and Trail For personal use only Upfront Trail 95.00% 95.00% 90.00% 90.00% 85.00% 85.00% 80.00% 80.00% 75.00% 75.00% 70.00% 70.00% UF FY2012 UF FY2013 UF FY2014 UF FY2015A UF FY2015F TRL FY2012 TRL FY2013 TRL FY2014 TRL FY2015A TRL FY2015F 14
Slide 15: AFG Home Loans
AFG Home Loans For personal use only Strong growth in higher margin business Actual FY15 IPO Forecast $000’s $000’s Total AFGHL Revenue 61,993 59,867 4% AFGHL Profit Before Tax 638 131 387% Result is stronger than forecast and is assisted b y the following; l Improved margin within AFG Securities b
Slide 16: Summary Balance Sheet
Summary Balance Sheet For personal use only 2015 2014 $000’s $000’s Points to n ote: Assets Cash1 90,776 76,022 1. Cash and liquidity levels are within Receivables2 594,667 518,611 desired ranges Loans and advances3 1,025,344 1,025,191 Property, plant and equipment 2,998 3,394 2. Predominantly relat
Slide 17: Summary Cash Flow
Summary Cash Flow For personal use only 2015 2014 Points to n ote: $000’s $000’s 1. Includes cost of I PO and further Cash flows from operating activities Cash receipts f rom c ustomers 399,849 345,220 property development costs prior to 1 Cash paid t o s uppliers and employees (397,454) (338,454) t
Slide 18: Outlook
For personal use only Outlook
Slide 19: Outlook
Outlook For personal use only Combination of market share, strong recruitment and record low interest rates continue to leave us optimistic about the sector l Broker market penetration of the Australian mortgage market – now at 51.5% l Brokers now preferred option for customers l AFG Home Loans W
Slide 20: Investor Loans
Investor Loans For personal use only APRA acting to reduce residential investor activity Investor loans % past 12 months Investor Loans per state 44% 55% 43% 50% 42% 45% 41% 40% 40% 35% 39% 38% 30% 37% 25% 36% 20% Investment Average NSW QLD SA VIC WA l Higher proportion of investor loans being writ
Slide 21: Lending Activity
Lending Activity For personal use only Non-‐Majors maintaining market share, average loan size influenced by NSW Major vs Non Major National Average Loan Size 120% $500,000 $450,000 100% $400,000 80% $350,000 60% $300,000 $250,000 40% $200,000 20% $150,000 $100,000 0% $50,000 May-‐15 Sep-‐14 Feb-
Slide 22: July Trading
July Trading For personal use only Strong start to FY2016 Breakdown of July Lodgements Change on J uly 2014 NSW 42.4% l Total Residential Lodgements were $4.7 billion l On a like for like basis lodgements were up 13% QLD 4.4% on July 2014 SA 40.0% l Considering seasonal aspect of July (ie school
Slide 23: AFG's growth strategy
AFG’s growth strategy For personal use only Growth focused on protecting and growing share of core mortgage broking market, increasing penetration of own branded product and leveraging our technology investment to pursue other opportunities. Wholesale Mortgage Broking AFG Home Loans Other Opportunit
Slide 24: Appendices
For personal use only Appendices
Slide 25: Balance Sheet
Balance Sheet For personal use only 2015 2014 2015 2014 $000’s $000’s $000’s $000’s Assets Liabilities Cash and c ash equivalents 90,776 76,022 Interest-‐bearing liabilities 1,041,099 1,034,685 Trade and other receivables 593,931 515,741 Trade and other payables 580,341 502,301 Current tax asset 68
Slide 26: Consolidated Income Statement
Consolidated Income Statement For personal use only 2015 2014 2015 2014 $'000’s $'000’s $'000’s $'000’s Continuing Operations Other comprehensive income Commission and other income 462,820 393,190 Items that may be reclassified Securitisation interest income 48,534 46,814 subsequently to profit or l
Slide 27: Cash Flows
Cash Flows For personal use only 2015 2014 2015 2014 $000’s $000’s $000’s $000’s Cash flows from operating activities Cash flows used in financing activities Cash receipts from customers 399,849 345,220 Proceeds from b orrowings 13,805 4,932 Cash p aid to s uppliers and employees (397,454) (338,454)
Slide 28: Impact of Trail Book Accounting
Impact of Trail Book Accounting For personal use only 2015 2014 $000’s $000’s Total Profit Total Profit Statutory Revenue before tax Revenue before tax Underlying results from continuing 447,258 18,488 391,599 22,338 operations Change in the present value of trailing 78,937 3,238 61,412 2,345 commis
Slide 29: Thank you
For personal use only Thank you
Slide 30: Important Disclaimer
Important Disclaimer For personal use only This presentation contains general information w hich is current as at 27 August 2015. The information is intended to be a summary of Australian F inance G roup Limited ( AFG) and it its activities as at 30 June 2015, and does not purport to be complete in
Australian Finance Group — FY2015 Earnings Presentation on 6ix