Macquarie Group, Ltd. · ASX:MQG
Macquarie — Shareholder Meeting (July 2016)
39 slides from Macquarie's shareholder meeting presentation, Jul 28, 2016
Slide 1: Macquarie Group Limited 2016 Annual General Meeting
For personal use only Macquarie Group Limited 2016 Annual General Meeting 28 July 2016
Slide 2: Disclaimer
Disclaimer For personal use only The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie’s activities current as at the date of this presentation. This information is given in summary form and
Slide 3: FY16 Overview
For personal use only FY16 Overview Peter Warne Chairman
Slide 4: Performance reflects mix and quality of Macquarie's businesses
Performance reflects mix and quality of Macquarie’s businesses For personal use only In FY15, we saw trading conditions across most markets continue to improve resulting in a significant increase to Macquarie’s operating income and profit In FY16, operating income and profit continued to grow in
Slide 5: Financial performance
Financial performance FY16 profit up on pcp For personal use only FY16 Operating income of $A10,135m FY16 Profit of $A2,063m FY16 up 9% on FY15 FY16 up 29% on FY15 $Am $Am 12,000 2,400 1,600 8,000 800 4,000 - FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY16 EPS of $A6.19 FY16 DPS of $A4.00 FY1
Slide 6: FY16 dividend
FY16 dividend For personal use only FY16 ordinary dividend of $A4.00, 66% payout ratio, up on FY15 ordinary dividend of $A3.30 – 2H16 ordinary dividend of $A2.40, 40% franked – 1H16 ordinary dividend of $A1.60, 40% franked Dividend policy remains 60 – 80% annual payout ratio PAGE 6
Slide 7: Years of profitability
47 years of profitability For personal use only yrs $Ab 2.4 $A2,063m 2.0 29on% FY15 1.6 1.2 0.8 0.4 - PAGE 7
Slide 8: Macquarie's total shareholder return continues to outperform
Macquarie’s total shareholder return continues to outperform For personal use only • Since 2007, Macquarie’s TSR of 61% outperformed the ASX 200 by 68% and the MSCI World Capital Markets Index by 103% Rebased to 1 Aug 07 Total shareholder return 200 Macquarie (+61%) ASX 200 (-7%) MSCI World Capital
Slide 9: Risk culture and conduct
Risk culture and conduct For personal use only Macquarie’s unbroken profitability is underpinned by our long-standing risk culture. This is reflected in our principles of Opportunity, Accountability and Integrity An appropriate risk culture drives good conduct Macquarie’s risk culture and our
Slide 10: Macquarie Group Foundation
Macquarie Group Foundation Providing support to hundreds of community organisations For personal use only globally each year FY16 $A29.7m donated by staff and Foundation 46,000 + 1,500 + HOURS CHARITIES NEW YORK HONG KONG SUPPORTED $A270m+ contributed since inception LONDON SYDNEY
Slide 11: Overview of the result for the year ended March 2016
For personal use only Overview of the result for the year ended 31 March 2016 Nicholas Moore Managing Director and Chief Executive Officer
Slide 12: FY16 result
FY16 result For personal use only FY15 FY16 FY16 v FY15 Operating income $A9.3b $A10.1b 9% Operating profit before tax $A2.5b $A3.0b 20% Profit $A1.6b $A2.1b 29% Earnings per share $A5.02 $A6.19 23% Dividends per share $A3.30 $A4.00 21% Return on Equity 14.0% 14.7% 5% PAGE 12
Slide 13: Where we make our income
Where we make our income International income 68% of total income1 For personal use only Total staff 14,372; International staff 54% of total Europe, Middle East & Africa Asia Americas Income: $A2,376m (24% of total) Income: $A1,432m (14% of total) Income: $A2,926m (30% of total) Staff: 1,508 Staff:
Slide 14: Growth of Annuity-style and Capital markets facing businesses since FY12
Growth of Annuity-style and Capital markets facing businesses since FY12 For personal use only Annuity-style businesses represent more than 70% of the Groups’ performance1 Net profit contribution2 ($Am) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 (500) FY12 FY13 FY14 FY15 FY16 Annuity-styl
Slide 15: Macquarie Asset Management
ANNUITY-STYLE BUSINESS Macquarie Asset Management MAM 37%1 $A477b assets under management For personal use only Net profit $A1.6b Operating income $A2.7b 12 % 13% MIRA MIM MSIS 66.5b $A 337.1b 5.5b $A $A Equity Under Assets Under Investor funds on Management Management MIDIS platform FY16 AWARDS Not
Slide 16: Corporate and Asset Finance
ANNUITY-STYLE BUSINESS Corporate Asset Finance $A39b asset and loan portfolio For personal use only CAF1 Net profit $A1.1b 26% 2 2% 2 Operating income $A1.7b 8% $Ab Growing portfolios 20 Mar 09 Mar 16 17.4 15 Esanda acq. 8.9 9.5 10 AWAS acq. Motor vehicle portfolio Aircraft leasing portfolio 5 4.0 1
Slide 17: Banking and Financial Services
ANNUITY-STYLE BUSINESS Banking and Financial Services 1.1 million Australian customers For personal use only Net profit $A350m BFS1 23% 8% Operating income $A1.5b 9% Personal Banking Wealth Management Business Banking 28.5b 58.4b 5.9b% $A $A $A MORTGAGE PORTFOLIO 16% FUNDS ON PLATFORM2 22% BUSINESS
Slide 18: Macquarie Securities Group
CAPITAL MARKETS FACING BUSINESS Macquarie Securities Group Global securities house with strong Asia-Pacific foundations For personal use only MSG Net profit $A268m 1 6% from FY15 $A64m Operating income $A1.2b 33% 1 by value 1 Equity research 1 market share in listed No. No. No. for IPOs house in war
Slide 19: Macquarie Capital
CAPITAL MARKETS FACING BUSINESS Macquarie Capital Advised on 395 transactions in FY16 For personal use only MacCap 1 10% Net profit $A451m Operating income $A1.2b 10 % 5% Impacted by impairments of non-related underperforming investments Transaction value in Australia 1 No. M&A for announced 176b 23
Slide 20: Commodities and Financial Markets
CAPITAL MARKETS FACING BUSINESS Commodities and Financial Markets CFM 13% 1 Covering 25+ market segments, with 140+ products For personal use only Net profit $A576m Operating income $A1.7b 7% 31% Impacted by impairments on certain underperforming commodity-related loans 3 US physical gas 1 Australia
Slide 21: Business backed by strong funding and capital
Business backed by strong funding and capital For personal use only MGL funded balance sheet APRA Basel III surplus capital6 Credit ratings 31 March 2016 31 March 2016 $Ab 140 130 120 Short-term 1 Cash, liquids & 110 self securitised 100 assets3 90 Customer $A3.9b Deposits 80 70 Trading & 4 Short-te
Slide 22: 1Q17 Update
For personal use only 1Q17 Update Nicholas Moore Managing Director and Chief Executive Officer
Slide 23: 1Q17 Macquarie Update
1Q17 Macquarie Update For personal use only • Operating groups performing in line with expectations • 1Q17 operating group contribution1 down on a strong pcp and up on prior quarter 1Q17 contribution1 vs 1Q16 Continued to perform well: Annuity-style • Higher base fees in MAM. Performance fees and as
Slide 24: Annuity-Style Businesses 1Q17 Update
Annuity-Style Businesses For personal use only 1Q17 Update FY16 contribution1 Activity during the quarter • AUM of $A496.9b, up 4% on Mar 16 due to market movements and FX Macquarie • Performance fees from several funds including Macquarie Atlas Roads and Macquarie Korea Infrastructure Fund Asset •
Slide 25: Capital Markets Facing Businesses 1Q17 Update
Capital Markets Facing Businesses For personal use only 1Q17 Update FY16 contribution1 Activity during the quarter Macquarie • Lower client volumes, particularly in Asia; ECM and Derivatives trading also lower Securities 6% Group • Asian trading opportunities in pcp not repeated • Market conditions
Slide 26: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only $Ab 31 March 2015 $Ab 31 March 2016 $Ab 30 June 2016 140 4 140 140 130 130 ST wholesale issued paper 130 ST wholesale issued paper (7%) (6%) 120 120 Other debt maturing in the 120 Cash, liquids and self Other debt maturing in the next 12 mths
Slide 27: Basel III capital position
Basel III capital position For personal use only • APRA Basel III Group capital at Jun 16 of $A16.6b, Group surplus of $A3.5b1 • Bank Group APRA Basel III CET1 ratio: 10.3%; Tier 1 ratio: 11.4%; Leverage ratio: 5.3% • Bank Group Harmonised Basel III CET1 ratio: 12.1%; Tier 1 ratio: 13.2%; Leverage r
Slide 28: Strong regulatory ratios
Strong regulatory ratios For personal use only Macquarie Bank Group (Jun 16) Macquarie Bank Group (Harmonised1 ) Macquarie Bank Group (APRA) Basel III minimum 2 6.2% 14.0% 6.0% 200% 12.1% 5.0% 10.5% 150% 4.0% 5.3% 166% 10.3% 7.0% 3.0% 100% 2.0% 3.5% 50% 1.0% 0.0% 0.0% - CET1 ratio Leverage ratio LCR
Slide 29: FY17 Outlook
For personal use only FY17 Outlook Nicholas Moore Managing Director and Chief Executive Officer
Slide 30: Factors impacting short-term outlook
Factors impacting short-term outlook For personal use only FY17 combined net profit contribution1 from operating groups expected to be broadly in line with FY16 Annuity-style businesses Capital markets facing businesses Macquarie Asset Management Macquarie Securities Group • Historical range: $A0.3b
Slide 31: Short-term outlook
Short-term outlook For personal use only We currently expect the FY17 combined net profit contribution1 from operating groups to be broadly in line with FY16 The FY17 tax rate is currently expected to be broadly in line with FY16 Accordingly, the Group’s result for FY17 is currently expected t
Slide 32: Medium-term
Medium-term For personal use only Macquarie remains well positioned to deliver superior performance in the medium-term Deep expertise in major markets Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions ‒ Annuity-style income is provided by
Slide 33: Approximate business Basel III Capital & ROE
Approximate business Basel III Capital & ROE For personal use only As at 31 Mar 16 1 APRA Basel III Capital Approx. FY16 Return Approx. 10-Year Average 2 Operating Group @ 8.5% ($Ab) on Ordinary Equity2 Return on Ordinary Equity Annuity-style businesses 8.1 Macquarie Asset Management 1.4 Corporate a
Slide 34: Medium-term
Medium-term For personal use only • Annuity-style business that is diversified across regions, products, asset classes and investor types • Diversification of capabilities allows for the business to be well placed to grow assets under management in different MAM market conditions • Well positioned f
Slide 35: Glossary
For personal use only Glossary
Slide 36: Glossary
Glossary For personal use only $A/AUD Australian Dollar BCN Bank Capital Notes $US/USD United States Dollar BFS Banking and Financial Services 1H16 Half Year ended 30 September 2015 Bps Basis Points 2H16 Half Year ended 31 March 2016 CAF Corporate and Asset Finance 2H14 Half Year ended 31 March 2014
Slide 37: Glossary
Glossary For personal use only FUA Funds Under Administration MEREP Macquarie Group Employee Retained Equity Plan FX Foreign Exchange MGL Macquarie Group Limited FY Full Year ended 31 March MIM Macquarie Investment Management FY12 Full Year ended 31 March 2012 MIRA Macquarie Infrastructure and Real
Slide 38: Glossary
Glossary For personal use only RWA Risk Weighted Assets S&P Standard and Poor’s Financial Services LLC SYD Sydney Airport TSR Total Shareholder Return UK United Kingdom US United States of America VaR Value at Risk VS Versus yr Year PAGE 38
Slide 39: Macquarie Group Limited 2016 Annual General Meeting
For personal use only Macquarie Group Limited 2016 Annual General Meeting 28 July 2016