Ma Financial Group Limited · ASX:MAF
Ma Financial — H1 2020 Earnings Presentation
38 slides from Ma Financial's earnings presentation, Aug 19, 2020
Slide 1: 1H20 Result Presentation
1H20 RESULT PRESENTATION AUGUST 2020 Page 0
Slide 2: Contents
Contents I. 1H20 Results & Highlights 3 II. Asset Management 8 III. Corporate Advisory & Equities 20 IV. 1H20 Financials 23 V. Appendices 30 Page 1
Slide 3: Explanation of underlying measures in this presentation
Explanation of underlying measures in this presentation Moelis Australia Ltd (Moelis Australia or the Company) and its subsidiaries Differences in classification arise because the Company chooses to (Group) utilises non-IFRS “Underlying” financial information in its classify some IFRS measures in a
Slide 4: 1H20 Results & Highlights
1H20 Results & Highlights MOELIS AUSTRALIA LIMITED Page 3
Slide 5: 1H20 Results
1H20 Results Resilient performance in a challenging environment 1H20 result 6.5% ahead of guidance provided at AGM in May1 Resilient earnings Resilient performance across both business segments Stable Assets under Management (AUM) supported by positive net client fund flows Core business growth Reco
Slide 6: 1H20 Results
1H20 Results Underlying Results1 1H19 1H20 Growth Statutory Results1 1H19 1H20 Growth Revenue $68.0m $67.4m (0.8)% Revenue2 $61.4m $74.2m 20.8% EBITDA $26.7m $21.5m (19.5)% EBITDA3 $18.3m $24.6m 34.2% Net profit after tax $17.0m $12.1m (28.7)% Net profit after tax $7.5m $8.9m 19.4% Earnings per shar
Slide 7: Responding to COVID-19
Responding to COVID-19 Proactive response to minimise impacts on our shareholders, clients and staff Our Shareholders Our Clients Our Staff • Response focused on cash flow, cost & • Early and continued client and investor • Smooth transition to working from capital management: communication program
Slide 8: 1H20 Business segment priorities
1H20 Business segment priorities Scaling our strengths Asset Management EBITDA contribution1 79% Corporate Advisory & Equities EBITDA contribution1 21% Increasing exposure to annuity like income streams Leverage our specialist expertise in real estate & restructuring − 85% of 1H20 asset manageme
Slide 9: Asset Management
Asset Management MOELIS AUSTRALIA LIMITED Page 8
Slide 10: Asset Management Performance
Asset Management Performance Underlying Financials ($m) 1H19 1H20 Growth 1H20 impacted by -$2.3m lower RDC Hotel Base Management Fees 24.7 28.3 14.6% Operator fees compared to 2H19 Principal Investments Income1 10.3 9.4 (8.2)% 1H20 impacted by -$1.8m from suspended RDC distribution Total Recurring R
Slide 11: Assets Under Management
Assets Under Management We manage assets of $5 billion with a core focus on Real Estate, Hospitality and Credit Diversified by asset class and investor base $5.0b $4.9b 0.6 0.6 1.0 0.9 $3.7b 0.4 1.2 1.2 0.6 $2.8b 1.2 2.2 2.2 $1.1b 1.5 $0.9b $0.7b FY14 FY15 FY16 FY17 FY18 FY19 1H20 Core Real Estate H
Slide 12: Credit
Credit A scale opportunity underpinned by operational excellence Regulatory dynamics and bank strategic refocusing creates a significant opportunity in certain lending segments Market opportunity Low interest rate environment driving significant demand for yield Deep expertise across credit asset cl
Slide 13: Credit AUM Growth
Credit AUM Growth We have a significant strategic opportunity in credit and will continue to scale our expertise in this segment 40% CAGR (FY16 - 1H20) $980m $915m $580m $340m $300m FY16 FY17 FY18 FY19 1H20 Core Funds Fixed Income and other Credit Secured Loan Series Construction Financing Partnersh
Slide 14: Credit
Credit Our Credit teams manage $980 million across various credit strategies $400m $20m on FY19 • Active management of corporate bonds and fixed income products for HNW clients Fixed Income established 2013 $230m $20m • Provides bridging finance with real estate first mortgage backing on FY19 • Cons
Slide 15: Hospitality AUM Growth
Hospitality AUM Growth Hospitality AUM supported by Byron Bay Beach Hotel Fund acquisition, offset by divestments (Grand Hotel & Royal Hotel) and revaluations 17% CAGR (Jul-17 - 1H20) since acquisition of RDC $1.2b $1.2b $1.2b Acquisition of Redcape Hotel Group ($0.7b) in July 2017 $0.9b $0.1b FY16
Slide 16: Hospitality
Hospitality MA Hotel Management (MAHM) manages $1.2 billion of hospitality assets in NSW and Queensland • MAHM is a unique hospitality operating platform that applies strong sector expertise across its high-quality real estate backed portfolio • The platform is highly scalable and is well placed to
Slide 17: Real Estate AUM Growth
Real Estate AUM Growth Stable Real Estate AUM through a challenging half 51% CAGR (FY16 - 1H20) $0.7b acquisition of Marion via Moelis $2.2b $2.2b Australia managed vehicle, fully capitalised by SPH REIT $1.5b $1.4b $0.8b acquisition of Armada Funds Management $0.5b FY16 FY17 FY18 FY19 1H20 Retail R
Slide 18: Real Estate
Real Estate Our Real Estate team manages $2.2 billion across a range of retail and commercial real estate assets • A scalable real estate platform driven by a team with deep experience across all market segments • The portfolio has traditionally been focused on retail assets, but opportunity exists
Slide 19: ASX Listed Equities and PE / VC
ASX Listed Equities and PE / VC Our team manages $570m across ASX Listed Equities, Private Equity & Venture Capital $310m $10m on FY19 • Small Cap Equities Fund saw good net client inflows with AUM up to $280m • Fund delivered a return of 6.5% (after fees) over 12 months to 30 June versus the ASX/S&
Slide 20: Asset Management – Clients
Asset Management – Clients Today we manage over $5 billion of assets for institutional, HNW and retail clients We are focused on the growth and diversification of our existing distribution channels $1.5b • Strong existing partnerships with large offshore institutions 1 • Dedicated resource appointed
Slide 21: Corporate Advisory & Equities
Corporate Advisory & Equities MOELIS AUSTRALIA LIMITED Page 20
Slide 22: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance Underlying Financials ($m) 1H19 1H20 Growth Corporate Advisory Fees [$m] 15.2 21.3 39.9% Equities Commissions [$m] 3.6 5.1 41.9% Total Underlying Revenue [$m] 18.8 26.4 40.2% Expenses [$m] 18.3 21.0 14.4% Underlying EBITDA [$m] 0.5 5.4 Large Advisory Head Co
Slide 23: Revenue Seasonality
Revenue Seasonality Record 1H underlying revenue contribution for Corporate Advisory & Equities • Corporate Advisory revenue is typically seasonal with, on average, second half weighting of approximately 66% • A record 1H20 contribution and volatile market conditions makes forecasting 2H20 Advisory
Slide 24: 1H20 Financials
1H20 Financials MOELIS AUSTRALIA LIMITED Page 23
Slide 25: Group Underlying Profit & Loss
Group Underlying Profit & Loss Summary Underlying Profit & Loss Statement ($m)1 1H19 1H20 Growth Underlying Revenue -$7.2m2 impact in 1H20 arising from partial Asset Management 49.2 41.1 (16.4)% closure of RDC’s hotel assets Corporate Advisory & Equities 18.8 26.4 40.2% Total Underlying Revenue 68.0
Slide 26: Group Operating Balance Sheet
Group Operating Balance Sheet1 Operating Balance Sheet ($m) 31 Dec 2019 30 Jun 2020 Cash and cash equivalents 126.1 139.6 Refer to Group Investments detail on page 26 Loans receivable 92.7 121.7 Investments 113.3 105.1 Goodwill and other intangibles 32.6 36.0 Other assets 48.8 34.1 Total Assets 413.
Slide 27: Group Investments
Group Investments Summary of investments ($m) 31 Dec 2019 30 Jun 2020 Cash 126.1 139.6 Credit 84.7 114.0 Redcape Hotel Group (ASX.RDC) 59.3 56.3 Co-Investment 44.3 46.7 Japara Health Care Limited (ASX.JHC) 14.8 7.3 Other 2.8 2.6 Total 332.0 366.4 Highlights • ~$90m of investments expected to mature
Slide 28: Borrowings
Borrowings Bond Issuance ($m) Maturity Date Coupon 31 Dec 2019 30 Jun 2020 MOE Bond I Unsecured note 18 Sep 2020 5.25% 32.2 32.2 MOE Bond II Unsecured note 14 Sep 2022 5.85% 25.0 25.0 MOE Bond III Unsecured note – limited recourse 16 May 2024 4.35% + RBA 35.0 35.0 MOE Bond IV Unsecured note 30 Sep 2
Slide 29: Group Outlook
Group Outlook MOELIS AUSTRALIA LIMITED Page 28
Slide 30: Looking ahead
Looking ahead Positive start to 2H20 and well positioned for medium term growth Post balance date update • Significant market uncertainty makes near term forecasting extremely difficult & FY20 outlook • Positive start to 2H20: − Strong client inflows during July − Advisory transaction pipeline is en
Slide 31: Appendices
Appendices MOELIS AUSTRALIA LIMITED Page 30
Slide 32: 1H20 Financials - Statutory to Underlying Profit Reconciliation
1H20 Financials - Statutory to Underlying Profit Reconciliation Note Revenue1 EBITDA NPAT CI1 1H20 Statutory Results ($m) 74.2 24.6 8.9 1.8 Differences in measurement Business acquisition adjustments (a) - 0.7 1.6 1.6 Equity issued to staff (b) - 0.5 0.5 0.5 Net unrealised (gains)/losses on investme
Slide 33: 1H19 Financials – Statutory to Underlying Results Reconciliation
1H19 Financials – Statutory to Underlying Results Reconciliation Note Revenue1 EBITDA NPAT CI1 1H19 Statutory Results ($m) 61.4 18.3 7.5 9.8 Differences in measurement Business acquisition adjustments (a) - 2.1 2.7 2.7 Equity issued to staff (b) - (1.7) (1.7) (1.7) Net unrealised (gains)/losses on i
Slide 34: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement Differences in Classification a) The acquisition of Armada Funds Management in 2017 for cash and h) The Underlying treatment records the distributions received from the shares gives rise to non-cash IFRS expenditure. A
Slide 35: Group Consolidated Balance Sheet – Statutory
Group Consolidated Balance Sheet – Statutory 31 Dec 2019 31 Dec 2019 31 Dec 2019 30 Jun 2020 30 Jun 2020 30 Jun 2020 Summary consolidated balance sheet ($m) Statutory MCT Operating Statutory MCT Operating Cash and cash equivalents 128.8 (2.7) 126.1 165.2 (25.6) 139.6 Loans receivable 199.8 (107.1) 9
Slide 36: Moelis Australia – A Snapshot
Moelis Australia – A Snapshot • Founded in 2009 as a joint venture with NYSE listed global Investment Bank Moelis & Company to provide Investment Banking Advisory & Equities services in Australia & New Zealand History • In 2012 hired first Asset Management executives and launched its first managed f
Slide 37: About Moelis Australia
About Moelis Australia An integrated financial services provider focused on Asset Management and Corporate Advisory services Asset Management Corporate Advisory & Equities Platform • Scalable platform managing $5 billion • Part of NYSE listed Moelis & Company • Strong balance sheet with weighting to
Slide 38: Disclaimer
Disclaimer The material in this presentation has been prepared by Moelis Australia Forecasts and hypothetical examples are subject to uncertainty and Limited ABN 68 142 008 428 (Moelis Australia) and is general contingencies outside Moelis Australia’s control. Past performance is not background info