Foresight Group Holdings Ltd. · LSE:FSG
Foresight — FY2022 Earnings Presentation
44 slides from Foresight's earnings presentation, Jul 12, 2022
Slide 1: Results presentation
Results presentation Year ended 31 March 2022 12 July 2022
Slide 2: Agenda
Agenda Bernard Fairman 1. Financial and Operational Highlights Executive Chairman & Co‐Founder Co‐founded Foresight Group in 1984 40+ years of private equity experience 2. Business Review Responsible for strategic direction and management Prior to founding Foresight, he was an Investment 3.
Slide 3: Financial and Operational Highlights
Financial and Operational Highlights Bernard Fairman, Executive Chairman & Co‐Founder |3
Slide 4: Financial highlights
Financial highlights Achieving our strategic targets Target Delivered in FY22 20‐25% +23% As at 31 March 2022 Fundraising growth achieved ‒ AUM to £8.8 billion (+ 23%) growth in AUM per annum organically ‒ FUM £6.7 billion (+ 30%) 87% recurring 85‐90% revenue Revenue No underlying fee pressure recur
Slide 5: Operational highlights
Operational highlights Excellent progress made across all business divisions Substantial and diverse fundraising achieved ‒ November 2021 IPO of dedicated UK forestry fund ‒ Foresight Energy Infrastructure Partners fund closed at €851.4 million total FY22 ‒ £216 million raised across regional priv
Slide 6: Post period end acquisitions
Post period end acquisitions Earnings and AUM accretive to Private Equity and Infrastructure Private Equity Infrastructure Acquisition of Downing LLP’s technology ventures division1 100% acquisition of Australian based Infrastructure Capital Enhances earnings, with anticipated 12‐month core EB
Slide 7: Business Review
Business Review Gary Fraser, Chief Financial Officer & Chief Operating Officer |7
Slide 8: Leading Private Equity and Infrastructure manager
Leading Private Equity and Infrastructure manager Long established focus on ESG and sustainability led investment strategies Investment INFRASTRUCTURE PRIVATE EQUITY FORESIGHT CAPITAL MANAGEMENT (“FCM”) A prominent European real assets A leading regional SME investor, Team applies private investor,
Slide 9: Infrastructure summary
Infrastructure summary Proven ability to capture sustainable investment opportunities in growing markets FY22 growth Key facts FUM + 26% to £4.2 billion, AUM + 17% to £6.3 billion 337 assets, 15 classes Revenue + 17% to £50.8 million Investments in new sectors: geothermal energy, pumped hydro po
Slide 10: Private Equity summary
Private Equity summary Delivering growth and addressing significant opportunity with specialist team FY22 growth AUM + 30% to £0.9 billion Revenue + 31% to £23.9 million Performance and deployment £81 million invested across 53 equity transactions Several successful retail and institutional
Slide 11: FCM summary
FCM summary Providing access to real assets and sustainable investment opportunities in listed markets FY22 growth UK OEIC performance since launch(1) AUM +43% to £1.6 billion Revenue + 52% to £11.4 million FP Foresight UK infrastructure Income Fund Performance and deployment +41.38% Net inflo
Slide 12: Sustainability embedded within Foresight's business model
Sustainability embedded within Foresight’s business model Acting conscientiously and investing responsibly are critical to long‐term success FY22 highlights Certified CarbonNeutral company Investments aligned to UN Sustainable Development Goals 4.1 million tonnes CO2 emissions avoided Winner
Slide 13: Our people
Our people Foresight’s most valuable asset Employee Value Proposition I&D commitments We have invested significant time in developing our Women in Finance Charter – progressing towards employee value proposition target of 30% of women in senior leadership roles by 2024 Four values drive Foresi
Slide 14: Financial Results
Financial Results Gary Fraser, Chief Financial Officer & Chief Operating Officer | 14
Slide 15: Key financial metrics
Key financial metrics Strong performance across all metrics 31 March 2022 31 March 2021 YoY Change Year‐end AUM (£m) 8,839 7,193 +22.9% Year‐end FUM (£m) 6,675 5,132 +30.1% Total Revenue (£m) 86.1 69.1 +24.6% Recurring Revenue (% of Total) 86.9% 90.3% ‐3.4 pts Core EBITDA pre‐SBP(1) (£m) 31.8 23.9 +
Slide 16: AUM bridge
AUM bridge Very strong organic growth continued across broad range of fund strategies Retail Institutional 9.0 0.4 8.8 0.6 (0.3) 1.2 (0.6) 8.5 0.3 8.0 7.5 £bn 7.2 7.0 6.5 6.0 5.5 31 Mar 2021 Retail ‐ inflow Retail ‐ outflow Market Institutional ‐ Institutional ‐ Market 31 Mar 2022 AUM movement(1) in
Slide 17: Revenue analysis
Revenue analysis Accelerating revenue growth, with all businesses performing strongly Revenue Contribution by fee type Total Revenue £69.1m £86.1m Arrangement and performance fees £11.3m anticipated to increase by c.25% in FY23 £6.7m 90.3% 86.9% High quality recurring revenue recurring £74.8m re
Slide 18: Cost analysis
Cost analysis Maintained good cost discipline to deliver operational leverage Administrative Expenses Total £48.9m £54.4m AUM and revenue continue to grow faster than costs £3.5m £2.6m Administrative expenses anticipated to £9.4m £6.5m grow by c.12% in FY231. Driven by; £6.0m £6.1m ‒ Wage inflat
Slide 19: EBITDA progression
EBITDA progression On track to achieve medium‐term margin target of c.43% Core EBITDA pre‐SBP £35.0m + 33.1% growth in core EBITDA £30.0m pre‐SBP to £31.8 million £25.0m ‒ Result of strong revenue growth and cost discipline £20.0m £15.0m £23.9m £31.8m £10.0m +31.2% growth in core EBITDA £5.0m po
Slide 20: Strong Group liquidity position
Strong Group liquidity position Financial flexibility maintained to support future investment in growth Closing cash position as at 31 March 2022 £54.3m (+38%) Inflows to 9 July 2022 £18.9m Technology ventures division of Downing LLP (£13.6m)1 Cash position as at 9 July 2022 £59.6m Infrastructure Ca
Slide 21: Acquisition of Infrastructure Capital Group
Acquisition of Infrastructure Capital Group Nigel Aitchison, Co‐Head of Infrastructure | 21
Slide 22: Acquisition of Infrastructure Capital Group
Acquisition of Infrastructure Capital Group (“Infrastructure Capital’’) Compelling opportunity, delivering inorganic growth aligned with Foresight’s stated strategy Infrastructure Capital is an established, leading specialist infrastructure manager in the Australian market ⁻ Adds £2.8bn of infrastru
Slide 23: Infrastructure Capital overview
Infrastructure Capital overview An established, leading specialist infrastructure manager in the Australian market Company description Key facts & figures • Founded in 2000 in collaboration with ANZ Bank A$5.0bn (£2.8bn) A$3.2bn (£1.8bn) Client base of 31 • Currently owned by Log Creek (63.3%), othe
Slide 24: Infrastructure Capital's funds under management
Infrastructure Capital’s funds under management Infrastructure Capital offers investors access to funds that are diversified by sector, counterparty and risk profile Funds AuM split Australian Renewables Infrastructure Trust (ARIF) Infrastructure Capital AUM by Fund (as at 31‐Mar‐22) FUM of c.A$1.
Slide 25: Market opportunity
Market opportunity Infrastructure Capital is well positioned and respected in the Australian market 1 The Australian market has one of the largest institutional investor bases in the world Large and Growing interest in the Australian energy sector which offers the potential for higher returns th
Slide 26: Geographic diversification
Geographic diversification Stronger international presence across key markets 1 Transaction impacts on pro‐forma Group AUM(1) By Geography Increases the share of Foresight’s non‐UK business from 18% to 37% of AUM 2% 16% 25% 2 c.£9.4bn c.£12.2bn Diversifies the Group’s revenue profile and 12% 63% inc
Slide 27: Enhanced distribution capabilities
Enhanced distribution capabilities Broader investor reach and stronger business profile for the combined group 1 Growing appetite from Australian investors for foreign investments with credible managers with a strong sustainability Enhanced focus Foresight product Infrastructure Capital has esta
Slide 28: Combined business
Combined business Strong strategic and cultural alignment to enable a seamless integration Client benefits Integration plan Combined business will be one of the leading independent renewable Foresight's existing Australian team of 7 individuals to generation and infrastructure investors in Austr
Slide 29: Key transaction terms
Key transaction terms Transaction structure provides strong alignment with Infrastructure Capital’s shareholders and management Up‐Front A$105m (£59.7m) up‐front consideration, payable 50% in cash and 50% in newly issued Foresight shares Consideration ‒ Equates to a multiple of forecast EBITDA for
Slide 30: Financial benefits
Financial benefits A highly accretive transaction for Foresight’s shareholders Growth High quality income Strong profitability Earnings accretion Increase in AUM of Increase in Core EBITDA of c.93%(2) recurring revenue c.10% EPS accretion c.£2.8bn (+30%)(1) c.£7.2m(2) Exceeds c.85%‐90% recurring In
Slide 31: Current Trading and Outlook
Current Trading and Outlook Gary Fraser, Chief Financial Officer & Chief Operating Officer Bernard Fairman, Executive Chairman & Co‐Founder | 31
Slide 32: Current trading
Current trading Key metrics reflect resilient Q1 performance AUM growth in line with our annualised target despite challenges in listed market valuations AUM +20% to £9.4 billion (Q1 FY21: £7.8 billion) FUM +27% to £7.2 billion (Q1 FY21: £5.7 billion) Reflects the strength of Foresight’s div
Slide 33: Outlook
Outlook Concluding remarks Proven access to quality sustainable investment opportunities in growing international markets, across both private and public vehicles Strong performance, consistently delivering on our targets and creating value for our diverse international investor base M&A strategy is
Slide 34: Appendices
Appendices All figures in the appendices of this presentation are subject to de minimis rounding | 34
Slide 35: Appendix 1: Foresight Group
Appendix 1: Foresight Group Sustainability‐led Alternative Assets and SME Investment Manager Business At A Glance 35+ year track record of successful investment in specialist, difficult‐to‐access markets Infrastructure Private Equity FCM Group Revenue £50.8m £23.9m £11.4m £86.1m AUM by Strategy En
Slide 36: Appendix 2: Revenue analysis by business division
Appendix 2: Revenue analysis by business division Infrastructure Private Equity FCM Group Mar‐22 Mar‐21 Mar‐22 Mar‐21 Mar‐22 Mar‐21 Mar‐22 Mar‐21 Total AUM £bn 6.3 5.4 0.9 0.7 1.6 1.1 8.8 7.2 Revenue / average AUM % 0.77% 0.78% 1.89% 1.98% 0.81% 0.92% 0.89% 0.92% Retail FUM £bn 1.4 1.0 0.6 0.4 1.6 1
Slide 37: Appendix 3: Cost analysis by business division
Appendix 3: Cost analysis by business division Infrastructure Private Equity FCM Central Group Mar‐22 Mar‐21 Mar‐22 Mar‐21 Mar‐22 Mar‐21 Mar‐22 Mar‐21 Mar‐22 Mar‐21 £m FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Staff costs 17.4 17.3 7.0 6.3 3.7 3.0 7.3 7.2 35.4 33.8 Legal & professional costs
Slide 38: Appendix 4: FUM movement by business division and investor type
Appendix 4: FUM movement by business division and investor type (£m) Infrastructure retail Private Equity retail Foresight Capital Management retail (1) 221 (56) 600 2,000 844 (483) 1,400 1,368 75 (13) 566 1,300 258 (78) 550 74 (18) 1,800 1,612 93 28 1,200 500 1,600 448 1,100 450 1,400 1,023 1,000 1
Slide 39: Appendix 5: Summary FY22 Income Statement
Appendix 5: Summary FY22 Income Statement Income Statement (£m) Mar‐22 Mar‐21 Revenue 86.1 69.1 Cost of sales (5.1) (4.6) Gross profit 81.0 64.5 Administrative expenses (54.4) (48.9) Other operating income 0.3 0.4 Operating profit 26.9 16.0 Finance income — — Finance expense (0.7) (0.7) Fair value g
Slide 40: Appendix 6: Core EBITDA pre-SBP reconciliation
Appendix 6: Core EBITDA pre‐SBP reconciliation (£m) Core EBITDA pre‐SBP Calculation £m Mar‐22 Mar‐21 Total comprehensive income 24.9 14.9 Adjustments: Non‐operational staff costs 0.7 3.2 Non‐operational legal costs — 2.7 Profit on disposal of fixed assets — (0.1) Gain on business combination (1.0) (
Slide 41: Appendix 7: Summary Statement of Financial Position
Appendix 7: Summary Statement of Financial Position as at 31 March 2022 (£m) Summary Statement of Financial Position 31‐Mar‐22 31‐Mar‐21 Assets Property, plant and equipment 2.7 3.0 Right of use assets 8.3 9.1 Intangible assets 4.4 3.0 Investments 2.8 2.4 Deferred tax asset 0.6 1.0 Contract costs 4.
Slide 42: Appendix 8: Cashflow statement
Appendix 8: Cashflow statement (£m) Cashflow Statement Mar‐22 Mar‐21 Mar‐22 Mar‐21 Cash generated from operations 29.2 17.2 Profit before tax 27.9 15.7 Tax paid (3.4) (0.2) Gain on business combination (1.0) (0.2) Loan interest paid (0.1) ‐ Profit from share in joint venture (0.1) ‐ Interest on leas
Slide 43: Disclaimer
Disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE
Slide 44: For further information, please contact
For further information, please contact: Foresight Group LLP The Shard t: +44 (0)20 3667 8100 32 London Bridge Street e: investors@foresightgroup.eu London SE1 9SG w: fsg‐investors.com United Kingdom
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