NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Corporate Update (April 2020)
27 slides from NAOS Ex-50 Opportunities's corporate update, Apr 8, 2020
Slide 1: Investor Update and Q&A, COVID-19
NAOS Asset Management Limited Investor Update and Q&A, COVID-19 11:00am 8th April 2020 Register for the webinar, if you have already registered then you will have received an email with a link to join the webinar. Alternatively, participants may dial in for audio only +61 2 9091 7604 or Toll Free 18
Slide 2: Important Information
Important Information This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. It does not constitute an offer to purchase any security or financial product or servi
Slide 3: NAOS investment beliefs provide a competitive advantage
NAOS investment beliefs provide a competitive advantage Value with Long Quality over Invest for the Term Growth Quantity Long Term 5+ years Performance v Ignore the Pure Exposure Liquidity Focus Index to Industrials The closed end LIC structure removes application and redemption risk. Environmental,
Slide 4: Investment team focus in the current environment
NAOS Investment team focus in the current environment Short-Term Liquidity Proven Long-Term Management Solvency Teams NAOS Focus Long-Term Quality Trends CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 4
Slide 5: COVID-19 implications
COVID-19 implications The key issues impacting the majority of businesses within the current economic environment: Revenue Reduction • Little to no domestic or international tourism • Closure of retail stores and cafes/restaurants • Significant reduction in elective surgeries and dental • Issues ari
Slide 6: COVID-19 impact on NAOS LIC core investments
COVID-19 impact on NAOS LIC core investments In our view, the near term impact of COVID-19 on the core holdings across the NAOS LIC’s can be classified as follows: 30% 19.85% % Share Price Movement March 2020 15% 0.19% 0% -3.85% -15% -11.59% -9.06% -21.65% -19.44% -30% -24.66% -45% -37.65% -46.58% -
Slide 7: COVID-19 impact on NAOS LIC core investments
COVID-19 impact on NAOS LIC core investments Investment COVID-19 Impact Positive • Significant network dependency driven by demand for voice applications i.e. Zoom video conferencing. MNF Group Limited • MNF should be a significant beneficiary as more people work remotely. (ASX: MNF) • Sound balance
Slide 8: COVID-19 impact on NAOS LIC core investments
COVID-19 impact on NAOS LIC core investments Investment COVID-19 Impact Neutral • We do not expect any significant change to existing operations. Saunders International • SND currently have the largest order and tender book in the company’s history with Tier-1 clients i.e. RIO, Australian Defence Fo
Slide 9: COVID-19 impact on NAOS LIC core investments
COVID-19 impact on NAOS LIC core investments Investment COVID-19 Impact Negative • COG have ceased writing leases and will now ‘run-off’ the lease book over the next 2-3 years. Consolidated Operations • The broking business has seen a significant uptick in demand due to government stimulus. Group Li
Slide 10: Impact on 'quality businesses'
Impact on ‘quality businesses’ * Businesses that have generally been perceived as high quality have not been immune to market volatility, below are select figures from companies within the S&P/ASX All Ordinaries Index (XAO) for the month of March. -20.70% 43 450 14 Average company TSR Companies with
Slide 11: Impact on 'quality businesses'
Impact on ‘quality businesses’ * Funds Management • Significant revenue drop due to lower funds under management even if revenue is recurring in nature. Stock examples: Pendal Group (ASX: PDL) -40%, • Yet to see any significant evidence of redemptions/outflows which were significant during the GFC.
Slide 12: Long term investing
Long term investing Historical Market Events and S&P/ASX All Ordinaries Accumulation Index Long Term Performance* 7000 S&P/ASX All Ordinaries Accumulation Index 6000 5000 COVID-19 4000 3000 US Loses 2000 Tech Wreck Global AAA Stock Great Bond Financial Credit Market Australian Massacre Crisis Rating
Slide 13: Bear markets since 1987
Bear markets since 1987 Number of Days 1 14 27 40 53 66 79 92 105 118 131 144 157 170 183 196 209 222 235 248 261 274 287 300 313 326 339 0% -10% -20% Market Decline % -30% -40% -50% -60% 2020 2011 2007-2009 2002-2003 1994-1995 1989-1991 1987 Average S&P/ASX All Ordinaries Bear Markets Since 1987* *
Slide 14: Potential for further downside
Potential for further downside Longer lasting COVID-19 How sharp will the restrictions demand recovery be? e.g. international travel potentially not e.g. will businesses and consumers be re-commencing until end CY20 more cautious? Long term structural Long term credit issues demand changes e.g. cred
Slide 15: NAOS investment portfolio financial year returns
NAOS investment portfolio financial year returns * 30% 20% 10% 0% -10% -20% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD NAOS Emerging Opportunities Company Limited (ASX: NCC) NAOS Ex-50 Opportunities Company Limited (ASX: NAC) NAOS Small Cap Opportunities Company Limited (ASX: NSC) * Investment Port
Slide 16: NAOS LIC dividend history and profit reserves
NAOS LIC dividend history and profit reserves 70 65.89 60 50 46.50 Cents per share (CPS) 40 35.64 30.90 30 24.95 20 16.43 17.90 15.80 11.50 10 0 NCC NSC NAC Total Dividends Paid (Since Inception) Total Gross Dividends Paid Including Franking (Since Inception) Profit Reserves 31 March 2020 All figure
Slide 17: Summary
Summary Short-term earnings Continue to upgrade are irrelevant, focus the quality of the purely on business investments when survival opportunities arise Invest in businesses where positive long- Focus on long-term term trends are valuation scenarios sustainable Smaller and more illiquid companies t
Slide 18: Q&A
Q&A Thank you for your continued support, we hope you and your family stay well. “If you own stocks like you’d own a farm or apartment house, you don’t get a quote on those every day or every week.” Warren Buffett CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 18
Slide 19: Appendix
Appendix CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 19
Slide 20: NAOS investment universe
NAOS investment universe CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 20
Slide 21: NAOS strong long term (5 years+) risk-adjusted returns
NAOS strong long term (5 years+) risk-adjusted returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics 9% 9% 7.44% 7% 7% 5.60% 5% 5% 3.16% 3.09% 2.69% 3% 2.40% 3% 1.54% 1.72% 1% 1% -1% -1% -1.35% -1.28% -3% -3% -3.41% -3.25% -5% -5% Perfo
Slide 22: NAOS alignment of interests
NAOS alignment of interests 9,000,000 7,944,998 • Investment team members 8,000,000 Inception Directors Shareholding (Ordinary are prohibited from holding 7,000,000 Shares) any securities outside of the NAOS LICs. 6,000,000 • Directors and all investment 31 March 2020 Directors Shareholding (Ordinar
Slide 23: NAOS investment process
NAOS investment process CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 23
Slide 24: NAOS ESG framework
NAOS ESG framework CONVICTION. LONG TERM. ALIGNED | Copyright 2020 NAOS Asset Management Limited 24
Slide 25: NAOS giving
NAOS giving NAOS Asset Management, the management company, is proud to be giving back ~ 1% of recurring income to the following charities ‘Golden Shouldered Parrot’ threatened ‘Reef Aid’ campaign, in partnership RFDS, dedicated to providing species project, in partnership with with Greening Australi
Slide 26: NAOS Directors and Team
NAOS Directors and Team OUR DIRECTORS Sebastian Evans Warwick Evans Matthew Hyder David Rickards Sarah Williams Mark Bennett Trevor Carroll Managing Director, NAOS Chairman, NAOS Asset Director, NAOS Asset Independent Chairman & Independent Director, Director, NAOS Asset Independent Chairman Asset M
Slide 27: Investor awareness and communication
Investor awareness and communication CEO Insights, NAOS Shareholder Monthly Investment The news and media Twice yearly National Newsletter, Conference Calls, Report & NTA email section of our website Roadshow subscribe via our subscribe via our updates, subscribe via is updated regularly website web
NAOS Ex-50 Opportunities Company — Corporate Update (April 2020) on 6ix