NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — Non-Deal Roadshow (October 2022)
52 slides from NAOS Ex-50 Opportunities's roadshow presentation, Oct 11, 2022
Slide 1: NAOS Investor Roadshow – Presentation Materials (ASX announcement)
NAOS Ex-50 Level 34 OPPORTUNITIES 25 Martin Place COMPANY LIMITED Sydney NSW 2000 (ASX: NAC) T (02) 9002 1576 ABN 49 169 448 837 F (02) 8215 0037 E enquiries@naos.com.au www.naos.com.au For personal use only 11 October 2022 ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 NAOS I
Slide 2: Investor Roadshow 2022
For personal use only Investor Roadshow 2022 Today’s trends which are driving the emerging companies of tomorrow
Slide 3: Important Information
Important Information For personal use only 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 fina
Slide 4: Acknowledgement of Country
Acknowledgement of Country For personal use only We would like to acknowledge the Gadigal People of the Eora Nation, the Traditional Custodians of the land now called Sydney, and pay our respect to the Elders past, present and emerging. 2
Slide 5: NAOS Asset Management
NAOS Asset Management For personal use only To provide investors genuine long-term, concentrated exposure to quality public and private emerging companies with an industrial focus. NAOS established its first Listed Investment NAOS was originally founded in 2004 and Company (LIC) in 2013 with 400 sha
Slide 6: Focus on Capital Management for All Shareholders
Focus on Capital Management for All Shareholders For personal use only Since their inception, the NAOS LICs have returned $157m to shareholders through a combination of dividends, franking credits and buybacks. NCC NAC NSC Inception date Feb 2013 Nov 2014 Dec 2017 Outperformance since inception* 5.2
Slide 7: NAOS Directors and Team
NAOS Directors and Team For personal use only 5
Slide 8: Our Investment Beliefs and Differentiation
Our Investment Beliefs and Differentiation For personal use only 6
Slide 9: NAOS LICs Director Alignment
NAOS LICs Director Alignment Directors' shareholdings have significantly increased since the inception of each LIC For personal use only Inception Directors Shareholding 31 August 2022 Directors Shareholding 9,000,000 8,394,479 8,000,000 7,000,000 6,000,000 5,332,207 NUMBER OF SHARES 5,000,000 4,000
Slide 10: What Qualitative Information Sources Does NAOS Use?
What Qualitative Information Sources Does NAOS Use? The NAOS Investment Team undertakes fundamental analysis on potential and current investments. Some For personal use only examples of our key focus areas include: 8
Slide 11: Reasons Not to Invest with NAOS
Reasons Not to Invest with NAOS Our LICs are not for everyone. Some reasons why you may not choose to invest with NAOS For personal use only include: Concentrated portfolios (0-15 investments & shareholdings often >20%) Long-term investment philosophy (5+ years) Focus on emerging companies ($2
Slide 12: How Have the LICs Performed Since our Last Roadshow?
How Have the LICs Performed Since our Last Roadshow? For personal use only 3 Year and inception performance for NCC, NAC, NSC relative to each benchmark BENCHMARK 3 YEAR INCEPTION Investment Portfolio PERFORMANCE 3 YEAR BENCHMARK PERFORMANCE (p.a.) INCEPTION PERFORMANCE PERFORMANCE (p.a.) NCC Invest
Slide 13: Reflecting on FY22
For personal use only Reflecting on FY22 Let’s Reflect on FY22 11
Slide 14: What Has Changed in the Macro-Economic Backdrop?
What Has Changed in the Macro-Economic Backdrop? For personal use only Reserve banks globally have been rising interest rates to offset inflation caused by supply side disruptions and strong demand, driven in part by Government stimulus related to the COVID-19 pandemic. Capital is no longer “fre
Slide 15: Comparing Investment Alternatives
Comparing Investment Alternatives: Will Macroeconomic Conditions Change Investor Preferences? For personal use only US 10-yr T-Note ~53x Fwd P/E Yield of 0% Div. Yield ~3.7% Source: CapIQ, NAOS Data as at 5/10/2022 13
Slide 16: US 10 Year Bond Yield (20 Year History)
For personal use only Yield (%) 0 1 2 3 4 5 Sep-02 Sep-03 Source: Factset Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 US 10 Year Bond Yield (20 Year History) Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 What Has Changed in the Macro-Economic Backdrop? Sep-20 Sep-21 Sep-22 14
Slide 17: How is This Affecting Investors?
How is This Affecting Investors? For personal use only Do many of the “new age” valuation methods (such as EV/revenue) still apply in today's market? What certainty do I have over the short-term E (earnings) in the P/E of a business? Does my investment have the financial flexibility to withsta
Slide 18: S&P/ASX All Technology Index (Previous 5 Years)
For personal use only Price 1,000 1,500 2,000 2,500 3,000 3,500 Sep-17 Dec-17 Source: Bloomberg Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 S&P/ASX All Technology Index (Previous 5 Years) Mar-20 How is This Affecting Investors? Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-
Slide 19: Share price performance of high ROIC & ROCE businesses
How is This Affecting Investors? For personal use only Share price performance of high ROIC & ROCE businesses High ROIC & ROCE Businesses (Price) 120 110 100 90 Price Return % 80 70 60 50 40 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 August 2022 September 2022 Dick
Slide 20: What We Believe Has Worked
What We Believe Has Worked For personal use only Continued focus on industry dynamics. Fruitful exits of successful investments. Holding for the long-term and allowing capital to compound. 18
Slide 21: Key Learnings
Key Learnings For personal use only Reduce exposure to low margin businesses. Avoiding management teams who are non-transparent or poor capital allocators. Waiting too long to exit poor performing investments or seeking to effect change. 19
Slide 22: How We Have Evolved Our Investment Process
How We Have Evolved Our Investment Process For personal use only Trusted long-term partnerships. Board representation and/or recommendations. Private/unlisted investment opportunities. 20
Slide 23: Where We are Investing & How We Are Positioned
For personal use only Where We are Investing & How We Are Positioned
Slide 24: Where We Are Investing & How We Are Positioned
Where We Are Investing & How We Are Positioned For personal use only Industry/Structural Tailwinds: Residential Property Shortage (Big River Industries) Renewable Energy Transition (Gentrack Group) Ageing & Complex Transport Vehicle Fleet (Maxiparts) De-risking of Supply Chains (Move Logisti
Slide 25: Big River Industries Core Investee Update
NAOS Core Investee Company Updates For personal use only Big River Industries (ASX: BRI) Why should Big River Industries remain a core investment? Moat Business founded in 1910’s and has the size and scale to service all types & sizes of trade customers (>10,000 accounts) around Australia and New Ze
Slide 26: Big River Industries Growth Over 5 Years
NAOS Core Investee Company Updates For personal use only Big River Industries (ASX: BRI) Significant growth over last 5 years, with expectation of further growth given acquisition strategy. 2017 2022 Source: Big River, NAOS 24
Slide 27: MOVe Logistics Core Investee Update
NAOS Core Investee Company Updates For personal use only MOVe Logistics (NZX: MOV) Why have we made MOV a new core investment? Moat Strong NZ regional presence with the scale, offering and network to meet the customer requirements of the largest NZ businesses. People & Alignment A majority new execu
Slide 28: Mainfreight Story Quote
NAOS Core Investee Company Updates For personal use only “The final deal saw Mainfreight financed into the purchase with vendor money – the perfect arrangement. This was vintage Dunphy: first agree a favorable price, then casually mention, ‘We’re not going to pay you upfront, we’re going to pay you
Slide 29: Recent MOVe Executives Appointments
NAOS Core Investee Company Updates Recent MOVe Executives Appointments For personal use only MOVe Hire MOVe Role Experience Executive Director Mainfreight and General Manager Mainfreight Chris Dunphy Executive Director International CEO Mainfreight Europe 2011-16, General Manager Mainfreight New Mar
Slide 30: Maxiparts Ltd Core Investee Update
NAOS Core Investee Company Updates For personal use only Maxiparts Ltd (ASX: MXI) Why have we made MXI a new core investment? Moat A national distribution network with significant product breadth and depth including Japanese after-market parts. People & Alignment CEO tenure of >16 years with an effe
Slide 31: EBIT Margin Comparison
NAOS Core Investee Company Updates For personal use only EBIT Margin Comparison – ASX: MXI, ASX: SNL and ASX: BAP 16% 14% 12% EBIT % 10% 8% 6% 4% 2017 2018 2019 2020 2021 2022 Maxiparts Supply Network Bapcor Source: Factset 29
Slide 32: Gentrack Group Ltd Core Investee Update
NAOS Core Investee Company Updates For personal use only Gentrack Group Ltd (ASX: GTK) Why have we maintained GTK as a core investment? Moat A strong product offering which has been in market since the 1980’s and a track record of implementing large and sophisticated system offerings. People & Align
Slide 33: Gentrack Group Core Investee Update
NAOS Core Investee Company Updates For personal use only Source: Gentrack communications 31
Slide 34: Outlook
For personal use only Outlook 32
Slide 35: Outlook for NAOS core investments
Outlook for NAOS core investments The chart below represents a selection of core investments across the NAOS LICs, comparing the FY22 P/E For personal use only multiple (blue dot) to our internal expectations of the P/E multiple (orange dot) in 24 months’ time, factoring in what we believe is a reas
Slide 36: Remain Focused on Long-Term Opportunity
Remain Focused on Long-Term Opportunity For personal use only • We have no competitive advantage in picking market tops and bottoms. • We believe a significant majority of our investments will be significantly more profitable in 5–10 years' time compared to where they are today. • The capital requir
Slide 37: Expect the Best but Prepare for the Worst
Expect the Best but Prepare for the Worst For personal use only • In our view the primary short-term risks for listed businesses include: • Funding • Counterparty • Refinancing • Margins • We will remain focused on mitigating these risks through investing in businesses with proven business models, t
Slide 38: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge For personal use only 36
Slide 39: NAOS Asset Management 1% Pledge
NAOS Asset Management 1% Pledge For personal use only 37
Slide 40: The NAOS Guide to Investing in LICs
The NAOS Guide to Investing in LICs Scan the QR code to learn more about NAOS and our Listed Investment Companies. For personal use only 38
Slide 41: Q&A
Q&A For personal use only Thank you for your continued support. “Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard.” Warren Buffett 39
Slide 42: Appendix
For personal use only Appendix
Slide 43: NCC Overview as at August 2022
NCC Overview as at 31 August 2022 For personal use only $1.00 $1.01 $0.88 8.52% 13 $154.6m Pre-Tax NTA Post-Tax NTA Share Price Dividend Yield Number of Weighted Average Holdings Market Capitalisation of the Investments FRANKED DIVIDEND HISTORY Dividends Paid Cumulative Dividends Paid 65.00 8.0 7.50
Slide 44: NAC Overview as at August 2022
NAC Overview as at 31 August 2022 $1.01 $1.03 $0.92 6.41% 10 $163m For personal use only Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FULLY FRANKED DIVIDEND HISTORY Fully Franked Dividends Paid Cumulati
Slide 45: NSC Overview as at August 2022
NSC Overview as at 31 August 2022 $0.91 $0.89 $0.745 6.71% 8 $231.4m For personal use only Pre-Tax NTA Post-Tax NTA Share Price Fully Franked Number of Weighted Average Dividend Yield Holdings Market Capitalisation of the Investments FULLY FRANKED DIVIDEND HISTORY Fully Franked Dividends Paid Cumula
Slide 46: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * NCC Investment Portfolio Risk and Performance Metrics NAC Investment Portfolio Risk and Performance Metrics For personal use only 15% 15% 11.33% 10.71% 10% 10% 6.87% 5.47% 5% 5% 2.99% 3.51% 2.67% 2.41% 0% 0% -1.18% -1.36% -3.03% -3.49% -5% -5% Performanc
Slide 47: NAOS Strong Long-term Risk-adjusted Returns
NAOS Strong Long-term Risk-adjusted Returns * For personal use only NSC Investment Portfolio Risk and Performance Metrics 10% 4.87% 4.78% 5% 3.81% 2.35% 0% -1.88% -3.74% -5% Performance Since Monthly Average Monthly Average Inception p.a. Performance when the Performance when the Market is up Market
Slide 48: Historical Shareholder Numbers
Historical Shareholder Numbers For personal use only 8000 6000 4000 2000 0 NCC Shareholders NAC Shareholders NSC Shareholders 46
Slide 49: NAOS ESG Framework
For personal use only NAOS ESG Framework 47
Slide 50: Key Business & Industry Traits for Maximising Long-term Performance
Key Business & Industry Traits for Maximising Long-term Performance and Reducing the Risk of Permanent Capital Loss Events For personal use only Industry Tailwinds Supporting A growing revenue base provides companies with a number of competitive advantages such as the ability to scale Long-Term Reve
Slide 51: Why Invest via a Listed Investment Company?
Why Invest via a Listed Investment Company? We strongly believe LICs are a highly effective structure to give investors the highest quality For personal use only exposure to specific asset classes, which in the case of NAOS is emerging businesses. A Listed Investment Company structure: Allows the
Slide 52: Investor Awareness and Communication
Investor Awareness and Communication For personal use only FOLLOW NAOS 50
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