Slide 1: Magellan Financial Group Limited Full Year Results
Magellan Financial Group Limited Full Year Results For the year ended 30 June 2022
Slide 2: Chairman Update
Chairman Update Hamish McLennan Magellan| 2
Slide 3: Chairman Update: Governance
Chairman Update Governance • Strengthened independence and governance • Hamish McLennan appointed as independent non-executive Chairman of Magellan Financial Group (“Magellan”) • Robert Fraser appointed Deputy Chairman of Magellan and continues as independent non-executive Chairman of Magellan Asset
Slide 4: Chairman Update: Leadership & team
Chairman Update Leadership & team • Appointment of David George as CEO and Managing Director — Over 20 years’ experience across analytical roles, investment management and organisational leadership — Most recently was Deputy Chief Investment Officer, Public Markets at the Future Fund • Appointment o
Slide 5: Chairman Update: Capital management initiatives
Chairman Update Delivery on capital management initiatives announced at 1H22 Interim Results • Announced and commenced implementation of an on-market buy-back of up to 10 million shares — 626,960 shares bought back as at 30 June 2022 at an average price of $12.43 per share • Completed the issue of B
Slide 6: Business Performance Update
Business Performance Update David George CEO and Managing Director Magellan| 6
Slide 7: Performance Overview
Performance Overview FY22 results highlights • Adjusted net profit after tax down 3% to $399.7 million • Statutory net profit after tax up 44% to $383.0 million • Average funds under management (“FUM”) for the year down 9% to $94.3 billion • FUM as at 30 June 2022 of $61.3 billion • Management fee r
Slide 8: Overview of FY22 Results
Overview of FY22 Results Funds Management business: Profit before tax and performance Adjusted net profit after tax Statutory net profit after tax fees $526.4m $470.6m (11%) $412.4m $399.7m $383.0m (3%) $177.1m 2H22 $151.2m 2H22 $265.2m $131.4m 2H22 +44% $293.5m 1H22 $248.5m 1H22 $251.6m 1H22 FY21 F
Slide 9: Investment Performance
Investment Performance For the periods to 30 June 2022 1 Year 3 Years 5 Years Since • Long history of safeguarding and Inception growing wealth for clients (%) (% p.a.) (% p.a.) (% p.a.)1 • Global equities strategy has Magellan Global Fund (11.8) 2.1 8.4 10.2 underperformed in recent years MSCI Worl
Slide 10: Funds Under Management
Funds Under Management As at 30 June 2022 ($ billion) Strategy 30 June 2021 Net Flows Investment Performance 30 June 20221,2 Global Equities $85.4 ($47.6) ($3.8) $33.3 Global Listed Infrastructure $19.0 ($0.9) $2.3 $20.1 Australian Equities $9.5 ($0.9) ($0.7) $7.9 Total1 $113.9 ($49.5) ($2.3) $61.3
Slide 11: Business Mix
Business Mix Based on FUM of $60.2 billion as at 29 July 2022 Funds Under Management Base Fees1 32% 38% 62% 68% Retail FUM Institutional FUM Retail Fees Institutional Fees 1. Base Fees are annualised Management fees based on FUM of $60.2 billion as at 29 July 2022 Magellan| 11
Slide 12: Financial Position
Financial Position $915.5 million 4% ____________________ $963.3 million 7% __________________________ Net tangible assets Cash, financial assets & investments in associates No debt _______________ 179.0 cps $434.6 million _____________ Total liabilities of $214.6 million, predominantly relating to
Slide 13: Full Year Dividend of 179.0 cps
Full Year Dividend of 179.0 cps • Full year dividend of 179.0 cents per share comprising: — Interim dividend of 110.1 cents per share — Total dividend for 2H22 of 68.9 cents per share (80% franked), comprising Final Dividend of 65.0 cents per share and Performance Fee dividend of 3.9 cents per share
Slide 14: Group Financial Results
Group Financial Results Kirsten Morton COO and CFO Magellan| 14
Slide 15: Reported Earnings
Reported Earnings $ million 30 Jun 2022 30 Jun 2021 % change Management and services fees 592.6 635.4 (7%) • 7% decrease in management and Performance fees 11.5 30.1 (62%) services fees, reflecting reduction Other revenue and income 43.1 32.5 33% Adjusted revenue and other income 647.3 697.9 (7%) in
Slide 16: Funds Management Segment
Funds Management Segment $ million 30 Jun 2022 30 Jun 2021 % change Revenue • Represents the core business that Management fees 588.6 631.4 (7%) drives profits and dividends Performance fees 11.5 30.1 (62%) Services fees 4.0 4.0 0% • Profit before tax and performance Other revenue and income 5.0 (2.
Slide 17: Expenses
Expenses • Cost to income ratio (excluding performance fees) of 21.3% during the period • Significant headroom to invest in the business • Funds Management business operating expenses in the range of $125-$130 million remain appropriate for 2023 financial year • We continue to pay close attention to
Slide 18: Principal Investments
Principal Investments Kirsten Morton COO and CFO Magellan| 18
Slide 19: Fund Investments
Fund Investments The Board has set a pre-tax hurdle of 10% p.a. (over the business cycle) for the Fund Investments portfolio Fund Investments Portfolio: Investment Returns: Investment ($ million) 30 June 2022 30 June 2021 Time Period Return Internal investments Cash 0.3 0.5 1 Year to 30 June 2022 (1
Slide 20: Magellan Capital Partners
Magellan Capital Partners • Share of after-tax profits of Magellan Capital Partners (“MCP”) investments of $8.4 million • Barrenjoey Capital Partners — Delivered a modest profit for the year, ahead of the original plan — Further investment by Barclays of $75 million strengthens Barrenjoey’s balance
Slide 21: First Impressions and Outlook
First Impressions and Outlook David George CEO and Managing Director Magellan| 21
Slide 22: First Impressions
First Impressions • Challenging year for the business and its stakeholders • Client confidence has been impacted by changes in leadership team and personnel and underperformance of the Global Equities strategy • Impressed with the resilience and commitment of the team • Focus is on core funds manage
Slide 23: Strong Platform for Growth
Strong Platform for Growth Fund Manager of Significant Scale Deep Client Base — $60.2bn across a large diversified client base1 — Relationships with >9,500 financial planners & all major stockbroking firms — Three core strategies – each of scale and with capacity to deliver new products that leverag
Slide 24: Key Priorities
Key Priorities • Work closely with investment team to focus on efficiency, effectiveness and excellence in investment activity • Engage with, and listen to, stakeholders including clients, shareholders and our people • Remain highly focused on the core Funds Management business — Further stabilisati
Slide 25: Q&A
MAGELLAN FINANCIAL GROUP Q&A
Slide 26: Important Information
Important Information This presentation has been prepared by Magellan Financial Group Limited ACN 108 437 592 (‘Magellan’). This presentation contains summary information about Magellan and its related bodies corporate and is current as at 17 August 2022. While the information in this presentation h
Slide 27: www.magellangroup.com.au
www.magellangroup.com.au Phone: +61 2 9235 4888