Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — FY2015 Earnings Presentation
23 slides from Magellan Financial's earnings presentation, Aug 12, 2015
Slide 1: Final Results for the year ended 30 June 2015
For personal use only Magellan Financial Group Limited Final Results For the year ended 30 June 2015 Hamish Douglass | CEO & Chief Investment Officer | 12th August 2015
Slide 2: Magellan Financial Group Overview
Magellan Financial Group Overview [2] For personal use only • For the year ended 30 June 2015: – Net profit after tax $174.3 million, 110% increase1 – EPS (diluted) of 101.8 cents per share, 108% increase1 – Dividends (interim & final) of 74.9 cents per share fully franked, 96% increase1 • As at 30
Slide 3: Magellan Financial Group Overview (cont.)
Magellan Financial Group Overview (cont.) [3] $ million 30 Jun 2015 30 Jun 2014 % change For personal use only Management, performance and services fees 254.3 138.6 83% Other revenue 30.6 9.5 222% Revenue 284.9 148.1 92% Expenses (54.6) (37.6) 45% Profit before tax expense 230.3 110.5 108% Tax expen
Slide 4: Magellan Financial Group Overview (cont.)
Magellan Financial Group Overview (cont.) [4] • Two business activities For personal use only – Magellan Asset Management (Funds Management Business) – Principal Investments • Continuing dividend policy 75%-80% of net profit after tax of the funds management business1 • Pay dividends promptly – 26 A
Slide 5: Funds Management Business
Funds Management Business [5] $ million 30 Jun 2015 30 Jun 2014 % change Revenue For personal use only Management fees 203.5 132.6 53% Performance fees 43.4 2.1 nm Services fees 7.9 3.9 100% Interest/other income 1.1 0.5 115% 255.9 139.1 84% Expenses Employee expense 31.2 23.6 32% 1 US Marketing/con
Slide 6: Scalable Business Model
Scalable Business Model [6] Funds Management Business For personal use only $M 300 90 % 200 60 100 30 - 0 2010 2011 2012 2013 2014 2015 Total Revenue - LHS Cost/Income (ex Perf Fees) - RHS
Slide 7: Funds Management Business - Highlights
Funds Management Business - Highlights [7] For personal use only • Solid investment performance1 for the year ended 30 June 2015 – Magellan Global Fund 29.5% (outperforming MSCI World NTR Index by 4.9%) – Magellan Infrastructure Fund 12.3% (outperforming Global Infrastructure Benchmark2 by 4.8%) • L
Slide 8: Funds Under Management Summary
Funds Under Management Summary [8] 30 June 2015 30 June 2014 30 June 2013 $ million For personal use only Retail 9,809 6,693 4,542 Institutional - Australia/NZ 3,871 2,889 2,424 - North America 8,462 4,690 2,891 - Rest of World 14,239 9,241 4,838 26,572 16,820 10,153 Total FUM 36,381 23,513 14,695 %
Slide 9: Well-balanced business
Well-balanced business [9] For personal use only Funds Under Management1 Base Fees2 27% 43% 57% 73% Retail Fees Institutional Fees Retail FUM Institutional FUM Notes 1. FUM split is as at 30 June 2015. 2. Base Fees are Management and Services fees for the 12 months to 30 June 2015 and exclude Perfor
Slide 10: Institutional Client Diversity
Institutional Client Diversity [10] For personal use only 12.0% % of Total Management & Service Fees 1 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Top 30 Institutional Clients Cumulative Total Management and Services Fees 1 Top Inst
Slide 11: Employee Summary
Employee Summary [11] Staff 30-Jun-15 30-Jun-14 30-Jun-13 For personal use only Investment team Portfolio Managers/Analysts 29 22 20 Traders 3 2 2 32 24 22 Governance & Advisory1 4 1 - Distribution 21 15 14 Risk, Compliance & Company Secretarial 5 3 1 Business Support & Control 23 18 16 Administrati
Slide 12: Retail Business – well positioned to grow
Retail Business – well positioned to grow [12] For personal use only Well positioned to benefit from compulsory superannuation trends: • Independent Financial Advice firms – Relationships with over 500 firms1 • Bank/AMP aligned advice markets – Strong relationships and representation with 4 of the t
Slide 13: Retail Business – well positioned to grow (cont.)
Retail Business – well positioned to grow (cont.) [13] For personal use only • ASX quoted funds – Magellan Global Equities Fund (MGE) launched in March 2015 – Magellan Global Equities Fund (Currency Hedged) (MHG) launched in August 2015 • Strong Adviser Support – Total advisers using Magellan Global
Slide 14: Retail Business – Magellan Global Equities Fund
Retail Business – Magellan Global Equities Fund [14] For personal use only 100 5,000 $M 80 4,000 60 3,000 40 2,000 20 1,000 - - Mar-15 Apr-15 May-15 Jun-15 Jul-15 Net Monthly Flows - LHS Number of Unit Holders - RHS
Slide 15: Retail Business
Retail Business [15] Funds Under Management and Net Inflows • Total Retail FUM up by 47% to $9.8 billion at 30 June 2015 (30 June 2014: $6.7 billion) For personal use only • Total Net Retail Inflows for the year to 30 June 2015: $1.4 billion (year to 30 June 2014 was $2.1 billion) • Average Monthly
Slide 16: Institutional Business
Institutional Business [16] For personal use only • Total institutional FUM up 58% to $26.6 billion at 30 June 2015 (30 June 2014: $16.8 billion) – Global equities $21.9 billion (82%) – Infrastructure $4.7 billion (18%) • More than 100 institutional clients1 at 30 June 2015 • Net inflows for the yea
Slide 17: Institutional Business cont.
Institutional Business cont. [17] Institutional Flows: For personal use only • Lumpy and difficult to predict timing of new business • Gross outflows have averaged 0.5% of monthly institutional FUM (range 0.1% to 1.6%) • Small institutional net outflows in April and June 2015 • Institutional outflow
Slide 18: Institutional Business cont.
Institutional Business cont. [18] For personal use only • Australia/New Zealand – FUM is $3.9 billion at 30 June 2015 (30 June 2014: $2.9 billion) • United States: – FUM is $7.3 billion at 30 June 2015 (30 June 2014: $4.0 billion) – Net inflows of $1.8 billion for the year to 30 June 2015 • United K
Slide 19: Investment Performance
Investment Performance [19] For the periods to 30 June 2015 For personal use only Since 1 Year 3 Years 5 Years Inception (%) (% p.a.) (% p.a.) (% p.a.)1 Magellan Global Fund ($A) 29.5 26.4 19.6 12.0 MSCI World NTR Index ($A) 24.6 25.8 15.3 4.5 MSCI World Minimum Volatility NTR Index ($A) 30.6 22.7 1
Slide 20: Global Equity Peer Comparison
Global Equity Peer Comparison [20] Investment Performance for the period to 30 June 2015 in USD 1 year (%) 3 years (% p.a.) 5 years (% p.a.) For personal use only Magellan Global Equity 7.4 16.9 19.4 Independent Franchise Partners Global Franchise 7.0 15.4 18.2 BLS Invest Global Equities 3.0 15.7 17
Slide 21: Principal Investments
Principal Investments [21] For personal use only • Principal Investments include investments in Magellan Funds, listed shares, a small number of unlisted investments and surplus cash after allowing for the Group’s working capital requirements. • Board set a pre-tax return hurdle of 10% p.a. (over bu
Slide 22: Principal Investments cont.
Principal Investments cont. [22] For personal use only Investment ($ million) 30 June 2015 30 June 2014 Cash 2.1 0.3 Magellan Unlisted Funds1 127.6 115.2 Magellan Global Equities Fund2 50.2 - Listed shares 11.6 10.1 Other3 12.4 3.8 Total 203.9 129.4 Deferred tax liability4 (14.5) (9.7) Net principal
Slide 23: Important Information
Important Information [23] This presentation has been prepared by Magellan Financial Group Limited (‘MFG’). For personal use only While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the
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