Macquarie Group Limited Presentation to Debt Investors November 2014
Disclaimer The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie’s activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before actingonany information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financialadvice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Macquarie’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. Macquarie does not undertake any obligation to publicly release the result of any revisionstothese forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outsideMacquarie’s control. Past performance is not a reliable indication of future performance. Unless otherwise specified all information is for the half year ended 30 September 2014. Certainfinancial information in this presentation is prepared on a different basis to the Macquarie Group Limited Financial Report, which is prepared in accordance with Australian Accounting Standards.Where financial information presented within this presentation does not comply with Australian Accounting Standards,a reconciliation to the statutory information isprovided. This report provides further detail in relation to key elements of Macquarie Group Limited’s financial performance and financialposition.It also provides an analysis of the funding profile of the Groupbecausemaintaining the structural integrity of the Group's balance sheet requires active management of both asset and liability portfolios. Active management of the funded balance sheet enables the Group to strengthen its liquidity and funding position. Any additional financial information in this presentation which is not included in the Macquarie Group Limited Financial Report was not subject to independent audit or review by PricewaterhouseCoopers. PAGE 2
Agenda 01. Overview 02. Financial Results 03. FY15 Outlook 04. Capital and Funding 05. Appendices PAGE 3
01 Overview Presentation to Debt Investors November 2014
Macquarie overview Global provider of banking, financial advisory, investment and funds management services Macquarie Group Overview Global Locations North America Europe Middle East Asia Fixed Income, Currencies Macquarie Securities Group and Commodities 21 locations 12 locations 2 locations 14 locations Macquarie Corporate Asset Macquarie Capital Group Finance Banking Financial Services Macquarie Funds Group Latin America Africa Australia New Zealand 3 locations 2 locations 9 locations 3 locations Macquarie Group in Numbers Market 14,138 ~A$425bn APRA primary MBL $A678m Capitalisation of employees, assets under A/A2/A regulator for A$18.5bn operating in 28 in Net Profit for management as at MBL & MGL 1H14 credit rating countries 30 Sep 2014 as at 30 Sep 2014 Note: Unless otherwise noted, all data is as at 30 September 2014. PAGE 5
Group funding structure • MGL and MBL are the Group’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements • MBL provides funding to the Bank Group • MGL provides funding principally to the Non-Bank Group and limited funding to some MBL Group subsidiaries Debt and Macquarie Group Limited (MGL) Equity Hybrid Equity Debt and Equity Debt and Equity Macquarie Bank Limited Debt and (MBL) Hybrid Non-Bank Group Equity Bank Group PAGE 6
Macquarie has a long history of profitability 2.0 Hill Samuel UK 1.6 opens branch office in Sydney 1.2 Recession 0.8 Currency Crisis 100 Hills Motorway 0.4 Mortgage 0.0 Global real securitisation 80 estate crash 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Recession 60 Stock US banks capital London office market First listed losses opens Savings and loan crash property trust 40 Global debt crisis crisis MBL Enter stockbroking $A floated established US recession 20 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 ILFC Orion Securities GMAC CIT Systems Leasing ING IM Korea Thames Water Presidio Group Restructure GE Capital’s Premium Giuliani Capital Innovest Significant Market Disruption Funding business 2,000 REGAL Delaware FPK European Blackmont GFC rail leasing Sal Opp. Onstream Constellation 1,500 Tristone ING Acquired 9/11 1,000 Dot BT Asian Russian US Sydney SARS Com Australia Financial Debt Recession Airport MBL crash acquired Crisis Crisis listed 500 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15 PAGE 7
Evolution of business • Macquarie’s pre-tax earnings are almost identical with that achieved in FY08 FY08 FY14 Operating Income 8,248 8,132 Operating Expenses 6,043 6,026 NPBT 2,205 2,106 PAGE 8
Annuity style income growth Evolution of the business Annuity vs Market Facing Income FY08 Annuity vs Market Facing Income FY14 Market Annuity facing 32% 26% Market Annuity facing 74% 68% Annuity income represents the % contribution to net profit before tax after profit share for MFG, CAF and BFS. Market facing represents the % contribution to net profit before tax after profit share for MSG, MacCap and FICC. PAGE 9
About Macquarie Macquarie Funds Group Top 50 global asset manager with $A423b 1 of assets under management • Provides clients with access to a diverse range of capabilities and Macquarie Macquarie Investment Macquarie Specialised Infrastructure products, Management Investment Solutions and Real Assets including: AUM: $A114b 1 AUM: $A307b 1 AUM: $A2b 1 – Infrastructure and real asset management – Securities investment management – Tailored investment solutions over funds and listed equities No.1 No.2 alternative asset 8 Lipper Awards Asia New Stars No.1 Fund awarded Infrastructure manager for pension in 2014 across Best Global Equities Fund – Investor globally 2 funds globally 3 the US and Europe 4 Emerging & Regional Markets 4,5 1. As at 30 Sep 14. 2. First in Infrastructure Investor magazine’s 2013 ranking of ‘Top 30 investors’ by equity raised in the past 5 years, for the 4th consecutive year. 3. Ranking taken from ‘The Global Alternatives Survey’, published by Towers Watson in conjunction with the Financial Times using AUM data from the Global Billion Dollar Club, published by HedgeFund Intelligence, as at 31 Dec 13. 4. For more information about these awards, the issuers of these awards, their methodologies, and other important information about these awards, please visit: http://www.macquarie.com.au/mgl/au/mfg/mim/about-us/awards. 5. Lonsec/Money Management Fund Manager of the Years awards 2014 and Professional Planner / Zenith Fund Awards 2014. PAGE 10
Assets under management of $A425 billion 1 • AUM broadly in line with 31 Mar 14 with favourable currency and market movements, as well as fund raisings and investments in the infrastructure and real assets business offset by the impact of the formation of the Jackson Square Partners joint venture and the management buyout of the MIM Private Markets business $Ab 450 400 350 300 250 200 150 100 50 0 Mar 11 Mar 12 Mar 13 Mar 14 Sep-14 Fixed income Direct infrastructure Equities Cash Direct real estate Currency Other 1. As at 30 Sep 14. PAGE 11
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