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Marlin Global Limited AGM Information 2020

Oct 29, 2020

66231_rns_2020-10-30_0196cd7c-341b-4c91-a4e0-1a8a2cc8fcbd.pdf

AGM Information

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MARLIN GLOBAL LIMITED Annual Meeting of Shareholders 30 October 2020

Agenda

  • Preliminary matters

  • Chair’s Overview

  • Manager’s Review

  • Q&A

  • Annual Meeting Resolutions

ONLINE Attendees – Question Process

  • When the Question function is available, the Q&A icon will appear at the top of the app.

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  • To send in a question, simply click in the ‘Ask a question’ box, type your question and the press the send arrow

  • Your question will be sent immediately for review

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Board of Directors

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Alistair Ryan Carmel Fisher Andy Coupe Carol Campbell

Marlin Team

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Ashley Gardyne Chris Waters Harry Smith Wayne Burns Snr Portfolio Snr Snr Investment Corporate Manager Investment Analyst Manager Analyst

Chair’s Overview

  • July 2019 – January 2020

  • February – March 2020

  • April – September 2020

Marlin’s Investment Objectives

Absolute Returns

Achieve a high real rate of return, comprising both income and capital growth within acceptable risk parameters

Diversified Portfolio Access to a diversified portfolio of international quality, growth stocks in a single tax-efficient vehicle

Corporate Governance

  • Board meetings

  • Investment Committee meetings

  • Audit and Risk Committee meetings

2020 Overview

Net profit Dividend NAV per share Share price
$22.6m
(2019: $8.4m)		 7.90cps
(2019: 7.87cps)		 $1.03
(2019: $0.96)		 $0.98
(2019: $0.90)
Total shareholder
return		 Dividend return Adjusted NAV
return		 Share price
discount to NAV
+15.5%
(2019: 15.5%)		 +8.8%
(2019: +9.2%)		 +16.6%
(2019: 6.8%)		 2.9%
(2019: 6.2%)

*These metrics are Non-GAAP measures calculated in accordance with the methodology described in the Marlin Non-GAAP Financial Information Policy which is available on the Marlin website.

^Share price discount to NAV (including warrant price on a pro-rated basis).

2020 Overview- Continued 2020 Overview- Continued 2020 Overview- Continued 2020 Overview- Continued
For the year ended
30 June		 12 months **3 years (annualised) ** 5 years (annualised)
**Adjusted NAV return *** +16.6%
(2019: +6.8%)		 +15.3% +10.8%
**Gross Performance *** +19.8%
(2019: +10.1%)		 +18.6% +14.5%
Benchmark Index ^ +0.04%
(2019: +2.1%)		 +6.1% +6.5%

*These metrics are Non-GAAP measures calculated in accordance with the methodology described in the Marlin Non-GAAP Financial Information Policy which is available on the Marlin website.

  • ^ Benchmark Index: World Small Cap Gross Index until 30 October2015 & S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD) from 1 October 2015

Movements in Shareholders’ Funds

12 Months to 30 June 2020 ($m)

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Quarter 1, 2021

30 June – 30 September 2020

Total shareholder return Net profit +16.1% $11.6m NAV per share Adjusted NAV Return +7.4% $1.08 Share price Benchmark Index +5.7% $1.10

.

Marlin Warrants - MLNWD

  • Final Exercise Price $0.86 – announced via

NZX and the Marlin website in late September

  • Exercise Letter / Exercise Form / Marlin

Warrant Website Details sent to all MLNWD warrant holders in early October

  • Exercise Date - 6 November 2020

Manager’s Review Ashley Gardyne (Senior Portfolio Manager)

Agenda

  1. Review of markets in 2020

2. Company performance

  1. Portfolio activity and positioning

  2. Outlook

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Why Marlin
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1. Review of markets in 2020

A dramatic year in financial markets

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27% decline on COVID concerns

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MSCI World Index (NZ$) 27%

Jul-19

Oct-19

Jan-20

Apr-20

Partial recovery by June

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-11%
MSCI World Index (NZ$)
✓ Monetary policy
✓ Fiscal stimulus
✓ Covid curve flattened
Why Marlin
× Job losses and sluggish
economy
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Jul-19

Oct-19

Jan-20

Apr-20

The recovery has not been uniform

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-57%
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-57% Figures show % change from 12 Feb to 30 June 2020

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+28%
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+187%
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Why Marlin
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2. Company Performance

Strong performance in a difficult market

Marlin gross portfolio performance vs Global benchmark (%)

20% 0%

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Marlin Benchmark*

  • S&P Large Mid Cap/S&P Small Cap Index (hedged 50% to NZD)

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Why Marlin
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Stock performance by company

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70
50
30 Marlin gross return
10
%
-10
-30
Total Shareholder Return (%)
Why Marlin
-50 Marlin portfolio companies
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Separating the winners and losers

What drove stock price performance in 2020?

  • Business quality, profitability and balance sheet strength

  • Structural growth companies and Covid-beneficiaries

  • Dynamic companies that adapted

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Why Marlin
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Separating the winners and losers

What drove stock price performance in 2020?

Adidas’s digital pivot

  • Business quality, profitability and balance sheet strength

  • Structural growth companies and Covid-beneficiaries

  • Dynamic companies that adapted

Why Marlin

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- Primed to be a structural winner

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Online retail penetration
(% of US retail sales)
27%
16%
6%
Why Marlin
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Apr 2020
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3. Portfolio activity and positioning

Managing the portfolio through a crisis

  • Safety first approach

New portfolio additions

  • Portfolio high grading

  • Opportunistic acquisitions

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8
6
5 5
Post-covid
1
Pre-covid
2017 2018 2019 2020
Why Marlin
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Selected portfolio changes - Additions

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  • World’s largest coffee chain

  • 40% market share in the US

  • Compelling growth story in China

  • Attractive store economics

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  • One of largest hotel brands globally

  • Branded chains taking share

  • Asset-light and cash generative model

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  • Leading aerospace parts manufacturer

  • 1 share in non-OEM aftermarket parts

  • Track-record of accretive acquisitions

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  • Digital payment provider in Brazil

  • Taking share from legacy players

  • Digital penetration low but increasing

  • Well-run founder-led business

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  • 1 IT research company

  • Limited competition

  • Large underpenetrated market

  • Growing into adjacent verticals

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  • Leading hard flooring retailer

  • Strong value proposition for customers

  • Taking share in a fragmented industry

  • Long runway for new store openings

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- Early stage category killer

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  • Bunnings scale stores, but only sell hard flooring

  • Taking market share in highly fragmented industry

  • Unique business model and direct sourcing edge

  • Significant growth ahead – potential to nearly quadruple store footprint

Store count

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400+
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120
101
83
72
2016 2017 2018 2019 Potential
Why Marlin
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Building an all-weather portfolio

Economic scenarios Covid reopening scenarios Economy muddles Vaccine soon and old Structural change in Strong economy Deep recession through habits return behaviour Cyclicals outperform Tech & growth stocks Defensives outperform Travel, aerospace, Ecommerce, digital (housebuilders, outperform (consumer staples, utilities) hospitality payment, cloud, WFH industrials, banks)

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Diversification across sectors, cyclicals / defensives and covid exposure helps reduce exposure Why Marlin Why Marlin to any one economic scenario

4. Outlook

Outlook: weak economy offset by stimulus

  • Covid-19 will continue to drag on economies and create market volatility

  • Coordinated fiscal and monetary stimulus provides an offset

  • Low interest rates likely to persist

  • Supportive for share markets, although valuations are elevated

  • Creates a world of lower growth, interest rates and returns

Active management increasingly important in world of lower growth and market returns

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Why Marlin
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General Questions from Shareholders (not relating to resolutions)

Online Attendees – Voting Process

  • When the poll is open, the vote will be accessible by selecting the voting icon at the top of the screen

  • • To vote simply select the direction in which you would like to cast your vote, the selected option will change colour.

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  • There is no submit or send button, your selection is automatically recorded.

Annual Meeting 2020 resolutions

2020 Annual Meeting Resolutions

  • Introduce and propose

  • Discussion, questions

• Enter your vote on voting paper and lodge your voting paper at end of resolutions

Matters of Business

  • Annual Report

  • Resolutions:

– Re-elect Andy Coupe

  • Auditor remuneration

Resolution 1 Re-election of And Cou e y p

To re-elect Andy Coupe as a Director of Marlin Global Limited

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Resolution 2 Auditor Remuneration

That the Board of Directors be authorised to fix the remuneration of the auditor for the ensuing year

Conclusion

  • Complete and sign voting paper

  • Voting papers in the voting boxes

  • If you need a voting paper please see Computershare

  • Results to NZX

Thank You

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