WAM ACTIVE LIMITED — AGM Information 2020

Nov 25, 2020

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Annual General Meeting Chairman’s Address

26 November 2020

Introduction and welcome

Good afternoon and welcome to the 13[th] WAM Active Limited Annual General Meeting (AGM). During the coronavirus pandemic, we are focused on the health of our shareholders, and therefore this meeting is being held virtually. We recognise the limitations of holding AGMs in this format, and we look forward to seeing you all again in person when it is safe to do so.

I would like to begin by acknowledging the Traditional Owners of the land on which I am speaking to you from today, the Gubbi Gubbi people and pay my respects to Elders past and present. As we are unable to meet together, I also acknowledge the traditional custodians of the land from which our shareholders and fellow directors are currently viewing and listening to today’s AGM.

Wunya Ngulum. Welcome to all our shareholders – thank you for joining us and for your continued support of WAM Active.

I am Geoff Wilson, Chairman of the Board of Directors. I am joined today by my fellow Board members, Kate Thorley, Karina Kwan and Emma Rugge-Price. Scott Whiddett, a representative from WAM Active’s auditor, Pitcher Partners, will be available to address any questions relating to the Company’s financial statements.

FY2020 in review

Equity market and company overview

Since listing in 2008, we have provided shareholders with exposure to active trading strategies aimed at delivering risk-adjusted returns over the long term. WAM Active has achieved an investment portfolio return of 11.0% per annum since inception in 2008, with less volatility than the market as measured by its standard deviation. We remained focused on taking the least risk possible to protect shareholders’ capital during a highly volatile period for the Australian equity market. The S&P/ASX All Ordinaries Accumulation Index fell 7.2% in the 12 months to 30 June 2020 while the investment portfolio only declined 0.3%. We were pleased with the relative performance in the financial year dominated by bushfire, drought, the coronavirus pandemic and geopolitical turmoil. Our flexible mandate allowed us to preserve shareholder capital during this period, with an average cash holding of 20.2% over the year.

Financial results

WAM Active reported an operating loss before tax of $1.4 million (2019: operating profit before tax of $0.4 million) and an operating loss after tax of $0.8 million (2019: operating profit after tax of $0.7 million), mainly due to the decline in the investment portfolio over the period. The after tax figure was boosted by a $0.6 million income tax benefit, primarily delivered through franking credits received on franked dividend income from investee companies and the tax benefit on the operating loss for the period.

Total shareholder return and share price premium to NTA

The total shareholder return (TSR) for WAM Active for the year to 30 June 2020 was impacted by the investment portfolio performance of -0.3% during a highly volatile period for equity markets, in addition to the decline in the share price discount to net tangible assets (NTA). As at 30 June 2020, the share price discount to NTA was 2.9% (2019: discount of 4.1%), with TSR of -4.1% for the year. The S&P/ASX All Ordinaries Accumulation Index fell 7.2% for the period. This measure does not value the potential benefit of franking credits distributed to shareholders through fully franked dividends.

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info@wilsonassetmanagement.com.au Page 1 of 4 Level 26, Governor Phillip Tower, 1 Farrer Place Sydney NSW 2000 Australia

wilsonassetmanagement.com.au Telephone. + 61 2 9247 6755 Fax. +61 2 9247 6855

ABN 49 126 420 719

On 25 November 2020, the share price traded at a 17.2% premium to NTA. Throughout its 12 year history, the Company’s share price has traded at both premiums and discounts to its NTA.

Fully franked dividends since inception

The Board declared a fully franked full year dividend of 6.0 cents per share, which represents a 6.7% yield on the 30 June 2020 share price of $0.90 per share. Since inception, the Company has paid 74.7 cents per share in fully franked dividends to shareholders.

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Cents per share
10.0
8.0
6.0
4.0
2.0
0.0
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Fully franked dividends Return of capital
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Making a difference

Wilson Asset Management, WAM Active’s Investment Manager, is passionate about making a positive difference to our shareholders and the community. In the 2020 financial year, the team worked towards this goal through philanthropy, advocacy and shareholder engagement.

Philanthropy

Wilson Asset Management created and is the lead supporter of the first listed investment companies to deliver both investment and social returns: Future Generation Australia (ASX: FGX) and Future Generation Global (ASX: FGG). Wilson Asset Management advocates and acts for retail investors, is a member of the global philanthropic Pledge 1% movement and is a significant funder of many Australian Charities. All philanthropic investments are made by the Investment Manager.

We raised $1 million for Australians impacted by bushfires and drought, matching shareholders' donations to the Foundation for Rural and Regional Renewal (FRRR), our major philanthropic contribution during FY2020. More recently, we donated more than $100,000 to the GO Foundation, which creates opportunities for Indigenous youth through education, as part of a 10 year commitment that will total $1 million. We made a number of other donations, including through our WAMI Gives initiative, which provides all team members provided with $10,000 each year to donate to charities of their choice. In the 2020 financial year, our 36 team members donated to 67 different charities.

Advocacy

One area of passion for the team at Wilson Asset Management is levelling the playing field for all investors, and we have been active in this space for a long time. In a column for the Australian Financial Review this May, Chief Executive Officer Kate Thorley advocated for retail investors’ equal participation in capital raisings. A tidal wave of capital raisings hit equity markets as companies looked to strengthen their balance sheets as government mandated lockdowns set in earlier this year. Twelve years since we last experienced this trend, in the wake of the Global

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info@wilsonassetmanagement.com.au Level 26, Governor Phillip Tower, 1 Farrer Place Sydney NSW 2000 Australia

wilsonassetmanagement.com.au Telephone. + 61 2 9247 6755 Fax. +61 2 9247 6855

ABN 49 126 420 719

Financial Crisis, retail investors are still locked out of discounted capital raisings open only to wholesale investors. We find this unacceptable and are currently lobbying the Federal Government to make changes. We are preparing to lodge a submission on this matter to the Senate Select Committee on Financial Technology and Regulatory Technology.

We also participated in the public debate and formal consultation regarding the proposal to reduce Board transparency and accountability by permanently removing the requirement for AGMs to be conducted in person. We are firmly opposed to this change as it would undermine AGM transparency and accountability, primarily impacting retail shareholders. I would like to thank all shareholders for their support in advocating for retail shareholders' rights and those of you who sent a submission to Treasury. We were pleased to see Treasurer Josh Frydenberg endorse our preferred hybrid model for AGMs, ensuring the requirement for AGMs to be conducted in person and virtually. We look forward to holding our AGMs in person when it is safe to do so.

Shareholder engagement

Shareholders are the owners of WAM Active. Our responsibility is to manage the Company on their behalf and be available to report to them on a regular basis. For the first time in more than 20 years, we were unable to take to the road and meet with our shareholders across the country and we have missed catching up with you all, over a cup of tea, at our Shareholder Presentations. In May, we launched a virtual alternative to our Shareholder Presentations, WAM Vault. Our second instalment, The Case for Optimism, was released on 20 November 2020. If you have not yet done so, we encourage you to visit wilsonassetmanagement.com.au/vault to watch, read and listen to the engaging and insightful conversations between Oscar Oberg and Tobias Yao, Catriona Burns and Nick Healy, Matthew Haupt and John Ayoub, Dania Zinurova, Kate Thorley and myself.

We encourage all shareholders to utilise our proactive approach to keeping you informed, particularly by accessing the:

• Updates from our Lead Portfolio Managers;

• Investment team insights at WAM Vault: wilsonassetmanagement.com.au/vault ;

• Regular roundtables with our shareholders and planners, advisers and their clients;

• NTA reports and investment updates;

• Shareholder Q&A calls;

• Presentations and lunches across Australia; and

• Annual and interim results announcements.

We aim to provide valuable and insightful information and welcome all feedback on how we can improve our communication and engagement. Please contact myself or our Head of Corporate Affairs James McNamara on (02) 9247 6755 or email us at info@wilsonassetmanagement.com.au with any questions or feedback.

FY2021 update and outlook

Company update

WAM Active has achieved a strong start to FY2021. Through our continued focus on market mispricing in the Australian equity market, the Company’s investment portfolio has increased 11.4% in the financial year to 30 October 2020. In the calendar year to date, WAM Active’s investment portfolio has increased 1.2% while holding on average 15.0% cash. As at 31 October 2020, the Company had 8.5 cents per share available in its profits reserve, after payment of the FY2020 fully franked final dividend of 3.0 cents per share.

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wilsonassetmanagement.com.au info@wilsonassetmanagement.com.au Telephone. + 61 2 9247 6755 Level 26, Governor Phillip Tower, 1 Farrer Place Fax. +61 2 9247 6855 Sydney NSW 2000 Australia

ABN 49 126 420 719

Equity market outlook

After a strong start to the financial year, global equities paused their positive run in September, driven by a resurgence of the coronavirus and uncertainty surrounding the US election. In November, global equity markets surged, as clarity on the US election outcome and progress on the coronavirus vaccines provided cause for optimism. We believe the election of Joe Biden is positive in terms of social, geopolitical, and, potentially, economic outcomes; it is worth noting that historically the US equity market has performed better under a Democratic President. The conditions for equity markets remain highly accommodative given the sustained commitment of central banks to stimulate economies, and Australia has responded to the pandemic with strength. We are cautiously optimistic as we look towards 2021 and believe that small and mid-cap companies, particularly in the retail, travel, agricultural, building materials and automotive sectors, are well-positioned to benefit from the reopening of the Australian and global economies.

Thank you

I would like to close by thanking all 1,965 loyal WAM Active shareholders. We greatly appreciate your support at all times; in challenging periods, as this year has been, that support is all the more profound. I would also like to thank the Wilson Asset Management team, who worked tirelessly to the benefit our shareholders, as well as my fellow Board members, whose guidance and expertise make an invaluable contribution.

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Page 4 of 4

info@wilsonassetmanagement.com.au Level 26, Governor Phillip Tower, 1 Farrer Place Sydney NSW 2000 Australia

wilsonassetmanagement.com.au Telephone. + 61 2 9247 6755 Fax. +61 2 9247 6855

ABN 49 126 420 719