WAM ACTIVE LIMITED — Call Transcript 2018

Mar 5, 2018

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Investor conference call 6 March 2018

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Disclaimer

This presentation has been prepared by MAM Pty Ltd and Wilson Asset Management (International) Pty Ltd (Wilson Asset Management) for use in conjunction with a verbal presentation and should be read in that context. This presentation Information for the graphs, charts and quoted indices contained in this presentation has been sourced from WAM Capital Ltd, WAM Leaders Ltd, WAM Research Ltd, WAM Active Ltd, WAM Microcap Ltd, Century Australia Investments Ltd and WAM Global Ltd unless otherwise stated. This presentation is proprietary to Wilson Asset Management. It may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the express consent of Wilson Asset Management. The information in this presentation is only intended for Australian residents. The purpose of this presentation is to provide information only and the contents of the presentation do not purport to provide investment or financial advice. We strongly suggest that investors consult a financial advisor prior to making any investment decision. The presentation does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making investment, financial or other decisions. The information is selective and may not be complete or accurate for your particular purposes and should not be construed as a recommendation to invest in any particular investment or security, or listed investment company offered by Wilson Asset Management. The information provided in this presentation is given in good faith and is believed to be accurate at the time of compilation. Neither Wilson Asset Management, WAM Capital Ltd, WAM Leaders Ltd, WAM Research Ltd, WAM Active Ltd, WAM Microcap Ltd, Century Australia Investments Ltd and WAM Global Ltd nor their respective directors or employees (Wilson Asset Management parties) make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information. To the extent permissible by law, Wilson Asset Management parties disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise). Performance figures quoted in the report are past performance. Past performance is not an indicator of future performance. None of the Wilson Asset Management parties guarantee or make any representation as to the performance of the listed investment companies, the maintenance or repayment of capital, the price at which shares may trade or any particular rate of return. This presentation includes “forward looking statements” within the meaning of securities laws of applicable jurisdictions. Forward looking statements can generally be identified by the use of the words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” “guidance” and other similar expressions. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of any Wilson Asset Management party, that may cause actual results to differ materially from those expressed or implied in such statement. Actual results, performance or achievements may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. Readers are cautioned not to place undue reliance on forward looking statements and Wilson Asset Management assumes no obligation to update such information. This presentation is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase, any securities and neither this presentation nor anything contained in it forms the basis of any contract or commitment. Without limiting this, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States.

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Making a difference

• Six LICs and almost $3 billion in shareholder capital for over 55,000 retail shareholders

• Nine investment professionals with combined investment experience of more than 100 years

• Proven investment approach that has delivered superior returns for over 20 years

• Committed to philanthropic and advocacy initiatives

• Creator and supporter of:

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Winner of the Listed Investment Companies category at the Professional Planner | Zenith Fund Awards 2014, 2015, 2016, 2017

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Investment and management team

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Geoff Wilson AO

Chairman

• & Portfolio Manager

Kate Thorley Chief Executive Officer

Chris Stott

Chief Investment Officer

& Portfolio Manager

Matthew Haupt CFA Portfolio Manager

Catriona Burns CFA Oscar Oberg CFA Portfolio Manager Portfolio Manager

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Martin Hickson John Ayoub Tobias Yao CFA Jesse Hamilton Portfolio Manager Senior Equity Analyst Senior Equity Analyst Chief Financial Officer

James McNamara Martyn McCathie Head of Corporate Affairs General Manager

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Investing in undervalued growth companies

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Focus on ASX listed small-to-mid cap industrial companies Research and market-driven processes

Focus on ASX listed small-to-mid cap industrial companies Market-driven process

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Focus on ASX top 200 listed companies Research and market-driven processes

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Focus on ASX listed micro-cap industrial companies Research and market-driven processes

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Focus on ASX top 300 listed companies Research, market and investment-driven processes

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Focus on small-to-mid cap international companies Research and market-driven processes

Focus on ASX listed small-to-mid cap industrial companies Research-driven process

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Investing in undervalued international growth companies Conference call: Thursday, 15 March at 11am (Sydney time) Register for updates at wilsonassetmanagement.com.au/global

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Gross assets

$1,363.9m

Share price[*] $2.46

Pre-tax net tangible assets

Fully franked interim dividend

$2.07 7.75 cents

Annualised dividend yield[*] Portfolio performance (p.a. since inception August 1999)

6.3%

17.7%

As at 31 January 2018

*As at 5 March 2018

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Half year highlights

• Record interim profit before tax of $119.4 million (+49.8% on 2016)

• 10.4% investment portfolio performance, outperforming the index

• • 9.1% increase in the pre-tax NTA for the six months to 31 December 2017

• 7.75 cents per share fully franked interim dividend.

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Share price[*] $1.16

Gross assets

$848.1m

Pre-tax net tangible assets $1.19 2.5 cents

Fully franked interim dividend

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Portfolio performance (p.a. since inception May 2016)

13.3% As at 31 January 2018 *As at 5 March 2018

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Half year highlights

• Record profit before tax increased 158.8% to $62.7 million

• Investment portfolio increased 11.9%, outperforming the index by 3.5%

• Fully franked interim dividend of 2.5 cents per share, an increase of 150%.

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Gross assets

$196.4m

Share price[*] $1.525

Pre-tax net tangible assets Maiden fully franked interim dividend

2.0 cents $1.37

Portfolio performance (since inception June 2017)

30.7% As at 31 January 2018 *As at 5 March 2018

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Half year highlights

• Operating profit before tax of $37.2 million

• Investment portfolio increased 27.2%, outperforming the index by 8.6%

• Maiden fully franked interim dividend of 2.0 cents per share.

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Gross assets Share price[*] $245.1m $1.55

Pre-tax net tangible assets Fully franked interim dividend $1.30 4.75 cents

Annualised dividend yield[*] Portfolio performance (p.a. since July 2010)

6.1%

18.8%

As at 31 January 2018 *As at 5 March 2018

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Half year highlights

• Interim profit before tax of $20.4 million

• 9.8% investment portfolio performance, outperforming the index

• 4.75 cents per share fully franked interim dividend

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Gross assets

$45.9m

Share price[*] $1.14

Pre-tax net tangible assets Fully franked interim dividend $1.11 2.85 cents

Annualised dividend yield[*] Performance (p.a. since inception January 2008)

5.0%

13.1%

As at 31 January 2018

*As at 5 March 2018

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Half year highlights

• Interim profit before tax up 85.0%

• 11.2% investment portfolio performance, outperforming the index

• Increased fully franked interim dividend of 2.85 cents per share.

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Options

ASX: WAAO Options exercise price: $1.14 Exercise by 6 April 2018 to receive the fully franked 2.85 cents per share interim dividend

Options expire on 17 September 2018

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Gross assets

$96.7m

Pre-tax net tangible assets $1.02

Share price[*] $0.96

Fully franked interim dividend

2.09 cents

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As at 31 January 2018 *As at 5 March 2018

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Half year highlights

• After-tax profit of $4.4 million

• Total comprehensive income up 8.6% to $6.4 million

• Fully franked 2.09 cents per share interim dividend

• Continued portfolio outperformance under Wilson Asset Management

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Equity market outlook

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The bull market is approaching nine years… its days appear numbered The key risk is a contraction in price-to-earnings multiples due to faster than expected interest rate increases as a result of stronger global macroeconomic conditions In early Feb, higher than expected US wage growth sparked expectations of higher inflation… which led to a rout on bonds and equites globally

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Reporting season

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Satisfactory reporting period Earnings estimates slightly upgraded Companies joining ‘second half club’ Reinvesting to drive growth

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What worked: Small-to-mid caps

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ASX
NEC
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What didn’t work: Small-to-mid caps

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ASX
IPH
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What worked: Micro-caps

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ASX LHC

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What didn’t work: Micro-caps

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ASX
NUH
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What worked: Large-caps

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ASX ORG

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What didn’t work: Large-caps

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ASX
AGL
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Ma 2018 Shareholder Presentations y

Launceston & Hobart	Canberra	Sydney	Brisbane
Friday 11 May 2018	Monday 14 May 2018	Tuesday 15 May 2018	Wednesday 16 May 2018
Launceston: Conference Centre	National Convention Centre	The Westin	Brisbane Exhibition &
50 Glen Dhu Street	31 Constitution Avenue	1 Martin Place	Convention Centre
South Launceston TAS 7249	Canberra ACT 2601	Sydney NSW 2000	Cnr Merivale & Glenelg Streets
Hobart: Wrest Point Hotel			South Bank QLD 4101
410 Sandy Bay Road, Sandy Bay
TAS 7005
Presentation:	Presentation:	Presentation:	Presentation:
11.00am – 12.30pm	10.00am – 12.00pm	10.00am – 12.00pm	10.00am – 12.00pm
Toowoomba	Perth	Adelaide	Melbourne
Thursday 17 May 2018	Monday 21 May 2018	Tuesday 22 May 2018	Thursday 24 May 2018
Fitzy’s	Perth Convention & Exhibition	Adelaide Convention Centre	Melbourne Convention Centre
153 Margaret Street	Centre	North Terrace	1 Convention Centre Place
Toowoomba City QLD 4350	21 Mounts Bay Road	Adelaide SA 5000	South Wharf VIC 3006
	Perth WA 6000
Presentation: 10.00am – 12.00pm	Presentation: 10.00am – 12.00pm	Presentation: 10.00am – 12.00pm	Presentation: 10.00am – 12.00pm	Page 29

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wilsonassetmanagement.com.au

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