Kingfish ASM Presentation 31 July 2019

ANNUAL MEETING
OF SHAREHOLDERS
KINGFISH LIMITED
31 July 2019

Agenda
•Preliminary matters
•Chair’s Overview
•Manager’s Review
•Q&A
•Annual Meeting Resolutions

Board of Directors
Kingfish Team
Alistair RyanCarmel Fisher
Andy Coupe
Carol Campbell
Sam Dickie
Snr Portfolio Manager
Zoie Regan
Snr Investment Analyst
Matt Peek
Investment Analyst
Wayne Burns
Corporate Manager

Chair’s Overview

Kingfish’s Investment Objectives
Achieve a high real rate of return, comprising both income
and capital growth within acceptable risk parameters
Access to a diversified portfolio of New Zealand quality,
growth stocks through a single tax-efficient vehicle
Absolute Returns
Diversified Portfolio

Corporate Governance
•Investment Committee
•Management Agreement Renewal
•Performance Fee Reduction

2019 Overview
Net profitDividendNAV per shareShare price
$47.1m
(2018: $36.3m)
11.76cps
(2018:11.28cps)
$1.57
(2018: $1.45)
$1.35
(2018: $1.31)
Total
shareholder
return*
Dividend return
Adjusted NAV
return*
Share price
discount to
NAV^
+13.5%
(2018: 12.0%)
+9.0%
(2018: +8.7%)
+17.6%
(2018: 14.7%)
13.1%
(2018: 9.7%)
*These metrics are Non-GAAP measures calculated in accordance with the methodology described in the Kingfish Non-GAAP
Financial Information Policy which is available on the Kingfish website.
^Share price discount/(premium) to NAV (including warrant price on a pro-rated basis).

Basic and Diluted Earnings per share
Earnings
per
Share
20192018201720162015
Basic
Earnings
per Share
(cents)
24.2419.6214.5016.719.85
Diluted
Earnings
per Share
(cents)
23.8119.5114.1316.438.99

Use of Shareholder Funds

Quarter 1, FY 2020
1 April –30 June 2019
Total shareholderreturn*
+10.1%
Adjusted NAV return*
+5.3%
NAV per share
$1.62
Share price
$1.44
Net profit
$18.8m
*These metrics are Non-GAAP measures calculated in accordance with the methodology described in the Kingfish Non-GAAP Financial
Information Policy which is available on the Kingfish website.

Warrants
•Warrant holders had the option to convert
all or some of their warrants into Kingfish
shares in July 2019
•41.9m warrants were exercised, providing
an additional $52.4m to invest in the
Kingfish portfolio

Sam Dickie
Senior Portfolio Manager
Manager’s Review

Which investment has performed the best over the last
15 years (since Kingfish’s inception)?
Let’s start with a quiz...

Agenda
1.Review of FY2019
2.Portfolio insights
3.How we think
4.Outlook

1.Review of FY2019

31 Mar 1830 Jun 1830 Sep 1831 Dec 1831 Mar 1930 Jun 19
How did the NZ market fare in FY2019?
Note: S&P/NZX50G index; Source: Bloomberg
FY2019 financial year
1
‘The Goldilocks economy’
2
Global growth scare
3
‘Dovish’ central banks

The impact of lower interest rates
+35.3%
Utilities
+21.6%
Property
+19.2%
S&P/NZX50G
+22.8%
Kingfish*
Notes: Utilities = S&P / NZX All Utilities Sector Index, Property = S&P / NZX All Real Estate Index, * Gross performance return
Source: Bloomberg
Total return for first half calendar 2019
(6 months)

+21.2%
+18.3%
+10%
+12%
+14%
+16%
+18%
+20%
+22%
Kingfish gross performance
return
S&P/NZX50G index
Fiscal year to 31 March 2019
Strong Manager performance FY2019

This has continued FY2020 year to date
+11.1%
+10.0%
+6%
+8%
+10%
+12%
Kingfish gross performance
return
S&P/NZX50G index
Fiscal year FY2020 to date as at 26 July 2019

Portfolio company performance
12 / 15
positive
-20%
0%
20%
40%
60%
80%
Fletcher Buiding
Pushpay Holdings
Summerset
Freightways
a2 Milk
Delegat
Port Of Tauranga
Ryman Healthcare
F&P Healthcare
Restaurant Brands
Auckland Airport
Infratil
Mainfreight
Meridian Energy
Vista
Portfolio company return (year to 31 March 2019*)
Note: * Pushpayand Fletcher Building from date of first investment, only shows positions held at 31 March 2019
Source: Bloomberg

2.Portfolio insights

What key changes have we made?
Decreases
(-8.5%)
Increases
(+14.5%)
Exits
(-9.0%)
Entries
(+3.5%)
LargerSmaller
Note: 31 March 2018 until present, logos show target weight changes of 1.5% or larger only

FY2019 external sales
New ZealandAustralia
EuropeThe Americas
Asia
What went especially well
NZ$2.95b
(+13%)
+8%
+14%+12%
+13%
Note: FY19-FY22 illustrative based on $70m revenue in FY22
Moviosales revenue
-
$10m
$20m
$30m
$40m
$50m
$60m
$70m
$80m
FY16FY17FY18FY19FY20FY21FY22

What went especially well
Investment Portfolio (by value)
“China is about to make
a second attempt to control
the daigoutrade with new rules”
“China's birth rate falls despite
repeal of one-child policy”
“A2 shifts from a brand to a category,
with Nestle and Mengniu now on board”
FY2018
Current
Renewable EnergyData/connectivity
AirportsRetirement and other

What went against us?
•Best in class, large growth runway, and
highly scalable business with operating
leverage surprising to the upside
•Company remains relatively young and
is transitioning to its next phase of growth
•Maintain small, nursery-sized position
-
50,000
100,000
150,000
200,000
250,000
FY15FY16FY17FY18FY19FY20
Note: FY20 from company release (midpoint)
Australian dwelling commencements

3.How we think

Key Theme 1:
Our culture is critical
•The most successful companies have
strong, positive cultures
•Core values in our culture:
–Totally honest with one another
–Learn from our mistakes
–Create repeatable processes
–Continuous improvement,
“build a learning machine”
–Focus on what is most important
•Delivering performance for Kingfish
investors

Jeff BezosSteve JobsBill GatesDon Braid
Key Theme 2:
Genuine long-term thinking is critical, yet rare

Key Theme 3:
Deep, differentiated proprietary research
Proprietary research +
Deep domain expertise
What we
strive for
What everyone does
Fundamental understanding
Strong understanding
Examples
•Subject matter experts
•Long term focus
(cumulative, enduring)
•Differentiated insights
(e.g. competitors, customers)
•Unique analysis

Key Theme 4:
When the story changes, change your mind
•Key performance metrics not improving
•Rolling-up dentists problematic
•Reduced confidence in management
•Poor execution in core business
•Evidence moat is less strong than we thought
•Original investment thesis plays out
•Growth strategy diminished
•Increasing long term challenges for core

4.Outlook

Outlook
•New Zealand economy is in a late cycle
slowdown, but still growing
•Laser-like focus on honing our culture and
process
•Think long term –and mean it!
•Deep, differentiated proprietary research
= Active portfolio management

$110,000
$86,000
$81,000
$70,000
$61,000
$55,000
$39,000
KFL NZ EquityBRK/A US EquityKO US EquityBMW GY EquityGS US EquityIBM US EquityVOD LN Equity
$25,000 invested in 2004 would be worth this much today...
Quiz results
Source: Bloomberg (in NZD), total shareholder returns with net dividends reinvested from 31 March 2004 to 19 July 2019,
amounts have been rounded to the nearest $1,000, Kingfish excludes warrants.

General Questions from
Shareholders
(not relating to resolutions)

Annual Meeting
2019 resolutions

2019 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 Alistair Ryan
–Re-elect Carmel Fisher
–Auditor remuneration
–Constitution changes

Proxy Count
Proxy votes to date: 15.6 million
ResolutionForAgainst DiscretionaryTotalAbstain
Re-elect Alistair
Ryan
14,768,712114,121732,59915,615,4323,000
Re-elect Carmel
Fisher
14,840,98072,305703,27215,616,5571,875
Auditor
remuneration
13,753,095201,6561,593,07315,547,82470,608
Constitution
amendments
13,685,203135,6391,521,26015,342,102276,330

Resolution 1
Re-election of Alistair Ryan
To re-elect Alistair Ryan as a Director of
Kingfish Limited

Resolution 2
Re-election of Carmel Fisher
To re-elect Carmel Fisher as a Director of
Kingfish Limited

Resolution 3
Auditor Remuneration
That the Board of Directors be authorised to
fix the remuneration of the auditor for the
ensuing year

Resolution 4
Constitution changes
To amend the existing Constitution of the
company as marked up in the Constitution
described in the Explanatory Notes to the
Notice of Meeting, and tabled at the Annual
Meeting of Shareholders on 31 July 2019.

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

---

Kingfish Limited
Phone +64 9 489 7094
Fax +64 9 489 7139
Private Bag 93502
Takapuna, Auckland

31 July 2019
Kingfish Limited Annual Meeting
Chair’s Address from Alistair Ryan
[Slide: Kingfish Limited Annual Meeting of Shareholders]
Welcome to the 15th Kingfish Annual Meeting of Shareholders. I am Alistair Ryan, Chair of Kingfish.
We are duly convened as a notice of meeting has been circulated to shareholders and I can confirm
that a quorum is present so I declare the meeting open.
Please note that the exits are at the back and front of the room. Please ensure you turn off your cell
phones.
At the conclusion of the meeting there will be a light lunch. We look forward to meeting many of you
after the meeting.
[Slide: Agenda]
To briefly cover off preliminary matters:
 The minutes of the 2018 annual shareholders’ meeting held on 27 July 2018 are available at
the registration desk and are also on the Kingfish website.
 The 2019 annual report has been circulated to shareholders – additional copies are available
at the registration desk.
Today I’ll give a brief update on the Kingfish 2019 financial year, and then Kingfish’s Senior Portfolio
Manager, Sam Dickie will review the Kingfish portfolio.
After the Manager’s Review, we will have a Q&A session, and will then move to the formal business
of the meeting. There are four resolutions for you to consider and vote on today, which are set out
in the notice of meeting.
[Slide: Introductions]
Let me introduce the front table.
Firstly, the directors. To my right is Carmel Fisher, then Andy Coupe and Carol Campbell.
Next to Carol is Sam Dickie, Senior Portfolio Manager for Kingfish. Next to Sam, is Wayne Burns, the
Corporate Manager for Kingfish.
Senior Investment Analyst, Zoie Regan and Investment Analyst, Matt Peek are also in the audience
today, please stand Zoie and Matt.
We are pleased to have representatives from our share registrar, Computershare, auditor,
PricewaterhouseCoopers, our tax agent, Deloitte and our legal advisors, Bell Gully in the audience
today.

[Slide: Chair’s Overview]
Shareholders, it is my pleasure to again present the Chair’s Overview at this meeting.
[Slide: Kingfish’s Investment Objective]
Before we begin the review of the year ended 31 March 2019, it is useful to refresh ourselves as to
the key investment objectives of Kingfish, namely:
 to achieve a high real rate of return, comprising both income and capital growth, within risk
parameters acceptable to the directors; and
 to provide access to a diversified portfolio of New Zealand quality, growth stocks through a
single tax-efficient investment vehicle.
Both of these objectives were achieved for the 2019 financial year.
[Slide: Kingfish’s Corporate Governance]
The Board is committed to strong governance principles and to overseeing the Manager’s portfolio
performance on behalf of shareholders. The Investment Committee generally meets twice a year,
on a six monthly basis, to hear from the Manager about what has gone well and what has
disappointed, and to engage in a comprehensive review session covering key performance metrics,
some of which we will go through on the following slides. The Board generally meets formally six
times per annum plus other meetings as required.
During the second half of the 2019 financial year the Board held additional meetings to review the
Kingfish Management Agreement, which the Board and the Manager renewed for a further five
years in late March 2019. As part of the renewal process, the Board negotiated a 33% reduction to
the performance fee earn rate (above the performance hurdle) from 15% to 10% together with the
introduction of a cap (1.25%) on the total performance fee amount in conjunction with moving to
the payment of any performance fee 100% in cash rather than 50% cash and 50% shares. The
changes took effect from 1 April 2019.
The Kingfish board wishes to acknowledge the positive response from Fisher Funds Management
Limited to enter into fee discussions and for agreeing to these changes which will be of significant
benefit for Kingfish shareholders in the circumstances where a performance fee has been earned.
There has been no change to the fulcrum fee, where the base management fee can be reduced on a
sliding scale below 1.25% to as low as 0.75% depending on the performance of the fund.
The combination of the fulcrum fee, (down to as low as 0.75% for lower performance) along with the
potential for the Manager to receive upside benefit for performance above the nominated threshold
level is a good fee combination.
The Kingfish result as already announced is a record net profit result for the 2019 financial year
which I will highlight further on the next slide and which Sam will discuss in more detail in the
Manager’s Review.

[Slide: 2019 Overview]
So how has 2019 treated shareholders?
• Kingfish delivered a very strong net profit of $47.1m for the 2019 financial year, well
ahead of last year’s net profit result of $36.3m.
• Total shareholder return was 13.5% for the period, just ahead of the 2018 total
shareholder return of 12.0%.

• Kingfish’s regular dividends continued to contribute to the total shareholder return
with 11.76 cents per share paid in dividends during the 2019 financial year, which is
equivalent to a dividend return of +9.0% (2018: +8.7%).

• Due to the strong performance in 2019, the overall net asset value (NAV) per share
grew from $1.45 (as at 31 March 2018) to $1.57 (as at 31 March 2019) – even after
dividends were paid out.

• The adjusted NAV return was +17.6% for the period which represents the net return to
an investor after fees and tax, significantly ahead of the 2018 result of 14.7%. The
increase in return was largely driven by stronger portfolio performance.

• Over the 2019 financial year, the share price to NAV discount widened from 9.7% (31
March 2018) to be 13.1% at 31 March 2019. However, for a large part of the year the
discount was below 8%. Since year end, the share price to NAV discount has continued
to fluctuate.

• The Board has a number of initiatives in place to help manage the share price to NAV
discount including the buyback programme. Over the 12 months to 31 March 2019,
395k Kingfish shares were purchased under the buyback programme when the shares
were trading at sufficiently deep discounts. Shares purchased under the buyback
programme are held as treasury stock and primarily utilised under the dividend
reinvestment plan.

[Slide: Basic and Diluted Earnings per Share]
• Looking back over the last five years there has been steady growth in the Earnings per
Share.

• We know however that behind these steady growth statistics there has certainly been a
degree of volatility.

• During the 2019 financial year the steady first half of the year (to 30 September 2018)
produced a net profit of $31m, which was almost completely reversed in the extremely
volatile market conditions that prevailed during the quarter ending December 2018.

• The last quarter of the financial year to March this year saw yet another steady
recovery, with the Kingfish portfolio gaining $38m (NPAT).

[Slide: Use of Shareholder Funds]
The chart shows the Kingfish NAV of $276m (as at 31 March 2018) increased $34m to $310m (as at
31 March 2019).
The movements during the year as represented by the blue and yellow columns were:
- plus $47.1m net profit,
And movements due to our capital management initiatives:
- less $23m dividends paid,
- adding back $8m for dividends reinvested by shareholders, and
- less $0.5m for buybacks.

As per the terms of the Management Agreement, Kingfish issued the Manager 1,409,150 shares for
consideration of $2,211,942 in relation to the performance fee payment obligations.

[Slide: Quarter 1, 2019]
The first quarter of Kingfish’s 2020 financial year has been relatively settled and markets have risen.
This slide provides a snapshot of the first three months of the current financial year to 30 June 2019:
• Total shareholder return for the quarter was +10.1% - driven by share price increasing
from $1.35 (31 March) to $1.44 (30 June).

• As at 30 June, the NAV per share was $1.62 ($1.57 as at 31 March) – an increase of 5
cents in three months and after a dividend of 3.07 cents per share paid on 27 June.

• The adjusted NAV return for the first three months of the 2019 financial year was
+5.3% (which represents the net return to an investor after fees and tax).

• This performance to date, translates to a net profit of $18.8m for the three months to
30 June 2019.

[Slide: Warrants]
• Earlier this month, Kingfish warrant holders had the option to convert all or some of
their warrants into ordinary Kingfish shares at an exercise price of $1.25.
• At the time, Kingfish shares were trading on market at $1.45.
• 87% of warrant holders exercised their warrants, which has provided an additional
$52.4m to invest in the Kingfish portfolio, and has been invested in existing Kingfish
portfolio stocks.

Closing remarks
In closing, on behalf of the Board, thank you shareholders for your continued support of Kingfish. I
will now hand over to Sam Dickie, Senior Portfolio Manager of Kingfish.
ENDS