Annual Results Webcast Presentation

27 July 2021


The Manager
ASX Market Announcements
Australian Securities Exchange
Exchange Centre
Level 4
20 Bridge Street
Sydney NSW 2000

Electronic Lodgement



Australian Foundation Investment Company Limited
Annual Results Webcast Presentation

Please find attached the presentation to be given at the Shareholder Teleconference/
Webcast being held today, Tuesday 27 July 2021 at 3.30 p.m. (AEST)

To join the webcast please use the below link.

Webcast Link: https://edge.media-server.com/mmc/p/awoqj86r (This link will open
directly in your internet browser).

Alternatively to join via the teleconference, please use the details below:

Telephone: 1800 148 258 (free call within Australia)
1300 157 230 (mobile, free call within Australia)
+61 2 8038 5271 (outside Australia)
Conference ID: 1659653

Joining the Conference Call:

1. In the 10 minutes prior to the call start time, call the appropriate dial-in number.
2. Enter the Event Plus passcode 1659653, followed by the pound or # key and leave
any information requested after the tone. You will be joined automatically to the
conference. During the call you can indicate if you would like to ask a question by
pressing (*1) on your telephone keypad and wait for your name to be announced.


International Dial-In Numbers will be available via the Company’s website.

The shareholder presentation material made available through the Company’s website
www.afi.com.au.

ASX Release authorised by the Company Secretary, Matthew Rowe.

Full YearResults Presentation
27 July 2021

Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their
related entities and each of their respective directors, officers and agents (together the Disclosers) have
prepared the information contained in these materials in good faith. However, no warranty (express or
implied) is made as to the accuracy, completeness or reliability of any statements, estimates or opinions
or other information contained in these materials (any of which may change without notice) and to the
maximum extent permitted by law, the Disclosers disclaim all liability and responsibility (including,
without limitation, any liability arising from fault or negligence on the part of any or all of the Disclosers)
for any direct or indirect loss or damage which may be suffered by any recipient through relying on
anything contained in or omitted from these materials.
This information has been prepared and provided by AICS. To the extent that it includes any financial
product advice, the advice is of a general nature only and does not take into account any individual’s
objectives, financial situation or particular needs. Before making an investment decision an individual
should assess whether it meets their own needs and consult a financial advisor.
Disclaimer
2

Agenda
•Overview and Objectives – Mark Freeman
•Financial Year in Summary– Andrew Porter
•Portfolio –David Grace and Nga Lucas
•Outlook –Mark Freeman
•Questions
3

Our Company
Invests in Australian and New Zealand companies –looking for quality for the long term.
Largest listed investment company on the ASX at $9.1bn (also listed on NZX), 160k shareholders, full transparency
from being listed, independent Board of Directors providing strong governance.
Shareholders own the ‘management rights’ to the portfolio – no external funds management business deriving
an income from the portfolio.
Management expense ratio of 0.14% with no performance fees.
Long term investor with low turnover –tax has less of a negative impact on shareholder returns compared with high
turnover funds.
Long history of growing/stable fully franked dividends.
Team manages three other funds –Djerriwarrh, Mirrabookaand AMCIL which adds significantly to the effectiveness
of the investment process and idea generation.
4

Investment Objectives
The Company aims to provide
shareholders with attractive investment
returns through access to a growing
stream of fully franked dividends
and growth in capital invested.
The Company’s primary investment goals are:
• to pay dividends which, over time, grow
faster than the rate of inflation; and
• to provide attractive total returns over
the medium to long term.
5

Full Year Result Summary – 12 months to 30 June 2021
* Assumes a shareholder can take full advantage of the franking credits.
6

Sustainable competitive
advantage – unique
assets producing strong
returns on capital
AFIC offers a diversified portfolio of quality stocks – what we look for
Strong management
team and board
Recurring, predictable
earnings are preferred
Financial strength
– strong cash flow
and balance sheet
7

Businesses that can
grow over the long
term, producing
growing dividends
AFIC offers a diversified portfolio of quality stocks – what we look for
continued
Nursery stocks
– developing the
preceding attributes
Look to buy when we
see long term value
8

Market and Selected Sector Performances
S&P/ASX 200 Index
5 Years to 30 June 2021
Selected Sector Performance
Financial Year 20/21
9

Relative portfolio performance, including franking*
– per annum returns to 30 June 2021
AFIC portfolio returns have a lower
level of volatility (beta and standard
deviation) than the Index.
Returns include growing/stable fully
franked dividends over
a 10-year period.
AFIC share price returns have a
significantly lower level of volatility
(beta and standard deviation) than the
Index.
*assumes an investor can take full advantage of the franking credits
10

Over the 3-year period to 30 June 2021 AFIC has a higher portfolio return
with less volatility than the S&P/ASX 200 Index (both exclude franking)
11
Source: Mercer Investment Performance Survey of Wholesale-Equity – Australia. Note AFIC’s return is after tax paid and costs. The
universe for Wholesale-Equity – Australia returns are before tax and after fees

Winners and losers* - 12 months to 30 June 2021
12
Biggest DetractorsBiggest Contributors
* Percentage gain/loss over the period
not held
not held

Major portfolio changes
13
Sales
Purchases

Top 30 holdings – 30 June 2021
RankCompany% ofPortfolio
1
Commonwealth Bank of Australia8.8%
2
BHP Group 7.3%
3
CSL 6.9%
4
Wesfarmers 4.9%
5
Westpac Banking Corporation4.5%
6
Macquarie Group 3.8%
7
Transurban Group 3.8%
8
National Australia Bank 3.3%
9
Woolworths Group 2.7%
10
Australia and New Zealand Banking Group 2.7%
Total Portfolio 64 Holdings
(excluding international portfolio)
14

Top 30 holdings – 30 June 2021 continued
RankCompany% ofPortfolio
11
Rio Tinto 2.6%
12
Mainfreight 2.6%
13
James Hardie Industries*2.3%
14
Telstra Corporation* 2.3%
15
Amcor2.0%
16
Reece 1.9%
17
ARB Corporation 1.7%
18
Sydney Airport1.7%
19
Sonic Healthcare 1.6%
20
Goodman Group1.6%
15
* Options were outstanding against part of the holding.
Total Portfolio 64 Holdings
(excluding international portfolio)

Top 30 holdings – 30 June 2021 continued
RankCompany% ofPortfolio
21
ResMed1.6%
22
Coles Group 1.3%
23
Seek 1.3%
24
Ramsay Health Care 1.3%
25
Carsales.com 1.3%
26
Xero 1.3%
27
Fisher & Paykel Healthcare1.3%
28
ASX 1.2%
29
Brambles 1.2%
30
REA Group 1.0%
16
Total Portfolio 64 Holdings
(excluding international portfolio)

COVID-19Low Interest
rates and
valuation risks
Cost Inflation and
supply chain
disruptions –
rising costs for
companies?
Companies in the
portfolio well
positioned:
market strength
ability to absorb
rising costs
leverage
efficiencies
Outlook
17
Volatility likely
to increase

Questions
18