2023 Annual General Meeting Presentation

3 October 2023


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
2023 Annual General Meeting Presentation


Dear Sir / Madam

The following presentation will be delivered to shareholders at the Company’s Annual
General Meeting to be held today.


Yours faithfully


Matthew Rowe
Company Secretary


Authorised for release by the Company Secretary

Annual General Meeting
October 2023

Annual General Meeting / October 2023
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.
ABN: 56 004 147 120
2
Disclaimer

Annual General Meeting / October 2023
Overview and Investment ObjectivesMark Freeman
Financial ResultsAndrew Porter
Markets and the PortfolioDavid Grace
Recent portfolio activityNga Lucas
OutlookDavid Grace
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Agenda
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Annual General Meeting / October 2023
Overview and Investment Objectives
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Annual General Meeting / October 2023
Invests in Australian and New Zealand companies
Largest listed investment company on the ASX, over 160k shareholders, independent Board of Directors
Shareholders own the ‘management rights’ to the portfolio
Management expense ratio of 0.14% with no performance fees
Long term investor with low turnover (tax effective). Portfolio and share price returns less volatile than the index
Long history of growing/stable fully franked dividends
Team manages three other funds – Djerriwarrh, Mirrabooka and AMCIL
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Our Company
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Annual General Meeting / October 2023
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.
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Annual General Meeting / October 2023
Financial Results
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Annual General Meeting / October 2023
Results to 30 June 2023
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* Assumes a shareholder can take full advantage of the franking credits.
#
Includes a non-cash dividend of $74.9 million from the BHP Petroleum/Woodside merger in 2022.

Annual General Meeting / October 2023
Share Price Relative to Net Asset Backing Per Share
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31 August 2023
NTA: $7.20
Share price: $6.94

Annual General Meeting / October 2023
AFIC’s franking
reserve balance
ensures we can
pay a consistent
dividend even
through volatile
times.
Consistent dividend even through volatile times
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In 2019 AFIC also paid a special fully franked interim dividend of 8 cents per share

Annual General Meeting / October 2023
Markets and the Portfolio
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Annual General Meeting / October 2023
Long term investor in companies, not traders of share prices
Identify quality companies with sound growth prospects that we can buy
at a reasonable price
This supports our belief in the power of compounding returns from great businesses
Our research process is built on observing the key characteristics of a company
that our experience indicates will produce strong investment returns
Our Investment Process – Focus on Long Term Quality
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Annual General Meeting / October 2023
1 Year Sector returns to 31 August -do not include franking.
Portfolio and Sector Performance – to 31 August 2023
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Annual General Meeting / October 2023
Market Conditions
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Positive
Solid economic growth, reducing the risk
of a recession.
China policy initiatives to stabilisemarket
conditions.
Immigration likely to drive strong population
growth.
Negative
Inflation is moderating but still above Central
Bank targets.
Slowing consumer spending.
Sharp rise in interest costs in response to
higher rates.
Earnings growth becoming more challenging
with price rises expected to slow.
Employmenttrends will be important.
We remain committed that holding a diversified portfolio of quality companies over the long-term remains
appropriate.
Our Approach

Annual General Meeting / October 2023
0
100
200
300
400
500
600
700
800
900
19982000200120032004200620072009201020122013201520162018201920212022
8x
10x
12x
14x
16x
18x
20x
19982000200120032004200620072009201020122013201520162018201920212022
ASX 200 Total Return
ASX 200 firms trade at an average forward PE of
15.4x, which is 7% above the 20-yr average
ASX 200 valuation slightly above 20-year average.
MarketValuation in a Long Term Context
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Indexed
PE NTM
Source: Goldman Sachs Research

Annual General Meeting / October 2023
Source: Goldman Sachs Research
High PE firms trade at a 72% premium to the
market, which is 29% above the 20-yr average
Low PE firms trade at a 56% discount to the
market, which is 10% below the 20-yr average
0
10
20
30
40
50
60
70
80
90
100
19961998200020022004200620082010201220142016201820202022
High PE Firms vs ASX200
-70
-65
-60
-55
-50
-45
-40
-35
-30
19961998200020022004200620082010201220142016201820202022
Low PE Firms vs ASX200
Wide Dispersion of Valuations
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Highly valued companies trading materially above their long-term average.
Relative PE vs MarketRelative PE vs Market

Annual General Meeting / October 2023
Portfolio Set to Perform in a Variety of Economic Settings
AFIC
Stalwarts
Growth Companies
IncomeCyclicals
18%
25%
24%
33%
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Annual General Meeting / October 2023
Recent Portfolio Activity
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Annual General Meeting / October 2023
New PurchasesReduced HoldingsAdditions to Existing Holdings
Complete Disposals
Active Portfolio Management – Recent Transactions
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Annual General Meeting / October 2023
CSL is a specialist biotechnology company that develops and
manufactures products to treat serious human medical conditions.
Market leadership position in plasma fractionation operating
more efficiently than competitors.
Recent capital investment increasing capacity while
delivering operating efficiencies and higher returns.
Consistent investment in Research & Development of new
pipeline drugs for long-term earnings growth.
Source: CSL Website, Diogenes Research
EPS vs Share Price US$
CSL
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Annual General Meeting / October 2023
Telstra
21
Mobile Service Revenue Market Share
Source: Telstra Website, E&P Research
Telstra is Australia’s leading Telecommunications company with
dominant market share and extensive infrastructure assets.
Mobile network superiority with 99% network coverage and 85%
5G coverage.More rational competitors given industry returns.
T22 strategy triggered company’s digital transformation allowing for
better management of the business and ability to implement CPI
pricing.
Good earnings growth driven by mobile, facilitates a growing
fully franked dividend.

Annual General Meeting / October 2023
Goodman Group
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EPS vs Share Price
Source: Goodman Group Website, Diogenes Research
Goodman Group is a specialist developer, owner and manager
of industrial properties operating in 14 countries.
Market leader in providing high-quality essential infrastructure
for the digital economy and data centres.
Unique opportunity to invest alongside the founder of the company,
Greg Goodman, who remains a significant shareholder.
Strong balance sheet and experienced management team.

Annual General Meeting / October 2023
Outlook
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Annual General Meeting / October 2023
Outlook
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What’s Occupying Our Mind
Solideconomic growth with inflation remainingstubborn.
Consumer spendingstarting to slow.
Company earnings growth to stabilisefollowing two years of stronggrowth.
Strong migration to drive near record population growth.
Economic growth in China stabilising.
Portfolio Positioning
Diversified portfolio of quality companies owning strategic assets, with strong balance sheets that
are well managed.
An appropriate mix of forecast growth and income returns to meet our long-term investment
objectives.