2024 Annual General Meeting Presentation

3 October 2024


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
2024 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
- Presentation
October 2024

Annual General Meeting / October 2024
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
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Disclaimer

Annual General Meeting / October 2024
Overview and Investment Objectives Mark Freeman
Financial Results Andrew Porter
Markets and the Portfolio David Grace
Recent portfolio activity Winston Chong
Outlook David Grace
International Portfolio Mark Freeman
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Agenda
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Full Year Results
Overview and Investment
Objectives

Annual General Meeting / October 2024
Invests in Australian and New Zealand companies
Largest listed investment company on the ASX, 160k shareholders, independent Board of Directors
Shareholders own the ‘management rights’ to the portfolio
Management expense ratio of 0.15% 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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Investment Objectives
The Company’s primary investment goals are:
• to pay stable to growing dividends over time; and
• to provide attractive total returns over the medium to long
term.

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Ensuring a Stable to Growing Dividend for Shareholders
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AFIC’s franking reserve balance ensures we can pay a consistent dividend even
through volatile times – full year dividends last six financial years.

Annual General Meeting / October 2024
Attractive Total Returns Over the Long-term
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$10k in AFIC  $180k
$10k in the Index  $135k
Excludes the benefit of franking.
AFIC NTA vs ASX 200 Accumulation Index

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Financial Results

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* Assumes an investor can take full advantage of the franking credits.
Financial Year in Summary
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Share Price Relative to NTA
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31 August 2024
NTA: $8.20
Share price: $7.35

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Markets and the Portfolio

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Portfolio Set to Perform in Most Economic Settings
AFIC
Stalwarts
Growth Companies
Income
Cyclicals
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16%
34%
24%
26%

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Portfolio and Sector Performance – to 31 August 2024
Sector returns do not include franking.
Portfolio Return (Including the Full Benefit of
Franking) – Per Annum to 31 August 2024
Sector Performance 12 months to 31 August 2024
Past performance is not indicative of future performance.
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MarketValuation in a Long Term Context
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Source: Goldman Sachs Research
ASX 200 Firms Trade at an Average Forward PE of 17.2x, which is 19% Above the 20-yr Average

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Market Conditions
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What’s Occupying Our Mind
Earnings growth becoming more challenging with price rises expected to slow.
Consumer spendingis softening.
Employment trends to be important.
China. Announced policy initiatives attempting to stabilise market conditions.
Majority of the Central Banks moving to ease policy settings.
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.

Annual General Meeting / October 2024
Falling demand and a historically tight labour
market impacting labour productivity.
Labour Productivity Remains Weak. Cost-out to be a Focus?
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Source: Goldman Sachs Research
ASX 200 (ex-REITs) annual growth in labour
costs far exceeding sales growth.
%

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Recent Portfolio Activity

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Active Portfolio Management – Recent Transactions
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Additions to Existing Holdings
New Purchases
Trimmed Holdings
Complete Disposals

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Source: Goldman Sachs Research
ASX 200 Banks Valuation vs Earnings Trend
times
Recent Transactions – A Spotlight on Bank Valuations

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ARB Corporation
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Source: ARB Website, Diogenes Research
ARB Corporation is a founder led global business
operating in the 4WD parts and accessories market.
Vertically integrated controlling all aspects of its business –
design, development, manufacturing, distribution and retail.
Significant long-term opportunity supplying branded parts
directly to 4WD manufacturers.
Excellent balance sheet and experienced management
team.
EPS vs Share Price
EPS cents
Share Price (RHS)ASX 200 –
Indexed (RHS)

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CAR Group
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Source: CAR Group Investor Presentation,
Diogenes Research
CAR Group holds market leading positions in auto
classifieds in Australia, USA, South Korea and Brazil.
Management team with a long-term track record of delivering
strong returns for shareholders.
Ability to leverage CAR Group’s intellectual property from
Australia to accelerate growth in international markets.
Significant long-term opportunity remains within all
operating markets.
EPS vs Share Price
EPS cents
Share Price (RHS)ASX 200 –
Indexed (RHS)

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Outlook

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Outlook
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Slowing economic growth providing an increasingly challenging environment for companies to
deliver earnings growth.
Investment markets been prepared to pay high prices where there is a high degree of confidence
of earnings growth.
Drivers of market performance expected to broaden.
We remain focused on companies well positioned to create long term shareholder value.
The portfolio is invested in well managed companies with proven track records of financial
discipline capturing value-accretive opportunities as they arise.

Full Year Results
International Portfolio

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Snapshot of the International Portfolio which has 42 holdings
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