2025 Annual General Meeting Presentation

30 September 2025


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
2025 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
September 2025

Annual General Meeting / September 2025
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
Disclaimer
6

Annual General Meeting / September 2025
Overview and Investment Objectives Mark Freeman
Financial Results Andrew Porter
Markets and the Portfolio David Grace
Recent portfolio activity Winston Chong
Outlook David Grace
2
Agenda
7

Annual General Meeting / September 2025
Overview and Investment Objectives

Annual General Meeting / September 2025
Predominantly invests in Australian and New Zealand companies
Largest listed investment company on the ASX, 150k shareholders, independent Board of Directors
Shareholders own the ‘management rights’ to the portfolio
Management expense ratio of 0.16% with no performance fees
Long term investor with low turnover (tax effective)
Long history of growing/stable fully franked dividends
Team manages three other funds – Djerriwarrh, Mirrabooka and AMCIL
9
Our Company
9

Annual General Meeting / September 2025
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.
10

Annual General Meeting / September 2025
Stable to Growing Dividend for Shareholders
AFIC’s franking reserve balance ensures we can pay a consistent dividend even
through volatile times – full year dividends for the last 7 financial years.
Current franking credit
balance sufficient to pay
55c Dividend
11

Annual General Meeting / September 2025
Attractive Total Returns Over the Long-Term
$10k in AFIC  $178k
$10k in the Index  $146k
Excludes the benefit of franking.
AFIC NTA vs S&P ASX 200 Accumulation Index
12

Annual General Meeting / September 2025
Financial Results

Annual General Meeting / September 2025
Summary Full Year Results
14

Annual General Meeting / September 2025
Share Price Relative to Net Tangible Asset (NTA)
31 August 2025
NTA: $8.34
Share price: $7.33
15

Annual General Meeting / September 2025
Markets and the Portfolio

Annual General Meeting / September 2025
Portfolio Performance to 31 August 2025
Per annum returns. Assumes the full benefit of franking credits.
Only includes franking that has been paid out.
Past performance is not indicative of future performance.
17

Annual General Meeting / September 2025
CGT not yet paid out as franking-0.74%
Management expenses-0.16%
Portfolio: Key Contributors +0.9%
Index Winners Missed: Gold -1.1%
Factors Behind Recent AFIC Portfolio Performance
Portfolio Factors
Non-Portfolio Factors
Portfolio: Key Detractors -4.0%
18

Annual General Meeting / September 2025
Despite Near Term Headwinds Long-Term Opportunity
Remains Significant.
•
•Market leader in plumbing distribution in Australia and New Zealand.
•US housing market currently in a downturn.
•Highly capable board and management team. Strong balance sheet.
•Market leader in fibre cement cladding for US houses.
•Inappropriate capital structure in acquiring AZEK.
•Well positioned to capture significant market share over the long term.
•Strong market position in all business units.
•Demand for core IG product remains resilient and strong.
•The outlook for US healthcare funding remains highly uncertain
•Highly cash generative business with a strong balance sheet.
•Logistics operator with strong market positions in Australia and NZ.
•Near term earnings challenges on weak NZ economic conditions.
•Highly capable board and management team. Net cash balance sheet.
19

Annual General Meeting / September 2025
Share Prices Have Diverged From Earnings Growth
-
50
100
150
200
250
-
200
400
600
800
20112012201320142015201620172018201920202021202220232024202520262027
EPS US CentsShare Price USD (RHS)
-
40
80
120
160
200
-
200
400
600
800
20112012201320142015201620172018201920202021202220232024202520262027
EPS AU CentsShare Price AUD (RHS)
Source: FactSet
20

Annual General Meeting / September 2025
14x
16x
18x
20x
22x
24x
26x
28x
30x
Valuation Metrics – Price to Earnings of CBA vs. CSL
202020212022202320242025
Source: FactSet
15x
20x
25x
30x
35x
40x
45x
50x
26.3x
17.9x
202020212022202320242025
21

Annual General Meeting / September 2025
Mainfreight – Share Price Tracks Earnings
Source: FactSet
22
0
10
20
30
40
50
60
70
80
90
0.0
1.0
2.0
3.0
4.0
5.0
EPS NZD (LHS)Share Price NZD (RHS)

Annual General Meeting / September 2025
80
100
120
140
160
180
200
220
240
0
4
8
12
16
20
24
28
32
US Single Family Housing Starts Index (RHS)
REH A$ Share Price (LHS)
80
100
120
140
160
180
200
220
240
0
6
12
18
24
30
36
42
48
54
60
US Single Family Housing Starts Index (RHS)
JHX A$ Share Price (LHS)
A Cyclical Downturn Causing Short-Term Headwinds
Source: US Census Bureau, FactSet
•Market leader in a large, growing market
•Debt-funded acquisition has weighed on the share price
•Market opportunity remains unchanged
•Founder led. Market leader in Australia
•Less established US business facing cyclical headwinds
•Long-term opportunity remains but may require patience
20132016201920222025
20132016201920222025
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Annual General Meeting / September 2025
-
500
1,000
1,500
2,000
2,500
3,000
3,500
The Gold Price Has Run to All Time Highs
Source: Macrotrends
197519851995200520152025
The gold price has reached record highs,
driven by geopolitical uncertainty, Central
Bank Buying, rising Government debt, and
easing monetary conditions (rate cuts)
History shows these moves are often
extreme in both directions
Gold mining stocks have outperformed
substantially
These companies can have complex
operations and limited lifespans, meaning it
can be difficult to have long-term conviction
Price (USD)
24

Annual General Meeting / September 2025
Recent Portfolio Activity

Annual General Meeting / September 2025
Active Portfolio Management – Recent Transactions
Additions to Existing Holdings
New Purchases
Trimmed Holdings
Complete Disposals
Nil.
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Annual General Meeting / September 2025
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
5x
10x
15x
20x
25x
30x
35x
40x
Why Are We Trimming Wesfarmers?
20052010201520202025
Source: FactSet
36.3x
2.7%
20052010201520202025
Price to EarningsDividend yield
27

Annual General Meeting / September 2025
Goodman Group
Short Term Weakness
Concerns about slowing capex by hyperscalers
0
5
10
15
20
25
30
35
40
45
GMG Share Price (A$)
The Long Term Opportunity
Significant data centre development pipeline
0.2 GW
2.0 GW
North
America
Continental
Europe/UK
0.5 GW
Hong Kong SAR
1.0 GW
Australia &
New Zealand
1.3 GW
Japan
LOS ANGELES
GREATER LONDON
AMSTERDAM
FRANKFURT
PARISMILAN
MARDID
TOKYO
OSAKA
SYDNEY
AUCKLAND
Source: Goodman GroupSource: Factset
HONG KONG
MELBOURNE
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Annual General Meeting / September 2025
0
50
100
150
200
250
300
350
FY18FY19FY20FY21FY22FY23FY24FY25
ARB Export Sales (A$m)
ARB Corporation
The Long Term OpportunityShort Term Weakness
Soft Australian vehicle market and US tariff concerns
29
Growing traction in US export sales
0
10
20
30
40
50
60
ARB Share Price (A$)
Source: ARBSource: Factset

Annual General Meeting / September 2025
Outlook

Annual General Meeting / September 2025
24%
27%
17%
32%
Our Confidence in the Long-Term Portfolio Outlook Remains Strong
AFIC
Stalwarts
Growth Companies
Income
Cyclicals
Excludes cash.
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Annual General Meeting / September 2025
50
100
150
200
250
300
US Market – Market Valuation Following Earnings Higher
Source: FactSet
200520092013201720212025
200520092013201720212025
S&P 500 Price / Earnings NTMS&P 500 EPS (USD $/Share)
10x
13x
16x
19x
22x
25x
32

Annual General Meeting / September 2025
250
300
350
400
450
500
550
600
Australian Market – Market Valuation and Earnings Disconnected
Source: FactSet
S&P/ASX 200 Price / Earnings NTM
7x
9x
11x
13x
15x
17x
19x
21x
200520092013201720212025
200520092013201720212025
S&P/ASX 200 EPS (AUD $/Share)
33

Annual General Meeting / September 2025
Summary
Performance has been disappointing the last 12 months. It’s not where we expect it to be.
A small number of stocks have significantly underperformed.
We have reviewed all portfolio holdings and believe the portfolio remains well positioned to
deliver our investment objectives.
We maintain investment in a portfolio of quality companies with good prospects to deliver
meaningful earnings growth over the medium to long term.
Reinforce value considerations within our process.
We increased our dividend in FY25 despite aggregate dividends from ASX 200 companies being
below the prior year.

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Annual General Meeting / September 2025
Outlook
Low economic growth is providing an increasingly challenging environment for companies to
grow earnings. Slowing revenue growth means cost out initiatives increasingly required.
In many cases, the valuations of companies with perceived earnings certainty is now at extreme
levels, driven more by capital flows rather than a true reflection of fundamental value.
Portfolio positioning increasingly defensive with a particular focus on balance sheet strength.
We are cautious on valuations, over paying for even high quality companies will likely to lead to
poor investment returns over the longer term.
The portfolio is invested in well managed companies with proven track records of financial
discipline capturing value-accretive opportunities as they arise.

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Annual General Meeting / September 2025
International Portfolio
•Portfolio was first initiated in May 2021. At 30 June 2025 valued at $168.1 million
(1.6% of the AFIC total portfolio).
•Significant preparatory work has been done for establishing a separate global
investment company in the future.
•We are still considering the most appropriate next steps for this initiative.
•AFIC’s global portfolio returned 14.0% for the financial year, an attractive return for
shareholders although below our benchmark.
•Medium term performance since inception:

Gross Returns in $A 30 June 2025
3 Years Since Inception
%pa %pa
AFIC Global Portfolio 21.0 14.0
Benchmark 20.3 14.0
Source: Northern Trust
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Annual General Meeting / September 2025
Snapshot of the International Portfolio which has 43 holdings
37