Interim Review


Half year ended 30 September 2018

CEO overview

Macquarie Group half-year result

02 Nov 2018

Macquarie Group CEO Nicholas Moore and CEO designate Shemara Wikramanayake discuss the result for the half year ended 30 September 2018.

Approximately 67%

international income

14,800 staff

in 27 countries

$A551 billion

assets under management

16.3%

annualised return on equity

Operating group highlights

Macquarie Asset Management

Top 501 global asset manager with $A549.5 billion of assets under management.

Net profit contribution of $A762 million, down 36% on 1H18 and up 54% on 2H18.

Highlights of the half year:

  • Raised $A7.8 billion in new equity globally for infrastructure and real asset investments
  • Invested equity of over $A6.6 billion in infrastructure and real assets globally
  • Strong performance in Macquarie Investment Management across a range of asset classes including US, Australian and International Small Cap equities, and US Municipal Bonds
  • Continued to grow the Macquarie Infrastructure Debt Investment Solutions (MIDIS) business
  • Closed 10 third party investor commitments totalling $A1.4 billion, bringing total commitments on MIDIS platform to $A9.6 billion
  • Ranked No.1 infrastructure manager globally2
  • Received two Lipper awards and one Euro Fund award3

Read more about Macquarie Asset Management

In October 2018, Macquarie Infrastructure and Real Assets and Korea’s largest telco operator, SK Telecom, acquired Korea’s second largest security services provider, ADT Caps, for an enterprise value of KRW2.97 trillion ($US2.8 billion).

ADT Caps provides remote monitoring and patrol dispatch services to more than 420,000 commercial customers across a nationwide network. It exhibits many characteristics similar to an infrastructure business, in that it provides an essential service, presents high barriers to entry and has a stable and strong cash flow profile.

The acquisition will enable ADT Caps to build its customer base leveraging SK Telecom’s leading information and communications technology and Internet of Things capabilities, providing a strong platform to continue delivering best-in-class central monitoring services and boost its 27 per cent market share.

Corporate Asset Finance

Corporate and Asset Finance consists of an Asset Finance business, which provides specialist finance and asset management solutions globally, and a Principal Finance business, which provides flexible primary financing solutions and engages in secondary market investing, across the capital structure.

Net profit contribution of $A437 million, down 29% on 1H18 and down 26% on 2H18.

Highlights of the half year:

  • Vehicles portfolio of $A16.1 billion
  • Aircraft leasing portfolio of $A8.2 billion
  • Continued growth in mobile device finance programs in the Telecoms, Media and Technology business
  • Largest independent4 owner of gas and electricity meters in the UK, and a specialist funder of energy efficient assets
  • Principal Finance’s funded portfolio of $A4.1 billion, with portfolio additions of $A0.4 billion during the half year
  • Commitment to acquire 50% of a leading UK car park management and solutions company
  • Provided £71 million financing to the UK’s largest provider of construction waste management services
  • Completed Principal Finance’s sale of a portfolio of US multi-family rental properties acquired between 2014 and 2017

Consumers are being offered a new car-buying experience in an Australian first developed by Macquarie. MotoMe by Macquarie provides a user-friendly car research experience across all brands with in-store car and finance experts available to assist consumers with all the information and tools needed to make an informed new car decision.  

The new store experience, launched at the Westfield Hornsby shopping centre in Sydney, has been developed following research into what consumers want when buying a car and works with manufacturers and local dealerships to deliver an innovative experience.

The initiative builds on the MotoMe digital platform, which Macquarie launched in 2016, offering a range of online tools to support the car selection process in store, including a car matchmaker and comparison tool, budgeting calculator, finance comparison features and the option to book a test drive.

Banking and Financial Services

Macquarie’s retail banking and financial services business, providing a range of personal banking, wealth management and business banking products and services.

Net profit contribution of $A296 million, up 3% on 1H18 and up 8% on 2H18.

Highlights of the half year:

  • More than 1 million Australian clients
  • 8% increase in total Banking and Financial Services deposits to $A49.4 billion
  • $A36.1 billion Australian mortgage portfolio, representing approximately 2% of the Australian mortgage market
  • $A88.1 billion of funds on platform
  • 7% increase in business banking loan portfolio to $A7.8 billion
  • Named as a winner in the 2018 Mozo Experts Choice Awards in the Travel Money/International Money Transfer category
  • Macquarie Transaction Account maintained Canstar’s 5-Star rating for Outstanding value5
  • Awarded Outstanding Private Bank in Australia in the over $A10 million category at the 2018 Australian Business Banking Awards
  • Won Best Non Major Business Bank and Best Industry Specialisation awards at the 2018 Australian Business Banking Awards

Read more about Banking and Financial Services

Macquarie Marketplace is a new digital banking platform that allows customers to purchase and instantly redeem discounted eGift cards directly within the Macquarie mobile banking app and online banking site, helping them save on their retail spending.

Macquarie Marketplace offers eGift cards, discounted by up to 10 per cent, at more than 40 leading retailers in Australia including Woolworths, Myer, Freedom, Hoyts and Sephora.

It is the latest innovation in Macquarie’s award-winning digital banking offering, designed to create personalised solutions for customers that integrate seamlessly into their everyday digital banking experience. Customers are also given personalised recommendations based on their spending, helping them achieve further savings.

Launched in August 2018, Macquarie Marketplace is available to all Macquarie customers who have a transaction or savings account.

Commodities and Global Markets

Provides clients with an integrated, end-to-end offering across global markets including equities, fixed income, foreign exchange and commodities.

Net profit contribution of $A700 million, up 85% on 1H18 and up 32% on 2H18.

Highlights of the half year:

  • Strong result across the commodities platform, particularly from North American Gas and Power, Global Oil and Agriculture
  • Increased client hedging activity and improved trading opportunities
  • Named Derivatives House of the Year6
  • Strong result across the Fixed Income and Currencies platform with increased client activity in structured foreign exchange and rates solutions, particularly in North America and Asia-Pacific
  • Strong result across the Futures platform with an increased contribution from the US and continued strength in Australia
  • Ranked No.1 Futures broker on the ASX7

Read more about Commodities and Global Markets

Macquarie has been named Derivatives House of Year in the prestigious Energy Risk Awards 2018 recognising excellence across global commodity markets.

Despite low volatility in commodity markets in 2017, Energy Risk noted Macquarie’s platform had performed strongly through acquisitions, growth across multiple product lines and a continued focus on delivering bespoke services for clients.

Macquarie operates a global commodities platform across 25 markets and 115 products, offering physical, hedging and financing capabilities in metals, agriculture and energy.

In 2017, it acquired the petroleum and North American gas and power businesses of Cargill, significantly expanding its presence in physical oil markets and strengthening its position in North American gas marketing.

Macquarie Capital

Global capability in Advisory, Capital Raising Services and Investing Activities. 

Net profit contribution of $A406 million, up 114% on 1H18 and down 20% on 2H18.

Highlights of the half year:

  • Advised on 228 transactions valued at $A267 billion8
  • No.1 M&A for completed deals in ANZ9
  • No. 1 global infrastructure finance adviser10
  • Financial adviser to CSRA on its $US9.7billion sale to General Dynamics
  • Financial adviser to The Stars Group on its $US4.7 billion acquisition of Sky Betting & Gaming and joint bookrunner on its $US6.3 billion debt financing and $US1.1 billion  follow-on equity offering to support the acquisition
  • Joint financial adviser to the Sydney Transport Partners consortium on its acquisition of a 51% interest in WestConnex for $A9.3 billion, joint lead manager, bookrunner and underwriter to Transurban Group on its $A4.2 billion entitlement offer, the largest M&A fund raising by an ASX listed company in the last decade11
  • Successfully exited its investment in TriTech Software Systems and subsequently acted as financial adviser on its merger with Superion and Aptean and joint bookrunner on the $US1.0 billion related financing
  • GIG acquired and developed a 235MW onshore wind farm (under construction) in central Sweden and raised €270 million of related construction financing

Read more about Macquarie Capital

On 12 September 2018, Macquarie Group entered into binding agreements with the NSW Government to design and deliver a new integrated station development in Martin Place, creating a vibrant public precinct that integrates a new Sydney Metro railway station with office space and a retail, dining and lifestyle hub.

This project, led by Macquarie Capital, is the result of a collaboration with Corporate Operations Group Business Services Division over more than two years, with considerable support from Risk Management Group and Financial Management Group.

Integrating the new underground Martin Place Station with the development above the station and the existing Sydney Trains Martin Place Station, the project delivers a better station for commuters and a new and vibrant transport, commercial, retail, dining and lifestyle precinct in the heart of Sydney's CBD.

The development also incorporates two new office towers, one of which will combine with 50 Martin Place to form a new consolidated global headquarters for Macquarie.

Board and management changes

Jillian Broadbent AO

Effective 5 November 2018, Jillian Broadbent AO will join the Boards of Macquarie Group Limited and Macquarie Bank Limited as an independent director.

Ms Broadbent was a Member of the Reserve Bank of Australia Board between 1998 and 2013 after 22 years at Bankers Trust Australia as an economic strategist and then as executive director responsible for risk management of foreign exchange, interest rates and commodities.

Ms Broadbent is the Chair of Swiss Re Life and Health Australia, Chancellor of the University of Wollongong and a Non-Executive Director of Woolworths Limited, the National Portrait Gallery of Australia and the Sydney Dance Company.

Philip Coffey

Effective 28 August 2018, Philip Coffey was appointed to the Boards of Macquarie Group Limited and Macquarie Bank Limited as an independent director.

Mr Coffey has extensive international experience in financial services and financial markets and most recently served as Deputy CEO of Westpac Banking Corporation between 2014 and 2017.

Mr Coffey is a Non-Executive Director of Lendlease Corporation Limited, a member of the Clean Energy Finance Corporation Board and Chairman of the Westpac Bicentennial Foundation.

Nicholas Moore and Shemara Wikramanayake

Effective 28 August 2018, Shemara Wikramanayake was appointed to the Boards of Macquarie Group Limited and Macquarie Bank Limited as an Executive Voting Director.

Effective 1 December 2018, Ms Wikramanayake replaced Nicholas Moore as Managing Director and CEO of Macquarie Group after 10 years as CEO and 32 years of service.

Accordingly, effective 30 November 2018, Mr Moore stepped down from the Boards of Macquarie Group Limited and Macquarie Bank Limited.

Martin Stanley

Martin Stanley, currently Global Head of MIRA, and newly appointed Group Head, MAM, and to the Executive Committee. 

Mr Stanley joined Macquarie in 2004 and has over 30 years of experience in asset management, infrastructure and utilities.

MAM will comprise MIRA and MIM. Mr Stanley, based in London, will also continue to lead MIRA globally.

Florian Herold

Ben Brazil will step down as Group Head, CAF Principal Finance, and from the Executive Committee. He will become Chairman, CAF Principal Finance, and continue in that role until mid-2019.

Florian Herold, currently Co-Head of CAF Principal Finance in EMEA, will be appointed Group Head, CAF Principal Finance. Mr Herold will move to Sydney and join the Executive Committee.

Mr Herold joined Macquarie in 2009 and has over 15 years of investment experience.

In the community

Macquarie 50th Anniversary Award

Read more

To mark its 50th anniversary in 2019, Macquarie has launched a new $A50 million global philanthropic award.

The Macquarie 50th Anniversary Award will provide $A10 million each over five years to approximately five projects that demonstrate a lasting community benefit.

Lisa George, Head of the Macquarie Group Foundation, says non-profit organisations are encouraged to be bold and imaginative in their thinking about the enduring outcomes they can achieve with this funding.

“We’ve asked non-profits to think big and we’re excited to see the interest this award is generating around the world,” she says.

“We believe we’ll see genuine change and measurable social impact in the years ahead.

“This is a potentially game-changing opportunity for non-profits looking to initiate an idea, scale-up an existing program or build the capacity of their organisation.

Macquarie has supported the communities in which it operates since its inception in 1969, with the Macquarie Group Foudation established in 1985 to formalise this commitment.

Macquarie staff have devoted thousands of hours to work with non-profit organisations around the world and, along with the Macquarie Group Foundation, contributed more than $A330 million to drive social change at the local community level.

Applications for the Macquarie 50th Anniversary Award will close at 5pm on Friday 16 November 2018.

We’re excited to see the interest this award is generating around the world.” 

Lisa George
Head of the Macquarie Group Foundation

Interim Financial Report

The Interim Financial Report contains the Directors’ Report, including a review of operations and the financial result, and the full financial statements for Macquarie Group for the half-year ended 30 September 2018.

Access the full report

Additional information

Investor information

Reports

Results

Dividend

Share price

More

Key dates

12 Nov Ex-dividend date for 1H19 interim ordinary dividend
13 Nov Record date for 1H19 interim ordinary dividend
18 Dec Payment date for 1H19 interim ordinary dividend

More

Contacts

Manage your holding

You can access current shareholding and dividend information and update personal information such as address and direct credit details online at the share registry.

Phone: +61 1300 554 096

Fax: +61 2 9279 0664

Visit Investor Serve

Email

Macquarie Group Investor Relations enquiries

Should you have any questions regarding the Macquarie Group Interim review please feel free to email us using the link below.

Send us an email