17 August 2021 ASX Limited ASX Market Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 June 2021 Magellan Financial Group Limited (ASX code: MFG) hereby lodges: 1. Appendix 4E Statement for the year ended 30 June 2021; and 2. Annual Report for the year ended 30 June 2021, incorporating the Chairman's Report, the Chief Executive Officer's Annual Letter and the financial statements. Yours faithfully, Authorised by Marcia Venegas | Company Secretary Page 1 Appendix 4E Magellan Financial Group Limited Results for Announcement to the Market 30 June 2021 30 June 2020 % change $’000 $’000 Total revenue and other income 3 to 715,012 693,952 Net profit after tax (33) to 265,156 396,214 Total comprehensive income (34) to 261,672 397,096 Adjusted net profit after tax (6) to 412,659 438,299 Basic and diluted earnings cents per share 144.6 218.3 Adjusted basic and diluted earnings cents per share 225.0 241.5 Net tangible assets ("NTA") per share1 As at 30 June 2021 $4.77 As at 30 June 2020 $5.08 1 NTA per ordinary share includes right-of-use assets. Dividends Amount per security Franked Amount per security Interim dividend (paid on 25 February 2021) 97.1 cents 72.82 cents Final dividends (to be paid 23 September 2021)1 114.1 cents 85.57 cents Total dividends 211.2 cents 158.40 cents Final dividend dates Ex-dividend date 23 August 2021 Record date 24 August 2021 DRP election date 7 September 2021 Cash payment date 23 September 2021 DRP issue date 30 September 2021 1 Comprises a final dividend of 102.6 cents per share and a performance fee dividend of 11.5 cents per share. The Magellan Financial Group Limited Dividend Reinvestment Plan will operate in respect of the final dividend and a 1.5% discount will apply. Commentary on results including brief explanation of adjusted net profit after income tax expense Net profit after income tax expense and earnings per share are prepared in accordance with Australian Accounting Standards. For the year ended 30 June 2021, net profit after income tax expense of $265,156,000 included amortisation expense of $4,548,000, a net unrealised gain (net of tax) on changes in the fair value of financial assets and liabilities of $11,158,000 and transaction costs related to strategic initiatives (net of tax) of $154,113,000. Adjusted net profit after income tax expense of $412,659,000 excludes the impact of these items to provide additional meaningful information about the performance of the business and period-to-period comparability by adjusting for strategic, non-cash or unrealised items. For a full reconciliation of non-IFRS financial results refer to section 1.4.1 of the Directors’ Report in the 2021 Annual Report. Associates and controlled entities During the year, the Group acquired an interest in three associates and did not gain or lose control over any controlled entities. Refer to notes 9 and 19 of the financial statements for further details of associates and controlled entities respectively. Financial report Additional Appendix 4E disclosure requirements and further information including commentary on the Group's performance and results of segments are contained in the 2021 Annual Report and accompanying Press Release (2021 Full Year Results and Announcement). The consolidated financial statements contained in the 2021 Annual Report have been audited by Ernst & Young. Page 2 Magellan Financial Group Limited Annual Report 2021 ABN 59 108 437 592 Five year summary 30 June 30 June 30 June 30 June 30 June 2021 2020 2019 2018 2017 Group Results Total Revenue $'000 715,012 693,952 617,387 452,598 338,268 Total Expenses $'000 336,048 178,874 124,050 181,988 82,141 Net Profit Before Tax $'000 337,243 515,078 493,337 270,610 256,127 Net Profit After Tax $'000 265,156 396,214 376,947 211,791 196,225 Adjusted Revenue and Other Income1 $'000 699,072 692,941 577,251 452,598 338,268 Adjusted Expenses1 $'000 111,339 119,751 104,024 101,010 82,141 Adjusted Net Profit Before Associates1 $'000 454,441 438,299 364,225 268,897 196,225 Adjusted Net Profit After Tax1 $'000 412,659 438,299 364,225 268,897 196,225 Effective Tax Rate % 21.4 23.1 23.6 21.7 23.4 Funds Under Management2 Average Funds Under Management $m 103,680 95,458 75,819 59,034 45,667 Closing Funds Under Management $m 113,902 97,184 86,718 69,509 50,597 Funds Under Management comprises: Retail $m 30,883 26,769 23,216 19,182 15,159 Institutional $m 83,019 70,415 63,502 50,327 35,438 Average Base Management Fee (per annum)3 bps 61 62 62 65 66 Average AUD/USD Exchange Rate $ 0.7469 0.6716 0.7155 0.7752 0.7538 Funds Management Business1 Total Revenue $'000 663,608 674,811 561,326 428,705 329,188 Total Expenses $'000 106,918 116,799 101,537 97,275 80,908 Net Profit Before Tax $'000 556,690 558,012 459,789 331,430 248,280 Net Profit Before Tax and Performance Fees1 $'000 526,616 477,048 376,182 291,841 226,774 Employee Expenses / Total Expenses % 65.8 63.2 61.8 53.4 58.5 Cost to Income Ratio (expense/revenue) % 16.1 17.3 18.1 22.7 24.6 Cost to Income Ratio (excluding performance fees) % 16.9 19.7 21.3 25.0 26.3 Assets Total Assets $'000 1,216,166 1,123,873 800,291 674,943 493,981 Net Assets $'000 989,434 1,045,927 734,022 620,433 447,611 Net Tangible Assets Per Share $ 4.77 5.08 3.44 2.92 2.60 Shareholder Value Basic Earnings Per Share cents 144.6 218.3 213.1 122.0 116.9 Diluted Earnings Per Share cents 144.6 218.3 213.1 122.0 114.1 Adjusted Basic and Diluted Earnings Per Share1 cents 225.0 241.5 205.9 154.9 114.1 Total Dividends Per Share comprises: cents 211.2 214.9 185.2 134.5 85.6 Interim and Final Dividends Per Share cents 199.7 184.5 151.8 119.6 79.9 Performance Fee Dividend Per Share cents 11.5 30.4 33.4 14.9 5.7 Franking % 75 75 75 100 100 Other Information Number of Employees 139 131 125 124 108 Average Number of Employees 135 128 125 116 104 1 Adjustments are made for strategic, non-cash or unrealised items to provide additional meaningful information (refer to section 1.4.2 of the Directors’ Report and note 2 in the financial statements for the breakdown of these items). 2 As reported in the Group’s funds under management ("FUM") announcements published on the Australian Securities Exchange ("ASX"). 3 Calculated using management fees (excluding services and performance fees) for the relevant year divided by the average of month end FUM over the same year. Where accounting classifications have changed, or where changes in accounting policy are adopted retrospectively, comparatives have been revised and may differ from results previously reported. The above Consolidated Statement of Profit or Loss and Comprehensive Income and Consolidated Statement of Financial Position extracts are derived from the published financial statements. This table includes non-IFRS information as defined in section 1.4.2 of the Directors’ Report. The annual financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001. MFG has also released information to the ASX in compliance with the continuous disclosure requirements of the ASX Listing Rules and these announcements are available at www.asx.com.au (MFG's ASX code: MFG). Contents Chairman's Report 4 Chief Executive Officer’s Letter 7 Directors’ Report 22 Remuneration Report 29 Auditor's Independence Declaration 46 Financial Statements Consolidated Statement of Profit or Loss and Comprehensive Income 47 Consolidated Statement of Financial Position 48 Consolidated Statement of Changes in Equity 49 Consolidated Statement of Cash Flows 50 Notes to the Financial Statements 51 1. Basis of Preparation 51 Results for the Year 2. Segment Information 53 3. Earnings Per Share 56 4. Strategic Initiatives During the Year 56 5. Revenue 58 6. Taxation 60 7. Reconciliation of Operating Cash Flows 62 Investments 8. Financial Assets 63 9. Associates 65 10. Intangibles 66 Operating Assets and Liabilities 11. Loans and Receivables 67 12. Leases 69 13. Payables 70 14. Financial Liabilities 70 15. Provisions 71 Capital and Financial Instrument Risk Management 16. Capital Management 71 17. Contributed Equity 72 18. Dividends 72 19. Subsidiaries 73 20. Related Parties 74 21. Financial Instrument Risk Management 75 Other Items 22. Commitments and Contingent Assets and Liabilities 79 23. Parent Entity Information 80 24. Auditor Remuneration and Independence 81 25. Subsequent Events 82 Directors’ Declaration 84 Independent Auditor's Report 85 Corporate Sustainability and Responsibility Report 92 Corporate Information 98 Shareholder Information 99 Chairman's Report For the year ended 30 June 2021 Dear Shareholder, I am delighted to write to you as a fellow shareholder in Magellan Financial Group Limited (“Magellan”). Overall, we believe Magellan’s financial results for the year ended 30 June 2021 are satisfactory: • Average funds under management increased 9% to $103.7 billion. • Reported net profit after tax was $265.2 million (compared with $396.2 million for year ended 30 June 2020). • Net profit before tax of the Funds Management Segment was $556.7 million (compared with $558.0 million for the year ended 30 June 2020).