SRI Roadshow, May 2011
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Transcript of SRI Roadshow, May 2011
Demographic Challenges & Investment Opportunities:
Which companies are best positioned to tackle demographic challenges?
•SRI Roadshow, May 2011
2 2011 SRI Roadshow
Agenda
I. Demographic Trends
II. Challenges Posed by Demographic Trends Workforce, Consumer Base and Resource Impacts
III. Business Opportunities and Solutions to Demographic Challenges – The Investment Case Overview of Business Solutions to Demographic Challenges
Skills Shortages – the Education Services Solution
Base/Bottom of the Pyramid – the Affordable Telecoms Solution
Ageing Population-focused Products – the Healthier Living & Quality-of-Life Solution
Resource Scarcity & Environmental Degradation – the Hygiene & Sanitation Solution
IV. Stock Selection & Market Opportunities
V. Conclusions
3 2011 SRI Roadshow
I. Demographic Trends Definition
Demography is the study of population size, growth and age structure, and of the forces that lead to population change (fertility, mortality, migration)
Global populations are expected to grow from current levels of almost 7 billion to over 9 billion by 2050 (UN)
Global Population Growth & Projections
Source: UNDP
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Demographic TrendsDemographic trends have impacts on different, yet interrelated outcomes
• By 2050, 86% of the world’s population
(almost eight billion people) will be concentrated in less developed regions of the world
By 2050, approx. two billion people will be aged 60 or over
•
By 2050, 6.3 billion people are expected to live in urban areas
Annual population growth by major region, millions
Source: SocGen, 2007
Population aged 60 or over between
1950-2050, millions
Source: UN, 2009
Population living in
urban areas, %
Geographical Breakdown
Age Structure
Urbanisation
Source: UN, 2006
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Demographic TrendsTwo main demographic trends are emerging
Growing Populations
Ageing Populations
Higher population and economic growth rates, which results in:
Increased international migration, and
Growing rates of urbanisation
Increased life expectancy, particularly among women, and
Lower fertility rates, which results in:
Higher share of elderly people
6 2011 SRI Roadshow
Changes in the Workforce
II. Challenges Posed by Demographic ChangesThree main challenges posed by demographic changes affect…(1) the workforce
Skills shortages will primarily be present in:
Developing countries where educational shortfalls may exist
Developed markets where a significant proportion of the working population nears retirement age, with little prospect of worker replacement
Working age population to total population, %
Source: UN Population Database & Bank of America/ML, 2011
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Challenges posed by Demographic Changes…(2) consumers
• Increasing product and service needs for:
Low-income consumers in developing markets
Consumers with higher disposable incomes in all markets
Ageing populations in developed markets
Changes in the Consumer Base
NEEDS A GRAPHIC HERE
Worldwide, over three quarters of the population are low-income
* PPP – Purchasing Power Parity
Source: AT Kearney
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Challenges posed by Demographic Changes…(3) resource scarcity and the wider environment
• Ability to provide products and services which lessen impacts on resource depletion and environmental degradation are key
• If current consumption rates continue, by 2050 a global population of over nine billion will require the biological capacity of two Earths
Increasing Pressure on Resources and the Environment
Population growth leads to rising consumption and increasing pressure
on scarce resources
Source: Goldman Sachs, 2010
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III. Business Opportunities and Solutions to Demographic ChallengesThe Investment Case
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Changes in the Consumer BaseChallenges
Business Opportunities
Wealthier Consumers
Changes in the Workforce
Pressure on Resources &
the Environment
• Three main challenges resulting from demographic change have resulted in numerous business opportunities for companies
10 2011 SRI Roadshow
Business Opportunities and Solutions to Demographic ChallengesChanges in the Workforce – Skills Shortages
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources &
the Environment
11 2011 SRI Roadshow
Business Opportunity – Skills ShortagesFinding ways to maintain employee productivity offers solutions
• What is the issue? Ageing workforce which is
close to retirement age
► loss of skills and knowledge
Lack of education and vocational training
► lack of qualified new entrants into the labour market
Poor recruitment and employee retention policies and programmes
► lower productivity and higher turnover costs
• Business Solutions
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Education Services Automation ServicesEmployment &
Outsourcing Services
Source: Manpower, 2010; CEDEFOP, 2008
% Employers having difficulty filling jobs due to lack of available
talent
0% 10% 20% 30% 40% 50% 60%
Romania
Italy
Austria
Hungary
Germany
Greece
Belgium
Netherlands
Sweden
Czech Republic
France
Ireland
Spain
United Kingdom
Low qualification
Medium qualification
High qualification
15
20
25
30
35
40
45
50
55
1996 2001 2006 2015 2020
EU
Ski
lls b
reak
do
wn
in t
ota
l em
plo
ymen
t (%
)
Projections of skills' requirement in the EU until 2020
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Business Opportunity – Skills ShortagesBusiness Solution Example
• Emerging and developing economies: Lack of education is a major obstacle to
development
New technologies and increased access to the Internet may assist in offering a cheaper alternative
• Developed economies: Opportunities will increase for multi-skilled
workers and those able to adapt to new technical or cultural environment
Focus will be on companies providing educational material for educational systems with a significant client base in emerging and developing countries
Source: UN Human Development Report, 2010
Gross Enrolment Ratio by Expected Years of Schooling, 1970-2007
Education Services
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Skills Shortages – Education ServicesWell-positioned Company: Pearson
• Publisher with 70+% revenues derived from education-related services
Focus on the provision of education services
► education division is expected account for bulk of growth in revenues and profits in future
Opportunity in the shift to digital education programmes
► digital education revenue mix has increased from 30% to 44% over the period 2005 - 2010
Over 20% revenues derived from Asia and other parts of the world
► strong opportunities to expand in unsaturated media markets
Recent Company Acquisitions
* £228m paid for 70% with the balance to be paid in 2011
Source: Pearson, 2011
Growth in Emerging Markets, revenues USD million
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Business Opportunities and Solutions to Demographic ChallengesChanges in the Consumer Base – Base/Bottom of the Pyramid
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources &
the Environment
15 2011 SRI Roadshow
Business Opportunity – Base/Bottom of the PyramidEmerging lower income consumers offer growth opportunities
• What is the issue? Access to essential goods and services
► human right
Growing low-income populations
► over 4 billion people with a market opportunity estimated to be almost USD 5 trillion
Providing the right products
► affordability, availability, acceptability, accessibility
• Business Solutions
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Affordable Healthcare Affordable FinanceAffordable Food &
Nutrition
Access to Telecoms Access to EnergyAccess to Transport
Fairtrade Systems
Estimated BOP market by sector, USD 5 trillion
Source: WRI/IFC, April 2007
TRANSPORT
WATER OTHER
FOOD
ICTHEALTH
ENERGY
HOUSING
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Business Opportunity – Base/Bottom of the Pyramid (BOP)Business Solution Example
• Main opportunities in mobile technologies and Internet access
Mobile telephony offers new ICT solutions to regions that used to be without access
Imbalance in Internet access
• BOP market size for ICT estimated to be worth USD 51 billion
Focus will be on companies providing ICT services in emerging and developing countries, particularly those countries with low ICT penetration rates, as well as
ICT providers with low-cost business models
Digital Inclusion Index 2011
Source: Maplecroft, 2011
Access to Telecoms
17 2011 SRI Roadshow
Base/Bottom of the Pyramid – Access to TelecomsWell-positioned Company: Millicom International Cellular
• Offers mobile telephony and cable services in 13 emerging markets
Market share in countries of operation
Source: Millicom International Cellular, 2011
Operations in Latin America and Africa
► attractive markets due to relatively low penetration of telephony services
Low-cost ICT provider strategy
► operates in countries with low GDP/capita
Emphasis on ‘Affordability’
► focus on prepaid services with low denomination charges using mass market distribution services
During Q4 2010, customers were up 14% and organic revenue growth was double digit
► revenue growth expected to remain double digit
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Business Opportunities and Solutions to Demographic ChallengesChanges in the Consumer Base – Ageing Population-focused Products
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources &
the Environment
19 2011 SRI Roadshow
Business Opportunity – Ageing Population-focused ProductsA growing senior population has different product needs
•What is the issue? Rising generation of over-65s
► strong growth for certain products and services
Social perspective
► maintenance of quality of life and the increasing need for healthcare services
Economic perspective
► impacts on savings, investments and pensions and need for financial stability
•Business Solutions
Source: UN, 2009
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Percent of the population aged 60 or over, 2000-2025
Source: United Nations 2008 Revision
18.418.424.324.3
20.320.327.627.6
8.58.514.614.6
13.413.419.819.8
10.610.61515
16.216.224.524.5
8.38.315.115.1
2000 2025
AfricaAfricaLatin Latin AmericaAmerica & & CarribeanCarribean
RussianRussian FederationFederation
AsiaAsia
OceaniaOceania
EuropeEurope
NorthNorth AmericaAmerica
Healthier Living & Quality of Life
Financial Security
20 2011 SRI Roadshow
Business Opportunity – Ageing Population-focused ProductsBusiness Solution Example
• Healthcare expenditure for over-65s are nearly four times that of younger people
• Functional foods present growing market opportunities
Increasing shift towards managed healthcare services for elderly populations
Focus will be on companies which:• provide healthcare services and solutions for diseases prevalent among ageing
populations• offer specific products which aim to help consumers maintain a high living standard
for as long as possible
Healthier Living & Quality of Life
0
10
20
30
40
50
60
70
80
<25 25-44 45-64 65+
Age
%
Arthritis
Osteoporosis
Musculoskeletal Diagnoses by Age
Source: McIlhargey, 2008
21 2011 SRI Roadshow
Ageing Population Products – Healthier Living & Quality of LifeWell-positioned Company: Smith & Nephew
• Specialised in orthopaedics, endoscopy and wound management
Products tailored to meet ageing population needs
► orthopaedics (driven by hip and knee reconstruction) represents almost 60% of group revenues
Emphasis on quality products
► continued margin improvement in all divisions
Growth opportunities in emerging markets
► emerging market sales have risen 20% per year since 2006
Continued investment in emerging markets
► surgeon training centres and new manufacturing facilities in China
Emerging Markets Revenue and Growth
Source: Smith & Nephew, 2011
2009 Revenue by Regions
22 2011 SRI Roadshow
Business Opportunities and Solutions to Demographic ChallengesResources & the Environment – Resource Scarcity & Environmental Degradation
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources &
the Environment
23 2011 SRI Roadshow
Business Opportunity – Resource Scarcity & Env. DegradationResource scarcity pressures require innovative solutions
• What is the issue? If global population reaches 9.3 billion
people by 2050, global grain production will have to feed an additional 2.5 billion people, an 40% increase
By 2025 1.8 billion people will live in regions with absolute water scarcity, including most countries in the Middle East and North Africa
Population growth is intensifying the demand for, and consumption of, non renewable energy sources
• Business Solutions
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Base/Bottom of the Pyramid
(BOP)
Resource Scarcity &
Environmental Degradation
Ageing Population-
focused Products
Skills Shortages
Affordable Healthcare
Affordable Food & Nutrition
Access to Transport
Access to Telecoms
Affordable Finance
Access to Energy
Fairtrade Systems
Food ProductivityHealthier Living &
Quality of LifeEducation Services
Hygiene & Sanitation
Financial SecurityEmployment & Outsourcing
Services
Management of Resources
Automation Services
Changes in the Consumer BaseChallenges
Business Opportunities
Solutions
Wealthier Consumers
Aspirational Products
Changes in the Workforce
Pressure on Resources & the
Environment
Food ProductivityManagement of
ResourcesHygiene & Sanitation
Food demand exceeds addition of available land for agriculture
Source: Goldman Sachs, 2010; World Bank
24 2011 SRI Roadshow
Business Opportunity – Resource Scarcity & Environmental DegradationBusiness Solution Example
• Up to 90% of all wastewater in development countries is discharged untreated into the natural environment
• According to the UN/WHO, 2.2 million people die each year from diarrheal/water-linked disease
Focus will be on companies offering waste and water treatment products and services, but also, personal hygiene products aimed at consumers, primarily in
emerging and developing markets
Ratio of Wastewater Treatment
Source: UN Habitat, 2010
Hygiene & Sanitation
25 2011 SRI Roadshow
Resource Scarcity & Environmental Degradation – Hygiene & SanitationWell-positioned Company: Suez Environnement
• Global environmental services (water and waste) provider
Revenue Growth by Geography in 2010
Source: Suez Environnement
Servicing water and waste management needs globally
► over the last 15 years, it has brought drinking water to 11+ million people and wastewater services to 5+ million people
Environmental service growth driven by new infrastructure needs in emerging markets and upgrade of installations in developed markets
► presence in 25 countries worldwide
Continual innovation in product offer
► innovative technologies in water and waste (e.g. green energy production) and water resource preservation
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DEVELOPING ECONOMIES ECONOMIES IN TRANSITION DEVELOPED ECONOMIES
Economic Development Level
Base/Bottom of the Pyramid
Resource Scarcity & Environmental Degradation
Ageing Population-focused Products
Skills Shortages
Wealthier Consumers
IV. Stock Selection and Market OpportunitiesStock selection of companies positioned to offer business solutions
• Relevant business solutions to demographic challenges will differ depending on the level of economic development
27 2011 SRI Roadshow
Stock Selection and Market OpportunitiesStock selection of companies positioned to offer business solutions
• Stock selection of over 500 MSCI World, SMEs and emerging market companies aligned with demographic challenges and which offer tangible solutions
DEVELOPING ECONOMIES ECONOMIES IN TRANSITION DEVELOPED ECONOMIES
Base/Bottom of the Pyramid
Resource Scarcity & Environmental Degradation Ageing Population-
focused Products
Skills Shortages
Banks
Pharmaceuticals, Biotechnology
Others
Health Care Equipment & Services
Food & Staples Retailing
Capital Goods
Telecommunication Services
Others
Capital Goods
Food Beverage & Tobacco
Materials
Utilities
Technology Hardware & Semiconductors
Others
InsuranceHealth Care Equipment
& Services
Pharmaceuticals, Biotechnology
Others
Capital Goods
Media
Consumer Services
Others
Capital GoodsConsumer Services
Media
Commercial & Professional
Services
Skills Shortages
150 companies192 companies
145 companies
30 companies
23 companies
Source: Dexia AM, 2011
28 2011 SRI Roadshow
Affordable Healthcare
Affordable Food & Nutrition
Access to Telecoms
Access to Energy
Food P roductivity
Management of Resources
Education ServicesEmployment & Outsourcing
ServicesAccess to Transport
Fairtrade Systems
Hygiene & Sanitation
Automation Services
Healthier Living & Quality of Life
Demographic Selection
MSCI World ex Financials
4
6
8
10
12
14
5% 10% 15% 20% 25% 30%
Growth Potential (EBITDA CAGR 2011-2013E)
Val
uat
ion
(E
V /
EB
ITD
A 2
011E
)
Stock Selection and Market OpportunitiesDifferent business solutions present varying levels of opportunity
• Demographic Business Solutions offer a range of growth profiles during the next two years
Current EV/EBITDA and EBITDA CAGR 2011-2013e of sector selected companies
Source: Bloomberg and Dexia AM, 2011
29 2011 SRI Roadshow
V. ConclusionsDemography is a complicated subject but it offers many investable opportunities
• Two interrelated demographic trends Growing populations ► higher population and economic growth rates
Ageing populations ► higher share of elderly people
• Challenges implicate changes to the workforce, consumer base and even the wider environment and use of resources
• Business opportunities exist which offer both sustainable solutions and sound financial returns
Company stock selection needs to be sensitive to both product demands and geographic exposure
Small/medium-sized companies and emerging market companies generally offer more untapped ‘pure-play’ opportunities
The market currently appears to integrate demographic trends into company valuations and growth prospects of well-positioned companies
However, opportunities still exist for investors
Trends
Challenges
Solutions & Market
Opportunities
30 2011 SRI Roadshow
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31 2011 SRI Roadshow
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32 2011 SRI Roadshow
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