Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — Macquarie Australia Conference 2013
22 slides from Aub's conference presentation, May 1, 2013
Slide 1: Cover letter to ASX: Presentation to Macquarie Australia Conference
For personal use only 1st May 2013 The Manager Company Announcements Australian Securities Exchange Level 6, Exchange Centre, 20 Bridge Street Sydney, NSW 2000 Dear Sir / Madam, Re: Presentation to Macquarie Australia Conference Attached is a presentation to be given to Macquarie Australia Conferenc
Slide 2: Austbrokers Holdings Limited Presentation Macquarie Australia Conference
For personal use only AUSTBROKERS HOLDINGS LIMITED Presentation Macquarie Australia Conference 1 May 2013 Mark Searles CEO & Managing Director
Slide 3: Agenda
Agenda For personal use only • Business Overview – History – Business Overview – Strategy • Financial Performance • Outlook 1
Slide 4: History
History For personal use only • Business established 1985 in Mercantile Mutual (later ING) utilisng “owner:driver” model • Growth by acquisition and development of existing business • Developed back office services in IT (one broking software platform) and compliance • IPO November 2005 $2.00 offer
Slide 5: "Owner-Driver" Model
“Owner-Driver” Model For personal use only “Owner:Driver” Equity interest Equity interest Incentivised Principals • Purchasing power (typically 50%) (typically 50%) • Management and strategic • Retain equity in support through ROMs business • Assistance in obtaining capital • Standardised IT platfor
Slide 6: Business Overview
Business Overview For personal use only Insurance Broking Network Underwriting Agencies Top 4 broking network in Australia Act on behalf of insurers Owner driver model $160 million in premium Strong regional presence – all states Niche & general agencies – most classes SME base Presence in five stat
Slide 7: Business Overview - Broking
Business Overview - Broking For personal use only Owner Driver Model 21 50% owned 19 51% to 90% 3 100% 44 Businesses Broking Over 110 Locations Financial Services General & Specialist Insurance Broking Operations – Life & Brokers Network Superannuation Total of $1.4 billion base Over 85 Partner prem
Slide 8: Business Overview – Underwriting Agency
Business Overview – Underwriting Agency For personal use only No underwriting risk Backed by local Niche markets eg film insurers QBE Allianz bus & coach strata GLA Suncorp and accident & health CPE Lloyds Growth through Austagencies development of start Represented in 5 Underwriting up businesses a
Slide 9: Strategies
Strategies • Optimisation of operating model to continue to underpin future growth across the group For personal use only • Growth – acquisition activity to continue – focus on increasing cross sell of insurance products – continue to expand underwriting agency capability through product and acquisi
Slide 10: Agenda
Agenda • For personal use only Business overview • Financial Performance: – Financial highlights – Total shareholder return – Profit growth – EPS growth – Funding • Outlook 8
Slide 11: Financial Highlights
Financial Highlights For personal use only 1HY 2013 Adjusted NPAT up 20% (refer Appendix 1) CAGR EPS over 5 TSR 16.8% annualised years 13.4% over 5 years to 2012 Adjusted NPAT CAGR Market cap $564M at Austbrokers over 5 years 15.6% 31st March 2013 CAGR dividend per Austagencies premium share over 5
Slide 12: AUB Total Shareholder Return Performance
AUB Total Shareholder Return Performance 1 Year 3 Year 5 Year 35 For personal use only 30 25 % Annualised TSR 20 15 AUB 10 ASX All Ords ASX 200 Index 5 0 -5 -10 -15 % 13.5 (9.5) (9.0) 31.2 7.1 6.8 16.8 (4.2) (4.2) 10
Slide 13: Profit Growth 2007 – 2012
Profit Growth 2007 – 2012 For personal use only 30 Reported NPAT Adjusted NPAT $M 25 $27,935 20 $25,640 15 10 5 0 2007 2008 2009 2010 2011 2012 Increase N/A 15.3% 13.7% 18.5% 11% 14.7% 11.5% 12.1% 17.5% 18.1% 15.0% 20.0% Adjusted NPAT – Net profit after tax before amortisation of intangibles and pro
Slide 14: Earnings Per Share FY 2007 - 2012
Earnings Per Share FY 2007 - 2012 Cents For personal use only 50 Reported NPAT 45 Adjusted NPAT 49.5 cents 40 46.3 cents 35 30 25 20 15 10 5 0 2007 2008 2009 2010 2011 2012 Increase N/A 15.1% 13.6% 18.4% 11.0% 14.5% 11.5% 9.2% 12.2% 12.8% 16.9% 11.9% 12
Slide 15: Funding
Funding For personal use only • Current facility with St George Bank expires August 2013 • Reached Agreement for new facility – in process of documenting – limit $40 million at holding company level – $10 million undrawn available for acquisitions • Facility term is 3 years to April 2013. • Funding
Slide 16: Agenda
Agenda For personal use only • Business Overview • Financial Performance • Outlook – Market conditions – Outlook 14
Slide 17: Market Conditions
Market Conditions • Premium rates For personal use only – Underwriters continue to seek increases particularly property classes – Competition restrains extent of increases achievable – Premium rate movements vary across classes • Lower interest rate environment • Moderate economic growth forecast bu
Slide 18: Outlook
Outlook For personal use only • Premium rate increases being sought by underwriters • Economic outlook remains uncertain – impact on SME sector • Insurance broking industry consolidation – continuing acquisition opportunities • Further growth and development in underwriting agency business with cont
Slide 19: 1HY 2013 Results – Management Presentation
1HY 2013 Results – Management Presentation 1HY 2013 1HY 2012 VARIANCE VARIANCE For personal use only $'000 $'000 $'000 % BROKER OPERATIONS COMMISSION AND FEES 105,074 97,897 7,177 7.3% LIFE INCOME 6,018 4,827 1,191 24.7% PROFIT COMMISSIONS 241 202 39 19.3% PREMIUM FUNDING 11,654 10,217 1,437 14.1% I
Slide 20: 1HY 2013 Reconciliation of Reported NPAT to Adjusted NPAT
1HY 2013 Reconciliation of Reported NPAT to Adjusted NPAT 1HY 1HY 2013 2012 $’000 $’000 For personal use only Reported Profit attributable to members (NPAT) 24,489 11,214 Fair value adjustments to the carrying value of associates at the date at which they became controlled entities* (12,630) - Adjus
Slide 21: FY 2012 Results – Management Presentation
FY 2012 Results – Management Presentation FY 2012 FY 2011 VARIANCE VARIANCE For personal use only $'000 $'000 $'000 % BROKER OPERATIONS COMMISSION AND FEES 209,144 183,633 25,511 13.9% LIFE INCOME 9,243 8,620 623 7.2% PROFIT COMMISSIONS 970 1,910 (940) -49.2% PREMIUM FUNDING 18,312 15,746 2,566 16.3
Slide 22: FY 2012 Reconciliation of Reported NPAT to Adjusted NPAT
FY 2012 Reconciliation of Reported NPAT to Adjusted NPAT FY FY 2012 2011 $’000 $’000 For personal use only Reported Profit attributable to members 25,640 21,365 Profits on sale of interest in associates and controlled entities* - (105) Adjustment in contingent consideration on (192) - acquisition of
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