Chesnara PLC · LSE:CSN
Chesnara — FY2017 Earnings Presentation
31 slides from Chesnara's earnings presentation, Mar 29, 2018
Slide 1: Full Year Results 2017
FULL YEAR RESULTS 2017 29 March 2018 Chesnara Dividend track record continues 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 2: Agenda
AGENDA John Deane, Chief Executive - OVERVIEW – Strategic delivery – 2017 financial highlights – 2017 operational & strategic highlights – Impact of the Scildon acquisition John Deane, Chief Executive – BUSINESS REVIEW – Strategic objectives (including UK regulatory update) David Rimmington, Group F
Slide 3: Overview
John Deane Chief Executive Officer OVERVIEW Business as usual cash generation Dividend 2012 2013 2014 2015 2016 2017 CHESNARA | 2017 FINAL RESULTS PRESENTATION 2
Slide 4: Overview – Strategic Delivery
OVERVIEW – STRATEGIC DELIVERY During 2017 we have delivered against each of our core strategic objectives thanks to economic tailwinds, good operational delivery and a number of one-off movements including the successful completion of the acquisition of Legal & General Nederland. This has resulted i
Slide 5: Overview – 2017 Financial Highlights
OVERVIEW - 2017 FINANCIAL HIGHLIGHTS IFRS SOLVENCY IFRS PRE-TAX PROFIT £89.6M GROUP SOLVENCY 146% 2016 £40.7M 2016 158% (144% excluding equity raise impact) The 2017 profit includes £20.3m gain on acquisition of Legal & General Nederland. We are well capitalised at both group and subsidiary level an
Slide 6: Overview – 2017 Operational & Strategic Highlights
OVERVIEW - 2017 OPERATIONAL & STRATEGIC HIGHLIGHTS ACQUISITIONS NEW BUSINESS PROFIT COMPLETION OF LEGAL AND GENERAL NEW BUSINESS PROFIT £12.4M NEDERLAND ACQUSITION 2016 £11.7M ECONOMIC BACKDROP SOLVENCY EQUITY GROWTH, WEAKENING STERLING SOLVENCY II IN ACTION Equity markets in all territories have pe
Slide 7: Overview – Impact of the Scildon Acquisition
OVERVIEW – IMPACT OF THE SCILDON ACQUISITION EcV The increase in EcV represents the purchase price discount of 32% and equates to the difference between the Positive purchase price of £137.6m and the future cash acquired economic value of £203.0m generation EcV Surplus increase of increase of £65.4m
Slide 8: Business Review
John Deane Chief Executive Officer BUSINESS REVIEW CHESNARA | 2017 FINAL RESULTS PRESENTATION 7
Slide 9: Business Review – UK: Maximise Value from Existing Business
BUSINESS REVIEW – UK The division has delivered against its objectives. The customer strategy plan is on track and delivering tangible benefits to our customers and the division has continued to deliver strong financial results. INITIATIVES & PROGRESS IN 2017 FUTURE PRIORITIES KPIS CAPITAL AND - EcV
Slide 10: Regulatory Update: Further Insights and Chesnara Context
BUSINESS REVIEW – UK REGULATORY UPDATE: FURTHER INSIGHTS AND CHESNARA CONTEXT ISSUE POSITION AUGUST 2017 POSITION 28 MARCH 2018 FCA INVESTIGATION We are continuing to work with the FCA on the No change investigation. All information requests issued by the FCA have been completed. There is very littl
Slide 11: Business Review – Sweden: Maximise Value from Existing Business
BUSINESS REVIEW – SWEDEN Movestic has delivered a positive set of results across key financial metrics. Its new business operation continues to add value to the group and assets under management growth supports the division in achieving its ambitions on scale. That said, the division is not complace
Slide 12: Business Review – Sweden: Enhance Value Through New Business
BUSINESS REVIEW – SWEDEN Movestic has had a positive 2017. With continued focus on writing new business within our target range creating value within the group. INITIATIVES & PROGRESS IN 2017 FUTURE PRIORITIES KPIS PROFITABLE - New business profits of £11.8m have been generated - Continue to focus o
Slide 13: Business Review – Netherlands: Maximise Value from Existing Business
BUSINESS REVIEW – NETHERLANDS Both Dutch businesses have produced solid 2017 results and have strong solvency ratios, supporting dividend payments to Chesnara. 2018 will see further development of the Scildon business, with priorities include enhancing the profitable and scalable new business operat
Slide 14: Business Review – Netherlands: Enhance Value Through New Business
BUSINESS REVIEW – NETHERLANDS The completion of the Scildon acquisition brings a ‘New business profit’ dimension to the business model in the Netherlands. Scildon is a well-established profitable player in the term market, the current market leader in unit-linked savings with transparent products an
Slide 15: Business Review – Acquire Life & Pension Businesses
BUSINESS REVIEW – ACQUIRE LIFE & PENSION BUSINESSES On 5 April 2017 we completed the acquisition of Legal and General Nederland (subsequently renamed Scildon). The completion of Scildon, which had an economic value of €237.5m at the point of acquisition, results in the Group having 39% of its Econom
Slide 16: Financial Review
David Rimmington Group Finance Director FINANCIAL REVIEW CHESNARA | 2017 FINAL RESULTS PRESENTATION 15
Slide 17: Financial Review – Measuring Our Performance
FINANCIAL REVIEW – MEASURING OUR PERFORMANCE FINANCIAL ADDITIONAL METRICS STATEMENTS Throughout this presentation, we use measures to assess and report how well I IFRS profits Capital requirements R we have performed. Solvency SCR plus capital management The range of measures is broad and requiremen
Slide 18: IFRS Pre-tax Profit & Total Comprehensive Income
FINANCIAL REVIEW – IFRS PRE-TAX PROFIT & TOTAL COMPREHENSIVE INCOME Strong pre-tax results across all segments. All territories have delivered results ahead of 2016, supported by positive equity markets. The results include a one-off gain of £20.3m relating to the acquisition of Legal and General Ne
Slide 19: Financial Review – Cash Generation
FINANCIAL REVIEW – CASH GENERATION The three territories have generated £86.7m cash in the period, with all four businesses making positive contributions to the cash generation giving comfort regarding funding future acquisitions and dividends. – Cash generation (excluding the LGN acquisition impact
Slide 20: Financial Review – Solvency II
FINANCIAL REVIEW – SOLVENCY II We are well capitalised at both a group and subsidiary level, and we have not used any elements of the long term guarantee package. Each division has contributed positively to group solvency. GROUP SOLVENCY SURPLUS GENERATION GROUP SOLVENCY POSITION £m £m Divisional mo
Slide 21: Financial Review – Sensitivities
FINANCIAL REVIEW – SENSITIVITIES The table provides some insight into the immediate and longer term impact of certain sensitivities that the group is exposed to, covering solvency, cash generation and economic value EcV tends to take the “full force” of adverse conditions 1 Solvency surplus Cash gen
Slide 22: Financial Review – Value Movement in 2017
FINANCIAL REVIEW – VALUE MOVEMENT IN 2017 The total value of Chesnara has increased significantly during the period primarily as a result of underlying earnings and a gain of £65.4m on the acquisition of Scildon. The £120.5m movement in the year includes a £m £65.4 gain on the acquisition of Legal a
Slide 23: Financial Review – Value Growth
FINANCIAL REVIEW – VALUE GROWTH £m COMPANY HISTORY WHAT WE HAVE DONE Value growth 2004 6 Chesnara is born. EEV of £126m. SUCCESSFUL ACQUISITIONS, INCLUDING LGN. 2005 First acquisition. CWA adds £30m of EEV. 3 TERRITORIES 2009 Our deals demonstrate flexibility and 126 176 189 187 183 263 355 295 311
Slide 24: Conclusion & Outlook
John Deane Chief Executive Officer CONCLUSION & OUTLOOK CHESNARA | 2017 FINAL RESULTS PRESENTATION 23
Slide 25: Conclusion & Outlook – Regulatory Backdrop
CONCLUSION & OUTLOOK – REGULATORY BACKDROP MAXIMISE VALUE FROM EXISTING ACQUIRE LIFE AND PENSION ENHANCE VALUE THROUGH 01 02 03 BUSINESS BUSINESSES NEW BUSINESS • Solvency II SFCR and RSR reporting • Solvency II – review of published • General Data Protection Regulation information (GDPR) • FCA lega
Slide 26: Conclusion & Outlook – Future Priorities
CONCLUSION & OUTLOOK – FUTURE PRIORITIES MAXIMISE VALUE FROM EXISTING ACQUIRE LIFE AND PENSION ENHANCE VALUE THROUGH 01 02 03 BUSINESS BUSINESSES NEW BUSINESS • Solvency II in action – focus on capital • Continue to review market opportunities • Continue our work introducing management opportunities
Slide 27: Questions
QUESTIONS CHESNARA | 2017 FINAL RESULTS PRESENTATION 26
Slide 28: Appendices
APPENDICES CHESNARA | 2017 FINAL RESULTS PRESENTATION 27
Slide 29: Appendices: Historical Data - Headline Results
APPENDICES: HISTORICAL DATA - HEADLINE RESULTS Dec-17 Dec-16 Dec-15 Dec-14 Dec-13 Dec-12 IFRS profit £m (pre-tax and exceptionals) 89.6 40.7 42.8 28.8 57.8 24.5 EcV / EEV profit / (loss) £m (after tax and exceptionals) 1 139.5 72.5 57.5 44.2 82.7 31.2 EcV / EEV Shareholder equity £m 1 723.1 602.6 45
Slide 30: Appendices: Historical Data - Dividend History
APPENDICES: HISTORICAL DATA - DIVIDEND HISTORY Interim dividend (paid October) Final dividend (paid May of the following year) 20.07 20 19.49 18.94 18.40 13.07 17.88 12.69 17.35 12.33 16.85 11.98 16.40 11.63 15.55 15.95 11.25 15.10 10.90 10.60 15 10.30 10.05 9.85 13.10 12.45 11.85 8.05 7.55 7.10 10
Slide 31: Disclaimer
Disclaimer This presentation has been issued by Chesnara plc (“Chesnara” or the “Company”) and is being made only to and directed at: (a) persons who have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Pr