Nib Holdings Ltd · ASX:NHF
Nib — Shareholder Meeting (November 2017)
31 slides from Nib's shareholder meeting presentation, Nov 1, 2017
Slide 1: nib holdings limited 2017 Annual General Meeting (AGM) Presentation
nib holdings limited t 13 14 63 Head Office f 02 4925 1999 22 Honeysuckle Drive Newcastle NSW 2300 e nib@nib.com.au abn 51 125 633 856 w nib.com.au 1 November 2017 Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 nib holdings limited 2017 Annual General Meeting (AGM) Present
Slide 2: Annual General Meeting
ANNUAL GENERAL MEETING 1 November 2017
Slide 3: Steve Crane, Chairman
STEVE CRANE Chairman 2 ni b annual gener al meeti ng 2017
Slide 4: nib's Board and Executive
nib’s BOARD AND EXECUTIVE Steve Crane Chairman and Independent Non-Executive Director Mark Fitzgibbon Managing Director and Chief Executive Officer Lee Ausburn Independent Non-Executive Director Philip Gardner Independent Non-Executive Director Anne Loveridge Independent Non-Executive Director Chris
Slide 5: Meeting Agenda
MEETING AGENDA Steve Crane Mark Fitzgibbon Chairman Managing Director and Chief Executive Officer ITEM 1 ITEM 2 ITEM 3 ITEM 4 Consideration of Reports Remuneration Report Re-election of Re-election of Ms Lee Ausburn Ms Christine McLoughlin ITEM 5 ITEM 5 Approval of ITEM 6 ITEM 7 ITEM 8 participation
Slide 6: Chairman's Presentation
CHAIRMAN’S PRESENTATION STEVE CRANE Chairman 5 ni b annual gener al meeti ng 2017
Slide 7: Celebrating 10 Years as an ASX Listed Company
CELEBRATING 10 YEARS AS AN ASX LISTED COMPANY • November 2017 marks 10 years since we listed on ASX • Listing price of $0.85, more than a 7x increase. TSR* since listing is 1,166% versus 32% for ASX200 • Growth reflects strong customer focus and a business strategy supported by deep market insight,
Slide 8: Our Mission
OUR MISSION “We exist to help people access and afford world class health care when and where needed.” 7 ni b annual gener al meeti ng 2017
Slide 9: FY17 Results
FY17 RESULTS UNDERLYING OPERATING NET PROFIT AFTER TAX $m RETURN ON INVESTED CAPITAL* % PROFIT (UOP) $m 16.4% 30.9% 370bps * ROIC calculated using average shareholders’ equity including non-controlling interests and average interest-bearing debt over 8 ni b annual gener al meeti ng 2017 a rolling 12
Slide 10: Delivering Strong Shareholder Returns
DELIVERING STRONG SHAREHOLDER RETURNS DIVIDENDS (cps) • FY17 full year fully franked dividend of 19 cents per share (up from 14.75 28.8% cents per share in FY16) • FY17 full year dividend represents a payout ratio of 70% of full year NPAT and is consistent with our policy to pay ordinary full franke
Slide 11: Year in Review
YEAR IN REVIEW • arhi net policyholder growth almost 4x industry • Earnings from adjacent businesses (nib NZ, International Students and Workers and World Nomads Group) have almost doubled in past 3 years - Accounted for over 30% of total earnings in FY17 - We think we can get this as high as 50% in
Slide 12: Delivering Value to Customers
DELIVERING VALUE TO CUSTOMERS NET PROMOTER SCORE (arhi*) % 550bps arhi First Choice network for dentists, cutting out-of-pocket expenses for customers. *Australian Residents Health Insurance 11 ni b annual gener al meeti ng 2017
Slide 13: Government Reform
GOVERNMENT REFORM • Another year of considerable discussion, debate and unfortunate negative public commentary about private health insurance value and affordability • Welcome recent announcement by Health Minister − Further reduce prostheses prices − Offer premium discounts to people under 30 • Our
Slide 14: arhi Claims and Premiums
arhi CLAIMS AND PREMIUMS • In FY17 we paid for more than 310,000 episodes of care in our arhi business at a cost of almost $1.2 billion. Our largest nib customer claim was for almost $410,000 • Doing everything we can to keep a lid on claims inflation and maintain affordability of premiums 13 ni b a
Slide 15: Cost Variations
Services paid 14 10 20 25 30 35 40 45 15 0 5 Source: nib Up to 1,500 1,501 to 2,000 2,001 to 2,500 2,501 to 3,000 3,001 to 3,500 3,501 to 4,000 4,001 to 4,500 4,501 to 5,000 5,001 to 5,500 Prostatectomies (CY16) ni b annual gener al meeti ng 2017 5,501 to 6,000 6,001 to 6,500 COST VARIATIONS 6,501 t
Slide 16: Consumer Empowerment
CONSUMER EMPOWERMENT Our efforts to date have focused on: • Find, assess, select, and book providers • Better manage chronic health conditions (mental health, diabetes) • Helping customers recover from surgery/medical treatment in more appropriate settings • Discover relevant health information Whit
Slide 17: New Opportunities and Business Expansion
NEW OPPORTUNITIES AND BUSINESS EXPANSION Acquisition of specialist corporate private health Collaborating with Chinese pharmaceutical insurer GU Health company Tasly Holding Group* with plans to sell “critical illness” lump sum product in China * Refer slide 26 for further details 16 ni b annual gen
Slide 18: nib foundation
nib foundation • This year marks 10 years since nib raised $25 million to establish nib foundation • The foundation makes a positive contribution in supporting the health and wellbeing of people right across Australia • nib foundation has contributed almost $16 million in funding to over 100 charity
Slide 19: Board and Management Succession Planning
BOARD AND MANAGEMENT SUCCESSION PLANNING • Succession planning and ensuring we have the right skills mix, diversity and experience remains a priority • Retirement of Mr Harold Bentley as a Non-Executive Director in September 2017 and appointment of Non-Executive Director Anne Loveridge in February 2
Slide 20: Managing Director's Report
MANAGING DIRECTOR’S REPORT Mark Fitzgibbon Managing Director and Chief Executive Officer 20 ni b annual gener al meeti ng 2017
Slide 21: FY17 Key Performance Highlights
FY17 KEY PERFORMANCE HIGHLIGHTS TOTAL UNDERLYING REVENUE $m EARNINGS PER SHARE (STATUTORY) cps TOTAL SHAREHOLDER RETURN* (TSR) % 7.0% 28.3% Since November 2007 nib: 1,166% versus ASX200: 32% * Source: Bloomberg, assumes dividends and capital returns reinvested at the 21 ni b annual gener al meeti ng
Slide 22: Australian Residents Health Insurance
AUSTRALIAN RESIDENTS HEALTH INSURANCE POLICYHOLDER GROWTH PREMIUM REVENUE UOP 13.2% 3.8% 4x industry $1.7b 6.4% $107.0m aided by our multi-channel growth strategy 22 ni b annual gener al meeti ng 2017
Slide 23: nib New Zealand
nib NEW ZEALAND LAUNCH OF FIRST CHOICE PREMIUM REVENUE UOP 35.8% a network of medical professionals providing $199.3m 14.9% $23.5m customers with zero out-of-pocket costs. 23 ni b annual gener al meeti ng 2017
Slide 24: International and New Business
INTERNATIONAL AND NEW BUSINESS INTERNATIONAL (INBOUND) WORLD NOMADS GROUP HEALTH INSURANCE UOP 47.7% UOP 22.7% due to investment being made $25.4m $7.5m in growth opportunities NET POLICYHOLDER SALES Secured travel insurance distribution agreement with 28.5% Helloworld Travel 24 ni b annual gener al
Slide 25: Sustainability
SUSTAINABILITY Customers Employees Community 1.39m $1.5b 1,200 76.8% $15.8m $3.4m CUSTOMERS PAID IN EMPLOYEES EMPLOYEE nib FOUNDATION FUNDING WNG FOOTPRINT NETWORK COVERED CLAIMS1 ACROSS 8 ENGAGEMENT TO 105 CHARITIES FUNDING TO 173 PROJECTS COUNTRIES SCORE SINCE 2008 SINCE 2006 23.2% 94.2% $66k $100
Slide 26: New Ventures and Opportunities
NEW VENTURES AND OPPORTUNITIES • Currently collaborating with Chinese pharmaceutical company Tasly Holding Group: • Plan to sell “critical illness” lump sum product in Jing-Jin-Ji area (which includes Tianjin, Beijing City and Hebei Province, population approximately 100 million) by end of 2018. • P
Slide 27: New Ventures and Opportunities
NEW VENTURES AND OPPORTUNITIES • Acquisition of specialist corporate private health insurer GU Health for $155.5 million (announced 20 September 2017, completed 31 October 2017) • Acquisition meets nib’s return on investment criteria • Transaction funded by a fully underwritten institutional equity
Slide 28: PHI Reform and Regulation
PHI REFORM AND REGULATION nib welcomes Government’s PHI reform measures which are anticipated to be a net positive, including: • Further reductions in prostheses prices resulting in lower than otherwise premiums • Introduction of Lifetime Health Cover Discount - Premium discounts for younger people
Slide 29: Our Focus
OUR FOCUS • Pursue arhi organic net growth in 4-5% range with net margins 5-6% via market insight and multi-channel distribution. • Increase investment in adjacent businesses and their contribution to Group earnings towards 50% of total. • Expand the value proposition for consumers through knowledge
Slide 30: FY18 Guidance and Outlook
FY18 GUIDANCE AND OUTLOOK FY18 UOP forecast to be at least $155m1 (Statutory operating profit approximately $143 million), reflecting: • Reduced arhi net margin to within target range • New business and technology investments: - nib international students services - DTC 2.0 in NZ - arhi retention -
Slide 31: Annual General Meeting
ANNUAL GENERAL MEETING 1 November 2017 31 ni b annual gener al meeti ng 2017