Slide 1: CBL Corporation Limited Annual Results Presentation
CBL Corporation Limited Annual Results Presentation for the year ended 31 December 2016 24 February 2017 Presenters: Peter Harris, Managing Director Carden Mulholland, Group Chief Financial Officer
Slide 2: Disclaimer and important information
Disclaimer and important information The information in this presentation has been prepared by CBL Corporation Limited (CBL) to provide a general overview of CBL and its operations. It has been prepared solely for informational purposes and does not purport to be complete or comprehensive and does n
Slide 3: Contents
Contents 1 Results Overview 2 Company Results Analysis 3 Strategy & Outlook 4 Appendix 2 2
Slide 4: Results Overview
Section 1 Results Overview
Slide 5: 2016 Financial Highlights
2016 Financial Highlights CBL Group exceeds 2016 PFI with a record operating profit of $76.2m A record operating profit1 for 2016 of $76.2m, up 27.2% on 2015 of $59.9m Exceeded 2016 PFI2 operating profit forecast by 8.2% Underlying profit3 after tax of $46.7m, up 23.9% on 2015 of $37.7m Un
Slide 6: Results Summary
Results Summary 2016 operating profit up 27.2% to $76.2m IFRS accounting standards required CBL to record the acquisition of SFS, completed on 5 January 2017, in the 2016 results from the time regulatory approval was received in October 2016. Therefore the 2016 results includes three months of SF
Slide 7: Underlying Profit
Underlying Profit 2016 underlying profit before FX up 23.9% to $46.7m Reported profit adjusted for one-off non-operating gains / (losses) and foreign exchange translation adjustment, after adjusting for tax NZD Millions 2016 2015 % Change Reported profit for the year 30.7 35.5 -13.5% 1 Capital ra
Slide 8: Earnings per Share
Earnings per Share 2016 underlying earnings per share before FX up 12.8% NZD Millions 2016 2015 % Change Shares outstanding at year end 235.8 219.7 7.3% Reported profit for the year 30.7 35.5 Reported profit for the year attributable to non-controlling interests 1.0 0.0 Reported profit for the year
Slide 9: GWP Growth Analysis
GWP Growth Analysis GWP 5 year CAGR to 2016 of 31.5%, and 30.9% from IPO Includes GWP from CBL Insurance, CBL Insurance Europe and Assetinsure 350 300 250 NZD Millions 200 150 100 50 - 2012 2013 2014 2015 2016 8
Slide 10: GWP by Geography
GWP by Geography CBL continues to achieve geographic diversity of GWP CBL continues to diversify sources of GWP, with France reducing from 56% of GWP in 2015 to 46% in 2016, and GWP growing at a higher rate in Italy and other European territories Australasia now accounts for 18% of GWP compared
Slide 11: GWP by Product
GWP by Product Greater diversity achieved despite strong growth in major product lines CBL continues to diversify its producing product lines as the influence of French decennial liability and dommages ouvrage reducing from 50% in 2015 to 43% in 2016, despite strong GWP growth in these products 1%
Slide 12: Key Insurance Ratios
Key Insurance Ratios Combined ratio of 77.2% for the insurance entities, improvement on 2015 The consolidated key insurance ratios represents the underlying insurance operating performance of the Group’s three insurance entities; CBL Insurance, Assetinsure and CBL Insurance Europe The combined r
Slide 13: Investments Analysis and Counterparty Risk
Investments Analysis Conservative investment portfolio maintained 3% 17% 11% Investment Type 2015 2016 83% 86% Cash and cash equivalents Debt securities Cash and cash equivalents Debt securities Equity securities 0% 2% 2% 10% 20% Counterparty Risk 8% 1% 1% 2015 2016 3% 8% 72% 73% AAA AA A BBB Below
Slide 14: Cash Flow Analysis
Cash Flow Analysis Strong cash generation from operations Cash flow generation has been consistently strong with 2016 being affected by one-off finance costs relating to the early repayment of the AUD Medium Term Note (“MTN”), timing of a one-off commutation payment relating to Assetinsure, timing
Slide 15: Foreign exchange rates
Foreign exchange rates EUR spot rate has weakened 10.1% and AUD 4.6% since beginning of 2016 The chart displays the month end spot rate for the Euro and Australian Dollar to the NZ Dollar and illustrates that growth in operating earnings was achieved despite the weakening of these currencies over
Slide 16: Results Compared to PFI
Results Compared to PFI Operating profit exceeded 2016 PFI forecast by 8.2% 2016 results have been adjusted to compare to what was contemplated in NZD Millions 2016 2016 PFI % Change the 2016 PFI Gross written premium1 372.6 397.3 -6.2% These adjustments included: Total revenue2 291.8 304.7 -4.
Slide 17: Operating Profit Bridge to 2016 PFI
Operating Profit Bridge to 2016 PFI 2016 operating profit of $68.8m when calculated on same basis as PFI Adjustments to operating profit reflect profit and loss arising from acquired business not forecast at the time of the IPO, including the acquisition of PfP and SFS 1.8 5.5 76.2 74.3 68.8 68.8
Slide 18: Profit for the Year Bridge to 2016 PFI
Profit for the Year Bridge to 2016 PFI 2016 profit for the year of $38.3m when calculated on same basis as PFI Adjustments to net profit for the year reflect components of the profit and loss arising from acquired businesses and associated financing not forecast at the time of the IPO, such as the
Slide 19: Regulatory Capital
Regulatory Capital Regulatory capital exceeds maximum capital management thresholds Excess regulatory capital available to fund future growth in GWP and allows investment allocations to be reviewed 350% 300% 291.0% 278.0% 250% 203% 200% 188.6% 155.2% 157% 150% Target regulatory capital management
Slide 20: Capital Management
Capital Management CBL maintains investment-grade leverage ratio of 27.6% During the year CBL repaid the outstanding NZD Millions 2016 2015 Movement AUD MTN with an acquisition facility from ANZ as ANZ bank loan 64.2 - 64.2 part of the SFS acquisition funding structure Fixed interest note - 57.3 (
Slide 21: Company Results Analysis
Section 2 Company Results Analysis
Slide 22: CBL Insurance
CBL Insurance 2016 operating profit up 15.8% on 2015 and up 12.5% on 2016 PFI NZD Millions 2016 2015 % Change 2016 PFI % Change Gross written premium 247.5 216.3 14.4% 238.1 3.9% Total revenue 228.2 205.3 11.2% 221.7 2.9% Net claims expense (74.7) (70.3) -5.9% (79.9) 7.0% Operating expenses (95.0)
Slide 23: Assetinsure
Assetinsure 2016 operating profit up 57.1% from 2016 PFI NZD Millions 2016 2015 % Change 2016 PFI % Change Gross written premium 46.1 15.9 189.9% 64.9 -29.0% Total revenue 39.1 16.8 132.7% 50.5 -22.6% Net claims expense (8.0) (2.2) -72.5% (15.7) 96.3% Operating expenses (25.6) (7.4) -71.1% (31.4) 2
Slide 24: CBL Insurance Europe (CBLIE)
CBL Insurance Europe (CBLIE) 2016 operating profit up 22.2% on 2015 NZD Millions 2016 2015 % Change 2016 PFI % Change Gross written premium 39.9 10.4 283.7% 13.3 200.0% Total revenue 13.9 7.6 82.9% 13.6 2.2% Net claims expense (3.7) (2.1) -43.2% (4.4) 18.9% Operating expenses (8.0) (3.6) -55.0% (5.
Slide 25: European Insurance Services (EISL)
European Insurance Services (EISL) GWP was up 1.9% on 2015, but operating profit disappointed NZD Millions 2016 2015 % Change 2016 PFI % Change Gross written premium 52.6 51.6 1.9% 81.1 -35.1% Total revenue 13.8 16.8 -17.9% 20.8 -33.7% Operating expenses (11.2) (12.0) 7.1% (13.5) 20.5% Operating pr
Slide 26: Professional Fee Protection (PfP)
Professional Fee Protection (PfP) Operating profit margin of 21% on the back of revenue growth NZD Millions 2016 2015 % Change Total revenue 8.7 0.7 1142.9% Operating expenses (6.8) (0.3) -95.6% Operating profit 1.8 0.3 500.0% Profit before tax 1.8 0.3 500.0% Income tax (expense)/credit 0.0 (0.1) Pr
Slide 27: Securities & Financial Solutions Europe (SFS)
Securities & Financial Solutions Europe (SFS) SFS operating profit for the 3 months to 31 December 2016 of $5.5m NZD Millions 2016 Gross written premium 67.2 Total revenue 33.0 Operating expenses (27.4) Operating profit 5.5 Profit before tax 4.1 Income tax (expense)/credit (1.3) Profit for the year
Slide 28: Strategy & Outlook
Section 3 Strategy & Outlook
Slide 29: Strategy
Strategy 2017 themes: organic growth, market and product development CBL Corporation IT infrastructure, HR development, executive appointments Acquisition integration, development of intra-Group efficiencies, synergy development Targeted strategic value-add acquisitions (small) Capital management to
Slide 30: Outlook
Outlook CBL expects 2017 to be a strong year After a busy few years with the IPO, major acquisitions and capital raising, 2017 is about refocusing on business development opportunities across the Group and consolidating acquisitions Some of the business development initiatives for 2017 include:
Slide 31: Thank You Any questions?
Thank You Any questions? 30
Slide 32: Appendix
Section 4 Appendix
Slide 33: 2016 Prospective Financial Information Comparison
2016 Prospective Financial Information Comparison 2016 2016 2016 2016 Variance Variance Adjusted Actual Adjustments PFI #039;000 % Actual #039;000 #039;000 #039;000 #039;000 Gross written premium as an insurer 321,681 - 321,681 316,246 5,435 1.7% 1 Gross written premium as an MGA (EISL) 50,899 - 50,899 81,065 (30,