Hansard Global plc · LSE:HSD
Hansard Global — FY2014 Earnings Presentation
32 slides from Hansard Global's earnings presentation, September 2014
Slide 1: Delivering on our Strategy
Delivering on our Strategy September 2014
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future
Slide 3: Introduction & Overview
Introduction & Overview Results – FY 2014 Our Business Strategy New Business Plans Summary Questions 3
Slide 4: Meet the team
Meet the team Introduction & Overview Gordon Marr Chief Executive Officer Vince Watkins Chief Financial Officer Graham Morrall Global Sales & Marketing Director 4
Slide 5: Overview – FY 2014
Overview – FY 2014 Introduction & Overview Launch of new business strategies - April 2014 Strongly positive cash flows • Operating cash surplus of £37.8m (2013: £41.4m) HIL New Business of £83.0m (PVNBP) (2013: £172.1m) • Suspension of distribution relationship in Japan • Reduced new business margin
Slide 6: Overview – FY 2014 - continued
Overview – FY 2014 - continued Introduction & Overview Underlying IFRS profit of £14.7m (2013: £12.4m) before CEC provision Increased final dividend of 5.0p per share in line with guidance Revised Operating Model implemented successfully for Hansard Europe Board composition refreshed 6
Slide 7: New Business – Japan distribution
New Business – Japan distribution Introduction & Overview Japanese Distributor Distributor suspended writing new business in October 2013 – regulatory breach New business introduced - £10m PVNBP in FY 2014 (2013: £74m) Value of in-force at 30 June 2014 - £13m (2013: £24m) HIL has suspended taking bu
Slide 8: Chargeable Event Certificates
Chargeable Event Certificates Introduction & Overview Maximum estimated liability – £5m • Compensation to HMRC on “tax lost” basis based on last 6 tax years • Estimated liability includes costs • Settlement discussions under way – technical issues to resolve • Liability is fully provided for Prevent
Slide 9: Hansard Europe
Hansard Europe Introduction & Overview Revised Operating Model • Administration transferred to IOM • Regulatory control and litigation management in Dublin • Cash generating and capital-efficient model Capital • Surplus capital at 30 June 2014 – £13.4m • Assumed restriction on dividend distributions
Slide 10: Introduction & Overview
Introduction & Overview Results – FY 2014 Our Business Strategy New Business Plans Summary Questions 10
Slide 11: Results – Full Year 2014
Results – Full Year 2014 11
Slide 12: Summary Results – FY 2014
Summary Results – FY 2014 Results – FY2014 FY 2014 FY 2013 New business sales – Regular premiums * £63.7m £151.0m New business sales – Single premiums * £19.3m £21.1m New business margin 4.0% 12.0% Operating cash surplus £37.8m £41.4m Underlying IFRS profit after tax £14.7m £12.4m IFRS profit after
Slide 13: Profitable New Business
Profitable New Business Results – FY 2014 FY 2014 FY 2013* Present Value of New Business Premiums £m £m Regular premiums 63.7 151.0 Single premiums 19.3 21.1 Reductions in new business margin PVNBP 83.0 172.1 and IRR in FY 2014 reflect impact of reduced sales New Business Margin (PVNBP basis, after
Slide 14: Positive Operating Cash Flows
Positive Operating Cash Flows Results – FY 2014 Operating cash surplus at year ended 30 June 50 FY 2014 FY 2013 40 37.8 £m £m £m 30 Operating cash surplus 37.8 41.4 20 Interest and other income 1.0 1.6 10 Cash inflow 38.8 43.0 0 2010 2011 2012 2013 2014 Investment in new business (15.4) (28.8) Corpo
Slide 15: Abridged Income Statement - IFRS
Abridged Income Statement - IFRS Results – FY 2014 FY 2014 FY 2013 £m £m Fees and commissions 55.2 52.8 Investment and other income 0.2 2.2 Increased levels of fee 55.4 55.0 income and reduced underlying expenses. Origination costs (21.2) (21.2) CEC estimated liability of £5m, litigation Administrat
Slide 16: Strong IFRS Balance Sheet
Strong IFRS Balance Sheet Results – FY 2014 Deferred Origination Costs at 30 June FY 2014 FY 2013 140 123.9 £m £m 120 Deferred origination costs 123.9 131.0 100 £m 80 Other assets 7.3 7.8 60 Shareholder cash and bank deposits 78.5 67.2 40 20 Total assets 209.7 206.0 0 2010 2011 2012 2013 2014 Deferr
Slide 17: Resilient EEV Balance Sheet
Resilient EEV Balance Sheet Results – FY 2014 EEV Balance Sheet as at 30 June FY 2014 FY 2013 £m £m 300 Free surplus 28.3 20.0 250 £m Required Capital 25.1 24.6 200 53.4 Net Net Worth 53.4 44.6 150 Worth 100 VIF Value of Future Profits 150.4 181.1 150.4 50 European Embedded Value 203.8 225.7 0 2010
Slide 18: EEV return impacted by new business shortfall
EEV return impacted by new business shortfall Results – FY 2014 FY 2014 FY 2013 £m £m New business profit 3.3 22.5 Expected return 1.5 1.5 EEV return driven by new business profit and Experience variances (6.7) (5.5) assumption changes. Assumption and other changes (4.7) (6.8) Experience variances E
Slide 19: Our Business Strategy
Our Business Strategy 19
Slide 20: Strategic objective
Strategic objective Our Business Strategy To add significant scale to the business, on a more diversified basis, through organic growth at acceptable levels of risk & profitability To be the preferred choice of distributors when recommending international savings and investment products to their cli
Slide 21: Strategic objectives
Strategic objectives Our Business Strategy Better value More long-term For Customers relationships with distributors A more visible Excellent profile in the market customer service Motivated & engaged Market leading online workforce systems 21
Slide 22: New Business Plans
New Business Plans 22
Slide 23: More long-term relationships with distributors
More long-term relationships with distributors Maintain and Grow new Regional Business grow local Distribution Development Acceptance distribution Channels Focus • Continue non- • Expatriate IFA •Latin America admitted • Brazil •Asia • Increase • Russia • Insurance Companies •Middle East & admitted
Slide 24: More long-term relationships with distributors
More long-term relationships with distributors New Business Plans Rebuilding Distribution Rebuilding Sales Team Regional Round Up – diversification and risk reduction Marketing and Proposition focus in support of new business 24
Slide 25: More long-term relationships with distributors
More long-term relationships with distributors Our Business Strategy In 2014 we have added 33 brand new Terms Of Business with New business in 2013 (excluding Japan) was introduced by 71 networks – representing over 200 brokers to our available active* brokers distribution North Asia Europe X 6 TOB
Slide 26: More long-term relationships with distributors
More long-term relationships with distributors Our Business Strategy • China • Western Expatriate North Asia • Japanese Expatriate • Korea South East • Malaysia Asia • Expatriate New team and new segmented Middle East & • NRI • Expatriate distribution base Africa • Arab • Local Brazil Latin America
Slide 27: Summary
Summary 27
Slide 28: Summary
Summary Strategic plans being implemented Extending distribution potential in target markets • 33 new Terms of Business • Over 200 brokers on the ground • Larger networks, longer leadtimes Settled long-outstanding litigation Strongly positive cash flows Underlying IFRS profit of £14.7m (2013: £12.4m
Slide 29: Hansard Global plc
© HANSARD GLOBAL PLC
Slide 30: Financials
Ss © HANSARD GLOBAL PLC FINANCIALS
Slide 31: Business Model
Ss © HANSARD GLOBAL PLC BUSINESS MODEL
Slide 32: Business Model
Business Model High net worth, mass affluent and expatriate INTERNATIONAL POLICYHOLDERS segments Client Hansard Hansard OnLine supports IFA / policyholder needs Funds OnLine INTERNATIONAL NETWORK OF INTERMEDIARIES IFAs / Private Banks / Other Financial Institutions Policy retention drives fees Inves