Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — FY2006 Earnings Presentation
23 slides from Aub's earnings presentation, Aug 31, 2006
Slide 1: FY 2006 Results
<All> austbrokers AUSTBROKERS HOLDINGS LIMITED _ < FY 2006 Results — | Thursday 31*t August 2006
Slide 2: Agenda
<All> Ag enda austorokers * Overview: ~ Business overview ~ Unique owner-driver model ~ FY 2006 Financial Performance highlights * Detailed financial Statements — + 2006 FY Performance and 2007 outlook .
Slide 3: Business overview
<All> Business overview austbrokers * Top four insurance broking network in Australia — Client base of approx 175,000 — Over 900 employees — Over $720 million in premiums placed * National network servicing predominately SME market. Pen 68% ‘of Austbrokers’ premiums are placed in this segment
Slide 4: Business overview
<All> Business overview (ony austbrokers + Insurance Broking owner-driver model ~ 32 member broker firms + 20 50% owned * 9 51% - 99% owned * 3 100% owned + Underwriting agency business ~ Entities are authorised to write:business on behalf of licensed insurers ~ no underwriting risk ~ Austagencies *
Slide 5: Unique preferred owner-driver model
<All> Unique preferred owner-driver model — austnrokers + 32 Member Firms with ability to expand ¢ Austbrokers takes equity interest (60% or more) + The individual brokers retain the balance of the. equity as Co-Owners with Austbrokers + The Co-Owners retain day-to-day management and:control of each
Slide 6: FY 2006 financial performance
<All> on sale.of businesses {Adjusted NPAT) mus H nial ’ FY 2006 financial perfor austbrokers $000 Actual Forecast Actual % change on _% change on 2006 2006 2005 2005 Actual 2006 forecast Broker Revenue 122,674 119,411 113,137 8.4 2.7. Broker Profit (AHL share) 20,515 19,944 47,667 16.1 29. Profit b
Slide 7: FY 2006 compared to Prospectus forecasts
<All> FY 2006 compared to Prospectus forecasts austbrokers * Adjusted NPAT for FY 2006 at $11.5 million — Adjusted NPAT excludes $8.1 million profits on sale of businesses and $1.5 million amortisation of intangibles expense -. — exceeded forecast adjusted NPAT: by $1 -1.million — 10.6% : — 2HY cont
Slide 8: FY 2006 compared to Prospectus forecasts
<All> FY 2006 compared to Prospectus forecasts austbrokers * Underwriting agencies profit commission received $0.4 million after tax « Commission and fees down 2.5% on forecast (after excluding acquisitions) ; + Expenses down 1.4% on forecast (after excluding acquisitions) * Increases in interest ea
Slide 9: Broker profits as % of broker income
<All> Broker profits as % of broker income austbrokers Brokers Profits (before tax) as a percentage of Broker Income 2006 25.2% Forecast 2006 24.4% 2005 23.4% 2004 22.3% 2003 20.8%
Slide 10: FY 2006 compared with 2005
FY 2006 compared with 2005 ous « FY 2006 NPAT of $11.5 million before amortisation and profits from sale of businesses up 26% on 2005 (adjusted for sales of businesses) of $9.1 million + Profit (before tax and amortisation of intangibles) up 21.2% on 2005 - * Acquisitions contributed approximately o
Slide 11: FY 2006 compared with 2005
FY 2006 compared with 2005 ous * Total insurance broking income up 8.4% on 2005 (or 5.2% excluding acquisitions) « Premiums placed (excluding acquisitions) down 3.3% on 2005 * Insurance broking commission and fees (excluding acquisitions) up 0.5°% ~: * Net income broking commission yand fees 419. 4%
Slide 12: Agenda
<All> Ag enda austorokers * Overview * Detailed financials: - Profit and loss statement — as per ASX reporting ~ Profit and loss statement — detailed: ~ Reconciliation - ~ Balance.sheet ~ ‘Other financials - 2006 FY performance and 2007:-FY outlook 12
Slide 13: Profit & loss statement — ASX reporting
<All> Profit & loss statement — ASX reporting — austbrokers A.B.N. 60 000 000715 INCOME STATEMENT DED 30 JUNE 2006 Consolidated 2006 2005 $000 $000 Revenue from operating activities 52,524 42,948, Other income, 5,128 2470 Share of profit of associa 7,024 9,704 Other expenses (31584). .(29,505) Finan
Slide 14: Profit and loss statement
Profit and loss statement PROFIT SUMMARY - EXCLUDING BUSINESSES DIVESTED <All> a@ustbrokers 7008 2008 2005 Variance Variance ACTUAL Prospectus ACTUAL _ Prospectus 2005 Consolidated brokers Commission ane tess 49.936 50.290 an.082 (54) 18,854 Interest 2.928 4.821 4124 508 4.205 ‘Other income 1.003 83
Slide 15: Reconciliation of reported result to operating NPAT
Year to 30 June Profit after tax <All> a@ustbrokers Reconciliation of reported result to operating NPAT before profits relating to divestments and amortisation of intangibles. Reported Profit attributable tomembers Earnings from businesses divested Profits on sale of businesses : ge Profit from ongo
Slide 16: Balance sheet
<All> Balance sheet austbrokers 30 June 2006 30 June 2005 Assets $000 $000 Current Assets Cash at Bank : 28,378 16,276 Cash at Bank — Trust “29,867. 32,331 Receivables §2,746 49,136 Short term investments AA77 3,038 Total Current Assets 414,968 . 99,381 Non Current Assets. Receivables . i = 435 Plan
Slide 17: Balance sheet (cont)
<All> Balance sheet (cont austbrokers 30 June 2006 30 June 2005 Liabilities $000 $000 Current Liabilities Payables 83,473 79,919 Tax Liabilities 3,095 2,256 Borrowings ING Australia Holdings se Tee LS 21,004 Provisions 3,676. 1,964 interest bearing loans and borrowings 689 720 Total Current Liabilit
Slide 18: Other Financials
<All> Other Financials austbrokers Funding Market Capitalisation * Interest Bearing Liabilities * At30 June: $157.5 million; current: $148 million — $12 million (part fund broker ; loans of $15 million) Dividend per share * Cash available for acquisitions ~~. ae) cents Half Year — committed $6 milli
Slide 19: Agenda
<All> Ag enda austorokers * Overview * Detailed financials * 2006 FY Performance.and 2007 outlook oe ~ Market conditions DEEN ~ Strategy “= Highlights : 2 Outlook 19
Slide 20: Market conditions
<All> Market conditions austbrokers * Premium rates — Market remains soft — Less impact in the SME segment of the market than at the large corporate end a —- The SME market represents 68% of Austbrokers’ gross premium . Commission : fee mix moving more to fees and now at 66% 34% 20
Slide 21: Strategy
<All> Strategy austbrokers * Growth - acquisition * Back office synergies and efficiencies _ * Product development | * Premium funding « Life and superannuation 21
Slide 22: Highlights
Highlights 4 + Acquisitions + Alliances ~ 50% of Salisbury Payne Tinslay ~ 1 ~ Continuing to work with IBNA to negotiate October 2005 and settle terms of an alliance to be put to IBNA members ~ Traralgon Insurance Brokers (by Dustbrokers Stateplan} ~ 1 November Back offi ~ An 80% stake in Premier Au
Slide 23: Outlook
<All> Outlook austorokers . Market conditions unlikely to change significantly in immediate future + Austbrokers performance to remain steady — Healthy combination of fees and commissions - — Continued cost control through synergies * Insurance broking industry consolidation, ~ We continue.to seek o