Slide 1: Results 1H FY2016
RESULTS 1H FY2016
Slide 2: The Group's Strategic Goal
THE GROUP’S STRATEGIC GOAL To be the leading provider of risk management, advice and solutions to clients. Page 2 - AUB Group Ltd 1HY16 Results
Slide 3: Performance Summary 1HY16
PERFORMANCE SUMMARY 1HY16 Delivering growth in a challenging market . REPORTED NPAT GROWTH. Up 72% Including after tax profit on sale of Strathearn ADJUSTED NPAT GROWTH. Up 3.5% DIVIDEND MAINTAINED. 12c Fully franked DIVERSIFICATION. To 27% 27% of earnings outside Australian broking GROUP REVENUE IN
Slide 4: Business Highlights 1H FY16
BUSINESS HIGHLIGHTS 1H FY16 Delivering growth in a challenging market. INSURANCE BROKING. - Australia Continued to build customer and policy numbers despite challenging market. Rate of premium rate decline in market less than prior comparable period. Income held flat despite premium rate reduc
Slide 5: Benefits of Group Strategy Delivering
BENEFITS OF GROUP STRATEGY DELIVERING Income generated from non Australian broking supporting growth. Year end June 12 - Dec 15 $’000s 70,250 60,250 50,250 40,250 30,250 20,250 10,250 250 June 12 June 13 June 14 June 15 Dec 15 (12 months ending) Total Australian Broking profit Total Brokers Profit/A
Slide 6: Group Structure Supports Strategy
GROUP STRUCTURE SUPPORTS STRATEGY Fully integrated structure facilitates growth. AUB Group Broking network management AIMS NZbrokers Insurance Specialist Risk Broking U/W Services • AIMS: > $3.8bn • NZbrokers: GWP (JV with >$0.5bn GWP: leading broking New Zealand’s • 50+ broking groups • 21 agency g
Slide 7: Financial Performance
FINANCIAL PERFORMANCE
Slide 8: Key Results
KEY RESULTS Growth in challenging market. • Reported NPAT increased to $23.8m up 72% on 1HY15, 1HY16 1HY15 VARIANCE including $6.3m after tax profit on sale of associates. REVENUE FROM ORDINARY 105,938 97,691 8.4% • Adjusted NPAT increased 3.5% to $12.9m. ACTIVITIES ($000S) • Strong EPS growth, with
Slide 9: Reported NPAT
REPORTED NPAT 1HY16 1HY15 INCREASE $’000 $’000 % Revenue from ordinary activities1, 2 105,938 97,691 8.4% Expenses from ordinary activities2 (89,623) (81,599) 9.8% 16,315 16,092 1.4% Net profit before tax on sale of interests in associates, portfolios and controlled entities 9,122 - Adjustment to th
Slide 10: Adjusted NPAT
ADJUSTED NPAT¹ Reconciliation. 1HY16 1HY15 INCREASE $’000 $’000 % Net Profit after tax attributable to equity holders of the parent 23,788 13,853 71.7% Reconciling items net of tax and non controlling interest adjustments for: Reduction in contingent consideration for acquisitions of controlled enti
Slide 11: AUB Group Profit Contribution Analysis
AUB GROUP PROFIT CONTRIBUTION ANALYSIS Benefits of group diversification delivering. Strong growth contribution from Risk Services and New Zealand demonstrates benefits of strategy and resultant income diversification. Group expenses decreased on ’like for like’ basis (i.e. net of STI provision). Pr
Slide 12: Insurance Broking - Australia
INSURANCE BROKING - AUSTRALIA Stable income and tight cost management. • Broker total income down 0.7% and expenses up 0.6% resulting in 4.7% profit reduction (before non-controlling interests). • Key drivers of reduction - premium rate reductions and lower interest rate. • Good growth in life incom
Slide 13: Insurance Broking – New Zealand
INSURANCE BROKING – NEW ZEALAND Performing ahead of expectations. • Pre-tax profit contribution to AUB Group of $0.6m ($0.5m loss in 1HY15, due to acquisition costs). Before non-controlling interests profit increased $1.0m ($0.6m loss in 1HY15). • Benefits from merger of two largest cluster groups i
Slide 14: Underwriting Agencies
UNDERWRITING AGENCIES Strong policy growth and profit commissions in competitive market. • Net profit contribution to AUB Group of $3.6m, down 5.2% on pcp. • Total income growth up 7.7% (pcp) with strong policy growth offset by reductions in average premiums; and increased profit commissions underpi
Slide 15: Underwriting Agencies
UNDERWRITING AGENCIES Strong policy growth and profit commissions in competitive market. GWP and Policy Account Growth Profile 2010 – 2015 250000000 60000 50000 200000000 40000 150000000 30000 GWP Policy Count 100000000 20000 50000000 10000 0 0 2010 2011 2012 2013 2014 2015 • Growth in GWP now circa
Slide 16: Risk Services
RISK SERVICES Growing profit and capability. • Market has strong growth prospects across workers’ compensation, injury management and ancillary risk management activities and is less impacted by the insurance cycle. • AUB Group has acquired 4 stand alone businesses since February 2014 under the ‘own
Slide 17: Balance Sheet & Funding
BALANCE SHEET & FUNDING Balance sheet remains strong, with increased facility for acquisitions. Group balance sheet: BALANCE SHEET ($M) 31/12/15 30/06/15 • Investments (the aggregate of Investments in Associates CASH 50.9 50.5 and Intangible Assets and Goodwill) have increased by $14.5m due to acqui
Slide 18: Dividends Per Share
DIVIDENDS PER SHARE • Interim dividend per share of 12 cents, consistent with prior years. • DRP remains in place for interim dividend and will not be underwritten. CENTS PER SHARE 40 35 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Interim Dividend Final Dividend Page 18
Slide 19: FY16 Outlook
FY16 OUTLOOK • The commercial lines insurance market outlook remains challenging, and while premium rates were expected to stabilise over FY16 in Australia and New Zealand, the last six months have continued to deteriorate, albeit at lower single digit declines. In Australia and New Zealand, premium
Slide 20: Disclaimer
DISCLAIMER This release may contain forward looking statements relating to future matters, which are subject to known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of AUB Group Limited to be materially different from th
Slide 21: Appendices
APPENDICES
Slide 22: Appendix – HY16 Results: Management presentation
APPENDIX 1 – HY16 RESULTS: Management presentation. 1HY16 1HY15 VARIANCE VARIANCE Adjusted NPAT profit analysis – 100% ownership view $’000 $’000 $’000 % BROKER OPERATIONS Commission And Fees 121,642 122,182 (540) (0.4)% Life Income 6,786 6,025 761 12.6% Profit Commissions - 224 (224) N/a Premium Fu
Slide 23: Appendix – Cash Flow
APPENDIX 2 – CASH FLOW: 1HY16 1HY15 $’000 $’000 Cash flows from operations 13,130 14,967 Cash flows from investing activities Acquisitions¹ (14,166) (20,978) Prepayment for acquisition of controlled entity (33,974) - Proceeds from disposal of associates 28,930 - Cash out flow from Deconsolidation of