Slide 1: FY16 results, 19 August 2016
19 August 2016
Slide 2: Important notice
important notice The information contained in this presentation is for information purposes only. The information contained in this presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particula
Slide 3: Executive summary
Slide 4: Strong NPAT result driven by industry and Medibank-specific factors
strong NPAT result driven by a mix of industry and medibank- specific factors Group NPAT • • $417.6m o o Health Insurance operating profit o $510.7m • o • Final dividend • 6.0cps
Slide 5: Growth underpinned by strong health insurance result
growth underpinned by strong health insurance result
Slide 6: Group financial summary
group financial summary Financial year ended 30 June ($m) 2016 2015 Health Insurance premium revenue 6,172.5 5,934.8 4.0% Complementary Services revenue 569.3 641.2 (11.2)% Revenue 6,741.8 6,576.0 2.5% Health Insurance operating profit 510.7 332.2 53.7% Complementary Services operating profit 24.8 1
Slide 7: Health insurance
Slide 8: Claims management has delivered top tier industry margins earlier than expected
claims management has delivered top tier industry margins earlier than expected; focus on improving top line performance to increase • o o • o o o •
Slide 9: Growth trajectory declined due to challenging industry conditions
growth trajectory declined due to challenging industry conditions and below market performance in both acquisition and lapse • o • • • •
Slide 10: Continued margin improvement but some normalisation of claims growth in 2H16
continued margin improvement but some normalisation of claims growth in 2H16 • o o • • • •
Slide 11: Margin improvement driven by product management and payment integrity
continued margin improvement driven by product management and payment integrity program
Slide 12: MER reduced further, but need for greater reinvestment
MER reduced further, but growing need for greater reinvestment to address top line performance • • • o o o o
Slide 13: Complementary services
Slide 14: Profit improvement reflects divestments and solid result from ongoing businesses
profit improvement reflects divestments and solid result from ongoing businesses • • • •
Slide 15: Investment portfolio
Slide 16: Target asset allocation remains unchanged
target asset allocation remains unchanged
Slide 17: Investment returns affected by lower equity markets and interest rates
investment returns affected by lower equity markets and interest rates • o o •
Slide 18: Other financial information & capital
Slide 19: Corporate overheads, other expenses, tax
corporate overheads, other expenses, tax • • o o • o
Slide 20: Strong, debt free balance sheet
strong, debt free balance sheet • • • • •
Slide 21: Operating cash flow impacted by working capital movements
operating cash flow impacted by working capital movements • o o • • •
Slide 22: Health insurance capital within Medibank target range of 12–14%
health insurance capital within medibank target range of 12–14%
Slide 23: Final dividend brings payout ratio within FY16 target of 70-75%
final dividend brings payout ratio within FY16 full year target of 70-75% • • • Final dividend FY16 payout ratio 6.0cps 71.7%
Slide 24: Initial impressions, priorities & outlook
Slide 25: Major focus on customer value and experience
major focus on customer value and experience
Slide 26: Affordability pressures rising; market growth slowing
affordability pressures rising; market growth slowing
Slide 27: Must prioritise customers' needs and outcomes to restore health of Medibank brand
must prioritise customers’ needs and outcomes to restore health of medibank brand and sustainably address top line performance • • • o o o o • • •
Slide 28: FY17 health insurance outlook
FY17 health insurance outlook The FY17 Health Insurance operating result is expected to be impacted by a variety of factors, including: Premium growth * Slowing market growth reflecting slowing population growth but relatively steady health insurance participation rate * Continued market share loss,
Slide 29: is
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Slide 30: Appendix
Slide 31: Group financial summary: half by half
group financial summary: half by half Revenue 6,741.8 3,361.2 3,380.6 6,576.0 3,306.3 3,269.7 Health Insurance operating profit 510.7 239.0 271.7 332.2 161.1 171.1 Complementary Services operating profit 24.8 15.6 9.2 14.2 7.0 7.2 Segment operating profit 535.5 254.6 280.9 346.4 168.1 178.3 Corporat
Slide 32: Health insurance result: half by half
health insurance result: half by half Premium revenue 6,172.5 3,092.5 3,080.0 5,934.8 2,991.5 2,943.3 er eata eee 5,145.8) (2,594.7) (2,551.1) (5,092.8) (2,557.6) (2,535.2) incl. risk equalisation Gross profit 1,026.7 497.8 528.9 842.0 433.9 408.1 Management expenses (516.0) (258.8) (257.2) (509.8)
Slide 33: Glossary: Policyholder PSEUs or Policy Units
Policyholder PSEUs or Policy Units RE Underlying NPAT