Slide 1: FY23 Results – Investor Presentation
ASX Announcement 22 August 2023 The Manager Market Announcements Office Australian Securities Exchange Ltd Level 6, Exchange Centre 20 Bridge Street Sydney NSW 2000 FY23 Results – Investor Presentation Please find attached for immediate release in relation to AUB Group Limited (AUB) the following do
Slide 2: FY23 Investor Presentation
FY23 Investor Presentation 22 August 2023 Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 3: FY23 Key Highlights
FY23 KEY HIGHLIGHTS 74.4% UNPAT growth STRONG GROUP AUSTRALIAN BROKING AGENCY STRATEGY & 33.7% growth in PERFORMANCE MOMENTUM WELL AHEAD EPS CONTINUES ▪ 61.2% revenue growth to $1.1bn ▪ Revenue grew 13.7% ▪ Revenue grew 34.3%, EBIT grew 39.5% ▪ 160bps margin expansion to ▪ Margin expanded by 140bps
Slide 4: FY23 Results Overview
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Slide 5: FY23 Financial Highlights
FY23 FINANCIAL HIGHLIGHTS Continued Revenue growth, margin expansion and accretive acquisitions delivering strong Profit and EPS growth FY23 FY224 Performance Highlights Underlying Revenue1 $1,111.4mn $689.5mn ▪ Growth in Underlying Revenue of 61.2% in FY23, CAGR of 34.4% (+61.2%) (+12.2%) since FY2
Slide 6: FY23 Financial Performance
FY23 FINANCIAL PERFORMANCE FY23 Underlying NPAT grew by 74.4% on pcp, from strong organic performance as well as accretive acquisitions, particularly Tysers FY22 to FY23 Underlying NPAT1 Breakdown AUD mn 74.4% (25.8) 129.1 29.5% 33.2 95.9 44.9% 12.8 9.1 17.2% After deducting AUD 25.8mn 74.0 net fund
Slide 7: Shareholder Returns
SHAREHOLDER RETURNS 33.7% uplift in Underlying EPS and FY23 final dividend of 47.0 cents Underlying Earnings Per Share1, 2 (Cents per share) 33.7% 12.3% 129.32 22.0% 96.70 86.12 70.61 FY20 FY21 FY22 FY23 Dividend Per Share (Cents) Return on Invested Capital (ROIC) (%) – 3 Year Average 16.4% 64.0 55.
Slide 8: Full Conversion of Profits to Cash
FULL CONVERSION OF PROFITS TO CASH Cash Flow Summary1 FY23 FY22 Statutory Operating Cash Flow2 AUD 113.4mn AUD 102.0mn Add back: Acquisition related costs3 AUD 38.8mn - Less: Lease Obligation Payments (AUD 10.2mn) (AUD 7.4mn) Adjusted Operating Cashflow AUD 142.0mn AUD 94.6mn Underlying NPAT4 AUD 12
Slide 9: Interest and Leverage
INTEREST AND LEVERAGE Incremental interest income exceeds incremental borrowing cost Strong cash and debt headroom for normal acquisition appetite Interest Earning Assets vs Look through share of Debt at 30 Jun’23 (AUD mn)1 AUB look-through Trust AUB look-through AUD and Operating Cash1 share of deb
Slide 10: Overview of Transactional Forex Exposure
OVERVIEW OF TRANSACTIONAL FOREX EXPOSURE FY23 income 61% in USD, 21% in GBP. 89% of expenses in GBP. USD revenue hedging using monthly forwards. Portfolio by FX Currency1 Earn Revenue 21% 7% 5% 3% 61% 3% Operational Hedging ▪ 21% of revenue earned in GBP 3% earned in AUD ▪ 15% of revenue earned in E
Slide 11: FY23 Execution Priorities Update
FY23 EXECUTION PRIORITIES UPDATE Consistent focus on delivering against Strategic Priorities has been key to AUB Group performance FY23 Priority FY23 Achievements Revenue growth of 20% and underlying EBIT growth of 33.5% to $20.6mn, delivered EBIT margin expansion of Lola pilot Live with 3 insurers
Slide 12: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Maintained AA rating of ESG initiatives from MSCI and recertified as “Great Place to Work” - AUB Group is committed to reducing our scope 1 and 2 emissions for all of our Australian-controlled entities in which we hold a >70% shareholding Environmental o Identifi
Slide 13: Divisional Performance
Divisional Performance
Slide 14: FY23 Divisional Performance
FY23 DIVISIONAL PERFORMANCE Strong performance across all divisions OPERATING ALL Vs. FY22 comparative AUSTRALIAN TYSERS period BIZCOVER AGENCIES NEW ZEALAND BUSINESSES EX OPERATING BROKING (9 Months since acq only) TYSERS1,2 BUSINESSES Underlying1 $519.7mn $80.0mn $139.3mn $70.7mn $809.8mn $301.6mn
Slide 15: Australian Broking
AUSTRALIAN BROKING Network optimisation, disciplined acquisitions and favourable market conditions have enabled continuing revenue growth & margin expansion Key Metrics AUD 519.7mn Revenue1 35.1% EBIT Margin1 AUD 182.3mn EBIT1 FY23 Performance +13.7% on FY22 +140bps on FY22 +18.2% on FY22 Australian
Slide 16: BizCover
BIZCOVER Good continuing growth and margin expansion with initiatives under way to enhance products, insurer panel and lead sources Key Metrics AUD 80.0mn Revenue 40.1% EBIT Margin AUD 32.1mn EBIT FY23 Performance +14.8% on FY22 +230bps on FY22 +21.6% on FY22 Revenue Growth – EBIT Australia (AUD mn)
Slide 17: Agencies
AGENCIES General Commercial, Specialty and Strata continue to deliver growth and profit improvement with the original $1bn GWP goal now within reach Key Metrics AUD 139.3mn Revenue1 38.4% EBIT Margin1 AUD 53.5mn EBIT1 +520bps Ex. Profit Comms3 FY23 Performance +34.3% on FY22 140bps on FY22 +39.5% on
Slide 18: New Zealand
NEW ZEALAND Revenue and profit growth in all businesses with 290bps EBIT margin expansion AUD 70.7mn Revenue1 29.1% EBIT Margin1 AUD 20.6mn EBIT1 Key Metrics 38.0% Excl. NZ Tech Inv7 AUD 26.9mn Excl. NZ Tech Inv7 FY23 Performance +20.0% on FY22 +290bps on FY22 +310bps Excl. NZ Tech Inv7 +33.5% on FY
Slide 19: Tysers Financial Performance Update
TYSERS FINANCIAL PERFORMANCE UPDATE Stronger revenue growth combined with the benefit of cost reduction actions has delivered EBIT margins ahead of forecast (for 9 months to Jun’23) Key Metrics 26.1% EBIT Margin1 9M to Jun’23 AUD 301.6mn Revenue1 AUD 78.7mn EBIT1 Performance (forecast 23.7%) Actual
Slide 20: Tysers Synergies & Performance Efficiencies
TYSERS SYNERGIES & PERFORMANCE EFFICIENCIES FY23 direct AUB broker placements ahead of expectation, cost synergies on target while FY24 Agency binder placements are already ahead of plan Category Details FY23 In-Year Run-rate Run-rate Target *At 22 August 2023: ▪ Transition Austagencies’ binder plac
Slide 21: Ambition & Outlook
Ambition & Outlook
Slide 22: Medium-term Margin Ambition Upgraded
MEDIUM-TERM MARGIN AMBITION UPGRADED Margin improvement remains a significant opportunity together with further potential to upgrade medium-term targets FY23 Actual Margin Target Approach to deliver (∆ to FY22) Margin Ongoing portfolio optimisation, equity step- Australian Broking 35.1% +140bps 40%
Slide 23: Evolution of the AUB Group Operating Model
EVOLUTION OF THE AUB GROUP OPERATING MODEL Transitioning coordination of the business to global verticals across Retail Broking, Agencies and Wholesale Broking AUB Group Future Operating Model Retail Broking Wholesale Broking Agencies & MGAs Australia Geography Strategic coordination of AUB business
Slide 24: FY24 Outlook
FY24 OUTLOOK Underlying NPAT for FY24 is forecast to be between AUD 154.0 -164.0mn, representing growth of 19.3% - 27.0% over FY23 FY23 to FY24 Underlying NPAT1 Breakdown (AUD mn) 19.3% - 27.0% 13.7% - 16.8% 7.2 – 13.2 154.0 – 164.0 7.2 - 13.2 5.0 146.8 – 150.8 14.6 – 18.6 (1.9) 3.1 5.6% – 10.2% (1.
Slide 25: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 26: Closing
Closing Mike Emmett CEO and Managing Director
Slide 27: Appendices
APPENDICES A FY23 Detailed Financial Results Appendices B AUB Group Business Overview C AUB Group Portfolio Overview 26
Slide 28: Appendices A. FY23 – Detailed Financial Results
Appendices A. FY23 – Detailed Financial Results
Slide 29: FY23 Divisional Performance Breakdown
FY23 DIVISIONAL PERFORMANCE BREAKDOWN FY22 to FY23 Underlying NPAT1 (AUD mn) 74.4% 5.3 5.9 12.3 2.0 19.4 129.1 42.2 18.6 74.0 After deducting AUD 34.7mn net funding costs2 Pre-Tax FY22 Australian Tysers net BizCover Agencies New Zealand Corporate Head Tax FY23 Broking of funding costs2 Broking Offic
Slide 30: Australian Broking
AUSTRALIAN BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 21.6% to AUD 104.8mn (FY22: AUD 86.1mn). FY23 FY22 Movement Movement (%) (AUD mn) Commission and fee income (net) 456.2 413.3 42.9 10.4% ▪ EBIT Margin of 35.1% up 140bps from FY22. Premium Funding 29.
Slide 31: Tysers
TYSERS Profit contribution to AUB Group – Pre-tax ▪ Tysers included for the first time from 1 October 2022. FY23 FY22 (AUD mn) (9 months since acq only) ▪ Underlying pre-tax profit from Tysers for the 9 months to 30 June 2023 of AUD 76.9mn. Commission and fee income (net) 281.8 - Premium Funding 0.8
Slide 32: BizCover
BIZCOVER Profit contribution to AUB Group – Pre-tax Movement ▪ Revenue up 14.8% from FY22 (Direct Channels: 18.3%). FY23 FY22 Movement (AUD mn) (%) ▪ Underlying pre-tax profit increased 18.9% to AUD 12.5mn (FY22: AUD Underlying Revenue1 80.0 69.7 10.3 14.8% 10.5mn). Underlying Expenses1 (48.0) (43.4
Slide 33: Agencies
AGENCIES Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 53.9% to AUD 35.1mn (FY22: AUD 22.8mn). FY23 FY22 Movement Movement (%) (AUD mn) Commission and fee income (net) 130.1 93.5 36.6 39.2% ▪ EBIT margin of 38.4%. Excluding profit commissions in both periods, the E
Slide 34: New Zealand Broking
NEW ZEALAND BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 59.4% to AUD 14.3mn (FY22: AUD 9.0mn) due FY23 FY22 Movement Movement (%) (AUD mn) to: Commission and fee income (net) 64.5 53.5 10.9 20.5% o Revenue and profit growth for all businesses, supported b
Slide 35: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview (AUD mn) FY23 FY22 Movement Cash – incl subs 260.4 259.3 1.1 Leverage Ratio Cash – Trust Accounts 936.4 333.1 603.3 30 Jun’23 Investment in Associates 238.5 250.1 (11.6) 1.71 Intangible assets and goodwill 1,956.8 622.5 1,334.3 O
Slide 36: A1.0 Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 FY23 FY22 Movement (AUD $’000) (AUD $’000) (AUD $’000) Net Profit after tax attributable to equity holders of the parent 65,253 80,836 (15,583) Add back/(less): (net of NCI and income tax) Share of Amortisation of broking registers8 30,352 11,
Slide 37: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,3 FY23 (AUD $’000) FY22 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 519,706 457,211 62,495 13.7% Australian Broking expenses (337,397) (303,029) (34,368) 11.3% EBIT - Australian Broking 182,309 154,182 28,127 18.2% Tysers revenue2
Slide 38: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 FY23 (AUD $’000) FY22 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 519,706 457,211 62,495 13.7% Australian Broking expenses (342,082) (305,526) (36,556) 12.0% Net profit - Australian Broking 177,624 151,685 25,939 17.1% Profit attr
Slide 39: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1,4 FY23 ($’000) 2H23 ($’000) 1H23 ($’000) FY22 ($’000) 2H22 ($’000) 1H22 ($’000) FY21 ($’000) 2H21 ($’000) 1H21 ($’000) FY20 ($’000) 2H20 ($’000) 1H20 ($’000) FY19 ($’000) 2H19 ($’000) 1H19 ($’000) Australian Broking revenue 519,706 270,007 249,699 457,211 238
Slide 40: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 FY23 ($’000) 2H23 ($’000) 1H23 ($’000) FY22 ($’000) 2H22 ($’000) 1H22 ($’000) FY21 ($’000) 2H21 ($’000) 1H21 ($’000) FY20 ($’000) 2H20 ($’000) 1H20 ($’000) FY19 ($’000) 2H19 ($’000) 1H19 ($’000) Australian Broking revenue 519,706 270,007 249,699 457,211 238,2
Slide 41: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT FY23 FY22 (AUD $’000) (AUD $’000) Cash flows from operations 113,376 101,961 Cash flows from investing activities Acquisitions (171,713) 103,372 Sales proceeds (net of cash reduced on deconsolidation) 51,845 13,987 Plant equipment / Other (908) 307 Payments for
Slide 42: B. AUB Group Business Overview
Appendices B. AUB Group Business Overview
Slide 43: AUB Group – An Overview
AUB GROUP – AN OVERVIEW AUB Group Limited is an ASX200 listed group comprising insurance brokers and underwriting agencies, helping our clients to safeguard a stronger, protected future ▪ Full complement of services and technology supporting the Austbrokers AUSTRALIAN network of 41 brokerages ▪ Esta
Slide 44: Overview: Australian Broking
OVERVIEW: AUSTRALIAN BROKING OVERVIEW ▪ Our Australian broking businesses encompass some of Australia’s largest and most reputable brokerages, with specialist expertise, market penetration and quality client portfolios ▪ The portfolio consists of ~2,400 staff with 64% 41 capabilities across a broad
Slide 45: Overview: Tysers
OVERVIEW: TYSERS OVERVIEW ▪ Leading specialist international insurance broker and the 6th largest wholesale broker in the Lloyd’s marketplace with 200 years of expertise ▪ AUD 4.1bn Premium, ~1,000 employees, ~AUD 4.1bn Tysers Wholesale Tysers Retail ~34,000 across offices in 10 countries clients in
Slide 46: Overview: BizCover
OVERVIEW: BIZCOVER BizCover Channel Multi-channel market penetration leverages market leading platform while investment in brand drives operational leverage Intermediated BizCover Direct White-label BizCover for Brokers ExpressCover Leading full lifecycle SME insurance platform in AU and NZ – operat
Slide 47: Overview: Agencies
OVERVIEW: AGENCIES OVERVIEW ▪ Our Agencies comprise some of Australia’s leading specialist underwriters who distribute and manage insurance products on behalf of domestic and internationally licensed insurers, including Lloyd’s ▪ The business includes 27 agencies, driving 17% 27 ~$900mn in premium,
Slide 48: Overview: New Zealand
OVERVIEW: NEW ZEALAND OVERVIEW ▪ 4 Broking groups and Insurance Advisernet NZ broker network o Selective investments in high-performing broking businesses 9% 4 Brokers ▪ 2 underwriting agencies ~AUD 1.1bn contribution to 2 Agencies ~205,000 o Expansion of 360 in New Zealand through in premium group
Slide 49: C. AUB Group Portfolio Overview
Appendices C. AUB Group Portfolio Overview
Slide 50: AUB Group Ex Tysers: Insurance Portfolio Mix, by Product and Insurer
AUB GROUP EX TYSERS: INSURANCE PORTFOLIO MIX, BY PRODUCT AND INSURER Portfolio Mix – Premium by Product / Risk Line Portfolio Mix – Premium by Insurer 20% 18% 18% 2% 40% 2% 10% 4% 13% 4% 10% 5% 8% 8% 9% 2% 8% 2% 7% 3% 7% Business Farm ISR Workers Comp CGU/IAG Allianz National Transport Insurance Lia
Slide 51: Australian Broking Portfolio Mix by Client Segment, Product, Geography & Insurer
AUSTRALIAN BROKING PORTFOLIO MIX BY CLIENT SEGMENT, PRODUCT, GEOGRAPHY & INSURER Client Segment Mix Product Line Mix Geography Mix Insurer Mix Corporate 28% Busines PI NSW SA NT QBE National Transport Insurance 19% 5% 38% 11% 2% 11% 4% Medium Enterprise 27% ISR Strata VIC WA TAS Allianz Zurich 14% 4
Slide 52: AUB Group Ex Tysers: Insurance Portfolio Mix, by Product Category and Geography
AUB GROUP EX TYSERS: INSURANCE PORTFOLIO MIX, BY PRODUCT CATEGORY AND GEOGRAPHY Portfolio Mix – by Category (%) Portfolio Mix – by Geography (%) 11% 13% NT 1% QLD 12% WA 7% NSW SA 31% 9% ACT 2% 87% 89% VIC 16% Commercial Personal TAS NZ 1% 21% 51 Portfolio mix is based on available data from key Aus
Slide 53: Notice
NOTICE SUMMARY INFORMATION This document has been prepared by AUB Group Limited (ABN 60 000 000 715) (AUB). It is a presentation of general background information about AUB’s activities current at the date of the presentation. It is information in a summary form and does not purport to be complete.
Slide 54: Thank You
Thank You