Slide 1: 1H24 Investor Presentation
1H24 Investor Presentation 20 February 2024 Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 2: 1H24 Key Highlights
1H24 KEY HIGHLIGHTS 50.5% UNPAT growth STRONG GROUP AUSTRALIAN BROKING AGENCY STRATEGY with 33.0% organic + PERFORMANCE MOMENTUM CONTINUES WELL AHEAD OF PLAN accretive contribution from acquisitions ▪ 36.4% revenue growth ▪ Revenue grew 10.0% ▪ Revenue grew 45.4%, EBIT grew ▪ Margin expanded by 170b
Slide 3: 1H24 Results Overview
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Slide 4: 1H24 Financial Highlights
1H24 FINANCIAL HIGHLIGHTS Continued Revenue growth, margin expansion and accretive acquisitions delivering strong Underlying NPAT and EPS growth 1H24 1H23 Performance Highlights Underlying Revenue1 $635.7mn $466.0mn ▪ Growth in Underlying Revenue of 36.4% in 1H24, CAGR of 39.4% (+36.4%) (+42.4%) sin
Slide 5: 1H24 Financial Performance
1H24 FINANCIAL PERFORMANCE 1H24 Underlying NPAT grew by 50.5% on pcp, from strong organic performance and accretive acquisitions 1H23 to 1H24 Underlying NPAT1 Breakdown AUD mn 50.5% 8.9 70.2 17.9 (19.0%) 0.9 (1.9%) 38.4% 15.4 Includes 1Q24 Tysers 46.7 33.0% Includes 2Q24 Tysers growth vs. pcp 1H23 O
Slide 6: Divisional Performance
Divisional Performance
Slide 7: 1H24 Divisional Performance
1H24 DIVISIONAL PERFORMANCE Growth and profit improvement across all divisions Vs. 1H23 comparative OPERATING AUSTRALIAN BROKING BIZCOVER AGENCIES NEW ZEALAND TYSERS5,6 period BUSINESSES1,2 Underlying1 $274.8mn $43.1mn $84.6mn $40.8mn $192.4mn $635.7mn Revenue 10.0% 14.7% 45.4% 37.3% 36.4% 36.9% 39.
Slide 8: Australian Broking
AUSTRALIAN BROKING Network optimisation, disciplined acquisitions and favourable market conditions have enabled continuing revenue growth & margin expansion Key Metrics AUD 274.8mn Revenue1 36.9% EBIT Margin1 AUD 101.5mn EBIT1 1H24 Performance +10.0% on 1H23 +170bps on 1H23 +15.6% on 1H23 Australian
Slide 9: BizCover
BIZCOVER Good continuing growth and margin expansion with initiatives underway to enhance products, insurer panel and lead sources Key Metrics AUD 43.1mn Revenue 39.7% EBIT Margin AUD 17.1mn EBIT 1H24 Performance +14.7% on 1H23 +130bps on 1H23 +18.5% on 1H23 EBIT Australia (AUD mn)1 Australian Activ
Slide 10: Agencies
AGENCIES Strong growth and profit improvement with increased capacity for further growth Key Metrics AUD 84.6mn Revenue1 40.3% EBIT Margin1 AUD 34.1mn EBIT1 +380bps Ex. Profit Comms2 1H24 Performance +45.4% on 1H23 +870bps on 1H23 +85.3% on 1H23 Revenue Growth 1H21-1H24 (AUD mn) Premium Growth CY21-
Slide 11: New Zealand
NEW ZEALAND Revenue and profit growth in all businesses with 1390bps EBIT margin expansion AUD 40.8mn Revenue1 36.6% EBIT Margin1 AUD 14.9mn EBIT1 Key Metrics 40.6% Excl. NZ Tech Inv6 AUD 16.6mn Excl. NZ Tech Inv6 1H24 Performance +37.3% on 1H23 +1390bps on 1H23 +660bps Excl. NZ Tech Inv6 +121.9% on
Slide 12: Tysers
TYSERS2 Revenue and profit on track with operating model and portfolio changes underway to position for future growth Key Metrics 1H24 AUD 192.4mn Revenue1 20.4% EBIT Margin1 AUD 39.2mn EBIT1 Performance 1H23 (3M to 31 Dec’22) to 1H24 Underlying EBIT (AUD mn)1 Synergies (AUD mn) 39.2 36.6 2.6 19.1 1
Slide 13: Debt and FX
Debt and FX
Slide 14: Group Debt Funding Update
Group Debt Funding Update Balance Sheet strength to support growth strategy January’24 Debt Facility Refinancing Details AUD AUD • Larger AUD 850mn syndicated debt facility (up from AUD 675mn) 2.02x 122.0mn 267.7mn Leverage Ratio Cash & Undrawn Cash & Undrawn • AUD 550mn term facilities and AUD 300m
Slide 15: Tysers Transactional Forex Exposure
TYSERS TRANSACTIONAL FOREX EXPOSURE No material change in makeup of FX flows. USD revenue hedging using monthly forwards. Portfolio by FX Currency1 Earn Revenue 22% 7% 5% 3% 60% 3% Operational Hedging ▪ 22% of revenue earned in GBP 3% earned in AUD ▪ 15% of revenue earned in EUR + CAD + ’Other’ – re
Slide 16: Ambition & Outlook
Ambition & Outlook
Slide 17: Our Long-Term Levers for Earnings Growth
OUR LONG-TERM LEVERS FOR EARNINGS GROWTH There are multiple long-term earnings drivers across our global portfolio, with significant potential for further growth Improved Earning driver Consolidation / New Business Premium Rate M&A Commercial Cost Reduction Technology priorities Specialisation Growt
Slide 18: FY24 Outlook
FY24 OUTLOOK UNPAT guidance upgraded to AUD 161.0 – 171.0mn (from AUD 154.0 to 164.0mn), continued strong progress across all parts of AUB FY24 Underlying NPAT1 Breakdown $mn AUD 2H24: 90.8 – 100.8 (10.1% - 22.3% growth vs pcp) 4.2 161.0 – 171.0 5.2 9.0 – 19.0 (1.0) 82.4 (9.0) 10.9% – 23.0% HoH grow
Slide 19: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 20: Closing
Closing Mike Emmett CEO and Managing Director
Slide 21: Appendices
APPENDICES A 1H24 Detailed Financial Results Appendices 21
Slide 22: A. 1H24 Detailed Financial Results
Appendices A. 1H24 – Detailed Financial Results
Slide 23: 1H24 Divisional Performance Breakdown
1H24 DIVISIONAL PERFORMANCE BREAKDOWN 1H23 to 1H24 Underlying NPAT1 (AUD mn) 50.5% 14.0 20.2 11.5 6.1 70.2 12.6 1.0 9.2 46.7 Pre-Tax 1H23 Australian BizCover Agencies New Zealand Tysers2 Net Corporate Tax 1H24 Broking Broking Result3 1. Underlying NPAT is used by management and the board to assess o
Slide 24: Australian Broking
AUSTRALIAN BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 18.3% to AUD 59.1mn (1H23: AUD 49.9mn). 1H24 1H23 Movement Movement (%) (AUD mn) Commission and fee income (net) 234.3 218.8 15.5 7.0% ▪ EBIT Margin of 36.9% up 170bps from 1H23. Premium Funding 19.5
Slide 25: BizCover
BIZCOVER Profit contribution to AUB Group – Pre-tax Movement ▪ Revenue up 14.7% from 1H23. 1H24 1H23 Movement (AUD mn) (%) ▪ Underlying pre-tax profit increased 17.3% to AUD 6.7mn (1H23: AUD 5.7mn). Underlying Revenue1 43.1 37.6 5.5 14.7% ▪ Increase due to organic profit growth assisted by operating
Slide 26: Agencies
AGENCIES Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased by 102.3% to AUD 24.9mn (1H23: AUD 1H24 1H23 Movement Movement (%) (AUD mn) 12.3mn). Commission and fee income (net) 71.8 54.8 16.9 30.9% Interest 3.4 1.1 2.4 226.5% ▪ EBIT margin of 40.3%. Excluding profit com
Slide 27: New Zealand Broking
NEW ZEALAND BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 128.7% to AUD 10.9mn (1H23: AUD 4.8mn). 1H24 1H23 Movement Movement (%) (AUD mn) Commission and fee income (net) 37.0 27.5 9.5 34.7% ▪ EBIT Margin of 36.6% up 1390bps from 1H23. Premium Funding 2.1 1
Slide 28: Tysers
TYSERS3 Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit contributed by Tysers for the 6 months to 31 December 1H24 1H23 Movement Movement (%) (AUD mn) (3 months since acq only) 2023 was AUD 38.2mn vs 3 months for 1H23 of AUD 18.0mn. Commission and fee income (net) 175.3 84.3 9
Slide 29: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview (AUD mn) 1H24 FY23 Movement Cash – incl subs 208.8 260.4 (51.6) Leverage Ratio Cash – Trust Accounts 884.4 936.4 (52.0) 31 Dec’23 Investment in Associates 248.8 238.5 10.3 2.02x Intangible assets and goodwill 2,005.4 1,956.8 48.6
Slide 30: Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 1H24 1H23 Movement (AUD $’000) (AUD $’000) (AUD $’000) Net Profit after tax attributable to equity holders of the parent9 53,124 2,203 50,921 Add back/(less): (net of NCI and income tax) Amortisation of broking registers8,9 19,015 14,426 4,589
Slide 31: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,3 1H24 (AUD $’000) 1H23 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 274,777 249,699 25,078 10.0% Australian Broking expenses (173,264) (161,915) (11,349) 7.0% EBIT - Australian Broking 101,513 87,784 13,729 15.6% Tysers revenue2 1
Slide 32: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 1H24 (AUD $’000) 1H23 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 274,777 249,699 25,078 10.0% Australian Broking expenses (176,579) (163,688) (12,891) 7.9% Net profit - Australian Broking 98,198 86,011 12,187 14.2% Profit attribu
Slide 33: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1,4 1H24 ($’000) 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 ($’000) Australian Broking revenue 274,777 519,706 270,00
Slide 34: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 1H24 ($’000) 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 274,777 519,706 270,007
Slide 35: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT 1H24 1H23 (AUD $’000) (AUD $’000) Cash flows from operations 42,782 23,608 Cash flows from investing activities Acquisitions and portfolio purchases (47,098) (126,139) Sales proceeds (net of cash reduced on deconsolidation) 17,848 13,184 Plant equipment / Other
Slide 36: A3.1 Full Conversion of Profits to Cash
A3.1 FULL CONVERSION OF PROFITS TO CASH Cash Flow Summary 1H24 1H23 Statutory Operating Cash Flow1 AUD 42.8mn AUD 23.6mn AUD 56.4mn Add back: Acquisition and other one off costs2 AUD 35.8mn (incl. DoJ payment) Less: Lease Obligation Payments (AUD 7.4mn) (AUD 4.2mn) Adjusted Operating Cashflow AUD 91
Slide 37: 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 38: Thank You
Thank You