Slide 1: AUB Group 1H20 Results - Analyst Pack announcement letter
For personal use only 25 February 2020 The Manager Market Announcements Office Australian Securities Exchange Ltd Level 6, Exchange Centre 20 Bridge Street Sydney NSW 2000 FOR RELEASE TO THE MARKET Dear Sir / Madam AUB Group Limited 1H20 Results - Analyst Pack Attached for immediate release in relat
Slide 2: 1H20 Results Analyst Pack
For personal use only . 1H20 Results Analyst Pack 25 February 2020 © 2020 AUB Group Limited
Slide 3: 1H20 Group Performance
1H20 GROUP PERFORMANCE 1H20 1H19 Movement For personal use only Underlying Revenue1 $272.1mn $256.8mn 5.9% Underlying EBIT Margin2 23.0% 22.1% 90bps Adjusted NPAT3 $21.3mn $17.0mn 25.3% Adjusted Earnings per Share 28.96 cents 25.86 cents 12.0% Dividend per Share 14.5 cents 13.5 cents 7.4% Gearing Ra
Slide 4: 1H20 Performance Breakdown
1H20 PERFORMANCE BREAKDOWN 1H19 to 1H20 Adjusted NPAT1 Breakdown ($mns) For personal use only +25% +23% 0.4 22.8 1.3 0.9 0.6 21.3 3.3 18.6 1.6 17.0 1H19 1H19 Canberra 1H19 (excl. Organic Growth2 Acquisition Growth3 Interest Rate Cuts 1H20 excl. one-offs Redundancies 4 AASB16 Leases 1H20 Fraud Canber
Slide 5: 1H20 Divisional Performance
1H20 DIVISIONAL PERFORMANCE AUSTRALIAN NEW ZEALAND HEALTH AND For personal use only Vs. 1H19 OPERATING comparative AGENCIES period BROKING2 BROKING3 REHAB2 BUSINESSES4 $188.0mn $27.4mn $29.2mn $27.5mn $272.1mn Underlying1,3 Revenue 4.7 % 22.9 % 1.5 % 5.2 % 5.9 % 25.5% 30.4% 27.8% 12.2% 24.9% Underly
Slide 6: 1H20 Divisional Performance Breakdown
1H20 DIVISIONAL PERFORMANCE BREAKDOWN 1H19 to 1H20 Adjusted NPAT1 Divisional Breakdown ($mns) For personal use only +25% +15% 0.4 1.4 1.0 21.3 0.4 1.8 18.6 0.5 1.6 17.0 Pre-Tax 1H19 1H19 Canberra 1H19 (excl. Australian New Zealand Agencies Health and Rehab Net Corporate 2 Tax 1H20 Fraud Canberra Fra
Slide 7: Australian Broking – 1H20
AUSTRALIAN BROKING – 1H20 Profit contribution to AUB Group – Pre- Movement Movement ▪ Pre-tax profit contribution to AUB Group of $24.6mn, an For personal use only 1H20 1H19 tax ($mns) ($) (%) increase of 12.6% from 1H19. Commission and fee income (net) 180.6 171.6 8.9 5.2% ▪ Included in 1H20 were $
Slide 8: Australian Broking – Historical Performance
AUSTRALIAN BROKING – HISTORICAL PERFORMANCE Underlying Revenue1,2 ($mns and %) Underlying EBIT Margin1,2 (%) For personal use only CAGR +4% 188 25.0 25.5 180 23.9 24.0 24.2 168 158 155 17% 17% 24% 25% 26% 83% 83% 76% 74% 75% 1H16 1H17 1H18 1H19 1H20 1H16 1H17 1H18 1H19 1H20 Other Income Commissions
Slide 9: New Zealand Broking – 1H20
NEW ZEALAND BROKING – 1H20 Profit contribution to AUB Group – Pre- Movement Movement ▪ Pre-tax profit contribution $4.9mn, an increase of 55.2% For personal use only 1H20 1H19 on 1H19. tax ($mns) ($) (%) ▪ Significant portion of profit growth arising from the Commission and fee income (net) 26.8 21.
Slide 10: New Zealand Broking – Historical Performance
NEW ZEALAND BROKING – HISTORICAL PERFORMANCE Underlying Revenue1 ($mns and %) Underlying EBIT Margin1 (%) For personal use only CAGR +38% 27 35.2 31.9 32.6 13% 30.4 22 18 18 14% 15% 13% 87% 13.3 8 86% 13% 85% 87% 87% 1H16 1H17 1H18 1H19 1H20 1H16 1H17 1H18 1H19 1H20 Other Income Commissions and Fees
Slide 11: Agencies – 1H20
AGENCIES – 1H20 Profit contribution to AUB Group – Pre- Movement Movement ▪ Pre-tax profit contribution to AUB Group of $5.5mn, an For personal use only 1H20 1H19 tax ($mns) ($) (%) increase of 8.8% on 1H19. Commission and fee income (net) 28.4 27.9 0.5 1.9% ▪ Strong premium growth contributing to o
Slide 12: Agencies – Historical Performance
AGENCIES – HISTORICAL PERFORMANCE Underlying Revenue1 ($mns and %) Underlying EBIT Margin1 (%) For personal use only CAGR +5% 29 29 28.9 28.3 27.8 3% 26.9 25 26 5% 24 22.7 9% 6% 11% 95% 97% 89% 91% 94% 1H16 1H17 1H18 1H19 1H20 1H16 1H17 1H18 1H19 1H20 Other Income Commissions and Fees PBT attributab
Slide 13: Health and Rehabilitation – 1H20
HEALTH AND REHABILITATION – 1H20 Profit contribution to AUB Group – Pre- Movement Movement ▪ Pre-tax profit contribution to AUB Group of $1.8mn For personal use only 1H20 1H19 tax ($mns) ($) (%) increased by 124.8% on 1H19, as a result of improved utilisation, cost management and diversified service
Slide 14: Strong Balance Sheet and Capital Position
STRONG BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview Movement Movement For personal use only 31 Dec 19 30 Jun 19 ($mns) ($mns) (%) ▪ Cash reduced mainly due to repayment Cash 50.0 70.0 (20.0) -29% of group interest-bearing loans and borrowings. Cash - Trust 135.0 150.0 (15.0
Slide 15: Group Debt
GROUP DEBT 1 Total Group Debt on a look-through basis2 ($mns) For personal use only 134.0 9.8 118.3 23.0 4.8 1.1 21.9 55.5 50.7 19.9% 1H20 AUB Group Gearing5 (FY19 21.7%) 55.5 45.7 Total AUB 7 Corporate Debt3 Consolidated Entity Associates Total AUB 7 Group Debt Group Debt 30/6/19 31/12/19 Associate
Slide 16: FY20 Guidance Upgraded
For personal use only FY20 GUIDANCE UPGRADED 16-18 % + 5-6 % ANPAT Growth FY20 GUIDANCE 8-10 % + 1-2 % ANPAT Growth FY20 Guidance - August 2019 1 Organic Outperformance Acquisition Growth 2 FY20 Upgraded Guidance 6-8 % + 3-4 % EPS Growth EPS GROWTH 2-4 % EPS Growth FY20 Guidance - EPS Growth Impact
Slide 17: FY20 Guidance Overview
FY20 GUIDANCE OVERVIEW ▪ The AUB Group expects Adjusted NPAT growth of 16-18% for FY20 For personal use only ▪ 1H20 performance has been strong and significant progress has been made to realise internal efficiencies and implement strategic initiatives. This improved outlook together with recent majo
Slide 18: Improving Shareholder Returns a Priority
For personal use only IMPROVING SHAREHOLDER RETURNS A PRIORITY Dividend Per Share (Cents) Final Dividend Interim Dividend 45.5 46.0 42.0 40.0 32.0 32.5 28.0 29.5 14.5 12.0 12.5 13.5 13.5 14.5 1H16 1H17 1H18 1H19 1H20 Adjusted EPS ($ cents per share) CAGR +8.9% 29.0 25.8 25.9 22.7 20.6 1 1H16 1H17 1H
Slide 19: Track Record of Delivering Growth
For personal use only TRACK RECORD OF DELIVERING GROWTH Underlying Revenue1 ($mns) Underlying EBIT Margin2 (%) CAGR +7% 22.8 22.1 23.0 21.9 272 20.2 257 242 225 209 1H16 1H17 1H18 1H19 1H20 1H16 1H17 1H18 1H19 1H20 Adjusted NPAT3 ($mns) Reported NPAT3 ($mns) CAGR +13% 21.3 23.8 23.8 17.0 19.8 16.7 1
Slide 20: AASB16 Leases – 1H20 Impact on ANPAT
For personal use only AASB16 LEASES – 1H20 IMPACT ON ANPAT The new lease standard (AASB 16) has become effective for the 1H20 Estimated Impact: Group commencing 1 July 2019. OLD NEW NEW NEW All leases are now recognised on the balance sheet at inception of the lease, with the exception of short-term
Slide 21: Reconciliation of Reported NPAT to Adjusted NPAT
A1.0 RECONCILATION OF REPORTED NPAT TO ADJUSTED NPAT 1H20 1H19 Movement (%) For personal use only ($000) ($000) Net Profit after tax1 attributable to equity holders of the parent 16,596 19,826 -16.3% Reconciling items net of tax and non controlling interest adjustments for: Adjustments to contingent
Slide 22: Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,2 1H20 1H19 Movement ($) Movement (%) For personal use only ($000) ($000) Australian Broking revenue 187,952 179,594 8,358 4.7% Australian Broking expenses (140,036) (134,612) (5,424) 4.0% EBIT - Australian Broking 47,916 44,982 2,934 6.5% New Zealand Broking
Slide 23: Management Presentation of Results
For personal use only A2.1 MANAGEMENT PRESENTATION OF RESULTS1,2 1H20 1H19 Movement Movement ($000) ($000) ($) (%) Australian Broking revenue 187,952 179,594 8,358 4.7% Australian Broking expenses (143,033) (136,766) (6,267) 4.6% Net profit - Australian Broking 44,919 42,828 2,091 4.9% Profit attrib
Slide 24: Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT 1H20 1H19 For personal use only ($000) ($000) Cash flows from operations 33,051 20,978 Cash flows from investing activities Net cash inflow/(outflow) on consolidation or increase in interest of (5,413) (5,538) controlled entities¹ Acquisition of associate (3,516
Slide 25: Reconciliation of Operating Segments
A4.0 RECONCILIATION OF OPERATING SEGMENTS Consolidated 1H20 Consolidated 1H19 Insurance Insurance For personal use only Risk Services Total Risk Services Total Intermediary Intermediary ($000) ($000) ($000) ($000) ($000) ($000) Profit before tax and after non-controlling interests from: Insurance br
Slide 26: Realignment of Corporate Expenses & Risk Services Restructure
A5.0 REALIGNMENT OF CORPORATE EXPENSES & RISK SERVICES RESTRUCTURE 2 For personal use only Corporate Expenses re-alignment for Operating entities and Risk Services Restructure 2 1H19 1H18 1H17 1H16 ($000) AUSTRALIAN BROKING 22,609 20,389 19,085 19,000 RISK SERVICES 1,792 4,268 3,534 3,188 Corporate
Slide 27: Business Overview
For personal use only Business Overview © 2020 AUB Group Limited
Slide 28: AUB Group – An Overview
AUB GROUP – AN OVERVIEW $3.2B+ GWP 15 For personal use only ▪ 62 Partner businesses, with ~20% Commercial Insurance Market Share with primary SME focus INSURANCE BROKING OF $2.8B VIA EQUITY STRATEGIC INSURANCE AUSTRALIAN AND NETWORK PARTNERS | SPECIALIST PARTNERSHIPS ▪ Established complementary capa
Slide 29: Our Value Proposition
OUR VALUE PROPOSITION Comprehensive Product Exclusive products, wording Ongoing investment in For personal use only Offerings and arrangements technology Our partners have access to a Our partners have been able to access The Group leverages the consolidated comprehensive suite of >100 insurance mar
Slide 30: Market Recognised Capabilities
For personal use only MARKET RECOGNISED CAPABILITIES Authorised Insurance Brokerage of Best Digital Strategy – Elite Brokers 2019 Broker of the Year, Representative Group the Year (>20 Staff) Brokerage ▪ Dale Hansen, John Duncan of the Year Insurance Business Australia Insurance Business Australia A
Slide 31: Divisional Overview – Australian Broking
DIVISIONAL OVERVIEW – AUSTRALIAN BROKING Our Australian broking business For personal use only encompasses some of Australia’s largest and most reputable brokerage business, ~$2.1 billion in 63% contribution with specialist expertise, market penetration and quality client portfolios. premium to grou
Slide 32: Divisional Overview – New Zealand Broking
DIVISIONAL OVERVIEW – NEW ZEALAND BROKING AUB Group’s expansion into New Zealand For personal use only in 2015 has grown significantly, providing a key source of growth opportunities for the ~$700 million Group. 10% contribution in premium to group revenue AUB Group New Zealand, which selectively in
Slide 33: Divisional Overview – Agencies
DIVISIONAL OVERVIEW – AGENCIES Our Agencies division comprises some of For personal use only Australia’s leading specialist underwriters who distribute and manage niche ~$350 million 11% contribution insurance products on behalf of domestic and internationally licensed insurers, in premium to group
Slide 34: Partner Services: AMS
For personal use only PARTNER SERVICES: AMS Austbrokers Member Services Deliver market-leading products, services and business support to AUB Group’s partner brokers Insurance Technology Claims and Loss Business Education, Placements Services Adjusting Services Training & Advocacy 33
Slide 35: Market Sizing and AUB Group Share
MARKET SIZING AND AUB GROUP SHARE Australian Insurance Market For personal use only 27% Channel AUB ~11% AUB Share of the Intermediated GI Market Total 2019 Premium Intermediated Non-Intermediated $89bn 45% 28% AUB ~21% Client AUB Share of the GI SME Segment Segment General Insurance Life Insurance
Slide 36: AUB Insurance Portfolio – Growth and Size
For personal use only AUB INSURANCE PORTFOLIO – GROWTH AND SIZE Annual Premium1 ($bns) 3.2 2.8 2.5 ~3.2bn Premium under influence 1.8 across the AUB network (FY19) 1.5 2H 1.3 1.6 ~1.2mn Policies written within the 1.6 AUB network (FY19) 1.4 1.3 1H 1.1 FY17 FY18 FY19 FY20 1. Defined as Premium as cha
Slide 37: Stable and Predictable Growth Drivers
For personal use only STABLE AND PREDICTABLE GROWTH DRIVERS ~3.2bn Premium under influence across the AUB network (FY19) ~8% increase 90% FY19 Premium in average premium per client Retention CAGR over the last 3 years (excl. rate increases) ~1.2mn …supported by a small but consistent increase in ave
Slide 38: Insurance Portfolio Mix: Category and Geo
For personal use only INSURANCE PORTFOLIO MIX: CATEGORY AND GEO Portfolio Mix – By Category (%) Portfolio Mix – By Geography (%) 13% Personal Lines NT 2% QLD 12% WA 9% NSW 28% ACT 2% SA 9% 87% Commercial Lines VIC 14% TAS 1% NZ 23% Portfolio mix is based on available data from key Australian and New
Slide 39: Insurance Operations: Reach and Scale
For personal use only INSURANCE OPERATIONS: REACH AND SCALE NT QLD 4 locations 72 locations ~450 Locations WA 28 locations NSW 124 locations SA ACT 24 locations 7 locations >3,000 VIC 47 locations staff TAS New 4 locations Zealand 140 locations All data as at June 2019 38
Slide 40: Insurance Value Chain and Business Model
INSURANCE VALUE CHAIN AND BUSINESS MODEL Panel For personal use only Risk Advice, Support and Products Broker Partners Products Insurers AUB Group's network of broking AUB Group Commissions businesses, leveraging the placement insurance Insurance Premium and scale of a consolidated AUB Group to part
Slide 41: Our Board of Directors
For personal use only OUR BOARD OF DIRECTORS David Clarke Robin Low Cath Rogers Non-Executive Chairman, Chair of the Nomination and Non-Executive Director, Chair of the Audit & Risk Non-Executive Director Remuneration & People Committee Management Committee ▪ 35 years experience in investment ▪ Form
Slide 42: Thank You
For personal use only Thank You © 2020 AUB Group Limited
Slide 43: Notice
NOTICE SUMMARY INFORMATION For personal use only 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 Group's activities current at the date of the presentation. It is information in a summary form and does