Suncorp Group Limited · ASX:SUN
Suncorp — Investor Day (May 2012)
30 slides from Suncorp's investor day presentation, May 29, 2012
Slide 1: Suncorp flags annualised simplification benefits of $200 million
ASX announcement 29 May 2012 SUNCORP FLAGS ANNUALISED SIMPLIFICATION BENEFITS OF $200 MILLION For personal use only Key points - Building Blocks program already in place and on track to achieve $235 million of annualised savings by June 2013. - New Group simplification program to deliver annualised
Slide 2: Core businesses performing strongly
“There are four specific reasons why it makes good business sense for us to retain our five lines of business and why, ultimately, the whole of Suncorp is greater than the sum of its parts,” Mr Snowball said. “By leveraging the diversity and capital return of each of our businesses we can effectivel
Slide 3: Suncorp Group Limited Investor Day 2012
For personal use only Suncorp Group Limited Investor Day 2012 1 Suncorp Group Limited May 2012 Introduction Patrick Snowball Chief Executive Officer Suncorp Group Ltd 2 Suncorp Group Limited May 2012
Slide 4: Four takeaway messages; phases of transformation
Suncorp investor day 2012 ...four takeaway messages For personal use only 1 The Building Blocks are in place and delivering 2 A further simplification program underway 3 All Group businesses are growing strongly 4 The Group strategic assets (‘the 4C’s) will drive competitive advantage Suncorp’s tran
Slide 5: Agenda; Building Blocks benefits being realised
Agenda Part 1 – Introduction – Patrick Snowball For personal use only Part 2 – Simplification breakout sessions Part 3 – Group strategic benefits General Insurance system decommissioning and license consolidation Capital John Nesbitt Mark Milliner, Andrew Mulvogue and Darren O‟Connell Cost Jeff Smit
Slide 6: Building Blocks benefits confirmed by underlying metrics
Building Blocks Benefits confirmed by underlying metrics For personal use only Underlying ITR Operating expenses $1,278m $1,261m $1,235m $1,229m $1,211m 11.2% 11.1% At least 12.0% $151m $146m $155m $144m 10.5% $137m $269m $289m 1H12 11.1% is split: $277m $279m $291m 10.0% Australia 11.9% New Zealand
Slide 7: Financial impacts of simplification program
Simplification Financial impacts of simplification program For personal use only 200 Simplification benefits 150 100 50 $m FY12 FY13 FY14 FY15 FY16 0 (50) (100) One-off project costs Net financial impact Annualised benefits of $200m from FY16 One-off total project costs of $275m 9 Suncorp Group Limi
Slide 8: Targets and commitments
Stabilise NOHC Building Blocks Simplification Emergence of the 4C’s Strengthening core businesses For personal use only Targets and commitments Bank General Insurance Life • 1-1.3x system housing • $235m annualised benefit from the building blocks 3 year focus: lending growth program • RoE >15% Core
Slide 9: Transformation: establishing the platform
Transformation Establishing the platform... For personal use only Establish an efficient platform Simplify the legal structure Complete the integration Reduce complexity NOHC Building Blocks Simplification 13 Suncorp Group Limited May 2012 Transformation Strengthening the core... Corporate centre Ba
Slide 10: Transformation: driving competitive advantage
Transformation Driving competitive advantage... For personal use only Capital Cost Customer Culture Drive Group competitive advantage Corporate centre Bank General Insurance Life Strengthen the core business Personal Commercial Vero NZ Insurance Insurance Shared services Establish an efficient platf
Slide 11: Suncorp Bank simplification
For personal use only Suncorp Bank simplification David Foster and Jeff Smith 17 Suncorp Group Limited May 2012 Suncorp Bank Competitive Advantage The best bank for middle Australia • A+ credit rating • Part of the Suncorp Group QLD 125 branches • Strong capital and funding position 33 business cent
Slide 12: Strategic drivers; banking operations efficiency
Strategic drivers Delivering results For personal use only • Optimising distribution channels • Developing and training our people • Simplifying systems - progressing the • Building and embedding a robust risk Banking Platform Program culture • Ongoing process improvement Cost Culture Big bank capab
Slide 13: Banking Platform Program
Simplification in Action Banking Platform Program For personal use only Situation Solution • 15 legacy systems on ageing platforms • A prudent approach to • Specialist knowledge required to maintain obsolete systems mitigate cost and risks • Existing systems don‟t talk to each other • Staged program
Slide 14: Simplification of banking platforms: outcomes for stakeholders
Simplification of Banking Platforms Outcome for stakeholders For personal use only • Improved reliability • Greater speed to market • More intuitive systems for the user – both staff and customers • Customer orientated versus a product system • Better, more efficient service • A stable, sustainable
Slide 15: Building blocks benefits achieved; licence consolidation
Building blocks benefits achieved Delivered ahead of schedule and contributing to ITR uplift 10/11 11/12 For personal use only H1 H2 H1 H2 Portfolio Of Brands Managing as a portfolio of brands One Team Functional Model One Team Program One Pricing Engine Suncorp GIO AAMI APIA Vero One Claims S
Slide 16: Legacy simplification program
Legacy simplification program Rationalising policy applications from 14 to 2 in the next 3 yrs For personal use only • High complexity and duplication across the group Currently: • Significant “lights on” technology and business costs • High costs for simple changes across multiple brands NOW 3 YEAR
Slide 17: What is Operational Excellence?
What is Operational Excellence? Define For personal use only Roles Activities Unit Times Improve Measure Skills Productivity Process Quality Culture 29 Suncorp Group Limited May 2012 Operational Excellence How it works TOTAL PAID HOURS Maximising productivity is Sick Leave about removing waste Annua
Slide 18: Life Operational Excellence Journey; partnering
Life Operational Excellence Journey Group leverage delivers accelerated outcomes… For personal use only In Week 17 of a 24-week program End to end coverage from Claims, Administration, Underwriting to Call Centres, Business Development & Financial Planners 50% of Life’s employees participating in OE
Slide 19: Partnering - Finance
Partnering - Finance 3 year program For personal use only Simplification Using Lean techniques to remove blockages Automation Investing in one accounting systems One Suncorp way to achieve cost synergies: Oracle GL and one Standardisation accounting system vision Consolidation Shared services entity
Slide 20: Emergence of the 4C's
Emergence of the 4C’s Identifying the Group’s strategic assets For personal use only • Diversification benefit of managing capital across Group Capital • Fungibility of capital across NOHC and portfolio • Deliver scale cost benefits on third party procured goods / services Cost • Share scale on infr
Slide 21: Capital - strategic benefit
Capital – Strategic Benefit Key Capital advantages For personal use only • Leverage the diversity of managing capital across the group over the long Diversification term Fungibility • The NOHC provides greater transparency to facilitate capital efficiency • Performance linked to risk and capital Ris
Slide 22: Fungibility in action
Fungibility in action For personal use only Maintain capital targets Non-core run-off Surplus assets released $300m capital Group capital buffer GI Life Bank Vero NZ Suncorp Life Non-core Bank 39 Suncorp Group Limited May 2012 Cost Jeff Smith CEO Suncorp Business Services 40 Suncorp Group Limited Ma
Slide 23: Costs - scale benefits
Costs – scale benefits Driving costs down across the Group For personal use only Claims Ecommerce Benefits released Benefits partly released • 14 GI systems into 1 system • Leverage and reuse – delivering one platform • Driving down costs that can be rolled across businesses • Driving down training
Slide 24: Customer synergy
For personal use only Customer Mark Reinke Executive General Manager – Group Marketing 43 Suncorp Group Limited May 2012 Customer Synergy Unlocking low risk, dependable revenue streams GI Life Bank Competitive Leverage Customer scale • Enhanced pricing from cross line data Single client view across
Slide 25: Customer synergy: execution focuses on three areas
Customer Synergy Execution focuses on three areas For personal use only In place In flight • APIA Lifestyle New • Bizi SME portal innovation • Direct Super • Life sales through GI brands • Advisor & broker funding • GI sales through bank channel Capture existing • Bank/GI pricing leverage • SMART sh
Slide 26: Culture
For personal use only Culture Amanda Revis Group Executive Human Resources 47 Suncorp Group Limited May 2012 Suncorp Culture One Company Many Brands Engaging our workforce Simplified people management frameworks Leadership Talent 48 Suncorp Group Limited May 2012
Slide 27: Positive trends are emerging
Positive trends are emerging... Employee • Trending upwards For personal use only engagement Employee turnover • Down 20% External job • Up nearly 10% this FY applications Talent • Internal appointments to strategically critical roles up 35% 70% 52% 54% Benchmark: High performing companies fill 60%
Slide 28: Conclusion: continuing the journey FY13-FY15
For personal use only Conclusion Patrick Snowball Chief Executive Officer 51 Suncorp Group Limited May 2012 Continuing the journey FY13 - FY15 Reset targets and drive for growth FY12 - FY14 Improve Life EV Identify further Core Banking opportunities to drive Commercial Insurance FY12 - FY13 value Ac
Slide 29: Q&A session; important disclaimer
For personal use only Q&A session Suncorp Group Executive Team 53 Suncorp Group Limited May 2012 Important disclaimer This presentation contains general information about Suncorp Group Limited („Suncorp‟) which is current as at 29 May 2012. It is information given in summary form and does not purpor
Slide 30: Contacts
For personal use only Contacts Steve Johnston steve.johnston@suncorp.com.au 07 3135 3988 Mark Ley mark.ley@suncorp.com.au 07 3135 3991 Nicole McGinn nicole.mcginn@suncorp.com.au 07 3135 3993 Sam Miller samantha.miller@suncorp.com.au 07 3135 2415 Nick Perchey nick.perchey@suncorp.com.au 02 8121 9206