Slide 1: ASX cover letter: Media Release and Presentation of Results
27 August 2018 For personal use only 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, Re: Media Release and Presentation of Results for the Full Year Ended 30th June 2018 P
Slide 2: AUB Group's focused approach delivers strong organic growth
ASX release 27 August 2018 For personal use only AUB Group’s focused approach delivers strong organic growth Summary: — Adjusted NPAT1 $44.6 million (FY17: $40.4 million) up 10.3%. — Adjusted earnings per share 69.8 cents up 10.3%. — Reported Net Profit After Tax $46.5 million (FY17: $33.0 million),
Slide 3: Media release continued: divisional highlights and capital management
Organic growth has been delivered as a result of increases in new clients, life income and premium funding income supported by a hardening premium rate environment. The market strength of NZbrokers has been further enhanced with four new members joining the network which now manages in excess of
Slide 4: Outlook and webcast details
We remain focused on geographic diversification and cross-sell opportunities in our Risk Services businesses. We expect the impact of the NSW workers compensation changes to extend into FY19, with the impact of these changes lessened as a result of increasing diversification. Having built a stro
Slide 5: FY18 Presentation of Financial Results: Financial Results Summary
AUB GROUP FY18 PRESENTATION OF FINANCIAL RESULTS Table 1 Financial Results Summary FIN AN C IAL R ESU L TS SU MMAR Y F Y18 F Y17 Var ianc e $ 000 $ 000 % 1 Revenue from ordinary activities 278,479 264,509 5.3% For personal use only Adjusted NPAT 2 44,554 40,382 10.3% Profit before tax 68,148 54,377
Slide 6: Management Presentation of Results
Table 3 Management Presentation of Results A number of the businesses in the AUB Group are associates and are not consolidated in the financial statements. In order to give a more comprehensive view of performance, the following table aggregates 100% of these businesses’ revenues and expenses with t
Slide 7: AUB Group Ltd Full Year Results FY18
For personal use only AUB GROUP LTD FULL YEAR RESULTS FOR THE PERIOD ENDED 30 JUNE 2018 (FY18) 27 AUGUST 2018
Slide 8: Notice
NOTICE For personal use only 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 pu
Slide 9: Overview
For personal use only OVERVIEW MARK SEARLES CEO & MANAGING DIRECTOR
Slide 10: Performance Highlights – FY18
PERFORMANCE HIGHLIGHTS – FY18 EARNINGS SHAREHOLDER GROWTH CAPITAL For personal use only RETURN MANAGEMENT AUSTRALIAN BROKING 9.1% 10.3% +6.6 cps ADJUSTED COMMISSION + ADJUSTED FEE INCOME NPAT NET ASSETS EPS NEW ZEALAND $357.2M PROFIT CONTRIBUTION 18.5% 10.3% ADJUSTED +3.5 cps CASH & EPS FULLY FRANKE
Slide 11: Performance Highlights – The Details
PERFORMANCE HIGHLIGHTS – THE DETAILS Delivering strong profit and revenue growth FY18 FY17 GROWTH For personal use only Adjusted NPAT growth ($m) 44.6 40.4 +10.3% Reported NPAT growth ($m) 46.5 33.0 +41.0% Underlying1 Revenue increase ($m) 524.7 488.2 +7.5% Underlying1 EBITA increase ($m) 137.1 125.
Slide 12: Execution of Group Strategy Supports Continuous Growth
EXECUTION OF GROUP STRATEGY SUPPORTS CONTINUOUS GROWTH For personal use only $m 80 70 60 50 40 30 20 10 - 1 2 3 4 5 6 7 Total Group pre-tax Profit before Corporate Expenses Total Australian Broking profit Adjusted NPAT Corporate Expenses (after recoveries) Linear (Total Group pre-tax Profit before C
Slide 13: Execution of Group Strategy Supports Continuous Growth
EXECUTION OF GROUP STRATEGY SUPPORTS CONTINUOUS GROWTH $m Pre-tax profit contribution by division since FY121 For personal use only 90 17% 80 8% FY18 $81.6m 66% 70 9% 60 12% FY12 $48.8m 50 88% 40 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1 Excludes corporate income and expenses Page 7 - AUB Group Ltd FY18
Slide 14: Investment in Culture Continues to Deliver
INVESTMENT IN CULTURE CONTINUES TO DELIVER BOARD & LEARNING & DIVERSITY & ENGAGEMENT For personal use only MANAGEMENT DEVELOPMENT INCLUSION FOCUS FEMALE BOARD FULL-DAY WORKSHOP 10% HELD ON CULTURE 47 33% REPRESENTATION EMPLOYEE EXCEEDS AICD ENGAGEMENT WITH BOARD & GUIDELINE MANAGEMENT LEADERS AWARDE
Slide 15: Financial Performance
For personal use only FINANCIAL PERFORMANCE MARK SHANAHAN CHIEF FINANCIAL OFFICER
Slide 16: Key Results
KEY RESULTS Growth in all operating areas. For personal use only FY18 FY17 GROWTH • Strong underlying management results – growth primarily organic. Underlying Management Results1 • Underlying performance translates to growth in key performance metrics: Revenue ($m) 524.7 488.2 7.5% • Adjusted NPAT
Slide 17: AUB Group NPAT Contribution Analysis
AUB GROUP NPAT CONTRIBUTION ANALYSIS Execution of strategy delivers growth and diversification. For personal use only #039;m 50 45 40 35 1 2 3 4 5 6 7 8 Adjusted NPAT $000s 40,382 233 1,009 4,292 1,374 (667) (2,069) 44,554 Pre-tax Page 11 - AUB Group Ltd FY18 Results
Slide 18: Insurance Broking – Australia
INSURANCE BROKING – AUSTRALIA Strong growth in a hardening market. For personal use only • Pre-tax profit contribution to AUB Group of $53.5m up 8.7% due to organic growth and a full-year contribution from the acquisition of Lea Insurance Brokers in May 2017. • Strong growth in commission and fee in
Slide 19: New Zealand
NEW ZEALAND Strategy delivering strong organic growth. For personal use only • Pre-tax profit contribution to AUB Group of AUD $6.5m up 18.5%. The exchange rate weakened 2% vs FY17 which has detracted from the strong underlying organic growth. • Premium rates are hardening on average circa +5%, howe
Slide 20: Underwriting Agencies
UNDERWRITING AGENCIES Organic income growth in hardening market. For personal use only • Pre-tax profit contribution to AUB Group of $13.9m, up 11% on pcp. • Achieved strong average mid single digit premium rate growth. Policy count increased 4.2% (ex divested and acquired businesses). • Delays in c
Slide 21: Risk Services
RISK SERVICES Strong growth through uncertain market. For personal use only • Pre-tax profit contribution to AUB Group of $7.75m up 3% in a challenging market. Results achieved via organic growth with no acquisitions in the period. • Revenue grew 9% and EBIT margins reduced marginally by 0.5%. The b
Slide 22: Balance Sheet and Funding
BALANCE SHEET AND FUNDING Increased balance sheet capacity. For personal use only Group balance sheet: Consolidated balance sheet ($m) 30.06.18 30.06.17 • Investments (the aggregate of Investments in Associates and Intangible Cash 58.7 60.2 Assets and Goodwill) total $423.0m up $17.5m (30 June 2017:
Slide 23: Dividends Per Share
DIVIDENDS PER SHARE For personal use only • Final dividend per share of 32.0 cents, fully franked. • DRP remains suspended. 50 45.5 45 42.0 39.7 40.0 40 38.5 35.5 35 31.0 30 Cents per share 32.0 25.5 29.5 25 26.5 27.7 28.0 22.5 20.5 24.5 20 18.0 21.5 15.0 17.0 15 13.0 15.0 13.5 11.5 10 9.5 8.0 12.0
Slide 24: FY19 Priorities
FY19 PRIORITIES For personal use only The Group will continue its disciplined focus, building on the strength of our business model, operating model and group strategy. • Business model: We will continue to maximize partnerships and our ‘skin in the game’ model to drive both organic growth and throu
Slide 25: FY19 Priorities: Group ecosystem
FY19 PRIORITIES Continuing to drive execution of the Group’s ‘ecosystem’. For personal use only Page 19 - AUB Group Ltd FY18 Results
Slide 26: FY19 Outlook
FY19 OUTLOOK For personal use only • The Group will continue to maintain its disciplined approach to executing our business model, operating model and strategy – factors that have contributed to the positive growth environment over prior periods. • The commercial lines premium rate environment in Au
Slide 27: Appendices
For personal use only APPENDICES
Slide 28: Appendix – Adjusted NPAT
APPENDIX 1 – ADJUSTED NPAT 1 R EC ON C IL IATION OF AD JU STED N PAT TO R EPOR TED N PAT F Y18 F Y17 Var ianc e For personal use only $ 000 $ 000 % Net Profit after tax attributable to equity holders of the parent 46,520 32,988 41.0% Reconciling items net of tax and non controlling interest adjustme
Slide 29: Appendix – Management Results
APPENDIX 2 – MANAGEMENT RESULTS1 MAN AGEMEN T PR ESEN TATION OF R ESU L TS F Y18 F Y17 Var ianc e Var ianc e $ 000 $ 000 $ % For personal use only Australian Broking revenue 337,607 312,720 24,887 8.0% Australian Broking expenses (235,624) (218,967) (16,657) 7.6% EBIT - Aus tr alian Br ok ing 101,98
Slide 30: Appendix 2a – Management Results
APPENDIX 2a – MANAGEMENT RESULTS1 MAN AGEMEN T PR ESEN TATION OF R ESU L TS F Y18 F Y17 Var ianc e Var ianc e F Y16 F Y15 F Y14 F Y13 For personal use only AUB RESULT CO NT RIBUT IO N BY BUSINESS UNIT $ 000 $ 000 $ % $ 000 $ 000 $ 000 $ 000 Australian Broking revenue 337,607 312,272 25,335 8.1% 308,
Slide 31: Appendix – Cashflow
APPENDIX 3 – CASHFLOW C ASH FL OW F Y18 F Y17 For personal use only $ 000 $ 000 Cas h flows fr om oper ations 46,246 56,412 Cash flows from investing activities Acquisitions¹ (22,472) (9,643) Sales proceeds / loan repayments ( net of cash reduced on deconsolidation) (1,121) 7,135 Plant equipment / o
Slide 32: Appendix – Operating Segment Reconciliation
APPENDIX 4 – OPERATING SEGMENT RECONCILIATION R EC ON C IL IATION OF OPER ATIN G SEGMEN TS Cons olidated Cons olidated For personal use only F Y18 F Y17 Insurance Risk Insurance Risk Total Total Intermediary Services Intermediary Services #039;000 #039;000 #039;000 #039;000 #039;000 #039;000 Profit before tax and aft
Slide 33: Thank You
For personal use only THANK YOU