Slide 1: ASX cover letter for half year results release
27 February 2017 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 Half Year Ended 31st December 2016 Attached for imm
Slide 2: ASX release: focused approach drives profitable growth
ASX release 27th February 2017 AUB Group’s focused approach continues to drive profitable growth and shareholder benefits Summary: — 12.7% increase in Adjusted NPAT1 to $14.5 million (1H16: $12.9 million), with growth across all operating units. Adjusted earnings per share increased 10.5% to 20.6 ce
Slide 3: Media release: segment results, capital management, dividends
New Zealand $1.9m increase in profit contribution from New Zealand to $2.5m (1H16: $0.6m), reflecting strong organic growth and the contribution from the acquisition of Runacres & Associates Ltd in January 2016 and smaller acquisitions by associates. Risk Services 11% increase in profit contribu
Slide 4: Webcast details and forward-looking statements
Webcast Mark Searles, CEO & Managing Director and Jodie Blackledge, Chief Financial Officer will host a webcast today at 10:00am AEST followed by a Q&A session – details below: Direct DDI(s) for Teleconference: Australia Access: 1800 268 560 New Zealand: 0800 466 125 International: +61 2 8047 9300 T
Slide 5: AUB Group FY17 Presentation of Financial Results
AUB GROUP FY17 PRESENTATION OF FINANCIAL RESULTS Table 1 Financial Results Summary FINANCIAL RESULTS SUMMARY 1H17 1H16 Variance $ 000 $ 000 % Revenue from ordinary activities1 121,825 105,938 15.0% Profit before tax 21,197 31,750 -33.2% Net profit after tax (before non-controlling interests) 16,750
Slide 6: Management Presentation of Results
4 The adjustments to carrying values of associates or controlled entities arise where the Group increases its equity in associa tes whereupon they became controlled entities or decreases its equity in a controlled entity and it becomes an associate (deconsolidated). As required by accounting standar
Slide 7: AUB Group Ltd Half Year Results 1H17
AUB GROUP LTD HALF YEAR RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2016 (1H17) 27TH FEBRUARY 2017
Slide 8: 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 9: Overview
OVERVIEW MARK SEARLES MANAGING DIRECTOR & CEO
Slide 10: 1H17 First Half Results Highlights
1H17 FIRST HALF RESULTS HIGHLIGHTS Group continues to drive growth with focussed approach. ADJUSTED NPAT1 GROWTH +12.7% ADJUSTED EPS1 GROWTH +10.5% 1H17 INTERIM DIVIDEND INCREASED TO 12.5 CENTS PER SHARE +4.2% GROUP REVENUE INCREASED +15.0% Increase from 1H16: $105.9M to 1H17: $121.8M 1 Adjusted NPA
Slide 11: Group's Disciplined Approach Delivering
GROUP’S DISCIPLINED APPROACH DELIVERING Business model, Operating model and Group strategy supporting continuous growth. $m 70 60 50 40 30 20 10 - 12 months ended FY12 FY13 FY14 FY15 FY16 Dec-16 Total Australian Broking profit Total Group pre-tax Profit before Corporate Expenses Corporate Expenses (
Slide 12: Performance Highlights
PERFORMANCE HIGHLIGHTS Growth drivers across all segments. AUSTRALIAN BROKING NEW ZEALAND BROKING PROFIT CONTRIBUTION INCREASE PROFIT CONTRIBUTION INCREASE +$1.9m (inc divestment vs pcp1) +0.4% NEW ACQUISITIONS BY EQUITY PARTNERS +2 ORGANIC GROWTH (before NCI )2 +5.3% EXPANDED BROKING GROUP FOOTPRIN
Slide 13: Financial Performance
FINANCIAL PERFORMANCE JODIE BLACKLEDGE CFO
Slide 14: Key Results
KEY RESULTS Growth in all businesses in a stablising premium rate environment. • Revenue2 up 15.0% pcp1 with growth across all business 1H17 1H16 GROWTH areas. REVENUE FROM ORDINARY 121,825 105,938 15.0% • Adjusted NPAT increased 12.7% to $14.5m. ACTIVITIES ($000S) 2 • Adjusted EPS growth increasing
Slide 15: AUB Group Profit Contribution Analysis
AUB GROUP PROFIT CONTRIBUTION ANALYSIS Execution of strategy delivers growth and diversification. Adjusted Profit Contribution to AUB Group (after tax and non-controlling interests) 18 17 16 15 14 MILLION $ 13 12 11 10 9 8 1H16 Risk Services New Zealand Australian Underwriting Divested Corporate Tax
Slide 16: Insurance Broking - Australia
INSURANCE BROKING - AUSTRALIA Organic growth in stabilizing market. • Organic Broker profits1 (before non-controlling interests) increased with premium rates stabilizing, growth in other income sources (life insurance, client and policy count) and maintaining expense growth below revenue growth. • P
Slide 17: Insurance Broking – New Zealand
INSURANCE BROKING – NEW ZEALAND Increasing scale and further consolidating market position. • Pre-tax profit contribution to AUB Group of $2.5m ($0.6m in 1H16), with a strong contribution from Runacres (not included in the prior comparable period). Organic growth delivered despite tough rate environ
Slide 18: Underwriting Agencies
UNDERWRITING AGENCIES Return to growth in a competitive market. • Pre tax profit contribution from Underwriting Agencies of $4.3m, up $0.7m (21%) on prior comparable period, with strong performances in plant & equipment and Commercial agencies and organic growth across the portfolio. • 12% growth in
Slide 19: Risk Services
RISK SERVICES Growing profit and capability. • Pre tax profit contribution increased to $3.5m with acquisitions by equity partners and organic growth. • Growth in injury management and rehabilitation services underpinned by expanding insurer relationships, a broadening geographic footprint and conti
Slide 20: Balance Sheet & Funding
BALANCE SHEET & FUNDING Balance sheet remains strong. Group balance sheet: CONSOLIDATED BALANCE SHEET ($M) 31.12.16 30.06.16 • Investments (the aggregate of Investments in CASH 61.0 70.9 Associates and Intangible Assets and Goodwill) total $384.5m stable (30 June 2016: $380.6m), with CASH - TRUST 86
Slide 21: Dividends Per Share
DIVIDENDS PER SHARE • Interim dividend per share of 12.5 cents. • DRP remains suspended, with the group preferring to utilise cash and debt capacity in the current low interest rate environment. 39.7 40.0 40 38.5 35.5 35 31.0 30 25.5 25 22.5 26.5 27.7 28.0 CENTS PER SHARE 20.5 24.5 20 18.0 21.5 13.0
Slide 22: FY17 Priorities
FY17 PRIORITIES Continued disciplined focus, building on the strength of our Business Model; Operating Model and Group Strategy • Business Model: leverage ‘skin in the game’ model to continue to drive both organic growth and via acquisition. Six investments by equity partners already completed in 1H
Slide 23: FY17 Outlook
FY17 OUTLOOK • There is evidence of premium rates stabilising in selected portfolios. The continuation of transition to a stable rate environment in Australia and New Zealand in FY17 and even targeted rate increase in underperforming segments is dependent on actions by insurers. • Drivers of revenue
Slide 24: Appendices
APPENDICES AUB Group Ltd FY16 Results
Slide 25: Appendix 1 - Adjusted NPAT
APPENDIX 1 - ADJUSTED NPAT RECONCILIATION OF ADJUSTED NPAT TO REPORTED NPAT (1) 1H17 1H16 Variance $ 000 $ 000 % Net Profit after tax attributable to equity holders of the parent 12,404 23,788 -47.9% Reconciling items net of tax and non controlling interest adjustments for: Adjustments to contingent
Slide 26: Appendix 2 – Management Results
APPENDIX 2 – MANAGEMENT RESULTS(1) MANAGEMENT PRESENTATION OF RESULTS 1H17 1H16 Varianc e $000 $000 Australian Broking revenue 143,613 148,212 -3.1% Australian Broking expenses (107,770) (112,951) -4.6% Net profit - Australian Broking 35,843 35,261 1.6% Profit attributable to other equity interests
Slide 27: Appendix 3 – Cashflow
APPENDIX 3 – CASHFLOW CONSOLIDATED CASHFLOW 1H17 1H16 $ 000 $ 000 Cash flows from operations 27,391 13,130 Cash flows from investing activities Acquisitions (2,673) (14,166) Prepayment for acquisition of controlled entity - (33,974) Proceeds from disposal of associates - 28,930 Cash out flow from De
Slide 28: Appendix 4 – Operating Segment Reconciliation
APPENDIX 4 – OPERATING SEGMENT RECONCILIATION RECONCILIATION OF OPERATING SEGMENTS Consolidated Consolidated 1H17 1H16 Insurance Risk Insurance Risk Intermediary Services To tal $ 000 Intermediary Services To tal $ 000 $ 000 $ 000 $ 000 $ 000 P ro fit befo re tax and after no n-co ntro lling interes
Slide 29: Slide 29