Suncorp Group Limited · ASX:SUN
Suncorp — Merger or Acquisition (October 2006)
33 slides from Suncorp's merger presentation, Oct 23, 2006
Slide 1: Announcement of Suncorp and Promina Merger
Announcement of Suncorp and Promina Merger 23 October 2006 promina
Slide 2: Agenda
Agenda m@ Introduction — John Story & Leo Tutt m@ Strategic context — John Mulcahy m The combined entity — John Mulcahy m™ Benefits for Promina — Mike Wilkins m Transaction details — Chris Skilton m™ Conclusion - John Mulcahy oe,
Slide 3: John Story, Chairman, Suncorp
John Story Chairman, Suncorp We, BUCO,
Slide 4: Promina
promina
Slide 5: Leo Tutt, Chairman, Promina
Leo Tutt Chairman, Promina Wi BUCO,
Slide 6: Endorsement from Promina's Board & Management
Endorsement from Promina’s Board & Management m™ Promina’s Board unanimously recommends the merger proposal, in the absence of a superior offer m Merger creates compelling and sustainable shareholder benefits ™ Commitment to creating a diversified financial services business, with superior product o
Slide 7: John Mulcahy, CEO, Suncorp
John Mulcahy CEO, Suncorp We, BUCO,
Slide 8: Strategic context
Strategic context Value @® integration @ = Organic growth <3 Corporate Development Suncorp 1996 2001 2006 7 |
Slide 9: Transaction summary
Transaction summary m Merger via scheme of arrangement m™ Subject to Promina shareholder and regulatory approvals m Key conditions in merger implementation agreement ~ Co-operation of the parties in completing the transaction; ~ Conditions precedent, including ACCC and Treasurer/APRA approval; ~ No
Slide 10: Guiding principles for business model development
Guiding principles for business model development Create customer. advantage Deliver appropriate reward for risk Maximise the scale opportunity Create a common vision and set of values for .our people +Pursue a customer led strategy which: - Serves a diverse set of different, distinct client and cus
Slide 11: Structure
Structure Suncorp Promina Coo CEO Promina CEOS Cae. ola ne) f | : Intermediate ; : sk. People, | Peeumediaied io Gono | Promina | Direct ee | FEO | commercial [| office oo | ee Insurance ees Sanvices insurance Lines New Zealand The Merged Group | ceo {John Muleany) Wealth | Management || Retell [Bus
Slide 12: The combined entity
The combined entity m Over eight million customers m™ Strong positions in each line of business m Leading positions in Australia and New Zealand m™ Pro forma market value of $20bn m Top 10 ASX 100 company m Top 5 financial services provider in Australia and New Zealand SUNCORD, | 11 we vi "a
Slide 13: Pro forma profit before tax of the enlarged group
Pro forma profit before tax of the enlarged group Profit before tax, 12 months to June 2006 $2.5bn 7 $2.0bn $1.5bn Ea $1.0bn $0.5bn $0m Suncorp Promina Pro Forma @ Banking & General Insurance 0 Wealth Management :: Synergies 42 |
Slide 14: A portfolio of market-leading brands
A portfolio of market-leading brands eoUEINSUIBiauED __ astemon | jusiuebeuel : CHES Note: RACQ, RAA, RAC and AA are joint ventures with the respective motor clubs in Australia and New Zealand. NTI Is also a joint venture 43 promina
Slide 15: General Insurance — improved business mix
General Insurance — improved business mix GOWP by class of business Commercial 30% 20% 21% Suncorp Commercial Domestic Commercial Other Domestic nn 24% AIS », Motor 37% Commercia Motor 1% Other Personal T% Other 19% Personal 4% Promina Pro forma Source: company accounts, 12 months to 30 June 2006. 1
Slide 16: GI - Complementary brands
GI - Complementary brands Personal insurance Commercial insurance Managed schemes GIO) GI0| Direct buoness AAMI | Aas) Mainsteam vero’ Intermediated cone) Promina
Slide 17: Wealth management — experience, scale, distribution
Wealth management — experience, scale, distribution $800m 45 $60om 4|| || a _ $400m + $200m + | iil $0m ranarae ner a [1 os coc ogo ££ a aggeSeteteSs sR SPS 8b Sw oZz2z =F 54 83 8 TARE S CGE o Oo ee a 3 oat NN € @ Lane 22 G5 g2 BSN G8 2 a aa a 3 E 2 o Source: Plan For Life. Year to 31% March 2006 16
Slide 18: Growing market share in New Zealand
Growing market share in New Zealand New Zealand General Insurance Market Share WP - CY 2005, % Vero Market Share 1999 - 19.6% 30 / 2002 - 20.5% 2005 — 22.6% Vero Source: Promina estimates and iCNZ statistics 17 |
Slide 19: Banking — improved profitability
Banking — improved profitability m™ Increased scale and resulting cost reductions m Remains an integral part of our business m Distribution m@ Relationships m™ Continue to compete effectively SUNCORD, | 18
Slide 20: Right opportunity - right time
Right opportunity - right time Careful, detailed, planned acquisition Clear alignment with Suncorp strategy Best business combination of all available strategic alternatives Business model preserves the best elements from each organisation Combined entity of $20bn market value Brings together a powe
Slide 21: Mike Wilkins, CEO, Promina
Mike Wilkins CEO, Promina We, BUCO, 20
Slide 22: Benefits for Suncorp and Promina shareholders
Benefits for Suncorp and Promina shareholders m Vigorous and dynamic competitor in the Australian and New Zealand market place = Potential for superior growth profile, harnessing: — The benefits of a differentiated customer service proposition in General Insurance — Scale benefits afforded by combin
Slide 23: Premium for Promina shareholders is compelling
Premium for Promina shareholders is compelling 33.6 % 1 Month VWAP for both 1 Month VWAP for Promina and Suncorp Promina as at as at 10 October 2006 10 October 2006 and Suncorp last closing price as at 20 October 2006 22 Precna
Slide 24: Benefits for Suncorp and Promina customers
Benefits for Suncorp and Promina customers m Both companies share a common commitment to a customer led strategy serving distinct customer segments m™ The combined group will continue to build on market leading brands across Australia and New Zealand a All of the brands within the combined group hav
Slide 25: Benefits for Suncorp and Promina employees
Benefits for Suncorp and Promina employees m New business model will be framed around a core group of values such as honesty, respect, trustworthiness, fairness m@ A rewarding and attractive place to work m= Target continuing high level of employee engagement and commitment m Retention strategy has
Slide 26: Chris Skilton, CFO, Suncorp
Chris Skilton CFO, Suncorp We, BUCO, 25
Slide 27: Funding of cash component
Funding of cash component Cash component of approximately $1.9bn is intended to be funded through use of excess capital together with a non-dilutionary pro-rata equity entitlements issue to Suncorp shareholders Pro rata equity entitlements issue to Suncorp shareholders ~ Fully underwritten ~ To occu
Slide 28: Expected net cost savings of $225m per annum
Expected net cost savings of $225m per annum Savings focused around: ~ head office and back office functions ~ information technology ~ business efficiency ~ reinsurance Based on detailed bottom-up analysis Confirmed by due diligence In line with relevant benchmarks 75% expected to be achieved withi
Slide 29: John Mulcahy, CEO, Suncorp
John Mulcahy CEO, Suncorp We, BUCO, 28
Slide 30: Transaction timeline
Transaction timeline _ Announce transaction — ¥ ¥ Scheme booklet sent to shareholders ¥ Scheme meeting nd Second court hearing a Completic 290 |
Slide 31: Our aspiration
OUR ASPIRATION: To be the leading customer focused financial services provider in Australia and New Zealand. oe, 30
Slide 32: Announcement of Suncorp and Promina Merger
Announcement of Suncorp and Promina Merger 23 October 2006 promina
Slide 33: Important notice
important notice The purpose of this Presentation is to provide general information about the proposed merger of Promina Group Limited (Promina) by Suncorp-Metway Limited (Suncorp). It is not a recommendation that any person makes any investment decision in relation to Suncorp, Promina or the combin