Chesnara Plc · LSE:CSN
Chesnara — FY2024 Earnings Presentation
37 slides from Chesnara's earnings presentation, Mar 27, 2025
Slide 1: Full Year Results 2024
CHESNARA FULL YEAR RESULTS 2024 Continued strategic delivery driving growth in cash generation, future value and dividends 27 MARCH 2025
Slide 2: Agenda
AGENDA 01. Overview of strategic delivery Steve Murray Group Chief Executive Officer 02. Financial outcomes Tom Howard 03. Areas of focus, outlook and summary Group Chief Financial Officer 1
Slide 3: Overview of Strategic Delivery
OVERVIEW OF STRATEGIC DELIVERY Steve Murray Group Chief Executive Officer
Slide 4: Chesnara has continued to execute its strategy
CHESNARA HAS CONTINUED TO EXECUTE ITS STRATEGY We have a track record of running insurance books of business efficiently, for the benefit of customers, investors and our other stakeholders 1 2 3 MAXIMISE THE ACQUIRE LIFE ENHANCE VALUE VALUE FROM AND PENSION THROUGH EXISTING BUSINESS BUSINESSES PROFI
Slide 5: Continued strategic delivery driving growth in cash generation, future value and dividends
CONTINUED STRATEGIC DELIVERY DRIVING GROWTH IN CASH GENERATION, FUTURE VALUE AND DIVIDENDS Increased Cash Continued EcV per share New Business DPS Generation1 of robust Solvency increased to Contribution of increased to £60m 203% 352p £9m 24.7p ↑ +14% ↓ -2% ↑ +1% ↓ -8% ↑ +3% 4
Slide 6: Continuing to deliver for our shareholders
CONTINUING TO DELIVER FOR OUR SHAREHOLDERS We have the best2 dividend growth track record in UK and European insurance Total dividend Dividend Final Interim 24.7 per share has yield in 2024 Pence per share more than of 9%3 doubled since 2004 with 11.9 £502m paid 3% dividend out in increase cumulativ
Slide 7: Significant operational delivery achieved
SIGNIFICANT OPERATIONAL DELIVERY ACHIEVED ACQUISITIONS SYNERGIES MANAGEMENT SUSTAINABILITY ACTIONS o Completion of a o Process to merge o Renewal of the o On track to deliver second portfolio Dutch business Group FX hedge our 2030 and 2050 acquisition from units underway and financed emissions actio
Slide 8: M&A momentum continues with Canada Life deal
M&A MOMENTUM CONTINUES WITH CANADA LIFE DEAL Canada Life onshore bond and pension portfolio Strategic benefits Strategic benefits Successful partnership leads to second Consideration £2m transaction Day 1 EcV uplift £11m Further demonstration of portfolio acquisition capabilities to other potential
Slide 9: Financial Outcomes
FINANCIAL OUTCOMES Tom Howard Group Chief Financial Officer
Slide 10: Growing cash, value and dividend
GROWING CASH, VALUE AND DIVIDEND FUTURE VALUE CASH RESULT CAPITAL POSITION GENERATION Cash Generation¹ Solvency Coverage Ratio Economic Value AuA8 £60m 203% £531m £14bn FY 20234: £52m FY 2023: 205% FY 2023: £525m FY 2023: £11bn Dividend Cover5 IFRS Leverage⁶ IFRS Capital Base 1.60x 31% £449m FY 2023
Slide 11: Strong cash generation and dividend coverage
STRONG CASH GENERATION AND DIVIDEND COVERAGE 74 (8) 60 Cash (6) UK Generation of £60m Sweden provides full year Dividend Cover of 1.60x Netherlands Divisional Acquisition Central items Group Cash Generation impacts & adjustments Cash Generation 10
Slide 12: Strong and resilient balance sheet to support M&A
STRONG AND RESILIENT BALANCE SHEET TO SUPPORT M&A 4% 16% (3%) (7%) Solvency Coverage 205% Ratio of 203% is (12%) 203% significantly above Operating solvency range: 140% to 160% the upper end of our operating range SII ratio Capital Management Acquisitions SII adjustments⁹ Dividend SII ratio FY 2023
Slide 13: Strong central liquidity supports dividend and M&A
STRONG CENTRAL LIQUIDITY SUPPORTS DIVIDEND AND M&A 45 124 We expect cash (37) (10) 109 remittances net (13) of dividend and costs of Liquidity risk appetite £21m in H1 2025 Cash at Divisional Shareholder Debt Other centre Cash at FY 2023 remittances dividend servicing costs¹⁰ FY 2024 payment costs 1
Slide 14: Growth in EcV increases store of future value
GROWTH IN ECV INCREASES STORE OF FUTURE VALUE 11 594 5 (2) 5 50 (26) EcV Earnings¹¹ of 525 (37) 531 £69m driven by multiple sources of growth EcV at Economic Operating New Acquisition Other central EcV at FY FX Shareholder EcV at FY 2023 earnings: earnings business¹² and one off 2024 pre FX dividend
Slide 15: Growth in CSM and AuA increase store of future profits
GROWTH IN CSM AND AUA INCREASE STORE OF FUTURE PROFITS 21 2 528 26 (22) IFRS Profit 479 (21) Before Tax of £21m Insurance service result 9 Net investment result 53 449 Other income and expenses (40) (37) CSM growth13 of Profit Before Tax 21 £26m FY 2023 CSM Profit Before Other FY24 FX Tax Shareholde
Slide 16: Strong visibility on sources of future cash generation
STRONG VISIBILITY ON SOURCES OF FUTURE CASH GENERATION Reliable sources of organic future Cash Generation, expected to cover long-term debt cost and dividends; with further upside from future M&A New business, acquisitions and synergies¹⁴ Management actions Real-world investment returns in excess of
Slide 17: Areas of Focus, Outlook & Summary
AREAS OF FOCUS, OUTLOOK & SUMMARY Steve Murray Group Chief Executive Officer
Slide 18: Chesnara has a strong base on which to grow
CHESNARA HAS A STRONG BASE ON WHICH TO GROW We have a track record of running insurance books of business efficiently, for the benefit of customers, investors and our other stakeholders STRATEGIC OBJECTIVES 1 2 3 MAXIMISE THE VALUE ACQUIRE LIFE AND ENHANCE VALUE THROUGH FROM EXISTING BUSINESS PENSIO
Slide 19: A positive end to the year for M&A with a strong pipeline for 2025
A POSITIVE END TO THE YEAR FOR M&A WITH A STRONG PIPELINE FOR 2025 KEY DRIVERS FOR M&A ACTIVITY: 1 Operational simplification and expense pressure 2 Disposals of non-core products to release capital 3 Focus on specific geographies CURRENT COMPETITIVE ENVIRONMENT: Chesnara is well positioned for tran
Slide 20: Financing capacity offers ability to fund a range of deal sizes
FINANCING CAPACITY OFFERS ABILITY TO FUND A RANGE OF DEAL SIZES FINANCIAL CONSIDERATIONS Solvency Leverage Operating range Maintain our investment A B of 140% to 160% grade rating Investment grade rating important Equity financing from shareholders, for accessing debt capital markets new strategic p
Slide 21: Chesnara has been actively acquiring in recent years
CHESNARA HAS BEEN ACTIVELY ACQUIRING IN RECENT YEARS AND HAS LAID THE FOUNDATIONS FOR FURTHER GROWTH APRIL 2022 JAN 2023 DEC 2024 5 recent CASLP Conservatrix Canada Life NEXT STEPS acquisitions have Robein Leven onshore bond and pension ▪ Further value-accretive added portfolio M&A transactions c.£6
Slide 22: Continued strategic delivery driving growth in cash generation, future value and dividends
CONTINUED STRATEGIC DELIVERY DRIVING GROWTH IN CASH GENERATION, FUTURE VALUE AND DIVIDENDS Strong financial M&A delivered Internal Positive start results, with in the year restructuring to 2025 for growing cash, and capital M&A activity value and management dividend activities underway to realise fu
Slide 23: Questions
QUESTIONS
Slide 24: Appendices
APPENDICES
Slide 25: Chesnara Background
CHESNARA BACKGROUND WHO WE ARE KEY FINANCIAL METRICS OUR STRATEGIC PILLARS Chesnara plc was formed in 2004 and 31 December 2024 1 MAXIMISE THE VALUE is listed on the London Stock Exchange. Group Solvency II Ratio: 203% FROM EXISTING BUSINESS Efficient management of existing customers and The Group i
Slide 26: Products
PRODUCTS SII BEL17 by product 3% UK Sweden Netherlands 2%2% 6% 5% 4% 0% 5% 8% 4% 10% 57% 87% 16% 91% 100% Unit-linked Unit-linked Products with guarantees Unit-linked Unit-linked Other Products with guarantees Products with guarantees Non-linked Savings Non-linked Savings Life Risk / Protection Othe
Slide 27: Assets under administration
ASSETS UNDER ADMINISTRATION Group AuA18 by product type UK Sweden Netherlands AuA: £4.2bn18 AuA: £5.1bn AuA: £2.8bn £1.9bn (15%) 1% 13% 41% 59% £10.2bn (85%) 87% 99% Unit-Linked Non-linked Unit-linked Non-linked Unit-linked Non-linked Unit-linked Non-linked 26
Slide 28: Non-linked assets
NON-LINKED ASSETS Portfolio Bond portfolio by Corporate bonds by Sovereign debt by breakdown rating industry location 0.1 1% 6% 2% 0.1 16% 19% 3% 0.4 22% 25% 8% Total non-linked Total value of 45% 10% Total value of Total value of assets of £1.9bn bonds (government corporate issued government issued
Slide 29: Solvency II
SOLVENCY II SII ratio SII ratio SII ratio 197% 205% 203% T2 & T3: £166m T2 & T3: £158m T2 & T3: Surplus: £153m £351m Surplus: Surplus: £327m £298m UT1: UTI: £518m £485m UT1: £452m SCR: SCR: SCR: £333m £316m £307m FY 2022 FY 2023 FY 2024 28
Slide 30: Solvency II sensitivities
SOLVENCY II SENSITIVITIES Solvency Solvency surplus immediate impact % impact (80) (60) (40) (20) - 20 40 60 80 20% sterling appreciation +34pp 1 20% sterling depreciation -12pp 25% equity fall +6pp 25% equity rise -5pp 2 10% equity fall +3pp 10% equity rise -2pp 1% interest rate rise +6pp 3 1% inte
Slide 31: Sensitivities
SENSITIVITIES EXPLANATORY NOTES ON THE SENSITIVITIES ON THE PREVIOUS SLIDE ARE PROVIDED BELOW: Foreign Exchange: Appreciation of sterling relative to our overseas currencies reduces the value of overseas surplus with partial mitigation from the Group 1 currency hedge. Equity Valuations: Lower equity
Slide 32: Other KPI movements
OTHER KPI MOVEMENTS Increase in AUA driven by M&A; continued new business to deliver profitable value growth £bn £m £m 518 14 10 -6% 485 -8% 9 +19% 11 FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024 Assets under Administration (AuA) Solvency II Own Funds (UT1) New Business Contribution ▪ Increase dr
Slide 33: CSM movement
CSM MOVEMENT 4 2 7 32 (19) 176 (7) Pre foreign 157 exchange impacts and tax, CSM increased by £26m CSM Experience & New Interest Other CSM FX CSM (gross of tax) assumption business accreted release Impact (gross of tax) FY23 changes FY24 32
Slide 34: Macro environment
MACRO ENVIRONMENT EQUITY MARKETS FTSE all share Swedish OMX all share FTSE all world Netherlands AEX all share 4,468 6% 955 6% 554 16% 1,152 8% 31 Dec 2023: 4,232 31 Dec 2023: 904 31 Dec 2023: 479 31 Dec 2023: 1,072 INTEREST RATES (10 YEARS) FX RATES CREDIT SPREADS € SEK 5.00% 1.22 14.00 0.80% 13.84
Slide 35: Sustainability
SUSTAINABILITY We are committed to becoming a sustainable Group and net zero by 2050 OUR SUSTAINABILITY COMMITMENTS: OUR GOALS: OUR 2024 DELIVERY: Published our interim financed emissions reduction targets 1 NET ZERO Continued to develop our initial transition plan Support a EMISSIONS BY sustainable
Slide 36: Footnotes
FOOTNOTES SUMMARY OF FOOTNOTES USED THROUGHOUT THE PRESENTATION (1) Refers to Commercial Cash Generation which is defined as Base Cash Generation excluding the impact of technical adjustments and modelling changes (2) Verified by RBC research (3) Calculated using the share price as at 31 December 20
Slide 37: Thank you
hesnara THANK YOU