Slide 1: 1H22 Investor Presentation
1H22 Investor Presentation 22 February 2022 Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 2: Key Messages
KEY MESSAGES 1 2 3 4 5 6 Strong financial Australian BizCover Agencies New Zealand Guidance performance Broking revenue and strategy performance upgraded momentum profit growth delivering ahead improving of plan Strong results from Strategic initiatives The business grew Revenue growth of
Slide 3: Financial Highlights – Continuing Operations
FINANCIAL HIGHLIGHTS – CONTINUING OPERATIONS4 Growth in Revenue, Margin and UNPAT from continuing operations (excludes JobKeeper receipts and divested Altius) 1H22 1H214 Movement Underlying Revenue1 $327.2mn $284.7mn 14.9% Underlying EBIT Margin1 31.2% 30.5% 70bps Underlying NPAT2 $30.6mn $26.2mn 16
Slide 4: 1H22 Financial Performance: Overview
1H22 FINANCIAL PERFORMANCE: OVERVIEW 1H22 Underlying NPAT grew by 16.7% on continuing operations, arising from strong organic performance as well as accretive acquisitions 1H21 to 1H22 Underlying NPAT1,2 Breakdown $mns 16.7% 2.0% 1.0 30.6 30.0 2.7 (3.8%) 1.8 10.3% (6.0%) 2.7 2.0 26.2 360, acquired
Slide 5: 1H22 Divisional Performance
1H22 DIVISIONAL PERFORMANCE Strong performance achieved across Operating Businesses with growth in underlying revenue, margin and profitability for the Group AUSTRALIAN NEW ZEALAND OPERATING Vs. 1H21 comparative period BIZCOVER AGENCIES2 BROKING BROKING BUSINESSES4,5 $219.0mn $33.3mn $46.3mn $28.6mn
Slide 6: FY22 Priorities
FY22 PRIORITIES A focus on execution of strategic priorities is the primary driver for performance improvement over recent years FY22 Priority Overview Grow premium by acquiring or establishing new agencies Enhance margin by further consolidating into three pillars of General Commercial, Special
Slide 7: Australian Broking
AUSTRALIAN BROKING2 Network optimisation, disciplined acquisition and enhanced broker propositions continue to deliver revenue growth & margin expansion Key Metrics $219.0mn Revenue1 31.1% EBIT Margin1 $68.2mn EBIT1 1H22 Performance +8.8% on 1H21 3 +40bps on 1H21 3 +10.3% on 1H21 3 1H21 to 1H22 AUB
Slide 8: BizCover
BIZCOVER Continued strong growth in revenue & profitability while technology investments and geographic expansion are building future opportunities Margins & profitability are growing strongly as a result of the scalable Highlights business model 27% growth in PBT in 1H22 v 1H21 amid challenging m
Slide 9: Agencies
AGENCIES Agency growth progressing well with significant improvement in revenue, margin and profit as a result of enhanced scale and capability expansion Key Metrics $46.3mn Revenue1 32.6% EBIT Margin1 $8.9mn PBT1,2 1H22 Performance +58.2% on 1H21 +520bps on 1H21 +82.9% on 1H21 Performance Drivers &
Slide 10: New Zealand Broking
NEW ZEALAND BROKING Strong revenue and profit growth for the majority of AUB businesses offset by significant IT project cost and profit reduction in BWRS (remediation underway) 1H22 PBT1 Growth ($mns v 1H21) Overview Largest brokerage currently impacted by poor -20.6% BWRS performance with remedi
Slide 11: AUB Corporate Cash Flow and Funding
AUB CORPORATE CASH FLOW AND FUNDING Robust balance sheet and cash flow generation AUB Corporate Entity Cash Movement ($mns) Operating cash generated of $13.5mn 10.9 19.7 21.9 33.2 29.0 21.4 16.9 1H22 Opening Dividends Received Net Corporate Expenses Financing Activity Acquisitions net Dividend Paid
Slide 12: Shareholder Returns
SHAREHOLDER RETURNS 16.2% uplift in underlying EPS from continuing operations, and an interim dividend of 17.0 cents per share Underlying Earnings Per Share Continuing Operations1,2,3 (Cents per share) 16.2% 31.4% 8.5% 41.15 35.40 24.85 26.95 1H19 1H20 1H21 1H22 Dividend Per Share (Cents per share)
Slide 13: Strategic Focus on Profitability
STRATEGIC FOCUS ON PROFITABILITY Margin improvement remains a priority and we anticipate significant further opportunities to build on the expansion delivered over the past few years Growth since… Target 1H19 1H22 Australian Broking +610bps 31.1% (25.0%) 35% +100bps BizCover (36.0%) 37.0% 38% 1H211,
Slide 14: FY22 Outlook
FY22 OUTLOOK Underlying NPAT for FY22 is forecast to be between $72.0mn - $74.0mn, representing growth of 19.0% - 22.3% over FY21 continuing operations FY22 Underlying NPAT1,2 growth on PY $mns 2H21 to 2H22 Underlying NPAT1,2 Breakdown $mns 20.7% - 26.5% 10.3% - 13.3% 1.5 – 2.0 41.4 – 43.4 6.2 – 7.7
Slide 15: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 16: Closing
Closing Mike Emmett CEO and Managing Director
Slide 17: Appendices
APPENDICES A 1H22 Detailed Financial Results Appendices B AUB Group Business Overview C AUB Group Portfolio Overview 17
Slide 18: A. 1H22 – Detailed Financial Results
Appendices A. 1H22 – Detailed Financial Results
Slide 19: Australian Broking
AUSTRALIAN BROKING6 Underlying pre-tax profit for the half year increased by 9.5% to $38.3mn (1H21: $35.0mn). Profit contribution to AUB Group – Pre-tax ($mns) 1H22 1H21 Movement Movement (%) Excluding $2.1mn non-recurring JobKeeper receipts in the prior period, the Underlying pre-tax profit for t
Slide 20: BizCover
BIZCOVER2 Profit contribution to AUB Group – Pre-tax Movement Underlying pre-tax profit for the half year increased by 13.6% to $4.9mn (1H21: $4.3mn). 1H22 1H21 Movement ($mns) (%) Excluding $0.4mn non-recurring JobKeeper receipts in the prior period, the Underlying pre-tax profit for the half yea
Slide 21: Agencies
AGENCIES Profit contribution to AUB Group – Pre-tax 1H22 1H21 Movement Movement (%) Underlying pre-tax profit for the half year increased by 82.9% to $8.9mn (1H21: $4.9mn). ($mns) The current half includes the full period benefit of the investment in 360 Underwriting Commission and fee income (n
Slide 22: New Zealand Broking
NEW ZEALAND BROKING Profit contribution to AUB Group – Pre-tax Underlying pre-tax profit for the year decreased by 20.6% to $3.5mn (1H21: $4.5mn). 1H22 1H21 Movement Movement (%) ($mns) NZ technology investment costs of $2.2mn were incurred in the current period (1H21: Commission and fee income (n
Slide 23: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview ($mns) 1H22 FY21 Movement Cash – AUB Corporate Entity 16.9 21.4 (4.5) Cash – Other Consolidated Entities 58.9 55.2 3.7 Trust Cash – Other Consolidated Entities 196.8 205.2 (8.4) Investment in Associates 275.6 280.6 (5.0) Intangib
Slide 24: AUB Group Debt
AUB GROUP DEBT Total AUB Group Debt on a look-through basis1 ($mns) 275.1 8.7 9.6 26.2 238.4 7.9 30.9% 10.5 17.5 38.3 30.4 18.2 8.6 1H22 AUB Group Gearing Ratio4 181.9 192.4 (FY21 28.5%) Total AUB Group Debt Corporate Debt2 Consolidated Entities Associates Contingent Total AUB Group Debt 30 June 202
Slide 25: A1.0 Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 1H22 1H21 Movement (%) ($000) ($000) Net Profit after tax attributable to equity holders of the parent 29,684 23,241 27.7% Add back/(less): Share of Amortisation of broking registers8 5,520 5,649 Adjustments to value of entities (to fair value
Slide 26: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,5 Movement Movement 1H22 ($’000) 1H21 ($’000) ($’000) (%) Australian Broking revenue2 218,983 205,460 13,523 6.6% Australian Broking expenses2 (150,784) (139,509) (11,275) 8.1% EBIT - Australian Broking2 68,199 65,951 2,248 3.4% BizCover revenue2 33,312 27,94
Slide 27: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 1H22($’000) 1H21 ($’000) Movement ($’000) Movement (%) 2 Australian Broking revenue 218,983 205,460 13,523 6.6% Australian Broking expenses2 (151,937) (141,080) (10,857) 7.7% Net profit - Australian Broking2 67,046 64,380 2,666 4.1% Profit attributable to oth
Slide 28: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1,5 1H22 ($’000) FY21 ($’000) 2H21 ($’000) 1H21 ($’000) FY20 ($’000) 2H20 ($’000) 1H20 ($’000) FY19 ($’000) 2H19 ($’000) 1H19 ($’000) FY18 ($’000) 2H18 ($’000) 1H18 ($’000) FY17 ($’000) 2H17 ($’000) 1H17 ($’000) 2 Australian Broking revenue 218,983 429,183 223,
Slide 29: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 1H22 ($’000) FY21 ($’000) 2H21 ($’000) 1H21 ($’000) FY20 ($’000) 2H20 ($’000) 1H20 ($’000) FY19 ($’000) 2H19 ($’000) 1H19 ($’000) FY18 ($’000) 2H18 ($’000) 1H18 ($’000) FY17 ($’000) 2H17 ($’000) 1H17 ($’000) Australian Broking revenue2 218,983 429,183 223,723
Slide 30: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT1 1H222 1H211,2 ($’000) ($’000) Cash flows from operations 44,919 50,050 Cash flows from investing activities Acquisitions (21,547) (17,172) Sales proceeds (net of cash reduced on deconsolidation) 6,104 1,417 Plant equipment / Other 595 (1,302) Payments for defer
Slide 31: B. AUB Group Business Overview
Appendices B. AUB Group Business Overview
Slide 32: AUB Group – An Overview
AUB GROUP – AN OVERVIEW1 AUB Group Limited is an ASX200 listed group comprising insurance brokers and underwriting agencies operating in ~500 locations across Australia and New Zealand. Over 3,000 team members work with our 850,000 clients to place more than $4.0bn in insurance premiums with local a
Slide 33: Divisional Overview: Australian Broking
DIVISIONAL OVERVIEW: AUSTRALIAN BROKING3 OVERVIEW Our Australian broking business encompasses some of Australia’s largest and most reputable brokerage business, with specialist expertise, market penetration and quality client portfolios. 65% 50 The portfolio consists of ~2,200 staff with capabil
Slide 34: Divisional Overview: BizCover
DIVISIONAL OVERVIEW: BIZCOVER1 ESTABLISHED IN SME INSURANCE MARKET Positioned for ongoing growth – multi-channel presence underpinned by a comprehensive offering BizCover Channel Multi-channel market penetration leverages market leading platform while investment in brand drives operational leverage
Slide 35: Divisional Overview: Agencies
DIVISIONAL OVERVIEW: AGENCIES2 OVERVIEW Our Agencies division comprises some of Australia’s leading specialist underwriters who distribute and manage niche insurance products on behalf of domestic and internationally licensed 11% insurers, including Lloyd’s. The business includes 27 specialist a
Slide 36: Divisional Overview: New Zealand
DIVISIONAL OVERVIEW: NEW ZEALAND2 OVERVIEW 5 Broking businesses including Insurance Advisernet NZ o Selectively invest in high-performing broking businesses delivering ~$650mn in premium & ~$831mn 9% 5 Brokers ~200,000 an additional $145mn in IA NZ in premium 2 Agencies 2 underwriting agencies c
Slide 37: ESG Update
ESG UPDATE Social AUB Group ESG Framework & Targets .. - Unified learning platform for training Governance and monitoring compliance - Liveable wage benchmarking and monitoring - Public Policy and commitment to responsible investing - CEO multiple reporting (against lowest paid employee) - All emplo
Slide 38: Our Non-Executive Directors
OUR NON-EXECUTIVE DIRECTORS David Clarke Robin Low Paul Lahiff Non-Executive Chair, Chair of the Nominations Committee Non-Executive Director, Chair of the Audit & Risk Committee Non-Executive Director, Chair of the Remuneration & People Committee 40 years’ experience in investment Former PwC pa
Slide 39: C. AUB Group Portfolio Overview
Appendices C. AUB Group Portfolio Overview
Slide 40: Insurance Portfolio – Premium and Size
INSURANCE PORTFOLIO – PREMIUM AND SIZE Annual Premium1 ($bns) 4.0 ~$4.0bn Premium under 3.4 influence 3.2 across the AUB network 2.2 (FY21) 1.8 2H 1.8 Australian Broking 2.1 ~1.6mn 1.8 Policies written 1.6 1H 1.4 within the AUB network (FY21) FY19 FY20 FY21 FY22 1. Total includes premium and commiss
Slide 41: Australian Broking Portfolio Mix by Client Segment, Product, Geography & Insurer
AUSTRALIAN BROKING PORTFOLIO MIX BY CLIENT SEGMENT, PRODUCT, GEOGRAPHY & INSURER1 Client Segment Mix Product Line Mix Geography Mix Insurer Mix Corporate Business Motor - Commercial NSW WA NT QBE Millenium 26% 19% 6% 39% 11% 2% 12% 3% Medium Enterprise Liability Workers Comp VIC SA TAS Allianz SURA
Slide 42: Group: Insurance Portfolio Mix, by Product and Insurer
GROUP: INSURANCE PORTFOLIO MIX, BY PRODUCT AND INSURER1 Portfolio Mix – Premium by Product / Risk Line Portfolio Mix – Premium by Insurer 15% 11% 19% 3% 9% 34% 3% 3% 8% 4% 15% 4% 2% 8% 5% 2% 8% 12% 2% 3% 8% 3% 9% 3% 7% Business Workers Comp QBE Chubb Millenium Personal Farm CGU Lloyd’s AIG Liability
Slide 43: Group: Insurance Portfolio Mix, by Product Category and Geography
GROUP: INSURANCE PORTFOLIO MIX, BY PRODUCT CATEGORY AND GEOGRAPHY1 Portfolio Mix – by Category (%) Portfolio Mix – by Geography (%) 12% 13% NT 1% QLD 12% WA 8% NSW SA 31% 8% ACT 2% 87% 88% VIC 15% Commercial Personal TAS NZ 1% 22% 1. Portfolio mix is based on available data from key Australian Broki
Slide 44: Insurance Operations Reach and Scale
INSURANCE OPERATIONS REACH AND SCALE1 >500 NT 6 locations QLD locations 13% 82 locations WA 34 locations SA NSW 29 locations 145 locations >3,000 ACT 10 locations staff 87% VIC 55 locations TAS NZ 5 locations 150 locations 1. All data as at 30 Jun’21 44
Slide 45: 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 46: Thank You
Thank You