Tower Limited · NZX:TWR
Tower — Shareholder Meeting (February 2004)
26 slides from Tower's shareholder meeting presentation, Feb 12, 2004
Slide 1: TOWER 2004 Annual Meeting announcement cover letter
ITOWER 12 February 2004 Market Information Company Announcements Office New Zealand Exchange Limited Australian Stock Exchange Limited ASB Bank Tower Exchange Centre Level 9, 2 Hunter Street Level 6, 20 Bridge Street Wellington Sydney NSW 2000 NEW ZEALAND AUSTRALIA ARBN 088 481 234 Incorporated in N
Slide 2: Chairman's address: Olaf O'Duill
Olaf O’Duill Good morning and welcome to the 2004 TOWER Limited Annual General Meeting. Although our primary purpose today is to report on the results for the year ended 30 September 2003, it is an opportunity to tell you about our progress in the reconstruction of your business and advise you of ou
Slide 3: Chairman's address (continued)
heartened by our progress to date. I believe the Board has demonstrated accountability from the top and it should continue to provide sound leadership to the rest of the organisation. You will have read our Annual Report so I will not repeat the details to you. I will say, however, that despite a dr
Slide 4: TOWER Limited Annual Meeting, Keith Taylor
TOWER Limited Annual Meeting Wellington, 12 February 2004 Keith Taylor — Group Managing Director
Slide 5: What happened to TOWER in 2003?
What happened to TOWER in 2003? » Year of fundamental change Key accomplishments: Return to profit in second half Strengthened capital position Expense control Sales momentum Continuing remedial action Confident in rebuilding process to deliver value 4 TOWER
Slide 6: 2003 Operating Environment
4 TOWER 2003 Operating Environment Modest investment returns Increased regulatory and compliance oversight Restrained growth Sector turmoil
Slide 7: Summary Financials
Summary Financials Net Profit/(Loss) After Tax Before Accounting Change 5.5 (46.3) Net Profit/(Loss) 5.5 (154.4) Net Asset Backing NZ$ 1.89 3.20 Assets Under Management (NZ$bn) 20.8 19.4 (74.9) (74.9) 4.36 20.7
Slide 8: Underlying Operating Earnings
Underlying Operating Earnings (Adjusted for One-Off Items) NZ$ million H1 02 H2 02 H1 03 H2 03
Slide 9: Structure and Management Team
Structure and Management Team v Simplified structure; small management team a pete " Keith Taylor, Group MD = William Giesbers, Group CFO Australian Wealth Management ___NZ Insurance & Operations _ = Andrew Barnes, CEO » Paul Hunt, CEO _ TOWER Australia © ___NZ Investment Businesses = Jim Minto, CEO
Slide 10: TOWER New Zealand Investment Businesses
TOWER TOWER New Zealand » TOWER New Zealand Investment Business: Businesses » Retail Wealth Management = Wholesale Asset Management v Companies within TOWER New Zealand Investment Business operations include: Companies » TOWER Managed Funds =» TOWER Asset Management
Slide 11: New Zealand Investment Business: Financial Results
New Zealand Investment Business TOWER FINANCIAL RESULTS Fee revenue remained relatively static After tax loss of NZ$1.0m for TOWER Managed Funds — lower fees on reduced funds — increased expenses TOWER Asset Management profit of NZ$2.2m in line with expectations
Slide 12: New Zealand Investment Business: Strategy
New Zealand Investment Business STRATEGY Building on the established reputation of TOWER Asset Management as the leading NZ fund manager Refine product offerings to both wholesale and retail superannuation markets Build stronger distribution network through improved adviser services Reduce cost by c
Slide 13: TOWER New Zealand Insurance Businesses
TOWER TOWER New Zealand » TOWER New Zealand Insurance Business: Businesses = Fire & General Insurance = Life & Health Risk v» Companies within TOWER New Zealand Insurance Business operations include: Companies — = TOWER Insurance = TOWER Health & Life = TOWER Life (NZ) 10
Slide 14: New Zealand Insurance Business: Financial Results
New Zealand Insurance Business TOWER FINANCIAL RESULTS TOWER HEALTH & LIFE New business sales up 35% Net profit after tax up 38% from NZ$5.8m last year to NZ$8.0m TOWER INSURANCE Strong growth in premiums Continued underwriting profits Net profit after tax up 59% from NZ$10.3m last year to NZ$16.4m
Slide 15: New Zealand Insurance Business: Strategy
New Zealand Insurance Business TOWER STRATEGY Continued improvement in product quality Strong distribution and alliance relationships Upgraded technology Reduced cost levels 12
Slide 16: TOWER Australia
TOWER Australia TOWER Australia Limited (TAL) is a specialist risk provider Main product lines — Life risk insurance (personal and corporate) — Related investment products 2003 has been a year of reshaping and refocusing — Strategy to stabilise and rebuild — New management team — Strengthened servic
Slide 17: TOWER Australia: Business Focus/Strategy
TOWER Australia Business Focus/Strategy TOWER Growth in profitable risk products Strengthening distribution relationships Streamlining product range and business processes Emphasis on client retention Improved investment management Rebuilt service model Strengthened capital management 14
Slide 18: TOWER Australia: Progress
TOWER Australia TOWER Progress Excess Assets Over Year End Annualised Life Co. ; Regulatory Solvency Management Expenses Sales - Risk Products Requirements 120 120 . > — 100 100 4 40 80 : 80 30 + E : 2 OT & 60 & 607 < < zo 40 40 4 20 + 20 4 10 + 04 r?) of 30-Sep-02 30-Sep-03 30-Sep-02 30-Sep-03 FY02
Slide 19: Australian Wealth Management
Australian Wealth Management Provides advice based investment products and administrative services to planners & customers Amalgamation of — Bridges — TOWER Trust Australia — TOWER Asset Management Australia — TOWER Credit Union Alliance New CEO appointed 16
Slide 20: Australian Wealth Management: Bridges
4 TOWER Australian Wealth Management BRIDGES FUM up 10% to A$3.35bn at 30 Sept 03 (A$3.05bn pcp) Net inflows for year A$109m (A$149m pcp) Net profit after tax in line with last year at A$9.7m Bridges mastertrust increased market share to 3.3% (30 June 2003) - 9'" largest Planner numbers increased by
Slide 21: Australian Wealth Management: TOWER Trust
4 TOWER Australian Wealth Management TOWER TRUST Growth in FUM * 8% to A$4.13bn Including net inflow A$66m TAMA Consolidated three asset management functions Outsourced Australian equities - improved performance ToCUA Pilot programme successful - transitioning to full commercial model 18
Slide 22: Balance Sheet
Balance Sheet Equity raising - NZ$203m rights issue Debt — NZ$204m (pcp NZ$433m) Gearing (total debt / total debt + equity) — 21.8% (36.6% pcp) 19
Slide 23: Corporate Strategy/Focus
Corporate Strategy/Focus Committed to growing existing risk and wealth management businesses in both New Zealand and Australia by: — targeting market positions where TOWER can leverage its service and relationship management skills — re-emphasising risk based business growth in TOWER Australia — rat
Slide 24: How is TOWER doing in 2004?
How is TOWER doing in 2004? 21 Good investment returns (especially December) Continued operational improvement Overall sales levels improved Some improvement in retention TOWER Australia profitable Overall profitability continues to improve
Slide 25: Outlook
Outlook » New Zealand Investment Business — Relaunch of retail wealth management business » New Zealand Insurance Business — Continued strong growth in insurance business » TOWER Australia — Return to profitability — Growth in risk sales — Improved retention levels » Australian Wealth Management — I
Slide 26: Summary
Summary Trends are positive Focus on operational performance and simplification First quarter results sound Committed and revitalised Board and Senior Management Team 23