Slide 1: FY21 Investor Presentation
FY21 Investor Presentation 26 August 2021 Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 2: Key Messages
KEY MESSAGES 1 2 3 4 5 6 Strong and Strategic Exit Ongoing growth Underwriting Continued Ambitious accelerating from Health & in Australian Agencies progress with growth financial Rehabilitation Broking and performance Strategic continuing in performance complete BizCover improving as Priorities FY2
Slide 3: FY21 Results Overview
FY21 Results Overview
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue, margin and UNPAT growth have accelerated over the past three years FY21 FY20 FY19 Performance Highlights Underlying Revenue1 $651.8mn $583.9mn $541.6mn Growth in Underlying revenue continues to accelerate, (+11.6%) (+7.8%) (+3.2%) growing at 11.6% in FY21, and 20.4% s
Slide 5: FY21 UNPAT Performance excl SaaS Impact
FY21 UNPAT PERFORMANCE EXCL SaaS IMPACT 2 UNPAT growth in FY21 underpinned by strong organic growth and complemented by accretive acquisitions FY20 to FY21 Underlying NPAT1,2 Breakdown ($mns) Notes 25.7% BizCover 1.4 67.1 0.1 5.8 (2.6%) Profit for the period 1 July 2020 to 31 0.2% January 2021 is
Slide 6: FY21 UNPAT Performance excl SaaS Impact
FY21 UNPAT PERFORMANCE EXCL SaaS IMPACT 4 Strong organic growth across the business in 2H21 Premium Retention1,2 (%) 93 FY21 Underlying NPAT3,4 by Half ($mns) Notes 92 SaaS 90 JobKeeper 1H21: $1.8mn Accounting for configuration 2.7% costs of Software as a Service changed in April and is explained
Slide 7: FY20 & FY21 UNPAT: SaaS Impact
FY20 & FY21 UNPAT: SaaS IMPACT2 Underlying NPAT adjusted for impact of changed accounting policy FY20 Underlying NPAT1,2 Impact of Accounting Policy Change – SaaS2 ($mns) FY21 Underlying NPAT1,2 Restated ($mns) Restated ($mns) IFRIC interpretation issued in April 2021 Software as a Service (SaaS
Slide 8: FY20 & FY21 Performance: Including SaaS Impact
FY20 & 21 PERFORMANCE: INCLUDING SaaS IMPACT UNPAT adjusted for the Accounting Policy change for Software as a Service (SaaS) configuration costs FY20 to FY21 Underlying NPAT1,6 Breakdown ($mns) 22.9% 1.4 67.1 0.1 (2.6%) 1.8 65.3 5.8 0.2% (3.4%) 10.9% Altius sold 1 Apr’21 Allied sold 1 Apr’20 8.
Slide 9: AUB Corporate Cash Flow and Funding
AUB CORPORATE CASH FLOW AND FUNDING AUB Corporate Entity Cash Movement ($mns) Operating cash generated of $60.0mn 17.3 10.0 77.3 18.0 36.4 25.8 21.4 FY21 Opening Dividends received Net corporate expenses Debt repayment Acquisitions net Dividends paid FY21 closing cash balance1 of Disposals cash bala
Slide 10: Shareholder Returns
SHAREHOLDER RETURNS Underlying EPS & Dividend growth Underlying Earnings Per Share1,2 (Cents per share) 22.0% 7.4% 7.5% -0.1% 4.9% 87.93 62.52 67.21 67.12 72.10 59.57 FY16 FY17 FY18 FY19 FY20 FY21 Dividend Per Share (Cents) 10.0% 8.7% 8.3% 1.1% 5.0% 55.0 50.0 45.5 46.0 40.0 42.0 32.0 32.5 35.5 [39.0
Slide 11: Divisional Performance
Divisional Performance
Slide 12: FY21 Divisional Performance
FY21 DIVISIONAL PERFORMANCE Excellent results in Australian Broking with a 360bps improvement in margins as benefits of strategic initiatives flow through AUSTRALIAN AUSTRALIAN CONTINUING HEALTH AND OPERATING Vs. FY20 BIZCOVER2,3 NEW ZEALAND REHABILITATION comparative period BROKING2 AGENCIES4 OPERA
Slide 13: Australian Broking: Increasing Operating Leverage
AUSTRALIAN BROKING2: INCREASING OPERATING LEVERAGE Recent initiatives in Australian Broking are driving improved revenue and underlying cost drivers Australian Broking2 Revenue and Expense: FY19-FY21 Revenue1 31.9% …expanding the jaws to EBIT Margin 28.3% deliver EBIT margin growth EBIT Margin 27.9%
Slide 14: BizCover
BIZCOVER Multiple initiatives underway to drive continued growth and outperformance Continued strong growth in revenue… Strategic Update Cumulative Revenue ($mns)1 34% Referral Portal Launched a new referral portal in June 2021 partnering with professional advisory firms to service the insurance nee
Slide 15: Underwriting Agencies
UNDERWRITING AGENCIES The restructure and improved performance of Austagencies is showing early promise and is a priority for FY22 Austagencies – FY21 Key Initiatives and Progress FY22 Focus Redesign Operating Reduce cost-to-serve Acquire for scale Model Underlying Increase Austagencies Restructure
Slide 16: New Zealand
NEW ZEALAND Strategy to improve income growth and returns in a low premium rate increase environment FY21 Performance Business Update and FY22/23 opportunity Evolving $831mn regulatory Recent significant & welcome change in the regulatory environment to ‘professionalise’ the industry. The quantum of
Slide 17: Supporting Our Team Through the Pandemic
SUPPORTING OUR TEAM THROUGH THE PANDEMIC AUB has implemented changes to support our team through these challenging times Key employee initiatives* A new 4/1 work policy Redesign of our work Generous approaches to Physical and Mental Health environment and leave and work-hour a priority employee enga
Slide 18: Progress against our Strategic Priorities over the past two years
Progress against our Strategic Priorities over the past two years
Slide 19: Delivering on Our Strategic Priorities
DELIVERING ON OUR STRATEGIC PRIORITIES Our overarching strategic focus Delivering on our strategy – Key Initiatives Leading group of Insurance Brokers and Agents… 1 Network Optimisation …offering General and 2 Acquisitions Specialist products and industry solutions… 3 Technology …to Commercial custo
Slide 20: 1. Network Optimisation
1. NETWORK OPTIMISATION Significant driver of margin expansion FY19 – Total Partner Business Count ~105 Consolidate Portfolio Realignment Specialty Disposals / Exits Entity Merge portfolios and Strategically ‘re-home’ Segment and acquire Strategic disposals of non- Rationalisation Purpose businesses
Slide 21: 2. Acquisitions
2. ACQUISITIONS Accretive acquisitions are accelerating strategy Insurance made easy February 2020 August 2020 December 2020 April 2021 - Market-leading direct small - Leading broker with scale in - 10 high-performing and - Led by 360 as a signal for business insurance platform specialist focus of l
Slide 22: 3. Technology
3. TECHNOLOGY The AUB technology landscape has rapidly transformed, delivering cost-effective solutions for clients and network partners Uplift process and Initiative Improve sales effectiveness Enhance user experience operational efficiency (clients, brokers) CBS+ - Share system enhancements across
Slide 23: 4. Partner Proposition
4. PARTNER PROPOSITION New and enhanced services for network partners ENHANCE PARTNER Negotiated 2 updated major Negotiated improved product Negotiated new claims delegation authorities with insurers on behalf of insurer agreements and 6 wordings and coverage to PROPOSITION new ExpressCover insurer
Slide 24: FY22 Priorities & Outlook
FY22 Priorities & Outlook
Slide 25: FY22 Priorities – Continue the Momentum
FY22 PRIORITIES – CONTINUE THE MOMENTUM FY22 Priority Overview Capitalise on FY21 momentum in Agencies by increasing focus on expanded binder capacity, REINVIGORATE INSURANCE 1 enhanced offering proposition, increased penetration into the Austbrokers network and AGENCIES leveraging synergies 2 OPTIM
Slide 26: FY22 Outlook
FY22 OUTLOOK Underlying NPAT for FY22 in the range of $70.0mn - $73.0mn, representing growth of 15.7% - 20.7% over FY21 continuing operations FY22 Underlying NPAT1,3 growth on PY $mns Highlights 15.7% - 20.7% Outlook assumes premium rate rises for Australia in the range of 5% to 6% 1.5 – 2.5 70.0
Slide 27: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 28: Closing
Closing Mike Emmett CEO and Managing Director
Slide 29: Appendices
APPENDICES A FY21 Detailed Financial Results Appendices B AUB Group Business Overview C AUB Group Portfolio Overview 29
Slide 30: A. FY21 – Detailed Financial Results
Appendices A. FY21 – Detailed Financial Results
Slide 31: FY21 Divisional Performance Breakdown
FY21 DIVISIONAL PERFORMANCE BREAKDOWN FY20 to FY21 Underlying NPAT1,8 ($mns) 22.9% 1.8 1.6 0.1 0.8 5.8 6.0 65.3 12.9 53.2 Pre-Tax FY20 Australian BizCover3,4 Australian New Zealand Health and Net Corporate Tax FY21 Broking2,3 Agencies5 Rehabilitation result7 (discontinued)6 1. Underlying NPAT is use
Slide 32: Australian Broking
AUSTRALIAN BROKING7 Profit contribution to AUB Group – Pre-tax Underlying pre-tax profit for the year increased by 21.8% to $72.0mn FY21 FY20 Movement Movement (%) ($mns) (FY20: $59.1mn). This increase predominantly driven by organic growth Commission and fee income (net) 381.4 343.0 38.4 11.2% as
Slide 33: BizCover
BIZCOVER2,3 Profit contribution to AUB Group – Pre-tax FY21 FY20 Movement Movement Underlying pre-tax profit for the year increased by 190.0% to $8.9mn ($mns) (5 months since acq only) (%) (FY20: $3.1mn): Underlying Revenue1 58.7 19.6 39.1 199.9% o FY20 included 5 months of BizCover (investment 1
Slide 34: Australian Agencies
AUSTRALIAN AGENCIES Profit contribution to AUB Group – Pre-tax Underlying pre-tax profit for the year increased by 13.9% to $14.8mn FY21 FY20 Movement Movement (%) ($mns) (FY20: $13.0mn): Commission and fee income (net) 68.7 55.8 13.0 23.3% Interest 0.3 0.5 (0.3) (52.1%) COVID-19 impacted client
Slide 35: New Zealand
NEW ZEALAND Profit contribution to AUB Group – Pre-tax Underlying pre-tax profit for the year decreased by 13.2% to $10.6mn FY21 FY20 Movement Movement (%) ($mns) (FY20: $12.2mn). This decrease was primarily due to the impact of a Commission and fee income (net) 53.8 53.4 0.4 0.7% change in accoun
Slide 36: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview ($mns) FY21 FY201 Movement Cash – Corporate 21.4 36.1 (14.7) Cash – Consolidated 76.6 84.4 (7.8) Cash – Trust (Consolidated) 205.2 158.8 46.4 Interest-bearing loans and borrowings 182.0 192.0 (10.0) – Corporate Interest-bearing l
Slide 37: AUB Group Debt
AUB GROUP DEBT Total AUB Group Debt on a look-through basis1 ($mns) 255.2 10.1 238.4 20.0 4.2 2.5 17.5 43.2 39.0 28.5% FY21 AUB Group Gearing 192.0 Ratio4 181.9 (FY20 34.2%) Total AUB Group Corporate Debt2 Consolidated Entity Associates Total AUB Group Debt 30 June 2020 Debt 30 June 20216 Associates
Slide 38: A1.0 Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 FY21 FY20 Movement (%) ($000) ($000) Net Profit after tax attributable to equity holders of the parent 70,621 46,984 50.3% Add back/(less): Share of Amortisation of broking registers9 10,948 7,114 Adjustments to value of entities (to fair valu
Slide 39: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1 Movement Movement FY21 ($’000) FY20 ($’000) FY ($’000) FY (%) Australian Broking revenue2 429,183 395,005 34,178 8.7% Australian Broking expenses2 (292,360) (283,045) (9,315) 3.3% EBIT - Australian Broking2 136,823 111,960 24,863 22.2% BizCover revenue2,3 58,
Slide 40: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 Movement Movement FY21 ($’000) FY20 ($’000) FY ($’000) FY (%) Australian Broking revenue2 429,183 395,005 34,178 8.7% Australian Broking expenses2 (295,285) (287,241) (8,044) 2.8% Net profit - Australian Broking2 133,898 107,764 26,134 24.3% Profit attributab
Slide 41: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1 FY21 ($’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 429,183 223,723 205,460 395,005 207
Slide 42: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 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 ($’000) 2 Australian Broking revenue 429,183 223,723 205,460 395,005 207
Slide 43: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT1 FY212 FY201,2 ($’000) ($’000) Cash flows from operations 83,840 77,995 Cash flows from investing activities Acquisitions (26,859) (148,279) Sales proceeds (net of cash reduced on deconsolidation) 49,526 1,094 Plant equipment / Other 2,752 (1,274) Payments for d
Slide 44: A4.0 Austbrokers Restructure and BizCover Realignment
A4.0 AUSTBROKERS RESTRUCTURE AND BIZCOVER REALIGNMENT1,2,3 Net Profit before tax attributable to equity holders FY21 2H21 1H21 FY20 2H20 1H20 of parent entity as previously reported ($000) ($000) ($000) ($000) ($000) ($000) Australian Broking 80,832 41,518 39,314 62,147 37,591 24,556 FY21 2H21 1H21
Slide 45: B. AUB Group Business Overview
Appendices B. AUB Group Business Overview
Slide 46: AUB Group – An Overview
AUB GROUP – AN OVERVIEW 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 an
Slide 47: Divisional Overview: Australian Broking
DIVISIONAL OVERVIEW: AUSTRALIAN BROKING 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 capabili
Slide 48: Divisional Overview: BizCover
DIVISIONAL OVERVIEW: BIZCOVER 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 L
Slide 49: Divisional Overview: Australian Agencies
DIVISIONAL OVERVIEW: AUSTRALIAN AGENCIES OVERVIEW Our Australian 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 inc
Slide 50: Divisional Overview: New Zealand
DIVISIONAL OVERVIEW: NEW ZEALAND 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 $145mn in IA NZ in premium 2 Agencies 2 underwriting agencies co
Slide 51: ESG: FY21 Highlights
ESG: FY21 HIGHLIGHTS Significant changes to enhance employee welfare, deliver on clients’ needs, and support the communities in which we operate AUB Group ESG Framework Customer Employees . .. - Increased investment in supporting - 4/1 work from home (4 days a week) clients with disruption claims fr
Slide 52: Our Non-Executive Directors
OUR NON-EXECUTIVE DIRECTORS David Clarke Robin Low Paul Lahiff Non-Executive Chair, Chair of the Nominations Committee Non-Executive Director, Chair of the Audit & Risk Committee Non-Executive Director, Chair of the Remuneration & People Committee 40 years’ experience in investment Former PwC pa
Slide 53: C. AUB Group Portfolio Overview
Appendices C. AUB Group Portfolio Overview
Slide 54: Insurance Portfolio – Premium and Size
INSURANCE PORTFOLIO – PREMIUM AND SIZE Annual Premium1 ($bns) 4.0 ~$4.0bn +13.0% CAGR Premium under 3.4 influence 3.2 across the AUB 2.8 2.2 network 1.8 1.8 2H 1.5 Australian Broking ~1.6mn 1.6 1.8 Policies written 1.4 1H 1.3 within the AUB network (FY21) FY18 FY19 FY20 FY21 1. Total includes premiu
Slide 55: Australian Broking Portfolio Mix by Client Segment, Product, Geography & Insurer
AUSTRALIAN BROKING PORTFOLIO MIX BY CLIENT SEGMENT, PRODUCT, GEOGRAPHY & INSURER 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 2
Slide 56: Group: Insurance Portfolio Mix, by Product and Insurer
GROUP: INSURANCE PORTFOLIO MIX, BY PRODUCT AND INSURER 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 57: Group: Insurance Portfolio Mix, by Product Category and Geography
GROUP: INSURANCE PORTFOLIO MIX, BY PRODUCT CATEGORY AND GEOGRAPHY 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% Portfolio mix is based on available data from key Australian Broking,
Slide 58: Insurance Operations Reach and Scale
INSURANCE OPERATIONS REACH AND SCALE >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 58
Slide 59: 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 60: Thank You
Thank You