Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — H1 2007 Earnings Presentation
22 slides from Aub's earnings presentation, Feb 28, 2007
Slide 1: First Half Year 2007 Results Presentation
<All> a@ustbrokers AUSTBROKERS HOLDINGS LIMITED — First Half Year 2007 - Results Presentation . Wednesday 28 February 2007
Slide 2: Agenda
<All> Ag enda austorokers * Business Overview + First HY 2007 Financial Performance + 2007 HY Review and 2007 Outlook
Slide 3: Business overview
<All> Business overview austbrokers * Top four insurance broking network in Australia — Client base of over 200,000 — Over 1,200 personnel engaged:in the business — Over $850 million in premiums placed * National network servicing predominately SME market LS 68% of Austbrokers premiums are placed‘ i
Slide 4: Business overview
<All> Business overview (ony austbrokers * Insurance Broking owner-driver model — 36 member broker firms * 24 50% owned * 9 51% - 80% owned * 3 100% owned * Underwriting agency business — Entities are authorised .to write business on n behalf of licensed insurers — no underwriting risk f . - Austage
Slide 5: Highlights
Highlights 4 + Acquisitions + Alliances ~ 50% of Insurance Advisernet Australia ~ ~ Progressing alliance discussions with IBNA November 2006 with formal structure being developed ~ A50% stake in Ferdi Nel Insurance Brokers -- September 2006 . Oe “Owner. Driver ~ A50% stake in DF McGarry & Associates
Slide 6: Shareholding Developments
<All> Shareholding Developments austbrokers * QBE 14.9% Stake announced February 2007 — Stated as friendly, strategic, long term ~ No request for Board representation — Allow Austbrokers to operate independently of underwriters « Bonus Share Plan — Prospectus foreshadowed transfer of shares from ING
Slide 7: Agenda
<All> Ag enda austorokers * Overview + First HY 2007 Financial Performance: ~ Highlights ; ~ Profit and loss statement —as perASX reporting ~ Reconciliation ~ Profit and loss statement — detailed ~ Balarice sheet bes ek ee aa ne Other financials + 2007 HY review and 2007 FY outlook.
Slide 8: First HY 2007 financial performance
<All> First HY 2007 financial performance —austnrokers cree Actual $000 irs' First HY 2007 2006 % change Broker Revenue 76,884 - 63,584 20.9% Brokers & Agencies Profit B646 ~ “7515 15.0% (AHL share) * : Profit (before taxind amortisation of» - 6.389 me 5874 — 88% intangibles-and.sales of businesses)
Slide 9: Income Statement
<All> Income Statement austbrokers FOR THE HALF-YEAR ENDED 31 DECEMBER 2006 Consolidated 6 months enced — 6 months ended December 2006 December 2605 S000 $7000 Revenue 27,263 24,629 Other income 3,011 2,333 Share of profit of associates 3,410 3,055 Othor expenses €28,230) (25,563) Finance costs (530
Slide 10: Half Year to December: Profit after tax reconciliation
<All> Half Year to 31 December austbrokers Profit after tax Reconciliation of reported result to operating NPAT before profits relating to divestments and amortisation of intangibles. First HY First HY Actual 2007 Actual 2006 $ ‘000 — $ ‘000 Reported Profit attributable to. members 4O77. we T245 Pro
Slide 11: Half Year to December
<All> Half Year to 31 December austbrokers 000 HY TO31 HY TO31 VARIANCE VARIANCE DECEMBER 2006 DECEMBER 2005 % CONSOLIDATED BROKERS COMMISSION AND FEES 27,430 23.871 3,289, 13.7% INTEREST 1,611 1.223 368 B% OTHER INCOME: 272 704 432 Bia REVENUE FROM CONSOLIDATED BROKERS 29,053 25,798 3218 125% EXPEN
Slide 12: First HY 2007 compared to First HY 2006
First HY 2007 compared to First HY 2006 oul « Adjusted NPAT for First HY 2007 at $4.7 million — Adjusted NPAT excludes $0.7 million profits on sale of businesses and $0.7 million amortisation of intangibles expense — exceeded prior period adjusted NPAT by $0. 6 million — 14:6% « NPAT Earnings Per Sh
Slide 13: Broker profits as % of broker income
<All> Broker profits as % of broker income austbrokers Brokers Profits (before tax) as a percentage of Broker Income* 2007 First HY 19.2% op, 2006 First HY 20.4% Acquisition of Insurance Advisernet (IAA) is’a: different model — authorised representatives with large payout of commissions. Excluding I
Slide 14: First HY 2007 compared with First HY 2006
First HY 2007 compared with First HY 2006 avs el> * Profits on sale of businesses / portfolios $0.7 million compared to $3.9 million in FH 2006 — result of pre-IPO restructuring * Acquisitions contributed all the increase to broker profits * Total broker expenses excluding impact of acquisitions wer
Slide 15: First HY 2007 compared with First HY 2006: Insurance Broking Income Analysis
<i> First HY 2007 compared with First HY 2006 austbrokers Insurance Broking Income Analysis * Total insurance broking income up approximately 3.0% on 2006 (excluding acquisitions) . « Premiums placed (excluding acquisitions) down 2.2% on 2006 * Insurance broking commission and fees (excluding acquis
Slide 16: Balance sheet
<All> Balance sheet austbrokers 31 Dec 2006 30 June 2006 Assets $000 $000 Current Assets Cash at Bank 20,523 ~~ > 28,378 Cash at Bank — Trust PBUH 225 ns 29,667 Receivables, 33,995 : : me 52,746 Broker Loans 4.625 a 4177 Total Currant Assets ae : 90,368 114,988. Non Current Assets .. 7 Receivables w
Slide 17: Balance sheet (cont)
Balance sheet (cont 31 December 2006 30 June 2006 Liabilities $'000 $000 Current Liabilities Payables 68,703 83,473 Tax Liabilities 4,146 3,085 Provisions 2,962 3,676 Interest bearing loans and borrowings 684 689 Tota! Current Liabilities 73,492 ., 98,893 Non current liabilities . Provisions ¢ : 2,3
Slide 18: Other Financials
<All> Other Financials austbrokers Funding Market Capitalisation + Interest Bearing Liabilities « At31 December: $213 million; current: $258 million ~ $12 million (part fund broker loans of : $14 million) “Interim Dividend per share * For acquisitions . - + 5.5 cents Half Year Estimated $5.5 million
Slide 19: Agenda
<All> Ag enda austorokers * Business Overview * First HY 2007 Financial Performance. * 2007 HY Review and 2007 Outlook ~ Market conditions ~ Strategy “= Highlights : 2 Outlook 19
Slide 20: Market conditions
<All> Market conditions austbrokers * Premium rates — Market remains soft * Declining premium rates reducing commission income on renewal business — offsets growth in income from new business . Signs of increased acquisition activity in the market 20
Slide 21: Strategy
<All> Strategy austbrokers * Growth - acquisition * Back office synergies and efficiencies _ * Product development | * Premium funding « Life and superannuation 21
Slide 22: Outlook
<All> Outlook austbrokers * Market conditions unlikely to change significantly in immediate future + Austbrokers performance to remain steady * Insurance broking industry consolidation.— continuing acquisition opportunities but evidence of increased competitor activity + In current market conditions