Slide 1: FY22 Investor Presentation
FY22 Investor Presentation 24 August 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 Mixed New FY23 Guidance performance Broking revenue and strategy Zealand momentum profit growth delivering ahead performance continues of plan ▪ Strong results from ▪ Australian Broking ▪ The business grew ▪ Revenue growth of ▪ G
Slide 3: Track Record of Growth
TRACK RECORD OF GROWTH (CONTINUING OPERATIONS4) Premium Client Count Underlying Revenue1,4 Underlying EBIT1,4 Underlying EBIT Margin1,4 +11.2% CAGR +12.0% CAGR +17.7% CAGR +14.2% CAGR +470bps +10.0% +12.2% +20.8% +4.3% +240bps FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY2
Slide 4: FY22 Results Overview
mimi livill mi 1 ft MUIR: ll i eT Whig
Slide 5: Financial Highlights – Continuing Operations
FINANCIAL HIGHLIGHTS – CONTINUING OPERATIONS4 Continued momentum in Revenue growth and Margin expansion delivering strong UNPAT and EPS growth FY22 FY214 FY204 Performance Highlights $689.5mn $614.8mn $528.6mn ▪ Growth in Underlying revenue of 12.2% in FY22, CAGR of Underlying Revenue1 (+12.2%) (+16
Slide 6: FY22 Financial Performance: Overview
FY22 FINANCIAL PERFORMANCE: OVERVIEW FY22 Underlying NPAT grew by 22.2% on continuing operations, arising from strong organic performance as well as accretive acquisitions FY21 to FY22 Underlying NPAT1 Breakdown $mn 22.2% 13.3% 1.6 74.0 3.5 (2.7%) 5.8% 65.3 11.6 1.8 3.0 60.5 19.1% FY21 FY21 JobKeepe
Slide 7: Portfolio Growth and Profitability
PORTFOLIO GROWTH AND PROFITABILITY Growth in Premium remains strong while Underlying NPAT continues to accelerate from the investment in yield improvement initiatives Premium Growth (GWP $bn FY19-FY22) Underlying NPAT1,2 Growth ($mn) (Continuing Operations) +11.2% CAGR +17.1% CAGR 10.0% 22.2% 4.4 74
Slide 8: Shareholder Returns
SHAREHOLDER RETURNS 21.1% uplift in Underlying EPS from continuing operations, with FY22 total dividend of 55.0 cents, flat YoY in light of the potential Tysers acquisition Underlying Earnings Per Share1 (Cents per share) (not adjusted) 12.3% 22.0% 96.70 7.4% 86.12 Historic 7.5% -0.1% Underlying 70.
Slide 9: Full Conversion of Profits to Cash
FULL CONVERSION OF PROFITS TO CASH Cash Flow Summary1 FY22 FY21 Statutory Operating Cash Flow2 $102.0mn $83.8mn Less Lease Obligation Payments ($7.4mn) ($9.4mn) Adjusted Operating Cashflow $94.6mn $74.5mn Underlying NPAT3 $74.0mn $65.3mn >100% >100% Conversion Conversion of $74.0mn FY22 of $65.3mn F
Slide 10: FY22 Execution Priorities Update
FY22 EXECUTION PRIORITIES UPDATE Consistent focus on delivering against Strategic Priorities has been key to AUB Group performance Pre-tax profit uplift of 53.5% and an EBIT margin Premium uplift of 31% to $658mn with Austbrokers REINVIGORATE INSURANCE improvement of 510bps penetration increasing by
Slide 11: Divisional Performance
Divisional Performance
Slide 12: FY22 Divisional Performance
FY22 DIVISIONAL PERFORMANCE Strong performance achieved across Operating Businesses with growth in underlying revenue, margin and profitability AUSTRALIAN NEW ZEALAND OPERATING Vs. FY21 comparative period BIZCOVER4 AGENCIES2 BROKING4 BROKING BUSINESSES3,4 Underlying1 $457.2mn $69.7mn $103.7mn $58.9m
Slide 13: Australian Broking
AUSTRALIAN BROKING Network optimisation, disciplined acquisition and enhanced broker propositions continue to deliver revenue growth & margin expansion Key Metrics $457.2mn Revenue1 33.7% EBIT Margin1 $154.2mn EBIT1 FY22 Performance +7.6% on FY21 2 +250bps on FY21 2 +16.2% on FY21 2 Australian Broki
Slide 14: BizCover
BIZCOVER Continued strong growth in direct channel, with an increased focus on investment for intermediated channels and international expansion Key Metrics $69.7mn Revenue 37.8% EBIT Margin $26.4mn EBIT FY22 Performance +21.0% on FY21 1 +150bps on FY21 1 +26.2% on FY21 1 Revenue Growth – Direct v I
Slide 15: Agencies
AGENCIES Growth in revenue, margin and profit underpinned by expansions in scale and breadth of product and capability Key Metrics $103.7mn Revenue1,2 37.0% EBIT Margin1,2 $38.4mn EBIT1,2 FY22 Performance +41.0% on FY21 +510bps on FY21 +63.8% on FY21 Performance Drivers & Opportunities Increased por
Slide 16: New Zealand
NEW ZEALAND Strong revenue and profit growth for the majority of AUB businesses offset by costs of the technology investment as well as reduced profit in BWRS $58.9mn Revenue1 26.2% EBIT Margin1 $15.4mn EBIT1 Key Metrics 34.9% Excl. NZ Tech Inv2 $20.5mn Excl. NZ Tech Inv2 FY22 Performance +0.5% on F
Slide 17: Tysers Acquisition
TYSERS ACQUISITION Acquisition will materially improve AUB’s broker and client value proposition; revenue growth remains on target as the business emerges from COVID On 9 May 2022, AUB Group announced its acquisition of Tysers Delivers specialty Captures further Highly synergistic Strengthens the ▪
Slide 18: FY23 Priorities & Outlook
FY23 Priorities & Outlook
Slide 19: FY23 Execution Priorities
FY23 EXECUTION PRIORITIES FY23 Priority Overview ▪ Successful pilot implementation of Project Lola including interfaces to select Insurers and IMPROVE AND ENHANCE NEW 1 commencement of roll-out to NZbrokers network ZEALAND PERFORMANCE ▪ Accelerated revenue and profit growth for AUB’s portfolio of br
Slide 20: FY23 Outlook
FY23 OUTLOOK Underlying NPAT for FY23 forecast to be between $86.0mn - $91.0mn, representing growth of 16.2% - 23.0% over FY22 (ex Tysers) FY22 to FY23 Underlying NPAT1 Breakdown $mn Assumptions ▪ Outlook assumes continued strong 16.2% - 23.0% premium rate rises for Australia and moderate but accele
Slide 21: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 22: Closing
Closing Mike Emmett CEO and Managing Director
Slide 23: Appendices
APPENDICES A FY22 Detailed Financial Results Appendices B AUB Group Business Overview C AUB Group Portfolio Overview 23
Slide 24: A. FY22 – Detailed Financial Results
Appendices A. FY22 – Detailed Financial Results
Slide 25: FY22 Divisional Performance Breakdown
FY22 DIVISIONAL PERFORMANCE BREAKDOWN FY21 to FY22 Underlying NPAT1 ($mn) 13.3% 1.6 7.9 4.3 1.6 6.2 3.0 74.0 14.2 65.3 Pre-Tax FY21 Australian BizCover Agencies2 New Zealand Altius (Sold)3 Net Corporate Tax FY22 Broking Broking result4 1. Underlying NPAT is used by management and the board to assess
Slide 26: Australian Broking
AUSTRALIAN BROKING ▪ Underlying pre-tax profit for the year increased by 19.7% to $86.1mn (FY21: $72.0mn). Profit contribution to AUB Group – Pre-tax FY22 FY21 Movement Movement (%) Excluding $2.1mn non-recurring JobKeeper receipts in the prior period, the Underlying ($mn) pre-tax profit for the yea
Slide 27: BizCover
BIZCOVER Profit contribution to AUB Group – Pre-tax Movement ▪ Underlying pre-tax profit for the year increased by 18.4% to $10.5mn (FY21: FY22 FY21 Movement ($mn) (%) $8.9mn). Excluding $0.4mn non-recurring JobKeeper receipts in the prior period, the Underlying pre-tax profit for the year increased
Slide 28: Agencies
AGENCIES Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit for the year increased by 53.5% to $22.8mn (FY21: FY22 FY21 Movement Movement (%) ($mn) $14.8mn) Commission and fee income (net) 93.5 68.7 24.8 36.0% ▪ The current year includes the full period benefit of the investment
Slide 29: New Zealand Broking
NEW ZEALAND BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit for the year decreased by 15.3% to $9.0mn (FY21: FY22 FY21 Movement Movement (%) ($mn) $10.6mn). NZ technology investment costs of $4.6mn were incurred in the current Commission and fee income (net) 53.5 53.8
Slide 30: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview ($mn) FY22 FY21 Movement Cash – incl subs1 259.3 76.6 182.7 Cash – Trust Accounts 333.1 205.2 127.9 Investment in Associates 250.1 280.6 (30.5) Intangible assets and goodwill 622.5 469.7 152.8 Other Assets 175.5 114.0 61.5 Total
Slide 31: A1.0 Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 FY22 FY21 Movement (%) ($000) ($000) Net Profit after tax attributable to equity holders of the parent 80,836 70,621 14.5% Add back/(less): (net of NCI and income tax) Share of Amortisation of broking registers9 11,143 10,948 Adjustments to va
Slide 32: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,3 Movement Movement FY22 ($’000) FY21 ($’000) FY ($’000) FY (%) Australian Broking revenue 457,211 429,183 28,028 6.5% Australian Broking expenses (303,029) (292,360) (10,669) 3.6% EBIT - Australian Broking 154,182 136,823 17,359 12.7% BizCover revenue 69,730
Slide 33: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 Movement Movement FY22 ($’000) FY21 ($’000) FY ($’000) FY (%) Australian Broking revenue 457,211 429,183 28,028 6.5% Australian Broking expenses (305,526) (295,285) (10,241) 3.5% Net profit - Australian Broking 151,685 133,898 17,787 13.3% Profit attributable
Slide 34: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1,3 FY22 ($’000) 2H22 ($’000) 1H22 ($’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) Australian Broking revenue 457,211 238,228 218,983 429,183 223
Slide 35: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 FY22 ($’000) 2H22 ($’000) 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 ($’000) Australian Broking revenue 457,211 238,228 218,983 429,183 223,7
Slide 36: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT FY22 FY21 ($’000) ($’000) Cash flows from operations 101,961 83,840 Cash flows from investing activities Acquisitions 103,372 (26,859) Sales proceeds (net of cash reduced on deconsolidation) 13,987 49,526 Plant equipment / Other 307 2,752 Payments for deferred s
Slide 37: B. AUB Group Business Overview
Appendices B. AUB Group Business Overview
Slide 38: AUB Group – An Overview
AUB GROUP – AN OVERVIEW AUB Group Limited is an ASX200 listed group comprising insurance brokers and underwriting agencies operating in ~520 locations across Australia and New Zealand. Over 3,000 team members work with our 900,000 clients to place more than $4.4bn in insurance premiums with local an
Slide 39: Overview: Australian Broking
OVERVIEW: AUSTRALIAN BROKING OVERVIEW ▪ Our Australian broking businesses encompass some of Australia’s largest and most reputable brokerages, with specialist expertise, market penetration and quality client portfolios ▪ The portfolio consists of ~2,300 staff with 66% 45 capabilities across a broad
Slide 40: Overview: BizCover
OVERVIEW: BIZCOVER BizCover Channel Multi-channel market penetration leverages market leading platform while investment in brand drives operational leverage Leading full lifecycle SME Intermediated insurance platform in AU and BizCover Direct White-label BizCover for Brokers ExpressCover NZ – operat
Slide 41: Overview: Australian Agencies
OVERVIEW: AUSTRALIAN AGENCIES OVERVIEW ▪ Our Australian Agencies comprise some of Australia’s leading specialist underwriters who distribute and manage insurance products on behalf of domestic and internationally licensed insurers, including Lloyd’s ~$600mn 15% 31 ~100,000 ▪ The business includes 31
Slide 42: Overview: New Zealand
OVERVIEW: NEW ZEALAND OVERVIEW ▪ 5 Broking groups including Insurance Advisernet NZ o Selective investments in high-performing broking businesses ~$900mn 9% 5 Brokers ▪ 2 underwriting agencies in premium contribution to 2 Agencies ~200,000 (20% of AUB Group 1 member network clients o Expansion of 36
Slide 43: ESG Update
ESG UPDATE Social AUB Group ESG Framework & Targets Governance .. - Unified learning platform for training - Top-down governance model and monitoring compliance - AUB representative on all sub boards - Liveable wage benchmarking and monitoring - Group level centralised monitoring - Public employee a
Slide 44: C. AUB Group Portfolio Overview
Appendices C. AUB Group Portfolio Overview
Slide 45: Insurance Portfolio – Premium and Size
INSURANCE PORTFOLIO – PREMIUM AND SIZE Annual Premium1 ($bns) 4.4 ~$4.4bn 4.0 Premium under +12.0% CAGR influence 3.4 across the AUB 3.2 2.3 network 2.8 2.2 1.8 1.8 2H 1.5 Australian Broking ~1.6mn 2.1 1.8 Policies written 1.6 1H 1.3 1.4 within the AUB network FY18 FY19 FY20 FY21 FY22 1. Total inclu
Slide 46: 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% 18% 17% 3% 3% 41% 3% 12% 14% 4% 5% 8% 5% 12% 2% 2% 8% 9% 9% 3% 7% Business Workers Comp CGU/IAG Vero Zurich Personal Farm QBE Chubb AIG Liability Commercial In
Slide 47: 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 PI 28% 20% 7% NSW WA NT QBE Chubb Dual 39% 12% 2% 12% 6% 2% Medium Enterprise Liability Motor - Commercial 26% 13% 6% VIC SA TAS Allianz V
Slide 48: 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 (%) 11% 13% NT 1% QLD 12% WA 9% NSW SA 31% 8% ACT 2% 87% 89% VIC 15% Commercial Personal TAS NZ 1% 21% 48 Portfolio mix is based on available data from key Australian Brokin
Slide 49: Insurance Operations Reach and Scale
INSURANCE OPERATIONS REACH AND SCALE ~520 NT 5 locations QLD locations 13% 76 locations WA 34 locations SA NSW 29 locations 151 locations >3,000 ACT 8 locations staff 87% VIC 51 locations TAS NZ 4 locations 163 locations 49
Slide 50: 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 51: Thank You
Thank You