Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — FY2009 Earnings Presentation
29 slides from Aub's earnings presentation, Aug 27, 2009
Slide 1: ASX cover letter: Presentation on Results for Year ended 30 June 2009
For personal use only 27th August 2009 The Manager Company Announcements ASX Ltd Level 6, Exchange Centre, 20 Bridge Street Sydney, NSW 2000 Dear Sir / Madam, Re: Presentation on Results for the Year ended 30 June 2009 Attached for immediate release is Austbrokers Holdings Limited (AUB) Presentation
Slide 2: Financial Year 2009 Results Presentation
For personal use only AUSTBROKERS HOLDINGS LIMITED Financial Year 2009 Results Presentation Thursday 27th August 2009 Lach McKeough CEO Steve Rouvray CFO 1
Slide 3: Agenda
Agenda For personal use only • Overview – Business Overview – FY 2009 Business Highlights – FY 2009 Financial Highlights • FY 2009 Financial Performance • FY 2010 Outlook 2
Slide 4: Business overview
Business overview For personal use only • Austbrokers is one of top four insurance broking networks in Australia – Client base of over 255,000 – Over 1,300 personnel engaged in the business – $1.3 billion in gross written premiums placed – Wide geographical spread over 80 locations – Regional presen
Slide 5: Business overview (con't)
Business overview (con’t) For personal use only • Insurance Broking owner-driver model – 40 member broker firms • 20 50% owned • 17 51% - 80% owned • 3 100% owned • Underwriting agency business – Entities are authorised to write business on behalf of licensed insurers – no underwriting risk – Austag
Slide 6: FY 2009 Highlights
FY 2009 Highlights For personal use only • Acquisitions Direct – 50% of SRG Corporate – Perth & Gold Coast on 1 July 2008 – FWR portfolio from Horsells in November 2008 by Austbrokers Sydney – Mortlock portfolio by Austbrokers Sydney on 1 July 2008 – 50% Austral Insurance Brokers – Perth on 30 June
Slide 7: FY 2009 Highlights
FY 2009 Highlights For personal use only • Increase in Equity – 10% of SPT (now 60% owned) – 20% of Austbrokers City State (now 100% owned) – 20% of North Cost Insurance Brokers (now 70% owned) – 40% of Dolphin Insurance (now 100% owned) – 16% of Austbrokers Phillips (now 66% owned) – 15% of Austbro
Slide 8: FY 2009 Highlights
FY 2009 Highlights For personal use only • Synergies / Efficiencies – Merger of BHI and Austbrokers ALIB 1 October 2008 – Continued transfers of brokers to central DataCentre now co-located with Telstra – now over 70% of users in the group • IBNA Joint Venture (AIMS) – Presentation to and agreement
Slide 9: Profit Growth 2003 - 2009
Profit Growth 2003 - 2009 For personal use only 18 $17.989 16 14 $M 12 10 8 6 4 2 0 2004* 2005* 2006 2007 2008 2009 Profit – Net profit after tax before amortisation of intangibles before profits on businesses / portfolios sold (Adjusted NPAT) * From Prospectus dated 30 September 2005 adjusted for p
Slide 10: FY 2009 financial performance
FY 2009 financial performance For personal use only $’000 Actual Actual % change 2009 2008 Broker Revenue (net of commission 190,335 171,993 10.8% paid) Brokers Profit 34,735 17.0% 29,700 (AHL share) Profit (before tax and amortisation of 27,011 23,634 14.3% intangibles and sales of businesses) NPAT
Slide 11: Agenda
Agenda For personal use only • Overview • FY 2009 Financial Performance: – Income statement – as per Financial Report – Reconciliation to Adjusted NPAT – Profit and loss statement – detailed – Balance sheet – Other financials – Changes to accounting standards • FY 2010 outlook 10
Slide 12: Income Statement
Income Statement For personal use only AUSTBROKERS HOLDINGS LIMITED A.B.N. 60 000 000 715 INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009 Consolidated Company Notes 2009 2008 2009 2008 $'000 $'000 $'000 $'000 Revenue 4 (i) 78,089 64,938 - - Other income 4 (ii) 4,566 5,982 12,019 16,030 Share of pro
Slide 13: Profit after tax reconciliation
FY 2009 For personal use only Profit after tax Reconciliation of reported result to operating NPAT before profits relating to divestments and amortisation of intangibles. FY FY Actual 2009 Actual 2008 $ ‘000 $ ‘000 Reported Profit attributable to members 15,903 14,316 Profits after tax on sale of bu
Slide 14: FY 2009 Results – Management Presentation
FY 2009 Results – Management Presentation For personal use only FHY 2009 FHY 2008 VARIANCE VARIANCE $'000 $'000 $'000 % BROKER OPERATIONS COMMISSION AND FEES 155,784 141,178 14,606 10.3% LIFE INCOME 7,710 7,188 522 7.3% PROFIT COMMISSIONS 1,126 796 330 41.5% PREMIUM FUNDING 13,197 10,599 2,598 24.5%
Slide 15: FY 2009 Results – Management Presentation
FY 2009 Results – Management Presentation For personal use only FHY 2009 FHY 2008 VARIANCE VARIANCE $'000 $'000 $'000 % CONSOLIDATED BROKERS COMMISSION AND FEES 53,950 44,958 8,992 20.0% LIFE INCOME 4,096 3,458 638 18.4% PROFIT COMMISSIONS 655 466 189 40.6% PREMIUM FUNDING 4,197 3,318 879 26.5% INTE
Slide 16: FY 2009 compared to FY 2008 - Highlights
FY 2009 compared to FY 2008 - Highlights For personal use only • Adjusted NPAT for FY 2009 at $18 million (2007 $15.7 million) – Adjusted NPAT excludes $0.5 million profits on sale of businesses and $2.6 million amortisation of intangibles expense – exceeded 2008 Adjusted NPAT by $2.3 million – 14.6
Slide 17: Analysis of Contribution to Growth in NPAT
Analysis of Contribution to Growth in NPAT For personal use only Growth in Adjusted NPAT $’000 % of Growth Share of broker profits - Direct acquisitions FY 2009 281 1.8 - Existing network 2806 17.9 Austagencies 84 0.5 Lower effective tax 218 1.4 Offset by Corporate Income (353) (2.2) Interest earnin
Slide 18: Broker Income / Expenses FY2009 vs FY 2008
Broker Income / Expenses FY2009 vs FY 2008 For personal use only Increase (Decrease) Increase (Decrease) Ex Direct Acquisitions % % Commission & Fees 10.3 7.8 Life Income 7.3 7.3 Profit Commissions 41.6 37.1 Premium Funding 33.8 33.6 Interest earned (14.3) (15.4) Total Income 17.2 15.9 Expenses 8.4
Slide 19: Broker Profits as % of Broker Income
Broker Profits as % of Broker Income For personal use only Profits (before tax) as a percentage of Broker Income Including Austagencies Insurance Broking only 2009 28.3% 28.4% 2008 26.7 % 26.8% 2007 24.8% 24.2% 2006 25.2% 2005 23.4% 2004 22.3% 2003 20.8% 18
Slide 20: Austagencies Underwriting Agencies
Austagencies Underwriting Agencies For personal use only PROFIT IMPACT $’000 FY 2009 FY 2008 INCR / (DECR) INCR / (DECR) % Commission and fees 8,446 7,820 626 8.0 Profit commission 1,166 1,011 155 15.3 Interest 421 723 (302) (41.8) Other income 15 34 (19) (55.9) 10,048 9,588 460 4.8 Expenses 7, 462
Slide 21: Balance Sheet
Balance Sheet For personal use only 30 June 2009 30 June 2008 Assets $000 $000 Current Assets Cash at Bank 17,047 23,640 Cash at Bank – Trust 51,611 35,016 Receivables 87,594 69,621 Short term investments 703 2,297 Total Current Assets 156,955 130,574 Non Current Assets Receivables 27 67 Plant Equip
Slide 22: Balance Sheet (cont)
Balance Sheet (cont) For personal use only 30 June 2009 30 June 2008 Liabilities $000 $000 Current Liabilities Payables 141,488 112,718 Tax Liabilities 3,316 3,663 Provisions 6,822 5,020 Interest bearing loans and borrowings 611 501 Total Current Liabilities 152,137 121,902 Non current liabilities P
Slide 23: Cash Flow
Cash Flow For personal use only 2009 2008 $’000 $’000 Cash flows from operations 28,139 19,403 Cash flows from investing activities - Acquisitions (23,402) (18,522) - Sales proceeds / loan repayments 5,687 4,985 - Plant equipment (1,726) (1,110) (19,441) (14,647) Cash flows from financing activities
Slide 24: Other Financials
Other Financials For personal use only Funding • Facility from St George Bank – limit $44.4 million including subsidiaries $6.4 million • Facility term is to August 2013 • Drawn bank facility at 30 June 2009 – $25 million – interest rate locked in at 6.8% pa until October 2011 – $7.7 million in subs
Slide 25: New Accounting Standards FY2010
New Accounting Standards FY2010 For personal use only Changes to AASB 3 Accounting for Business Combinations will change current accounting policies and impact results • Acquisition costs will be expensed • Under / over estimations of final acquisition prices where earn outs are involved will be tak
Slide 26: Agenda
Agenda For personal use only • Business Overview • FY 2009 Financial Performance • FY 2010 Outlook – Market conditions – Strategy – Outlook 25
Slide 27: Market conditions
Market conditions For personal use only • Premium rates – Indications from underwriters of premium rate increases – Premium rate movements will vary across classes • Lower interest rate environment • Uncertainty over the extent of economic slowdown and impact on business • Superannuation and financi
Slide 28: Strategy
Strategy For personal use only • Growth – acquisition activity to continue – business development – marketing strategies – marketing initiatives implemented to increase cross sell of insurance products • Expand underwriting agency capability • Back office synergies and efficiencies – transfer of bro
Slide 29: Outlook
Outlook For personal use only • Premium rate increases now likely to occur but rate and timing of increase uncertain • Insurance broking industry consolidation – continuing acquisition opportunities • Organic growth expected to continue to emerge through broker network initiatives and at least some