Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — FY2008 Earnings Presentation
26 slides from Aub's earnings presentation, Aug 28, 2008
Slide 1: ASX cover letter: 2008 Financial Year Results presentation
28th August 2008 For personal use only The Manager Australian Stock Exchange Company’s Announcement Office Level 6, Exchange Centre 20 Bridge Street Sydney, NSW 2000 Dear Sir or Madam, Re: Austbrokers Holdings Limited Presentation – 2008 Financial Year Results Further to the company’s release today
Slide 2: Financial Year 2008 Results Presentation
For personal use only AUSTBROKERS HOLDINGS LIMITED Financial Year 2008 Results Presentation Thursday 28th August 2008 Lach McKeough CEO Steve Rouvray CFO 1
Slide 3: Agenda
Agenda For personal use only • Overview – Business Overview – FY 2008 Business Highlights – FY 2008 Financial Highlights • FY 2008 Financial Performance • FY 2009 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 250,000 – Over 1,200 personnel engaged in the business – $1.2 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 – 39 member broker firms • 23 50% owned • 13 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 2008 Highlights
FY 2008 Highlights For personal use only • Acquisitions Direct – 50% of Strathearn Insurance Brokers – Perth, Brisbane, Sydney – 50% of Rivers Insurance Brokers – Cairns, Brisbane, Innisfail • Acquisitions in the Network – MGA acquired 75% of Portfolio Planners General Insurance Book in Adelaide – A
Slide 7: FY 2008 Highlights (con't)
FY 2008 Highlights ((con’t) con’t) For personal use only • Underwriting Agencies – Established new agency – Latitude – property and liability underwritten by Great Lakes Australia – Acquired 60% Dolphin Insurance specialising in tourism industry • Premium Funding – Continuing promotion and developme
Slide 8: Profit Growth 2003 - 2008
Profit Growth 2003 - 2008 For personal use only 16 $15.691 14 $M 12 10 8 6 4 2 0 2004* 2005* 2006 2007 2008 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 profits f
Slide 9: FY 2008 financial performance
FY 2008 financial performance For personal use only $’000 Actual Actual % change 2008 2007 Broker Revenue (net of commission 171,993 134,631 27.8% paid) Brokers Profit 29,700 24% 23,948 (AHL share) Profit (before tax and amortisation of 23,634 18,931 24.8% intangibles and sales of businesses) NPAT (
Slide 10: Agenda
Agenda For personal use only • Overview • FY 2008 Financial Performance: – Income statement – as per ASX reporting – Reconciliation to Adjusted NPAT – Profit and loss statement – detailed – Balance sheet – Other financials • FY 2009 outlook 9
Slide 11: 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 2008 Consolidated Company Notes 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Revenue 4 (i) 64,938 58,788 - - Other income 4 (ii) 5,982 5,173 16,030 9,869 Share of prof
Slide 12: Profit after tax reconciliation
FY 2008 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 2008 Actual 2007 $ ‘000 $ ‘000 Reported Profit attributable to members 14,316 12,590 Profits after tax on sale of bu
Slide 13: FY 2008 Results – Management Presentation
FY 2008 Results – Management Presentation For personal use only $'000 FY 2008 FY 2007 VARIANCE VARIANCE $ % CONSOLIDATED BROKERS COMMISSION AND FEES 44,958 40,105 4,853 12.1% LIFE INCOME 3,458 2,613 845 32.3% PROFIT COMMISSIONS 566 714 (148) -20.7% PREMIUM FUNDING 3,318 2,861 457 16.0% INTEREST 2,56
Slide 14: FY 2008 compared to FY 2007
FY 2008 compared to FY 2007 For personal use only • Adjusted NPAT for FY 2008 at $15.7 million (2007 $13.2 million) – Adjusted NPAT excludes $0.5 million profits on sale of businesses and $1.9 million amortisation of intangibles expense – exceeded 2007 Adjusted NPAT by $2.5 million – 18.5% – 2HY con
Slide 15: FY 2008 compared with FY 2007
FY 2008 compared with FY 2007 For personal use only • Major acquisitions (before funding costs) contributed approximately 60% of the total increase in Austbrokers share of broker profits from $23.9 million to $29.7 million • Total broker expenses excluding impact of acquisitions were up approximatel
Slide 16: Insurance Broking Income Analysis
FY 2008 compared with FY 2007 For personal use only Insurance Broking Income Analysis • Total insurance broking income up approximately 9% on FY 2007 (excluding acquisitions) despite flat market • Premiums placed (excluding major acquisitions) up approximately 5% on FY 2007 (2007 flat) • Insurance b
Slide 17: Broker Profits as % of Broker Income
Broker Profits as % of Broker Income For personal use only Brokers Profits (before tax) as a percentage of Broker Income Including Austagencies Insurance Broking 2008 26.7 % 26.8% 2007 24.8% 24.2% 2006 25.2% 2005 23.4% 2004 22.3% 2003 20.8% Increase contributed by acquisition of Strathearn, Rivers a
Slide 18: Austagencies Underwriting Agencies
Austagencies Underwriting Agencies For personal use only PROFIT IMPACT $’000 FY 2008 FY 2007 INCR / (DECR) Commission and fees 7,820 7,187 633 Profit commission 911 873 38 Interest 723 515 208 Other income 134 71 63 9,588 8,646 942 Expenses 7,105 5,665 (1,440) Net Profit before income tax 2,483 2,98
Slide 19: Balance Sheet
Balance Sheet For personal use only 30 June 2008 30 June 2007 Assets $000 $000 Current Assets Cash at Bank 23,640 25,250 Cash at Bank – Trust 35,016 32,732 Receivables 69,621 55,586 Short term investments 2,297 5,057 Total Current Assets 130,574 118,636 Non Current Assets Receivables 67 84 Plant Equ
Slide 20: Balance Sheet (cont)
Balance Sheet (cont) For personal use only 30 June 2008 30 June 2007 Liabilities $000 $000 Current Liabilities Payables 112,718 89,241 Tax Liabilities 3,663 1,307 Provisions 4,580 3,562 Interest bearing loans and borrowings 501 404 Total Current Liabilities 121,462 94,514 Non current liabilities Pro
Slide 21: Cash Flow
Cash Flow For personal use only 2008 2007 $’000 $’000 Cash flows from operations 19,403 12,312 Cash flows from investing activities - Acquisitions (18,522) (13,236) - Sales proceeds / loan repayments 4,985 9,387 - Plant equipment (1,110) (1,853) (14,647) (5,702) Cash flows from financing activities
Slide 22: Other Financials: Funding
Other Financials For personal use only Funding • Interest Bearing Liabilities – $16 million at holding company level – $4.2 million in subsidiaries • Increased facility from St George Bank – limit $44 million including subsidiaries $6 million • Drawn bank facility at 30 June 2008 – $16 million – Und
Slide 23: Agenda
Agenda For personal use only • Business Overview • FY 2008 Financial Performance • FY 2009 Outlook – Market conditions – Strategy – Outlook 22
Slide 24: Market conditions
Market conditions For personal use only • Premium rates – Market conditions improving but varies for different classes of business – Indications from underwriters of need for premium rate increases – Premium rate movements will vary across classes • As insurance market conditions improve, organic gr
Slide 25: Strategy
Strategy For personal use only • Growth – acquisition activity to continue – business development – cross marketing – marketing initiatives implemented to increase cross sell of insurance products • Back office synergies and efficiencies – transfer of brokers to central IT DataCentre, mergers, centr
Slide 26: Outlook
Outlook For personal use only • Market conditions are expected to improve but not dramatically in the short term • Insurance broking industry consolidation – continuing acquisition opportunities • Organic growth expected to continue to emerge through broker network initiatives provided premium rates