Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — H1 2009 Earnings Presentation
26 slides from Aub's earnings presentation, Feb 26, 2009
Slide 1: ASX cover letter: Presentation on Results for Half Year ended 31 December 2008
For personal use only 26th February 2009 The Manager Company Announcements Australian Stock Exchange Level 6, Exchange Centre, 20 Bridge Street Sydney, NSW 2000 Dear Sir / Madam, Re: Presentation on Results for the Half Year ended 31 December 2008 Attached for immediate release is Austbrokers Holdin
Slide 2: First Half Year 2009 Results Presentation
For personal use only AUSTBROKERS HOLDINGS LIMITED First Half Year 2009 Results Presentation Thursday 26th February 2009 Lach McKeough CEO Steve Rouvray CFO 1
Slide 3: Agenda
Agenda For personal use only • Overview – Business Overview – First HY 2009 Business Highlights – First HY 2009 Financial Highlights • First HY 2009 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 255,000 – Over 1,300 personnel engaged in the business – Over $1.25 billion in premiums placed – Wide geographical spread over 80 locations – Regional presence – Sol
Slide 5: Network Premium Distribution by Class & State
Network Premium Distribution by Class & State For personal use only by Class by State 37% Property 15% Motor Commercial 11% Liability 6% Workers Compensation 43% NSW 6%Professional Indemnity 14% QLD 4% Contractors 11% SA 12% VIC 5% Householders 19% WA 1% NT 4% Private Motor 2% Marine 1% Livestock *
Slide 6: 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 7: First HY 2009 Highlights
First HY 2009 Highlights For personal use only • Acquisitions Direct – 50% of SRG Corporate – Perth & Gold Coast – FWR portfolio from Horsells in November 2008 by Austbrokers Sydney – Mortlock portfolio by Austbrokers Sydney • Acquisitions in the Network – Stateplan acquired bus portfolio with $300,
Slide 8: First HY 2009 Highlights
First HY 2009 Highlights For personal use only • Synergies / Efficiencies – Merger of BHI and Austbrokers ALIB 1 October 1 October – Continued transfers of brokers to central DataCentre now co-located with Telstra – now over 60% of users in the group • IBNA Alliance – Presentation of value propositi
Slide 9: Profit Growth Half Year to December 2005 - 2008
Profit Growth Half Year to 31 December 2005 - 2008 For personal use only 8000 7000 6000 5000 4000 Profit $M 3000 2000 1000 0 2005 2006 2007 2008 % increase 14.6% 38% 12.6% Profit – Net profit after tax before amortisation of intangibles before profits on businesses / portfolios sold (Adjusted NPAT)
Slide 10: First HY 2009 financial performance
First HY 2009 financial performance For personal use only Actual Actual $’000 First HY First HY % change 2009 2008 Broker Revenue (net of commission 89,290 80,954 10.3% paid) Brokers & Agencies Profit 14,199 10.9% 12,800 (AHL share) Profit (before tax and amortisation of 10,240 9,451 8.3% intangible
Slide 11: Agenda
Agenda For personal use only • Overview • First HY 2009 Financial Performance: – Income statement – as per ASX reporting – Reconciliation to Adjusted NPAT – Profit and loss statement – detailed – Balance sheet – Other financials • FY 2009 outlook 10
Slide 12: Income Statement
Income Statement For personal use only FOR THE HALF YEAR TO 31 DECEMBER 2008 2008 2007 Variance % $’ 000 $’ 000 Revenue from ordinary activities 46,060 39,917 15.4% Expenses from ordinary activities- Expenses (36,180) (31,058) 16.5% Borrowing Costs (1,182) (820) 44.1% 8,698 8,039 8.2% Profit from sa
Slide 13: Half Year to December 2008 - Profit after tax
Half Year to 31 December 2008 For personal use only Profit after tax Reconciliation of reported result to operating NPAT before profits relating to divestments and amortisation of intangibles. First HY First HY Actual 2009 Actual 2008 $ ‘000 $ ‘000 Reported Profit attributable to members 6,689 5,853
Slide 14: Half Year to December 2008 compared to 2007
Half Year to 31 December 2008 compared to 2007 For personal use only FHY 2009 FHY 2008 VARIANCE VARIANCE $'000 $'000 $'000 % BROKER OPERATIONS COMMISSION AND FEES 72,077 65,356 6,721 10.3% LIFE INCOME 3,646 3,754 -108 -2.9% PROFIT COMMISSIONS 295 235 60 25.5% PREMIUM FUNDING 5,597 4,763 834 17.5% IN
Slide 15: Consolidated & Equity Brokers Results
Half Year to 31 December 2008 compared to 2007 For personal use only Consolidated & Equity Brokers Results FHY 2009 FHY 2008 VARIANCE VARIANCE $'000 $'000 $'000 % CONSOLIDATED BROKERS COMMISSION AND FEES 23,884 20,259 3,625 17.9% LIFE INCOME 2,197 2,233 -36 -1.6% PROFIT COMMISSIONS 26 14 12 85.7% PR
Slide 16: First HY 2009 compared to First HY 2008
First HY 2009 compared to First HY 2008 For personal use only • Adjusted NPAT for First HY 2009 at $7.3 million – Adjusted NPAT excludes $0.5 million profits on sale of interests in associates and controlled entities and $1.1 million amortisation of intangibles expense – Exceeded prior period adjust
Slide 17: Insurance Broking Income Analysis
First HY 2009 compared with First HY 2008 For personal use only Insurance Broking Income Analysis • Total insurance broking income up approximately 7.6% on 2008 (excluding direct acquisitions) • Premiums placed (excluding direct acquisitions) up approximately 9% on 2008 (2007 up 5%) • Insurance brok
Slide 18: 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 FH2009 25.6% 25.4% FH2008 25.2% 25.0% FH2007 20.7% FH2006 19.2% Continued improvement in margins 17
Slide 19: Austagencies Underwriting Agencies
Austagencies Underwriting Agencies For personal use only PROFIT IMPACT $’000 HY 2009 HY 2008 INCR / (DECR) Commission and fees 4,347 3,604 743 Profit commission 653 663 (10) Interest 292 393 (101) Other income 8 108 (100) 5,300 4,768 532 Expenses 3,799 3,457 342 Net Profit before income tax 1,501 1,
Slide 20: Balance sheet
Balance sheet For personal use only 31 Dec 2008 30 June 2008 Assets $000 $000 Current Assets Cash at Bank 19,505 23,640 Cash at Bank – Trust 40,755 35,016 Receivables 50,699 69,621 Other Financial Assets 975 2,297 Total Current Assets 111,904 130,574 Non Current Assets Receivables 27 67 Plant Equipm
Slide 21: Balance sheet (cont)
Balance sheet (cont) For personal use only 31 December 2008 30 June 2008 Liabilities $’000 $000 Current Liabilities Payables 92,265 112,718 Tax Liabilities 2,351 3,663 Provisions 5,398 4,580 Interest bearing loans and borrowings 547 501 Total Current Liabilities 100,561 121,462 Non current liabiliti
Slide 22: Other Financials
Other Financials For personal use only Funding • Interest Bearing Liabilities – $25 million at holding company level – $6.6 million in subsidiaries • Increased facility from St George Bank in August 2008 – limit $44 million including subsidiaries $6 million • Estimated $4.6 million committed for fut
Slide 23: Agenda
Agenda For personal use only • Business Overview • First HY 2009 Financial Performance • FY 2009 Outlook – Market conditions – Strategy – Outlook 22
Slide 24: Market conditions
Market conditions For personal use only • Premium rates – Indications from underwriters that they will increase premium rates – Premium rate increases will vary across classes • Lower interest rate environment and likelihood of further decrease • Uncertainty over the extent of economic slowdown and
Slide 25: 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 26: Outlook
Outlook For personal use only • Premium rate increases now likely • Insurance broking industry consolidation – continuing acquisition opportunities • Organic growth in income expected to continue to emerge through broker network initiatives and rate increases • Additional borrowing costs arising fro