Nib Holdings Ltd · ASX:NHF
Nib — H1 2019 Earnings Presentation
27 slides from Nib's earnings presentation, Feb 18, 2019
Slide 1: 2019 half year results
2019 half year results 18 February 2019 2 0 1 9 h a l f y e a r r e s u l ts 1
Slide 2: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the six months ended 31 December 2018 and an update on nib’s activities and is current at the date of preparation, 18 February 2019. Further details are provided in nib’s half year accounts and
Slide 3: Mark Fitzgibbon, Chief Executive Officer & Managing Director
• CLICK TO EDIT MASTER TEXT STYLES Mark Fitzgibbon Chief Executive Officer & Managing Director 2 0 1 9 h a l f y e a r r e s u l ts 3
Slide 4: Our purpose: your better health
Our purpose: your better health How we’re acting in the best interest of our members and travellers (6 months to 31 December 2018) $0.9b 168,454 1,854,679 Total claims paid1 Hospital admissions Ancillary visits $313,861 7,994 1 April 2019 Highest claim paid2 Members helped via PHI reforms adopted3 h
Slide 5: 1H19 Group summary
1H19 Group summary Total Group Underlying operating Net investment NPAT1 revenue profit (UOP) income $1.2b $114.3m $1.5m $74.3m up 10.9% up 18.6% down 91.2% up 4.8% Statutory operating profit2 $107.2m (up 21.7%) Non-arhi Statutory EPS2 Interim dividend Net promoter contribution to (fully franked) sc
Slide 6: Michelle McPherson, Chief Financial Officer & Deputy CEO
• CLICK TO EDIT MASTER TEXT STYLES Michelle McPherson Chief Financial Officer & Deputy CEO 2 0 1 9 h a l f y e a r r e s u l ts 6
Slide 7: Group revenue & underlying operating profit (UOP)
Group revenue & underlying operating profit (UOP) Strong Group revenue and earnings result $1,202.0m $114.3m Group underlying revenue1 Group UOP2 up 10.9% up 18.6% arhi iihi arhi iihi $1,007.3m $53.8m $88.3m $17.9m up 11.2% up 16.5% up 33.2% up 15.5% nz wng nz wng $104.5m $33.5m $9.5m $2.3m up 3.1%
Slide 8: Group underlying operating expenses
Group underlying operating expenses1 Operating expenses in line with expectations to support business capability and value creation Operating expenses 1H19 v 1H18 ($m) Group underlying operating expenses have increased $31.5m primarily due to: • GU Health expenses (6mth v 2mth) • 200.0 Marketing and
Slide 9: Australian residents health insurance (arhi)
Australian residents health insurance (arhi) Financial performance ($m) 1H19 1H18 Change Strong earnings aided by top line growth and claims cost control Premium revenue 1,006.1 905.2 11.1% Claims expense1 (810.9) (752.5) 7.8% • Premium revenue ▲11.1% due to policyholder growth, premium adjustments
Slide 10: International (inbound) health insurance (iihi)
International (inbound) health insurance (iihi) Financial performance ($m) 1H19 1H18 Change Double digit top line and earnings performance driven by strong policyholder Premium revenue 53.3 45.7 16.6% growth and GU Health acquisition Claims expense (20.0) (17.5) 14.3% • Stellar earnings result with
Slide 11: New Zealand
New Zealand Financial performance ($m) 1H19 1H18 Change Margin in line with expectations as we deliver more value to our members Premium revenue 104.5 97.5 7.2% Claims (medical & PPB1) (63.7) (58.0) 9.8% • Claims expense ▲9.8% (gross margin ▼410bps) driven by: Management expenses (31.5) (29.1) 8.2%
Slide 12: World Nomads Group (WNG)
World Nomads Group (WNG) Financial performance ($m) 1H19 1H18 Change Earnings down reflecting investment in global expansion strategy plus challenging Gross written premium1 71.5 70.7 1.1% domestic market Operating income 33.5 32.5 3.1% • International sales continues to be strong with ▲14.4% growth
Slide 13: Investments, gearing, cash flow & capital
Investments, gearing, cash flow & capital Capital metrics remain sound • Net investment income impacted by soft equity performance in our growth portfolio. Recent improvement 1H19 1H18 Change with January actual investment return of 1.0%, representing net investment income of $8.9m for the month. Ne
Slide 14: Capital management
Capital management nib remains confident of navigating potential regulatory capital changes nib actively engaged and contributing to discussions with APRA, both formal and informal, as part of their PHI capital review. We have a number of levers available to navigate any potential changes including:
Slide 15: Mark Fitzgibbon, Chief Executive Officer & Managing Director
• CLICK TO EDIT MASTER TEXT STYLES Mark Fitzgibbon Chief Executive Officer & Managing Director 2 0 1 9 h a l f y e a r r e s u l ts 15
Slide 16: Business strategy
Business strategy Personalised healthcare Harness data science and digital technologies to better “personalise” our relationship with members, the products and services we provide or connect them with and especially help them, their doctors and other clinicians make more informed healthcare decision
Slide 17: Key focus areas
Key focus areas • PHI value, affordability and reform impact • Federal election and 2x2 possibility • APRA PHI capital review • Banking royal commission implications/social licence • Required technology investment • Operating efficiency and cost 2 0 1 9 h a l f y e a r r e s u l ts 17
Slide 18: Outlook
Outlook Australian residents International workers New Zealand health Travel insurance China health insurance and students health insurance insurance Australian market Ongoing organic Market growth Growing international JV expected to remains tepid but growth with strong remains challenging sales an
Slide 19: Guidance
Guidance FY19 UOP forecast to be at least $195m Statutory operating profit of at least $178m • Ordinary dividend payout ratio 60% – 70% of full year NPAT ($m) FY19 Statutory operating profit ~178 One-off transactions and M&A costs ~7.7 Amortisation of acquired intangibles 9.5 GU Health 2.7 IMAN 0.8
Slide 20: Questions and answers
Questions and answers 2 0 1 9 h a l f y e a r r e s u l ts 20
Slide 21: Appendix
Appendix 2 0 1 9 h a l f y e a r r e s u l ts 21
Slide 22: Policyholder and other data
Policyholder and other data nib Group health insurance 1H19 1H18 Total persons covered 1,547,803 1,494,510 Total policyholders 862,465 816,676 Australian residents health insurance 601,131 584,416 International (inbound) health insurance 156,935 131,109 New Zealand 104,399 101,151 arhi Net policyhol
Slide 23: Detailed income statement (underlying underwriting result)
Detailed income statement (underlying underwriting result) ($m) 1H19 1H18 Change Net premium revenue 1,163.9 1,048.4 11.0% - arhi 1,006.1 905.2 11.1% - iihi 53.3 45.7 16.6% - nz 104.5 97.5 7.2% Net claims expense (762.8) (712.7) 7.0% - Hospital claims paid (arhi) (515.2) (452.5) 13.9% - Ancillary cl
Slide 24: Management expenses (underwriting businesses)
Management expenses (underwriting businesses) Amortisation of (commissions (commissions (commissions management management underwriting underwriting intangibles amortised) Marketing Marketing Marketing expenses expenses expenses expenses Marketing deferred) acquired indirect indirect indirect Other
Slide 25: Other income and expenses
Other income and expenses1 ($m) 1H19 1H18 Change Other income Complementary insurances 1.4 1.3 7.7% nib foundation income2 1.1 - n/a Sundry income 0.4 0.3 33.3% Total other income 2.9 1.6 81.3% Other expenses Complementary insurances expenditure (0.4) (0.6) (33.3)% Share registry costs (0.6) (0.6) -
Slide 26: Investment asset allocation
Investment asset allocation Australian investment GU Health investment New Zealand investment nib foundation investment Consolidated portfolio portfolio portfolio portfolio (excluding GU Health) Net Net Net Net investment investment investment investment Balance at Allocation at Allocation at Alloca
Slide 27: Glossary
Glossary Term Definition Term 1H Six months ended/ending 31 December of the relevant financial year Net premium revenue Premium revenue net of reinsurance 2H Six months ended/ending 30 June of the relevant financial year nib nib holdings limited APRA Australian Prudential Regulation Authority niss n