Aub Group Limited · ASX:AUB
Aub — Investor Presentation (February 2023)
42 slides from Aub's investor presentation, Feb 22, 2023
Slide 1: 1H23 Results – Investor Presentation (ASX Announcement)
ASX Announcement 22 February 2023 The Manager Market Announcements Office Australian Securities Exchange Ltd Level 6, Exchange Centre 20 Bridge Street Sydney NSW 2000 1H23 Results – Investor Presentation Please find attached for immediate release in relation to AUB Group Limited (AUB) the following
Slide 2: 1H23 Investor Presentation
1H23 Investor Presentation 22 February 2023 Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 3: Key Highlights
KEY HIGHLIGHTS 52% UNPAT Australian Broking, Medium term FY23 guidance growth New Zealand and margin targets upgraded (32.6% ex Tysers) Tysers upgraded across AUD 112.9mn - 121.4mn Revenue and profit (52.5% - 64.0% v FY22) outperforming Group growth across all Tysers target 30% divisions expectation
Slide 4: 1H23 Results Overview
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Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS Continued Revenue growth and Margin expansion delivering strong UNPAT and EPS growth 1H23 1H224 Performance Highlights $466.0mn $327.2mn ▪ Growth in Underlying revenue of 42.4% in 1H23, CAGR of Underlying Revenue1 (+42.4%) (+14.9%) 27.9% since 1H214 31.3% 31.2% ▪ Strong expansio
Slide 6: 1H23 Financial Performance: Overview
1H23 FINANCIAL PERFORMANCE: OVERVIEW 1H23 Underlying NPAT grew by 52.4% on pcp, from strong organic performance as well as accretive acquisitions 1H22 to 1H23 Underlying NPAT1 Breakdown AUD mn 52.4% 32.6% 7.7 13.8 46.7 (25.3%) 40.6 45.1% 7.2 30.6 2.8 23.5% 9.1% Driven by: ▪ Further optimised broking
Slide 7: Shareholder Returns
SHAREHOLDER RETURNS 19.6% uplift in Underlying EPS, with 1H23 interim dividend of 17.0 cents Underlying Earnings Per Share1, 2 (Cents per share) 19.6% 41.4% 1.7% 48.18 39.64 40.30 28.04 1H20 1H21 1H22 1H23 Dividend Per Share (Cents) Interim Dividend flat ▪ Prudent approach taken given 55.0 55.0 50.0
Slide 8: Interest and Leverage
INTEREST AND LEVERAGE Incremental interest income exceeds incremental borrowing cost Leverage ratio tracking downwards as planned Interest Earning Assets vs Look through share of Debt (AUD mn)1 AUB look-through AUB look-through By June ‘23 Trust & Op Cash1 share of debt1 776 2.74 ▪ Leverage ratio an
Slide 9: FY23 Priorities Update / AUB Business Model
FY23 Priorities Update AUB Business Model
Slide 10: FY23 Execution Priorities
FY23 EXECUTION PRIORITIES Progress Update and 2H23 Focus FY23 Priority 1H23 Achievements 2H23 Focus ▪ Excluding NZ Tech investment, NZ business delivered margin expansion of ▪ Roll-out Lola to two additional brokerages, 250bps and EBIT growth of 12.5% as a result of profit improvement integrate Lola
Slide 11: Our Business Model
OUR BUSINESS MODEL AUB Group is now a more diversified business with significant, increased scale Portfolio Revenue - split by Portfolio Revenue - split by ▪ 78 independent businesses Business Segment3, 4 Geography3, 4 ▪ $8bn+ premium across ~950k clients, delivered by a global team of over 4,000 pe
Slide 12: Divisional Performance
Divisional Performance
Slide 13: 1H23 Divisional Performance
1H23 DIVISIONAL PERFORMANCE Strong performance across all divisions (Excludes Tysers, acquired 1 October 2022) OPERATING AUSTRALIAN NEW ZEALAND Vs. 1H22 comparative period BIZCOVER AGENCIES BUSINESSES EX BROKING BROKING TYSERS1,2 Underlying1 $249.7mn $37.6mn $58.2mn $29.7mn $375.2mn Revenue 14.0% 12
Slide 14: Australian Broking
AUSTRALIAN BROKING Network optimisation, disciplined acquisitions, enhanced broker proposition resulting in continued revenue growth & margin expansion Key Metrics AUD 249.7mn Revenue1 35.2% EBIT Margin1 AUD 87.8mn EBIT1 1H23 Performance +14.0% on 1H22 +410bps on 1H22 +28.7% on 1H22 Australian Broki
Slide 15: BizCover
BIZCOVER Revenue growth slowed especially in Intermediated Channels. Initiatives underway to enhance products, insurer panel and new lead sources Key Metrics AUD 37.6mn Revenue 38.4% EBIT Margin AUD 14.4mn EBIT 1H23 Performance +12.8% on 1H22 +140bps on 1H22 +17.1% on 1H22 Revenue Growth – EBIT Aust
Slide 16: Agencies
AGENCIES Three pillars of General Commercial, Specialty and Strata continue to deliver growth and profit improvement Key Metrics AUD 58.2mn Revenue1 31.6% EBIT Margin1 AUD 18.4mn EBIT1 +400bps Ex. Profit Comms3 1H23 Performance +25.5% on 1H22 -100bps on 1H22 +22.0% on 1H22 Revenue Growth 1H19-1H23 (
Slide 17: New Zealand
NEW ZEALAND Revenue and profit growth for all businesses EBIT margin impacted by technology investment cost AUD 29.7mn Revenue1 22.7% EBIT Margin1 AUD 6.7mn EBIT1 Key Metrics 34.0% Excl. NZ Tech Inv2 AUD 10.1mn Excl. NZ Tech Inv2 1H23 Performance +4.1% on 1H22 -20bps on 1H22 +250bps Excl. NZ Tech In
Slide 18: Tysers Financial Performance Update
TYSERS FINANCIAL PERFORMANCE UPDATE Performing well, strong post-covid rebound 12.3% revenue outperformance for 3 months to Dec’22 (vs forecast) Key Metrics 3M to Dec22 AUD 90.8mn Revenue1,2 20.4% EBIT Margin1 AUD 18.5mn EBIT1 (~1% better than adjusted EBIT used for acquisition) Performance Tysers I
Slide 19: Tysers – Overview of FX
TYSERS – OVERVIEW OF FX Tysers earns 55% income in USD and 28% in GBP, and pays 91% of its expenses in GBP; FX risks have been hedged using forwards that run until 2025 Portfolio by FX Currency1 Hedging Earn Revenue ▪ 51% of Tysers net USD income hedged using FX Forwards 28% 7% 4% 4% 55% 2% ▪ FX For
Slide 20: Tysers Synergies & Integration Update
TYSERS SYNERGIES & INTEGRATION UPDATE Value of Synergies reaffirmed, rapid progress with initial cost savings Revenue Levers Cost Levers (AUD) - Optimise Tysers & AUB operating - Increased placement of AUB client risks with Tysers ~AUD structure & governance ✓ Austbrokers and Tysers wholesale/retail
Slide 21: Ambition & Outlook
Ambition & Outlook
Slide 22: Our Medium-Term Ambition
OUR MEDIUM-TERM AMBITION Margin improvement remains a priority Significant opportunity to deliver further improvement Target Approach to deliver 1H19 1H23 Actual Australian Broking 25.0% 35.2% +1,020bps 38% Ongoing portfolio optimisation, equity step-ups and bolt-ons up from 35% BizCover 36.0% 38.4%
Slide 23: FY23 Outlook
FY23 OUTLOOK UNPAT guidance upgraded to AUD 112.9 – 121.4mn (from AUD 107.5 to 115.0mn), continued strong progress across all parts of AUB FY22 to FY23 Underlying NPAT1 Breakdown $mn AUD 2H23 incl Tysers: 66.2 – 74.7 52.4% 34.0 – 40.5 -18.0 32.6% 112.9 – 121.4 6.8 – 8.8 43.4 15.7% – 20.3% YoY growth
Slide 24: Questions?
Questions? Mike Emmett CEO and Managing Director Mark Shanahan CFO
Slide 25: Closing
Closing Mike Emmett CEO and Managing Director
Slide 26: Appendices
APPENDICES A 1H23 Detailed Financial Results Appendices 25
Slide 27: A. 1H23 – Detailed Financial Results
Appendices A. 1H23 – Detailed Financial Results
Slide 28: 1H23 Divisional Performance Breakdown
1H23 DIVISIONAL PERFORMANCE BREAKDOWN 1H22 to 1H23 Underlying NPAT1 (AUD mn) 52.4% 1.2 3.4 0.8 12.9 18.0 6.0 46.7 11.6 30.6 Pre-Tax 1H22 Australian Tysers2 BizCover Agencies New Zealand Net Corporate Tax 1H23 Broking Broking result3 1. Underlying NPAT is used by management and the board to assess op
Slide 29: Australian Broking
AUSTRALIAN BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 30.3% to AUD 49.9mn (1H22: AUD 38.3mn). 1H23 1H22 Movement Movement (%) (AUD mn) Commission and fee income (net) 218.8 194.3 24.5 12.6% ▪ EBIT Margin of 35.2% up 410bps from 1H22. Premium Funding 18.0
Slide 30: Tysers
TYSERS Profit contribution to AUB Group – Pre-tax ▪ Tysers included for the first time from 1 October 2022. 1H23 1H22 (AUD mn) (3 months since acq only) ▪ Underlying pre-tax profit from Tysers for the 3 months to 31 December 2022 of AUD Commission and fee income (net) 84.3 - 18.0mn. Premium Funding
Slide 31: BizCover
BIZCOVER Profit contribution to AUB Group – Pre-tax Movement ▪ Revenue up 12.8% from 1H22 (Direct Channels: 17.2%). 1H23 1H22 Movement (AUD mn) (%) ▪ Underlying pre-tax profit increased 15.2% to AUD 5.7mn (1H22: AUD 4.9mn). Underlying Revenue1 37.6 33.3 4.3 12.8% ▪ Increase due to organic profit gro
Slide 32: Agencies
AGENCIES Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 38.0% to AUD 12.3mn (1H22: AUD 8.9mn). 1H23 1H22 Movement Movement (%) (AUD mn) Commission and fee income (net) 54.8 41.3 13.6 32.9% ▪ EBIT margin of 31.6%. Excluding profit commissions in both periods, the EBI
Slide 33: New Zealand Broking
NEW ZEALAND BROKING Profit contribution to AUB Group – Pre-tax ▪ Underlying pre-tax profit increased 34.6% to AUD 4.8mn (1H22: AUD 3.5mn). 1H23 1H22 Movement Movement (%) (AUD mn) Commission and fee income (net) 27.5 26.1 1.4 5.3% ▪ AUD 3.4mn (1H22: AUD 2.2mn) tech investment. Excluding tech investm
Slide 34: Balance Sheet and Capital Position
BALANCE SHEET AND CAPITAL POSITION Consolidated Balance Sheet Overview (AUD mn) 1H23 FY22 Movement Cash – incl subs 192.9 259.3 (66.4) Leverage Ratio Cash – Trust Accounts 834.4 333.1 501.3 31 Dec’22 Investment in Associates 249.8 250.1 (0.3) 2.74 Intangible assets and goodwill 1,806.9 622.5 1,184.4
Slide 35: A1.0 Reconciliation of Reported NPAT to Underlying NPAT
A1.0 RECONCILIATION OF REPORTED NPAT TO UNDERLYING NPAT1 1H23 1H22 Movement (%) (AUD $000) (AUD $000) Net Profit after tax attributable to equity holders of the parent 364 29,684 (98.8) Add back/(less): (net of NCI and income tax) Share of Amortisation of broking registers9 16,265 5,520 194.7 Adjust
Slide 36: A2.1 Management Presentation of Results
A2.1 MANAGEMENT PRESENTATION OF RESULTS1,3 1H23 (AUD $’000) 1H22 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 249,699 218,983 30,716 14.0% Australian Broking expenses (161,915) (150,784) (11,131) 7.4% EBIT - Australian Broking 87,784 68,199 19,585 28.7% Tysers revenue2 90
Slide 37: A2.2 Management Presentation of Results
A2.2 MANAGEMENT PRESENTATION OF RESULTS1 1H23 (AUD $’000) 1H22 (AUD $’000) Movement (AUD $’000) Movement (%) Australian Broking revenue 249,699 218,983 30,716 14.0% Australian Broking expenses (163,688) (151,937) (11,751) 7.7% Net profit - Australian Broking 86,011 67,046 18,965 28.3% Profit attribu
Slide 38: A2.3 Management Presentation of Results
A2.3 MANAGEMENT PRESENTATION OF RESULTS1,4 1H23 ($’000) 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 ($’000) Australian Broking revenue 249,699 457,211 238,22
Slide 39: A2.4 Management Presentation of Results
A2.4 MANAGEMENT PRESENTATION OF RESULTS1 1H23 ($’000) 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 249,699 457,211 238,228
Slide 40: A3.0 Consolidated Cash Flow Statement
A3.0 CONSOLIDATED CASH FLOW STATEMENT 1H23 1H22 (AUD $’000) (AUD $’000) Cash flows from operations 23,608 44,919 Cash flows from investing activities Acquisitions (124,980) (21,318) Sales proceeds (net of cash reduced on deconsolidation) 13,184 6,104 Plant equipment / Other 2,023 366 Payments for de
Slide 41: 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 42: Thank You
Thank You