Nib Holdings Ltd · ASX:NHF
Nib — 2015 Morgan Stanley Private Health Forum
20 slides from Nib's conference presentation, Feb 11, 2016
Slide 1: Presentation to Morgan Stanley Private Health Forum
nib holdings limited t 13 14 63 Head Office f 02 4925 1999 22 Honeysuckle Drive Newcastle NSW 2300 e nib@nib.com.au abn 51 125 633 856 w nib.com.au 20 April 2015 The Manager Company Announcements Australia Securities Exchange Limited Level 4, Bridge Street SYDNEY NSW 2000 Presentation to Morgan Stan
Slide 2: 2015 Morgan Stanley Private Health Forum
2015 Morgan Stanley Private Health Forum Mark Fitzgibbon Managing Director and CEO 20 April 2015 All figures in this document are represented in Australian dollars unless otherwise stated
Slide 3: Agenda
Agenda • Investment thematic • nib strategy and results to date • Overview by segment • Australian Residents Health Insurance • International Students Health Insurance • International Workers Health Insurance • nib New Zealand • Adjacent businesses • Whitecoat and digital capability • Capital • Key
Slide 4: Investment Context of Healthcare
INVESTMENT CONTEXT OF HEALTHCARE 1. We’re spending more and more on our healthcare. 2. Government’s relative funding contribution cannot be sustained (including New Zealand). 3. Inevitably, the private sector will play an increased role although there are challenges. 4. Accelerating international cr
Slide 5: Overarching Business Strategy
OVERARCHING BUSINESS STRATEGY Grow our Australian residents health insurance business (arhi) organically at circa 10% annual premium growth (4-5% policyholder growth) through national brand presence and an ongoing emphasis on <40 market 1 (Virgin Green), growing >55 market share (Virgin Silver),othe
Slide 6: nib Results to Date
nib RESULTS TO DATE Group premium revenue ($m) Group operating profit ($m) First half (1H) Full Year First half (1H) Full Year FY15 guidance range ($75m-$82m) 1,500.0 80.0 60.0 1,000.0 40.0 500.0 20.0 0.0 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY08* FY09 FY10 FY11 FY12 FY13 FY14 1H15 Return on
Slide 7: nib Results to Date
nib RESULTS TO DATE Dividend (cps) Net promoter score* NPS (Australia) NPS (NZ)* Ordinary Dividend Special Dividend Capital Return 30.00% 30.0 20.00% 25.0 10.00% 20.0 16.1 0.00% 15.0 9.0 -10.00% 10.0 5.0 -20.00% 5.0 5.0 9.3 10.0 11.0 7.0 8.0 -30.00% 5.5 2.1 2.4 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Slide 8: Australian Residents Health Insurance (arhi)
AUSTRALIAN RESIDENTS HEALTH INSURANCE (arhi) Premium revenue ($m) Policyholder growth Half Year (1H) Full Year Industry growth (%) nib growth (%) 1,500.0 12.00% 1,000.0 8.00% 500.0 4.00% 000.0 0.00% FY08 FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Operating profit ($m) 1H15
Slide 9: arhi Outlook
arhi OUTLOOK Industry policyholder growth Industry policyholder growth (%) • Ongoing annual system policyholder growth circa 2%-3% with nib expected to grow in range 4%-5%. 300,000 6.0% Intense competition and churn the new “normal” with implications for net growth and required level 200,000 4.0% of
Slide 10: International Students Health Insurance (ishi)
INTERNATIONAL STUDENTS HEALTH INSURANCE (ishi) Premium revenue ($m) Policyholder growth* Half Year (1H) Full Year ishi growth (actual) ishi growth (%) 10.0 20,000 350.0% 8.0 16,000 250.0% 6.0 12,000 150.0% 4.0 8,000 50.0% 2.0 4,000 0.0 0 -50.0% FY11 FY12 FY13 FY14 1H15 FY12 FY13 FY14 * FY11 ishi pol
Slide 11: ishi Outlook
ishi OUTLOOK International students (ishi) International student visa applications granted in Australia • Powerful organic growth supported by clear business and distribution 300,000 strategy. • Saudi student business increases 200,000 annual GWP x 2 and is expected to contribute powerfully towards
Slide 12: International Workers Health Insurance (iwhi)
INTERNATIONAL WORKERS HEALTH INSURANCE (iwhi) Premium revenue ($m) Policyholder growth Half Year (1H) Full Year iwhi growth (actual) iwhi growth (%) 30.0 3,000 20.0% 20.0 15.0% 2,000 10.0% 10.0 1,000 5.0% 0.0 FY11* FY12 FY13 FY14 1H15 0 0.0% FY11 FY12 FY13 FY14 * FY11 was a 9 month result, IMAN busi
Slide 13: iwhi Outlook
iwhi OUTLOOK International workers (iwhi) • 457 visa entries remain steady Number of 457 visas in Australia causing us to also focus upon other visa classes and distribution 100,000 possibilities. • Competition will see some insurance margin pressure 50,000 (yield), with strategies intended to more
Slide 14: nib New Zealand (nib NZ)
nib NEW ZEALAND (nib NZ) Premium revenue ($m) Policyholder growth Half Year (1H) Full Year Launch of DTC in October 2013. Sales of DTC now account for 150.0 more than 50% of all sales. 80,000 100.0 75,000 50.0 0.0 FY13* FY14 1H15 70,000 * nib New Zealand acquired November 2012, FY13 represents 7 mon
Slide 15: New Zealand Outlook
NEW ZEALAND OUTLOOK • Focus will remain upon building business fundamentals: • nib brand awareness. • Improved operating model for wealth advisor sales and distribution. • Direct to Consumer (DTC) channel. • Competitive group offering. • Extracting synergies with Australia. • Profitability will cont
Slide 16: Adjacent Business
ADJACENT BUSINESS nib Options Leverages nib’s brand reputation and distribution to support and grow the market for overseas cosmetic, dental and surgical treatment. Initial efforts focus upon cosmetic surgery and dental. Value proposition centred around trustworthiness, safety and choice. Ea
Slide 17: Whitecoat & Digital Capability
WHITECOAT & DIGITAL CAPABILITY Develop “Whitecoat” and digital capability as a source of differentiation and competitive advantage 1. Will help customers make more informed decisions around their general health, and when necessary, remedial options from the choice of treatment to the choice of provi
Slide 18: Gearing and Available Capital
GEARING AND AVAILABLE CAPITAL Gearing ratio Available capital ($m) 18.0% 160.0 16.0% 17.1% 140.0 16.1% 15.8% 14.0% 120.0 12.0% 100.0 10.0% 80.0 8.0% 60.0 6.0% 4.0% 40.0 2.0% 20.0 0.9% 0.9% 0.9% 0.1% 0.0% - FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY09 FY10 FY11 FY12 FY13 FY14 1H15 • Gearing ratio at 31 De
Slide 19: Key Risks
KEY RISKS • Macro-economic environment and Government policy. • Heightened competitor activity. • Claims inflation and affordability. • Premium pricing. • New business initiatives. • Industry and market disruption. 18
Slide 20: FY15 Guidance
FY15 GUIDANCE • FY15 consolidated operating profit of $75m-$82m, with result likely to be at the lower end of this range. • FY15 investment income forecast to be in line with relevant internal benchmarks*. • Ordinary dividend payout ratio 60%-70% of full year NPAT. * Excluding gain on sale from Paci
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