Slide 1: HY18 Results Presentation
HY18 Results Presentation For personal use only 1
Slide 2: For personal use only
For personal use only HY18 RESULTS PRESENTATION Good morning everyone. I trust you've had a chance to review the headline results. While reported profit for this half is lower, you will see that our focus on running the business well is delivering solid top line performance. Suncorp is well placed f
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For personal use only HY18 RESULTS PRESENTATION The reported NPAT for the six months was $452 million. This includes the impact of the damaging Victorian hailstorm that occurred just prior to the balance date, as well as the significant investment in our two major programs. Those programs are on tra
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For personal use only HY18 RESULTS PRESENTATION Two things are happening with growth: — As a result of our intense focus on the business, Suncorp is growing and achieving good momentum. — At the same time, we are benefitting from a hardening market. We’ve progressed our digital transformation. This
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For personal use only HY18 RESULTS PRESENTATION We are delivering good top line growth, and solid underlying performance across all businesses. With working claims under control and effective pricing strategies, we have achieved 3.9% growth in Motor & Home GWP, with unit growth up, and market shares
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For personal use only HY18 RESULTS PRESENTATION Digital transformation is progressing well. Building the capability quickly, means faster adoption by customers, and faster benefits to shareholders: — The pilot Reward and Recognition program is being used by 55,000 customers, further embedding our re
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For personal use only HY18 RESULTS PRESENTATION As I said earlier, our Business Improvement Program is on track to deliver shareholder benefits. The net benefits this year will be $10 million but that grows quickly to an expected $195 million next year, and $329 million in FY20. With a gross benefit
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For personal use only HY18 RESULTS PRESENTATION There has been a lot of discussion about the increasing rate of Regulatory change and the bias of these changes towards greater competition. We expect this trend to continue and together, with the improvements we are driving internally, we expect to be
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For personal use only HY18 RESULTS PRESENTATION Now I want to provide more detail around the outlook for shareholders. In FY19, we are committing to a $2.7 billion cost base despite expected volume growth, and inflation. We expect that Suncorp’s underlying ITR will return to at least 12%, and our Ba
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For personal use only HY18 RESULTS PRESENTATION I now want to make a couple of comments on the performance of each of our businesses. This graph shows the steady increase in Motor & Home GWP. It is being achieved by growing both units and price. Consumer loss ratios have also improved. We have execu
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For personal use only HY18 RESULTS PRESENTATION Our team has done a great job with the Banking business. The Bank delivered well above system growth compared to a flat performance this time last year. Origination processes were simplified there was a big and successful focus on retention and the bra
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For personal use only HY18 RESULTS PRESENTATION The New Zealand business continues to deliver strong premium growth at 7.6%. This again reflects both good unit growth and increased pricing. We also saw a stabilisation of claims inflation in the New Zealand Consumer book. Our pricing strategies and e
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For personal use only HY18 RESULTS PRESENTATION Thank you and good morning. Today I will briefly step through each of the business lines then cover our expense position, underlying ITR and capital before handing back to Michael to conclude the presentation. 13
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For personal use only HY18 RESULTS PRESENTATION Starting with Insurance which delivered a net profit after tax of $264 million, including a $30 million after tax contribution from Life. While this is a reduction on the prior period, we feel the underlying trends in this business are very positive. A
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For personal use only HY18 RESULTS PRESENTATION First to premium, and I have included these charts to show the positive momentum we have in our consumer portfolios. The story in motor is very pleasing with two successive halves of positive volume and average written premium growth, resulting in a 4.
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For personal use only HY18 RESULTS PRESENTATION Together, these portfolios added $92 million of premium, which I have included on this waterfall which reconciles premium movements over the half. Commercial GWP increased by $11 million, or 1.5%, reflecting our disciplined approach to growth and the n
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For personal use only HY18 RESULTS PRESENTATION Turning to claims and again I have included a waterfall on the left of the slide that calls out the key movements. It is important to note that the movement in net incurred claims includes a $154 million mark-to-market impact from increases in risk fre
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For personal use only HY18 RESULTS PRESENTATION Moving to the investment portfolios, and investment income on the insurance funds was $120 million. The headline result was supported by mark-to-market gains from narrowing credit spreads and the outperformance of inflation-linked bonds. This was offse
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For personal use only HY18 RESULTS PRESENTATION Now to Australian Life, where underlying profit of $39 million is up 56% from the prior period. Reported NPAT is reduced to $30 million due to the revaluation of Deferred Acquisition Costs given the rise in long dated yields. Pleasingly, planned margin
Slide 20: For personal use only
For personal use only HY18 RESULTS PRESENTATION Turning to Banking and Wealth, which returned a net profit after tax of $197 million. Total lending grew by 8.7% annualised, with an improved growth profile across both retail and business lending. Growth throughout the half was very strong, continuing
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For personal use only HY18 RESULTS PRESENTATION Finally to New Zealand, where the General Insurance business achieved gross written premium growth of 7.6%, with pleasing performance across all channels. On a like for like basis, excluding the impact of the sale of Autosure in FY17, GWP increased 10.
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For personal use only HY18 RESULTS PRESENTATION Moving now to operating expenses and as we have previously discussed, the Group’s direct expense base has been maintained at around $2.7 billion for the past 4 years, absorbing wage and underlying inflation and increased commission costs as the Group h
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For personal use only HY18 RESULTS PRESENTATION Turning now to the General Insurance underlying ITR and on this slide I have called out the key movements over the first half. The first point to note is the main movements are in Australia, as NZ was stable over the period. The standout movement is Au
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For personal use only HY18 RESULTS PRESENTATION Finally to capital, and we continue to maintain a very strong capital position. This has enabled us to increase our payout ratio and match last year’s 33 cent per share interim dividend. After the payment of the dividend we continue to hold a robust su
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For personal use only HY18 RESULTS PRESENTATION Thanks Steve. I want to provide some commentary on the group’s strategy from here and in particular, some of the key drivers of value to measure us against. Suncorp’s strategy has been an evolution. It is built on strong foundations, progressively esta
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For personal use only HY18 RESULTS PRESENTATION With most of the heavy lifting done on simplification, in 2016, the next logical step was aligning the structure around the customer. With this complete, our two major programs will now improve both customer outcomes and shareholder outcomes. We are no
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For personal use only HY18 RESULTS PRESENTATION It’s fair to say that many companies seek to improve their business either by focusing on driving operational excellence or improving customer experience. We are doing both. The Business Improvement Program creates capacity to invest in our customer in
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For personal use only HY18 RESULTS PRESENTATION This slide and the next begin the process of laying out additional measures for tracking, and assessing our progress. On the left, we show the clear link between our strategy to meet more customer needs for longer and the increase in the value of that
Slide 29: For personal use only
For personal use only HY18 RESULTS PRESENTATION In addition to revenue, expenses and claims costs data etc that we already provide, this slide shows some starting point metrics for the other drivers of growth. We will update these for future results to assist you in tracking our progress and potenti
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For personal use only HY18 RESULTS PRESENTATION Suncorp has a strong, capable and aligned senior team to deliver on our strategy. The team reflects a good balance of industry expertise, technology, diversity and specialist skills. This slide sets out the various functions, and highlights clear accou
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For personal use only HY18 RESULTS PRESENTATION Beyond our focus on implementing the strategy, we are continuing to work closely with Government and Regulators on a long list of important reforms and reviews. We have been actively reviewing and improving products and systems in recent years. I belie
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For personal use only HY18 RESULTS PRESENTATION Historically, we have provided medium term projections on key metrics. As a result of the progress we are making with our two key strategic programs, today we are confident in giving specific guidance for FY19. This includes: — top line growth of 3-5%
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For personal use only HY18 RESULTS PRESENTATION In conclusion, we have a growing business with good momentum. Today we have provided evidence that our strategy, our team, and our organisation will deliver an improved second half result and a significant uplift in performance in FY19 and ’20. Thank y
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