Hansard Global Plc · LSE:HSD
Hansard Global — FY2013 Earnings Presentation
35 slides from Hansard Global's earnings presentation, Sep 26, 2013
Slide 1: Results for the year ended 30 June 2013
HANSARD GLOBAL plc Results for the year ended 30 June 2013 26 September 2013
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future
Slide 3: Agenda
Agenda • Overview & Strategy 3 • New business 10 • Financial performance 14 • Summary 21 • Appendix 23 2
Slide 4: Overview & Strategy
OVERVIEW & STRATEGY GORDON MARR CHIEF EXECUTIVE OFFICER 3
Slide 5: Year ended 30 June 2013 - Highlights
Overview New Financial Summary & Strategy Business Performance Year ended 30 June 2013 - Highlights • Record level of Regular Premium new business of £156m (PVNBP) (2012: £124m) • Reflects investment in growth markets (Far East, Latin America) • Improvement in new business margins to 12.0% (2012: 9.
Slide 6: Key strategic pillars
Overview New Financial Summary & Strategy Business Performance Key strategic pillars • Regular premiums from growth markets • Leverage Hansard OnLine • Reduce exposure to Europe • Manage business risk • Progressive dividend stream 5
Slide 7: Strategy – Regular premiums from growth markets
Overview New Financial Summary & Strategy Business Performance Strategy – Regular premiums from growth markets • Reinvigorate sales force • new Chief Distribution Officer in place in July 2013 • restructure of Hansard sales force • Innovative support to IFA networks • Improvements to our product ran
Slide 8: Strategy – Leverage Hansard OnLine
Overview New Financial Summary & Strategy Business Performance Strategy – Leverage Hansard OnLine • Meeting policyholders’ requirements • Local needs in local languages – 11 different languages • Secure communications – 13,000 OnLine accounts • Supporting intermediaries’ business models • Contract c
Slide 9: Strategy - Reduce exposure to Europe
Overview New Financial Summary & Strategy Business Performance Strategy - Reduce exposure to Europe • Headcount - Group • Reduce by 19 in Ireland between May 2013 and 31 December 2013 • Recruit additional 6 personnel on Isle of Man • Annual savings of £0.4m from FY 2015 • Revised Operating Model – H
Slide 10: Strategy delivery - continued
Overview New Financial Summary & Strategy Business Performance Strategy delivery - continued Manage business risk • Efficient management of legal claims – two settlements totalling £1.6m • Minimise exposure to potential litigation – introduced restrictions on acquisition of more complex assets and f
Slide 11: New Business
NEW BUSINESS GORDON MARR CHIEF EXECUTIVE OFFICER 10
Slide 12: New Business strategy
Overview New Financial Summary & Strategy Business Performance New Business strategy • Develop profitable relationships with Intermediaries in growth markets • Far East, Latin America, Middle East, Expatriate markets • Reorganise sales management structures • Invest in Hansard OnLine and the Group’s
Slide 13: New Business – key metrics
Overview New Financial Summary & Strategy Business Performance New Business – key metrics PVNBP – Regular Premiums for years ended 30 June 156.2 160 Issued CC for years ended 30 June 140 120 £m 25 100 80 CAGR:+15% pa 19.6 60 20 40 20 £m 15 0 2009 2010 2011 2012 2013 New business margins 10 for years
Slide 14: Profitable New Business – FY 2013
Overview New Financial Summary & Strategy Business Performance Profitable New Business – FY 2013 2013 2012 Present Value of New Business Premiums £m £m % change Regular premiums 156.2 124.4 +25.6% Single premium 32.5 51.3 (36.6%) PVNBP 188.7 175.7 7.4% Compensation Credit 19.6 17.1 +14.6% Annualised
Slide 15: Financial Performance
FINANCIAL PERFORMANCE VINCE WATKINS CHIEF FINANCIAL OFFICER 14
Slide 16: Summary Results – FY 2013
Overview New Financial Summary & Strategy Business Performance Summary Results – FY 2013 Year ended 30 June 2013 2012 New business sales – Regular Premiums £156.2m £124.4m New business sales – Single Premiums £32.5m £51.3m New business margin 12.0% 9.6% Operating cash surplus £41.4m £36.7m EEV profi
Slide 17: Positive Operating Cash Flows
Overview New Financial Summary & Strategy Business Performance Positive Operating Cash Flows Operating cash surplus in years ended 30 June 50 2013 2012 45 41.4 40 £m £m 35 £m 30 Operating cash surplus 41.4 36.7 25 20 Interest and other income 1.6 2.1 15 10 Cash inflow 43.0 38.8 5 0 Investment in new
Slide 18: Increased EEV profits
Overview New Financial Summary & Strategy Business Performance Increased EEV profits 2013 2012 £m £m New business profit for years ended 30 June New business profit 22.5 16.8 25 22.5 Expected return 1.2 5.4 20 Experience variances (5.5) (6.0) £m Operating assumption changes (4.2) (13.0) 15 Expected
Slide 19: Resilient EEV Balance Sheet
Overview New Financial Summary & Strategy Business Performance Resilient EEV Balance Sheet EEV balance sheet as at 30 June 275 250 225.7 225 200 £m 175 Analysis of EEV 150 2013 2012 125 Net Worth £m £m 100 Free surplus 20.0 35.1 75 Required Capital 24.6 15.3 VIF 50 Net Worth 44.6 50.4 25 0 Value of
Slide 20: Abridged Income Statement - IFRS
Overview New Financial Summary & Strategy Business Performance Abridged Income Statement - IFRS 2013 2012 £m £m Fees and commissions 52.8 50.2 FX gains on revaluation of net operating assets 0.6 (1.0) Investment income 1.6 2.2 55.0 51.4 Origination costs (21.2) (19.3) Administrative, development and
Slide 21: Strong Balance Sheet
Overview New Financial Summary & Strategy Business Performance Strong Balance Sheet Deferred Origination Costs at 30 June 140 131.0 2013 2012 120 £m £m 100 £m Deferred Origination Costs 131.0 121.2 80 60 Other Assets 7.8 7.8 40 Shareholder Cash and Bank Deposits 67.2 65.3 20 Total Assets 206.0 194.3
Slide 22: Summary
SUMMARY GORDON MARR CHIEF EXECUTIVE OFFICER 21
Slide 23: Summary for year ended 30 June 2013
Overview New Financial Summary & Strategy Business Performance Summary for year ended 30 June 2013 • Increased RP flows from target markets • RP flows up by 25% to record level • High return on capital • Industry-leading margins at 12.0% • IRR > 15% pa • Continued investment in distribution, Hansard
Slide 24: Segmental Reporting
Appendix SEGMENTAL REPORTING 23 23
Slide 25: New Business sales – by company
New Business sales – by company Group Continuing Discontinued FY 2013 FY 2013 FY 2013 HIL HEL PVNBP £m £m £m Regular premiums 156.2 151.0 5.2 Single premiums 32.5 21.1 11.4 Total PVNBP 188.7 172.1 16.6 Compensation Credit 19.6 18.6 1.0 Annualised Premium Equivalent 29.4 27.3 2.1 24 24
Slide 26: Segmental Reporting – IOM proportion
Segmental Reporting – IOM proportion FY 2013 FY 2012 New business - Issued compensation credit 95% 86% New business - PVNBP 91% 77% IFRS fees and commission income 78% 77% IFRS profit before taxation 100% 101% IFRS gross assets (including policyholder assets) 73% 71% IFRS gross liabilities (includin
Slide 27: New Business Analysis
Appendix NEW BUSINESS ANALYSIS 26 26
Slide 28: Focus on International Regular Premium
Focus on International Regular Premium PVNBP premium split 100% 90% 17% 80% 70% 60% 50% 40% 83% 30% 20% 10% 0% 2009 2010 2011 2012 2013 PVNBP - Regular Premium % PVNBP - Single Premium % • Record level of Regular Premium sales in FY 2013 • Volatility in Single Premium sales continues – Hansard Europ
Slide 29: Assets Under Administration
Assets Under Administration 2013 2012 £m £m Deposits to investment contracts – regular premiums 87.9 87.3 Deposits to investment contracts – single premiums 32.5 51.3 120.4 138.6 Withdrawals and charges (199.5) (187.9) Effect of market and currency movements 73.4 (146.5) (5.7) (195.8) Assets under a
Slide 30: Business Model
Appendix BUSINESS MODEL 29 29
Slide 31: Business Model
Business Model INTERNATIONAL POLICYHOLDERS High net worth, mass affluent and expatriate segments Client Hansard Hansard OnLine supports IFA / policyholder needs Funds OnLine INTERNATIONAL NETWORK OF INTERMEDIARIES IFAs / Private Banks / Other Financial Institutions Policy retention drives fees • Inv
Slide 32: Managing our business
Managing our business DESIGN SYSTEMS PROPOSITION • Products are profitable in • Hansard portal for the • Designed to make it easier, all circumstances policyholder/intermediary cheaper and more convenient to use Hansard • Insurance wrapper • Branded for intermediary increases client loyalty • Hansar
Slide 33: Product Families
Product Families 3 core types used to construct a suite of SP and RP investment opportunities CONTRACTUAL CAPITAL PERSONAL SAVINGS BUILDER PORTFOLIO Aspire / Vantage products Premium > £10,000 (or Premium > £40,000 (or Regular Premiums at a equivalent) within 3 years equivalent) specified level for
Slide 34: Multiple Sources of Income
Multiple Sources of Income • Contract Fee Income Analysis of fee income – FY 2013 Establishment fees (setting up wrapper) Service fees (maintaining it) 8% Policyholder-directed activity 20% (e.g. Dealing, withdrawals) • Fund management fees Annual management charge 72 % • Commission receivab
Slide 35: Illustrative Shareholder Cashflows
Illustrative Shareholder Cashflows RETIREMENT PROGRAMME 12,000 8,000 4,000 GBP 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -4,000 -8,000 Policy Year • Annual premium e.g. £10,000 for 25 years CAPITAL BUILDER PERSONAL PORTFOLIO 2,000 20,000 1,500 10,000 1,000 Period when actua