Aub Group Limited · ASX:AUB
Aub — H1 2019 Earnings Presentation
31 slides from Aub's earnings presentation, Feb 25, 2019
Slide 1: 1H19 Results Presentation and Announcement
25th February 2019 The Manager Market Announcements Office Australian Securities Exchange Limited Level 6, Exchange Centre, 20 Bridge Street Sydney NSW 2000 FOR RELEASE TO THE MARKET Dear Sir / Madam, Re: AUB 1H19 1H19 Results Presentation and Announcement Attached for immediate release in relation
Slide 2: AUB Group delivers continued growth
ASX release 25 February 2019 AUB Group delivers continued growth Half Year Results Summary: — Adjusted NPAT1 $17.0 million (1H18: $16.7 million) up 1.8%, which includes costs relating to Austbrokers Canberra fraud of $1.6 million. — Adjusted earnings per share 25.9 cents up 0.23%, with 1H18 TERP2 ad
Slide 3: New Zealand
New Zealand 15% increase in profit contribution from New Zealand to $3.2m (1H18: $2.8m), primarily driven by strong organic income growth partially offset by investment in NZ group management and infrastructure to support growth. Organic growth has been delivered as a result of increases in new
Slide 4: Webcast
We remain focused on geographic diversification and cross-sell opportunities in our Risk Services businesses. We expect the impact of the NSW workers compensation changes to lessen in 2H19, supporting a return to growth in FY20. In the context of a mid-single digit premium rate environment, part
Slide 5: AUB Group FY18 Presentation of Financial Results
AUB GROUP FY18 PRESENTATION OF FINANCIAL RESULTS Table 1 Financial Results Summary FIN AN C IAL R ESU L TS SU MMAR Y 1H19 1H18 Var ianc e $ 000 $ 000 % 1 Revenue from ordinary activities 145,439 129,830 12.0% Adjusted NPAT 2 17,014 16,706 1.8% Profit before tax 29,673 33,772 -12.1% Net profit after
Slide 6: Management Presentation of Results
Table 3 Management Presentation of Results A number of the businesses in the AUB Group are associates and are not consolidated in the financial statements. In order to give a more comprehensive view of performance, the following table aggregates 100% of these businesses’ revenues and expenses with t
Slide 7: AUB Group Ltd Half Year Results
AUB GROUP LTD HALF YEAR RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2018 (1H19) 25 FEBRUARY 2019
Slide 8: 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 9: Overview
OVERVIEW MARK SEARLES CEO & MANAGING DIRECTOR
Slide 10: Key Highlights in 1H19
KEY HIGHLIGHTS IN 1H19 • Good industry growth evidenced in 1H19 • Group grew Adjusted NPAT and Adjusted EPS • Successful completion of $116m capital raise to fund acquisitions and de-lever balance sheet • Focus on strategic execution with increasing evidence of collaboration between divisions and pa
Slide 11: Performance Details
PERFORMANCE DETAILS Delivering good underlying profit and revenue growth 1H19 1H18 GROWTH Adjusted NPAT1 ($m) 17.0 16.7 +1.8% (Adjusted NPAT ($m) excluding Austbrokers Canberra fraud costs) 18.6 16.7 +11.4% Reported NPAT ($m) 19.8 23.8 -16.5% Underlying2 Revenue ($m) 256.8 241.6 +6.3% Underlying2 EB
Slide 12: Execution of Group Strategy Supports Continued Growth
EXECUTION OF GROUP STRATEGY SUPPORTS CONTINUED GROWTH $m 90 80 70 60 50 40 30 20 10 - 12 months ended FY12 FY13 FY14 FY15 FY16 FY17 FY18 Dec-18 Total Group pre-tax Profit before Corporate Expenses Total Australian Broking profit Adjusted NPAT Corporate Expenses (after recoveries) Linear (Total Group
Slide 13: Financial Performance
FINANCIAL PERFORMANCE MARK SHANAHAN CHIEF FINANCIAL OFFICER
Slide 14: Key Results
KEY RESULTS Overall continued growth 1H19 1H18 GROWTH • Strong underlying management result - 1H19 impacted by weaker Risk Services Underlying Management Results1 performance and costs of Austbrokers Canberra fraud. • Underlying performance translates to growth in key performance metrics: Revenue ($
Slide 15: AUB Group NPAT Contribution Analysis
AUB GROUP NPAT CONTRIBUTION ANALYSIS Execution of strategy delivers growth and diversification $'m Adjusted Profit Contribution to AUB Group (after tax and non-controlling interests) 20 19 18 17 16 15 14 13 12 1H18 Risk Services New Zealand Australian Broking AB Canberra Underwriting Corporate Tax 1
Slide 16: Insurance Broking – Australia
INSURANCE BROKING – AUSTRALIA Continued growth • Pre-tax profit contribution1 to AUB Group of $22.6m up 10.9% resulting from organic growth and shareholding changes. • Underlying EBIT margin, excluding Austbrokers Canberra fraud cost, of 29.0% vs 26.6% in 1H18. • Growth in income driven by premium r
Slide 17: New Zealand
NEW ZEALAND Strong organic growth • Pre-tax profit contribution to AUB Group of A$3.2m, up 15%. Revenue growth is strong up 23%. • Premium rates continue to firm on average circa +5%, with varied application across geographies and classes, and the overall market remains competitive. • NZbrokers is p
Slide 18: Underwriting Agencies
UNDERWRITING AGENCIES Organic income growth in positive market • Pre-tax profit contribution to AUB Group of $5.1m, up 11% on pcp. • Strong average mid-single digit premium rate growth. Policy count increased 6.7% (ex divested and acquired businesses) largely contributing to strong organic revenue g
Slide 19: Risk Services
RISK SERVICES Investment for growth • The investment in new propositions, national capability and quality service models provides positive outlook for growth in the medium term. • Costs have increased due to planned strategic investment in new ancillary risk and injury management services across sta
Slide 20: Balance Sheet and Funding
BALANCE SHEET AND FUNDING Increased balance sheet capacity Consolidated balance sheet ($m) 31.12.18 30.06.18 Group balance sheet: Cash 71.3 58.7 • Investments (the aggregate of Investments in Associates and Intangible Assets and Goodwill) total $463.0m up $40.0m (30 June 2018: $423.0m), Cash – Trust
Slide 21: Dividends Per Share
DIVIDENDS PER SHARE • Interim dividend per share of 13.5 cents, fully franked. • $1.3m increase in cash dividend payment. • DRP remains suspended for the interim dividend. 50 45.5 45 42.0 39.7 40.0 40 38.5 35.5 35 31.0 30 CENTS PER SHARE 32.0 25.5 29.5 25 26.5 27.7 28.0 22.5 20.5 24.5 20 18.0 21.5 1
Slide 22: FY19 Priorities
FY19 PRIORITIES The Group will continue its disciplined focus, building on the strength of our business model, operating model and group strategy. • Business model: We will continue to maximise partnerships and our ‘skin in the game’ model to drive both organic growth and through attracting new equi
Slide 23: FY19 Priorities
FY19 PRIORITIES Continuing to drive execution of the Group’s ‘ecosystem’ Page 17 - AUB Group Ltd 1H19 Results
Slide 24: FY19 Outlook
FY19 OUTLOOK • The Group will continue to maintain its disciplined approach to executing our business model, operating model and strategy. The Group’s client-focused strategy accords with potential directional outcomes of the Financial Services Royal Commission. • The benefits of acquisitions undert
Slide 25: Appendices
APPENDICES
Slide 26: Appendix – Adjusted NPAT
APPENDIX 1 – ADJUSTED NPAT 1 R EC ON C IL IATION OF AD JU STED N PAT TO R EPOR TED N PAT 1H19 1H18 Var ianc e $ 000 $ 000 % Net Profit after tax attributable to equity holders of the parent 19,826 23,752 -16.5% Reconciling items net of tax and non controlling interest adjustments for: Adjustments to
Slide 27: Appendix – Management Results
APPENDIX 2 – MANAGEMENT RESULTS1 MAN AGEMEN T PR ESEN TATION OF R ESU L TS 1H19 1H18 Var ianc e Var ianc e AUB RESULT CO NT RIBUT IO N BY BUSINESS UNIT $ 000 $ 000 $ % Australian Broking revenue 163,100 154,440 8,660 5.6% Australian Broking expenses (including interest expense) (120,153) (115,242) (
Slide 28: Appendix 2a – Management Results
APPENDIX 2a – MANAGEMENT RESULTS1 MAN AGEMEN T PR ESEN TATION OF R ESU L TS 1H19 1H18 Var ianc e Var ianc e $ 000 $ 000 $ % Australian Broking revenue 163,100 154,440 8,660 5.6% Australian Broking expenses (118,096) (113,358) (4,738) 4.2% EBIT - Aus tr alian Br ok ing 45,005 41,082 3,922 9.5% New Ze
Slide 29: Appendix – Cashflow
APPENDIX 3 – CASHFLOW C ASH FL OW 1H19 1H18 $ 000 $ 000 Cas h flows fr om oper ations 20,978 28,930 Cash flows from investing activities Acquisitions¹ (5,538) (13,497) Acquisition of associate (1,291) - Cash out from deconsolidation of of controlled entity (1,501) (4,413) Sales proceeds 5,209 2,371
Slide 30: Appendix – Operating Segment Reconciliation
APPENDIX 4 – OPERATING SEGMENT RECONCILIATION R EC ON C IL IATION OF OPER ATIN G SEGMEN TS Cons olidated Cons olidated 1HY19 1HY18 Insurance Risk Insurance Risk Total Total Intermediary Services Intermediary Services $'000 $'000 $'000 $'000 $'000 $'000 Profit before tax and after non-controlling int
Slide 31: Thank You
THANK YOU