Aub Group Limited · ASX:AUB
Aub — Investor Presentation (May 2023)
37 slides from Aub's investor presentation, May 18, 2023
Slide 1: Equity Raising Presentation & Overview
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ASX Announcement 18 May 2023 The Manager Market Announcements Office Australian Securities Exchange Ltd Level 6, Exchange Centre 20 Bridge Street Sydney NSW 2000 Equity Raising Presentation & Overview Please find attached for i
Slide 2: AUB Equity Raising Presentation & Overview
AUB EQUITY RAISING PRESENTATION & OVERVIEW 18 May 2023 Mike Emmett CEO and Managing Director Mark Shanahan CFO Not for release to US wire services or distribution in the United States
Slide 3: Important Notice and Disclaimers
IMPORTANT NOTICE AND DISCLAIMERS This investor presentation (Presentation) is dated 18 May 2023 and has been prepared by AUB Group Limited (ACN 000 000 715) (AUB). By accepting this Presentation you represent and warrant that you are entitled to receive this Presentation in accordance with the restr
Slide 4: Important Notice and Disclaimers
IMPORTANT NOTICE AND DISCLAIMERS Investors should be aware that certain financial measures included in this Presentation are “non-IFRS financial information” under ASIC Regulatory Guide 230: “Disclosing non-IFRS financial information” published by ASIC and also “Non-GAAP financial measures” within t
Slide 5: Important Notice and Disclaimers
IMPORTANT NOTICE AND DISCLAIMERS To the maximum extent permitted by law, AUB, the Underwriter and each of their respective affiliates and related bodies corporate, and each of their respective directors, officers, partners, employees and agents (Extended Parties) expressly exclude and disclaim any r
Slide 6: Important Notice and Disclaimers
IMPORTANT NOTICE AND DISCLAIMERS SPP The offer booklet for the SPP (SPP Offer Booklet) will be available to eligible shareholders following its lodgement with the ASX. Any eligible shareholder who wishes to participate in the SPP should consider the SPP Offer Booklet in deciding whether to apply und
Slide 7: Important Notice and Disclaimers
IMPORTANT NOTICE AND DISCLAIMERS The Underwriter, in conjunction with its affiliates, is acting in the capacity as such in relation to the Placement and will receive fees and expenses for acting in this capacity. The Underwriter and/or its affiliates are or may in the future be lenders to AUB or its
Slide 8: Contents & Agenda
CONTENTS & AGENDA 8 Overview 18 Appendix A - Key Risks 27 Appendix B - Summary of Underwriting Agreement 31 Appendix C - International Offer Restrictions 7
Slide 9: Overview
Overview
Slide 10: Executive Summary
EXECUTIVE SUMMARY Operational update • AUB is delivering against its strategy with strong organic performance driven by revenue growth and underlying margin expansion (440 bps improvement since FY19) • AUB continues to grow Gross Written Premium (GWP) (33.1% CAGR since FY19) and benefits from a favo
Slide 11: AUB Strategy
AUB STRATEGY Clearly articulated with delivery on target Delivering strong core business performance Successful accretive acquisitions Strong organic performance driven by revenue growth and underlying margin expansion across all divisions (1H23 UNPAT grew 32.6% ex Tysers vs pcp) Australian Brok
Slide 12: FY23 Earnings Guidance
FY23 EARNINGS GUIDANCE UNPAT guidance range upgraded to AUD 120mn – AUD 124mn (previously AUD 112.9 – AUD 121.4mn) due to continued strong progress across all parts of AUB Underlying NPAT1 over time (AUD mn) FY23 Underlying NPAT1 guidance evolution (AUD mn) FY23 UNPAT guidance upgraded 124 121.4 +17
Slide 13: Tysers Financial Performance Update
TYSERS FINANCIAL PERFORMANCE UPDATE Strong post-Covid rebound. 9.6% organic revenue outperformance for 6 months to Mar’23 (vs initial forecast) Key Metrics AUD 196.3mn > 22.5% EBIT 6M to Mar’23 Performance Revenue1 Margin1 Tysers Income Mix (6M to Wholesale Broking Income Mix Business Update (L6M si
Slide 14: Tysers UK Retail Update
TYSERS UK RETAIL UPDATE High-performance strategically aligned business Strategic alignment Future growth areas - Meaningful scale, attractive profitability and strategic alignment with Tysers wholesale business - Increased cross-sell opportunities between wholesale and retail resulting from increas
Slide 15: Tysers Synergies & Integration Update
TYSERS SYNERGIES & INTEGRATION UPDATE Cost synergy delivery on track, revenue synergies to flow in FY24 Revenue Levers Cost Levers - Optimise Tysers & AUB operating ~AUD - Increased placement of AUB client structure & governance risks with Tysers 25m Austbrokers and Tysers wholesale/retail - Deliv
Slide 16: Acquisition Growth Strategy
ACQUISITION GROWTH STRATEGY Capital to support a strong BAU M&A pipeline Underlying NPAT1 over time (AUD mn) +22.2% 74.0 +23.6% 3.5 5.9% By June ’23 (Post equity raising) 10.0 60.5 Leverage ratio anticipated to 2.57 +6.4% 5.8 16.3% 49.0 5.7 11.9% 46.0 0.6 3.6 11.7% Leverage Ratio reduce to <2.0x (
Slide 17: Equity Raising
EQUITY RAISING AUB is launching a AUD 150mn Institutional Placement and Share Purchase Plan of up to AUD 15mn to position the business for future growth Offer structure and • Fully underwritten institutional placement (“Placement”) of new fully paid ordinary shares to raise AUD 150mn size • 6.25mn s
Slide 18: Equity Raising Timetable
EQUITY RAISING TIMETABLE Event Date Institutional placement Trading halt and announcement of the Offer Thursday, 18 May 2023 Institutional Placement opens Thursday, 18 May 2023 Institutional Placement closes Friday, 19 May 2023 Announcement of results of Institutional Placement Friday, 19 May 2023 T
Slide 19: Appendix A – Key Risks
Appendix A – Key Risks
Slide 20: Summary of Key Risks
SUMMARY OF KEY RISKS This section discusses some of the key risks associated with any investment in AUB, together with the risks relating to participation in the Placement and the SPP (the Offer), which may affect the value of AUB shares. The risks set out below are not listed in order of importance
Slide 21: Summary of Key Risks
SUMMARY OF KEY RISKS Business model of An important part of AUB’s business model and its growth strategy is to acquire and hold equity in insurance broking, underwriting agency or risk services businesses. While AUB acquiring and holding ordinarily has veto rights on most decisions concerning AUB gr
Slide 22: Summary of Key Risks
SUMMARY OF KEY RISKS Increased competition Any increase in competition or deterioration in the competitive positioning of AUB may have an adverse impact on AUB network members and could potentially result in a reduction in or market change gross written premium placed through AUB network members due
Slide 23: Summary of Key Risks
SUMMARY OF KEY RISKS Financial crime risk AUB may be exposed to violations of financial crime laws including fraud, anti-bribery and corruption, sanctions and anti-money laundering and terrorism financing. The acquisition of Tysers has further exposed AUB to the risk of operating in some jurisdictio
Slide 24: Summary of Key Risks
SUMMARY OF KEY RISKS Investment impairment AUB's balance sheet includes a significant level of investments and intangible assets recognised as a result of its various acquisitions. Investments and intangible assets must be regularly tested for impairment. Impairment results from a decrease in value
Slide 25: Summary of Key Risks
SUMMARY OF KEY RISKS Damage to the AUB and AUB faces the risk of loss that directly or indirectly impacts earnings or value that would be caused by adverse perceptions of AUB and/or Tysers held by brokers, customers, Tysers brands shareholders, employees, regulators and the broader community. AUB's
Slide 26: Summary of Key Risks
SUMMARY OF KEY RISKS Market and liquidity risk The operating and financial performance of AUB is influenced by a variety of general economic and business conditions, including levels of consumer spending, inflation, interest rates and exchange rates, supply and demand, industrial disruption, access
Slide 27: Summary of Key Risks
SUMMARY OF KEY RISKS EQUITY RAISING RISKS Underwriting risk AUB has entered into an underwriting agreement with Macquarie Capital (Australia) Limited (MCAL) (the underwriter) pursuant to which the underwriter has agreed to underwrite the Placement (Underwriting Agreement), subject to those terms and
Slide 28: Appendix B – Summary of Underwriting Agreement
Appendix B – Summary of Underwriting Agreement
Slide 29: Summary of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT AUB has entered into an underwriting agreement with Macquarie in respect of the Placement dated 18 May 2023 (Underwriting Agreement), pursuant to which Macquarie has agreed to fully underwrite the Placement on the terms and conditions of the Underwriting Agreement.
Slide 30: Summary of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • AUB is prevented from allotting and issuing the Placement Shares under the ASX Listing Rules, applicable laws, an order of a court of competent jurisdiction or a governmental agency; • a change in the Chief Executive Officer, the Chief Financial Officer or Chairpe
Slide 31: Summary of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT • a suspension or material limitation in trading in shares generally on ASX, HKEX, LSE or NYSE for at least 1 day on which that exchange is open for trading; and • any adverse change or disruption to the existing financial markets, political or economic conditions o
Slide 32: Appendix C – International Offer Restrictions
Appendix C – International Offer Restrictions
Slide 33: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 34: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS Statutory rights of action for damages and rescission. Securities legislation in certain Provinces may provide a purchaser with remedies for rescission or damages if an offering memorandum contains a misrepresentation, provided the remedies for rescission or damages
Slide 35: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be a
Slide 36: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in co
Slide 37: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 20