Nib Holdings Ltd · ASX:NHF
Nib — FY2024 Earnings Presentation
49 slides from Nib's earnings presentation, Aug 26, 2024
Slide 1: FY2024 Full Year Results
FY2024 Full Year Results 26 August 2024
Slide 2: Acknowledgement of Aboriginal and Torres Strait Islander peoples
nib acknowledges Aboriginal and Torres Strait Islander peoples as the First Australians and pays respect to Elders past and present across all the lands on which we operate. We acknowledge the rich and meaningful contribution they make to life and culture in Australia, and we aim to be a partner in
Slide 3: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the 12 Whilst the forward-looking statements are based on current views, expectations and beliefs as at the months ended 30 June 2024 and/or its related bodies corporate (Group) and an update o
Slide 4: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 5: Our purpose: Your better health and wellbeing
Our purpose Your better health and wellbeing • Deliver deep insight and guidance about how you might best achieve personal health and wellbeing goals and manage risk. • Connect you with a wide ecosystem of relevant and high quality products, services, programs and providers. • Render it all accessib
Slide 6: Payer to Partner progress
Payer to Partner progress Active app users nib members in Telehealth consults2 GreenPass members No Gap dental health management locations in FY25 625,000+ programs1 22,700+ 176,000+ 67,000+ 200+ Up 21.4% on FY23 with increasing take up of Up 18% on FY23 Up 84.0% on FY23 As at 31 July 2024 Nationwid
Slide 7: FY24 key commercial overview
FY24 key commercial overview At a Group level nib continues to grow revenue, earnings and cash flow. ROIC remains strong and EPS stable. PCA ratio of 1.94x. Full year dividend is at the top end of policy range (adjusting for impact of AASB17). The FY24 results accommodated some unbudgeted impacts (i
Slide 8: FY24 Group financial highlights
FY24 Group financial highlights Group revenue1 Group UOP Net investment income Net profit after tax $3.3b $257.5m $61.7m $181.6m AASB10232 AASB10232 AASB10232 ▲9.6% ▲12.8% ▲9.3% ▲5.9% ▲77.3% ▲2.8% ▲67.4% 3.1 3.4 3.1 3.3 263.2 278.6 145.2 257.5 54.7 61.7 191.1 196.4 108.5 181.6 FY23 FY24 FY23 FY24 FY
Slide 9: Nick Freeman
Nick Freeman Group Chief Financial Officer This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 10: Group income statement
Group income statement Financial performance ($m) FY24 FY23 Change UOP of $257.5m up 77.3% or 5.9% under AASB1023 Insurance revenue 3,211.6 2,939.3 ▲9.3% • Strong top line growth driven by policyholder growth Incurred claims (2,487.2) (2,330.5) ▲6.7% across all insurance segments. Other insurance ex
Slide 11: nib Group P&L AASB17 to AASB1023
nib Group P&L AASB17 to AASB1023 AASB17 basis1 AASB1023 basis1 Financial performance ($m) FY24 FY23 Change Financial performance ($m) FY24 FY23 Change Premium revenue 3,211.6 2,939.3 ▲9.3% Premium revenue 3,232.7 2,942.1 ▲9.9% Claims expense (2,487.2) (2,330.5) ▲6.7% Claims expense (2,487.2) (2,219.
Slide 12: Revenue and UOP growth – AASB17 vs AASB1023
Revenue and UOP growth – AASB17 vs AASB1023 Revenue is similar and UOP is more volatile under AASB17, but ends up in a similar place over the periods FY2019 – FY2024 cumulative UOP reconciliation ($m) Underlying operating profit (UOP)1 Cumulative UOP FY2019 – FY2024 AASB1023 1,330.9 Cumulative UOP F
Slide 13: Ed Close
Ed Close Chief Executive Australian Residents Health Insurance This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 14: Australian residents health insurance
Australian residents health insurance Financial performance ($m) FY24 FY23 Change Strong UOP result driven by growth and cost containment Insurance revenue 2,640.3 2,433.8 ▲8.5% supporting return of margins to target range Insurance service costs (2,419.4) (2,324.7) ▲4.1% • UOP of $220.1m up 100.6%
Slide 15: Australian residents health insurance – HY trend
Australian residents health insurance – HY trend Margins moving back to target range in 2H24 – on both a AASB17 and AASB1023 basis AASB17 basis1 AASB1023 basis1 Financial performance ($m) 2H24 1H24 2H23 1H23 Financial performance ($m) 2H24 1H24 2H23 1H23 Underlying operating profit 91.5 128.6 9.1 10
Slide 16: arhi policyholder growth continues strongly
arhi policyholder growth continues strongly Both nib and industry have shown consistent and FY24 was another strong year of growth, focused long-term policy growth on combined and hospital policies1 2,458 2,452 205.0% 12,699 200% nib CAGR: 5.2% and nib has had positive growth 714,724 every quarter s
Slide 17: arhi policies trend towards combined and hospital
arhi policies trend towards combined and hospital nib is trending towards combined and hospital policies which are outgrowing ancillary 697,115 714,724 665,773 +2.3% +3.8% 104,933 107,385 101,080 +6.2% 91,397 +2.7% 93,855 86,076 +4.6% +2.5% 478,617 500,785 513,484 FY22 FY23 FY24 Combined Hospital An
Slide 18: Hospital claims growth
Hospital claims growth FY24 saw elevated claims growth across nib and industry Hospital Claims per SEU Growth1 15% 10% 5% 0% -5% -10% -15% Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 Sep 23 Dec 23 Mar 24 nib Hospital Claims Growth Industry Hospital Claims Growth 18 1. Rolli
Slide 19: Overall arhi claims growth
Overall arhi claims growth We still see long-term inflation at ~4%, with shorter term risk towards 6% as we normalise from low inflation during COVID Cumulative paid claims per person growth (excl. risk equalisation) 180% CAGR nib1 Industry2 150% FY02 – FY23/24 4.2% 4.3% FY02 – FY19 4.5% 5.2% 120% F
Slide 20: arhi revenue growth vs claims growth
arhi revenue growth vs claims growth Both nib and the industry have been able to price in claims inflation Cumulative revenue and claims per person growth1 180% 150% Industry revenue CAGR to FY23: 4.6% 120% Industry claims CAGR to FY23: 4.3% 90% 60% nib revenue CAGR to FY24: 4.5% nib claims CAGR to
Slide 21: Nick Freeman
Nick Freeman Group Chief Financial Officer This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 22: International inbound health insurance
International inbound health insurance Financial performance ($m) FY24 FY231 Change Continued improvement in UOP result driven by top line growth Insurance revenue 192.8 162.0 ▲19.0% • Revenue growth of 19.0% led to a record top line result, with Insurance service costs (165.0) (135.9) ▲21.4% robust
Slide 23: New Zealand
New Zealand Financial performance ($m) FY24 FY231 Change Strong resident PHI policyholder growth, result impacted by Insurance revenue 371.2 336.7 ▲10.2% high claims inflation and DAC adjustment in FY23 Insurance service costs (348.8) (308.7) ▲13.0% • Revenue up 10.2% due to policyholder growth and
Slide 24: nib Travel
nib Travel Financial performance ($m) FY24 FY23 Change Gross profit after acquisition costs (GPAC) increase despite Underwriting result 0.3 0.2 ▲50.0% loss of income Operating income 87.0 113.2 ▼23.1% • Impact of Qantas contract loss largely as expected with Acquisition costs (34.7) (63.6) ▼45.4% GW
Slide 25: nib Thrive
nib Thrive Financial performance ($m) FY24 FY23 Change Strong UOP result amid industry reform Fee income 51.3 14.6 ▲251.4% • 'Navigator' model is taking shape with the acquisition of Operating expenses (36.0) (11.5) ▲213.0% six plan managers, a support coordination business and Underlying operating
Slide 26: Capital management
Capital management nib Group ($m) FY24 FY231 Change Net assets 1,043.8 996.8 ▲4.7% • Reduction in Group net tangible assets due to nib Thrive acquisitions in 1H24 and increased software development. Net tangible assets2 301.9 339.2 ▼11.0% Debt 264.6 245.9 ▲7.6% • Improved leverage ratio due to stron
Slide 27: Cash flow
Cash flow Consolidated cash flow ($m) FY24 FY23 Change • Strong operating cash inflow reflects growth in insurance Operating cash inflows 3,595.5 3,288.2 ▲9.3% revenue across PHI businesses. Growth in Midnight Health Operating cash outflows (3,338.4) (3,041.5) ▲9.8% and the full year operation of ni
Slide 28: Honeysuckle Health
Honeysuckle Health Revenue growth and expanding client base building the foundation HMP enrolments1 (#) 10,000 for improving profitability • Revenue growth of 13.4% (FY24 v FY23). 8,000 2,343 2,387 • Expansion of general insurance sector client base in late FY24 will 6,000 2,169 drive ongoing increa
Slide 29: Midnight Health
Midnight Health Accelerating revenue growth driving improving performance Gross Revenue ($m)1 • Very strong gross revenue growth of 47% in 2H24 vs 1H24 supported 4.0 by increasing average revenue per customer. • Over 25,000 GLP-1 agonist prescriptions. Wegovy to launch Aug 24. 3.0 • 12,000 sales fro
Slide 30: Roslyn Toms
Roslyn Toms Group Executive Legal & Chief Risk Officer This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 31: Sustainability – FY24 highlights
Sustainability – FY24 highlights More than 78k health assessments Maintained carbon neutral or screens undertaken by nib certification from Climate Active members (annual target 28,000) through the purchase of 100% Australian Carbon Credit Units1 22.7k members enrolled in Offered new career pathways
Slide 32: Sustainability – FY25 targets
Sustainability – FY25 targets Population Natural People, culture Community spirit Leadership & health environment & employment & cohesion governance • 75,000 members • Transition all new nib- • Ensure 40/40/20 gender • 250,000 people reached • Re-assess the modern participating in controlled locatio
Slide 33: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director This document has been marked with a sensitivity label of Internal Use Only by nib Group.
Slide 34: Business strategy – Payer to Partner (P2P)
Business strategy – Payer to Partner (P2P) arhi expansion Value, cost containment Adjacent markets and affordability Payer to Partner Government and Honeysuckle and 3rd party programs Midnight Health 34
Slide 35: Financial protection and support; Insight and guidance
Financial protection Insight and guidance and support • Health checks and Good Health Plan • Private health insurance • Health score • Travel insurance • Symptom checker & E-triage • Living benefits (life) insurance • Find a provider & program • NDIS plan management • Personalised health content & r
Slide 36: FY25 Outlook and beyond
FY25 Outlook and beyond • FY25 net policyholder growth ~3%. arhi • Medium to long term underlying claims inflation to revert 4-6% range. • Ongoing net margin 6-7%. • Student arrivals revert to pre-COVID levels with continued margin improvement. iihi • Continued demand for temporary skilled workers.
Slide 37: Questions & Answers
Questions & Answers nib
Slide 38: nib Group income statements AASB1023 – AASB17
nib Group income statements AASB1023 – AASB17 The Group has adopted AASB17 Insurance Contracts (AASB17) on a retrospective basis. As a result, the Group has restated certain comparative amounts in the financial results included in this presentation, however these restatements are unaudited.
Slide 39: nib Group summary AASB1023
nib Group summary AASB1023 Income statement1 ($m) 2024 2023 2022 2021 2020 2019 Net premium revenue 3,200.6 2,911.5 2,703.4 2,548.8 2,439.6 2,340.8 Net claims incurred (2,471.7) (2,203.6) (2,066.3) (1,985.5) (1,933.4) (1,811.4) Gross profit 728.9 707.9 637.1 563.3 506.2 529.4 Movement in policy liab
Slide 40: nib Group summary AASB17
nib Group summary AASB17 Income statement1 ($m) 2024 2023 2022 2021 2020 2019 Insurance revenue 3,211.6 2,939.3 2,753.9 2,574.1 2,479.8 2,372.6 Insurance service costs – incurred claims (2,487.2) (2,330.5) (2,000.3) (2,065.8) (1,851.8) (1,827.0) Insurance service costs – other insurance expenses (45
Slide 41: nib Group FY23 AASB1023 to AASB17
nib Group FY23 AASB1023 to AASB17 Income statement ($m) FY23 AASB1023 FY23 impact FY23 AASB17 Insurance revenue 2,942.1 (2.8) 2,939.3 Insurance service costs – incurred claims (2,219.3) (111.2) (2,330.5) Insurance service costs – other insurance expenses (438.3) (2.3) (440.6) Net reinsurance costs (
Slide 42: nib Group FY24 AASB1023 to AASB17
nib Group FY24 AASB1023 to AASB17 Income statement ($m) FY24 AASB1023 FY24 impact FY24 AASB17 Insurance revenue 3,232.7 (21.1) 3,211.6 Insurance service costs – incurred claims (2,487.2) - (2,487.2) Insurance service costs – other insurance expenses (451.4) - (451.4) Net reinsurance costs (16.6) - (
Slide 43: Appendix
Appendix nib
Slide 44: Key trends
Key trends PHI participation rate (AU)1 Student visas (AU)2 Workers visas lodged (AU)2 Lodged Granted 47.0% 80,000 50,000 46.0% 40,000 60,000 30,000 45.0% 40,000 20,000 44.0% 20,000 10,000 43.0% 0 0 Dec-18 Dec-16 Dec-17 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun
Slide 45: Policyholder data
Policyholder data nib Group policyholders (#) FY24 FY23 FY22 FY21 FY20 Total persons covered 1,878,951 1,813,773 1,715,081 1,644,887 1,616,263 Australian residents health insurance 1,349,587 1,314,131 1,255,265 1,224,320 1,186,805 International (inbound) health insurance1 241,668 212,643 181,181 187
Slide 46: Other income and expenses
Other income and expenses Other income and expenses ($m)1 FY24 FY23 Change Other income 153.0 137.5 ▲11.3% arhi 2.3 2.8 ▼17.9% iihi 3.7 2.0 ▲85.0% nib NZ 0.4 0.9 ▼55.6% nib Travel 87.0 113.2 ▼23.1% nib Thrive 51.3 14.6 ▲251.4% Honeysuckle Health n/a n/a n/a Midnight Health – Net Income 6.4 2.4 ▲166.
Slide 47: Statutory operating profit
Statutory operating profit Underlying to Statutory operating profit ($m) FY24 FY23 Change Underlying operating profit (UOP) 257.5 145.2 ▲77.3% • Total one-offs, M&A and amortisation of acquired intangibles has increased $16.4m driven by nib Thrive (25.0) (4.8) ▲420.8% investment in nib Thrive. Amort
Slide 48: Investments and finance expense
Investments and finance expense $m FY24 FY23 $m FY24 FY23 Change Defensive Net investment income1 42.5 33.7 Net finance expense (17.4) (13.8) ▲26.1% Net investment return (%) 3.7 3.2 Finance costs (15.5) (11.7) ▲32.5% Funds invested 1,162.1 1,122.6 Interest on lease liabilities (2.1) (2.3) ▼8.7% Gro
Slide 49: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year Liability for incurred claims is an entity's obligation to investigate and pay valid claims 2H Six months ended/ending 30 June of the relevant financial year LIC for insured events that hav