Transcript FBD Holdings plc (LOGO)

FBD Holdings plc
2007 Interim Results
August 2007
A.
2007 Interim Results
Forward Looking Statements
This presentation contains certain forward-looking statements.
Actual results may differ materially from those projected or implied
in such forward-looking statements. Such forward-looking
information involves risks and uncertainties that could affect
expected results.
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2007 Interim Results
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2007 Interim Results

Indigenous Irish company
………. Founded in 1970
………. Stock Exchange, 1989

Primary Business
………. Insurance Underwriting (Property/Casualty)

Other Interests
………. Leisure/Property Development
………. Financial Services

Excellent growth record
……… “TSR” 46% p.a., last 5 years

Committed to
………. Shareholders, customers, staff

Key Business Driver
………. Maximising shareholder value
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2007 Interim Results

Mission Statement
“In our target markets, to be the
leading customer focused
insurance group, delivering long
term sustainable value.”
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2007 Interim Results
Operational Highlights: H1 2007
Underwriting

Strong new business volumes offset reduced premium rates

Premium income ahead of 2006

Policy count up 3% on December 2006

Business Support Centre (“BSC”) commenced operations in February 2007
- 90 FTE staff
- 12,500 phone calls on average per week
- Phone traffic to 12 offices migrated to BSC
- Branch staff freed up to focus on sales

Progress in Dublin market maintained

Platform for business growth enhanced….. technology based efficiencies
advanced
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2007 Interim Results
Operational Highlights: H1 2007
Non-Underwriting – Leisure/Property Development
La Cala

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Property handovers ahead of comparable 2006 period
Improved trading in hotel and golf activities
Sunset

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Excellent performance
Record visitor numbers
Tower
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Visitor numbers up – improved trading
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2007 Interim Results
Operational Highlights: H1 2007
Non Underwriting – Financial Services
FBD Life

Continued strong growth
………. Customer and product opportunities
exploited
FBD Brokers

Maintained performance
………. In highly competitive environment
Capital Fund

Balance in fund reduced arising from
……….Remaining fund impacted by weak
decision to return capital
equity markets
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2007 Interim Results
Operational Highlights: H1 2007 (contd)
Corporate

Capital Management
-
-
-

€176m of capital distributed to shareholders on 27th June 2007
Flexible capital return mechanism devised to maximise returns for all
shareholders
Buy back of 957,000 shares in June 2007 for €31.1m
Organisation
-
Management capacity enhanced by key appointments
-
Formation of dedicated strategic developments unit
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2007 Interim Results
Financial Highlights
H1 2007
H1 2006
%
€000s
€000s
Gross written premiums
205,445
203,996
+0.7%
Net earned premiums
175,596
173,166
+1.4%
Underwriting result
26,158
41,649
-37.2%
Operating profit
65,118
75,721
-14.0%
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2007 Interim Results
Financial Highlights (contd)
Operating earnings per share
Dividend per share
Distribution of financial reserves per share
H1 2007
H1 2006
Cent
Cent
158.45
173.11
-8.5%
27.50
24.00
+14.6%
500.00
31/12/06
Net asset value per share
Return on equity (6 months)
938.67
1,424.76
%
%
11%
26%
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2007 Interim Results
Income Statement
H1 2007
H1 2006
€000s
€000s
%
Gross written premiums
205,445
203,996
+0.7%
Net earned premiums
175,596
173,166
+1.4%
(122,777)
(108,558)
+13.1%
(26,661)
(22,959)
+16.1%
Underwriting Result
26,158
41,649
-37.2%
Loss Ratio
69.9%
62.7%
Net Expense Ratio
15.2%
13.2%
Combined Ratio
85.1%
75.9%
Net claims incurred
Net operating expenses
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2007 Interim Results
Income Statement (contd)
H1 2007
€000s
H1 2006
€000s
%
Underwriting Result
26,158
41,649
-37.2%
Longer term investment return
27,523
23,773
+15.8%
Non underwriting operating income
11,437
10,299
+11.0%
Operating profit
65,118
75,721
-14.0%
53,681
65,422
Operating profit by activity:
Insurance underwriting
Non-underwriting
- Property/leisure
7,397
3,728
- Financial services/other
4,267
2,740
- Capital fund
(227)
11,437
65,118
3,831
10,299
75,721
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2007 Interim Results
Income Statement (contd)
H1 2007
H1 2006
€000s
€000s
65,118
75,721
-
83,626
(12,458)
318
Finance costs
(2,912)
(2,220)
Profit before tax
49,748
157,445
Income tax expense
(5,048)
(34,845)
Profit for the year
44,700
122,600
Operating profit
Profit on sale of land at La Cala
Short term fluctuation in investment return
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2007 Interim Results
Balance Sheet - Assets
Property & Equipment
Hotels/golf
30/06/07
31/12/06
€000s
€000s
181,661
180,369
Property – own use
32,735
33,195
Fixtures & Fittings
17,307
231,703
16,815
230,379
Investments
Property
81,291
81,181
Financial
939,867
1,099,309
Reinsurers’ share of technical provisions
81,144
72,553
Other receivables/DAC’s
93,025
99,319
Other Assets
Development land
31,549
32,608
Work-in-Progress
38,004
33,825
Cash
35,022
Total Assets
104,575
1,531,605
37,423
103,856
1,686,597
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2007 Interim Results
Balance Sheet - Liabilities
30/06/07
€000s
31/12/06
€000s
21,277
21,277
299,378
476,242
320,655
497,519
Preference Shareholders
2,923
2,923
Minority Interests
6,636
6,476
330,214
506,918
Equity
Share Capital
Reserves
Shareholders’ funds – equity interests
Total equity
Liabilities
Technical provisions
- Unearned premiums
200,698
- Claims
751,500
Deferred tax
197,507
952,198
734,439
31,520
931,946
33,227
Creditors
- Loans
103,492
- Other
114,181
Total Liabilities
112,350
217,673
1,531,605
102,156
214,506
1,686,597
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2007 Interim Results
Reconciliation of Movement in Shareholders’ Funds
30/06/07
€000s
30/06/06
€000s
506,918
485,473
44,700
122,600
(175,645)
-
Buyback of own shares
(31,134)
(129,212)
Dividends paid
(15,798)
(14,277)
-
(6,325)
1,173
1,682
330,214
459,941
Balance at 1st January
Profit for the period
Return of capital
Available-for-sale investments
Other
Balance at 30th June
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2007 Interim Results
Cash Flow Statement
H1 2007
€000s
H1 2006
€000s
Net Cash from operating activities
101,271
129,963
From investing activities
125,664
10,438
(229,215)
(144,217)
Net decrease in cash and cash equivalents
(2,280)
(3,816)
Cash and cash equivalents at the beginning of the period
37,423
41,897
(121)
(334)
35,022
37,747
Used in financing activities
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the period
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2007 Interim Results
Return on Equity
2003
2004
2005
2006
H1 2007
H1 2006
Underwriting
50.75%
43.78%
53.08%
58.44%
16.38%
23.36%
Non underwriting
13.68%
8.63%
11.63%
39.75%
3.42%
30.00%
Total
35.09%
31.61%
36.53%
50.61%
10.86%
26.46%
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2007 Interim Results
Market Shares
Gross Written Premium – 2006 (IIF)
Hibernian
Quinn
Allianz
FBD
AXA
R.S.A.
Eagle Star
13.4%
12.4%
8.7%
10.4%
10.2%
6.4%
5.0%
5.0%
4.5%
4.8%
9.4%
9.0%
8.7%
8.1%
7.8%
11.7%
11.1%
10.7%
10.2%
9.7%
13.3%
12.8%
12.3%
10.6%
10.3%
8.2%
8.7%
8.8%
10.1%
10.7%
14.9%
14.1%
13.2%
12.5%
11.6%
5.7%
7.1%
9.3%
11.0%
12.0%
21.7%
21.8%
21.1%
19.7%
20.7%
2006
2005
2004
2003
2002
AIG
Others(14)
Total Market
2006 - €3,822m: 2005 - €3,841m: 2004 - €3,933m : 2003 - €4,239m: 2002 - €3,955m
FBD Premium 2006 - €407m: 2005 - €389m:
2004 - €351m:
2003 - €369m: 2002 - €326m 20
2007 Interim Results
Group

Outlook
Expect to achieve analysts’ full year operating earnings forecast
Underwriting
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Insurers expect price competition to abate
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Further reductions in premium only justifiable if progress on claims
reform agenda sustained

Further improvement in claims environment possible
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Confident that we will continue to grow our customer base
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Ongoing investment in our operational platform will deliver growth
- Business Support Centre
- Technology enhancements programme
- New strategic developments unit
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2007 Interim Results
Outlook
Non-Underwriting
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
Leisure/Leisure Property Development
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Businesses on course to deliver performances ahead of 2006
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Anticipate regional planning approval necessary to trigger La
Cala Tranche II €80m land sale payment in H1 2008
Financial Services

Businesses on course to deliver performances ahead of 2006

Continued growth in investment/life product sales
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2007 Interim Results
Outlook
Capital



Efficient capital management will continue
Repatriations of €472m since March 2005 evidence of attention to
capital management
Growth in dividend/earnings payout ratio to be maintained
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