2017 ANNUAL RESULTS 8 MARCH 2018, PARIS

Transcription

1 2017 ANNUAL RESULTS 8 MARCH 2018, PARIS

2 INTRODUCTION Bruno Rousset 2

3 INTRODUCTION A SOLID BASIS The result of three years of hard work thanks to strong governance and major milestones reached > Prioritising initiatives that promote our growth drivers > Return to organic growth in both divisions > Significant progress in turning around loss-making operations > Breakeven in international business > Resumption of dynamic, targeted external growth > Step-up in the global expansion of our expertise 3

4 INTRODUCTION GRADUAL TRANSFER OF GROWTH 2015 Sales growth 2016 Gross margin growth 2017 Current EBIT growth 4

5 1 OUR BUSINESS IN 2017 Emmanuel Morandini 5

6 OVERVIEW GROWTH ACROSS ALL FINANCIAL INDICATORS SALES GROSS MARGIN CURRENT EBIT NET INCOME (GROUP SHARE) +7.8% +1.8% +6.2% +97.0% 928.4m 428.4m 69.4m 39.6m > Gross margin: increase driven by growth in Health & Personal Protection and Property & Casualty brokerage activities, but hampered by the risk carrying business > Current EBIT: increase higher than the October guidance review, driven by a turnaround in certain subsidiaries and the impact of the 2016 restructuring 6

7 1 GROWTH DRIVERS A SOLID FOUNDATION FOR THE FUTURE Broker distribution > 11,300 brokers at end 2017 > Proportion of brokers working with more than one company within the Group up 3 pp International > Gross margin organic growth > Breakeven achieved, excluding impact of foreign exchange fluctuations > Turnaround of loss-making operations: > Two acquisitions to further our growth drivers Partnerships and key accounts 23 new contracts in 2017: > 13 new partnerships > 10 extensions Direct distribution > Return to breakeven in direct corporate brokerage activities > Continued streamlining of the agency network and business turnaround 7

8 1 HEALTH & PERSONAL PROTECTION 2017 RETURN TO EBIT GROWTH Individual health Group Personal Loan insurance health insurance Protection insurance > Employees: portfolio stabilisation > Seniors and selfemployed: continued business development > International health insurance (IPMI): growth in Europe, strong momentum in Asia > Digitalisation: 100% online application process for SMEs > Brazil: confirmation of strong Public Broker growth potential > Growth driven by pros and SMEs > Launch of new offers and extension of our range > Stable portfolios following loan renegotiations > Increased range covering a wider target clientèle > Deployment and enhancement of our digital application process 8

9 1 PROPERTY & CASUALTY 2017 STRONG MOMENTUM IN WHOLESALE BROKERAGE AND TRAVEL INSURANCE Wholesale International Travel insurance APRIL brokerage Property & Mon Assurance France Casualty > Excellent performance in car, two-wheeled and boat insurance > Continued growth in professional liability insurance > Spain: Acquisition of Pont Grup, wholesale broker specialised in two-wheeled vehicle insurance > France: Strong business momentum and return to profit > Brazil: strong business growth, work on cross-selling > Net production up almost 5 % year-onyear > Digital: present on 3 major price comparison tools > United States: turnaround progressing well > 154 agencies at 2017 year-end 9

10 CONSOLIDATED EARNINGS Emmanuel Maillet 10

11 2 CONSOLIDATED SALES TWO SOURCES OF GROWTH +7.8% 2017 sales ( m) Reported 2016 sales Forex Acquis. Deconso LFL sales Insurance premiums Brokerage comm. Reported 2017 sales Change 2017 vs 2016 (like-for-like): +7.1% 11

12 2 SALES HEALTH & PERSONAL PROTECTION 2017 breakdown of sales ( m) Commissions +4.9% BROKERAGE PORTFOLIOS Individual: +3.6% > Employees: -10.5% > Seniors and self-employed: +6.6% Group insurance: +1.4% Loan insurance: -3.0% Insurance premiums Brokerage commissions 12

13 2 SALES P&C DIVISION 2017 breakdown of sales ( m) Commissions +6.1% BROKERAGE PORTFOLIOS Wholesale brokers: +3.1% > Substandard car: +6.4% > Two-wheeled vehicle: +11.4% > Professionals: +0.6% APRIL Mon Assurance (P&C): stable Insurance premiums Brokerage commissions Travel insurance and assistance: +22.1% 13

14 2 CONSOLIDATED GROSS MARGIN SECOND YEAR OF GROWTH +1.8% 2017 gross margin ( m) GM Acquis. Deconso. H&PP P&C 2017 GM 14

15 2 GROSS MARGIN HEALTH & PERSONAL PROTECTION 2017 breakdown of gross margin ( m) Brokerage +3.7% BROKERAGE GROSS MARGIN AS AT Brokerage Insurance Expat 13% Pro & indiv. personal protection France 15% Group private insurance France 18% Local H&PP outside France 7% Individual health France 24% Loan insurance France 23% 15

16 2 GROSS MARGIN P&C DIVISION 2017 breakdown of gross margin ( m) Brokerage +4.0% BROKERAGE GROSS MARGIN AS AT International P&C 11 % Legal protection 5 % Brokerage Insurance Corporate P&C France 7 % Travel / Assistance 26 % Individual P&C France 51 % 16

17 2 FINANCIAL ASSETS STABLE AND PRUDENT PORTFOLIO Financial income excluding forex ( m) One-offs Recurring m 16.3m 13.1m Financial assets Equities 7% Other 9% Equities 7% Other 12% Cash 12% Money market 44% Cash 11% EQUITIES Money market 41% 17 Bonds 28% : 743m Bonds 29% : 760m

18 2 CURRENT EBIT RETURN TO GROWTH +6.2 % 2017 current EBIT ( m) current EBIT Acquis. and deconso. H&PP P&C Other 2017 current EBIT 18

19 2 INCOME STATEMENT BY DIVISION HEALTH & PERSONAL PROTECTION PROPERTY & CASUALTY OTHER m Sales Gross margin Financial income Current EBIT (11.5) (11.2) 1 Excluding inter-division eliminations (- 2.7m for 2017, - 2.5m for 2016) 19

20 2 INCOME STATEMENT NON-CURRENT ITEMS AND TAX m Current EBIT Research tax credit Disposals and restructuring (2.4) (3.2) Goodwill write-offs (4.8) (13.3) Other non-current items (0.1) (6.8) EBIT Income tax (24.3) (22.2) Minority interests 0.7 (0.3) Net income (Group share)

21 2 CONSOLIDATED INCOME STATEMENT m Change (%) Change ( m) Sales % Gross margin % +7.8 Net financial income % -5.4 Current EBIT % +4.0 EBIT % Net income (Group share) % The gross margin calculation is described in the notes to the consolidated financial statements published on 21

22 2 CONSOLIDATED BALANCE SHEET A SOLID GROUP 31/12/ /12/2016 Change Shareholders equity, Group share ( m) % Debt-to-equity ratio (%) 5.9% 1.1% +4.8 pp Net cash ( m) Adjusted net cash 1 ( m) ROE (%) 6.3% 3.3% +3.0 pp ROCE after tax (%) 6.1% 3.3% +2.8 pp Goodwill ( m) % of equity 35.6% 35.3% +0.3 pp 1 Net cash, adjusted for deposit accounts held as part of our cash management policy 22

23 2 ADJUSTED NET CASH BRIDGE Op. cash flow Change in brokerage WCR Change in insurance WCR Dividends Financing Financial invest. Other invest > Net cash: + 5.2m > Adjustment for deposit accounts (recorded under financial investments): + 1.1m > Adjusted net cash: + 6.2m 23

24 2 DIVIDEND GROWTH OF 3.8% 2017 (proposed) 2016 Payout ratio 28% 53% Dividend per share ( ) Earnings per share ( ) ELIMINATION OF NON-CURRENT EXPENSES > Formula applied: dividend = 25% * (Current EBIT tax charge minority interests) > In line with APRIL's operating performance > More attractive to shareholders 24

25 3 CHALLENGES FOR 2018 Emmanuel Morandini 25

26 3 OUTLOOK HEALTH & PERSONAL PROTECTION FRANCE Individual and group health > Individual: expectation of more modest growth than in 2017, within a policy-transfer market > Group: strengthen our position in the seniors and self-employed segment Personal Protection > Individual: business development and work on cross-selling > Pro and SME: extension of the range OUTSIDE FRANCE Local PMI outside France > Brazil: strong growth driven by the market > Further opportunities under review International health insurance (IPMI) > Developing the corporate market > Optimising policy and claims handling > Extending operations, including via acquisitions 26

27 3 OUTLOOK LOAN INSURANCE The Bourquin amendment, a major change for the market > Option to change loan insurance each year > Market worth 6.4 billion in premiums > Potential market for loan insurance switch-overs estimated between 600m and 1.4 billion. An increasingly competitive market > Mixed reactions expected from banks > Many insurers are adding loan insurance to their offering An expected decrease in prices and stronger competition. An opportunity for capturing new business > The price, support and simplicity (solutions and tools) triangle has made us the leader in delegated loan insurance > Offers available under the APRIL brand or as white-label products for third parties A wide range and a leading position. 27

28 3 OUTLOOK PROPERTY & CASUALTY Property & Casualty in France > Strong growth expected in wholesale brokerage, particularly in car, twowheeled vehicle and boat insurance > Optimisation of policy and claims handling and distribution models Property & Casualty outside France > Canada: current market concentration > Search for development opportunities, specifically through external growth > Objective: export our expertise abroad Travel insurance > Growth driven by primary market improvements and our sales strategy (in and outside agencies) > Latin America: a penetration rate of 10% with significant growth opportunities Assistance > An activity that continues to support travel and international health insurance 28

29 3 REGULATORY CHANGES APRIL ON TRACK GENERAL DATA PROTECTION REGULATION (GDPR) > A project underway at APRIL since 2015, with support from PwC > Action plan prepared and currently under deployment INSURANCE DISTRIBUTION DIRECTIVE (IDD) Duty to advise, a focal point of the IDD > Increase in sales process formalities (recording of needs and advice) > Greater transparency in the broker/insurer relationship Ongoing training in advisory services > Minimum annual training of 15 hours, mandatory for distributors Adaptation of remuneration models underway > Customers must know how the broker is paid (commissions, fees, etc.) > Remuneration must not influence the advice provided to the customer Partially effective product governance at APRIL > A documented and audited process for designing new products > Verification that distributors fully understand the product and target clientèle 29

30 OUTLOOK MAINTAIN AND STEP UP GROWTH MOMENTUM Maintain organic growth Continue to turn around loss-making operations External growth in targeted business activities 2018 TARGET: Current EBIT growth between 6% and 10% versus

31 4 CONCLUSION Bruno Rousset 31

32 4 APRIL TOMORROW CONTINUED REFOCUSING AND TRANSFORMATION Refocusing Acceleration Transformation 2018: ramp-up of APRIL's redeployment in its value-added businesses for sustainable growth 32

33 4 INVESTMENTS TARGETING LONG-TERM GROWTH EXTERNAL GROWTH IT STAFF MEMBERS > Focus on strengthening our areas of expertise > Extend our presence in new high-potential countries within our strategic activities on a case-by-case basis > Continue to digitalise the customer experience and develop self-care > Optimise back-office functions > Maintain the current level of investment > Prioritise delegation and trust, to create a more agile and efficient business > Concentrate on mobility to promote our development abroad THREE KEY INVESTMENT PRIORITIES 33

34 4 APRIL TOMORROW MAINTAIN GROWTH MOMENTUM OVER THE LONG TERM Development of key markets > Health & Personal Protection: continue our development on local markets and become a significant competitor in international health > Loan: seize opportunities offered by the Bourquin loan insurance amendment and maintain our leading position amongst alternative operators > Niche Property & Casualty: globalise our areas of expertise Strengthened global and multichannel networks > A multichannel strategy including key accounts, wholesale and direct brokers > International expansion in high-growth markets and areas of expertise 34

35 35 QUESTIONS

36 36 APPENDICES

37 DEFINITION OF SPECIFIC INDICATORS SALES Sales consist of insurance premiums and brokerage commissions. Insurance premiums comprise the specific remuneration generated from risk-carrying activities. Brokerage activities are remunerated in the form of commissions and services provided. Where the risk carrier and the broker belong to the same group, intra-group transactions are eliminated by reducing insurance premiums in favour of brokerage commissions, which remain the sole item under consolidated sales. FINANCIAL INCOME Financial income is an integral part of the risk-carrying cycle. It consist s of interest received and accrued as well as net capital gains on sale of financial assets. GROSS MARGIN With regard to our risk-carrying operations, gross margin is the sum of the underwriting result and the financial result. It covers the other items of current EBIT: other purchases and external expenses, personnel costs, tax, amortisation and provisions. With regard to our brokerage activities, gross margin is the difference between commissions and services provided recognised under sales and commissions paid to intermediaries recognised under purchases and external expenses. Gross margin also covers the other items of current EBIT: other purchases and external expenses, personnel costs, tax, amortisation and provisions. ADJUSTED NET CASH Adjusted net cash = Cash and cash equivalents - current bank loans and overdrafts + deposit accounts registered in the name of APRIL (classified under Financial investments on the balance sheet) 37

38 BREAKDOWN OF SALES AND GROSS MARGIN BY DIVISION AND TYPE OF EARNINGS Sales BY DIVISION BY TYPE 61.0% Health & Personal Protection -0.1 pp 39.0% Property & Casualty +0.1 pp 55.1% Brokerage -1.3 pp 44.9% Insurance +1.3 pp Gross margin BY DIVISION BY TYPE 62.1% Health & Personal Protection +0.2 pp 37.9% Property & Casualty -0.2 pp 87.1% Brokerage +1.6 pp 12.9% Insurance pp 38

39 39 THE APRIL GROUP

40 PROFILE THE APRIL GROUP Created in 1988, listed in figures: > Sales of 928.4m > EBIT of 64.9m > Net assets (group share) of 632.3m OUR AMBITION: MAKE INSURANCE EASIER AND MORE ACCESSIBLE APRIL, an international insurance services group, has chosen innovation as the key to driving its development since it was established. Our ambition is to make insurance easier and more accessible. This commitment has enabled us to become the leading wholesale broker in France and an international authority in the sector. > Operations based in 31 countries > 26% of gross margin generated outside France > 3,842 employees > 2 divisions sales of: > Health & Personal Protection m > Property & Casualty m > 20,000 distributors, of which 11,300 active brokers > 154 agencies in France 40

41 PROFILE OUR POSITIONING AND MARKETS A PRESENCE THROUGHOUT THE INSURANCE VALUE CHAIN TO ADDRESS THE NEEDS OF ALL OUR CUSTOMERS WHOLESALE BROKER Long-standing position as a wholesale broker and leader in the French market 20,000 DISTRIBUTORS WORLDWIDE INSURE Bearing the financial risks with our insurance companies DESIGN Designing and building innovative, tailored and targeted products and services MANAGE AND ASSIST Managing policies in our own right, for the benefit of policyholders or Third Party Administration (TPA) DISTRIBUTE Running distribution networks brokers travel agencies car dealerships Key Account partners through white label products DIRECT DISTRIBUTION FOR POLICY- HOLDERS 154 APRIL Mon Assurance agencies e-commerce websites 8 policy-handling platforms and call centres 41

42 HISTORY THE HISTORY OF OUR DEVELOPMENT A STORY COMBINING ORGANIC GROWTH AND GROWTH THROUGH ACQUISITIONS CREATION OF APRIL Wholesale broker in specialist markets FIRST SUBSIDIARY OUTSIDE FRANCE Acquisition of AIPS (now APRIL International Expat) and expansion in Italy, Spain, Germany, the UK and Canada MULTICHANNEL DISTRIBUTION Start of direct distribution with takeover of first network of agencies (Mutant, which became APRIL Mon Assurance COMMON BRAND Streamlining and simplification of the organisation uniting all the entities under the same APRIL brand FIRST STEPS IN ASIA Acquisition of Asia Assistance Partners (Singapore) DEVELOPMENT OF ACTIVITIES IN ASIA Acquisition of GlobalHealth, a company specialised in the design, sale and administration of group and individual international health insurance IPO AND BEGINNING OF RISK-CARRYING ACTIVITIES IPO for group (Second Marché of the Paris stock exchange) and acquisition of Axéria Prévoyance DIVERSIFICATION WITH P&C INSURANCE Motor and comprehensive home insurance DIVERSIFICATION WITH EXPAT & ASSISTANCE Acquisition of the Coris network with operations in Europe, Asia and North America START OF THE DIGITAL DRIVE Launch of april.fr allowing end customers to access the whole range of policies EXTERNAL GROWTH RESUMES Acquisition of Avilog, Third Party Administrator for group life and health insurance New impetus given to the partnerships and key accounts approach INTERNATIONAL EXPANSION OF OUR EXPERTISE Acquisitions of Public Broker, a broker in group health insurance in Brazil, and of Pont Grup, a Spanish wholesale broker in two-wheeled vehicules 42

43 RESPONSABILITÉ SOCIALE D ENTREPRISE AN ORGANISATION WHICH IS COMMITTED TO SUPPORTING A MORE RESPONSIBLE AND MORE ACCESSIBLE SOCIETY STAFF MEMBERS CUSTOMERS CIVIL SOCIETY THE ENVIRONMENT Involving staff in community projects and facilitating the professional integration and retention of vulnerable populations Facilitating access to insurance for our vulnerable customers Contributing towards a more responsible society and facilitating access to heathcare for all Supporting a sustainable world by encouraging our stakeholders to adopt eco-friendly behaviour Young people facing barriers to employment People with disabilities Volunteering: APRIL Citizen People with disabilities Penalised drivers Limited policyholders Carers The APRIL Foundation: clearing up fact and fiction about major health issues 17 different subsidiaries offer financial support to the APRIL Foundation Our customers Our partners Our staff 43

44 DISCLAIMER This presentation contains forward-looking statements that are based on assessments or assumptions that were reasonable at the date of the presentation, and which may change or be altered due to, in particular, random events or uncertainties and risks relating to the economic, financial, regulatory and competitive environment, the risks set out in the 2016 Registration Document, and any risks that are unknown or non-material to date that may subsequently occur. The Company undertakes to publish or disclose any adjustments or updates to this information as part of the periodical and permanent information obligation to which all listed companies are subject. 44

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