Building. Title??? relationships. September 2015

Transcription

1 Building relationships Title??? September 2015

2 Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial conditions, business performance and results of Hansard Global plc. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of Hansard Global plc, including amongst other things, Hansard Global s future profitability, competition with the markets in which the Company operates and its ability to retain existing intermediary clients and win new intermediary clients, changes in economic conditions generally or in the life assurance, savings and investment products sectors, terrorist and geopolitical events, changes in legal and regulatory regimes and practice, the ability of its owned and licensed technology to continue to service developing demands, changes in taxation regimes, exchange rate fluctuations, and volatility in the Company s share price. As a result, Hansard Global s actual future financial condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements. Hansard Global undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this presentation is intended to be a profit forecast or be relied upon as a guide to future performance. In particular, past performance is no guide to future performance.

3 Introduction & Overview Our Business Strategy Results FY 2015 New Business Plans Summary Questions

4 Meet the team Introduction & Overview Gordon Marr Chief Executive Officer Tim Davies Chief Financial Officer Graham Morrall Global Sales & Marketing Director

5 Overview FY 2015 Introduction & Overview Highlights Underlying IFRS profit of 12.0m (2014: 14.7m) i.e. excluding effects of chargeable event certificates ( CEC ) issue HIL New Business of 60.6m (PVNBP) for the year (2014: 83.0m) Product and pricing refresh completed with number of new Account Executives in place Refresh of senior management team and structures

6 Overview FY continued Introduction & Overview Strongly positive cash flows maintained by existing RP portfolio Highlights Provision for CEC settled in full with HMRC ( 3m write back for FY 2015 vs 5m provision) Increased final dividend of 5.25p per share in line with guidance Assets under Management ( AuA ) 907m (2014: 944m)

7 Introduction & Overview Our Business Strategy Results FY 2015 New Business Plans Summary Questions

8 Our Business Strategy

9 Strategic objective Our Business Strategy To add significant scale to the business, on a more diversified basis, through organic growth at acceptable levels of risk & profitability To be the preferred choice of distributors when recommending international savings and investment products to their clients

10 Strategic objectives Our Business Strategy More long-term relationships with distributors Better value For Customers Excellent customer service A more visible profile in the market Motivated & engaged workforce Market leading online systems

11 Hansard Europe Update Operating Model Dublin based subsidiary which wrote European business. In run-off since 30 June 2013 Outsourcing of administration and finance activities to head office in Isle of Man operating successfully and efficiently Further cost savings achievable in future over time Capital Regulatory assets at 30 June 2015: 15.4m (2014: 13.4m) Restriction on dividend distributions linked to litigation resolution Litigation Outstanding writs totalling 8.8m (2014: 5.2m) - Belgium, Italy and Madoff One large new case received at end of year considered speculative and will be robustly defended Tactical settlement in some instances where makes financial sense

12 Introduction & Overview Our Business Strategy Results FY 2015 New Business Plans Summary Questions

13 Results Full Year 2015

14 Summary Results FY 2015 Results FY2015 FY 2015 FY 2014 New business sales PVNBP 60.6m 83.0m New business margin (6.2)% 4.0 % Operating cash surplus 24.3m 37.8m Underlying IFRS profit after tax 12.0m 14.7m IFRS profit after tax 14.9m 8.3m EEV Operating loss after tax ( 6.3m) ( 6.6m) Final dividend per share 5.25p 5.00p FY 2015 FY 2014 European Embedded Value 195m 204m Assets Under Administration 907m 944m

15 Profitable New Business Results FY 2015 RP comparisons continue to be impacted by loss of Japanese distribution. SP s increasing through more competitive pricing. FY 2015 FY 2014 Present Value of New Business Premiums m m Regular premiums Single premium PVNBP Annual Premium Equivalent ( APE ) Margin on new business negative in FY 2015 due to insufficient sales volumes in 2015 New Business Margin (PVNBP basis, after tax) (6.2)% 4.0 %

16 M M Positive Operating Cash Flows Results FY 2015 FY 2015 FY 2014 m m Operating cash surplus Interest and other income Cash inflow Investment in new business (8.6) (15.4) Operating cash surplus in year ended 30 June Corporation tax received / (paid) 0.2 (0.2) Capital expenditure (0.2) (1.4) Net Cash inflow before dividends Dividends paid (11.7) (11.2) Net Cash flow for the year Shareholder cash at 30 June Cash flows support investment in new business, strategic development and dividends

17 Free Cash Results FY 2015 FY 2015 FY 2014 m m Headline cash balance is allocated to a number of constituents before true free cash can be identified. Total Group cash + deposit balances Net shareholder payables (2.1) (7.8) Policyholder claims payable (17.3) (19.7) Regulatory reserves (9.0) (9.0) Minimum regulatory capital * (10.8) (11.5) Regulatory capital currently restricted within HEL (10.2) (7.5) Free Group cash + deposit balances * Minimum regulatory capital taken as 200% of amount needed to continue in operation. Includes capital requirements in Isle of Man, Ireland and Labuan.

18 AuA M HIL & HEL AuA Development Results FY 2015 HIL and HEL AuA 5 year trend 800 HIL: Steady AuA after effects of global financial crisis worked through HEL: Expected decline after being placed in run-off in Year HIL HEL

19 Abridged Income Statement - IFRS Results FY 2015 Fee income declining as HEL book reduces and lower initial fees in HIL. Administrative expenses include strategic development costs, increased compliance costs and general inflation. Exceptional items in 2015 consist of the 3m write-back on the CEC provision. FY 2015 FY 2014 m m Fees and commissions Investment and other income Origination costs (20.1) (21.2) Administrative expenses before settlements and discontinued activities CEC settlement, litigation settlements and discontinued activities (21.9) (19.5) (6.4) Profit for the period before taxation Tax - - Profit for the period

20 M M IFRS Balance Sheet Results FY 2015 FY 2015 m FY 2014 m Deferred origination costs Other assets Shareholder cash and bank deposits Total assets Deferred Origination Costs at 30 June Deferred income Other payables Net assets Deferred Income Reserve at 30 June Shareholders Equity Strong level of shareholders funds post dividend payments

21 m EEV Balance Sheet Results FY 2015 FY 2015 FY 2014 m m Free surplus Required Capital Net Worth Value of Future Profits European Embedded Value EEV balance sheet as at 30 June VIF Net Worth Future profits are converting to cash at a higher rate than new business being added. Change in EEV year on year includes pay out of 11.7m dividends. EEV per share = 143p (2014: 149p)

22 EEV return impacted by new business shortfall Results FY 2015 Negative new business contribution is due to low volumes of new business. Assumption changes reflect reduced numbers of policies available to cover future expenses. Experience variances include 3m positive writeback of CEC provision. FY 2015 m FY 2014 m New business contribution (3.7) 3.3 Expected return Experience variances 2.6 (6.7) Assumption and other changes (7.0) (4.7) EEV operating loss after tax (6.3) (6.6) Investment return variances 4.3 (8.2) Economic assumption changes EEV profit/(loss) after tax 2.9 (10.7)

23 Introduction & Overview Our Business Strategy Results FY 2015 Progress in New Business Strategy Summary Questions

24 Progress on New Business Strategy

25 More long-term relationships with distributors Rebuilt Sales Team Rebuilding Distribution Activity since launch of strategy Refreshed All Products Increased Market Awareness Enhanced OnLine systems

26 Rebuilt sales team key execution levers 1 Sizing of target sales structure & capacities 2 Recruitment The Strategy requires a more organised, more closely managed & monitored sales team to ensure the entire business can anticipate where & when resources are required to support our growth 3 3 Training & Development Sales Team may look different in the future dependent on how quickly the anticipated growth becomes real 4 Remuneration 5 Sales force management

27 Rebuilt sales team Current structure Global Sales Latin America Middle East & Africa Far East Les Wong Rest of the Rest World of the World Account Executives 1 Account Executive Account Executives 3 Account Executives Account Executives 6 Account Executives Account Executives 2 Account Executives

28 Capturing strong market opportunities Rebuilding distribution New business in 2013 (excluding Japan) was introduced by 71 active* brokers. New business in 2015 (excluding Japan) was introduced by 118 active* brokers. *Active brokers means all brokers that produced more than 10k NICC

29 Rebuilding Distribution (since July 1 st 2013) Latin America + 5 TOB Rest of the World + 12 TOB North Asia + 19 TOB M.E & Africa S.E Asia + 10 TOB + 32 TOB

30 Better value for clients Proposition improvements over the last 12 months New Products New Contractual and Non Contractual Savings Plans New Portfolio Bond launched in February 2015 Average number of applications per month up 92% Average new premiums per month up 115% Completes initial refresh of all products New Funds Events 120 new funds added since March 2014 including a range of risk rated portfolios 9 new Shariah compliant funds Continue to add funds that add value to the proposition of 180 funds New Services QROPs Bureau now give technical support to Hansard and IFAs for QROPs / SIPPS business Agreements in place with 23 Trust Companies for QROPs / SIPPS business

31 More Visible profile in the market Marketing improvements over the last 12 months Brand Refreshed Brand Refreshed Corporate website More changes to come Refreshed Literature Promotion Events New Hansard OnLine Presentation International Adviser Advertisements and events Local marketing including IOM New Corporate and Product presentations

32 More Visible profile in the market New corporate web site

33 QROPS launch/on-going promotion Dedicated QROPS Microsite Targeted campaigns Trade publications, advertorials Industry conference, launch presentation (Dubai & KL)

34 Advertising to an international audience

35 Raising local profile

36 On-going PR activity Digital trade advertising Promotional Microsites Corporate LinkedIn page

37 Market leading OnLine systems System improvements over the last 12 months New Hansard OnLine Presentation New languages Refreshing Client and Broker Sites Hansard OnLine Lite Payment card processing Unit Fund Centre on client sites Fund switching for client sites Broker hierarchy New servers New New web site languages in development Online Change of Personal and Tax Details

38 Activity since launch of strategy Rebuilt Sales Team Rebuilding Distribution Activity since launch of strategy Refreshed All Products Increased Market Awareness Enhanced OnLine systems

39 Summary

40 Summary Product refresh and internal reorganisations complete Indications from the past and current quarter that new business levels have turned a corner Infrastructure highly leverageable needs additional scale to reap the benefits Several large closedbook litigation cases will be tied up for some time but gross claims levels generally seen as speculative Continued strong cash generation from generally a stable, regular premium portfolio Underlying IFRS profit of 12.0m (2014: 14.7m) excl. write back of CEC provision of 3.0m Increased final dividend of 5.25p per share, in line with guidance

41 Q&A

42 Appendix BUSINESS MODEL

43 Business Model INTERNATIONAL POLICYHOLDERS High net worth, mass affluent and expatriate segments Client Funds Hansard OnLine Hansard OnLine supports IFA / policyholder needs INTERNATIONAL NETWORK OF INTERMEDIARIES IFAs / Private Banks / Other Financial Institutions Investment within a Hansard life assurance wrapper Hansard reinsures the life insurance risk Client Funds Hansard OnLine Policy retention drives fees and commissions receivable 907m AuA at FY 2015 (FY 2014: 944m) UNDERLYING INVESTMENTS