Hansard Global Plc · LSE:HSD
Hansard Global — H1 2012 Earnings Presentation
32 slides from Hansard Global's earnings presentation, Feb 23, 2012
Slide 1: Results for the half-year ended 31 December 2011
HANSARD GLOBAL plc Results for the half-year ended 31 December 2011 23 February 2012
Slide 2: Disclaimer
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
Slide 3: Agenda
Agenda • Overview 3 • New business 7 • Financial performance 14 • Summary 22 • Appendix 24 2 2
Slide 4: Overview
OVERVIEW GORDON MARR MANAGING DIRECTOR 3 3
Slide 5: Half-year ended 31 December 2011 - Results highlights
New Financial Overview Summary Business Performance Half-year ended 31 December 2011 - Results highlights • Growth of 41% y-o-y in new regular premium business volumes (PVNBP) • Reflects investment in growth markets (Far East, Latin America) • EEV operating profit growth of 5% reflects; • Increased
Slide 6: Achievements
New Financial Overview Summary Business Performance Achievements Customer retention in difficult Develop markets profitable Reduce operational relationships with intermediaries in risk growth markets Grow regular premium new business Invest in Hansard OnLine Generate and the Group’s Cash systems Pay
Slide 7: Managing our business
New Financial Overview Summary Business Performance Managing our business DESIGN SYSTEMS PROPOSITION • Products are profitable in • Hansard portal for the • Designed to make it easier, all circumstances policyholder/intermediary cheaper and more convenient to use Hansard • Insurance wrapper • Brande
Slide 8: New Business
NEW BUSINESS JOE KANAREK CHIEF DISTRIBUTION OFFICER 7 7
Slide 9: Directing distribution support to growth markets
New Financial Overview Summary Business Performance Focus on Growing Markets • Far East and Latin America are main drivers for growth • Continued investment in distribution infrastructure to capture regular premium flows • Continued local support to intermediaries to establish profitable relationshi
Slide 10: Global Distribution
New Financial Overview Summary Business Performance Global Distribution New business profit by region PVNBP split by region 100 % 100% 12 % 90 % 11% 90% 80 % 80% 28 % 26% 70 % 70% 60 % 60% 50 % 50% 40% 40 % 40% 44% 30 % 30% 20 % 20% 10% 23% 10 % 16% 0% 0% 2007 2008 2009 2010 2011 HY 2012 Jun-07 Jun-
Slide 11: Focus on International Regular Premium business
New Financial Overview Summary Business Performance Focus on International Regular Premium business PVNBP premium split 100% • Successful 90% 25% implementation of 80% Single strategy: increased 70% RP sales in growth 60% markets 50% • Regular premiums 40% 75% Regular typically HIL 30% 20% • Single
Slide 12: New Business – market metrics
New Financial Overview Summary Business Performance New Business – market metrics PVNBP - RP 80 for 6 months ended 31 December 67.6 70 60 Issued Compensation Credit for 6 months £m 50 ended 31 December 40 30 10 20 9 8.6 10 8 0 2006 2007 2008 2009 2010 2011 7 £m 6 PVNBP - SP 5 100 for six months ende
Slide 13: New Business summary
New Financial Overview Summary Business Performance New Business summary 2011 2010 New Business Sales £m £m % Regular premium 67.6 47.9 +41.1% PVNBP for the six months ended 31 December Single premium 22.1 66.6 (66.8%) PVNBP - RP PVNBP - SP Total New Business (PVNBP) 89.7 114.5 (21.7%) 140 120 £m 10
Slide 14: Investing For The Future
New Financial Overview Summary Business Performance Investing For The Future SALES TOOLS CLIENT TOOLS BACK OFFICE Done Done Done • Refreshed look & feel • Allow data to be • Replaced unit pricing • Client monitoring changed online systems • Upgrade client site Developing Continually develop security
Slide 15: Financial Performance
FINANCIAL PERFORMANCE VINCE WATKINS CHIEF FINANCIAL OFFICER 14 14
Slide 16: Summary Results
New Financial Overview Summary Business Performance Summary Results 2011 2010 Resilient performance in volatile Regular premium new business sales £67.6m £47.9m Single premium new business sales £22.1m £66.6m markets New business margin 10.4% 7.4% EEV operating profit £10.2m £9.7m IFRS profit after
Slide 17: Sources of Income
New Financial Overview Summary Business Performance Sources of Income Analysis of fee income – H1 2012 • Contract Fee Income Establishment fees (setting up wrapper) Service fees (maintaining it) 8% Policyholder-directed activity (e.g. Dealing, withdrawals) 20% • Fund management fees Annual m
Slide 18: EEV Profit
New Financial Overview Summary Business Performance EEV Profit 2011 2010 New business £m £m profits fund New business profit 9.3 8.5 Expected return 2.7 2.3 investments in Experience variances (2.4) (1.3) growth and Operating assumption changes (0.2) (2.7) systems Expected return on net worth 0.8 0.
Slide 19: EEV Balance Sheet
New Financial Overview Summary Business Performance EEV Balance Sheet EEV resilient after funding EEV balance sheet as at 31 December new business and dividends 300 250 £m 52.8 200 Progressive dividend record Net 150 Worth 100 190.6 VIF 16 50 14 12 0 2006 2007 2008 2009 2010 2011 10 8.00 pence per 8
Slide 20: IFRS Profit & Loss Account
New Financial Overview Summary Business Performance IFRS Profit & Loss Account IFRS results 2011 2010 impacted by £m £m Fees and commissions 25.2 25.1 increased Investment income 1.2 1.3 investment 26.4 26.4 expenditure Origination costs (9.8) (9.0) Administrative, development and other expenses (10
Slide 21: Balance Sheet
New Financial Overview Summary Business Performance Balance Sheet 2011 2010 £m £m Continued Deferred Origination Costs 117.1 108.9 Other Assets 9.1 11.6 investment in Shareholder Cash and Bank Deposits 67.4 77.1 profitable Total Assets 193.6 197.6 contracts Deferred Income Reserve 127.1 124.9 Deferr
Slide 22: Cash Flow Statement
New Financial Overview Summary Business Performance Cash Flow Statement Cash flows support 2011 2010 investment in £m £m new business Fees net of operational expenses 16.3 17.4 Other income and timing differences 1.4 (0.4) Cash inflow 17.7 17.0 Investment in new business (12.3) (10.8) Shareholder ca
Slide 23: Summary
SUMMARY GORDON MARR MANAGING DIRECTOR 22 22
Slide 24: Summary for half-year ended 31 December 2011
New Financial Overview Summary Business Performance Summary for half-year ended 31 December 2011 • Decisions taken to focus on growth markets bearing fruit • Industry-leading margins at 10.4% up from 7.4% • Increased regular premium flows from Far East and Latin America • RP flows up by 41.1% • cond
Slide 25: Appendix
Appendix 24 24
Slide 26: Business Model
Business Model INTERNATIONAL POLICYHOLDERS High net worth, mass affluent and expatriate segments Client Hansard Hansard OnLine supports IFA / policyholder needs Funds OnLine INTERNATIONAL NETWORK OF INTERMEDIARIES IFAs / Private Banks / Other Financial Institutions Policy retention drives fees • Inv
Slide 27: Risk Management
Risk Management What have we done? • OnLine new business • Piloting OnLine Dealing, Switching • Implemented unit pricing system • Outsourced unit fund administration • Increased risk and compliance resources What is out there? • Home State regulations impacts on Cross-border business • “Deep pocket”
Slide 28: Product Families
Product Families 3 core types used to construct a suite of SP and RP investment opportunities RETIREMENT CAPITAL PERSONAL PROGRAMME BUILDER PORTFOLIO Premiums at a specified Premium > £10,000 (or Premium > £40,000 (or level for a fixed term equivalent) within 3 years equivalent) Regular premium Sing
Slide 29: Compensation Credit (“CC”)
Compensation Credit (“CC”) Prime • Visible measure of New Business profit indicator of • Preserves margins new business • Allows allocation of capital value • Aligned to interests of IFA • Internal accounting measure 28 28
Slide 30: Illustrative Shareholder Cashflows
Illustrative Shareholder Cashflows RETIREMENT PROGRAMME 12,000 8,000 4,000 GBP 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -4,000 -8,000 Policy Year • Annual premium e.g. £10,000 for 25 years CAPITAL BUILDER PERSONAL PORTFOLIO 2,000 20,000 1,500 10,000 1,000 Period when actua
Slide 31: Profitable Distribution
Profitable Distribution Issued Compensation Credit for 6 months New business margins ended 31 December for six months ended 31 December (% PVNBP) 10 11.0% 10.5% 10.4% 9 £8.6m 8 10.0% 7 9.5% % £m 6 9.0% 5 8.5% 4 8.0% 3 7.5% 2 7.0% 1 6.5% 0 6.0% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2
Slide 32: Movement in AuA
Movement in AuA 1400 1200 1000 800 £'000 600 400 200 0 Assets under Administration movement reflects current market sentiment 31 31