Hansard Global Plc · LSE:HSD
Hansard Global — FY2011 Earnings Presentation
33 slides from Hansard Global's earnings presentation, Sep 22, 2011
Slide 1: Results for the year ended 30 June 2011
HANSARD GLOBAL plc Results for the year ended 30 June 2011 22 September 2011
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 8 • Financial performance 14 • Summary 22 • Appendix 24 2 2
Slide 4: Overview
OVERVIEW GORDON MARR MANAGING DIRECTOR 3 3
Slide 5: Year ended June 2011 - Results highlights
New Financial Overview Summary Business Performance Year ended June 2011 - Results highlights • Growth of 33% y-o-y in new business volumes (PVNBP) • Reflects investment in growth markets (Latin America, Far East) • Regular premiums + 62% • EEV growth of 4% reflects; • Improvement in margins to 8.3%
Slide 6: Achievements
New Financial Overview Summary Business Performance Achievements Grow regular Develop premium new Reduce profitable business relationships with operational intermediaries in risk growth markets Invest in Hansard OnLine Generate and the Group’s Pay Cash systems increased dividend 5 5
Slide 7: Risk Management
New Financial Overview Summary Business Performance Risk Management What have we done? • OnLine new business • Developing OnLine Dealing, Switching • Implemented unit pricing system • Outsourced unit fund administration • Increased risk and compliance resources What is out there? • Home State regula
Slide 8: 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 9: New Business
NEW BUSINESS JOE KANAREK CHIEF DISTRIBUTION OFFICER 8 8
Slide 10: Directing distribution support to growth markets
New Financial Overview Summary Business Performance Focus on Growing Markets • Latin America and Far East are main drivers for growth • Continued investment in distribution infrastructure to capture regular premium flows • Continued AE support to establish profitable relationships Directing distribu
Slide 11: Focus on International Regular Premium
New Financial Overview Summary Business Performance Focus on International Regular Premium Single vs. Regular Premium 100% • Successful 90% implementation of 80% strategy: increased 49% Single 70% 63% 58% 62% 59% 67% RP sales in growth 60% markets 50% 40% • Regular premiums 30% 51% Regular 20% 42% 4
Slide 12: New Business
New Financial Overview Summary Business Performance New Business 2011 2010 PVNBP for the year New Business Sales £m £m % PVNBP - RP PVNBP - SP Regular premium 112.0 69.0 +62.3% 300 250 Single premium 109.1 97.3 +12.1% £m 200 170.0 186.0 151.9 Total New Business 221.1 166.3 +33.0% 109.1 150 (PVNBP) 1
Slide 13: Investing In Infrastructure
New Financial Overview Summary Business Performance Investing In Infrastructure 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 secur
Slide 14: OnLine New Business – how we develop
New Financial Overview Summary Business Performance OnLine New Business – how we develop What • First pilot in November 2009 • Began with regular premium products • Selected intermediaries, trained individually for maximum acceptance • Fast release and update process drawing in users • Still need to
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 % New Increase business performance New business sales - PVNBP £221.1m £166.3m +33.0% drives results New business margin 8.3% 6.9% +20.3% EEV operating profit £14.9m £15.5m (3.9%) EEV profit after tax £28.5m £28.0m +1.8% E
Slide 17: Sources of Income
New Financial Overview Summary Business Performance Sources of Income • Contract Fee Income Group income split by type Establishment fees 100% 9% 9% 10% 7% 8% 9% (setting up wrapper) 90% 16% 18% Service fees (maintaining it) 80% 19% 19% 20% 21% 70% Policyholder-directed activity (e.g. Dealing,
Slide 18: EEV Profit
New Financial Overview Summary Business Performance EEV Profit 2011 2010 New business £m £m profits fund New business profit 18.5 11.5 Expected return 4.9 5.9 investments in Experience variances (3.0) (4.1) growth and Operating assumption changes (11.3) (2.1) systems Expected return on net worth 1.7
Slide 19: EEV Balance Sheet
New Financial Overview Summary Business Performance EEV Balance Sheet Continued EEV growth after funding new EEV balance sheet as at 30 June 300 business and 257 250 dividends 56.9 68.0 59.8 £m 200 68.2 56.5 Progressive dividend record 43.3 150 16 13.75 14 100 186.2 197.2 168.4 179.0 161.5 12 pence
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 50.8 49.6 increased Investment income 3.8 1.3 investment 54.6 50.9 expenditure Origination costs (18.2) (17.2) Administrative, development and other expenses (
Slide 21: Balance Sheet
New Financial Overview Summary Business Performance Balance Sheet 2011 2010 £m £m Deferred Origination Costs 113.1 105.6 Continued Other Assets 12.1 10.7 investment in Shareholder Cash and Bank Deposits 73.1 81.8 Total Assets 198.3 198.1 profitable contracts Deferred Income Reserve 125.3 125.9 Other
Slide 22: Cash Flow Statement
New Financial Overview Summary Business Performance Cash Flow Statement Cash flows support 2011 2010 investment in £m £m profitable Fees net of operational expenses 35.2 34.1 Other income and timing differences 1.1 8.8 contracts and Cash inflow 36.3 42.9 dividends Investment in new business (25.7) (
Slide 23: Summary
SUMMARY GORDON MARR MANAGING DIRECTOR 22 22
Slide 24: Summary for year ended June 2011
New Financial Overview Summary Business Performance Summary for year ended 30 June 2011 • Decisions taken to focus on growth markets bearing fruit • Industry-leading margins at 8.3% • Increased RP flows from Latin America and Far East • RP flows up by 62.3% (to record level) • conditions remain chal
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: 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 28: 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 29: Multiple Revenue Sources
Multiple Revenue Sources Group Fees and Commissions by year (£m) 60 50 4.5 4.9 4.2 3.4 4.2 40 9.3 8.5 10.0 10.6 7.4 6.0 6.7 7.0 7.0 7.0 30 5.8 4.6 6.6 4.7 4.7 20 22.7 24.1 22.0 23.7 24.1 10 0 2007 2008 2009 2010 2011 Establishment Fees Policyholder Activity Charges Service Charges (Inflation Linked)
Slide 30: Compensation Credit
Compensation Credit (“CC”) Prime • Visible measure of New Business profit indicator of • Preserves margins new business • Allows allocation of capital activity • Aligned to interests of IFA • Internal accounting measure 29 29
Slide 31: Global Distribution
Global Distribution New business profit by region PVNBP split by region 100 % 4% 2% 3% 100% 8% 11% 13% 17% 15% 90 % 13 % 19 % 90% 18% 20% 25 % 80 % 80% 13% 32% 11% 16% 31% 23% 70 % 31 % 70% 23% 60 % 36 % 60% 27% 26 % 23% 19% 19% 50 % 22% 50% 32% 27% 40 % 40% 30 % 30% 52 % 47% 47% 48% 43 % 45 % 20% 4
Slide 32: Profitable Distribution
Profitable Distribution New Business Margins Issued CC for financial year for financial year 20 9.0% 8.3% 18.1 8.3% 17.7 8.0% 7.8% 18 17.0 16.5 8.0% 16 6.9% 7.0% 14 6.1% % PVNBP 11.6 11.9 6.0% 12 £m 5.0% 10 4.0% 8 6 3.0% 4 2.0% 2 1.0% 0 0.0% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 201
Slide 33: Movement in AuA
Movement in AuA 1,400 186 90 19 1,230 1,200 1,135 201 1,000 800 £m 600 400 200 0 30 June 2010 Deposits to Withdrawals Foreign Market 30 June 2011 Investment and Exchange Movements Contracts deductions Continuing net cash flows underpin growth in Assets under Administration 32 32