National Financial Partners Corp
National Financial Partners — Q2 2012 Earnings Presentation
19 slides from National Financial Partners's earnings presentation, Jul 31, 2012
Slide 1: Second Quarter 2012 Earnings Call Presentation
SECOND QUARTER 2012 EARNINGS CALL PRESENTATION July 31, 2012 Exhibit 99.1
Slide 2: Related to Forward-Looking Statements
Related to Forward-Looking Statements Certain items in this presentation and in today’s discussion, including matters relating to revenue, net income, Adjusted EBITDA, cash earnings, cash earnings per diluted share and percentages or calculations using these measures, acquisitions, capital structure
Slide 3: Related to Non-GAAP Financial Information
Related to Non-GAAP Financial Information The Company analyzes its performance using historical and forward-looking non-GAAP financial measures called cash earnings, cash earnings per diluted share, Adjusted EBITDA, and percentages or calculations using these measures. The Company believes these non
Slide 4: Reconciliation: Net Income to Cash Earnings
Reconciliation: Net Income to Cash Earnings (1) Cash earnings is a non-GAAP financial measure, which the Company defines as net income excluding amortization of intangibles; depreciation; the after-tax impact of the impairment of goodwill and intangible assets; the after-tax impact of non-cash inter
Slide 5: Reconciliation: Net Income to Adjusted EBITDA
Corporate Individual Advisor Client Group Client Group Services Group Consolidated Reconciliation: Net Income to Adjusted EBITDA (1) Adjusted EBITDA is a non-GAAP financial measure, which the Company defines as net income excluding income tax expense; interest income; interest expense; gain on early
Slide 6: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 7: 2Q12 Highlights
2Q12 Highlights Revenue $255.4 million Revenue growth +6.7% Organic revenue growth +4.1% – Corporate Client Group +7.2% – Individual Client Group +1.5% – Advisor Services Group (1.9)% Growth from Corporate Client Group Organic revenue Acquisitions Adjusted EBITDA grew 9.6% Adjusted EBITDA margin exp
Slide 8: Recurring Revenue
Quarter-over-Quarter Recurring Revenue Year-over-Year Recurring Revenue Recurring Revenue Recurring revenue includes revenue from corporate and executive benefits, property & casualty, wealth management and asset-based fees and trails. Previously reported as 57.0% for FY10; updated due to re-categor
Slide 9: Mid-Year Capital Allocation Update
Mid-Year Capital Allocation Update Stock buyback 2Q12: Started in May 2012, repurchased 463,210 shares at average price of $13.13 for $6.1 million; $43.9 million remaining on authorization as of June 30, 2012 YTD through June 30, 2012: repurchased approximately $14 million (includes shares repurchas
Slide 10: NFP Industry Recognition
NFP Industry Recognition # 8 100 Largest Brokers of U.S. Business Business Insurance # 9 Top Global Insurance Brokers Best’s Review The NFP logo is a trademark of National Financial Partners Corp. All other trademarks or service marks used herein are the property of their respective owners.
Slide 11: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 12: 2Q12 Revenue by Business Segment
2Q12 Revenue $255.4 million $112.6 44.1% $80.9 31.6% 1 Business Segments Advisor Services Group Individual Client Group Corporate Client Group ($ in millions) 2Q12 organic revenue growth +4.1% Corporate Client Group +7.2% Individual Client Group +1.5% Advisor Services Group (1.9)% The sum of the com
Slide 13: Corporate Client Group
Corporate Client Group 27.3% 52.1% 82.0% 9.0% 44.1% Business Segment 2Q12 Overview & Components of Revenue Steady and recurring business Diversification of products and services Health & Welfare Retirement Ancillary & Voluntary Benefits NFP Executive Benefits NFP P&C Strategic acquisitions Managemen
Slide 14: Individual Client Group
27.3% 52.1% Individual Client Group 29.9% 50.5% 31.6% Business Segment 2Q12 Overview & Components of Revenue % of ICG Revenue 19.6% Life insurance Challenges and uncertainty remain in the market Wealth management Solid performance continues Marketing Organization & Wholesale Life Brokerage Retail Li
Slide 15: Advisor Services Group
27.3% 52.1% 63.1% Advisor Services Group Business Segment 2Q12 Overview & Components of Revenue % of ASG Revenue 36.9% 24.3% Business drivers New assets Advisor recruitment Asset-based fees AUM $10.2 billion, up 1.7% YOY Fusion acquisition in July 2012 Expect 2013 Adjusted EBITDA margin to expand 75
Slide 16: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 17: 2Q12 Consolidated Financial Highlights
Adjusted EBITDA Margin 2Q11 2Q12 $94. 3 $112. 6 $81. 9 $80.9 $16.7 $22.1 $10. 3 $7.9 YOY revenue growth of 6.7%, Adjusted EBITDA growth of 9.6% and margin expansion primarily driven by CCG Revenue Adjusted EBITDA & Margin 2Q12 Consolidated Financial Highlights $239.4 $255. 4 ($ in millions) Corporat
Slide 18: Total Compensation Ratio by Segment
Corporate Client Group Individual Client Group (Compensation Expense, Employees )+(Fees to Principals) Revenue Total Compensation Ratio = Total Compensation Ratio by Segment 49.7% 47.8% 48.6% 52.5% 50.2% 50.0% 49.2% 49.0% 51.2% 51.9% 46.0% 48.0% 50.0% 52.0% 54.0% Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12
Slide 19: Quarterly Operating Cash Flow
Quarterly Operating Cash Flow Increases in operating cash flow from both organic growth and acquisitions offset by: • 1Q12: Management Contract Buyout of $3.4 million; payment of $7.3 million for Principal Incentive Plan (plan period 10/10-12/11) • 2Q12: payments of $13.0 million for legal settlemen
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