Nib Holdings Ltd · ASX:NHF
Nib — Shareholder Meeting (October 2011)
26 slides from Nib's shareholder meeting presentation, Oct 26, 2011
Slide 1: 2011 Annual General Meeting Presentation
nib holdings limited t 13 14 63 Head Office f 02 4925 1999 22 Honeysuckle Drive Newcastle NSW 2300 e [email protected] abn 51 125 633 856 w nib.com.au For personal use only 26 October 2011 The Manager Company Announcements Australia Securities Exchange Limited Level 4, Bridge Street SYDNEY NSW 2000 Sub
Slide 2: Wednesday 26 October 2011
oS ey + oer a Qa Cae Qe BD ee rye os MG a «J : HC « Se ‘A es Wednesday 26 October 2011
Slide 3: Steve Crane, Chairman
For personal use only gus Steve Crane Chairman
Slide 4: nib's Board & Executive
INTRODUCTION For personal use only nib’s BOARD & EXECUTIVE HAROLD BENTLEY - Independent Non-Executive Director DR ANNETTE CARRUTHERS - Independent Non-Executive Director PHILIP GARDNER - Independent Non-Executive Director CHRISTINE MCLOUGHLIN - Independent Non-Executive Director MARK FITZG
Slide 5: Meeting Schedule
MEETING SCHEDULE For personal use only Chairman’s Address Managing Director’s and Chief Executive Officer’s Address Notice of Meeting Consideration of reports for the financial year ended 30 June 2011. Consideration of the Remuneration Report. Re-election of Independent Non-Executive Dir
Slide 6: Steve Crane, Chairman
For personal use only gus Steve Crane Chairman
Slide 7: Total Shareholder Return
TOTAL SHAREHOLDER RETURN 250.0 For personal use only Total shareholder return for nib S&P/ASX 200 Accumulation Index 200.0 101.5% 150.0 100.0 (19.1%) 50.0 0.0 Nov-07 May-08 Nov-08 May-09 Dec-09 Jun-10 Dec-10 Jun-11 Source: Iress, J.P. Morgan. Share price appreciation plus reinvestment of dividends
Slide 8: Net Profit After Tax
NET PROFIT AFTER TAX For personal use only $65.5 million, up 6.4% on the previous year. 7
Slide 9: Investment Returns
INVESTMENT RETURNS For personal use only Lower investment return primarily due to the transition of our investment portfolio to being more defensive, with less than 10% of the portfolio invested in shares. A t l return Actual t for f the th first fi t three th months th off FY12 was 1 1.26%. 26%
Slide 10: Dividends
DIVIDENDS For personal use only Ordinary Special nd (cents perr share) 14.0 12 0 12.0 5.0 10.0 8.0 6.0 6 0 Dividen 5.0 4.0 8.0 7.0 2.0 2.1 2.4 0.0 FY08 FY09* FY10 FY11 *Estimated ordinary to special dividend breakdown for FY09 Full year dividend consistent with nib’s dividend policy of paying full
Slide 11: Capital Return
CAPITAL RETURN For personal use only Following shareholder approval at the general meeting held on 5 July 2011 a capital return of approximately $75 million or just over 16 2011, cents per ordinary share held by shareholders on the record date, was distributed on 21 July 2011. This highlights th
Slide 12: Dividend Reinvestment Plan (DRP)
DIVIDEND REINVESTMENT PLAN (DRP) For personal use only Allows shareholders to reinvest the whole or part of their dividend into shares in a company. p y It is ggenerallyy used as a means of ppreserving g capital in a business and typically involves issuing new shares. Due to nib’s surplus capita
Slide 13: Capital Position at June 2011
CAPITAL POSITION AT 30 JUNE 2011 For personal use only As at 30 September 2011, after payment of the final dividend ($42m) and capital return ($75m), nib had surplus capital above its internal prudential target of $75.5m with no debt. nib ib remains i wellll placed l d tto play l a major j role
Slide 14: nib foundation
nib foundation For personal use only nib foundation remains one of the great legacies of demutualisation. Since 2008, the foundation has provided more than $6 million in funding support to 26 community and charitable organisations that seek k to t improve i the th health h lth and d wellbeing ll
Slide 15: Changes to the nib Board
CHANGES TO THE nib BOARD For personal use only MS CHRISTINE McLOUGHLIN Appointed to nib Board in March 2011 2011. MR KEITH LYNCH R ti d ffrom nib Retired ib B Board d iin S September t b 2011 after ft 30 years service i and d Chairman for 10 years. 14
Slide 16: Looking Ahead
LOOKING AHEAD For personal use only Our FY11 result continues nib’s track record of improvement across most key metrics. metrics The outlook for FY12 remains positive despite uncertainty in the broader economy economy. nib is well positioned to continue to deliver strong shareholder returns. 1
Slide 17: Mark Fitzgibbon, Managing Director
For personal use only gue Mark Fitzgibbon Managing Director 16
Slide 18: Group Highlights
GROUP HIGHLIGHTS For personal use only FY10 FY11 Change Net policyholder growth Health Insurance Business (HIB) 5.9% 6.0% 0.1% Consolidated Premium Revenue $901.4m $1,007.8m 11.8% Net underwriting profit1 $47.1m $61.5m 30.7% Net Investment income $44.5m $32.1m (27.7)% NPAT $61.5m $65.5m 6.
Slide 19: Policyholder Growth
POLICYHOLDER GROWTH HEALTH INSURANCE BUSINESS (HIB) ( ) For personal use only nib Industry 12% holder growth ((%) 11.1 10% nib ib CAGR (FY07 (FY07-FY11) FY11) = 7 7.0% 0% 8% 8.8 (Industry 3.4%) 6% 5.9 6.0 Net policyholder growth (HIB) for first Net policyh 5.2 4% 4.2 4.2 three months of FY12 of
Slide 20: Claims Expense
CLAIMS EXPENSE For personal use only In FY11, nib’s net claims incurred (including risk equalisation and international business operations) totalled $848.7m, an increase of 10.5% on FY10. Risk equalisation remains an ongoing concern – in FY11 nib nib’s s risk equalisation contribution was $132.7
Slide 21: Management Expenses
MANAGEMENT EXPENSES For personal use only FY11 Management Expense Ratio (MER) of 9.7% includes HIB and International Business operations - was within our forecast target of 9 9.5% 5% - 10%. 10% HIB MER of 9.2% (FY10: 9.6%) lowest since listing on ASX. HIB MER result was achieved notwithstandin
Slide 22: Track Record of Double Digit Underlying Earnings Growth
TRACK RECORD OF DOUBLE DIGIT UNDERLYING EARNINGS GROWTH For personal use only 70 60 $61.5m 50 $47.1m 40 $40.2m 30 $33.0m 20 $23.7m 10 0 FY07* FY08* FY09 FY10 FY11 * Result was normalised to remove the impact of costs associated with nib’s demutualisation and listing, and “notional” tax 21 21
Slide 23: Market Outlook & Issues
MARKET OUTLOOK & ISSUES For personal use only System growth (predicted at 3% in FY12) Means testing of 30% private health insurance rebate unlikely Claims utilisation and cost inflation, including Risk Equalisation National Health and Hospital “Reform” Industry consolidation/globalisation
Slide 24: Business Strategy
BUSINESS STRATEGY Ongoing organic growth with focus on <40 years of age but with additional For personal use only investment in: • Corporate market (in conjunction with International Workers Business) • Western Australia • Seniors segment International workers/students global cover Further ope
Slide 25: FY12 Business Outlook & Guidance
FY12 BUSINESS OUTLOOK & GUIDANCE For personal use only Net HIB policyholder growth of 5% - 6% Consolidated net pre pre-tax tax underwriting profit of $65m - $70m Investment return in line with • Regulatory capital (80/20 defensive/growth) - target for portfolio UBS bank bill index plus 1% • Su
Slide 26: For personal use only
oS ey + oer a Qa Cae Qe BD ee rye os MG a «J : HC « Se ‘A es Wednesday 26 October 2011