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FBD Holdings plc. 2008 Interim Results. 2008 Interim Results. Forward Looking Statements. - PowerPoint PPT Presentation
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FBD Holdings plc
2008 Interim Results
August 2008
2
Forward Looking Statements
This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forward-looking information involves risks and uncertainties that could affect expected results.
2008 Interim Results
3
Contents H1 2008 Highlights Page
• Underwriting 4
• Non-Underwriting 9
• Corporate 10
Summary Financial Statements
• Income Statement 11
• Balance Sheet 14
• Statement of Changes in Equity 16
• Cash Flow Statement 17
• Return on Equity 18
Outlook 19
4
H1 2008 Highlights - Underwriting
FBD now 3rd largest non-life insurer in Irish market
2008 Interim Results
5
Market Shares Gross Written Premium – 2007
11.9
0%
5.20
%
8%
10%10.4
0%
11.2
0%
11.3
0%
12.2
0%
19.9
0%
5.0%
10.4%
5.0%
12.8%
11.1%
8.7%
11.7%
8.2%
5.7%
10.3%
20.7%
12.0%
10.7%
11.6%
9.7%
7.8%
4.8%
12.4%
8.7%9.3%
21.1%
12.3%
8.8%
10.2%
10.7%
13.2%
14.1%
21.8%
9.0%
7.1%
14.9%
9.4%
8.7%
21.7%
13.3%
6.4%
Others(14)AIGEagle StarAXAR.S.A.AllianzFBDQuinnHibernian
200720062005200420032002
Total Market 2007 -€3,604m: 2006 - €3,822m: 2005 - €3,841m: 2004 - €3,933m : 2003 - €4,239m: 2002 - €3,955mFBD Premium 2007 - €408m: 2006 - €407m: 2005 - €389m: 2004 - €351m: 2003 - €369m: 2002 - €326m
6
H1 2008 Highlights - Underwriting FBD now 3rd largest non-life insurer in Irish market
Top Line Performance● Growth of recent years consolidated● Strong new business volumes● Retention impacted by unrealistic pricing of certain competitors● Underwriting discipline maintained● Excellent outcome in a competitive market
Support Centre● Aim – cost efficient and customer centric delivery and service of
personal lines● 165 FTE staff● 21,000 calls per week● 27 branch offices “migrated”
2008 Interim Results
7
H1 2008 Highlights - Underwriting Business developments
“No Nonsense” car insurance launched via Ryanair website Aimed at price-conscious/no frills customer Take up in line with expectations Builds platform for other distribution activities
E-Commerce car insurance proposition brought to launch stage
Pilot of commercial business via intermediaries
Branch network aligned to exploit commercial opportunities- Athlone- Newbridge
“Enhancing our business platform and creating capacity toextend our reach by meeting customer needs, cost effectively”
2008 Interim Results
8
H1 2008 Highlights - Underwriting Investments
Continued de-risking of balance sheet
2008 Interim Results
9
H1 2008 Highlights – Non Underwriting La Cala
Market environment for property sales challenging Focus on costs
Sunset Excellent performance Record revenue and visitor numbers
Tower Revenue ahead of 2007 Oversupply in certain market segments
Financial Services Contribution from FBD Brokers maintained Reduced customer appetite for retail investment products due to volatile
markets
Capital Fund Converted to cash
2008 Interim Results
10
H1 2008 Highlights – Corporate Capital Management
10% increase in interim dividend
Remain committed to efficient capital management and maximising shareholder returns
March 08 – Stated intention of returning €94.2m to shareholders Board reconsidered decision in light of market conditions Decision made to distribute €1.50 per share (€49.8m) in Oct 08 Retain flexibility to repatriate further capital to shareholders subject
to market conditions
2008 Interim Results
11
Income StatementH1 2008 H1 2007
€000s €000s
Gross written premiums 198,335 205,445
Net earned premiums 173,853 175,596
Net claims incurred (130,586) (122,777)
Net operating expenses (30,451) (26,661)
Underwriting Result 12,816 26,158
Loss Ratio 75.1% 69.9%
Net Expense Ratio 17.5% 15.2%
Combined Ratio 92.6% 85.1%
2008 Interim Results
12
Operating profit by activity:
Insurance underwriting 35,897 53,681
Non-underwriting
- Property/leisure 3,203 7,397
- Financial services/other 2,510 4,267
- Capital fund (869) 4,844 (227) 11,437
40,741 65,118
Income Statement (contd)
2008 Interim Results
H1 2008
€000s
H1 2007
€000s
Underwriting Result 12,816 26,158
Longer term investment return 23,081 27,523
Non underwriting operating income 4,844 11,437
Operating profit 40,741 65,118
13
H1 2008 H1 2007
€000s €000s
Operating profit 40,741 65,118
Short term fluctuation in investment return (44,175) (12,458)
Finance costs (1,780) (2,912)
(Loss) profit before tax (5,214) 49,748
Income tax expense (1,334) (5,048)
(Loss) profit for the year (6,548) 44,700
Income Statement (contd)
2008 Interim Results
14
Balance Sheet - Assets30/06/08 31/12/07
Property & Equipment €000s €000s
Hotels/golf 192,628 192,352
Property – own use 33,446 32,806
Fixtures & Fittings 17,071 243,145 18,186 243,344
Investments
Property 69,150 83,019
Financial 786,556 823,151
Reinsurers’ share of technical provisions 54,348 50,483
Other receivables/DAC’s 107,164 85,705
Other Assets
Development land 30,781 30,781
Work-in-Progress 32,144 34,964
Cash 35,562 98,487 35,618 101,363
Total Assets 1,358,850 1,387,065
2008 Interim Results
15
Balance Sheet - Liabilities
Equity
30/06/08
€000s
31/12/07
€000s
Share Capital 21,277 21,277
Reserves 338,057 362,312
Shareholders’ funds – equity interests
359,334 383,589
Preference Shareholders 2,923 2,923
Minority Interests 5,620 5,689
Total equity 367,877 392,201
Liabilities
Technical provisions
- Unearned premiums 198,071
199,074
- Claims 618,136
816,207 612,852 811,926
Deferred tax 22,124 27,738
Creditors
- Loans 60,729 60,406
- Other 91,913 152,642 94,794 155,200
Total Liabilities 1,358,850 1,387,065
2008 Interim Results
16
Statement of Changes in Equity
30/06/08
€000s
30/06/07 €000s
Balance at 1st January 392,201 506,918
(Loss) profit for the period (6,548) 44,700
Return of capital - (175,645)
Buyback of own shares - (31,134)
Dividends paid (17,277) (15,798)
Other (499) 1,173
Balance at 30th June 367,877 330,214
2008 Interim Results
17
Cash Flow StatementH1 2008
€000sH1 2007
€000s
Net Cash from operating activities 11,766 101,271
From investing activities 5,590 125,664
Used in financing activities (16,934) (229,215)
Net increase (decrease) in cash and cash equivalents 422 (2,280)
Cash and cash equivalents at the beginning of the period 35,618 37,423
Effect of foreign exchange rate changes (478) (121)
Cash and cash equivalents at the end of the period 35,562 35,022
2008 Interim Results
18
Return on Equity
2003 2004 2005 2006 2007 H1 2008 H1 2007
Underwriting 50.75% 43.78% 53.08% 58.44% 49.46% (3.54%) 16.38%
Non underwriting 13.68% 8.63% 11.63% 39.75% 2.89% 1.71% 3.42%
Total 35.09% 31.61% 36.53% 50.61% 31.73% (1.84%) 10.86%
2008 Interim Results
19
Outlook : Underwriting
Market premiums in certain lines unrealistic
Steady increase in claims costs
Severe weather in July / August 2008 Impact FBD Impact Industry
Increasing evidence of stabilising rates
2008 Interim Results
20
Outlook : Underwriting (contd)
Combined ratios reported in market signal hardening market in near future
FBD well positioned to benefit from hardening market
Initiatives in progress Internet car insurance offering launch in early September – home
insurance before year end Metro markets Enhancing Support Centre delivery
2008 Interim Results
21
Outlook : Non Underwriting
● Leisure/Leisure Property Development● Market conditions will continue to be challenging● Marketing/sales initiatives countering market conditions● Management focused on operational efficiencies
● La Cala Land Sale● Delivery of planning achievable
● Financial Services● Focus on deposit and protection products● Consolidate customer relationships
2008 Interim Results
22
Outlook : Corporate
● Capital● Maximising returns via efficient capital management
● Progressive dividend policy to continue
● Repatriation since March 2005 now total €546m. (excl. ordinary dividends)
2008 Interim Results
FBD Holdings plc
2008 Interim ResultsQUESTIONS?
A.August 2008