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2014 Interim Results

2014 Interim Results. Highlights Organic revenue growth of 6 % Underlying PBT up by 15% Strong performances from Asia, Latin America and International Employee Benefits Good progress in Towers Watson Re integration

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2014 Interim Results

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  1. 2014 Interim Results Highlights • Organic revenue growth of 6% • Underlying PBT up by 15% • Strong performances from Asia, Latin America and International Employee Benefits • Good progress in Towers Watson Re integration • Continuing investment in the business through acquisitions in Hong Kong, Brazil and the UK and a start up operation in Argentina • Business Transformation Programme on track • Increased interim dividend

  2. 2014 Interim Financial Highlights Growth 6 months to June (£m) 2014 2013 Actual CRE3 Organic4 Total revenue1559.6 487.2 15%22%6% Underlying trading profit2110.5 92.8 19%31% Underlying profit margin219.7% 19.0% Underlying PBT2107.4 93.1 15% Reported PBT 98.4 85.1 16% Underlying EPS (diluted)233.6p 29.7p 13% Reported EPS (diluted) 30.3p 26.9p 13% Dividend per share 10.6p10.1p5% • Total revenue comprises fees, commissions and investment income • Underlying results exclude exceptional items • CRE = constant rates of exchange • Organic growth is based on total revenue excluding the effect of currency, acquisitions, disposals and investment income

  3. Total Revenue and Trading Profit Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic Risk & Insurance 429.615%24%5%94.9104.6 82.7 22%23% 22% Employee Benefits 130.013%18%12%26.027.5 21.1 20%20% 18% Central Costs - - - -(10.4)(10.4) (11.0) -- - 559.615%22%6%110.5121.7 92.8 19.7%20.4% 19.0%

  4. Organic revenue growth of 4% Lower trading profit due to tougher trading conditions Notable new business wins and strong new business pipeline Intensifying insurance rating and FX headwinds 2014 full year overall financial performance anticipated to be broadly similar to 2013 Risk & Insurance JLT Specialty Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic JLT Specialty 112.3 2%4% 4%16.417.517.815%15% 16% Highlights

  5. Risk & Insurance JLT Towers Re Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic JLT Towers Re 110.0125%137% 6%33.235.6 14.7 30%31% 30% Highlights • Good first trading period for combined business • Integration progressing well; encouraged by support of cedants and strength of sales pipeline • Significant growth opportunity, that we are continuing to invest in • Expecting that full year trading margin will be broadly flat to the previous year due to: • Ongoing investment • Sharp decline in reinsurance rating environment • Strengthening of sterling

  6. Risk & Insurance JLT Australia & New Zealand Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic JLT Australia & NZ 64.5(10%)7%7%22.626.9 25.4 35%35% 35% Highlights • Organic revenue growth of 7%, in part benefiting from phasing of business into 1H • Fall in revenue and trading profit due to adverse FX movements • A strong performance given fierce broker competition and fall in insurance rates • Public Sector business continues to perform well • Benefiting from aligning business along specialty lines to drive growth

  7. Risk & Insurance Lloyd & Partners Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic Lloyd & Partners 43.3(3%) - (1%)10.511.0 10.5 24%25% 23% Highlights • Revenues decreased by 3%; flat at constant rates of exchange • Continuing to invest in building leading specialty capabilities • Surplus of capital in domestic markets currently impacting competitiveness of London, European and Bermuda markets

  8. Risk & Insurance JLT Asia Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic JLT Asia 38.09%20%14%7.07.7 6.4 18%18% 18% Highlights • Strong organic revenue growth of 14% • Trading profit increased 9%, or 19% at constant rates of exchange • Specialty led strategy attracting clients and enabling us to continue to win market share • Acquisition of Lambert Brothers adds to Marine and Corporate capabilities in Hong Kong

  9. Risk & Insurance JLT Latin America Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic JLT Latin America 26.2 2%19%17%6.87.97.326%26% 28% Highlights • Strong organic revenue growth of 17% • 6% reduction in trading profit due to adverse FX movements • Trading margin reduced as expected due to continuing investments • Launched new start-up operation in Argentina

  10. Employee Benefits UK & Ireland Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic UK & Ireland 85.45%5% 1%12.312.3 12.9 14%14% 16% Highlights • Organic revenue growth of 1% in difficult market conditions • Continuing to win new clients and secure further business from existing clients • Building strong position in bulk-purchase annuity market including acquisition of Ensign Pension Administration • Year-on-year financial progress anticipated in 2014

  11. Employee Benefits International Total Revenue Trading Profit Trading Margin 2014 CRE 2013 2014 CRE 2013 6 months to June (£m) 2014 Growth CRE Organic Asia 30.635%49%42%11.112.2 7.5 36%36% 33% Latin America 9.3 39%63%30%2.63.0 1.2 28%27% 17% Australia & NZ 3.1(7%)12%12%0.30.3 (0.3) 10%10%(9%) Other 1.665%98% 11%(0.3)(0.3) (0.2) (19%)(19%)(17%) Highlights • Strong performance by JLT EB in Asia, with growing demand for healthcare in the region • Asia high-net-worth life insurance broker maintains positive track record • Latin America benefiting from increasing corporate spend on healthcare • Acquisition of SCK during the period in Brazil

  12. Associates 6 months to June (£m) 2014 2013 Growth Total contribution to JLT after tax 7.2 7.5 (4%) Principal Associate Holdings Highlights • Reduced contribution reflecting poor macro economic conditions across most of Europe • Weighting of contribution towards the first half of the year expected to continue in 2014 Siaci Saint Honoré France 26% GrECo Austria 20% MAG-JLT Italy 25% March-JLT Spain 25% JLT Sterling Mexico 36% % = JLT equity interest

  13. Underlying Operating Cost Ratio 6 months to June (£m)2014 2013 Variance Total revenue 560100% 487 100% 73 Operating costs: Staff costs 32057.2% 281 57.7% 39 Premises 285.0% 25 5.1% 3 Depreciation & amortisation 142.5% 12 2.4% 2 Travel & entertainment 234.0% 18 3.7% 5 Other operating costs 6411.6% 58 12.1% 6 44980.3% 394 81.0% 55

  14. USD Revenue Protection Full Year Projections Forward rates Actual 2013 2014 2015 2016 USD hedging rates achieved 1.56 1.53 1.54 as at 28th July 2014 Current USD hedged positions 77% 48% 25% Forward USD rates as at 28th July 2014 1.70 1.69 1.67 Blended USD rates post hedging 1.55 1.591.611.64 Value of 2014 revenue ($350m) £226m £220m £217m £213m Approx YOY revenue impact(£6m) (£3m) (£4m)

  15. 2014 impact of exchange rate movements • March guidance indicated that we were facing a potential £12.7 million reduction in profits due to the transactional and translational impact of adverse exchange rate movements • The impact at the half year was £11.2 million when compared to the same period in 2013 • We expect further negative year-on-year impact if rates stay at current levels • Second half impact however likely to be less than first half as sterling strengthened significantly in the second half of 2013

  16. Breakdown of exceptional items 6 months to June (£m)2014 2013 Exceptional costs: Acquisition and integration costs 6.2 3.9 Business Transformation Programme costs 2.8 3.8 St Botolph costs - 0.3 9.0 8.0 Taxation impact of exceptional items: Tax on exceptional items 1.6 1.8

  17. Balance Sheet As at 30th June (£m) 2014 2013 Change 31 Dec 2013 Goodwill and intangibles 523341 182 499 Fixed assets 6044 16 60 Associates and investments 108109 (1) 107 Net working capital and other 233177 56 137 Hedging contracts after deferred tax(5)(11) 6 (7) Net pension deficit after deferred tax (120) (100) (20) (106) Other deferred net tax assets 511 (6) 15 Net debt (436) (228) (208) (345) Net assets368343 25 360

  18. Cash Flow (Operational Basis) 6 months to June (£m) 2014 2013 EBITDA 138 116 Deduct: Net interest (7) (3) Tax paid (18) (20) Net working capital increase (101) (62) Annual capex(31) (33) Net shares acquired (15) (18) Pension deficit funding (1) (7) Acquisitions/disposals (12) (11) Dividends paid (41) (39) Foreign exchange (1) 1 Associates & other (2) (9) Net cash outflow (91) (85)

  19. Group funding • Successful issue of additional long-term loan notes: • £75 million of unsecured 2026 loan notes @ 4.27% • Proceeds swapped to floating rate, currently @ 2.1% • Used to refinance shorter term bank borrowings • Extends debt maturity profile • Group committed debt facilities now total £636 million • Good balance between long and short term debt • Net debt/EBITDA ratio of 1.8:1

  20. 2014 Current estimate of full year exceptional items £m 2014 Acquisition and integration costs12.2 Business Transformation Programme 8.5 20.7

  21. Incremental: One-off costs (9.5) (8.5) Associated benefits 7.3 4.7 Cumulative: One-off costs (9.5) (18.0) Recurring benefit 7.3 12.0 Business Transformation Programme (£m) 2014 Full Year Forecast 2013 Actual 2013 Actual

  22. Market Update • Speed of decline in insurance and reinsurance rating environment steepest since just before 9/11; pricing also fast approaching levels seen at that time • Reinsurance rates fell by between 15-25% on average during the 1st June renewals • Primary market seeing rating declines of 15-30% at present • Opportunistic buying environment for clients • Risk of a lack of underwriting discipline from certain capital providers poses threat to long term stability of the market • Brokers play an important role helping clients navigate current market • JLT’s long-term success tied more to economic growth than insurance rates

  23. We are confident that we can deliver year-on-year financial progress, but we are more cautious over the outlook for the remainder of the year given the marked decline in the insurance and reinsurance rating environment over the last quarter and the continued strength of sterling. The strong organic revenue growth we achieved in the period despite these challenges, demonstrates the success of our strategy of focusing on our areas of specialisation and higher growth economies. Outlook

  24. This presentation contains forward-looking statements with respect to the operations, performance and financial condition of Jardine Lloyd Thompson Group plc. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. Nothing in this presentation should be construed as a profit forecast.

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