Accelerating growth Results for the year to 31 December 2014 March - - PowerPoint PPT Presentation

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Accelerating growth Results for the year to 31 December 2014 March - - PowerPoint PPT Presentation

Professional services for global insurance markets Accelerating growth Results for the year to 31 December 2014 March 2015 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015 RESULTS DISCLAIMER NOT FOR PUBLICATION, RELEASE


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SLIDE 1

Accelerating growth

Results for the year to 31 December 2014 March 2015

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

Professional services for global insurance markets

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SLIDE 2

RESULTS DISCLAIMER NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. THIS PRESENTATION IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW ORDINARY SHARES. NOTHING IN THIS PRESENTATION SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW ORDINARY SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS ONCE PUBLISHED. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF CHARLES TAYLOR PLC AND ON ITS WEBSITE AT WWW.CTPLC.COM. The distribution of this presentation into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. In particular, subject to certain exceptions, this presentation, the Prospectus (once published) and the Provisional Allotment Letters (once printed) should not be distributed, forwarded to or transmitted in or into the United States or any

  • ther Excluded Territory.

This presentation is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares (each as defined in the prospectus, once published) or to take up any entitlements to Nil Paid Rights in any jurisdiction. No offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares or to take up any entitlements to Nil Paid Rights will be made in any jurisdiction in which such an offer or solicitation is unlawful. The information contained in this presentation is not for release, publication or distribution to persons in the United States or any other Excluded Territory, and should not be distributed, forwarded to or transmitted in or into any jurisdiction, where to do so might constitute a violation of local securities laws or regulations. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred

  • r delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from or in a transaction not subject to the registration

requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public

  • ffer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares in the United States.

The information in this presentation may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions. This presentation does not constitute a recommendation concerning any investor’s options with respect to the Rights Issue. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this presentation are not to be construed as legal, business, financial or tax

  • advice. Each Shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial,

business or tax advice. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States. This presentation does not contain or constitute an

  • ffer for sale or the solicitation of an offer to purchase securities in the United States. Any securities referred to herein have not been and will not be registered under the

Securities Act, and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or transaction not subject to, the registration requirements of the Securities Act. This presentation may contain certain forward-looking statements, beliefs or opinions, with respect to the financial condition, results of operations and business of the Company and the Company and its subsidiary undertakings (the “Group”).

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SLIDE 3

RESULTS DISCLAIMER - Continued These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “will”, “seek”, “continue”, “aim”, “target”, “projected”, “plan”, “goal”, “achieve” and words of similar meaning, reflect the Company’s beliefs and expectations and are based on numerous assumptions regarding the Company’s present and future business strategies and the environment the Company and the Group will operate in and are subject to risks and uncertainties that may cause actual results to differ materially. None of the Company or any of such person’s respective directors, officers, employees, agents, affiliates or advisers makes any representation that any

  • f these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements involve inherent known and unknown risks,

uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Company or the Group to be materially different from those expressed or implied by such forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company’s or the Group’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as the Company’s or the Group’s ability to continue to

  • btain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological

trends or conditions. Past performance of the Company cannot be relied on as a guide to future performance. As a result, you are cautioned not to place undue reliance on such forward-looking statements. The list above is not exhaustive and there are other factors that may cause the Company’s or the Group’s actual results to differ materially from the forward-looking statements contained in this presentation. Forward-looking statements speak only as of their date and the Company, its parent and subsidiary undertakings, the subsidiary undertakings of such parent undertakings, any of their directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, expect where it would be required to do so under applicable law.

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SLIDE 4

Delivered strong performance in 2014

4 4 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

  • Increased Revenue

+8.1% to £122.8m

  • Increased Statutory PBT

+38.5% to £9.6m

  • Increased Adjusted PBT

+11.3% to £11.1m

  • Increased Statutory EPS

+37.0% to 19.48p

  • Increased Adjusted EPS

+15.6% to 23.17p

  • Net debt in line with prior year £32.6m
  • Progressed growth initiatives
  • Announced progressive dividend policy
  • Second interim dividend of 7.50p/full year dividend of 10.75p
  • Announced rights issue to raise £30m in new equity
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SLIDE 5

Focusing on organic growth from professional services with targeted acquisitions

5 5

Strong fundamentals

  • Well established in

global insurance market

  • Long-standing, loyal

client relationships

  • Highly skilled,

technically excellent staff

Consistently profitable

  • Reliable revenue

streams

  • Diversified, resilient

business

  • Well supported

dividend

Positive prospects

  • Driving forward four

key growth themes:

  • Grow mutual-related

businesses

  • Expand Adjusting Services
  • Build on existing skills

and services

  • Consolidate run-off life

insurers

  • Healthy acquisition

pipeline

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 6

Run-off 4%

Adjusted EPS 20152

Professional Services – revenue principally from fees Owned Insurance Companies

Management Adjusting Insurance Support

Owns and consolidates life insurance companies. Owns and runs-off non-life insurance companies End to end insurance company management Loss adjusting for larger and more complex losses Stand-alone professional insurance support services 24% 58% 18%

Positioned for growth in global insurance markets

6

36% 46% 18% Insurance Support Management Adjusting

Revenue 20141 Staff breakdown 2014

Adjusting Management Insurance Support

  • 1. Stated before inter-segment eliminations. 2. Excludes acquired intangible amortisation of £1.5m and non-recurring costs of £0.2m.
  • 3. As at 18 March 2015.
  • • •
  • • •
  • We have over 1,200 staff in 67 offices in 27 countries worldwide 3.
  • Professional

Services 96%

Expanding global network

  • Charles Taylor plc

Investor Presentation - 2014 Results 18 March 2015

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SLIDE 7

Strong performance from Management and Insurance Support Services – benign claims market slows Adjusting Services

Results 2014 (£m) Revenue Operating segment profit

Services

2014 2014 (CER)2. 2013 2014 2014 (CER)2. 2013

Management

43.9 44.7 41.1 7.7 8.0 6.6

Adjusting

56.1 58.6 54.9 2.2 2.2 4.8

Insurance Support

21.8 22.0 15.9 2.0 2.1 (0.9)

Unallocated

  • 0.2

0.2 (0.2)

Professional Services 1

121.8 125.3 111.9 12.2 12.5 10.4

Run-off

4.2 4.2 5.0 0.5 0.5 0.8

Eliminations

(3.1) (3.2) (3.3)

  • Group 1

122.8 126.3 113.6 12.7 13.0 11.2

7

Group

2014 2014 (CER)2. 2013

Adjusted PBT (£m) 11.1 11.4 10.0 Statutory PBT (£m) 9.6 9.9 6.9 Adjusted EPS (p) 23.17 23.71 20.05 Statutory EPS (p) 19.48 20.01 14.22 Dividend per share (p) 10.75

  • 10.00

1 Small rounding differences arise in the total amounts above. 2 CER = Constant Exchange Rates

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 8

Benign claims market in 2013 and 2014 - losses below 10-year average

8 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015 Munich Re NatCatSERVICE: Natural catastrophes, insured losses SwissRe Sigma estimates: Global natural catastrophes and man-made disaster events, insured losses Aon Benfield Impact Forecasting: Global natural disasters, insured losses

2014 2013 10 year average 2014 2013 10 year average 2014 10 year average

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SLIDE 9

Long term trend in insured losses is still upwards

9

Munich Re: “It would be wrong to conclude any trend reversal based

  • n the last few years. The loss trend of the past decades is clearly

upwards, primarily driven by the rise in exposed values.”

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

Source: Munich Re, NatCatSERVICE (2015)

Insured losses US$m Trend Insured losses US$m

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SLIDE 10

Net debt (£m) Net debt Average annual net debt At 31 Dec 2013

32.4 22.0

At 31 Dec 2014

32.6 24.6

Adjusting Services working capital (months) WIP Debtors Working capital months At 31 Dec 2013

5.2 4.9 10.1

At 31 Dec 2014

4.8 4.9 9.7

Retirement benefit

  • bligation (£m)

At 31 Dec 2013

26.7

At 31 Dec 2014

41.5

Managing net debt – investing for growth

10 Average annual net debt demonstrates that average net debt is considerably lower than year end net debt Net debt rose slightly over the year largely due to investments in the business to deliver our growth strategy, including:

  • Opening new offices
  • Investing in new IT systems

Increase driven by a change in discount rates as a result of a fall in corporate bond yields and gilt yields We are focused on reducing Adjusting Services’ working capital

  • Appointed working capital specialists to review approach in 2014
  • Appointed a dedicated working capital manager in 2015
  • CMA will contribute reducing working capital requirements

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 11

11 11

Optimise business

  • perations

Deliver organic growth in Professional Services Create medium term strategic opportunities

Strengthened core capabilities:

  • Focused on debt management
  • Created Group ExCo
  • Appointed key development staff
  • Created Adjusting Services SMT
  • Strengthened global HR and

finance functions

  • Negotiated 5 year bank facilities
  • Created global IT function
  • Capitalising on areas of strength
  • Launched many products & services
  • Established new offices & teams
  • Strengthened existing teams
  • Won sizeable new client contacts
  • Building businesses to leadership

positions

  • Realising potential for cross-referral

and joint working Made targeted acquisitions – criteria good strategic, cultural and financial fit:

  • NILACO (Aug 13)
  • KnowledgeCenter (Dec 13)
  • Knowles Loss Adjusters (May 14)
  • CTMA (Feb 15)
  • Strike Club Management

(Mar 15)

Owned Insurance Companies Strategy

Targeted International Life Company acquisitions – four acquisitions in four years:

  • 1. Alico (Isle of Man) (Nov 11)
  • 2. Global Life Assurance (Dec 12)
  • 3. Nordea Life & Pensions (Nov 14)
  • 4. Scottish Widows International (Announced Jan 15)

Professional Services Strategy

We have been delivering against our growth strategy since 2011

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 12

12 Completed Pipeline Grow Mutual- related businesses

Key growth themes

Expand Adjusting Services Build on existing skills & services Consolidate run-off life insurers Geared for recovery New services gaining traction Building record of acquisitions and releases Strike Club Management NILACO/ Knowles Loss Adjusters CTMA Alico GLA Nordea Scottish Widows Select

  • pportunities

in the short/ medium term Select

  • pportunities

in the short/ medium term Seeking new

  • pportunities

Long gestation period Select

  • pportunities

in the short/ medium term Comment

We have achieved growth within our existing resources

Benefits flowing through Deliver increased revenues by growing alongside the mutual insurers managed by Charles Taylor,

  • ffering new products and services,

and winning new contracts Grow adjusting revenues by expanding into new locations and expanding the services offered from each office Generate new revenues by extending our professional services capabilities for global insurance markets Secure capital releases by acquiring and consolidating international run-

  • ff life insurance businesses

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 13

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

Appointed by:

(Mar 2015)

Growing mutual-related businesses

13

Grow Mutuals

Grow mutuals Grow services to mutuals Seek new

  • pportunities

Since 2011:

  • Premium income +21%
  • Insured tonnage +11%
  • Free reserves +5%

Since 2011:

  • Total calls +28%
  • Payroll +52%
  • No. Members +10%

Established Syndicate 1884 (Mar 2015) Grow membership and scale of client mutuals Introduce new products and services for client mutuals Seek management contracts from new and existing mutuals, group captives, buying groups and associations Launched new products

  • Fixed premium P&I
  • Cover for Turk P&I
  • Singapore War Risks

SCALA

Total calls C$4.95m

  • developed bespoke IT

solutions Launched small accounts program:

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SLIDE 14

Developed P&C adjusting in Singapore and P&C and Energy in Sydney

Expanding adjusting offices, teams, services and locations

14

Expanded Adjusting

Expand into new locations Expand services from each location Seek new

  • pportunities

Opened Brazil office in 2014 Acquired Knowles Loss Adjusters to build UK P&C market penetration +10 offices +70 staff Identifying further locations where there is a demand for our services Recruiting experienced senior adjusters with a market following Expanded global office network +30% in 5 years Appointed senior loss adjusters across global network in 2014 Appointed Corporate Development Director to identify new business

  • pportunities

Seconded adjusters between London, Hong Kong, Jakarta, Taipei and Liverpool offices

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 15

Rolling-out TPA Central Database and launched new delegated claims adjusting services for Lloyd’s market

Extending professional services expertise

15

Develop skills & services

Develop core services Launch products and services Drive growth initiatives

Extending US Safety Management Services

Capitalising on cross- Group working:

  • Rebranded CTIS IoM
  • Launched CTIFS
  • Developing new

covers for clients

Grow life insurance run-

  • ff servicing

Developing IT services:

  • Additional CTKC clients
  • Developing IT

consultancy services

  • Developing Lloyd’s

claims systems Seek new Turn-key Managing Agent appointments

Growing US TPA business

Grow captive business Expanding MGA and coverholder services Securing business for new insurance covers Grow life insurance fund services business

Established Charles Taylor Managing Agency at Lloyd’s

Actively promote insurance IT capabilities Extend London market claims services Seek further run-off servicing

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 16

Securing capital releases from life run-off

16

Consolidate life insurers

Grow life run-off business Secure additional acquisitions

Growing run-off servicing business through acquisitions

Consolidated run-off life insurers:

  • Global Life Assurance (2013)
  • Alico (Isle of Man) (2012)
  • Finistere Life (2010)
  • Premium Life International (2006)
  • Aberdeen International Assurance (Isle
  • f Man) (2006)
  • Aberdeen International (2006)

Identifying additional international life acquisition targets

Acquired international life insurers:

  • Nordea Life & Pensions (2014)
  • Scottish Widows International (agreed

to acquire Jan 2015)

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 17

Our progress is accelerating

17

2011

Alico (Isle of Man)

2012

NILACO Global Life Assurance

2014

Knowles Loss Adjusters Nordea Life & Pensions Agreed to acquire Scottish Widows International CTMA Strike Club Management

Executing growth strategy Delivering targeted acquisitions 2015 2013

Appointed by OPOL D&O/Hull for The Standard Club US Safety Service US General Agency San Francisco/ Colombia TPA Database Elective claims services CTIS (IOM) The Strike Club Syndicate 1884 Turk P&I Singapore War Risks Brazil office SafeShore MEL/Hull products for Signal MGA Service Static claims Charles Taylor TPA P&C adjusting in Indonesia Energy/P&C adjusting in Sydney P&C adjusting Singapore Cardinal Risk Management

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

Knowledge- Center

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SLIDE 18

We are undertaking a rights issue to fund potential acquisitions, business investment and joint venture opportunities

18

  • We have a variety of acquisition opportunities under

consideration in the £5-10m range

  • Additional significant acquisition opportunity under discussion

which may require separate funding

  • Rights issue to raise gross proceeds of £30.6m

(three shares for every seven shares held)

  • Private placement to qualifying US holders
  • Expected discount of 34.9% to TERP after adjusting for second

interim dividend

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 19

9 April 2015 8 April 2015 (11am) 23 March – 8 April 2015 23 March 2015 20 March 2015

Expected timetable

19

Charles Taylor FY 2014 results announcement Announcement of rights issue terms Record date for rights issue Provisional Allotment Letters dispatched Shares marked “ex-rights” Rights issue trading period Last time and date for acceptances Announcement of results of rights issue Publication of prospectus 18 March 2015 18 March 2015 18 March 2015 16 March 2015

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 20

Accelerating growth and shareholder value

  • Charles Taylor is a strong, resilient and diversified Group, with a clear focus on professional services

for the insurance market

  • Our people are highly regarded, technically excellent and committed to service excellence to all our

clients on a consistent basis

  • Our people are supported by strong leadership across all business lines and offices along with

effective and efficient shared services

  • Our extensive and growing office network ensures we are located close to our clients and have on-

the-ground experience in the largest and fastest growing markets

  • We are successfully executing on our business strategy for growth:

– Our Management and Insurance Support businesses are growing; we are working on many new initiatives to build on that growth – Our Adjusting business is geared for growth when market claims reverts to norm. We’re expanding our network and recruiting experienced adjusters – Our Insurance Support Services business is poised to capitalise on CTMA and is working on numerous other insurance services – Our Owned Insurance Companies business is acquiring and consolidating run-off life insurers

  • We are executing a targeted strategy to source and complete attractive opportunities for

acquisitions joint ventures and business investments across all business lines

20

£30m rights issue to capitalise on opportunities and strengthen the balance sheet

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 21

Appendices

21 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 22

Clients

Strong performance by Management Services business

22

Management Services profile

  • Provides end-to-end management of insurance

companies

  • Delivers a complete outsourced management

service covering every aspect of the companies’

  • perations

Growth opportunities

  • Grow membership of client mutuals
  • Introduce new products and services for clients of

mutuals

  • Seek new management contracts.
  • Identify opportunities for new mutuals, group

captives and buying groups

2014 key points

  • Increased revenue to £43.9m (2013: £41.1m)
  • Secured management of The Strike Club (2015)
  • Helped The Standard Club create Syndicate 1884 (2015)
  • Helped The Standard Club launch new fixed premium

P&I product

  • Supported The Standard Club to provide cover to Turk P&I
  • Created Singapore War Risks for The Standard Club (2015)
  • Opened Management Services office in Brazil
  • Secured 11 new members for Signal
  • Created a new Maritime Employers’ Liability cover
  • Launched Longshoreman Workers’ Compensation Small

Account program

  • Appointed President of CTMSA and Performance and

Strategy Director to CTMSUKI

SCALA

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 23

Key business lines

Benign claims market slows Adjusting Services business

23

Adjusting Services profile

  • Provides loss adjusting services across four main

sectors: energy, marine, aviation property and casualty along with marine average adjusting and technical support services

  • Primarily focuses on larger and more complex

commercial losses arising from major insured incidents

Growth opportunities

  • Expand network into new territories
  • Extend service offering in each office
  • Recruit and retain top producing adjusters in

existing offices

  • Develop and retain next generation

2014 key points

  • Maintained revenue of £56.1m (2013: £54.9m)
  • Opened adjusting office in Brazil
  • Extended adjusting services from existing offices
  • Appointed a senior loss adjuster in Singapore to

build and lead our P&C and a senior executive adjuster to develop and lead our property and casualty adjusting practice in Sydney

  • Acquired Knowles Loss Adjusters, a UK loss

adjusting business focused on UK and Ireland property and casualty (P&C) claims to further penetrate further the UK loss adjusting market

  • Appointed Corporate Development Director

Energy Aviation P&C Marine

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 24

Key business lines

Positive performance from Insurance Support Services

24

Insurance Support Services profile

  • Provides stand-alone professional services

which enable our clients to select the specific services they require

Growth opportunities

  • Expand claims management services
  • Seek additional investment management

mandates

  • Develop MGA services
  • Develop additional technology solutions for

the insurance sector

  • Secure more run-off servicing contracts
  • Seek new captive management mandates
  • Develop risk consulting services
  • Explore niche insurance opportunities
  • Develop workers’ compensation TPA services
  • Develop outsourced safety services

Claims Management Services

2014 key points

  • Increased revenue to £21.8m (2013: £15.9m)
  • Launched Charles Taylor Managing Agency (2015)
  • Launched delegated claims adjusting services
  • Launched TPA Central Database for LMA
  • Launched Charles Taylor TPA
  • Secured new business for KnowledgeCenter
  • Secured US business wins for TPA
  • Won new business for H&M, D&O and MEL covers
  • Provided IT consultancy services
  • Appointed COOs for Non-life ISS and Captives
  • Launched CTIS and CTIFS in Isle of Man

Insurance Technology Services Business process Outsourcing Risk Transfer Solutions Claims Management Services Investment Management

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 25

Owned Insurance Companies

Insurance Companies strategy being implemented

25

Owned Insurance Comnpanies profile

  • Life - Owns and consolidates life insurance

businesses which are primarily in run-off, creating value through targeted acquisitions and operational efficiency

  • Non-life - Owns non-life insurance companies

which are closed to new business and are running off their liabilities in an orderly manner.

Growth opportunities

  • Life - Exploring opportunities to acquire

niche offshore life companies in run-off

  • Non-life - no further non-life acquisitions to

be made

2014 key points

  • Delivered revenue of £4.2m (2013: £5.0m)
  • Acquired Nordea Life & Pensions
  • Agreed to acquire Scottish Widows

International (2015) LCL International Life Assurance Company Three non-life insurers in run-off LCL Life & Pensions

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 26

2014 Results

26 Year to 31 December 2014 Professional Services Owned Insurance Companies Eliminations/other Total Revenue (£m)

121.8 4.2 (3.1) 122.8

Operating segment profit (£m)

12.2 0.5

  • 12.7

Finance costs/other (£m)

  • (1.4)

(1.4)

Non-controlling interests before tax (£m)

(0.1) (0.2)

  • (0.2)

Adjusted profit before tax (£m)

12.1 0.4 (1.4) 11.1

Tax (£m)

(1.3)

  • (1.3)

Tax on non-controlling interests (£m)

(0.0)

  • 0.0

Adjusted earnings (£m)

10.8 0.4 (1.4) 9.8

Adjusted earnings per share (p)

25.65 0.88 (3.36) 23.17

Year to 31 December 2013 Professional Services Owned Insurance Companies Eliminations/other Total Revenue (£m)

111.9 5.0 (3.3) 113.6

Operating segment profit (£m)

10.4 0.8

  • 11.2

Finance costs/other (£m)

  • (1.5)

(1.5)

Non-controlling interests before tax (£m)

(0.1) 0.3

  • 0.2

Adjusted profit before tax (£m)

10.4 1.1 (1.5) 10.0

Tax (£m)

(1.8) (0.0)

  • (1.8)

Tax on non-controlling interests (£m)

0.0

  • 0.0

Adjusted earnings (£m)

8.6 1.1 (1.5) 8.2

Adjusted earnings per share (p)

21.11 2.63 (3.69) 20.05 Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 27

Analysis of adjusted profit before tax

27

2014 £m 2013 £m Statutory profit before tax 9.6 6.9 Amortisation of acquired intangible assets 1.5 1.2 Non-recurring items: Reorganisation costs 0.2 1.4 Charges related to refinancing

  • 0.3

Non-controlling interests before tax (0.2) 0.2 Adjusted profit before tax 11.1 10.0

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 28

Segmental results

28

£m Professional Services Insurers Other Group

Year to 31 December 2014

Management Services Adjusting Services Insurance Support Services Unallocated Total Owned Insurance Companies Eliminations Total Revenue from external clients 43.9 56.1 18.7 0.0 118.6 4.2

  • 122.8

Revenue from other operating segments

  • 3.1
  • 3.1
  • (3.1)
  • Total revenue

43.9 56.1 21.8 0.0 121.8 4.2 (3.1) 122.8 Depreciation and amortisation (1.0) (1.2) (0.5)

  • (2.7)

(0.4)

  • (3.0)

Other expenses (35.1) (52.7) (19.3) 0.2 (106.9) (3.3) 3.1 (107.0) Operating segment profit 7.7 2.2 2.0 0.2 12.2 0.5

  • 12.7

Finance costs / other (1.4) Non-controlling interests before tax (0.2) Profit before tax – adjusted 11.1 Amortisation of acquired intangible assets (1.5) Non-recurring costs (0.2) Non-controlling interests before tax 0.2 Profit before tax - statutory 9.6 Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 29

Free cash flow

29 29

Note: Small rounding differences arise in the total amounts above

£m 2014 2013 Operating cash flow before movement in working capital Change in working capital Change in insurance company net assets 14.5 (2.9) (1.4) 13.4 (1.4) (1.7) Cash flow generated by operations

whereof Professional Services whereof Owned Insurance Companies

Income tax paid Interest paid 10.2

10.5 (0.3)

(1.1) (1.1) 10.4

10.2 0.2

(1.0) (1.2) Net cash flow before movement in client funds Net capital expenditure Interest received 7.9 (4.2) 0.0 8.2 (2.7) 0.1 Free cash flow 3.8 5.5

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 30

£m 2014 2013

Revenue Expenses

122.8 (110.1) 113.6 (102.4)

Operating segment profit Finance costs /other Non-controlling interests before tax

12.7 (1.4) (0.2) 11.2 (1.5) 0.2

Adjusted profit before tax

11.1 10.0

Tax Tax on non-controlling interests

(1.3) 0.0 (1.8) 0.0

Adjusted earnings

9.8 8.2

Adjusted earnings per share (p)

23.17 20.05

Income statement

30 30

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

slide-31
SLIDE 31

Segmental balance sheet

31

£m 31 December 2014 31 December 2013 Professional Services Owned Insurance Companies Group Professional Services Owned Insurance Companies Group Management Services 3.0

  • 3.0

2.0

  • 2.0

Adjusting Services 121.2

  • 121.2

109.5

  • 109.5

Insurance Support Services 31.7

  • 31.7

31.3

  • 31.3

Unallocated and eliminations 22.1

  • 22.1

20.1

  • 20.1

Owned Insurance Companies

  • 798.3

798.3

  • 322.2

322.2 Total assets 178.0 798.3 976.3 162.9 322.2 485.1 – Non-current assets 65.8 2.7 68.5 60.3 3.0 63.3 – Current assets 112.2 795.6 907.8 102.6 319.2 421.8 Total assets 178.0 798.3 976.3 162.9 322.2 485.1 Current liabilities (71.8) (756.0) (827.8) (67.0) (281.0) (348.0) Deferred consideration (0.6) (3.4) (4.0) (0.1) (4.2) (4.3) Net current assets 39.8 36.2 76.0 35.5 34.0 69.5 Non-current liabilities (79.3)

  • (79.3)

(62.4)

  • (62.4)

Deferred consideration (1.7) (8.8) (10.5) (1.0) (8.7) (9.7) Total liabilities (153.4) (768.2) (921.6) (130.5) (293.9) (424.4) Net assets 24.6 30.1 54.7 32.4 28.3 60.7 Non-controlling interests (1.1) (20.9) (22.0) (1.1) (20.8) (21.9) Equity attributable to owners

  • f the Company

23.5 9.2 32.7 31.3 7.5 38.8 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

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SLIDE 32

Accelerating growth

Results for the year to 31 December 2014 March 2015

Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015

Professional services for global insurance markets