Accelerating growth
Results for the year to 31 December 2014 March 2015
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
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to 31 December 2014 March 2015 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015 RESULTS DISCLAIMER NOT FOR PUBLICATION, RELEASE
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
RESULTS DISCLAIMER NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA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
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
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
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
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
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”).
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
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
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.
4 4 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
5 5
global insurance market
client relationships
technically excellent staff
streams
business
dividend
key growth themes:
businesses
and services
insurers
pipeline
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
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%
6
36% 46% 18% Insurance Support Management Adjusting
Revenue 20141 Staff breakdown 2014
Adjusting Management Insurance Support
Services 96%
Expanding global network
Investor Presentation - 2014 Results 18 March 2015
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)
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)
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
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
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
9
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Source: Munich Re, NatCatSERVICE (2015)
Insured losses US$m Trend Insured losses US$m
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
At 31 Dec 2013
26.7
At 31 Dec 2014
41.5
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:
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
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
11 11
Optimise business
Deliver organic growth in Professional Services Create medium term strategic opportunities
Strengthened core capabilities:
finance functions
positions
and joint working Made targeted acquisitions – criteria good strategic, cultural and financial fit:
(Mar 15)
Targeted International Life Company acquisitions – four acquisitions in four years:
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
12 Completed Pipeline Grow Mutual- related businesses
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
in the short/ medium term Select
in the short/ medium term Seeking new
Long gestation period Select
in the short/ medium term Comment
Benefits flowing through Deliver increased revenues by growing alongside the mutual insurers managed by Charles Taylor,
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-
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Appointed by:
(Mar 2015)
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Grow mutuals Grow services to mutuals Seek new
Since 2011:
Since 2011:
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
SCALA
Total calls C$4.95m
solutions Launched small accounts program:
Developed P&C adjusting in Singapore and P&C and Energy in Sydney
14
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
Seconded adjusters between London, Hong Kong, Jakarta, Taipei and Liverpool offices
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Rolling-out TPA Central Database and launched new delegated claims adjusting services for Lloyd’s market
15
Extending US Safety Management Services
Capitalising on cross- Group working:
covers for clients
Grow life insurance run-
Developing IT services:
consultancy services
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
16
Growing run-off servicing business through acquisitions
Identifying additional international life acquisition targets
to acquire Jan 2015)
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
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
18
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
9 April 2015 8 April 2015 (11am) 23 March – 8 April 2015 23 March 2015 20 March 2015
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
for the insurance market
clients on a consistent basis
effective and efficient shared services
the-ground experience in the largest and fastest growing markets
– 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
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
21 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Clients
22
Management Services profile
companies
service covering every aspect of the companies’
Growth opportunities
mutuals
captives and buying groups
2014 key points
P&I product
Account program
Strategy Director to CTMSUKI
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Key business lines
23
Adjusting Services profile
sectors: energy, marine, aviation property and casualty along with marine average adjusting and technical support services
commercial losses arising from major insured incidents
Growth opportunities
existing offices
2014 key points
build and lead our P&C and a senior executive adjuster to develop and lead our property and casualty adjusting practice in Sydney
adjusting business focused on UK and Ireland property and casualty (P&C) claims to further penetrate further the UK loss adjusting market
Energy Aviation P&C Marine
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Key business lines
24
Insurance Support Services profile
which enable our clients to select the specific services they require
Growth opportunities
mandates
the insurance sector
Claims Management Services
2014 key points
Insurance Technology Services Business process Outsourcing Risk Transfer Solutions Claims Management Services Investment Management
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Owned Insurance Companies
25
Owned Insurance Comnpanies profile
businesses which are primarily in run-off, creating value through targeted acquisitions and operational efficiency
which are closed to new business and are running off their liabilities in an orderly manner.
Growth opportunities
niche offshore life companies in run-off
be made
2014 key points
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
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
Finance costs/other (£m)
(1.4)
Non-controlling interests before tax (£m)
(0.1) (0.2)
Adjusted profit before tax (£m)
12.1 0.4 (1.4) 11.1
Tax (£m)
(1.3)
Tax on non-controlling interests (£m)
(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
Finance costs/other (£m)
(1.5)
Non-controlling interests before tax (£m)
(0.1) 0.3
Adjusted profit before tax (£m)
10.4 1.1 (1.5) 10.0
Tax (£m)
(1.8) (0.0)
Tax on non-controlling interests (£m)
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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Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
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£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
Revenue from other operating segments
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)
(0.4)
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
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
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
£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
30 30
Note: Small rounding differences arise in the total amounts above
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
31
£m 31 December 2014 31 December 2013 Professional Services Owned Insurance Companies Group Professional Services Owned Insurance Companies Group Management Services 3.0
2.0
Adjusting Services 121.2
109.5
Insurance Support Services 31.7
31.3
Unallocated and eliminations 22.1
20.1
Owned Insurance Companies
798.3
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)
(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
23.5 9.2 32.7 31.3 7.5 38.8 Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015
Charles Taylor plc Investor Presentation - 2014 Results 18 March 2015