February 2016 Disclaimer This presentation does not constitute an - - PowerPoint PPT Presentation

february 2016 disclaimer this presentation does not
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February 2016 Disclaimer This presentation does not constitute an - - PowerPoint PPT Presentation

Delivering on Strategy February 2016 Disclaimer This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements


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Delivering on

Strategy

February 2016

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Disclaimer

This presentation does not constitute an invitation to subscribe for or otherwise to acquire or dispose of shares in Hansard Global plc. This presentation may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial conditions, business performance and results of Hansard Global plc. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of Hansard Global plc, including amongst other things, Hansard Global’s future profitability, competition with the markets in which the Company operates and its ability to retain existing intermediary clients and win new intermediary clients, changes in economic conditions generally or in the life assurance, savings and investment products sectors, terrorist and geopolitical events, changes in legal and regulatory regimes and practice, the ability of its owned and licensed technology to continue to service developing demands, changes in taxation regimes, exchange rate fluctuations, and volatility in the Company’s share price. As a result, Hansard Global’s actual future financial condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements. Hansard Global undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this presentation is intended to be a profit forecast

  • r be relied upon as a guide to future performance. In particular, past performance is no guide to future performance.
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Results – H1 2016 Our Business Strategy New Business Summary Questions Introduction & Overview

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Meet the team

Les Wong

Director of Marketing

Gordon Marr

Chief Executive Officer

Tim Davies

Chief Financial Officer

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Overview – H1 2016

Success of Middle East & Africa being replicated in Asia and Rest of World regions Interim dividend

  • f 3.6p per

share (H1 2015: 3.5p) New Business

  • f £56.4m (PVNBP)

for the year (H1 2015: £29.4m) IFRS profit

  • f £4.9m

(H1 2015: £6.6m)

Highlights

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Results – H1 2016 Our Business Strategy New Business Summary Questions Introduction & Overview

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Strategic objective

To add significant scale to the business, on a more diversified basis, through

  • rganic growth at acceptable

levels of risk & profitability To be the preferred choice of distributors when recommending international savings and investment products to their clients

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Better value For Customers More long-term relationships with distributors A more visible profile in the market Excellent customer service Market leading online systems Motivated & engaged workforce

Strategic objectives

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Hansard Europe & Japan

  • Regulatory assets at 31 December 2015: £15.6m (30 June 2015: £15.4m).
  • On-going restriction on dividend distributions linked to litigation resolution.
  • Outstanding writs have increased by a net £1m since the date of release of our full year 2015

results, primarily due to additional complainants adding to what we believe is a highly speculative group action in Belgium.

  • We have however had some important successes which establish some legal precedent: two cases

in Belgium and one case in Italy were ruled fully in our favour (reducing total writs by £1m).

Capital Litigation Operating Model

  • Dublin based subsidiary which wrote European business. In run-off since 30 June 2013.
  • Outsourcing of administration, legal function and finance activities to head office in Isle of Man
  • perating successfully and efficiently.

Hansard Europe Japan

  • Licence application status
  • Registered office
  • Sales plan
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Results – H1 2016 Our Business Strategy New Business Introduction & Overview Summary Questions

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11 H1 2016 H1 2015 New business sales – PVNBP £56.4m * £29.4m New business margin (0.4)% (3.9)% Operating cash surplus £8.8m £13.8m IFRS profit after tax £4.9m £6.6m EEV operating profit after tax £1.2m £6.6m Interim dividend per share 3.6p 3.5p H1 2016 H1 2015 European Embedded Value £189m £204m Assets Under Administration £856m £924m

Summary Results – H1 2016

* Includes £8.3m invested by Hansard’s President on arm’s length terms

Results – H1 2016

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New Business Statistics

H1 2016 H1 2015 £m £m Present Value of New Business Premiums Regular premiums 29.9 17.6 Single premium 26.5 * 11.8 PVNBP 56.4 29.4 Annual Premium Equivalent (“APE”) 8.4 * 4.7 New Business Margin (PVNBP basis, after tax) (0.4)% (3.9)%

Margin on new business close to recovering to break-even level and was positive in Q2. New business increasing across the board.

* Included within these figures is a transaction which took place during Q2 FY 2016 whereby the Group President invested the Sterling equivalent of £8.3m as a lump sum top-up to a Hansard savings product on arm’s-length

  • terms. The transaction resulted in £8.3m PVNBP and £0.8m APE being included in the figures above.

Results – H1 2016

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H1 2016 H1 2015 £m £m Operating cash surplus 8.8 13.8 Interest and other income 0.5 0.4 Cash inflow 9.3 14.2 Investment in new business (7.1) (3.8) Capital expenditure (0.2) (0.1) Net Cash inflow before dividends 2.0 10.3 Dividends paid (7.2) (6.9) Net Cash flow for the year (5.2) 3.4 Cash flows support investment in new business, strategic development and dividends. Operating Cash Surplus lower as initial period fees have come to an end for years where sales were higher than present. Overall outflow expected in our projections – over £27m free cash to cover transition period.

Cash Flows

Results – H1 2016

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Free Cash

H1 2016 H1 2015 £m £m Total Group cash + deposit balances 79.6 81.2 Net shareholder payables (1.9) (6.8) Policyholder claims payable (20.2) (19.2) Regulatory reserves (9.0) (9.0) Minimum regulatory capital * (10.8) (11.4) 37.7 34.8 Regulatory capital currently restricted within HEL (10.0) (9.0) “Free” Group cash + deposit balances 27.7 25.8

Results – H1 2016

Headline cash balance is allocated to a number of constituents before true free cash can be identified. Increase this period is primarily due to release of 2015 CEC provision.

* Minimum regulatory capital taken as 200% of amount needed to continue in operation. Includes capital requirements in Isle of Man, Ireland and Labuan.

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Hansard Int’l & Hansard Europe AuA Development

Results – H1 2016

HI: AuA relatively steady although affected by recent H1 market turmoil. HE: Expected decline after being placed in run-off in 2013.

719 742 705 700 683 314 286 239 207 174 100 200 300 400 500 600 700 800 2012 2013 2014 2015 HY 2016

AuA £M Year

Hansard Int’l and Hansard Europe AuA 5 year trend

HI HE

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16 H1 2016 H1 2015 £m £m Fees and commissions

  • Hansard International

21.7 22.1

  • Hansard Europe

3.6 4.6 25.3 26.7 Investment and other income 1.0 1.0 26.3 27.7 Origination costs (10.5) (10.5) Administrative expenses (9.7) (9.5) Strategic spend (1.2) (1.1) Profit for the period 4.9 6.6

Abridged IFRS Income Statement

Fee income declining as HE book runs-off. HI slightly down due to new products earning fees over longer term. Costs being kept in line with budgets, adding to distribution capabilities prudently.

Results – H1 2016

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17 H1 2016 £m H1 2015 £m Deferred origination costs 111.2 118.3 Other assets 6.0 7.1 Shareholder cash and bank deposits 79.6 81.1 Total assets 196.8 206.5 Deferred income 132.7 140.4 Other payables 26.3 29.5 159.0 169.9 Net assets 37.8 36.6 Shareholders’ Equity 37.8 36.6

Abridged IFRS Balance Sheet

Strong level of shareholders’ funds maintained post dividend payments

Results – H1 2016

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EEV Balance Sheet

While new business levels are still recovering, the Value of Future Profits will convert to cash at a higher rate than new VoFP is being added. Required capital includes capital currently locked in Hansard Europe. Dividends are paid

  • ut of Free Surplus.

H1 2016 H1 2015 £m £m Free surplus 31.4 31.5 Required Capital 27.2 26.4 Net Worth 58.7 57.9 Value of Future Profits 130.3 145.6 European Embedded Value 189.0 203.5

Results – H1 2016

EEV per share = 138p (H1 2015: 148p). The change essentially reflecting the dividends paid out (£12m since 31 Dec 2015).

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19 H1 2016 £m H1 2015 £m New business contribution (0.2) (1.1) Expected return 0.7 0.9 Experience variances (1.5) (0.2) Assumption and other changes 0.4

  • EEV operating loss after tax

(0.6) (0.4) Investment return variances 1.3 4.6 Economic assumption changes 0.5 2.4 EEV profit after tax 1.2 6.6

New business contribution has recovered to close to breakeven level. Experience variances reflect an accumulation of a number

  • f small items, including

persistency. Investment return and economic assumptions reflect foreign exchange and government bond yield favourable movements.

EEV Profit

Results – H1 2016

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Results – H1 2016 Our Business Strategy New Business Introduction & Overview Summary Questions

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6 New Sales People 14 Funds added to Savings Plans to give 180 Funds Continuation in work to increase Market Awareness Consolidating Production - Reduced Concentration Risk Launched Hansard Online Lite

Activity since July 1st 2015

The last 6 months

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Global Sales

Latin America Les Wong Rest of the World

More long-term relationships

Account Executives

2 Account Executives

Account Executives

3 Account Executives

Middle East & Africa Asia Account Executives

6 Account Executives

Rest of the World Account Executives

2 Account Executives

In Force Management Managers

2 In force Managers

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Top 10 Distributors accounted for 60% of H1 Production, of which… New Business received from 114 Distributors worldwide, of which…

Asia 25% 27% Lat Am 4% 24% RoW 24% 15% Middle East 47% 34%

More long-term relationships

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Rebuilding Distribution (July 1st 2013 to end Dec 2015)

Rest of the World North Asia

New Terms of Business set up

RoW

+ 16

(+ 4 H1 2016)

+ 8

(+ 3 H1 2016) Lat Am

+ 26

(+ 7 H1 2016) North Asia SE Asia

+ 13

(+ 3 H1 2016)

+ 42

(+ 10 H1 2016) Middle East

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Events

New Products

  • Phase 1 rebuild of our single , regular and ad hoc premium products

is now complete.

  • Now working on Phase 2 with launch of improved regular premium

proposition due Q4 (2015/16)

  • We continue to add new funds with over 180 funds on our platform
  • 14 internal funds added including 6 protected funds and 3 Shariah

compliant plus a new Fund Group partner added in H1 2016

  • QROPs Bureau (an independent specialist) continue to give technical

support to Hansard and IFAs for QROPs / SIPPS business worldwide

  • Agreements in place with 38 Trust Companies for QROPs / SIPPS

business

New Funds New Services

Improved proposition

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More Visible…online USP

financial advisers signed up to HOL Lite since launch in October 2015 Of which 100 in the past 2 months

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More Visible…new arrivals

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shops.com More Visible…trade publications

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Example editorials

More Visible…trade publications

‘Below the line’ thought leadership & opinion forming content, in trade publications

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LinkedIn has been chosen as our primary channel for digital promotion via social/professional media. Our corporate LinkedIn page was officially launched in Q2 2015. followers (318 in the last 12 months)

Example post

Senior Managers

  • r Directors

Financial Services specialists Non- Hansard employees

More Visible…professional networks

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Unique visitors to hansard.com in 12 months prior to October 2015 launch Mobile device visitors to hansard.com in 12 months prior to October 2015 launch

More Visible…all new mobile website

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Improving motivated & engaged workforce

EMPLOYEE ENGAGEMENT

Hansard 2014 Hansard 2014 Hansard 2014

“I would recommend this company as a great place to work” “Overall, I am extremely satisfied with this company as a place to work”

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Events

Customer Survey

  • 5000 Responses from Brokers and Clients
  • Results were extremely strong with scores of:
  • 70% for Customer Service Excellence
  • 78% for Online System Excellence
  • 52% for Net Promoter Score (Apple = 67%, Santander = 28%, Insurance

Industry = -5%)

  • Results of the restructure coming through
  • Number of handoffs of work between departments down by 20,000 p.a.
  • New Turnaround time of 24 hrs for processing instructions and answering

queries met 99.8% of the time

  • 2016’s Programme of process re-engineering is going well
  • The withdrawals process has been engineered and is being piloted
  • 5 other processes have been re-engineered and are delivering
  • 5 processes are close to being delivered and a further 6 are in progress
  • Efficiency savings in excess of 50% have been experienced to date

Operations Restructure Process Re-engineering Market leading customer service

Proposition improvements over the last 12 months

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Summary

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Results of strategic changes are now being strongly realised in increased new business Interim dividend

  • f 3.6p per

share (H1 2015: 3.5p) IFRS profit

  • f £4.9m. Decrease

due to European run

  • ff and market

turbulence

Summary

European legacy issues starting to show positive development with three legal cases won Diversification of new business & new business relationships

Summary

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Q&A