Half year results presentation 6 months ended 30 June 2016 4 August 2016 1
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES 2016 HALF YEAR RESULTS PRESENTATION Agenda SECTION 1 SECTION 2 SECTION 3 Overview Financial Outlook & review Operating Priorities Joy Linton CFO Evelyn Bourke CEO Evelyn Bourke CEO Gareth Evans Group Treasurer 2
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES SECTION 1 Overview Evelyn Bourke CEO 3
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES Our refreshed strategy 1. Customers front 2. Our people critical 3. Continuous and centre to delivering great change and digital customer transformation experiences and outcomes Deliver strong and sustainable growth through: • Strengthening our businesses in current geographies • Selective expansion in Asia and Latin America • Leveraging our partnerships to grow and innovate Remain focused on efficiency and compliance, with highly disciplined capital management 4
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES HY 2016 GROUP HIGHLIGHTS Modest growth in challenging market conditions Operating environment characterised by: Revenue £5.3bn up 7% CER (1) Customer spending under pressure Underlying profit before tax (2) Medical and cost inflation £261.7m up 2% CER Uncertain political and economic backdrop Statutory profit before tax £139.6m down 45% AER (3) Net cash flow from operations £513.4m up 13% AER Customers (4) 28.2m up 11% (1) Constant exchange rates (2) Underlying profit is defined as profit before taxation adjusted to remove amortisation and impairment of intangible assets arising on business combinations, impairment of goodwill, net property revaluation gains or losses, realised and unrealised foreign exchange gains and losses, gains or losses on return seeking assets, profits or losses on the sale of businesses and fixed assets, restructuring costs, transaction costs on acquisitions and disposals and one -off non trading items. (3) Actual exchange rates (4) Total customers served in the six months to 30 June 2016 5
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES AUSTRALIA AND NEW ZEALAND Good revenue growth across all business lines in a challenging and competitive environment Revenues Operating Environment up 8% CER £1,989.3m • Ongoing consumer affordability pressures resulting from up 7% AER rising costs and increasing demand (HY 2015: £1,845.3m CER) • Economic uncertainty in Australia coupled with shifting political backdrop Underlying profit up 10% CER £133.4m up 9% AER Performance (HY 2015: £121.4m CER) • Revenue growth driven by robust performance of Health Insurance business Customers • Performance driven by higher customer numbers, higher 5.3m up 4% premiums and a stable loss ratio (HY 2015: 5.1m) • Steady expansion of aged care business; opening five new care homes in the region Revenues by business • Good profit growth in Health Services, particularly in branded dental centres 6
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES UNITED KINGDOM Revenue and profit growth driven by health insurance Revenues Operating Environment £1,479.1m • Limited immediate impact following EU Referendum up 8% • Increase in Insurance Premium Tax continues to penalise (HY 2015: £1,375.0m) customers Underlying profit • Active negotiations with local authorities to ensure their fees reflect the true cost of care £72.1m up 30% (HY 2015: £55.4m) Performance • Customers Revenue up 8% driven by growth in health insurance business with higher earned premiums and strong retention 4.8m up 33% • Profit growth driven by health insurance with improved loss (HY 2015: 3.6m) ratios in Consumer and Corporate segments • Positive acquisition contribution in Care Services and Revenues by business Health Clinics • Completed the sale of Bupa Home Healthcare to Celesio on 1 July 2016 7
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES SPAIN AND LATIN AMERICA Good revenue and customer growth; underlying profit impacted by regulatory changes Revenues Operating Environment up 7% CER £1,034.9m • Persistent political uncertainty following recent Spanish election up 10% AER • Free Choice Act legislation in Valencia continues (HY 2015: £964.8m CER) to negatively impact profitability Underlying profit down 9% CER Performance £55.4m down 4% AER • Increased investment in customer acquisition (HY 2015: £60.7m CER) and retention • Customers Increased customer numbers and acquisitions of dental centres driving strong revenue growth of 7% 4.8m up 14% • Decrease in underlying profit is driven mainly by regulatory (HY 2015: 4.2m) changes affecting Manises PPP hospital • Record occupancy levels in aged care business, Revenues by business up 2% to 95% • Bupa Chile growth driven by higher premiums in Isapre business • 100% shareholding in Bupa Chile 8 *Our aged care business, previously known as Sanitas Residencial
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES INTERNATIONAL DEVELOPMENT MARKETS Good revenue growth, although profit reduction primarily due to high claims in Thailand Revenues (1) Operating Environment up 12% CER £312.4m • Oil price-driven macroeconomic slowdown in up 16% AER Saudi Arabia (HY 2015: £279.7m CER) • Heavy flu season in Thailand resulting in high claims Underlying profit down 9% CER Performance £9.6m down 5% AER • Maintained strong market positions in Poland and Hong (HY 2015: £10.5m CER) Kong, driving 12% increase in revenue • Customers Despite economic pressures, growth in customer numbers has driven an increase in underlying profit in Bupa Arabia 11.4m up 9% • Underlying profit decline mostly driven by high claims in Bupa (HY 2015: 10.5m) Thailand • Hong Kong businesses continue to perform well Revenues by business (2) • Increased walk-ins in Poland supported by new flagship clinic in Warsaw • Increased shareholding in associate company in India, Max Bupa, to 49% 9 (1) Revenue of £312.4m does not include the revenues of our equity accounted associates (Max Bupa, India and Bupa Arabia) (2) Chart includes 100% of Bupa revenues from all businesses to give a sense of scale
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES BUPA GLOBAL Decline in profits following 2013 decision to exit non- strategic markets and investment in capability Revenues (1) Operating Environment down 3% CER £484.7m • Continued growth in demand for international private up 1% AER medical insurance (HY 2015: £499.9m CER) • Some corporate clients have faced economic pressures, particularly in the oil and gas sector, reducing the Corporate Underlying profit and SME book down 43% CER £30.1m down 41% AER Performance (HY 2015: £52.4m CER) • Revenue down 3%, with strong new business performance Customers and contributions from new geographies offset by significant 1.9m lapses following exit from non-strategic markets flat • Underlying profit down 43%, primarily due to investment in (HY 2015: 1.9m) capability and infrastructure • Record new business performance in Corporate book Revenues by business (2) • Bancassurance partnership in Hong Kong, a key contributor to new business growth • Good performance in Highway to Health 10 (1) Revenue of £484.7m does not include the revenue of our equity accounted associate (Highway to Health, part of Bupa Global North America) (2) Chart includes 100% of Bupa revenues from all businesses to give a sense of scale
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES SECTION 2 Financial review Joy Linton CFO Gareth Evans Group Treasurer 11
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES HY 2016 FINANCIAL OVERVIEW Revenues up 7%, Underlying profit up 2% Revenue up 7% at CER • Good revenue growth across all Market HY 2016 £5.3bn Units with the exception of Bupa Global up 8% at AER £5.0bn HY 2015 (CER) Underlying profit before tax (1) up 2% at CER • Modest profit growth in challenging conditions HY 2016 £261.7m up 3% at AER HY 2015 (CER) £256.8m (1) Underlying profit is defined as profit before taxation adjusted to remove amortisation and impairment of intangible assets arising on business combinations, impairment of goodwill, net property revaluation gains or losses, realised and unrealised foreign exchange gains and losses, gains or losses on return seeking assets, profits or losses on the sale of businesses and fixed assets, restructuring costs, transaction costs on acquisitions and disposals and one -off non trading items. 12
OVERVIEW FINANCIAL REVIEW OUTLOOK & OPERATING PRIORITIES HY 2016 FINANCIAL OVERVIEW Statutory profit impacted by one-off securitisation redemption charge Revenue up 7% at CER HY 2016 £5.3bn up 8% at AER HY 2015 (CER) £5.0bn Underlying profit before tax up 2% at CER HY 2016 £261.7m up 3% at AER HY 2015 (CER) £256.8m Statutory profit before tax • £112.3m net expense on the redemption of down 45% at AER HY 2016 £139.6m £235m secured loan notes • Return-seeking asset gains of £17.7m driven HY 2015 (AER) £255.4m by corporate bond and emerging market debt exposure 13
Recommend
More recommend
