Results Presentation Preliminary Results for the year ended 31 - - PowerPoint PPT Presentation

Results Presentation

Preliminary Results for the year ended 31 January 2017

Lance Batchelor Chief Executive Officer

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Saga plc Preliminary Results for the year ended 31 January 2017

Today’s Agenda

Lance Batchelor CEO Overview Jonathan Hill CFO Financials Lance Batchelor CEO Capital markets presentation: Evolution of the model to drive growth Matt Atkinson Chief Marketing Officer Project Connect Roger Ramsden CEO, Insurance Broking Insurance Broking Jeannette Linfoot MD, Tour Operating Division Tour Operations Robin Shaw CEO, Cruise Cruise Lance Batchelor CEO Summary Q&A

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Saga plc Preliminary Results for the year ended 31 January 2017

Saga investment case – key takeaways

• 1. Differentiated model
• 2. Consistent earnings growth
• 3. Enhanced confidence in future delivery

Saga plc Preliminary Results for the year ended 31 January 2017

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How we’re different – our model

1.Focus on growing demographic 2.Strong customer relationships and loyalty 3.Multiple businesses with differentiated products

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Saga plc Preliminary Results for the year ended 31 January 2017

Consistent delivery of profit growth and deleveraging

Saga plc Preliminary Results for the year ended 31 January 2017

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Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 £163.8m £172.1m £176.2m £176.2m £184.8m

Net debt to EBITDA PBT* IPO 3.1x 2.6x 2.4x 2.3x 1.9x

£193.3m

*Reported PBT from continuing

• perations on a

last 12 months basis, excluding IPO expenses in FY15

2.2x

Profit up and debt down since IPO

Clear strategy

• 1. Become increasingly customer centric
• 2. Grow earnings from core insurance and travel

businesses

• 3. Maintain our efficient operating model
• 4. Invest for future growth

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= Confidence in consistent financial performance and progressive dividends

Saga plc Preliminary Results for the year ended 31 January 2017

Evolution of our model

Retain and deepen our customer relationships

• Increased persistency
• Better cross-sell
• Rewarding retention

Improve new customer targeting

• More efficient acquisition spend

Generate increased profits at lower risk, with less capital

• Higher quality of earnings

Driven by project connect

Saga plc Preliminary Results for the year ended 31 January 2017

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Consistent group results

8 Reserve releases Travel



Underwriting



Retail insurance broking



• vs. FY 2016

Profits Finance costs

=

Saga plc Preliminary Results for the year ended 31 January 2017

(1) Profit before tax excluding derivatives and Odgen Impact

• Retail insurance broking

PBT +9%

• Travel PBT

+10%

• Underlying PBT(1)

+5.6%

• Debt ratio

1.9x

• FY dividend 8.5p

+18%

• 58% PBT growth in motor broking

– increased marketing and operational efficiencies – panel benefit – pricing optimisation – Full year of Bennetts

• Underwriting revenue decreased as expected

– external underwriters taking higher risk, higher premium policies, as expected

• Strong underwriting profit and cash delivery

– continued competitive advantage of AICL in lower risk drivers – solid in year profit performance – historic reserves reducing – quota share – less capital and less risk – solvency II – robust SCR

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Significant capital release from underwriter

Growing profits from broking, de-risking underwriting

Strong broking performance

Motor insurance

Saga plc Preliminary Results for the year ended 31 January 2017

Home broking

• Continued competitive environment in home insurance

– Limited premium inflation – Panel flexibility enabled stable policy volumes with limited profit reduction

Other broking

• Travel insurance

– Differentiated product has remained popular despite industry wide reduction in H2 travel demand and currency impacts on risk pricing

• PMI

– Enhanced proposition has led to robust performance

10

Other insurance performing robustly Home broking model continues to provide flexibility

Home broking and other broking

Saga plc Preliminary Results for the year ended 31 January 2017

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Robust travel performance

• On track to beat ambitious growth targets
• Strong growth in tour operating profitability with improved mix and business efficiencies
• Solid year in cruise as expected with planned maintenance

Saga plc Preliminary Results for the year ended 31 January 2017

£19.7m* £26.0m £30.3m £33.4m £4.8m* £13.6m £17.2m £17.8m

FY14 FY15 FY16 FY17

Travel Trading Profit and EBITDA

Travel EBITDA Travel Trading Profit

*FY14 figures have been adjusted to exclude the effect of the Saga Ruby that was retired in that year and reduced the Cruising fleet from 3 to 2 vessels

Launch of Spirit of Discovery

Saga plc Preliminary Results for the year ended 31 January 2017

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Saga Money

• Based on our customer insight we have expanded our product offering during year

and will continue to explore new product offerings. Healthcare

• The private pay trial in Hertfordshire continues to delight our customers.
• We will be cautiously exploring expanding the business in the future.

Retirement Villages

• We have successfully worked with Wadswick Green and are now considering

expanding deeper into the category. 13

Emerging businesses

Saga plc Preliminary Results for the year ended 31 January 2017

Saga is learning its way into three new categories, all of which have the capacity to contribute materially for us in the future:

The future – investments to support profit growth

1.Cruise ship 2.Modernised insurance platform 3.New claims platform 4.Customer insight tools

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Saga plc Preliminary Results for the year ended 31 January 2017

Jonathan Hill Chief Financial Officer

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Saga plc Preliminary Results for the year ended 31 January 2017

Another consistent year of profit growth

• Strong PBT growth despite Ogden

impact

• Continued high cash generation

enabled further deleveraging. Now within medium-term target range

• Net debt of £464.8m (FY2016:

£547.7m)

• Increased dividend underlines

confidence in future performance

Saga plc Preliminary Results for the year ended 31 January 2017

16

Debt ratio

1.9x

(0.4)x

Proposed full year dividend

8.5p

18 %



From continuing operations

Profit before tax (excl. derivatives and Ogden)

£187.4m

5.6 %



Profit before tax

£193.3m

9.7 %



• vs. FY 2016

Strong group results

• Strong customer spend

increase reflecting attractive propositions

• Revenue decrease

reflects impact of quota share

• Lower finance costs

from reduced average debt

• PY includes £6.9m loss
• n discontinued
• perations

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Revenue Profit before tax Profit after tax Basic EPS(2)

£963.2m £176.2m £141.2m

FY 2016

13.3p £871.3m £193.3m £157.3m

FY 2017

14.1p

(9.5)% 9.7% 11.4%



6.0%



(1) Customer spend represents the total amount that customers spent on products provided by the Saga group of companies, including gross written premiums, ancillary income and Insurance Premium Tax for all of the core policies and add-ons sold in the period (2) From continuing operations



Saga plc Preliminary Results for the year ended 31 January 2017

Customer spend(1)

£1,128.5m £1,182.2m 4.7%



Increased profit from retail insurance and travel businesses

£126.5m £138.0m

FY 2016 FY 2017

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Motor broking Home broking Other broking Travel

PBT growth from retail broking

£28.6m £63.4m £34.5m £13.5m

FY 2016 58.0% (3.5)% (8.4)% 10.4%

+9.1%

£45.2m £61.2m £31.6m £14.9m

FY 2017 Profit before tax

Saga plc Preliminary Results for the year ended 31 January 2017

Underwriting

£84.1m

(8.3)%

£77.1m

Insurance – Focus on broking

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Saga plc Preliminary Results for the year ended 31 January 2017

• Enhanced disclosure facilitates identification of broked earnings
• Allows improved assessment of higher quality earnings stream

FY2017 Motor broking Home broking Other insurance broking Total retail broking Revenue £127.5m £89.8m £80.4m £297.7m PBT £45.2m £61.2m £31.6m £138.0m Profit per core policy £33.1 £48.8 £82.9 £46.0 Core policies 1,366k 1,254k 381k 3,001k FY2016 Revenue £89.5m £90.0m £82.4m £261.9m PBT £28.6m £63.4m £34.5m £126.5m Profit per core policy £23.1 £49.3 £90.1 £43.5 Core policies 1,238k 1,287k 383k 2,908k

Strong in-house motor underwriting performance

20

Reducing revenue and lower reserve releases

Comparable Expense and Combined Operating Ratios*

£248.2m £84.1m £223.5m £77.1m NEP Profit before tax

– Revenue decreased 10% due to 3rd party underwriters on motor panel – Resulted in lower claims costs – Favourable small and large PI claims enabled reserve releases of £63.0m pre-Ogden (FY 2016: £68.0m)

FY 2016 FY 2017 FY 2016 FY 2017 100.5% 99.4% 72.0% 99.6% 71.4% UK Market** Saga (FY 2016) Saga (FY 2017) Pure COR COR

**EY statistics to end of December 2015 *2017 figures exclude the impact of the new quota share arrangement and Ogden impact to ensure a like-for-like comparison

Saga plc Preliminary Results for the year ended 31 January 2017

Quota share – reduces risk and volatility

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• Net cost of £1.6m for quota share

Underwriting P&L 12m to Jan 2016 Growth Underlying Quota Share + Ogden 12m to Jan 2017 Revenue £248.2m (10.0%) £223.5m (£111.2m) £112.3m Profit before tax £84.1m (8.3%) £77.1m (£4.0m) £73.1m Reported COR 72.0% (0.6%) 71.4% Pure COR 99.4% 0.2% 99.6%

Saga plc Preliminary Results for the year ended 31 January 2017

Insurance – focus on broking profitability

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• Panel and pricing optimisation
• Marketing efficiencies
• Operational efficiencies
• Claims and Insurance platform
• Reserve releases

Saga plc Preliminary Results for the year ended 31 January 2017

• Solvency capital has reduced to £146.7m from £219.6m
• Reduction to appropriate level due to quota share and smaller underwriter
• Release of extra capital supported further deleveraging and enhanced dividend
• Remain well capitalised

Robust Solvency II position

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Solvency II coverage

£102.9m £146.7m £43.8m

SCR Solvency coverage Solvency II capital

Surplus Solvency II capital SCR Saga plc Preliminary Results for the year ended 31 January 2017

170% 143%

31 Jan 2016 31 Jan 2017

Travel – continued demand

• Tour Operating

– 32% increase in PBT – Continued shift towards higher margin/value long-haul products – Profit growth benefitted from increased efficiency

• Cruise

– Customer revenue and PBT decreased due to scheduled Saga Sapphire maintenance – Offset by improvement in per diems and cost base 24

Revenue Number of holidays passengers FY 2016

£423.1m 189k

2.1% 0.5%

Number of cruise passengers 24k

(12.5)%

Profit before tax

£13.5m

10.4%

FY 2017

£432.0m 190k 21k £14.9m

Saga plc Preliminary Results for the year ended 31 January 2017

Cash Generation

25

• Available cash flow

increased by 22.2%

• Increase driven by:

– capital release from AICL due to historically strong solvency position – initial impact of quota share

• n solvency
• Will reduce towards 70%

Sustained cash generation

*Net cash flow from operating activities after capital expenditure but before tax and interest paid and non-trading items.

Saga plc Preliminary Results for the year ended 31 January 2017

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% £0m £50m £100m £150m £200m £250m £300m FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Trading EBITDA Available operating cash flow* Available operating cash flow %*

Capital structure

26

• Strong cash

generation has driven further deleveraging

• Net debt of £464.8m

(FY2016: £547.7m)

• Now within medium

target range of 1.5- 2.0x

• Moving towards 1.5x

ahead of new ship delivery

Net debt to Trading EBITDA

Target debt ratio achieved

3.1 2.6 2.3 1.9 1.5 1 1.5 2 2.5 3 3.5 May-14 FY 15 FY 16 FY 17 FY 17-Jul19 Jul-19 Ongoing ratio Net debt to EBITDA

Saga plc Preliminary Results for the year ended 31 January 2017

Financial outlook and guidance

• Expectation of improved insurance broking earnings
• Travel expected to be strongly ahead

– Current trading strong with current booked revenue for FY18 departure 8% ahead of prior year

• Lower finance cost on lower average net debt
• Offset by declining reserve releases
• Continued investment in growth
• Rate of deleveraging will slow following prior year boost from reduced SCR

and initial impact of quota share Aiming to deliver consistent PBT growth and deleverage further

Saga plc Preliminary Results for the year ended 31 January 2017

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Capital markets presentation

Lance Batchelor Chief Executive Officer

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Saga plc Preliminary Results for the year ended 31 January 2017

Evolution of the model to drive growth

Saga plc Capital Markets event 2017

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The evolution of the model

Project Connect Differentiated customer propositions Segmentation based

• n customer value

Deep insights Improved outcomes New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Matt Atkinson Chief Marketing Officer

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Saga plc Capital Markets event 2017

Saga plc Capital Markets event 2017

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We built a new integrated picture of our customers…

High Affinity Other

Number of customers

Deep insights Segmentation Customer propositions

High affinity customers comprise 80% of customer value

Saga plc Capital Markets event 2017

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• 20
• 10

10 20 30 40 # Products Retention Rate Avg Tenure HAC Other

Index to average

High Affinity Other

• Identified c.500k customers

with a very specific profile

• Defined as a specific cohort of

high affinity customers (“HACs”)

• The high affinity customers have deep

relationships with Saga:

‒ hold more products than average ‒ contribute more sales ‒ greater loyalty ‒ buy premium versions of our products

The insight provides significant opportunity

Deep insights Segmentation Customer propositions

We have used this insight to build tailored profiles

Unlocking future value by curating customer journeys

Saga plc Capital Markets event 2017

34 We know:

• What proposition will

they will engage with

• How to acquire them

effectively

• How to cross-sell the

next best product

• How likely they are to

retain with us

Deep insights Segmentation Customer propositions

Unlocking future customer value

Focus on rewarding, nurturing and acquiring our target customers

Saga plc Capital Markets event 2017

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HACs (483K) Incubation Customers (511k)

Other customers Other customers

Creating new activities:

• More effective acquisition spend on

incubation customers

• Nurturing the 511,000 incubation

customers that share similar traits to the HACs

• More differentiated propositions
• Create a proposition to increase

retention and increase cross-sell

Reward Nurture Acquire

Churn Deep insights Segmentation Customer propositions

We are creating a new proposition that will increase retention and product holding

• Say thank you to customers – reducing churn and protecting value
• Rewards them for loyalty in exciting ways
• Encourages them to choose to buy more products from the Saga family

Saga plc Capital Markets event 2017

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Deep insights Segmentation Customer propositions

The proposition is based on detailed understanding and input from customers

Saga plc Capital Markets event 2017

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Their time Making their money go further Keeping their health Trying new things Being appreciated A sense of belonging

Deep insights Segmentation Customer propositions

Saga Possibilities will open an exciting new world of

• pportunities for our members

The core membership benefits

Saga plc Capital Markets event 2017

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Immersive and exciting experiences Enhanced Saga products Knowledgeable expertise Everyday rewards

Saga Possibilities will give you access to..

The more you have and the longer you have it, the better it gets

Deep insights Segmentation Customer propositions

What does the future look like?

40

• More efficient acquisition
• Lower CPAs
• The ability to attract our target

customers to Saga

• Increase engagement
• Retain more of our target customers
• Reward loyalty with benefits
• Increase in average number of products

held

• Increase profit per customer

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell Improved outcomes

Roger Ramsden CEO Insurance broking

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Saga plc Capital Markets event 2017

Smarter acquisition of high affinity customers

Saga plc Capital Markets event 2017

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• The customer insight has allowed us to be more effective at the acquisition of high

affinity customers

• We can demonstrate that high affinity customers have a higher historical three year

value

61% 39%

FY17 gross new business

HACs Non-HACs

Change in customer value from FY14 to FY17

HACs +11ppts Non-HACs +6ppts

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Increased cross-sell

Saga plc Capital Markets event 2017

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• Number of new Home and Motor cross-holding customers has grown over last 3 years

70 85 87 60 65 70 75 80 85 90 FY15 FY16 FY17 000s

New customers with both Home and Motor

1.22 0.87 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 0% 10% 20% 30% 40% 50% 60% 70% 80%

Home and Motor product holders

Proportion of customers Additional products

HACs Other products held

HACs Non-HACs

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Motor panel delivering better product propositions

Saga plc Capital Markets event 2017

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Sales distribution mix Vehicle value £000s 0% 40% 20% 60% 5k 10k 15k 20k 25k 30k 35k 40k 45k 50k 55k 60k

• Motor panel enables targeting of

wider customer segment

• Offers more competitive pricing
• 3rd party panel underwriters

provide access to higher value vehicles and customers

• Working exactly as expected

3rd party underwriters AICL New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Lower CPA driving increased margins

Saga plc Capital Markets event 2017

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• Marketing cost per new business policy reduced by 6.6% over 5 years

£27 £28 £29 £30 £31 £32 £33 £34 £35 £36 FY14 FY15 FY16 FY17

Marketing cost per policy ("CPA")

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Jeannette Linfoot MD Tour Operating Division

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Saga plc Capital Markets event 2017

In-depth customer insight into changing customer needs

Saga plc Capital Markets event 2017

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• Desire to travel frequently and further afield
• Sense of adventure
• Authentic cultural experiences & connections
• Flexibility
• Never miss out make the most of every trip
• Take the hassle out of travelling

Within our HACs, 85k are within Saga holidays, with an average spend per customer per holiday of £1,900 vs £1,500 for non-HACs

Characteristics of HACs vs non-HACs

Findings of in-depth customer insight work

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

New differentiated product propositions

If you're going to do it, do it properly, do it with Saga

Saga plc Capital Markets event 2017

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Go For It

• Jaw-dropping adventure
• Bucket list
• Cultural experiences
• Local Expert Guide
• Authentic experiences

Stay & Explore

• In-depth destination

experience

• Live like the locals
• Handpicked unbeatable

locations

• Easy reach of local sights
• Expert on hand

Discover

• Ultimate touring holiday
• Epic journeys of a lifetime
• Road, rail or river
• Easy to fast pace you

choose

Unwind

• Stayput holidays across the

globe

• Dedicated Saga representative
• Wide range of activities
• Oceanfront hotels
• Fantastic hotel facilities

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Marketing campaign and new proposition has driven brand reappraisal & interest

Saga plc Capital Markets event 2017

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326k Travel Insurance Policy Buyers 56% 45% 54% 12% 11% 20% 10% 49%

Makes me feel Saga are changing for the better It's not the kind of advertising I'd expect from Saga Holidays I like the style of the advertising It's an old-fashioned style Ad Diagnostics (5pt scale) – among recognisers

Source: Hall & Partners Tracking 2016/17

“One hundred per cent improved on my idea of the company, makes me want to book a holiday with them today.” (non customer) “It reminded me that Saga Holidays are for age 50+ which can be active, curious and adventurous – and not

• nly for the more elderly and less able

amongst us.” (Saga Customer)

Agree (Top 2 box) Disagree (Bottom 2 box) Notably higher than benchmark

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Strong financial performance from customer led strategy

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Saga plc Capital Markets event 2017

• Forward bookings up 8% year on year for

FY17/18 and double digit growth for 18/19 departures

• Out performing the travel industry average
• Pipeline of innovation continues to reshape

proposition 72 new experiences to be launched for Q2/Q3

108 101 95 85 90 95 100 105 110 FY15 FY16 FY17

£

Marketing cost per acquisition

24% 25% 28%

22% 23% 24% 25% 26% 27% 28% 29% FY15 FY16 FY17

% First time buyers

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

FY15 FY16 FY17

Tour Operating PBT historic trend

£5.6m £8.7m £11.5m

Using customer insight to drive cross-sell opportunities between travel insurance and travel

51

Saga plc Capital Markets event 2017

• Currently leveraging cross-sell opportunities to

drive First Time Buyers

• Building customer insight to identify ‘hottest’

prospects

• 87% of customers answered the question

‘which kind of trip are you planning?’

• For the question ‘is your trip booked yet’ 31%

hadn’t Combination of cross-sell and membership to leverage further growth in Travel

326k Travel Insurance Policy Buyers 7k Travel insurance & travel buyers Opportunity for cross-sell New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Robin Shaw CEO Saga Cruise

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Saga plc Capital Markets event 2017

Meaningful recognition and reward for our HAC cohorts is improving our marketing effectiveness

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

• 1. Existing “High Affinity” Cruise Customers

Over £1million additional revenue generated Conversion levels increased three- fold versus standard

53

Meaningful recognition and reward for our high affinity customer cohorts is improving our marketing effectiveness

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

54

• 2. “High Affinity” Holiday (non Cruise) Customers

First Time Buyer acquisition cost reduced by 70%

• 3. Saga Magazine Subscribers

Over 150 passengers generated

Customer insight has been fundamental in developing a new highly differentiated proposition for Saga Cruise

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Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Existing Proposition

• Excellent quality
• First class service
• Amazing value

Customer insight told us about…

Customer needs and views

• A desire for new experiences
• Their need for flexibility
• To travel on their terms
• To be treated as an individual
• A willingness to pay for quality

Barriers to cruise

• Misconception of time spent at sea
• Time spent in ports too limited
• Worries of being trapped and herded

Positives about cruise

• The ship being a floating hotel
• Cruising offering a freedom that other holidays cannot
• A cruise enabling experiences of multiple destinations and cultures

A new and highly differentiated cruise proposition which…

• Overcomes barriers and misconceptions
• Amplifies positives of both Cruising and Saga Cruise

Our new Cruise proposition will reposition and reframe Saga Cruise

56

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

Overcoming Barriers and Perceptions Amplifying positives Through offering adventure & wow…

“On-board and ashore we create experiences that wow our customers and inspire and deliver their adventures”

Being thoughtful and personal…

“We think about the little details that matter to create exceptional and personal luxury experiences”

Unforgettable Experiences … Small Ship Luxury

57

Functionality … Improved functionality

• 8% balconies
• Average cabin 15m²
• 20% inside cabins
• Largest suite 50m²
• Simple cabaret lounge
• Restricted itineraries
• 100% balconies
• Average cabin 24m²
• No inside cabins
• Largest suite 68m²
• Fit for purpose theatre
• Able to visit all countries

Choice … More choice

• 2 eating locations
• 1 entertainment venue
• 2 bars
• 50 single cabins
• 5 main eating locations; incl.
• 3 signature restaurants
• 4 entertainment venues
• 5 bars
• Enhanced spa and gym
• Over 100 dedicated single cabins

Personalisation … Enhanced personalisation

• Hotel staff ratio of 1.7 pax:crew
• VIP chauffer car service
• Catering all dietary requirements
• Meet and dine with officers
• All that we currently do and
• Personal exploring ashore advice
• Individual wellness programmes
• Upgraded suite butler services
• All entertainment genres
• Pre-cruise concierge service

Our new ship is the ideal platform for future customer expectations

Now: Saga Pearl II 449 passengers Future: Spirit of Discovery

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

A strong strategy set to deliver increased value

58

Saga plc Capital Markets event 2017

New customer propositions Smarter Acquisition Increased retention Increased cross-sell

• Future-proofed ship design

and unique cruise proposition developed through customer insight

• High satisfaction and demand
• Improved repeat rates
• Reduced acquisition costs
• Strong customer demand
• Build a new ship built to

highest standards with latest ship technology

• Lower fuel costs per customer
• Improved economies of scale
• Reduced R & M costs
• Improved ship resilience
• Significant reduction in
• perating costs per capacity

day Robust business case for launch of New Ship in June 2019

Design Ship construction Action Delivering Outcome

Lance Batchelor Chief Executive Officer

59

Saga plc Capital Markets event 2017

Summary

Our achievements this year:

• Delivered third year of consistent results with underlying PBT +5.6%
• Project Connect is fully imbedded within the business, leading to:

‒ new propositions ‒ better retention ‒ increased cross-sell ‒ more effective acquisition

Increased confidence to deliver sustainable profit growth at lower risk, with less capital

Saga plc Capital Markets event 2017

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Measuring our performance

• Consistent sustainable PBT growth

– Enhancing quality of earnings with reducing reserve releases and investment in growth

Saga plc Capital Markets event 2017

61

Group KPIs FY17 The future Underlying PBT growth 5.6% Consistent sustainable profit growth Insurance broking PBT £138.0m Targeting increased broked earnings Travel PBT £14.9m Increase by 4-5 times over five years Dividend per share 8.5p Payout of ratio of 50-70% Net debt to EBITDA 1.9x In the range of 1.5-2.0 times Customer KPIs HACs (A) 483k n/a Product holding per HAC (B) 2.1 n/a Total products held by HACs (AxB) 1,014k Increase by 20% over the next five years

Q&A

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Saga plc Capital Markets event 2017

Biographies

Matt Atkinson,

Matt joined Saga in September 2015 as Group Chief Marketing Officer, and sits on Saga’s Executive Committee. He is responsible for marketing and customer engagement across all of Saga’s communication and e-commerce

• activities. Before joining Saga, Matt held a number of senior

roles at Tesco plc. Prior to this, Matt was Global CEO of Marketing Services for Havas, and has held Managing Director roles at Omnicom, and Saatchi & Saatchi.

Chief Marketing Officer

64

Saga plc Capital Markets event 2017

Roger Ramsden

Prior to joining Saga in August 2008 as CEO of Saga insurance broking, Roger was Managing Director of the household insurance business of RBS Insurance and Strategy and Marketing Director for the RBS Insurance Group. Previously, he was Commercial Director at Prudential for the UK life and pensions business, covering all marketing and product

• activities. Before joining the financial services

industry, Roger’s career was in food retailing as Marketing Director of Safeway and Management Consultancy for the Boston Consulting Group. He started his career at Unilever.

CEO, Insurance broking

65

Saga plc Capital Markets event 2017

Jeannette Linfoot

Jeannette joined Saga as Managing Director of Saga's tour

• perating division in December 2015, and is responsible for

Saga Holidays, Titan Travel, Destinology and the VIP transport division. Her role is focused on spearheading growth across the three brands and leveraging the travel potential across the wider Saga Group. Prior to joining Saga she held the position of Managing Director, Emerging Markets for TUI Travel. Jeannette also spent a number of years as product director at First Choice and Head of Product at Thomas Cook. Prior to this, Jeannette also spent time as a Government Economist responsible for demographic profiling and pensions forecasting.

Managing Director, Tour Operating Division

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Saga plc Capital Markets event 2017

Robin Shaw

Robin joined the Saga in March 2010 as CEO of its Cruise

• Division. As well as operating the existing Saga Sapphire and

Pearl II cruise vessels, he is also responsible for the development of Saga’s new ship build programme. Robin’s previous experience was gained at Royal Caribbean Cruise Lines, where he was latterly VP Managing Director for UK and Ireland with responsibility for the Royal Caribbean, Celebrity and Azamara brands. Prior to Royal Caribbean, Robin worked for Avis Europe, taking responsibility for fleet purchasing and operations across Europe, which followed senior roles within finance. Robin spent the majority of his early career at PepsiCo working first for their restaurants division before transferring to their snack foods division in Poland. Robin is also a qualified chartered accountant.

CEO, Saga Shipping

67

Saga plc Capital Markets event 2017

Appendix

Reserve releases

• Reserves have reduced by

£5m year-on-year

• No deterioration in reserve

margin 69

FY 2017 Total Group Reserve Releases by Accident Year (£m)

3.9 5.4 7.1 12.0 15.2 11.8 9.8

• 2.3

2008/09 and prior 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Saga plc Preliminary Results for the year ended 31 January 2017

£m 12m to Jan 2017 % Growth 12m to Jan 2016 Revenue £871.3m (9.5%) £963.2m Trading Profit £213.0m 0.9% £211.0m Non-trading items (incl. IPO expenses) (£1.9m) (£3.3m) Amortisation of acquired intangibles (£6.5m) (£6.3m) Net finance costs (£17.2m) (£24.0m) Profit before tax excluding derivatives and Ogden impact £187.4m 5.6% £177.4m Net fair value gains/(losses) on derivatives £9.9m (£1.2m) Ogden rate change impact (£4.0m)

• Profit before tax from continuing operations

£193.3m 9.7% £176.2m Tax expense (£36.0m) 28.1% (£28.1m) Loss after tax for the year from discontinued operations

• (£6.9m)

Profit after tax £157.3m 11.4% £141.2m Basic earnings per share: Earnings per share from continuing operations 14.1p 6.0% 13.3p

70

Saga Plc consolidated P&L

Saga plc Preliminary Results for the year ended 31 January 2017

Insurance Underwriting P&L

71

Underwriting P&L 12m to Jan 2017 Ogden Impact Quota Share Underlying Growth 12m to Jan 2016 Revenue A £112.3m (£0.7m) (£110.5m) £223.5m (10.0%) £248.2m Claims costs B (£93.9m)

• £102.0m

(£195.9m) (11.2%) (£220.6m) Reserve releases C £59.9m (£3.1m)

• £63.0m

(7.4%) £68.0m Other cost of sales D (£9.6m) (£0.2m) £11.8m (£21.2m) 2.4% (£20.7m) Total cost of sales E (£43.6m) (£3.3m) £113.8m (£154.1m) (11.1%) (£173.3m) Gross profit £68.7m (£4.0m) £3.3m £69.4m (7.3%) £74.9m Operating expenses F (£2.8m)

• £2.6m

(£5.4m) 0.0% (£5.4m) Investment return £7.2m

• (£7.5m)

£14.7m 0.7% £14.6m Quota share net cost

• £1.6m

(£1.6m) n/a

• Profit before tax

£73.1m (£4.0m)

• £77.1m

(8.3%) £84.1m Reported loss ratio (B+C)/(A 30.3% 59.5% (2.0%) 61.5% Expense ratio (D+F)/A 11.0% 11.9% 1.4% 10.5% Reported COR (E+F)/A 41.3% 71.4% (0.6%) 72.0% Pure COR (E+F-C)/A 94.7% 99.6% 0.2% 99.4% Saga plc Preliminary Results for the year ended 31 January 2017

Travel P&L

72

12m to Jan 2017 Growth 12m to Jan 2016 Tour Operating Cruising Total Travel Tour Operating Cruising Total Travel Revenue £350.1m £81.9m £432.0m 2.1% £336.9m £86.2m £423.1m Profit before tax excluding derivatives £11.5m £3.4m £14.9m 10.4% £8.7m £4.8m £13.5m Number of holidays passengers 190k n/a 190k 0.5% 189k n/a 189k Number of cruise passengers n/a 21k 21k (12.5%) n/a 24k 24k Number of cruise passenger days n/a 301k 301k (11.2%) n/a 339k 339k

Saga plc Preliminary Results for the year ended 31 January 2017

Cash flow and liquidity

73

Available Cash Flow 12m to Jan 2017 Growth 12m to Jan 2016 Trading EBITDA £246.1m 3.1% £238.8m Less Trading EBITDA relating to restricted businesses (£109.9m) 14.7% (£95.8m) Intra-group dividends paid by restricted businesses £115.0m 94.9% £59.0m Working capital and non-cash items (£13.6m) 267.6% (£3.7m) Capital expenditure funded with available cash (£20.0m) (1.0%) (£20.2m) Available operating cash flow £217.6m 22.2% £178.1m Available operating cash flow % 88.4% (13.8%) 74.6%

Saga plc Preliminary Results for the year ended 31 January 2017