Professional services for global insurance markets Delivering substantial progress Results for the half year to 30 June 2015 August 2015 Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015
Delivered substantial progress in H1 2015 • Increased Revenue +21.7% to £69.1m • Increased Statutory PBT +28.1% to £5.3m • Increased Adjusted PBT +14.1% to £5.9m • Increased Statutory EPS 1. +1.5% to 7.84p • Increased Adjusted EPS 2. +10.2% to 8.00p • Progressed numerous growth initiatives - including: • Completed Rights Issue • Launched Lloyd’s turn -key managing agent • Acquired international life insurer • Agreed to acquire significant stake in insurance software specialist – expected to complete October 2015 • Interim dividend of 3.00p (2014: 2.85p 1. ) Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 1. 2014 figures rebased to allow for the increased shares in circulation following the Rights Issue in April 2015. 2 2 2. Adjusted EPS figures have an adjustment applied to share capital to allow for the full effect of the Rights Issue in both H1 2015 and 2014.
Focusing on organic growth from professional services with targeted acquisitions Strong fundamentals • Well established in Consistently profitable global insurance market • Reliable revenue Positive prospects • Long-standing, loyal streams client relationships • Diversified, resilient • Driving forward four • Highly skilled, business key growth themes: technically excellent • Well supported - Grow mutual-related staff dividend businesses - Expand Adjusting Services - Build on existing ISS skills and services - Consolidate run-off life insurers • Healthy acquisition pipeline Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 3 3
Positioned for growth in global insurance markets Professional Services – revenue principally from fees Owned Insurance Companies Management Adjusting Insurance Support Owns and consolidates life insurance companies. Owns End to end insurance Loss adjusting for larger and Stand-alone professional and runs-off non-life company management more complex losses insurance support services insurance companies Revenue H1 2015 1 Management 22% Ins Cos Insurance 5% 35% Support Adjusted EPS H1 2015 2 Adjusting 43% Staff breakdown Professional Services 95 % H1 2015 Expanding global network Insurance Support Management • • • • • • 19% 25% • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 56% • Adjusting • • • • • We have over 1,200 staff in 69 offices in 28 countries worldwide 3. Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 1. Stated before inter-segment eliminations. 2. Excludes acquired intangible amortisation of £0.7m and non-recurring costs of £0.1m. 4 3. As at 27 August 2015.
Strong first half from ISS, steady performance from MS – market-wide reduction in claims and investment for growth slows AS H1 Results 2015 Revenue Operating segment Group (£m) profit H1 2015 H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 Adjusted PBT 5.9 5.2 Management 23.6 20.3 3.1 3.1 (£m) Adjusting 29.4 26.4 0.8 1.4 Statutory PBT 5.3 4.1 Insurance 15.3 9.7 2.6 1.1 (£m) Support Adjusted EPS 8.00 7.25 Professional 68.3 56.4 6.6 5.6 (p) 2. Services 1 Statutory EPS 7.84 7.73 Owned Ins Cos 0.2 0.0 (p) 3. 2.5 2.0 Statutory EPS - 6.96 5.99 Eliminations (1.6) (1.6) - - rebased (p) 3. Group 1 69.1 56.8 6.8 5.6 2.85 Dividend per 3.00p share (p) 3. 1. Small rounding differences arise in the total amounts above 2. Adjusted EPS figures have an adjustment applied to share capital to allow for the full effect of the Rights Issue in both H1 2015 and 2014. 3. 2014 figures rebased to allow for the increased shares in circulation following the Rights Issue in April 2015. Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 5
Benign claims market - losses continue to be below 10-year average Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 6
Long term trend in insured losses is still upwards Source: Munich Re, NatCatSERVICE (2015) Trend Insured losses US$m Insured losses US$m Munich Re: “ It would be wrong to conclude any trend reversal based on 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 2015 Half Year Results 28 August 2015 7
Balance sheet strengthened following Rights Issue and improved working capital performance in AS Net debt (£m) (Net debt)/ (Average cash annual net debt)/cash At 30 June 2014 (21.9) (23.7) At 31 Dec 2014 (32.6) (24.6) • Net debt benefits from Rights Issue proceeds • We have again benefited from the advanced fee payment by an At 30 June 2015 1.8 (18.2) insurance company client reducing debt from the y/e figure Retirement benefit Adjusting Services WIP Debtors Working obligation (£m) working capital (months) capital months At 30 June 2014 31.4 At 30 June 2014 5.3 5.3 10.6 At 31 Dec 2014 41.5 At 31 Dec 2014 4.8 4.9 9.7 At 30 June 2015 36.2 At 30 June 2015 4.9 4.5 9.4 Movement primarily due to changes We are focused on managing Adjusting Services’ working capital: • Appointed a dedicated working capital manager in 2015 in financial assumptions arising from • Started rolling out new case management system movements in corporate bond yields Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 8
Delivering on growth themes Delivered H1 Pipeline Comment Deliver increased revenues by Seeking new Grow - Secured Strike Benefits growing alongside the mutual opportunities Mutual- Club insurers managed by Charles Taylor, flowing Long related management through offering new products and services, gestation businesses contact and winning new contracts period Key growth themes - Opened new Select Grow adjusting revenues by Expand Geared for offices opportunities expanding into new locations and Adjusting recovery - Hired senior in the short/ expanding the services offered from Services loss adjusters medium term each office - Launched Build on Generate new revenues by New Select CTMA and won existing ISS extending our professional services services opportunities 1 st client skills & capabilities for global insurance gaining in the short/ - Agreed to services markets traction medium term acquire Fadata Building - Acquired Select Consolidate Secure capital releases by acquiring record of Scottish opportunities run-off life and consolidating international run- acquisitions Widows in the short/ insurers off life insurance businesses and releases International medium term Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 9
Accelerating growth and shareholder value • Charles Taylor is a strong, resilient and diversified Group • Our people are highly regarded , technically excellent and committed to service excellence • Our people are supported by strong leadership across all business lines • Our extensive and growing office network ensures we are located close to our clients • We are successfully executing on our business strategy for growth : – Management Services has secured a new mutual insurance company client ; we are working on many new initiatives to deliver further growth – Adjusting Services is geared for growth in profits when market claims reverts to norm. We are expanding our network and recruiting experienced adjusters – Insurance Support Services is delivering strong results and is working on numerous insurance services initiatives – Owned Insurance Companies is acquiring and consolidating run-off life insurers • We have successfully completed a Rights Issue to support our targeted strategy to source and complete attractive opportunities for acquisitions joint ventures and business investments across all business lines Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 10
Background materials Charles Taylor plc Investor Presentation 2015 Half Year Results 28 August 2015 11
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