Half year results for the six months to 30 June 2013 Charles Taylor plc 30 August 2013 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013
Charles Taylor – positive prospects, fundamentals in place for growth Strong fundamentals Consistently profitable • Well established in the global insurance • Positive prospects Reliable revenue market • Long-standing, loyal streams • • Diversified business client relationships Reinforcing business • • Well supported Highly skilled, foundations • dividend technically excellent Implementing staff strategic growth plan • Actively managing down debt Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 2 2
Positive start to 2013 • Increase in group adjusted profit before tax and statutory profit before tax • Adjusted earnings per share and statutory earnings per share increased • Professional Services profit up with improved trading conditions for Adjusting Services • Cautious outlook for H2 with more demanding conditions for much of Professional Services • Interim dividend of 3.25p Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 3 3
Focused on delivering professional services to the global insurance market Professional Services – revenue principally from fees Run-off Management Adjusting Insurance Support Owns and runs off closed insurance companies End to end insurance Loss adjusting for larger and Stand alone professional Run-off company management more complex losses insurance support services 10% Revenue H1 2013 1 Management Adjusting 35% 51% Adjusted EPS H1 2013 1 Insurance Professional 14% Support Staff breakdown 2013 2 Services 90% Adjusting Insurance 16% • • • Support • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 58% 28% • • • • • • Management • • • • We have around 1,000 staff in 50 offices worldwide 4 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 4 1 Stated before inter-segment eliminations. 2 Excludes shared services teams. 3 Excludes customer relationship intangible amortisation and non-reoccurring costs of £1.0m. 4 As at 30 June 2013.
A period of continued progress Half year results 2013 £m Revenue Operating segment profit H1 2013 H1 2012 H1 2013 H1 2012 1 Group H1 H1 Management 19.1 18.1 2.2 2.5 2013 2012 Adjusting 28.3 25.4 3.6 2.6 Adjusted 5.5 4.4 Insurance 8.0 8.5 0.2 (0.0) PBT (£m) Support Adjusted 11.26 9.06 Professional 55.4 52.0 6.0 5.0 EPS (p) Services 2 Statutory 8.19 7.47 EPS (p) Run-off 2.5 2.6 0.4 0.1 Dividend 3.25 3.25 Eliminations (1.7) (1.6) - - per share (p) Group 2 56.1 53.0 6.3 5.1 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 1 Restated for IAS19R. 2. Small rounding differences arise in the total amounts above 5
Average net debt benefits from advance fee payment. Pension deficit shrinks Debt movements £m Since 1 January Since 1 July • Advance payment in Q1 2013 2012 of annual fee by a Opening balance 29.5 34.2 mutual insurance client Term debt repayments (1.5) (3.0) reduces H1 net debt Other debt movements (8.3) (11.5) • Adjusted for this effect, At period end 19.7 19.7 net debt is in line with June 2012 Adjusting Services working capital Months As at 30 June 2013 As at 30 June 2012 • Reduction in pension WIP 4.9 5.7 obligation due to Debtors 4.6 4.6 favourable market conditions, investment Total working capital months 9.5 10.3 returns and employer Retirement benefit obligation 23.2 38.8 contributions £m Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 6
Business strategy advanced across all business lines Reinforce the foundations Create growth in the core Professional Services Broadened product Enhanced operations Extended reach offering and service • Investing in Adjusting claims • Launched Standard Hull • Acquired majority stake in management system insurance product Saudi Arabia adjusting business • Focusing on working capital • Appointed by managing • Integrated Colombia improvements agent for Taylored Claims Management adjusting offices • Driving improved business • Established and • Continued to build efficiency developing onshore US property & casualty • Revitalised Group finance captive manager adjusting capability in • Offshoring ICT services Jakarta • Developing new corporate literature and revamped website Explore strategic options Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 7
Positive start to 2013 - more cautious H2 outlook H1: Margin impacted partly due Management to a increase in people costs Services H2: Outlook remains positive H1: Benefited from upturn in claims activity, Professional Adjusting H2: Cautious outlook: some staff movement; Services Services investment in offices, people and claims system H1: New services taking time to gain traction Insurance Support Services H2: Continued slow progress; driving promising initiatives, but taking time to come to fruition H1: Improved claims experience Insurers in H2: Will not benefit from a repeat of the Run-off substantial cash release seen in 2012 We are enthusiastic about the potential for growth in the market for insurance services Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 8
Appendices Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 9
Good performance by Management Services business Management Services profile H1 2013 key points • • Continued positive performance from Provides end-to-end management of mutual insurance company clients insurance companies • Negotiated new Signal fee arrangement • Delivers a complete outsourced from Q4 management service covering every • Launched Standard Hull insurance aspect of the companies’ operations product from the marketing and the management of underwriting and claims, to the provision of regulatory, accounting and administrative Clients operations Growth opportunities • Grow mutual membership • Introduce new products and services • Identify opportunities for new insurance collectives Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 10
Adjusting Services benefited from improved claims volumes Adjusting Services profile H1 2013 key points • Benefited from upturn in claims activity • Provides loss adjusting services across • Experienced some staff movement four main sectors: energy, marine, • Stepped-up recruitment programme aviation and non marine along with • Acquired majority stake in Saudi Arabia marine average adjusting and technical business support services • • Integrated Colombia offices Primarily focuses on larger and more • Extended P&C adjusting in Jakarta complex commercial losses arising from • Continued to focus on working capital major insured incidents • Investing to transform claims management system Growth opportunities • Expand network into new territories • Extend service offering in each office Key business lines • Recruit and retain top producing Marine Energy adjusters in existing offices • • Develop and retain next generation P&C Aviation Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 11
Insurance Support Services steady Insurance Support Services profile H1 2013 key points • Slowing demand for mature services and • Provides stand-alone professional slower take-up of new services services which enable our clients to • Secured key TCM contract select the specific services they require • Exploring life servicing opportunities • Launched onshore US captive manager • Strengthened investment management team Growth opportunities Key business lines • Expand claims management services Managed claims services • Develop coverholder services • Coverholder services Develop MGA services • Secure more run-off servicing Financial reporting service • Extend US captive management Run-off servicing • Explore niche opportunities Investment Management Alternative risk services Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 12
Run-off strategy being implemented Insurers in Run-off profile H1 2013 key points • • Life Owns insurance companies which are - Integrating GLA closed to new business and runs off - Exploring acquisition opportunities their liabilities in an orderly manner • Non Life - Improved claims experience Growth opportunities - Considering options • Life - Exploring opportunities to acquire niche offshore life companies in run-off Owned Insurance Companies • Non-life - no further non-life acquisitions to be made LCL International Life Assurance Company (Life) Global Life Assurance Limited (Life) Cardrow Insurance (Non-life) Bestpark International (Non-life) Beech Hill Insurance (Non-Life) Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 13
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