1st august 2006 dominic burke chief executive. today’s meeting 2006 interim results operational...
TRANSCRIPT
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1st August 2006
Dominic BurkeChief Executive
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Today’s Meeting
• 2006 Interim Results
• Operational Review
– Strengthened management team– Business reviews– JLT Risk Solutions – Update on ongoing review of costs– Proposed closure of UK Defined Benefit Pension
Scheme
• Outlook
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Actual Growth1H 2006 1H 2005 Growth at CRE
Turnover 260.4 250.7 4% 3%
£ Million
Diluted Earnings per share 14.5p 15.8p (8%)
Financial Highlights
CRE – Adjusted growth at achieved constant rates of exchange
Trading Profit 38.3 42.0 (9%) (3%)
Underlying Profit Before Tax 47.1 47.3 - 5%
Interim Dividend per share 8.5p 8.5p -
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50
55
60
65
70
75
80
85
90
95
100
2004 2005
86.3%82.1%
Full year
First Half
1H83.2%
2006
1H85.3%
1H75.7%
Expense Ratio
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Turnover
Risk & Insurance 219.8 5% 5% 18% 22%
Employee Benefits 37.5 9% 9% 16% 15%
Other 3.1 - - - -
Growth
260.4 4% 3% 15% 17%
ActualAt CRE
1H 2006
Trading Margin
1H 20061H 2005
£ Million
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Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Risk & Insurance
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Turnover
Trading Margin
1H 20061H 2005
£ Million
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34% Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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JLT Re – Market Share
Aviation £50m*
17%
Marine & Energy£80m*
Non Marine£2bn*
Less than 1%
10%
*Estimated global reinsurance brokerage
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Risk & Insurance
Canada 8.7 27% 12% 8% (2%)
USA 19.2 22% 16% 9% 13%
Australia & NZ 32.1 (3%) (3%) 31% 36%
Latin America 8.5 7% 1% 13% 15%
Total 219.8 5% 5% 18% 22%
Risk Solutions Group 61.2 (1%) 1% 14% 18%
Asia 16.9 13% 7% 23% 22%
Agnew Higgins 9.6 63% 62% 17% 2%
UK/Ireland 23.4 7% 7% 13% 13%
JLT Re 24.7 (6%) (2%) 22% 34%
Lloyd & Partners 15.5 8% 14% 23% 34%
Growth
ActualAt CRE
Trading Margin
1H 20061H 2005
Turnover
£ Million
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• Good client retention with long term contracts renewing
• Closure of Defined Benefits schemes continue to provide opportunities
• ‘New World’ benefits providing increasing opportunities
Employee Benefits
37.5 9% 9% 16% 15%
Trading MarginGrowth
ActualAt CRETurnover 1H 2006
1H 2005
£ Million
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Today’s Meeting
• 2006 Interim Results
• Operational Review
– Strengthened management team– Business reviews– JLT Risk Solutions– Update on ongoing review of costs– Proposed closure of UK Defined Benefit Pension
Scheme
• Outlook
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Operational ReviewStrengthened management team
• Group Board
– Brian Carpenter CEO Australasia – William Nabarro Executive Chairman,
Employee Benefits Groupand GroupCommercial Director
– Jim Rush New Finance Director
• Group Executive Committee
– Mark Drummond-BradyMartin Hiller
– Adrian Girling JLT Corporate Risks– Alan Griffin JLT Re
} JLT Risk Solutions
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• Review of trading activities and strategic positioning of each business stream
• Dedicated project team has already undertaken a thorough review
– validated JLT’s clear leadership position in certain territories and chosen industries and product areas
– underlined the ability and determination of JLT’s people
Operational Review Business reviews
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Operational Review Business reviews
• Broad directions have emerged:
– to concentrate on existing areas of proven business and management strength
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• Broad directions have emerged:
– to concentrate on existing areas of proven business and management strength
– to improve the balance between one-off income generated from specialist services and recurring income received from providing clients with broader day-to-day services
Operational Review Business reviews
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• Broad directions have emerged:
– to concentrate on existing areas of proven business and management strength
– to improve the balance between one-off income generated from specialist services and recurring income received from providing clients with broader day-to-day services
– to focus investment on lower risk initiatives
Operational Review Business reviews
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• Broad directions have emerged:
– to concentrate on existing areas of proven business and management strength
– to improve the balance between one-off income generated from specialist services and recurring income received from providing clients with broader day-to-day services
– to focus investment on lower risk initiatives
– to seek out bolt-on consolidation opportunities offering concrete, quantifiable benefits
Operational Review Business reviews
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• Merger with JLT UK IB no longer necessary
• Much better communication and collaboration
between JLT RS and JLT UK IB
• Structural Changes
– UK Major corporate accounts JLT UK IB
– Global Aerospace Practice JLT Re
– Global Reinsurance Practice JLT Re
Operational Review JLT Risk Solutions
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• Align cost structure with Revenues
• IT systems
– UK IT infrastructure outsourced
– IT applications, support & maintenance outsourced
Operational ReviewUpdate on ongoing review of costs
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Operational ReviewUK Defined Benefit Pension Scheme
Current Position
• At 31st December 2005, deficit £146m.
• New entrants have a Defined Contribution Scheme.
• 40% of UK staff in Defined Benefit Pension Scheme.
• Deficit reflects lower investment yields and increasing life expectancy.
• Review undertaken on how to best manage pension issue going forward.
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Proposal• Defined Benefit Scheme - closing to existing members.
• Closure of DB Scheme will reduce liabilities under ISA 19.
• A competitive Defined Contribution Scheme will replace the DB Scheme.
• Special contributions to DB Scheme of £65m by 2009.
• To remove the volatility of DB Scheme – not a cost cutting exercise
• Currently in consultation with UK staff.
Operational ReviewUK Defined Benefit Pension Scheme
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Jardine Lloyd Thompson Group plcOutlook
• 2006 full year – no more than a modest improvement in trading performance over 2005.This remains our view.
• Much progress has been made on many fronts to reshape JLT for the future, the benefits of which will be seen in 2007 and more fully in 2008.
JLT - a strong independent broker