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Clear, Differentiated Business
• Leading UK independently owned general insurance intermediary
• Focus on specialist personal lines and SMEs
• Unique business model combining scale distribution and risk pricing capabilities
• Our model has no insurance capital risk and therefore limited capital requirements
• Significant market headroom for continued growth
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● EBITDA growth 4%● Group income growth 3% ( 3% retail in 2H2012 yoy)● Retention focus (Retail: 80%, Underwriting 73%)● Sales force effectiveness● New single-tie agreements in Paymentshield
● £250m capacity renewed in year (>£500m over two years)● 31% penetration (vs 30% in 2011)
● Expense ratio reduced 0.7 pts● Headcount reduction● CCV integration● Sale of Powerplace
● 27 new deals completed ● Target ROI of 38% and cost of £30m
Organic Growth
1
Enhance Value Chain Position
2
Drive Efficiencies
3
Targeted Market Share Capture
4
2012 Clear Delivery of Strategy
4Notes: (1) Figures presented on a pro forma basis for the acquisition of CCV and disposal of PowerPlace. 2011 PBT is presented on a pro forma basis to include the effect of the Group refinancing completed on 11 February 2011 as if it had occurred prior to 1 January 2011; (2) Management view of operating cash flow before exceptional costs
2012 2011 Change
GWP (£bn) 3.1 3.0 5%
Income 436.5 425.7 3%
Expenses (272.9) (269.0) 1%
Adjusted EBITDA 163.6 156.7 4%
PBT (50.7) (42.1) n.m.
Other KPIs:
Expense Ratio 62.5% 63.2% (0.7)pts
Operating Margin 37.5% 36.8% 0.7pts
Operating Cash Flow (2) 96.7
£ millions, unless otherwise stated (1)
• Income and profit growth across our largest three divisions despite challenging economic conditions
• BaU change program delivering revenue and cost benefits
• Continued momentum in acquisition strategy with 27 deals complete
• Cost and efficiency programmes in place to support margin growth
• Cash flow strong• Impacted by £20m of non-
recurring tax and working capital outflows
Towergate Holdings II Financial Highlights Building platform for further growth
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Commentary
• Retail top-line stabilisation and efficiency gains
• Strong growth in underwriting top and bottom line with long term capacity secured
• Robust top and bottom line growth in Paymentshield with new distribution channels and new propositions
• New Network leadership driving revitalised strategy
• Investment in group functions
Adjusted EBITDA (£m)
EBITDA By Business UnitStrong growth across the business
4.4%
9.3%
16.3%
9.9%
(24.2)%
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73.1
80.3
£50m
£60m
£70m
£80m
£90m
2011 2012
255.5 256.8
£200m
£220m
£240m
£260m
£280m
2011 2012
• Strong second half performance reversed H1 decline
• Won and renewed key affinity deals (e.g. RAC and FSB)
• Strong retention at c.80%
• Completed 25 acquisitions
• Integrated CCV and increased retention
• BaU change program delivering efficiencies highlighted in cost:income ratio
0.5%
Retail Top line stabilisation achieved
Margin:
Income (£m)
Operating Earnings (£m)
9.9%29% 31%
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• Strong top and bottom line growth
• Share of Retail’s GWP up from 30%
to 31%
• Attractive CORs evidenced by recent
renewal of another £200m of capacity
• Eight new products launched
• New third-party distribution partnerships
won (e.g. Saga, Tesco, Virgin Money)
• Total GWP £615m (+8%)
• Retention maintained at 73%
Underwriting Continued strong growth
36.4
42.4
£20m
£30m
£40m
£50m
2011 2012
76.9
87.2
£50m
£60m
£70m
£80m
£90m
£100m
2011 2012
13.4%
Margin:
Income (£m)
Operating Earnings (£m)
16.3%47% 49%
8
• Continued robust growth against a challenging market
• New exclusive single-tie agreements with major IFA networks (Openwork and Sesame), reinforcing leading position in the broking channel
• New panel proposition driving economic and customer benefits
• New distribution channels continue to diversify business
• Strongly positioned for expected growth in mortgage originations
• Award wins for excellence and best practice
Paymentshield Robust top and bottom line growth
50.655.3
£30m
£40m
£50m
£60m
£70m
2011 2012
67.572.2
£40m
£50m
£60m
£70m
£80m
2011 2012
7.0%
Margin:
Income (£m)
Operating Earnings (£m)
9.3%
75% 77%
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• Pressure from insurer strategies
• New insurer partners (QBE, Hiscox and Markel) joined underwriting panel
• New members up – 44 new members and 9 members upgraded
• High calibre new CEO recruited – strategy under development
• Cost actions implemented to reduce FTEs by 18%
• Launched new specialist lines product with new partners
Network New leadership driving revitalised strategy
13.210.0
£0m
£5m
£10m
£15m
£20m
2011 2012
20.416.6
£5m
£10m
£15m
£20m
£25m
£30m
2011 2012
(19.0)%
Margin:
Income (£m)
Operating Earnings (£m)
65% 60%
(24.2)%
10
• Improved efficiency
• Like for like headcount reduced across the group
• Cost focus delivering significant benefits
• Reinvesting in Group functions
• Exceptional costs of £17m as a result of investment in Strategic Change Programme
Operating Expense Control (£m)
Expense ManagementRationalisation and investment
11
Leverage Development (1) • Against a challenging operating economical environment, management successfully achieved EBITDA growth and robust delevering
• CCV contributed to the Group by shareholders thus increasing EBITDA / cashflow generation
• CCV was acquired on a debt for debt basis with an EBITDA contribution of £18.8m(2) and net debt of £54.8m (2.9x leverage)
• 2012 leverage figure does not include full-year benefit of completed acquisitions
LeverageDeleveraging momentum
(1) Adjusted net total borrowings to adjusted EBITDA; 2012 leverage is pro forma for CCV acquisition(2) 2011