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Towergate Insurance 2013 Q1 Results

Towergate Insurance 2013 Q1 Results. 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

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Towergate Insurance 2013 Q1 Results

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  1. Towergate Insurance 2013 Q1 Results

  2. 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

  3. Continuing To Grow The Business On track to achieve our strategic goals Organic Growth Enhance Value Chain Position Drive Efficiencies Targeted Market Share Capture

  4. Towergate Holdings II Financial highlights £ millions(1) • Successful bond offering. 3x oversubscribed. Raised £396m • Results in line with the OM estimated range • Income growth momentum continues in Retail and Underwriting • 5 acquisitions completed in Q1 • EBITDA broadly in line with 2012 largely as a result of timing differences in expense recognition • Continued focus on cash and working capital management Notes: (1) Figures for 2012 presented on a pro forma basis for the disposal of PowerPlace.

  5. Income and Operating Earnings By Business UnitGrowth continues in the larger divisions • Strong top and bottom line growth in Retail • Continued growth in Underwriting despite market conditions • 2ppt improvement in Paymentshield operating margin driven by lower headcount • Continuing to re-shape insurer relationshipsin Network. YOY results impacted by insurer withdrawal from the Network

  6. CashflowImproving cash generation • Q1 is historically an outflow quarter due to low level of income and timing of specific costs • Capexand tax costs reduced from previous year due to new data centre costs in Q1 2012 as well as a tax charge for CCV in 2012 relating back to 2010 • Swap interest has increased due to a fall in LIBOR compared to previous year • Exceptional items are weighted more towards the beginning of 2013 compared to 2012. The program built up during 2012 and will start to wind down towards the end of 2013 • Non-recurring items across working capital, swap interest and exceptional costs will improve cashflow generation over the next 12-24 months Cash flow Generation (£m) * Deductions are made for interest receivable, share of associates and profit on sale of businesses, all recognised within EBITDA

  7. LeverageDeleveraging momentum Leverage Development • Consistent with last year, Q1 2013 increased leverage due to payment of accrued interest which reduced available cash • 2013 Q1 leverage does not include the full benefit of the 2012 completed acquisitions • 2013 Q1 leverage figure does not reflect the benefit of 2013 completed acquisitions • The Board remain committed to deleveraging

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