Howden announces 2023 full year results
Double-digit organic growth and leading positions in key markets through strategic M&A reflect consistent delivery of long-term, sustainable strategy
David Howden, CEO, Howden, commented:
“We celebrate our 30th anniversary in 2024 as the largest privately held global insurance intermediary group outside North America with 16,000 employees in 50 countries looking after clients in retail, specialty and reinsurance broking, capital markets and underwriting. On a foundation of employee ownership, supported by long-term external investors, we have built a business with a difference. And we’ve grown by consistently and relentlessly executing on a strategy to attract and empower the best talent – both individuals and through high-quality, aligned acquisitions – to deliver standout organic growth over the long term.
“If we look back just three years, when we had just broken through the £1bn revenue mark, we set out our intentions to be a leader in our home market, the UK, to be strong in reinsurance, to strengthen our European platform, and to accelerate our global specialty business.
“Three years later and we are the second largest insurance broker in the UK – the biggest in reach; we have moved to become one of the four top tier reinsurance brokers; and we’re the largest independent global player in Europe; and in global specialty we have hired hundreds of people across the world creating a team of 2,000. “Our three-year revenue CAGR is 46%, our EBITDA CAGR 47% and our three year average organic growth number is 17%. I am incredibly proud of what we are building.
“We look ahead, from a position of scale and strength and united under our new brand, with the same consistent and relentless focus on empowering great people to deliver all the capabilities of the Group to our clients as we did right at the beginning.”
Financial highlights
Exceptional financial performance: a 33% increase in revenue to £2,443m (FY22: £1,841m), and a 30% increase in adjusted consolidated EBITDA to £780m (FY22: £599m), with EBITDA margin of 31.9%, driven by a combination of organic growth of 13% (FY22: 19%) and selective acquisitions. The Group’s employee ownership model consistently delivers excellent service that helps retain and win new clients.
Successful and sustainable capital management strategy: the Group has supportive shareholders who have contributed over £1bn of equity in FY23 to support investment for growth. The Group also has good access to the capital markets to raise financing for M&A; it raised $1.375bn (£1.1bn) of incremental debt to support its investment programme in FY23 while maintaining its rating.
56 completed acquisitions, including five transactions over £25m EV in FY23, building out Howden’s leading position in key markets: TigerRisk in the US, March RS in Spain, Apex in New Zealand, Théorème in France and Reich Insurance in the UK.
Howden welcomed 1,000 new employee shareholders in 2023, taking the total number to 4,500 from 35 out of the 50 countries in the Group.
Total headcount, pro forma for acquisitions post year end, stands at 16,000, with 800 people joining the Group in FY23 from lateral hiring as part of new initiatives.
Operational highlights
Announced new management structure to unify operations: single global executive with insurance broking, reinsurance broking and underwriting reporting directly to David Howden, CEO, and announced the appointment of David Shalders, Group COO, post year end.
Adopted a single brand name and visual identity for Howden’s broking operations (post year end) to improve brand recognition globally. This included the rebranding of UK branches, offices around the world and websites. The brand is reflected in Howden’s sponsorship investments, such as the British and Irish Lions and horse racing courses including Ascot, The Turf Club, Bahrain and Victoria Racing Club, Australia.
Corporate activity
Howden’s corporate activity across its three operating divisions executed on the strategy to expand its geographical footprint and strengthen and diversify its specialty proposition through M&A, attracting talent and new initiatives.
Insurance
Howden completed acquisitions in the UK, France, Austria, Italy, Greece, Germany, Spain, Switzerland, Finland, Cyprus, Australia, New Zealand, the US, and post year end in the Netherlands. Howden entered new markets in Liechtenstein and, post year end, in Peru and Denmark
Howden’s position as a leading equestrian insurance intermediary is strengthened through the acquisitions of Tyser’s UK bloodstock business and, post year end, Silks Insurance and HQ in Australia. Expansion of Howden’s Sport and Entertainment practice group to take a leading position in the film brokerage business with the acquisition of Media Insurance Brokers in the UK, Franz Gossler in Germany and Assimovie in Italy
Continued investment in specialist expertise across Howden’s international platform including the launch of Marine and Energy capability in Norway, the acquisition of leading Italian Employee Benefits service provider Wide Care Services, French marine broker Seasecure and Swiss aviation broker Hudson Sky
Reinsurance
Completion of the acquisition of TigerRisk added a large treaty reinsurance and capital markets business
Appointments to its entrepreneurial leadership team of Tim Ronda as CEO, Rob Bredahl as Co-Vice Chair of Howden Tiger & Executive Chair of Howden Tiger Capital Markets, and Massimo Reina, as CEO of Howden Tiger International
Continued attraction of top talent as Howen Tiger builds its international footprint and global team with over 200 new reinsurance practitioners excluding M&A
Acquisition of Swiss-headquartered specialist reinsurance broker Haakon, post year end
Further investment in specialty lines including Cyber, Marine, Construction and International Property add to Howden Tiger’s extensive capabilities
Underwriting
Opened offices in three new territories including Benelux, the Nordics, and, post year end, France
Acquisition of two London-based bloodstock operations – Galileo and David Ashby Underwriting – which combined create a £100m portfolio, positioning DUAL as one of the leading bloodstock underwriters
Launch of Howden Ventures that has made two investments (post year-end) into insurtechs to fund their journey to becoming fully-fledged MGAs
Changes to the Board and Global Leadership Team
David Shalders announced as new Group COO, post year end, who will take up his position once the contractual obligations to his current employer have been discharged.
Capital management
Post year end, Howden took advantage of strong financial market conditions to raise additional debt capital, refinance existing debt in the term loan market and diversify funding sources via an inaugural high yield bond, thereby achieving extended maturities and reduced weighted average cost of borrowing
1,000 employees joined as new shareholders in 2023 giving a total of 4,500 with a total stake of 32% in the business. Howden is one of the largest employee-owned business in the UK
Maintained a conservative leverage level with net leverage as at FY23 of 5.3x cash pay leverage at constant FX rates for debt within the Group’s finance subsidiaries
Group’s ratings were reaffirmed at B2 Stable (Moody) and B Stable (S&P), maintaining one of the best Moody’s and S&P’s ratings among all levered brokers
Sustainability
Accelerated the growth of the Group’s climate and resilience capabilities with the appointment of Rowan Douglas CBE as CEO, Howden Climate Risk and Resilience, who continues to build an expert, full spectrum function to support the group worldwide, embedding the offering across its specialties and regions.
Howden continues to promote the critical role of insurance in the world’s response to the climate emergency, through the:
Launch of first-of-its-kind carbon capture and storage leakage facility to support the growth of the global carbon market, post year end
Publication of ground-breaking research with Cambridge University to outline a model for Loss & Damage implementation that supports Small Island Developing States (SIDS) launched at COP 28, post year end
Partnership with the UNCDF and the Danish Red Cross to help enable those most exposed to climate disasters to access pre-financing
Binding of insurance coverage to enable the UN to proceed with FSO Safer Ship-to-Ship (STS) transfer, a mission to avert one of the world’s largest oil spills and man-made environmental disasters
Completion of the first year of the Global Risk and Resilience Fellowship, in partnership with the Sustainable Markets Initiative and Resilient Cities Network, which contributes to building city resilience
The Howden Foundation has donated over £5.6m to global charitable partners since its inception in 2014, and awarded £182k in employee matched funding in FY23.
Outlook
Howden’s differentiated capital model, blending employee ownership with long-term institutional shareholders continues to provide the business with flexibility, strength and sustainability when it comes to deploying capital
As we enter 2024, the macroeconomic and geopolitical challenges our clients and markets face are plentiful and are laid out in our recent report ‘A New World’, but in conditions such as these we believe insurance can deliver the greatest value and act as a force for good for our planet and the people on it
Bupa: Group full year financial results 2022
Revenue of £14.0bn was up 7% (2021: £13.1bn) at constant exchange rates (CER) with year-on-year growth in all our lines of business.Underlying profit1 before taxation of £575m was up 43% at CER (2021: £402m) and included a number of one-off exceptional trading items in our Market Units, which are broadly neutral at a Group level.There were asset impairments across goodwill, other intangibles and tangible assets during the second half of the year totalling £1bn. The material Business Unit impairments were UK Dental (£646m), Bupa Chile (£162m), BVAC Australia (£105m) and UK Care Services (£90m). In some cases, these were the result of macroeconomic factors and in other cases, due to market-specific dynamics which are further detailed below.Statutory loss before taxation of £(427)m is a decline from a profit of £423m in 2021 (a 201% decline at actual exchange rates (AER)).Continued implementation of our new 3×6 strategy drove strong customer volume growth, with one million more health insurance customers worldwide. In health provision, we grew by two million customers. Together with pricing action, these dynamics driven by customer demand offset global inflationary headwinds.
Solvency II coverage ratio2 remains strong at 181% (2021: 179%) with leverage (excluding IFRS 16 liabilities) improving to 18.5% (2021: 19.6%).
Market Unit and other Businesses underlying profit percentages are derived from reportable segments (which excludes central expenses and net interest margin). Revenues from associate businesses are excluded from reported figures. Customer numbers and economic share of post-tax profits from our associate businesses are included.
Business context
These results reflect continuing good organic growth across many of our insurance businesses and increased activity in health provision businesses to meet increasing customer demand.These results were offset by ongoing challenges in workforce availability across several markets, particularly in UK Dental. The impacts of COVID-19 have subsided in most of our markets but persisted in parts of our Asia Pacific Market Unit.During 2022, global inflation rose sharply resulting in higher central bank interest rates, leading to increased cost of capital which reduces the valuation of business units for impairment testing.Iñaki Ereño, Group CEO, commented:
“These results demonstrate positive underlying performance in a challenging economic environment and also reflect the rising demand for healthcare across all of our markets. We are making good progress implementing the new 3×6 strategy and we will accelerate this work through 2023 across all businesses.”We are transforming Bupa worldwide with a focus on digitalisation and customer service, and good organic customer growth demonstrates how our customers see the value of our services, even in a cost-constrained environment.”Significant goodwill impairments show that our businesses are not immune from macro-economic challenges and that we also have issues to fix in some businesses. We are encouraged by the quality of the growth across multiple businesses as they transform, while we continue to deliver quality and accessible healthcare for our customers.”
Market performance (all at CER)
Asia Pacific: Revenue declined marginally by 1% to £5,638m, largely due to our commitment to not benefit from COVID-19 by returning cash to, and deferring premium rises for, our Australian health insurance customers. Underlying profit was £302m, an increase of 32%, and 3% after removing the impact of, as yet, undistributed health insurance COVID-19 claim savings. Improved underlying profit reflects volume growth across insurance and provision, offset by reduced occupancy in aged care, due to the localised impacts of COVID-19 and workforce availability.Europe and Latin America: Revenue grew by 16% to £4,560m, and underlying profit increased by 40% to £233m. This included a one-off £40m Consumer Price Index (CPI) linked performance catch-up on a long-standing public private partnership (PPP) hospital contract in Spain. If excluded, the increase in underlying profit was 16%. This was driven by customer growth across most businesses and increased occupancy in Spanish aged care. This was offset by ongoing challenges affecting one of our businesses in Chile (the Isapre insurance business) which are explained in notes to the editor below.Bupa Global and UK: Revenue was up 9% to £3,752m, due to an increase in customers across insurance and health provision, alongside improved occupancy in UK Care Services. Underlying profit declined by 58% to £25m primarily due to a one-off £117m impairment to right of use leases and fixed assets in UK Dental. There was continued customer growth and improved loss ratios in health insurance, with Bupa Global, our International Private Medical Insurance (IPMI) business, returning to profitability. This outweighed higher staff and inflationary costs pressures in health provision and aged care, alongside a shortage of clinician hours in dental.Other businesses: Underlying profit of £58m is up 16% driven by strong underlying customer growth in our associate businesses as both the demand for private health insurance grew and these businesses emerged from the pandemic.
Financial position
• Solvency II capital coverage ratio of 181% (2021: 179%).• Leverage ratio is 26.3% (2021: 26.9%) including IFRS 16 lease liabilities. Excluding IFRS 16 liabilities, the leverage ratio is 18.5% (2021: 19.6%).• Net cash generated from operating activities was £966m, up £47m on prior year (2021: £919m3) primarily due to strong trading performance.
Other highlights
We continued to develop and roll-out Blua, our digital health solution, expanding it to 10 countries, including the UK.We launched our new sustainability strategy through which we will deliver health benefits for people and planet with innovative solutions to sustainability challenges.Through our business in Poland, LUX MED, we have been providing free healthcare support to Ukrainian refugees who have been forced to flee the war. To date, we have provided 320,000 free treatments to over 180,000 people and have employed 240 healthcare workers from Ukraine.We became the Official Healthcare Partner to Paralympics GB and Paralympics Australia, joining our existing partnerships in Spain, Poland and Chile.
Read the Bupa Group 2022 full year financial results statement.
Alpha Bank – Full Year 2020 Results
Alpha Bank’s CEO, Vassilios Psaltis stated:
“In a year of unprecedented disruption, Alpha Bank delivered a solid performance with Net Profit of Euro 103.7 million, after taking additional Euro 283 million of Covid related impairments, and achieved a Core Pre Provision Income of Euro 859 million, increased by 3.4% year-on-year.
We remained committed to our Strategic Plan and executed strongly on a multitude of targets. On the NPE deleveraging front, we signed an agreement with Davidson Kempner for our Project Galaxy, which comprises the sale of a Euro 10.8 billion securitization as well as an 80% stake in our servicer Cepal, along with an exclusive agreement for the management of our remaining NPE portfolio. On the capital front, we raised Euro 1 billion of Tier II in two transactions, bringing our Total Capital Ratio to a solid 16.9%, pro-forma for Galaxy. On the commercial front, we contributed Euro 5.6 billion to the Greek economy through new lending, a performance that we have not witnessed since 2008, whereby we participated in full to all government sponsored support programs for our customers. On the business development front, we entered into a long-term bancassurance partnership with Generali that will allow us to upgrade our ambition in the sale of insurance products to our Customers, especially through digital channels, while retaining the option to expand further into the pension and savings space.
As we are one full year into the pandemic, a special thanks goes to all our Employees for their continued resilience and hard work to service our Customers and to position our Bank in the best possible way as we envisage the exit from the crisis.
The conviction that Greece and the wider region will experience a strong recovery, supported by the reopening of the economy and the flows of the European recovery funds, as well as the superior delivery on our plan, give to our revamped senior management team increased confidence to work on an acceleration in meeting our ambition for a single digit NPE ratio in Greece and on upsizing our performance targets going forward, as we are kicking off the implementation phase of our wide-ranging transformation plan.”
View Full Press Release
Full Year 2020 results announcement scheduled for March 23, 2021
Alpha Bank will announce its Full Year 2020 results on Tuesday, March 23, 2021. The schedule for the day will be as follows:
• 17.20 Athens Time (15.20 London Time): Full Year 2020 Results Announcement Press Release available from Alpha Bank’s website (www.alpha.gr) and the Athens Exchange website (www.helex.gr).
• 17.50 Athens Time (15.50 London Time): Analyst and Institutional Investor conference call Details will be available closer to the announcement day.