FBD Holdings plc

FBD Holdings plc

2006 Preliminary Results

7th March 2007

A.

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Forward Looking Statements

This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forward-looking information involves risks and uncertainties that could affect expected results


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FBD Holdings plc


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FBD Holdings plc………

Indigenous Irish company

Primary Business

Other Interests

Excellent growth record

Committed to

Key Business Driver

………. Founded in 1970………. Stock Exchange, 1989

………. Insurance Underwriting (Property/Casualty)

………. Leisure/Property Development………. Financial Services

……… “TSR” 55% p.a., last 5 years.

………. Shareholders, customers, staff.

………. Maximising shareholder value.


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Mission Statement

“In our target markets, to be the leading customer focused

insurance group, delivering long term sustainable value.”


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Operational HighlightsGroup Net assets per share grew by 13.9% to 1,424.76c

Underwriting Strong new business volumes more than offset reduced premium rates.

Policy count at year end up 11.8% on December 2005.

Branch network enhanced. Dublin personal lines unit grown.

Continued growth in Dublin market.

Increased investment in infrastructure and people - VOIP/Business Support Centre – (Mullingar) - Workflow systems enhancing efficiency - New off-site IT availability for resilience/flexibility


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Non-Underwriting – Leisure/Property Development

La Cala €201m land sale agreed, February 2006.

- €100m (Tranche 1) initial consideration, received, June 2006.

- €21m (Tranche 1 balance) payable on 30th June 2007.

- €80m (Tranche 2) payable when Regional planning approval received ……anticipated early 2008

- €55m profit – after tax (Tranche 1) recognised in 2006.

Sunset Visitor numbers up – improved trading.

Tower Visitor numbers up – improved trading.

Operational Highlights (contd)


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Non Underwriting:Financial Services

FBD Life Improved trading

FBD Brokers Maintained performance

Capital Fund Excellent returns



………. Growth opportunities availed of

………. Premium reductions.

……….Benefiting from strong equity markets.

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Corporate

Farmer Business Developments plc share placing.

- 4.5m shares (11.6% of issued capital). - Shareholding moves from 34% to 24.4%.

- FBD buys 3.8m shares for €129m….. Shares cancelled.

- Free float moves to 67%.

La Cala Dividend.

- €1.60 Special Dividend in August in relation to Tranche 1 land



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2006 2005 %€000s €000s

Gross written premiums 407,256 389,472 +4.6%

Net earned premiums 345,959 332,371 +4.1%

Underwriting result 76,542 90,450 -15.4%

Operating profit 158,515 162,624 -2.5%

Profit on sale of land at La Cala 81,774 - -

Profit before taxation 296,780 185,155 +60.3%



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2006 2005Cent Cent

Operating earnings per share 376.60 363.54 +3.6%

Dividend per share 69.00 57.50 +20.0%

Special dividend – La Cala land sale 160.00 - -

Net asset value per share 1,424.76 1,250.62 +13.9%

% %Return on equity 50.61% 36.53%



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Income Statement2006 2005

€000s €000s %

Gross written premiums 407,256 389,472 +4.6%

Net earned premiums 345,959 332,371 +4.1%

Net claims incurred (224,712) (202,475) +11.0%

Net operating expenses (44,705) (39,446) +13.3%

Underwriting Result 76,542 90,450 -15.4%

Loss Ratio 65.0% 60.9%

Net Expense Ratio 12.9% 11.9%

Combined Ratio 77.9% 72.8%


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2006€000s

2005€000s

%

Underwriting Result 76,542 90,450 -15.4%Longer term investment return 48,054 44,435 +8.1%

Non underwriting operating income

33,919 27,739 +22.3%

Operating profit 158,515 162,624 -2.5%Operating profit by activity: Insurance underwriting 124,596 134,885

Non-underwriting

- Property/leisure 10,092 13,644

- Financial services 4,279 3,302

- Capital fund 19,548 33,919 10,793 27,739

158,515 162,624


Income Statement (contd)

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2006 2005

€000s €000sOperating profit 158,515 162,624

Profit on sale of land at La Cala 81,774 -

Short term fluctuation in investment return 61,350 25,956

Finance costs (4,859) (3,425)

Profit before tax 296,780 185,155

Income tax expense (49,948) (23,701)

Profit for the year 246,832 161,454


Income Statement (contd)

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Balance Sheet - Assets31/12/06

€000s31/12/05

€000sProperty & Equipment Hotels/golf 180,369 168,258

Property – own use 33,195 28,665

Fixtures & Fittings 16,815 230,379 13,302 210,225

Investments Property 81,181 48,856

Financial 1,099,309 1,061,846

Reinsurers’ share of technical provisions 72,553 66,034

Other receivables/DAC’s 99,319 73,058

Other Assets Development land 32,608 36,163

Work-in-Progress 33,825 26,333

Cash 37,423 103,856 41,897 104,393

Total Assets 1,686,597 1,564,412


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Balance Sheet - LiabilitiesEquity

31/12/06€000s

31/12/05€000s

Share Capital 21,277 23,557

Reserves 476,242 452,570

Shareholders’ funds – equity interests 497,519 476,127 Preference Shareholders 2,923 2,923

Minority Interests 6,476 6,423

Total equity 506,918 485,473LiabilitiesTechnical provisions

- Unearned premiums 197,507 188,953

- Claims 734,439 931,946 699,397 888,350

Deferred tax 33,227 33,873

Creditors

- Loans 112,350 99,831

- Other 102,156 214,506 56,885 156,716

Total Liabilities 1,686,597 1,564,412


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Reconciliation of Movement in Shareholders’ Funds

31/12/06€000s

30/6/05 €000s

Balance at 1st January 485,473 425,709

Profit for the period 246,832 93,920

Buyback of own shares (129,213) (81,238)

Dividends paid (77,672) (10,298)

Available-for-sale investments (26,342) 861

Revaluation of owner occupied property 6,038 -

Purchase of minority interests - (9,956)

Other 1,802 2,152

Balance at 31st December 506,918 421,150


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Cash Flow Statement2006

€000s2005 €000s

Net Cash from operating activities 180,509 141,626

Used in investing activities (3,136) (54,411)

Used in financing activities (181,574) (96,744)

Net decrease in cash and cash equivalents (4,201) (9,529)

Cash and cash equivalents at the beginning of the period 41,897 51,362

Effect of foreign exchange rate changes (273) 64

Cash and cash equivalents at the end of the period 37,423 41,897


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Return on Equity

2003 2004 2005 2006

Underwriting 50.75% 43.78% 53.08% 58.44%

Non underwriting 13.68% 8.63% 11.63% 39.75%

Total 35.09% 31.61% 36.53% 50.61%


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Gross Claims Run-Off

Estimate of cumulative claims:

PriorYears

€m2001

€m2002

€m2003

€m2004

€m2005

€m2006

€m

OutstandingClaims

2006€m

At end of underwriting year - 205 270 262 329 329 394

One year later - 201 222 225 278 278 -

Two years later - 198 209 206 256 - -

Three years later - 182 198 185 - - -

Four years later - 168 174 - - - -

Five years later - 163 - - - - -

Estimate of cumulative claims 1,147 163 174 185 256 278 394 2,597

Cumulative payments(1,101) (129) (134) (112) (139) (124) (124) (1,863)

Claims outstanding 46 34 40 73 117 154 270 734


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Market Share Gross Written Premium – (2006,

provisional)

5.0%

10.4%

5.0%

8.7%

11.1%

7.1%

11.7%

5.7%

14.9%

10.6%

8.7%

13.2%

21.1%

8.8%9.3% 10.2%

10.7%12.3%

12.8%

21.8%

9.0%

14.1%

13.3%

9.4%

8.7%

21.7%

8.2%

6.4%

Others(15)AIGEagle StarFBDR.S.A.AXAQuinnAllianzHibernian

20062005200420032002

Total Market 2006 - €3,840m: 2005 - €3,841m: 2004 - €3,957m : 2003 - €4,239m: 2002 - €3,955mFBD Premium 2006 - €407m: 2005 - €389m: 2004 - €351m: 2003 - €369m: 2002 - €326m


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OutlookGroup

Confident that successful development will continue.

Underwriting

Intense price competition and discounting to continue…. eroding margins.

Further ongoing claims costs savings from existing and new “reform” initiatives required to delay convergence of Irish & European Combined Ratios.

FBD – targeting strong new business volumes.

– focusing on growing efficiently, sustainability and profitably.

– investing further in people and business infrastructure to achieve our growth plans.

– Reserving policy………under ongoing review.


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Outlook (contd)Non-Underwriting

Leisure/Property Development Businesses on course to deliver satisfactory performances. Disposal of development land at La Cala confirms ongoing

commercial assessment of all businesses.

Financial Services Opportunities for further growth in Life/Investment product sales to

continue.

Falling premium levels will continue to impact insurance broking revenue growth.

Capital Fund Positive outlook for Stock Markets.


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OUTLOOK…Contd.

Capital

Capital efficiency is fundamental principle applied in all businesses.

Proactive approach to capital management confirmed; €265m repatriated since March 2005.

Dividend payout to continue to increase.

Utilisation of capital to maximum benefit of shareholders determined in context of development strategies which Group pursues.

Ongoing attention to use of capital.

……. Meanwhile, prudent investment.


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FBD Holdings plc