Q4 2026 AUB Group Ltd Earnings Call

August 25, 2026

Operator: Thank you for standing by, and welcome to the AUB Group FY26 Results Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Mike Emmett, CEO and Managing Director. Please go ahead.

Operator: Thank you for standing by, and welcome to the AUB Group FY 2026 Results Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Mike Emmett, CEO and Managing Director. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Mike Emmett, CEO and Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Good morning, and thank you for joining us. I'm joined by our CFO, Nick Dryden, and together we will take you through AUB Group's results for the year ended 30 June 2026, and our outlook for FY27.

Mike Emmett: Good morning, and thank you for joining us. I am joined by our CFO, Nick Dryden, and together we will take you through AUB Group's results for the year end of 30 June 2026, and our outlook for FY27. Before I start, I want to recognize our dear friend and colleague, Tim Wedlock, whose sudden and tragic passing has deeply saddened us. Tim was a highly valued member of the Austbrokers family, and we are absolutely heartbroken. Our love and wishes go out to his family and to the AEI team he led with patience, wisdom, and passion over many years. FY26 was another strong year for AUB. We delivered double-digit underlying profit growth, expanded margins, completed the acquisition of Prestige, and further strengthened the AUB platform for its next phase of growth. At the same time, FY26 was unquestionably a year of challenging market conditions.

Mike Emmett: Good morning, and thank you for joining us. I am joined by our CFO, Nick Dryden, and together we will take you through AUB Group's results for the year end of 30 June 2026, and our outlook for FY 2027. Before I start, I want to recognize our dear friend and colleague, Tim Wedlock, whose sudden and tragic passing has deeply saddened us. Tim was a highly valued member of the Austbrokers family, and we are absolutely heartbroken. Our love and wishes go out to his family and to the AEI team he led with patience, wisdom, and passion over many years. FY 2026 was another strong year for AUB. We delivered double-digit underlying profit growth, expanded margins, completed the acquisition of Prestige, and further strengthened the AUB platform for its next phase of growth.

Speaker #2: Before I start, I want to recognize our dear friend and colleague Tim Wedlock, whose sudden and tragic passing has deeply saddened us. Tim was a highly valued member of the Osbroakers family, and we're absolutely heartbroken.

Speaker #2: Our love and wishes go out to his family and to the AEI team he led with patience, wisdom, and passion. Over many years, FY26 was another strong year for AUB.

Speaker #2: We delivered double-digit underlying profit growth, expanded margins, completed the acquisition of Prestige, and further strengthened the AUB platform for its next phase of growth.

Speaker #2: At the same time, FY26 was unquestionably a year of challenging market conditions. Geopolitical disruption affected trade and business confidence in some markets, and together with policy uncertainty in the United States and foreign exchange movements, these conditions increased the period-to-period variability, particularly of the international division's revenue.

Mike Emmett: At the same time, FY26 was unquestionably a year of challenging market conditions. Geopolitical disruption affected trade and business confidence in some markets, and together with policy uncertainty in the United States and foreign exchange movements, these conditions increased the period-to-period variability, particularly of the international division's revenue. In parallel, lower interest rates created an income headwind across most divisions. Insurance premium rates also remain subdued, with rates declining in some classes. While we are pleased that many clients are benefiting from limited or no premium increases, competitive conditions have softened across several classes, and we encourage our insurer partners to maintain sustainable pricing and underwriting discipline, particularly in New Zealand and parts of the United Kingdom.

Mike Emmett: Geopolitical disruption affected trade and business confidence in some markets, and together with policy uncertainty in the United States and foreign exchange movements, these conditions increased the period-to-period variability, particularly of the international division's revenue. In parallel, lower interest rates created an income headwind across most divisions. Insurance premium rates also remain subdued, with rates declining in some classes. While we are pleased that many clients are benefiting from limited or no premium increases, competitive conditions have softened across several classes, and we encourage our insurer partners to maintain sustainable pricing and underwriting discipline, particularly in New Zealand and parts of the United Kingdom. Against that backdrop, there are three messages I would like you to take from today. First, AUB Group comprises a resilient portfolio with a strong earnings track record. Our businesses continue to grow and generate operating leverage across uncertain economic and premium rate environments.

Speaker #2: In parallel, lower interest rates created an income headwind across most divisions. Insurance premium rates also remained subdued, with rates declining in some classes. While we are pleased that many clients are benefiting from limited or no premium increases, competitive conditions have softened across several classes. We encourage our insurer partners to maintain sustainable pricing and underwriting discipline, particularly in New Zealand and parts of the United Kingdom.

Speaker #2: Against that backdrop, there are three messages I would like you to take from today. First, AUB Group comprises a resilient portfolio with a strong earnings track record.

Mike Emmett: Against that backdrop, there are three messages I would like you to take from today. First, AUB Group comprises a resilient portfolio with a strong earnings track record. Our businesses continue to grow and generate operating leverage across uncertain economic and premium rate environments. We have delivered a 16% compound annual growth rate in underlying EPS since FY19 and see strong earnings growth continuing. Second, our selective approach to portfolio management and acquisitions is improving both the scale and quality of the group. We continue to assess a range of selective M&A opportunities against clear strategic and financial return hurdles. Third, we have multiple earnings drivers across the group, and we reaffirm our medium-term margin targets.

Speaker #2: Our businesses continue to grow and generate operating leverage across uncertain economic and premium rate environments. We've delivered a 16% compound annual growth rate in underlying EPS since FY19, and we see strong earnings growth continuing.

Mike Emmett: We have delivered a 16% compound annual growth rate in underlying EPS since FY19 and see strong earnings growth continuing. Second, our selective approach to portfolio management and acquisitions is improving both the scale and quality of the group. We continue to assess a range of selective M&A opportunities against clear strategic and financial return hurdles. Third, we have multiple earnings drivers across the group, and we reaffirm our medium-term margin targets. Slide 2. Before turning to the year's performance, I want to briefly frame what AUB has become. AUB is now a global insurance distribution platform operating across 17 countries with approximately 7,000 insurance professionals in about 640 locations. The group supports more than AUD 11 billion of gross written premium, approximately 1.6 million clients, and 2.5 million policies. The point I am making is not simply about scale.

Speaker #2: Second, our selective approach to portfolio management and acquisitions is improving both the scale and quality of the group. We continue to assess a range of selective M&A opportunities against clear strategic and financial return hurdles.

Speaker #2: And third, we have multiple earnings drivers across the group, and we reaffirm our medium-term margin targets. Slide 2: Before turning to the year's performance, I want to briefly frame what AUB has become.

Mike Emmett: Slide 2. Before turning to the year's performance, I want to briefly frame what AUB has become. AUB is now a global insurance distribution platform operating across 17 countries with approximately 7,000 insurance professionals in about 640 locations. The group supports more than AUD 11 billion of gross written premium, approximately 1.6 million clients, and 2.5 million policies. The point I am making is not simply about scale. Our differentiation comes from combining the entrepreneurial leadership and local market expertise of our individual businesses with the capital, capability, insurer relationships, and technology of the broader group. These businesses are led by management teams who are also shareholders, and this owner-driver model remains central to how we create value. We are also increasingly diversified across retail and wholesale broking, agencies and MGAs, insurtech businesses, and claims and loss adjustment services.

Speaker #2: AUB is now a global insurance distribution platform, operating across 17 countries with approximately 7,000 insurance professionals in about 640 locations. The group supports more than $11 billion of gross written premium, approximately 1.6 million clients, and 2.5 million policies.

Speaker #2: The point I'm making is not simply about scale. Our differentiation comes from combining the entrepreneurial leadership and local market expertise of our individual businesses with the capital, capability, insurer relationships, and technology of the broader group.

Mike Emmett: Our differentiation comes from combining the entrepreneurial leadership and local market expertise of our individual businesses with the capital, capability, insurer relationships, and technology of the broader group. These businesses are led by management teams who are also shareholders, and this owner-driver model remains central to how we create value. We are also increasingly diversified across retail and wholesale broking, agencies and MGAs, insurtech businesses, and claims and loss adjustment services. These make AUB stronger and give our portfolio more ways to serve clients and partners. Slide 3 shows AUB's transformation from FY19 to FY26. The transformation has been deliberate and cumulative. Since FY19, revenue has grown from approximately AUD 540 million to now almost AUD 1.6 billion. While the underlying net profit after tax has increased from AUD 47 million to approximately AUD 225 million. The model has delivered sustained growth and returns.

Speaker #2: These businesses are led by management teams who are also shareholders, and this owner-driver model remains central to how we create value. We're also increasingly diversified across retail and wholesale broking.

Speaker #2: Agencies and MGAs insure tech businesses, as well as claims and loss adjustment services. These make AUB stronger, and give our portfolio more ways to serve clients and partners.

Mike Emmett: These make AUB stronger and give our portfolio more ways to serve clients and partners. Slide 3 shows AUB's transformation from FY19 to FY26. The transformation has been deliberate and cumulative. Since FY19, revenue has grown from approximately AUD 540 million to now almost AUD 1.6 billion. While the underlying net profit after tax has increased from AUD 47 million to approximately AUD 225 million. The model has delivered sustained growth and reurns. Underlying net profit after tax has grown at a compound annual growth rate of 25.1%, while the group EBIT margin has expanded by 920 basis points to 36.1%. Importantly, these improvements have also translated into shareholder value, with underlying EPS and dividends per share both growing strongly over the same period.

Speaker #2: Slide 3 shows AUB's transformation from FY19 to FY26. The transformation has been deliberate and cumulative. Since FY19, revenue has grown from approximately $540 million to now almost $1.6 billion.

Speaker #2: While the underlying net profit after tax has increased from $47 million to approximately $225 million, the model has delivered sustained growth and returns. Underlying net profit after tax has grown at a compound annual growth rate of 25.1%, while the Group EBIT margin has expanded by 920 basis points to 36.1%.

Mike Emmett: Underlying net profit after tax has grown at a compound annual growth rate of 25.1%, while the group EBIT margin has expanded by 920 basis points to 36.1%. Importantly, these improvements have also translated into shareholder value, with underlying EPS and dividends per share both growing strongly over the same period. Moving to slide 4. The margin expansion has been an important contributor to earnings growth, and it reflects the strength of the operating model we have created. Across the group, principal drivers have been organic growth, operating leverage and cost discipline, portfolio optimization, and accretive acquisition. We have benefited particularly from portfolio consolidation and from greater agency scale, which has enabled us to capture more of the insurance value chain as we have expanded our portfolio. The segment chart on the slide demonstrates both the progress already delivered and the remaining potential.

Speaker #2: Importantly, these improvements have also translated into shareholder value, with underlying EPS and dividends per share both growing strongly over the same period. Moving to slide 4: The margin expansion has been an important contributor to earnings growth, and it reflects the strength of the operating model we have created.

Mike Emmett: Moving to slide 4. The margin expansion has been an important contributor to earnings growth, and it reflects the strength of the operating model we have created. Across the group, principal drivers have been organic growth, operating leverage and cost discipline, portfolio optimization, and accretive acquisition. We have benefited particularly from portfolio consolidation and from greater agency scale, which has enabled us to capture more of the insurance value chain as we have expanded our portfolio. The segment chart on the slide demonstrates both the progress already delivered and the remaining potential. Our focus in FY27 is therefore very specific: to continue the established portfolio playbook, close the segment-level gaps, and use technology, data, and automation to lift productivity. We view the medium-term targets as achievable through execution rather than by relying on a material change in market conditions.

Speaker #2: Across the group, principal drivers have been organic growth, operating leverage and cost discipline, portfolio optimization, and accretive acquisition. We have benefited particularly from portfolio consolidation and from greater agency scale, which has enabled us to capture more of the insurance value chain as we've expanded our portfolio.

Speaker #2: The segment chart on the slide demonstrates both the progress already delivered and the remaining potential. Our focus in FY27 is therefore very specific: to continue the established portfolio playbook, close the segment-level gaps, and use technology, data, and automation to lift productivity.

Mike Emmett: Our focus in FY27 is therefore very specific: to continue the established portfolio playbook, close the segment-level gaps, and use technology, data, and automation to lift productivity. We view the medium-term targets as achievable through execution rather than by relying on a material change in market conditions. Slide 6. Turning now to the FY26 performance overview. Underlying net profit after tax increased by 12.2% to AUD 224.6 million, and the group EBIT margin expanded by 140 basis points to 36.1%. This was supported by particularly strong contributions from the International division and BizCover and another resilient year of profit growth in Australian Broking. International underlying profit before tax grew by 19.6% with a 410 basis point improvement in margin. BizCover and Australian Broking delivered profit before tax growth of 19.9% and 10%, respectively. New Zealand underperformed. Market conditions were difficult, and execution was not at the standard we expect.

Speaker #2: We view the medium-term targets as achievable through execution, rather than by relying on a material change in market conditions. Slide 6: Turning now to the FY26 performance overview.

Mike Emmett: Slide 6. Turning now to the FY26 performance overview. Underlying net profit after tax increased by 12.2% to AUD 224.6 million, and the group EBIT margin expanded by 140 basis points to 36.1%. This was supported by particularly strong contributions from the International division and BizCover and another resilient year of profit growth in Australian Broking. International underlying profit before tax grew by 19.6% with a 410 basis point improvement in margin. BizCover and Australian Broking delivered profit before tax growth of 19.9% and 10%, respectively. New Zealand underperformed. Market conditions were difficult, and execution was not at the standard we expect. During the year, we initiated a reset of the business, and business performance has stabilized over the past few months. We also completed the acquisition of Prestige in March, materially strengthening our UK retail position.

Speaker #2: Underlying net profit after tax increased by 12.2% to $224.6 million, and the group EBIT margin expanded by 140 basis points to 36.1%. This was supported by particularly strong contributions from the International division and BizCover, and another resilient year of profit growth in Australian broking.

Speaker #2: International underlying profit before tax grew by 19.6%, with a 410-basis-point improvement in margin. BizCover and Australian broking delivered profit before tax growth of 19.9% and 10%, respectively.

Speaker #2: New Zealand underperformed, market conditions were difficult, and execution was not at the standard we expect. During the year, we initiated a reset of the business, and business performance has stabilized over the past few months.

Mike Emmett: During the year, we initiated a reset of the business, and business performance has stabilized over the past few months. We also completed the acquisition of Prestige in March, materially strengthening our UK retail position. For FY27, we are guiding to Underlying Net Profit After Tax in the range of AUD 245 million to AUD 265 million, representing growth of 9.1% to 18% over FY26. We will discuss the guidance and its assumptions in more detail later. Slide 7, the FY26 financial highlights. Revenue grew 6.4% to approximately AUD 1.6 billion. This, together with a 140 basis point increase in EBIT margin, drove a 12.2% increase in Underlying Net Profit After Tax. The underlying EPS increased by 7% to AUD 1.8369.

Speaker #2: We also completed the acquisition of Prestige in March, materially strengthening our UK retail position. For FY27, we are guiding to underlying net profit after tax in the range of $245 million to $265 million, representing growth of 9.1% to 18% over FY26.

Mike Emmett: For FY27, we are guiding to Underlying Net Profit After Tax in the range of AUD 245 million to AUD 265 million, representing growth of 9.1% to 18% over FY26. We will discuss the guidance and its assumptions in more detail later. Slide 7, the FY26 financial highlights. Revenue grew 6.4% to approximately AUD 1.6 billion. This, together with a 140 basis point increase in EBIT margin, drove a 12.2% increase in Underlying Net Profit After Tax. The underlying EPS increased by 7% to AUD 1.8369. The reason EPS growth was lower than the underlying NPAT growth was because of the additional shares issued to fund the Prestige acquisition, which were on issue for the final quarter of the year.

Speaker #2: We'll discuss the guidance and its assumptions in more detail later. Slide 7: The FY26 financial highlights. Revenue grew 6.4% to approximately $1.6 billion. This, together with a 140 basis point increase in EBIT margin, drove a 12.2% increase in underlying net profit after tax.

Speaker #2: The underlying EPS increased by 7% to 183.69 cents. The reason EPS growth was lower than the underlying NPAT growth was because of the additional shares issued to fund the Prestige acquisition, which were on issue for the final quarter of the year.

Mike Emmett: The reason EPS growth was lower than the underlying NPAT growth was because of the additional shares issued to fund the Prestige acquisition, which were on issue for the final quarter of the year. The board has determined a final dividend of AUD 0.71 per share, taking the full year dividend to AUD 0.98, up 7.7% on the prior year, which is consistent with our long-term payout range. Slide 8. This bridge highlights the quality of the profit growth during FY26. Organic growth contributed AUD 21.6 million, which is 10.8% on prior year, with acquisitions adding a further AUD 17.3 million or 8.6%. These contributions more than offset a AUD 14.5 million or 7.2% headwind from foreign exchange and from increased funding costs. The existing portfolio continues to deliver strong growth, while selective acquisitions added a further layer of earnings growth. Turning now to the performance of the operating divisions. Slide 10.

Speaker #2: The board has determined a final dividend of 71 cents per share, taking the full-year dividend to 98 cents, up 7.7% on the prior year, which is consistent with our long-term payout range.

Mike Emmett: The board has determined a final dividend of AUD 0.71 per share, taking the full year dividend to AUD 0.98, up 7.7% on the prior year, which is consistent with our long-term payout range. Slide 8. This bridge highlights the quality of the profit growth during FY26. Organic growth contributed AUD 21.6 million, which is 10.8% on prior year, with acquisitions adding a further AUD 17.3 million or 8.6%. These contributions more than offset a AUD 14.5 million or 7.2% headwind from foreign exchange and from increased funding costs. The existing portfolio continues to deliver strong growth, while selective acquisitions added a further layer of earnings growth.

Speaker #2: Slide 8: This bridge highlights the quality of profit growth during FY26. Organic growth contributed $21.6 million, which is 10.8% on the prior year, with acquisitions adding a further $17.3 million, or 8.6%.

Speaker #2: These contributions more than offset a $14.5 million, or 7.2%, headwind from foreign exchange and increased funding costs. The existing portfolio continues to deliver strong growth, while selective acquisitions added a further layer of earnings growth.

Speaker #2: Turning now to the performance of the operating divisions. Slide 10: The portfolio was broadly strong. Australian broking, BizCover, agencies, and international all delivered profit growth, while New Zealand was the exception.

Mike Emmett: Turning now to the performance of the operating divisions. Slide 10. The portfolio was broadly strong. Australian Broking, BizCover, Agencies, and International all delivered profit growth, while New Zealand was the exception. As a reminder, this slide presents a 100% view of the portfolio. That is, all businesses, including associates, are shown as though they were 100% owned. At the operating business level, revenue increased by 6.4%, EBIT increased by 10.8%, and profit before tax attributable to AUB shareholders increased by 12.1%. The breadth of this contribution is important. The result was not reliant on a single division or transaction.

Mike Emmett: The portfolio was broadly strong. Australian Broking, BizCover, Agencies, and International all delivered profit growth, while New Zealand was the exception. As a reminder, this slide presents a 100% view of the portfolio. That is, all businesses, including associates, are shown as though they were 100% owned. At the operating business level, revenue increased by 6.4%, EBIT increased by 10.8%, and profit before tax attributable to AUB shareholders increased by 12.1%. The breadth of this contribution is important. The result was not reliant on a single division or transaction. This table also shows the margin progression. International improved by 410 basis points, BizCover by 200 basis points, and Australian Broking by 30 basis points. Agencies declined 50 basis points because of the Strata revenue challenges, but increased by 80 basis points when Strata is excluded.

Speaker #2: As a reminder, this slide presents a 100% view of the portfolio. That is, all businesses, including associates, are shown as though they were 100% owned.

Speaker #2: At the operating business level, revenue increased by 6.4%, EBIT increased by 10.8%, and profit before tax attributable to AUB shareholders increased by 12.1%. The breadth of this contribution is important.

Speaker #2: The result was not reliant on a single division or transaction. This table also shows the margin progression: International improved by 410 basis points, BizCover by 200 basis points, and Australian Broking by 30 basis points.

Mike Emmett: This table also shows the margin progression. International improved by 410 basis points, BizCover by 200 basis points, and Australian Broking by 30 basis points. Agencies declined 50 basis points because of the Strata revenue challenges, but increased by 80 basis points when Strata is excluded. You will note on the left-hand side of the page that we are showing a graphic aggregation of our retail broking businesses and operations in Australia and New Zealand. This foreshadows our proposed Australia-New Zealand retail reporting segment for FY27. This proposed structure better reflects how we manage the business and the changing scale of profit contributions across the AUB portfolio.

Speaker #2: Agencies declined by 50 basis points because of the strata revenue challenges, but increased by 80 basis points when strata is excluded. And you'll note on the left side of the page that we are showing a graphic aggregation of our retail broking businesses and operations in Australia and New Zealand.

Mike Emmett: You will note on the left-hand side of the page that we are showing a graphic aggregation of our retail broking businesses and operations in Australia and New Zealand. This foreshadows our proposed Australia-New Zealand retail reporting segment for FY27. This proposed structure better reflects how we manage the business and the changing scale of profit contributions across the AUB portfolio. Slide 11. Australian Broking delivered revenue of AUD 647.8 million, up 6%, and EBIT of AUD 246.7 million, up 6.8%. Broking commission and fee income grew by 7.8% during the year, while the average commission and fee income per customer grew by 6.5%. The core message is that revenue has continued to grow faster than expenses in Australian Broking. From FY19 to FY26, revenue increased at an 8% compound annual growth rate, compared with 5.7% for expenses.

Speaker #2: And this foreshadows our proposed Australian-New Zealand retail reporting segment for FY27. This proposed structure better reflects how we manage the business and the changing scale of profit contributions across the AUB portfolio.

Speaker #2: Slide 11: Australian broking delivered revenue of $647.8 million, up 6%, and EBIT of $246.7 million, up 6.8%. Broking commission and fee income grew by 7.8% during the year, while the average commission and fee income per customer grew by 6.5%.

Mike Emmett: Slide 11. Australian Broking delivered revenue of AUD 647.8 million, up 6%, and EBIT of AUD 246.7 million, up 6.8%. Broking commission and fee income grew by 7.8% during the year, while the average commission and fee income per customer grew by 6.5%. The core message is that revenue has continued to grow faster than expenses in Australian Broking. From FY19 to FY26, revenue increased at an 8% compound annual growth rate, compared with 5.7% for expenses. This operating leverage lifted EBIT margin to 38.1%, despite a headwind from lower interest income. We remain confident in the 40% medium-term margin target.

Speaker #2: The core message is that revenue has continued to grow faster than expenses in Australian broking. From FY19 to FY26, revenue increased at an 8% compound annual growth rate, compared with 5.7% for expenses.

Speaker #2: This operating leverage lifted EBIT margin to 38.1%, despite a headwind from lower interest income. We remain confident in the 40% medium-term margin target. The broking portfolio was also actively managed during the year, with three bolt-ons, 12 equity step-ups, one merger, one step-down, and one restructure.

Mike Emmett: This operating leverage lifted EBIT margin to 38.1%, despite a headwind from lower interest income. We remain confident in the 40% medium-term margin target. The broking portfolio was also actively managed during the year, with three bolt-ons, 12 equity step-ups, one merger, one step-down, and one restructure. This is the repeatable work that supports both earnings quality and margin progression, and we have further actions planned for FY27 and beyond. I would like to thank Mark White, who recently retired after more than 10 years representing AUB Group interests on a number of Austbrokers portfolio boards. I would also like to welcome Eric Harris, who has taken over this role. Eric is very well known in Australian broking circles and has made a seamless transition since joining. Slide 12. BizCover produced another excellent result.

Mike Emmett: The broking portfolio was also actively managed during the year, with three bolt-ons, 12 equity step-ups, one merger, one step-down, and one restructure. This is the repeatable work that supports both earnings quality and margin progression, and we have further actions planned for FY27 and beyond. I would like to thank Mark White, who recently retired after more than 10 years representing AUB Group interests on a number of Austbrokers portfolio boards. I would also like to welcome Eric Harris, who has taken over this role. Eric is very well known in Australian broking circles and has made a seamless transition since joining. Slide 12. BizCover produced another excellent result.

Speaker #2: And this is the repeatable work that supports both earnings quality and margin progression, and we have further actions planned for FY27 and beyond. I'd like to thank Mark White, who recently retired after more than 10 years representing AUB Group interests on a number of Ausbrokers portfolio boards.

Speaker #2: I would also like to welcome Eric Harris, who has taken over this role. Eric is very well known in Australian broking circles, and has made a seamless transition since joining.

Speaker #2: Slide 12: BizCover produced another excellent result. Revenue increased 14%, EBIT grew 19%, and the EBIT margin expanded by 200 basis points to 47.8%. The Australian business remains the primary earnings engine, with EBIT increasing 18.5% in FY26.

Mike Emmett: Revenue increased 14%, EBIT grew 19%, and the EBIT margin expanded by 200 basis points to 47.8%. The Australian business remains the primary earnings engine, with EBIT increasing 18.5% in FY26. At the same time, the non-Australian businesses are scaling, with margin improving from 8.5% in FY24 to 20.1% in FY26. Active clients grew by 13.7% to 308,000, and customer advocacy remains very strong with an NPS of +73. The direct channel gained momentum in the second half, and the new MYOB referral partnership provides another attractive distribution avenue. BizCover is at the forefront of insurance technology, including the practical deployment of AI. In March, BizCover launched the first business insurance app globally and the first insurance app of any kind in Australia to provide SME insurance quoting functionality within ChatGPT. Since launch, ChatGPT has also begun to emerge as a new source of business inquiries.

Speaker #2: At the same time, the non-Australian businesses are scaling, with margin improving from 8.5% in FY24 to 20.1% in FY26. Active clients grew by 13.7% to 308,000, and customer advocacy remains very strong, with an NPS of +73.

Speaker #2: The direct channel gained momentum in the second half, and the new MYOB referral partnership provides another attractive distribution avenue. BizCover is at the forefront of insurance technology, including the practical deployment of AI.

Speaker #2: In March, BizCover launched the first business insurance app globally, and the first insurance app of any kind in Australia, to provide SME insurance quoting functionality within ChatGPT.

Mike Emmett: In March, BizCover launched the first business insurance app globally and the first insurance app of any kind in Australia to provide SME insurance quoting functionality within ChatGPT. Since launch, ChatGPT has also begun to emerge as a new source of business inquiries. While it remains early, the evidence supports two initial observations. Firstly, AI appears to be actually expanding the addressable market by prompting some previously uninsured small businesses to recognize their need for cover. Secondly, AI-assisted research is increasing customer confidence in using digital intermediaries such as BizCover, including customers who previously approached insurers directly.

Speaker #2: Since launch, ChatGPT has also begun to emerge as a new source of business inquiries. While it remains early, the evidence supports two initial observations.

Mike Emmett: While it remains early, the evidence supports two initial observations. Firstly, AI appears to be actually expanding the addressable market by prompting some previously uninsured small businesses to recognize their need for cover. Secondly, AI-assisted research is increasing customer confidence in using digital intermediaries such as BizCover, including customers who previously approached insurers directly. We continue to monitor lead quality, conversion, and channel overlap as volumes develop, noting that we are not observing any cannibalization of AUB's existing broker channels, rather that we are seeing the capture of business from other non-traditional digital search engines or comparison channels. BizCover is also demonstrating practical benefits from AI and automation in other areas. The focus is on faster delivery, consistent code quality, and greater delivery capacity from the existing team.

Speaker #2: Firstly, AI appears to be actually expanding the addressable market by prompting some previously uninsured small businesses to recognize their need for cover. Secondly, AI-assisted research is increasing customer confidence in using digital intermediaries such as BizCover, including customers who previously approached insurers directly.

Speaker #2: We continue to monitor lead quality, conversion, and channel overlap as volumes develop, noting that we are not observing any cannibalization of AUB's existing broker channels. Rather, we are seeing the capture of business from other non-traditional digital search engines or comparison channels.

Mike Emmett: We continue to monitor lead quality, conversion, and channel overlap as volumes develop, noting that we are not observing any cannibalization of AUB's existing broker channels, rather that we are seeing the capture of business from other non-traditional digital search engines or comparison channels. BizCover is also demonstrating practical benefits from AI and automation in other areas. The focus is on faster delivery, consistent code quality, and greater delivery capacity from the existing team. AUB Group is benefiting from BizCover as a hub for Insurtech innovation, creating a pipeline of capabilities and solutions that can be leveraged more broadly.

Speaker #2: BizCover is also demonstrating practical benefits from AI and automation in other areas. The focus is on faster delivery, consistent code quality, and greater delivery capacity from the existing team.

Speaker #2: AUB Group is benefiting from BizCover as a hub for insurtech innovation, creating a pipeline of capabilities and solutions that can be leveraged more broadly.

Mike Emmett: AUB Group is benefiting from BizCover as a hub for Insurtech innovation, creating a pipeline of capabilities and solutions that can be leveraged more broadly. This, together with the Covernet team in Belfast, has accelerated AUB's ability to leverage AI tools and thinking. Slide 13. New Zealand was the one area of underperformance for the group. Local currency share of profit increased by 2.7%, while reported Aussie dollar profit before tax declined by 3.9% due to foreign exchange weakening. Revenue was broadly stable and the EBIT margin reduced by 130 basis points to 33.1%. Broking commission and fee income increased by 2.7%, while the average commission and fee income per client actually reduced by 2.9%, reflecting very competitive market conditions. This result did not meet our expectations, but the reset initiated during FY26 has stabilized recent performance, and the FY27 improvement plan is underway.

Speaker #2: This, together with the Covenant team in Belfast, has accelerated AUB's ability to leverage AI tools and thinking. Slide 13: New Zealand was the one area of underperformance for the group.

Mike Emmett: This, together with the Covernet team in Belfast, has accelerated AUB's ability to leverage AI tools and thinking. Slide 13. New Zealand was the one area of underperformance for the group. Local currency share of profit increased by 2.7%, while reported Aussie dollar profit before tax declined by 3.9% due to foreign exchange weakening. Revenue was broadly stable and the EBIT margin reduced by 130 basis points to 33.1%. Broking commission and fee income increased by 2.7%, while the average commission and fee income per client actually reduced by 2.9%, reflecting very competitive market conditions. This result did not meet our expectations, but the reset initiated during FY26 has stabilized recent performance, and the FY27 improvement plan is underway.

Speaker #2: Local currency share of profit increased by 2.7%, while reported Aussie dollar profit before tax declined by 3.9% due to foreign exchange weakening. Revenue was broadly stable, and the EBIT margin reduced by 130 basis points to 33.1%.

Speaker #2: Broking commission and fee income increased by 2.7%, while the average commission and fee income per client actually reduced by 2.9%, reflecting very competitive market conditions.

Speaker #2: This result did not meet our expectations, but the reset initiated during FY26 has stabilized recent performance, and the FY27 improvement plan is underway. Our priorities for FY27 are to restructure the NZ broker network, with closer alignment to Australia.

Mike Emmett: Our priorities for FY27 are to restructure the NZbrokers network with closer alignment to Australia, to better leverage our scale in New Zealand, to improve cost control, and to accelerate portfolio optimization. During the year, we completed nine bolt-ons and one equity step-up, and each of these will provide a base for renewed growth for the business in New Zealand. The 42% medium-term margin target highlights the size of the opportunity, but our immediate focus is on restoring operating momentum and consistent delivery. Slide 14. Agencies profit before tax increased by 8.4%, and the EBIT increased by 7.8% to AUD 105.2 million. The EBIT margin was 43.7%, down 50 basis points. However, the margin actually increased by 80 basis points to 46.5% if Strata agencies are excluded. Revenue in Strata actually reduced during the year.

Speaker #2: To better leverage our scale in New Zealand, improve cost control, and accelerate portfolio optimization. During the year, we completed nine bolt-ons and one equity step-up. Each of these will provide a base for renewed growth for the business in New Zealand.

Speaker #2: The 42% medium-term margin target highlights the size of the opportunity, but our immediate focus is on restoring operating momentum and consistent delivery. Slide 14: Agencies' profit before tax increased by 8.4%, and EBIT increased by 7.8% to $105.2 million.

Speaker #2: The EBIT margin was 43.7%, down 50 basis points. However, the margin actually increased by 80 basis points to 46.5% if strata agencies are excluded.

Speaker #2: Revenue in strata actually reduced during the year. Despite this, because of a very strong year of profit commission income, we were able to offset this reduction in income.

Mike Emmett: Despite this, because of very strong year of profit commission income, we were able to offset this reduction in income. The broader Agencies portfolio performed strongly, supported by organic growth and increased ownership positions in 360 and Pacific Indemnity. I would like to acknowledge and thank Angie Zissis, who recently retired from AUB after more than 10 years leading our SURA portfolio of agencies, and more recently establishing the new AUB Agencies portfolio. Denis Morrissey, founder 360, has been appointed as CEO to lead the next phase of growth for AUB Agencies. We are now working through a range of changes to simplify and optimize the portfolio. Slide 15. International delivered the strongest divisional profit growth.

Speaker #2: The broader agencies' portfolio performed strongly, supported by organic growth and increased ownership positions in 360 and Pacific Indemnity. I'd like to acknowledge and thank Angie Zusas, who recently retired from AUB after more than 10 years leading our SURE portfolio of agencies and, more recently, establishing the new AUB Agencies Portfolio.

Speaker #2: Dennis Morrissey, founder of 360, has been appointed as CEO to lead the next phase of growth for AUB Agencies. We are now working through a range of changes to simplify and optimize the portfolio.

Speaker #2: Slide 15: International delivered the strongest divisional profit growth. Revenue increased by 6.2%, EBIT increased by 24.5%, and the EBIT margin expanded by 410 basis points to 27.6%.

Mike Emmett: Revenue increased by 6.2%, EBIT increased by 24.5%, and the EBIT margin expanded by 410 basis points to 27.6%, benefiting from elevated war rates and momentum from recent acquisitions, partly offset by adverse foreign exchange movements. Recent investments are building momentum. Prestige has materially expanded our UK retail footprint, while Rönesans gives us a foothold in the rapidly expanding economy of Turkey and enhances Tysers' access to Lloyd's placement flows. Together with the continued scaling of our startup businesses, these investments are broadening the group's growth opportunities. The 32% medium-term margin target provides clear further growth potential as we integrate and leverage these businesses. I will now hand over to Nick.

Speaker #2: Benefiting from elevated war rates and momentum from recent acquisitions, partly offset by adverse foreign exchange movements. Recent investments are building momentum. Prestige has materially expanded our UK retail footprint, while Renaissance gives us a foothold in the rapidly expanding economy of Turkey and enhances ties, as well as access to Lloyd's placement flows.

Speaker #2: Together with the continued scaling of our startup businesses, these investments are broadening the Group's growth opportunities. The 32% medium-term margin target provides clear further growth potential as we integrate and leverage these businesses.

Speaker #2: I'll now hand over to Nick.

Speaker #1: Thank you, Mike. Slide 17 sets out our group funding position as at 30 June 2026. AUB retains a strong and flexible balance sheet, with available cash and undrawn debt of $330.5 million, and leverage of 2.30 times.

Nick Dryden: Thank you, Mike. Slide 17 sets out our group funding position on 30 June 2026. AUB retains a strong and flexible balance sheet with available cash and undrawn debt of AUD 330.5 million and leverage of 2.30 times. Leverage reduced from 2.49 times at the half, primarily reflecting higher EBITDA following the pro forma inclusion of Prestige, which was largely funded with equity. Compared with FY25, leverage increased from 1.97 times due to higher net debt, mainly from funding the increased ownership in Pacific Indemnity and AUB 360, the residual debt needed to fund the Prestige acquisition, and the final Pacific Indemnity earn-out. During the second half, we refinanced our syndicated facility with total commitments of approximately AUD 1.1 billion and maturities reset to three, four, and five years. The refinancing was well supported, oversubscribed by one and a half times, and delivered a 27 basis point reduction in credit margin.

Speaker #1: Leverage reduced from 2.49 times at the half, primarily reflecting higher EBITDA following the pro forma inclusion of Prestige, which was largely funded with equity.

Speaker #1: Compared with FY25, leverage increased from 1.97 times due to higher net debt, mainly from funding the increased ownership in Pacific Indemnity and AUB 360, the residual debt needed to fund the Prestige acquisition, and the final Pacific Indemnity earn-out.

Speaker #1: During the second half, we refinanced our syndicated facility with total commitments of approximately $1.1 billion, and maturities reset to 3, 4, and 5 years.

Nick Dryden: During the second half, we refinanced our syndicated facility with total commitments of approximately AUD 1.1 billion and maturities reset to three, four, and five years. The refinancing was well supported, oversubscribed by one and a half times, and delivered a 27 basis point reduction in credit margin. The AUD 200 million facility maturing in 4.7 years is the bilateral agreement with Macquarie, which was committed at the time of the Prestige acquisition. The right-hand side of the slide shows interest earning assets and interest bearing debt on a look-through ownership basis. While the totals are broadly aligned, the key exposure is the currency mismatch.

Speaker #1: The refinancing was well supported, oversubscribed by 1.5 times, and delivered a 27 basis point reduction in credit margin. The $200 million facility maturing in 4.7 years is the bilateral agreement with Macquarie, which was committed at the time of the Prestige acquisition.

Nick Dryden: The AUD 200 million facility maturing in 4.7 years is the bilateral agreement with Macquarie, which was committed at the time of the Prestige acquisition. The right-hand side of the slide shows interest earning assets and interest bearing debt on a look-through ownership basis. While the totals are broadly aligned, the key exposure is the currency mismatch. At 30 June 2026, around USD 210 million of interest earning assets were in US dollars with no US dollar denominated debt. These US dollar assets are hedged through to July 2027 via cross currency swaps that receive BBSW and pay SOFR plus 0.61%. Slide 18 sets out FX sensitivity on the expected FY27 currency mix, which includes the full year impact of Prestige, which is predominantly a GBP business. Our key exposure remains the unhedged US dollar brokerage from the international business.

Speaker #1: The right-hand side of the slide shows interest-earning assets and interest-bearing debt on a look-through ownership basis. While the totals are broadly aligned, the key exposure is the currency mismatch.

Speaker #1: At 30 June 2026, around $210 million of interest-earning assets were in US dollars, with no US dollar-denominated debt. These US dollar assets are hedged through to July 2027 via cross-currency swaps that receive VBSW and pay SOFR plus 0.61%.

Nick Dryden: At 30 June 2026, around USD 210 million of interest earning assets were in US dollars with no US dollar denominated debt. These US dollar assets are hedged through to July 2027 via cross currency swaps that receive BBSW and pay SOFR plus 0.61%. Slide 18 sets out FX sensitivity on the expected FY27 currency mix, which includes the full year impact of Prestige, which is predominantly a GBP business. Our key exposure remains the unhedged US dollar brokerage from the international business. GBP is broadly neutral after allowing for our US dollar to GBP hedging program. Post Prestige, this program would typically hedge around USD 50 to 80 million over the next 12 months and USD 25 to 40 million over the following 12 months.

Speaker #1: Slide 18 sets out FX sensitivity on the expected FY27 currency mix, which includes the full-year impact of Prestige, which is predominantly a GBP business.

Speaker #1: Our key exposure remains the unhedged US dollar brokerage from the International Business. GBP is broadly neutral after allowing for our US dollar to GBP hedging program. Post-Prestige, this program would typically hedge around $50 to $80 million over the next 12 months, and $25 to $40 million over the following 12 months.

Nick Dryden: GBP is broadly neutral after allowing for our US dollar to GBP hedging program. Post Prestige, this program would typically hedge around USD 50 to 80 million over the next 12 months and USD 25 to 40 million over the following 12 months. FY27 guidance incorporates our stated foreign exchange outlook assumptions and the current hedge positions shown on this slide. Approximately USD 75 million of brokerage income remains unhedged, with each 1% movement in the AUD to USD exchange rate affecting midpoint UNPAT by approximately 0.3%. As existing hedges mature, the replacement hedges will reflect the prevailing market rates. Slide 19 shows underlying earnings per share increased 7% in FY26, while the full year dividend increased 7.7% to AUD 0.98. I will now hand back to Mike to cover our FY27 priorities, AI strategy, and outlook.

Speaker #1: FY27 guidance incorporates our stated foreign exchange outlook assumptions and the current hedge positions shown on this slide. Approximately $75 million of brokerage income remains unhedged, with each 1% movement in the AUD to USD exchange rate affecting midpoint UNPAT by approximately 0.3%.

Nick Dryden: FY27 guidance incorporates our stated foreign exchange outlook assumptions and the current hedge positions shown on this slide. Approximately USD 75 million of brokerage income remains unhedged, with each 1% movement in the AUD to USD exchange rate affecting midpoint UNPAT by approximately 0.3%. As existing hedges mature, the replacement hedges will reflect the prevailing market rates. Slide 19 shows underlying earnings per share increased 7% in FY26, while the full year dividend increased 7.7% to AUD 0.98. I will now hand back to Mike to cover our FY27 priorities, AI strategy, and outlook.

Speaker #1: As existing hedges mature, the replacement hedges will reflect the prevailing market rates. Slide 19 shows underlying earnings per share increase 7% in FY26, while the full-year dividend increases 7.7% to 98 cents.

Speaker #1: I'll now hand back to Mike to cover our FY27 priorities, AI strategy, and outlook.

Speaker #2: Thanks, Nick. Slide 21: Our priorities for FY27 are focused and practical. The first is to integrate UK retail and unlock the benefits of scale, while continuing to expand Tysers’ wholesale and specialty capabilities.

Mike Emmett: Thanks, Nick. Slide 21. Our priorities for FY27 are focused and practical. The first is to integrate UK Retail and unlock the benefits of scale while continuing to expand Tysers wholesale and specialty capabilities. The second is to improve the portfolio. This means scaling and strengthening the agency's business across 360 Underwriting Solutions, SURA, and Pacific Indemnity, and taking decisive action in New Zealand and across the broader Australian portfolio to enhance earnings quality and margins. The third priority is disciplined capital deployment and continued investment in capability. We will remain selective on M&A, apply clear return hurdles, and continue strengthening our technology, data, and operational capability across the group. These priorities are deliberately consistent with the playbook that has driven AUB's performance over the past seven years to empower strong local entrepreneurial leaders, actively manage the portfolio, and to use collective scale to improve outcomes. Slide 22, our AI strategy.

Speaker #2: The second is to improve the portfolio. This means scaling and strengthening the agency's business across 360, Shure, and Pacific Indemnity, and taking decisive action in New Zealand and across the broader Australian portfolio to enhance earnings quality and margins.

Speaker #2: The third priority is disciplined capital deployment and continued investment in capability. We will remain selective on M&A, apply clear return hurdles, and continue strengthening our technology, data, and operational capability across the Group.

Speaker #2: These priorities are deliberately consistent with the playbook that has driven AUB's performance over the past seven years: to empower strong, local entrepreneurial leaders, actively manage the portfolio, and use collective scale to improve outcomes.

Mike Emmett: These priorities are deliberately consistent with the playbook that has driven AUB's performance over the past seven years to empower strong local entrepreneurial leaders, actively manage the portfolio, and to use collective scale to improve outcomes. Slide 22, our AI strategy. We are firmly of the view AUB is an AI beneficiary, and we have now moved well into deployment of multiple initiatives to improve our productivity, efficiency, and value to customers. We have an enterprise AI platform, an emerging data foundation, clear governance, and a scalable delivery model built around Covernet and BizCover.

Speaker #2: Slide 22: Our AI strategy. We are firmly of the view that AUB is an AI beneficiary, and we have now moved well into the deployment of multiple initiatives to improve our productivity, efficiency, and value to customers.

Mike Emmett: We are firmly of the view AUB is an AI beneficiary, and we have now moved well into deployment of multiple initiatives to improve our productivity, efficiency, and value to customers. We have an enterprise AI platform, an emerging data foundation, clear governance, and a scalable delivery model built around Covernet and BizCover. We are focused on citizen development and partnering with specialist partners. The adoption is already meaningful. 92% of active Copilot utilization, 43 active AI agents, more than 40 solutions in the pipeline, and 710 hours of capacity released in the last 30 days alone. These are indicators of momentum rather than an end outcome. We are now embedding AI into broking, underwriting, claims, and operational workflows to reduce administration, create more capacity for client-facing work, improve decision-making, and to deliver more consistent client outcomes.

Speaker #2: We have an enterprise AI platform, an emerging data foundation, clear governance, and a scalable delivery model built around Kubernetes and Bizcover. We are focused on citizen development and partnering with specialist partners.

Mike Emmett: We are focused on citizen development and partnering with specialist partners. The adoption is already meaningful. 92% of active Copilot utilization, 43 active AI agents, more than 40 solutions in the pipeline, and 710 hours of capacity released in the last 30 days alone. These are indicators of momentum rather than an end outcome. We are now embedding AI into broking, underwriting, claims, and operational workflows to reduce administration, create more capacity for client-facing work, improve decision-making, and to deliver more consistent client outcomes.

Speaker #2: The adoption is already meaningful: 92% active Copilot utilization, 43 active AI agents, more than 40 solutions in the pipeline, and 710 hours of capacity released in the last 30 days alone.

Speaker #2: These are indicators of momentum rather than an end outcome. We are now embedding AI into broking, underwriting, claims, and operational workflows to reduce administration, create more capacity for client-facing work, improve decision-making, and deliver more consistent client outcomes.

Speaker #2: Over time, we expect this to support growth, margin improvement, and differentiated insurance capabilities. Slide 23: For financial year ’27, we expect underlying net profit after tax in the range of $245 million to $265 million.

Mike Emmett: Over time, we expect this to support growth, margin improvement, and differentiated insurance capabilities. Slide 23. For FY27, we expect underlying NPAT in the range of AUD 245 million to AUD 265 million. The midpoint of AUD 255 million represents growth of 13.5%, with the range representing growth of 9.1% to 18%. The bridge on the slide shows the components. Organic growth is expected to contribute between AUD 15.2 million and AUD 33.2 million, with acquisition growth expected to contribute AUD 17.5 million to AUD 19.5 million. These growth rates are partly offset by approximately AUD 12.3 million of anticipated foreign exchange headwinds and increased funding costs. This guidance includes completed and sufficiently certain acquisitions and excludes any contribution from future unannounced transactions. At the midpoint, the expected H1 and H2 earnings split is 41% and 59%, broadly in line with our historical seasonality.

Speaker #2: The midpoint of $255 million represents growth of 13.5%, with the range representing growth of 9.1% to 18%. The bridge on the slide shows the components.

Speaker #2: Organic growth is expected to contribute between $15.2 million and $33.2 million, with acquisition growth expected to contribute between $17.5 million and $19.5 million.

Speaker #2: These growth rates are partly offset by approximately $12.3 million of anticipated foreign exchange headwinds and increased funding costs. This guidance includes completed and sufficiently certain acquisitions, and excludes any contribution from future unannounced transactions.

Mike Emmett: This guidance includes completed and sufficiently certain acquisitions and excludes any contribution from future unannounced transactions. At the midpoint, the expected H1 and H2 earnings split is 41% and 59%, broadly in line with our historical seasonality. The underlying EPS guidance is 187.54 cents to 202.85 cents per share. The difference between underlying NPAT and EPS growth reflects the full year impact of the shares issued for the Prestige acquisition. Excluding this equity funding effect, the EPS range will be 200.35 to 216.71 cents per share. We have set out the principal currency, interest rate, and cash rate assumptions on the slide.

Speaker #2: At the midpoint, we expect the first half and second half earnings split to be 41% and 59%, broadly in line with our historical seasonality. The underlying EPS guidance is 187.54 cents to 202.85 cents per share.

Mike Emmett: The underlying EPS guidance is 187.54 cents to 202.85 cents per share. The difference between underlying NPAT and EPS growth reflects the full year impact of the shares issued for the Prestige acquisition. Excluding this equity funding effect, the EPS range will be 200.35 to 216.71 cents per share. We have set out the principal currency, interest rate, and cash rate assumptions on the slide. The NPAT guidance range of AUD 20 million is intended to reflect an appropriate variability in organic growth and market conditions for a group of our scale, while preserving our commitment to consistent execution. In closing, FY26 demonstrated the strength of the AUB model. We delivered strong organic and acquisition growth. We expanded margins, increased shareholder returns, and further strengthened the global platform. We enter FY27 with clear execution priorities, a strong balance sheet, and meaningful earnings and margin growth potential.

Speaker #2: The difference between underlying impact and EPS growth reflects the full-year impact of the shares issued for the Prestige acquisition. Excluding this equity funding effect, the EPS range would be 200.35 to 216.71 cents per share.

Speaker #2: We have set out the principal currency, interest rate, and cash rate assumptions on the slide. The unpacked guidance range of $20 million is intended to reflect an appropriate variability in organic growth and market conditions for a group of our scale, while preserving our commitment to consistent execution.

Mike Emmett: The NPAT guidance range of AUD 20 million is intended to reflect an appropriate variability in organic growth and market conditions for a group of our scale, while preserving our commitment to consistent execution. In closing, FY26 demonstrated the strength of the AUB model. We delivered strong organic and acquisition growth. We expanded margins, increased shareholder returns, and further strengthened the global platform. We enter FY27 with clear execution priorities, a strong balance sheet, and meaningful earnings and margin growth potential.

Speaker #2: In closing, financial year '26 demonstrated the strength of the AUB model. We delivered strong organic and acquisition growth, expanded margins, increased shareholder returns, and further strengthened the global platform.

Speaker #2: We enter FY27 with clear execution priorities, a strong balance sheet, and meaningful earnings and margin growth potential. Nick and I are now happy to take your questions.

Mike Emmett: Nick and I are now happy to take your questions.

Speaker #3: Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced.

Operator: Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tim Lawson with Macquarie. Please go ahead.

Speaker #3: If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #3: Your first question comes from Tim Lawson with McCrory. Please go ahead.

Tim Lawson: Thanks, gentlemen, for taking my question. Just picking up on a couple of last comments you made there in terms of the sort of reset from AUB Group Agencies and then the rest of the new divisions. Can you just talk about the medium-term margin targets and the potential timing, so the potential to see those upgraded and brought forward?

Speaker #1: Thanks, gentlemen, for taking my question. Just picking up on a couple of the last comments you made there, in terms of the sort of reset from AI and then the reset of new divisions.

Speaker #1: Could you talk about the medium-term margin targets and the potential timing—specifically, the potential for those to be upgraded or brought forward?

Speaker #2: Thanks, Tim. Well, firstly, I think that in terms of the margin targets, the first point is we're confident in the margin targets as stated.

Mike Emmett: Well, firstly, I think in terms of the margin targets, the first point is we are confident the margin targets are stated. Second thing is as part of our new reporting grouping for the Australian New Zealand retail business, one of the things we will be doing is working through what our estimate is of that margin target for the aggregated business based on some assumptions around the medium term. As a reminder, we have always said whenever we upgrade or change these, it represents our three to five year view of what can be achieved in that time frame. They are not terminal margin targets. They are what we think are achievable within that time horizon.

Speaker #2: Second thing is, as part of our new reporting grouping for the Australian-New Zealand retail business, one of the things we'll be doing is working through what our estimate is of that margin target for the aggregated business, based on some assumptions around the medium term.

Speaker #2: As a reminder, we've always said that whenever we upgrade or change these, it represents our three- to five-year view of what can be achieved in that timeframe.

Speaker #2: They're not terminal margin targets; they are what we think are achievable within that time horizon. So, what we'll do—possibly at the AGM, but more likely, certainly for the February half year—will be to revise, where we think appropriate, the margin targets. But it's specifically to clarify what the margin target will be for the new reporting aggregation.

Mike Emmett: So what we will do, possibly at the AGM, but more likely certainly for the February half year, will be to revise where we think appropriate the margin targets, but specifically clarify what the margin target will be for the new reporting aggregation.

Tim Lawson: Just to clarify, but with that sort of AUB Group Agencies commentary you are making, are you telling us that there is scope that they could be increased, that you are quite positive on that AUB Group Agencies benefit in the business?

Speaker #1: Just to maybe clarify, but with that sort of AI commentary you're making, are you telling us that there's scope for that to be increased, and are you quite positive on the AI benefit in the business?

Speaker #2: Yes, absolutely.

Mike Emmett: Yes, absolutely.

Speaker #1: Thank you.

Tim Lawson: Thank you.

Speaker #3: The next question comes from Siddharth Parameswaran with JPMorgan. Please go ahead.

Operator: The next question comes from Siddharth Parameswaran with J.P. Morgan. Please go ahead.

Speaker #1: Thank you very much for taking my questions. Maybe a couple. The first one is just on your guidance for UNPACT for FY27. I was hoping you could just give us some detail as to what you're expecting the contributions to be in Australia versus international.

Siddharth Parameswaran: Thank you very much for taking my questions. Maybe a couple. The first one just on your guidance for UNPAT for FY27, I was hoping you could just give us some steer as to what you are expecting the contributions to be in Australia versus international. I know you gave us some high-level comments around funding costs and FX headwinds, but just directionally, if you can just flag. Previously you have been explaining that you thought we could still have pretty strong revenue growth in the Australian market even with the soft cycle. But there are a few things you flagged that were uncertain in your guidance around, I think just the war and other things. So I was just hoping you could tell us international versus Australian broking versus agency directionally, how you are seeing things in terms of margins and revenues.

Speaker #1: I know you gave us some high-level comments around funding costs and FX headwinds, but just directionally, if you can flag—previously you'd been explaining that you thought we could still have pretty strong revenue growth in the Australian market, even with a soft cycle. But there are a few things you flagged that were uncertain in your guidance around, I think, just the war and other things.

Speaker #1: So, I was just hoping you could tell us—international versus Australian broking versus agency—directionally, how you're seeing things in terms of margins and revenues.

Siddharth Parameswaran: So I was just hoping you could tell us international versus Australian broking versus agency directionally, how you are seeing things in terms of margins and revenues.

Speaker #2: So, I mean, if we just do a quick trundle through, the assumption is that BizCover will continue the momentum that it has demonstrated for several years.

Mike Emmett: So, if we just do a quick trundle through. The assumption is that BizCover will continue the momentum that it has demonstrated for several years. Agencies, actually, we think agencies have performed really well, ex Strata. Strata is a market phenomenon, so I will talk about that separately. The other two agencies, we think have performed really well. Remembering that premium rates impact agencies more than they impact broking businesses. So those two groups of agencies performed really well. We are winning market share, we are winning new business, and our focus on underlying profit for our insurer partners has paid dividends as well. On the Strata side, we foreshadowed this, in fact, in August last year and at the H1. The market is incredibly competitive. Candidly, we do not understand the logic behind why the market is so competitive.

Speaker #2: Agencies—actually, we think agencies have performed really well ex-strata. So, strata is a market phenomenon, so I'll talk about that separately. The other two agencies, we think, have performed really well.

Speaker #2: Remember that premium rates impact agencies more than they impact broking businesses, and so those two groups of agencies performed really well. We're winning market share.

Speaker #2: We're winning new business, and our focus on underlying profit for our insurer partners has paid dividends as well. On the strata side, we foreshadowed this, in fact, in August last year and at the half year.

Mike Emmett: On the Strata side, we foreshadowed this, in fact, in August last year and at the H1. The market is incredibly competitive. Candidly, we do not understand the logic behind why the market is so competitive. Premium rates have been dropping despite the fact that there is no view. We do not see any underlying reason why premium rates should be dropping. So our main competitors are willing to write business with significantly lower premium rates than we are comfortable to do. Obviously, these are decisions we take in partnership with our insurer partners, and they will be taking them in partnership with theirs.

Speaker #2: The market is incredibly competitive. Candidly, we don't understand the logic behind why the market is so competitive. Premium rates have been dropping. Despite the fact that there is no view—we don't see any underlying reason why premium rates should be dropping.

Mike Emmett: Premium rates have been dropping despite the fact that there is no view. We do not see any underlying reason why premium rates should be dropping. So our main competitors are willing to write business with significantly lower premium rates than we are comfortable to do. Obviously, these are decisions we take in partnership with our insurer partners, and they will be taking them in partnership with theirs. So Strata has continued the trend that we foreshadowed in February, which is, unfortunately, unless we drop rates, our retention rates, which we are not willing to do, our retention rates are dropping because we are losing business to competitors who are competing at much lower premium rates. Structurally, that has to be time boxed because insurers cannot afford. There is nothing in the market that says the cost of repairs and remediation or loss ratios for Strata are decreasing, right?

Speaker #2: And so, our main competitors are able and willing to write business at significantly lower premium rates than we are comfortable to do. And obviously, those are decisions we take in partnership with our insurer partners, and they'll be taking them in partnership with theirs.

Speaker #2: So strata has continued the trend that we foreshadowed in February which is unfortunately unless we drop rates, our retention rates which we're not willing to do, our retention rates are dropping because we are losing business to competitors who are competing at much lower premium rates.

Mike Emmett: So Strata has continued the trend that we foreshadowed in February, which is, unfortunately, unless we drop rates, our retention rates, which we are not willing to do, our retention rates are dropping because we are losing business to competitors who are competing at much lower premium rates. Structurally, that has to be time boxed because insurers cannot afford. There is nothing in the market that says the cost of repairs and remediation or loss ratios for Strata are decreasing, right?

Speaker #2: Structurally, that has to be timeboxed, because insurers can't afford—there's nothing in the market that says the cost of repairs and remediation for, or the loss ratios for, strata are decreasing, right?

Mike Emmett: They match residential loss ratios. So it does not make sense the rate trend. So ex that, we see agencies as continuing to grow and expand. I referenced when I spoke about agencies that we do see some cost and margin improvement opportunities out of some of the consolidation activities, which we started in agencies during FY27, but that we have been very successfully doing in the broader broking business for the last few years. In terms of Australian broking and New Zealand broking, I think I probably gave as much color. I think it is more of the same. So it is more consolidations in the two markets. We do see signs that the market is strengthening, the market conditions are strengthening in New Zealand.

Speaker #2: They match residential loss ratio, so it doesn’t make sense—the rate trend. So, except that, we see agencies as continuing to grow and expand.

Speaker #2: Our reference when I spoke about agencies is that we do see some cost and margin improvement opportunities out of some of the consolidation activities, which we started in agencies during FY27, but that we’ve been very successfully doing in the broader broking business for the last few years.

Speaker #2: In terms of Australian broking and New Zealand broking, I think I probably gave as much colour. I think it's more of the same, so it's more consolidations in the two markets.

Speaker #2: We do see signs that the market is strengthening. The market conditions are strengthening in New Zealand. We have taken the opportunity over the last 12 months to invest and expand our broking footprint in New Zealand.

Mike Emmett: We have taken the opportunity over the last 12 months to invest and expand our broking footprint in New Zealand, and so we believe we will be strong beneficiaries of that market strengthening. Then in international, it is really on the retail piece. It is about executing on our plans around the consolidation and integration of the UK retail piece. While in parallel on international wholesale, it is about, I guess part of it is linked to some pieces of the geopolitical uncertainty dialing back slightly so that trade in some of those affected areas can continue. But broadly, those are the key levers.

Speaker #2: And so, we believe we'll be strong beneficiaries of that market strengthening. And then, in international, really on the retail piece, it is about executing on our plans around the consolidation and integration of the UK retail piece.

Speaker #2: While in parallel on international wholesale, I guess part of it is linked to some pieces of the sort of geopolitical uncertainty dialing back slightly, so that trade in some of those affected areas can—the key levers.

Speaker #1: Sorry, so just on international, excluding the acquisition, am I to read that you're expecting growth? I just wasn't clear exactly whether we're expecting margin expansion or not.

Siddharth Parameswaran: Sorry. Just on international ex-acquisition, am I to read that you are expecting growth? I just was not clear exactly whether you are expecting margin expansion or not, ex-Prestige. We do not presume lows the margin, but just was not 100% clear on international.

Speaker #1: Ex the prestige, which I presume lowers the margin, but just, I wasn't 100% clear on international.

Speaker #2: So, if you took the full year, we think that there's some artificial inflation in the margin in the international business. We actually believe it's running at about a 25% margin.

Mike Emmett: Well, if you took full year. We think that there is some artificial inflation in the margin in the international business. We actually believe it is running at about a 25% margin. So we do see revenue growth, and we do see the opportunity for some expansion of margin. The exact timing of that H1 versus H2 is a bit unclear, so it may still look lumpy. But I think that is more related to the timing of revenue flows in the H1 than anything else.

Speaker #2: So we do see revenue growth, and we do see the opportunity for some expansion of margin. The exact timing of that—first half versus second half—is a bit unclear.

Speaker #2: So, it may still look lumpy, but I think that's more related to the timing of revenue flows in the first half than anything else.

Speaker #1: Okay, thank you. Thanks very much for that colour. Just my second question is around the strategic priorities, and I think you've got a slide there.

Siddharth Parameswaran: Okay. Thank you. Thanks. Thank you very much for that color. My second question is just around the strategic priorities, and I think you have got a slide there. I think it is slide 47. Let me just have a look at it. There was a slide you had there about change in your strategic priorities from, sorry, it is 45, versus where you were a year ago. It seems like M&A has reduced in terms of focus, and there is much more of a focus on the consolidation and specialization. In fact, a lot of the other areas, it seems like there has been a down weighting in terms of the expected improvements from commercial arrangements, fees, et cetera. So I was hoping you could just firstly flesh out what you mean by specialization leading to improvement. Is that a long-dated thing? Presumably, that takes a while to come through.

Speaker #1: I think it's slide 47. Let me just have a look. There was a slide you had there about the change in your strategic priorities from—sorry, it's 45—versus where you were a year ago.

Speaker #1: And it seems like M&A has reduced in terms of focus, and there's much more of a focus on consolidation and specialization. In fact, in a lot of the other areas, it seems like there's been a downweighting in terms of the expected improvements from commercial arrangements, fees, et cetera.

Speaker #1: So, I was hoping you could first flesh out what you mean by specialization leading to improvement. Is that something that happens over a long period of time? Presumably, that takes a while to come through.

Siddharth Parameswaran: So I was hoping you could just firstly flesh out what you mean by specialization leading to improvement. Is that a long-dated thing? Presumably, that takes a while to come through. Just comments on just the down weighting on M&A and some of the other levers.

Speaker #1: Just comments on the downweighting on M&A, and some of the other levers.

Siddharth Parameswaran: Just comments on just the down weighting on M&A and some of the other levers.

Speaker #2: I think, firstly, I'd say the way to read the slide is as a statement of progress, right? So, for example, commercial arrangements—so, in Tyres, for example, a year ago we had one commercial arrangement with one insurer partner.

Mike Emmett: I think firstly, I'd say the way to read the slide is about a statement of progress. For example, commercial arrangements. In Tysers, for example, a year ago, we had one commercial arrangement with one insurer partner. Let's imagine that the majority of the business is placed with, pick a number, 20 insurers. Obviously, we had one commercial arrangement. We now have seven with imminently another three that will be entered into. The opportunity size has reduced simply by virtue of the fact that we now have 10 in the bag rather than one. I think that's the first thing you should read it as. This is not necessarily a comment on the size of the total prize, but more a comment on the progress we've made toward getting to achieving that. That's the first comment I'd make.

Speaker #2: Let's imagine that the majority of the business is placed with, say, 20 insurers. Obviously, we had one commercial arrangement—now we have seven, with another three imminently to be entered into.

Speaker #2: And so the opportunity size has reduced, simply by virtue of the fact that we now have 10 in the bag rather than one. So, I think that's the first thing. You should read it as: this is not necessarily a comment on the size of the total prize, but more a comment on the progress we've made towards achieving that.

Speaker #2: So that's the first comment I'd make. The second comment is your question about M&A. So there are two observations I make about M&A. The first one is we don't buy things just because we're trying to be an aggressive acquirer.

Mike Emmett: The second comment is your question about M&A. There are two observations I make about M&A. The first one is, we don't buy things just because we're trying to be an aggressive acquirer. I've used the analogy of a jigsaw puzzle before. We intentionally target certain types of assets. Agency is the perfect example. We bought 360 Underwriting Solutions because we wanted to strengthen general commercial. We bought Pacific Indemnity because we wanted to strengthen financial lines. We bought Strata Unit Underwriters because we wanted to strengthen strata. In UK retail, we bought Prestige Insurance Holdings because we wanted to strengthen UK retail. We bought Movo Group and Momentum Broker Solutions or invested in them because we wanted to have access to replicate our insurance advisor network in Australia, in the UK, and have access to the Appointed Representative share of the market.

Speaker #2: I've used the analogy of a jigsaw puzzle before. We intentionally target certain types of assets; agencies are the perfect example. We bought 360 because we wanted to strengthen general commercial.

Speaker #2: We bought Pacific Indemnity because we wanted to strengthen financial lines. We bought SUU because we wanted to strengthen strata. In UK retail, we bought Prestige because we wanted to strengthen UK retail. We bought Movo and Momentum, or invested in them, because we wanted to have access to replicate our insurance advisor network in Australia.

Mike Emmett: We bought Movo Group and Momentum Broker Solutions or invested in them because we wanted to have access to replicate our insurance advisor network in Australia, in the UK, and have access to the Appointed Representative share of the market. We invested in BizCover because we wanted access to an insurtech with access to the micro SME space in the market. All of our M&A has not been about trying to spend a certain amount of money or discrete isolated decisions. It's a strategic overlay about what we're trying to complete.

Speaker #2: In the UK, we have access to the appointed representative share of the market. We invested in BizCover because we wanted access to an insurtech with coverage in the micro SME space in the market.

Mike Emmett: We invested in BizCover because we wanted access to an insurtech with access to the micro SME space in the market. All of our M&A has not been about trying to spend a certain amount of money or discrete isolated decisions. It's a strategic overlay about what we're trying to complete. The fact is, we've made fantastic progress in completing that jigsaw puzzle, but obviously that also needs to be in the context of unlocking all of the value that we can see. I almost see this as a series of phased approaches where you unlock. The first round is about ensuring that an acquisition is stabilized. You're getting the return you expected from it in isolation. The next step then is unlocking some of the synergy benefits you get from particularly consolidation and creating almost these centers of excellence.

Speaker #2: So all of our M&A has not been about trying to spend a certain amount of money or making discrete, isolated decisions. It's a strategic overlay of what we're trying to complete.

Mike Emmett: The fact is, we've made fantastic progress in completing that jigsaw puzzle, but obviously that also needs to be in the context of unlocking all of the value that we can see. I almost see this as a series of phased approaches where you unlock. The first round is about ensuring that an acquisition is stabilized. You're getting the return you expected from it in isolation. The next step then is unlocking some of the synergy benefits you get from particularly consolidation and creating almost these centers of excellence.

Speaker #2: The fact is, we've made fantastic progress in completing that jigsaw puzzle. But obviously, that also needs to be in the context of unlocking all of the value that we can see.

Speaker #2: And so I almost see this as a series of phased approaches, where you unlock the first round, which is about ensuring that an acquisition is stabilized.

Speaker #2: You're getting the return you expected from it in isolation. The next step, then, is unlocking some of the synergy benefits you get from, particularly, consolidation and creating almost these centers of excellence.

Speaker #2: The third piece is then iterating how you can further consolidate and strengthen the way in which the business flows go through those businesses across the different parts of our network and our group.

Mike Emmett: The third piece is then iterating how you can further consolidate and strengthening the way in which the business flows go through those businesses across the different parts of our network and our group. I think this is more a function of actually we've completed a lot of the jigsaw puzzle. That doesn't mean there aren't opportunities for us to still make bolt-on acquisitions, et cetera. But the reality is, a lot of the core capabilities that we needed to invest in, we have invested in now. Now it's about unlocking more of the value from those. There's also a simple function, which is we are very focused on ensuring that investments we make, we make with an eye on the return we can generate. We are cautious about capital capacity and the deployment of that capital and the best ways to generate return from that.

Speaker #2: So, I think this is more a function of actually—we've made, we've completed—a lot of the jigsaw puzzle. That doesn't mean there aren't opportunities for us to still make bolt-on acquisitions, et cetera.

Speaker #2: But the reality is, a lot of the core capabilities that we needed to invest in, we have invested in now. And that's about unlocking more of the value from those.

Mike Emmett: There's also a simple function, which is we are very focused on ensuring that investments we make, we make with an eye on the return we can generate. We are cautious about capital capacity and the deployment of that capital and the best ways to generate return from that. We have seen that as we have matured and expanded our portfolio, the better return now is about leveraging those investments to optimize the return for shareholders.

Speaker #2: There's also a simple function, which is we are very focused on ensuring that the investments we make are made with an eye on the return we can generate.

Speaker #2: And so we are cautious about capital capacity and the deployment of that capital, and the best ways to generate returns from that. And so we have seen that as we've matured and expanded our portfolio, the better return now is about leveraging those investments to optimize the return for shareholders.

Mike Emmett: We have seen that as we have matured and expanded our portfolio, the better return now is about leveraging those investments to optimize the return for shareholders.

Speaker #1: Yep. Okay. Okay, thank you very much. Your next question comes from Blake Douset with Jordan Group. Please go ahead.

Siddharth Parameswaran: Yep. Okay. Thank you very much.

Operator: Your next question comes from Blake Dowsett with Jarden Group. Please go ahead.

Speaker #3: Back in, thanks for taking my questions. I just have a couple on Prestige, if you don't mind. I'm just curious to get your initial read.

Blake Dowsett: Hi, Tim. Thanks for taking my questions. I have just got a couple on Prestige, if you do not mind. I am just curious to get your initial read. I see you got the keys in March. Just your initial read on how that business has run relative to your expectations and maybe a comment on the 10 million or more in synergies that you talked to back in February. Is that implied in your FY27 guidance?

Speaker #3: I see you've got the keys in March. Is your initial read on how that business has run relative to your expectations, and maybe a comment on the $10 million or more in incentives that you talked to back in February?

Speaker #3: Is that implied in your FY27 guidance?

Speaker #2: Not all of it is implied in the FY27 guidance, Black. So I think three observations—it might sound slightly contradictory. So, the first observation is that we're very pleased with the acquisition.

Mike Emmett: Not all of it is implied in the FY27 guidance, Blake. The first observation is very pleased with the acquisition. Excellent business, excellent growth potential, excellent management team. So very happy with that, firstly. Secondly, the market environment for SME, and the smaller end of broking in the UK has been really challenging, very competitive. Some of the competitors, and this is not news because there have been some broker type reports about some of our big competitors there, have been struggling because of capital and funding challenges, and have been very, very aggressive at trying to, dare I say, buy business. So it has been a challenging market environment. So we have focused on ensuring that the business strength and capacity and capability is preserved and focused.

Speaker #2: Excellent business, excellent growth potential, excellent management team. So very happy with that. Firstly. Secondly, the market environment for sort of SME and sort of the smaller end of broking in the UK has been really challenging.

Speaker #2: Very competitive. Some of the competitors—and this is not news, because there have been some broker-type reports about some of our big competitors there.

Speaker #2: Have been struggling because of capital and funding challenges, and have been very, very aggressive at trying to, dare I say, buy business. So it has been a challenging market environment.

Speaker #2: So, we've focused on ensuring that the business's strength, capacity, and capability are preserved and focused. And we've put in place, I guess, we've tried to make sure that we integrate the business but don't negate the benefits of the independence and the entrepreneurial capability that they have.

Mike Emmett: We have put in place, I guess we have tried to make sure that we integrate the business but don't negate the benefits of the independence and the entrepreneurial capability that they have. In terms of unlocking the synergy benefits, a key first step is about transitioning the historic Tysers retail branches into Prestige. There is an element where we require legal compliance and regulatory changes, including approvals from the regulator. So there is always a lead time on that. So we are in that phase now. So we have been, I think, had a balanced view of how much of the synergy to include in FY27 versus what flows through to FY28. So very confident about the synergy quantum on a run rate basis. In terms of timing, only a portion of that finds its way into our estimate for FY27.

Speaker #2: In terms of unlocking the synergy benefits, I mean, the key first step is about transitioning the ties—the historic ties as retail branches—into Prestige.

Speaker #2: There's an element where we require legal compliance and regulatory changes, including approvals from the regulator, and so there's always a lead time on that.

Speaker #2: So we're in that phase now. We have, I think, maintained a balanced view of how much of the synergy to include in FY27 versus what flows through to FY28.

Speaker #2: So, very confident about the synergy quantum in terms of, on a run rate basis. In terms of timing, only a portion of that finds its way into our estimate for FY27.

Mike Emmett: So very confident about the synergy quantum on a run rate basis. In terms of timing, only a portion of that finds its way into our estimate for FY27.

Speaker #3: Perfect. I appreciate that. Just a second question on agencies. Just noting, historically and back in 1H, for example, you told us the margin ex profit commission.

Blake Dowsett: Got it. I appreciate that. Just a second question on agencies. Just noting historically and back in H1, for example, you told us margin ex profit commission. Is there any way you can give us that number for FY26? Just helps us understand the underlying business.

Speaker #3: Is there any way you can give us that number for FY26? It just helps us understand the underlying business.

Mike Emmett: Blake, I will have to come back to you with that.

Speaker #2: Blake, I'll have to come back to you with that. I think the reality is, starter sort of clouds the view.

Blake Dowsett: SURA.

Mike Emmett: I think the reality is Strata sort of clouds the view. We can give you that. We will probably defer. I think we will have to come back to you with that.

Speaker #2: So we can give you that. We'll probably defer, yeah, yeah. I think we'll have to come back to you with that.

Speaker #3: That's fine. I'll circle back later tonight. Thanks for your time.

Blake Dowsett: That is fine. I will circle back later tonight. Thanks for your time.

Speaker #1: Your next question comes from Andre Stadnik with RBC. Please go ahead.

Operator: Your next question comes from Andrei Stadnik with RBC. Please go ahead.

Speaker #4: Good morning. Can I ask just my first question a little bit around—we’ve seen in ties this and the Lloyd’s market. We’re hearing that marine insurance and reinsurance demand is rather strong at the moment.

Andrei Stadnik: Good morning. Can I ask, just my first question, a little bit around what we have seen in Tysers and the Lloyd's market. We are hearing that marine insurance, reinsurance demand is rather strong at the moment. What are you seeing in terms of conditions there for Tysers and their marine franchise?

Speaker #4: So what are you seeing in terms of conditions there for Tys, this, and their marine franchise?

Speaker #2: Yeah, Andrej, so thanks for the questions. I mean, the reality is there's incredibly strong pent-up demand with a lot of potential in marine.

Mike Emmett: Yeah, Andrei, thank you for the questions. The reality is there is incredibly strong pent-up demand, with a lot of potential in marine. It is very hard to estimate. There is a judgment call. As a reminder, the way it works is, you will have insurance on the ship, including both on the hull as well as on the cargo. If the ship doesn't sail or isn't filled with cargo, then even though you have placed the insurance for it, the actual premium is quite low. There is significant value, premium volatility according to what it is carrying and where it is sailing. Ironically, you have the premium, you are the broker for the ship.

Speaker #2: So it's very hard to estimate, and so there's a judgment call. As a reminder, the way it works is you'll have insurance on the ship, including both on the hull as well as on the cargo.

Speaker #2: But if the ship doesn't sail, or isn't filled with cargo, then even though you've placed the insurance for it, the actual premium is quite low.

Speaker #2: But then there's significant value premium volatility according to what it is carrying and where it's sailing. And so, ironically, you have the premium; you are sort of the broker for the ship.

Speaker #2: And if it’s a ship that then carries cargo—let’s imagine it’s oil at the moment—and it’s through the Strait of Hormuz, and it’s able to sail filled with cargo, then there’s a massive payday for the insurer and for the broker, right?

Mike Emmett: If it is a ship that then carries cargo, let's imagine it is oil at the moment, and it is through the Strait of Hormuz, and it is able to sail filled with cargo, then there is a massive payday for the insurer and for the broker, right? Obviously, if the ship doesn't sail and it is sitting outside the Strait of Hormuz and can't get loaded with oil, then there is very little income for us. I don't want to overstate the Middle East piece, but the fact is that is where a significant chunk of oil shipment come from, and that is where a significant portion of the world's shipping is deployed. The uncertainty is not will the income flow to us, the uncertainty is when and how much. I know that sounds crazy, but it is because you don't know when and how much. That is part of the slight uncertainty.

Speaker #2: Obviously, if the ship doesn't sail, and it's sitting outside the Strait of Hormuz and can't get loaded with oil, then there's very little income for us.

Speaker #2: So I don't want to overstate the Middle East piece, but the fact is, that is where a significant chunk of oil shipments come from. And that's where a significant portion of the world's shipping is deployed.

Speaker #2: So the uncertainty is not whether the income will flow to us. The uncertainty is when and how much. And I know that sounds crazy, but it's because you don't know when and how much.

Mike Emmett: The uncertainty is not will the income flow to us, the uncertainty is when and how much. I know that sounds crazy, but it is because you don't know when and how much. That is part of the slight uncertainty. The second piece is, we do a lot of construction and engineering projects, in terms of the insurance and placing the insurance. Historically, Dubai has been a center of significant construction activity. At the moment, there is little to no construction activity going on in Dubai. Again, that is a pent-up demand. Our clients haven't changed, their needs haven't changed.

Speaker #2: And so that's part of the slight uncertainty. A second piece is, we do a lot of construction and engineering projects in terms of the insurance and placing the insurance.

Mike Emmett: The second piece is, we do a lot of construction and engineering projects, in terms of the insurance and placing the insurance. Historically, Dubai has been a center of significant construction activity. At the moment, there is little to no construction activity going on in Dubai. Again, that is a pent-up demand. Our clients haven't changed, their needs haven't changed. In fact, if anything, there is going to be an increased level of activity in Dubai. The question is when and how much of that will flow how quickly. The optimist in me says, if I look out over the next three or four years, there is a massive pent-up revenue opportunity for us. It is stronger than just opportunity. If you said to me how much of that will flow through in the next three months, I haven't got a clue.

Speaker #2: And historically, Dubai has been a center of significant construction activity. At the moment, there's little to no construction activity going on in Dubai, and so again, that's a pent-up demand.

Speaker #2: Our clients haven't changed, their needs haven't changed. And in fact, if anything, there's going to be an increased level of activity in Dubai. The question is when, and how much of that will flow, and how quickly.

Mike Emmett: In fact, if anything, there is going to be an increased level of activity in Dubai. The question is when and how much of that will flow how quickly. The optimist in me says, if I look out over the next three or four years, there is a massive pent-up revenue opportunity for us. It is stronger than just opportunity. If you said to me how much of that will flow through in the next three months, I haven't got a clue.

Speaker #2: So the optimist in me says, if I look out over the next three or four years, there's a massive pent-up revenue opportunity for us.

Speaker #2: And it's stronger than just opportunity. But if you said to me, how much of that will flow through in the next three months, I haven't got a clue.

Speaker #2: And so I think that's the level of opportunity versus uncertainty that we have at the moment. But you're right, marine war rates are at the highest that I think they've ever been.

Mike Emmett: I think that is the level of opportunity versus uncertainty that we have at the moment. But you are right. Marine war rates are at the highest that I think they have ever been. We are significantly well represented in that area. Our teams are incredibly respected and capable. It is a significant upside for us. But quantifying that and estimating that is incredibly difficult. In fact, nigh on impossible.

Speaker #2: We are significantly well represented in that area. Our teams are incredibly respected and capable, and it's a significant upside for us. But quantifying that and estimating it is incredibly difficult.

Speaker #2: In fact, non-impossible.

Speaker #4: Thank you, Mike. And look, for my second question, there’s something closer to home, right? So a threat in broking—it looks like the thin commission revenue line went up just under 8% year-on-year.

Andrei Stadnik: Thank you, Mike. For my second question, there is something closer to home. With Australian broking, it looks like the fee and commission revenue line went up just under 8% year-on-year. But the premium pool went up maybe 5.5%, roughly to AUD 3.8 billion. Were you successful in optimizing some of the fee and commission levels? How do you view that going forward?

Speaker #4: But the premium pool went up, maybe 5.5%, roughly, to $3.8 billion. So we're successful in optimizing some of the fee and commission levels. How do you view that going forward?

Speaker #2: Yeah, so part of it is about slightly a mix. So actually, interestingly, previously I've spoken about the bookends, where we've been very successful at winning new large clients where predominantly it's fee-based income rather than commission.

Mike Emmett: Yeah. Part of it is about slightly a mix. Actually, interestingly, previously I have spoken about the bookends, where we have been very successful at winning new large clients, where predominantly it is fee-based income rather than commission. The premium would go up disproportionately to the revenue. We have also won a lot of new clients on the small end, the micro SME, largely through BizCover and Express Cover. Ironically, in FY26, we actually lost, so more of our client losses stroke the mix shifted where we actually had a net shrinking of business in the large corporate side, which means that proportionately, where the premium might have gone down from losing those clients, our revenue proportionally went down. It is not a fundamental piece where we actually, I would love to say we are earning more per dollar of premium.

Speaker #2: And so the premium would go up disproportionately to the revenue. And we've also won a lot of new clients on the small end, the micro SME, largely through BizCover and ExpressCover.

Speaker #2: Ironically, in FY26, we actually lost some more of our clients, so losses struck—the mix shifted, where we actually had a net shrinking of business in the large corporate side. Which means that, proportionately, premium went—where the premium might have gone down from losing those clients, our revenue proportionately went down.

Speaker #2: So it's not a fundamental piece where we actually—I'd love to say we're earning more per dollar of premium. It's a mix shift where we've lost some of our revenue—sorry, some of our clients—where they had big premium levels, but not commission rates.

Mike Emmett: It is not a fundamental piece where we actually, I would love to say we are earning more per dollar of premium. It is a mix shift where we have lost some of our revenue, sorry, some of our fee earning clients where they had big premium levels but not commission rates.

Mike Emmett: It is a mix shift where we have lost some of our revenue, sorry, some of our fee earning clients where they had big premium levels but not commission rates.

Speaker #4: Thank you. Your next question comes from Shreyas Patel with UBS. Please go ahead.

Andrei Stadnik: Thank you.

Operator: Your next question comes from Shreyas Patel with UBS. Please go ahead.

Speaker #5: Hi guys, just a question on some of the below-the-line items. Your statutory profit this year is less than half your management profit, so I'm just keen to understand when we can expect that gap to narrow going forward.

Shreyas Patel: Hi, guys. Just a question on some of the below the line items. Your stat profit this year, less than half your management profit. Just keen to understand when we can expect that gap to narrow going forward. In terms of some of the H2 impairments, where those came from and I guess what revenue impacts there would be off the back of that going forward.

Speaker #5: And in terms of some of the second half impairments, where those came from, and I guess what revenue impacts there would be off the back of that going forward.

Speaker #2: Yeah. So, I think the first thing I'd do is say, let's put this in context. So, firstly, since FY22, you have two correlated and therefore relevant points.

Mike Emmett: Yeah. I think the first thing I'd do is I'd say let's put this in context. The first is, since FY22 you have two correlated, and therefore relevant points. Since FY22, we've had a cumulative sum of AUD 110 million of impairments. This is across roughly 55 Cash-Generating Units that get tested for impairment. In the same period, it's AUD 110 million of impairment. At the same period, we've had AUD 150 million of write-ups in value, right? So gains on effectively increases in carrying value. There's a net AUD 40 million increase rather than a net decrease in carrying values over that period. That's the first thing. In context, this is every 6 months, all of those CGUs are tested. We test the headroom in terms of the carrying value of those assets, et cetera. That's the first point.

Speaker #2: Since FY22, we've had a cumulative sum of $110 million of impairments. This is across roughly 55 cash-generating units that get tested for impairment.

Speaker #2: In the same period—so it's $110 million of impairment. In that same period, we've had $150 million of write-ups in value, right?

Speaker #2: So, gains on, effectively, increases in carrying value. And so there's a net $40 million increase, rather than a net decrease, in carrying values over that period.

Speaker #2: So that's the first thing. In context, every six months all of those CGUs are tested. We test the headroom in terms of the carrying value of those assets, etc.

Mike Emmett: In context, this is every 6 months, all of those CGUs are tested. We test the headroom in terms of the carrying value of those assets, et cetera. That's the first point. The second point I'd make is that we rarely have one asset that didn't meet the headroom test, right? That asset is an Australian broking business, very unimaginatively called Austbrokers Corporate, which is where we house our corporate broking business. That's what I actually was referencing when I was answering Andrei's question about losing some large corporate clients.

Speaker #2: So that's the first point. The second point I'd make is that we really have one asset that didn't meet the headroom test, and that asset is an Australian broking business, very unimaginatively called "AUB Brokers Corporate," which is where we house our corporate broking business.

Mike Emmett: The second point I'd make is that we rarely have one asset that didn't meet the headroom test, right? That asset is an Australian broking business, very unimaginatively called Austbrokers Corporate, which is where we house our corporate broking business. That's what I actually was referencing when I was answering Andrei's question about losing some large corporate clients. Austbrokers Corporate is sort of the outcome of the merging of four entities. Two we already owned and then two we acquired over the last 4 or 5 years. When you acquire them, I'll try to do this briefly. When you acquire a broking business, you estimate the value of the client portfolio, which we call the broking register. The balance of the purchase price is then the carrying value or the goodwill, right? I'm leaving out any other tangible assets.

Speaker #2: And that's what I was actually referencing when I was answering Andre's question about losing some large corporate clients. So, Osbrokers Corporate is sort of the outcome of the merging of four entities.

Mike Emmett: Austbrokers Corporate is sort of the outcome of the merging of four entities. Two we already owned and then two we acquired over the last 4 or 5 years. When you acquire them, I'll try to do this briefly. When you acquire a broking business, you estimate the value of the client portfolio, which we call the broking register. The balance of the purchase price is then the carrying value or the goodwill, right? I'm leaving out any other tangible assets.

Speaker #2: Two we already owned and then two we acquired over the last four or five years. When you acquire them I don't want to I'll try to do this briefly.

Speaker #2: When you acquire a broking business, you estimate the value of the client portfolio, which we call the broking register. The balance of the purchase price is then the carrying value, or the goodwill, right?

Speaker #2: And I'm leaving out any other tangible assets. So then the test is, when you lose clients that were part of that original portfolio you acquired, you write off the balance of whatever the carrying value is related to the clients that have left.

Mike Emmett: The test is when you lose clients that were part of that original portfolio you acquired, you write off the balance of whatever the carrying value is related to the clients that have left. That happened in the H1 of FY26. We had an impairment in December, and then we foreshadowed in March with the cap raise that we thought there might be additional impairment related to those client departures. That is because you are trying to estimate how much income you will retain or lose from their portfolio. Important point is you never increase the carrying value of that for new clients you might have won. You might have the irony where you bought a business with three clients. They won three new clients.

Speaker #2: And so that happened in the first half of FY26. We had an impairment in December, and then we foreshadowed in March, when we did the cap raise, that we thought there might be additional impairment related to those client departures.

Speaker #2: And that's because you're trying to estimate how much income you'll retain or lose from that portfolio. The important point is you never increase the carrying value of that for new clients you might have won.

Speaker #2: So, you might have the irony where you bought a business with three clients, won three new clients, but actually, if you lose the three clients that were there at the time of the buying, you write off and impair the asset. But you never write up for the new clients that you've won, right?

Mike Emmett: But actually, if you lose the three clients that were at the time of the buying, you write off and impair the asset, but you never write up for the new clients that you have won, right? You cannot directly correlate and say, therefore, the business has lost its original clients, it is worth nothing. The second thing you do is you then test the carrying value by looking at the, you basically do a DCF of the future cash flows using a discounting rate. There are a couple of vagaries there. Obviously, what you are doing is you are estimating the future cash flows. If those have come down, then your carrying value, your DCF is reduced. If that is below the carrying value, then you do decrease it. But the second thing is you do have changes in that discounting rate.

Speaker #2: So, you can't directly correlate and say, therefore, the business has lost its original clients—it's worth nothing. The second thing you do is then test the carrying value by looking at the— you basically do a DCF of the future cash flows using a discounting rate.

Speaker #2: Now, there are a couple of vagaries there. Obviously, what you’re doing is you’re estimating the future cash flows. So if those have come down, then your carrying value—your DCF—is reduced.

Speaker #2: And if that's below the carrying value, then you do decrease it. But the second thing is, you do have changes in that discounting rate.

Mike Emmett: But the second thing is you do have changes in that discounting rate. You could have this slight vagary where if discounting rates shift from year to year, you could have an impairment purely because of that. Now, I am not saying that is what happened here, but what I am saying is this is a technical accounting process that happens every six months across the carrying value of all of our cash-generating units. It is a standard practice. It is for the purposes of assessing value, only a partially representative view of things. But nonetheless, you are correct. The fact is we had a significant set of impairments, but only one cash-generating unit that was, let us call it a fundamental impairment.

Speaker #2: So you could have this slight vagary, where if discount rates shift from year to year, you could have an impairment purely because of that.

Mike Emmett: You could have this slight vagary where if discounting rates shift from year to year, you could have an impairment purely because of that. Now, I am not saying that is what happened here, but what I am saying is this is a technical accounting process that happens every six months across the carrying value of all of our cash-generating units. It is a standard practice. It is for the purposes of assessing value, only a partially representative view of things. But nonetheless, you are correct. The fact is we had a significant set of impairments, but only one cash-generating unit that was, let us call it a fundamental impairment. I think in context, the 150 versus 110 are the important numbers. As to your question about when does this stop happening? Well, I think, ironically, this is something that we have tested every year.

Speaker #2: Now, I'm not saying that's what happened here. But what I am saying is, this is a technical accounting process that happens every six months across all of the carrying value of all of our cash-generating units.

Speaker #2: It's a standard practice. It's for the purposes of assessing value, and only provides a partially representative view of things. But nonetheless, you are correct. The fact is, we had a significant set of impairments.

Speaker #2: But only one cash-generating unit—that was sort of, let's call it, a fundamental impairment. So I think, in context, the 150 versus 110 are the important numbers.

Mike Emmett: I think in context, the 150 versus 110 are the important numbers. As to your question about when does this stop happening? Well, I think, ironically, this is something that we have tested every year. I think in most years, we have had some form of small impairment. It is actually, ironically, a function of our oldest assets that we might have bought at five or six or seven times multiples are the least likely to be impaired. As soon as we buy a majority stake in one of those, we write up the value and your view on discounting rates and multiples might shift over time. For example, there is a difference in multiples in the market now versus 18 months ago. That shift in the market valuations also changes this.

Speaker #2: As to your question about when do we see this stop happening—well, I think, ironically, this is something that we've tested every year.

Speaker #2: I think in most years we've had some form of small impairment. It's actually, ironically, a function of our oldest assets—that we might have bought at five, six, or seven times multiples—are the least likely to be impaired.

Mike Emmett: I think in most years, we have had some form of small impairment. It is actually, ironically, a function of our oldest assets that we might have bought at five or six or seven times multiples are the least likely to be impaired. As soon as we buy a majority stake in one of those, we write up the value and your view on discounting rates and multiples might shift over time. For example, there is a difference in multiples in the market now versus 18 months ago. That shift in the market valuations also changes this. I do not want to poo-poo it. I am an accountant, so I am comfortable with the principle of it, but we should not conflate it with a representation of the quality of our historic M&A.

Speaker #2: As soon as we buy a majority stake in one of those, we write up the value. And your view on discounting rates and multiples might shift over time.

Speaker #2: So, for example, there is a difference in multiples in the market now versus 18 months ago. So that shift in market valuations also changes this.

Speaker #2: So I don't want to pooh-pooh it. I'm an accountant, so I am comfortable with the principle of it. But we shouldn't conflate it with a representation, or a representation of the quality of our historic M&A.

Mike Emmett: I do not want to poo-poo it. I am an accountant, so I am comfortable with the principle of it, but we should not conflate it with a representation of the quality of our historic M&A.

Speaker #1: All right. Thanks, Mike. If I can just ask a second question—around M&A, just how you're seeing the pipeline and what changes have you seen in valuation multiples relative to six months ago?

Shreyas Patel: All right. Thanks, Mike. If I can just ask a second question around M&A, just, I guess, how are you seeing the pipeline and what changes have you seen in valuation multiples relative to 6 months ago?

Speaker #2: So I think the short, quick answer is valuation multiples have drifted down. But I think it's less about the valuations; it's more about the rationality of the participants.

Mike Emmett: I think the short quick answer is valuation multiples have drifted down, but I think it is less about the valuations, it is more about the rationality of the participants. I think some of the participants who were inflating the multiples and inflating. So for me, the issue with the valuations was actually more about the normalizations being made to EBIT rather than the multiples themselves. We are seeing less of the silliness of EBIT normalizations, and we are seeing more sensible vendors because some of the, dare I say, irrational participants on the buyer side have sort of gone away. But we have been very clear all along about our view on valuations, and so we have not really been beneficiaries of it. I think we are just seeing less competition. We definitely are. We see New Zealand as a market where we have our eye on quality M&A.

Speaker #2: I think some of the participants were inflating the multiples. For me, the issue with the valuations was actually more about the normalizations being made to EBIT rather than the multiples themselves.

Speaker #2: And so we're seeing less of the silliness of normalizing EBIT normalizations, and we're seeing more sensible vendors, because some of the—let's dare I say—irrational participants on the buyer side have sort of gone away.

Speaker #2: But we've been very clear all along about our view on valuations. And so we haven't really been beneficiaries of it. I think we're just seeing less competition.

Mike Emmett: But we have been very clear all along about our view on valuations, and so we have not really been beneficiaries of it. I think we are just seeing less competition. We definitely are. We see New Zealand as a market where we have our eye on quality M&A. That might sound counterintuitive against the backdrop of what I said about the market competitiveness. The reality is we see that as a very attractive market in the medium term, and the best time, frankly, to be investing in that market is now when the market is under a bit of stress.

Speaker #2: We definitely are. We see New Zealand as a market where we have our eye on quality M&A, and that might sound counterintuitive against the backdrop of what I said about the market competitiveness.

Mike Emmett: That might sound counterintuitive against the backdrop of what I said about the market competitiveness. The reality is we see that as a very attractive market in the medium term, and the best time, frankly, to be investing in that market is now when the market is under a bit of stress.

Speaker #2: The reality is, we see that as a very attractive market in the medium term. And the best time, frankly, to be investing in that market is now.

Speaker #2: When the market is under a bit of stress.

Speaker #1: Right. Thanks.

Shreyas Patel: Right. Thanks.

Speaker #3: Your next question comes from Richard Amland with CLSA. Please go ahead.

Operator: Your next question comes from Richard Umland with CLSA. Please go ahead.

Speaker #1: Hi. Good morning, guys. Just wanted to ask for any commentary on the impairment charges recorded on slide 36 as a reasonable uplift year on year.

Richard Umland: Hi. Good morning, guys. Just wanted to ask for any commentary on the impairment charges recorded on slide 36 as a reasonable uplift year-on-year and just where is that coming from?

Richard Amland: Hi. Good morning, guys. Just wanted to ask for any commentary on the impairment charges recorded on slide 36 as a reasonable uplift year-on-year and just where is that coming from?

Speaker #1: And just where's that coming from?

Mike Emmett: I sort of feel like I just answered that question from Shreyas.

Speaker #2: I sort of feel like I just answered that question from Shreyas.

Speaker #1: Okay. I was trying to get a bit more granular in terms of which business segment, or anything like that.

Richard Umland: Okay. I was trying to get a bit more granular in terms of which business segment or anything like that.

Richard Amland: Okay. I was trying to get a bit more granular in terms of which business segment or anything like that.

Speaker #2: Yeah, I'm pretty sure I answered that quite thoroughly. Yeah.

Mike Emmett: Yeah, pretty sure I answered that quite thoroughly.

Speaker #1: Okay. All right. And maybe it’s exactly the same. The adjustments to fair value of entities—that, it seems, these things are intertwined, I guess, or they’re more or less the same.

Richard Umland: Okay. All right. Maybe it is exactly the same, the adjustments to fair value of entities, that seems these things are intertwined, I guess. More the same?

Richard Amland: Okay. All right. Maybe it is exactly the same, the adjustments to fair value of entities, that seems these things are intertwined, I guess. More the same?

Mike Emmett: Yeah. That is the-

Speaker #2: Yeah, so that's the reference I made. So, yeah, $150 million up, $110 million down. Yeah.

Richard Umland: In terms of year-on-year changes.

Richard Amland: In terms of year-on-year changes.

Mike Emmett: Yeah, AUD 150 million up, AUD 110 million down. Yeah.

Speaker #1: All right. Okay. All right. That's it for me. Thank you.

Richard Umland: Right. Okay. All right. That is it for me. Thank you.

Richard Amland: Right. Okay. All right. That is it for me. Thank you.

Speaker #3: And the last question today will come from Julian Braganza with Goldman Sachs. Please go ahead.

Operator: The last question today will come from Julian Braganza with Goldman Sachs. Please go ahead.

Speaker #4: Good morning, guys. Just to follow up on the previous discussion, just around slide 45. I just want to round up the discussion there, just around the reduced focus on fees and commission changes.

Julian Braganza: Good morning, guys. Just to follow up on the previous discussion, just around slide 45. Just want to round up the discussion there just around the reduced focus on fees and commission changes. I just thought that would be a more important feature in a softer market and should continue. So I just want to understand that piece and also just the cost reduction piece reducing to low for broking. Thanks.

Speaker #4: I just thought it would be a more important feature in a softer market and should continue, so I just want to understand that piece. And also, just the cost reduction piece—reducing to low for broking.

Speaker #4: Thanks.

Speaker #2: Well, the commission and fee changes—I mean, I think that implies that these are things that we see as levers we can apply. So this is not about—so our view is, at the moment, we can put some fees through, and the split in international is a function of retail versus wholesale.

Mike Emmett: Well, the commission and fee changes, I think that implies that these are things that we see as levers we can apply. Our view is, at the moment, we can put some fees through, and the split in international is a function of retail versus wholesale. We think we have put through quite a lot in H2, in particular of FY26. It is how much more can we do versus this flowing through the business as we progress through FY27.

Speaker #2: But we think we've put through quite a lot in the second half, in particular of FY26. And so it's how much more can we do versus this flowing through the business as we progress through FY27.

Speaker #4: Okay, got it. And then, the cost reduction piece for broking?

Julian Braganza: Okay, got it. The cost reduction piece for broking.

Mike Emmett: The cost reduction is actually a function of the Is that specifically on retail broking that you-

Speaker #2: The cost reduction is actually a function of the— is that specifically on retail broking that you…?

Julian Braganza: Yeah. Statistically, it was reduced actually through retail broking. That is right.

Speaker #4: Yeah. Specifically, it was reduced for retail broking. That's right.

Speaker #2: I think it’s because, actually, a lot of the—let’s call it enterprise-wide cost reduction that we could apply across Australia and New Zealand broking—we feel like we’ve implemented.

Mike Emmett: I think it is because actually a lot of the, let us call it, enterprise-wide cost reduction that we could apply across Australia and New Zealand broking, we feel like we have implemented. We think that the margin improvement is going to come from growth without increase in cost rather than cost reduction per se. Whereas we do see opportunities to reduce cost in the underwriting agencies and in the international, so both UK retail and wholesale. Again, just a function of what we have put through versus what we still see to come.

Speaker #2: We think that the margin improvement is going to come from growth without increasing cost, rather than cost reduction per se. Whereas, we do see opportunities to reduce cost in the underwriting agencies and in the international.

Speaker #2: So both UK retail and wholesale. So again, it's just a function of what we've put through versus what we still see to come.

Speaker #4: Okay, got it. And that's fine. In terms of just sizes, if my memory serves me correctly—correct me if I’m wrong—but there’s about $11 million of port tax costs on the bonus pool realignment that came through in FY25.

Julian Braganza: Okay, got it. That is fine. In terms of just Tysers, if my memory serves me correctly, and correct me if I am wrong, but there is about AUD 11 million of post-tax costs on the bonus pool realignment that came through in FY25. I am seeing about a AUD 6 million pre-tax unwind coming through the FY26 numbers. There is still a little bit of a gap between what was booked in FY25, noting that AUD 11 million was post-tax in FY25. So I just want to understand, are those numbers featured recurring, or is anything held back there, and what is being assumed for FY27 in the outlook phase?

Speaker #4: I'm seeing about $6 million of pre-tax unwind coming through the FY26 numbers. There's still a little bit of a gap between what was booked in FY25, noting that $11 million was forced tax in FY25.

Speaker #4: So I just want to understand: are those numbers for features recurring? And is there anything held back there? Also, what's being assumed for FY27 in the outlook?

Speaker #4: Thanks.

Speaker #2: No. So there's nothing in FY, so that is now reversed. So what we can recognize and estimate as reversed—I mean, I think the challenge is we're trying to compare and clarify things in a moving piece.

Mike Emmett: No. There is nothing in FY. So that is now reversed. What we can recognize and estimate has reversed. I think the challenge is we are trying to compare and clarify things in a moving piece. For example, if you have fewer people, so you have got natural turnover. So you might get a cost in the provision when someone joins, or, sorry, when someone is there, then when they leave, you can release that provision. But it is not a precise. We do not have provisions by individual, by month, et cetera. So it is trying to make a portfolio-wide estimate into too precise a sort of a spreadsheet piece. I think the reality is whatever we can recognize as will reverse, has reversed.

Speaker #2: So, for example, if you have fewer people, you've got natural turnover, so you might get a cost in the provision when someone joins.

Speaker #2: Oh, sorry. When someone is there, then when they leave, you can release that provision. But it's not precise—we don't have provisions by individual, by month, etc.

Speaker #2: So it's trying to make a portfolio-wide estimate into too precise a sort of spreadsheet piece, Julian. So I think the reality is, whatever we can recognise as will reverse, has reversed.

Speaker #2: Some of it we might have overestimated the negative in FY25, but some of it would have flowed through potentially in organic or as sort of still there because people have stayed, because part of that is an assumption around retention rates, etc.

Mike Emmett: Some of it may have, we might have overestimated the negative in FY25, but some of it would have flowed through potentially in organic or is sort of still there because people have stayed. Because part of that is an assumption around retention rates, et cetera. So if our retention rates go up, ironically, the reversal goes down because that becomes almost like a permanent provision that you carry until they leave.

Speaker #2: So if our retention rates go up, ironically, the reversal goes down, because that becomes almost like a permanent provision that you carry until they leave.

Speaker #4: Okay, got it. Then, maybe just stepping back in terms of the outlook, I'm keen to understand how you're expecting the premium rate environment to pan out across the different divisions.

Julian Braganza: Okay, got it. Then, maybe just stepping back in terms of the outlook, I am keen to understand how you are expecting the premium rate environment to pan out just across the different divisions versus what you have seen today. Thank you.

Speaker #4: Versus what do you think today? Yeah. Thank you.

Speaker #2: Yeah, so, I mean, again, it's one of these "predict the unpredictable" situations. Our view is that premium rates in New Zealand have softened too far.

Mike Emmett: Yeah. So, again, it is one of these predict the unpredictable. Our view is that premium rates in New Zealand have softened too far. So, we believe that premium rates have to harden in the New Zealand market, that they are too low. Rate reductions and rate freezes have gone too far and they have been too aggressive. So, we think that is unhealthy. Ultimately, we want our clients to be paying fair prices. We do not want them to be exposed to volatility where you have a -20% premium rate and then +20%. We want just a 4% or 5% rate growth through the cycle. It should be less volatile. So, New Zealand is definitely too soft, needs some remediation, and we are hoping that flows through in the next 6 to 12 months.

Speaker #2: And so we believe that premium rates have to harden in the New Zealand market, that they are too low. Rate reductions and rate freezes have gone too far, and they've been too aggressive.

Speaker #2: So, we think that is unhealthy, and ultimately, we want our clients to be paying fair prices. We don't want them to be exposed to volatility, where you have a minus 20% premium rate and then plus 20%.

Speaker #2: We want just a four or five percent rate growth through; it should be less volatile. So, New Zealand is definitely too soft, needs some remediation, and we're hoping that flows through in the next 6 to 12 months.

Speaker #2: The UK is behind where New Zealand is, but still, it's softened faster than we think is appropriate. So, this is particularly on UK retail.

Mike Emmett: The UK is behind where New Zealand is, but still it has softened faster than we think is appropriate. This is particularly on UK retail. So, we would see some hardening in New Zealand in the next 12 months. We would see some hardening in the UK in the next 18 to 24 months. In Australian broking, I think it is by class. We do think that strata, in general, is now irrationally priced. So, there is a piece there where the strata market logically needs to harden. We are not seeing evidence of that, but we are saying it needs to harden. So, those are the observations at a generic level. I think at a particular specific level, we are observing that insurers are releasing reserves. So, they have released reserves now consecutively through a couple of H1 reporting cycles. They release reserves bluntly when insurance profits are inadequate.

Speaker #2: And so we would see some hardening in New Zealand in the next 12 months. We would see some hardening in the UK in the next 18 to 24 months.

Speaker #2: In Australian broking, I think it's by class. We do think that strata, in general, is now irrationally priced. And so there's a piece there where the strata market logically needs to harden.

Speaker #2: We're not seeing evidence of that, but we are saying it needs to harden. So those are the observations at a generic level. I think at a more specific level, we are observing that insurers are releasing reserves.

Speaker #2: So, they've released reserves now consecutively through a couple of half-year reporting cycles. They release reserves, bluntly, when insurance profits are inadequate—my words, not theirs.

Mike Emmett: My words, not theirs. So, that normally preempts an adjustment in terms of the way in which they price underwriting risks. All of these are unfortunately hypotheses, Julian, because we do not know what is going to happen. But that reflects a little bit of what we have seen in the last 2 months, so in June and July, in terms of some pricing behaviors. Certainly it reflects what some of them are saying, necessarily what they are doing. So, unfortunately, that is the best I can predict. Again, I come back to if I observe what FY26 to me demonstrates. If we went back 2 or 3 years, the comment I was making all the time was irrespective of premium rate cycle, we will be able to manage through the cycle to ensure that we deliver fair and reasonable profit growth.

Speaker #2: And so that normally pre-empts an adjustment in terms of the way in which they price underwriting risks. Now, all of these are unfortunately hypotheses, Julian, because we don't know what's going to happen.

Speaker #2: But that reflects a little bit of what we've seen in the last two months—so, in June and July—in terms of some pricing behaviors.

Speaker #2: Certainly, it reflects what some of the more—saying is really what they're doing. And so, unfortunately, that's the best I can predict. Again, I come back to: if I observe what FY26, to me, demonstrates.

Mike Emmett: Again, I come back to if I observe what FY26 to me demonstrates. If we went back 2 or 3 years, the comment I was making all the time was irrespective of premium rate cycle, we will be able to manage through the cycle to ensure that we deliver fair and reasonable profit growth. Our view is that our sustainable ability to grow profit is low double digit. I think what we've evidenced is through feast and famine, we've been able to do that consecutively for 7 or 8 years at least now. For me, that's the key message.

Speaker #2: If we went back two or three years, the comment I was making all the time was, irrespective of premium rate cycle, we would be able to manage through the cycle to ensure that we deliver fair and reasonable profit growth.

Speaker #2: Our view is that our sustainable ability to grow profit is in the low double digits. I think what we've demonstrated is that, through feast and famine, we've been able to do that consecutively for, I don't know, seven or eight years at least now.

Mike Emmett: Our view is that our sustainable ability to grow profit is low double digit. I think what we've evidenced is through feast and famine, we've been able to do that consecutively for 7 or 8 years at least now. For me, that's the key message.

Speaker #2: And so for me, that's the key message.

Speaker #1: I'll now hand back to Mr. Emmett for closing remarks.

Operator: I'll now hand back to Mr. Emmett for closing remarks.

Speaker #2: Thank you very much, Moderator. Thanks, everybody, for joining us today. Hopefully, you could hear from the presentation and from the answers to the questions.

Mike Emmett: Thank you very much, moderator. Thanks everybody for joining us today. Hopefully you could hear from the presentation and from the answers to the questions. We're quietly pleased and proud of the result. I think an important metric to throw out there is, last year, at this time, we had a guidance range, and as we have this time, we state all of our assumptions in terms of FX rates, interest rates, split in terms of the seasonality, et cetera. That guidance range a year ago was AUD 215 million to AUD 227 million. If you applied those assumptions around FX rates, for example, to our result, then we estimate that the result would have been AUD 231 million. So against the AUD 215 million to AUD 227 million a year ago, which a number of you said was a bit conservative.

Speaker #2: We're quietly pleased and proud of the result. I think an important metric to throw out there is, last year at this time, we had a guidance range, and as we have this time, we state all of our assumptions.

Speaker #2: In terms of FX rates, interest rates, and the split in terms of seasonality, etc. And that guidance range a year ago was $215 to $227 million.

Speaker #2: If you applied those assumptions around FX rates, for example, to our result, then we estimate that the result would have been $231 million.

Mike Emmett: If you applied those assumptions around FX rates, for example, to our result, then we estimate that the result would have been AUD 231 million. So against the AUD 215 million to AUD 227 million a year ago, which a number of you said was a bit conservative. The reality is we don't adjust or restate our guidance every time we see FX headwinds, for example. Our view is we're managing a portfolio of businesses. We're going to try and manage to the guidance range.

Speaker #2: So, against the 215 to 227 a year ago—which a number of you said was a bit conservative—the reality is, we don't adjust or restate our guidance every time we see FX headwinds, for example.

Mike Emmett: The reality is we don't adjust or restate our guidance every time we see FX headwinds, for example. Our view is we're managing a portfolio of businesses. We're going to try and manage to the guidance range. Actually our read of our performance is a beat because we've delivered effectively against the assumptions we stated a year ago in a year of frankly, incredible global craziness. We've delivered an incredibly strong, robust result and the equivalent of a significant beat on our top end last year. We are pleased about not only the result, but mostly we are pleased with the fact that we now have significantly complemented our geographic and our capability footprint. We've got a number of additional revenue and margin growth opportunities, and we have made very strong progress. We're looking forward to a strong FY27 and stronger FY28 and FY29.

Speaker #2: Our view is we're managing a portfolio of businesses. We're going to try and manage to the guidance range, and so actually, our read of our performance is a beat.

Mike Emmett: Actually our read of our performance is a beat because we've delivered effectively against the assumptions we stated a year ago in a year of frankly, incredible global craziness. We've delivered an incredibly strong, robust result and the equivalent of a significant beat on our top end last year. We are pleased about not only the result, but mostly we are pleased with the fact that we now have significantly complemented our geographic and our capability footprint. We've got a number of additional revenue and margin growth opportunities, and we have made very strong progress. We're looking forward to a strong FY27 and stronger FY28 and FY29.

Speaker #2: Because we've delivered effectively against the assumptions we stated a year ago, in a year of, frankly, incredible global craziness, we've delivered an incredibly strong, robust result.

Speaker #2: And the equivalent of a significant beat on our top end last year. So we are pleased about not only the result, but mostly we're pleased with the fact that we now have significantly complemented our geographic and our capability sort of footprint.

Speaker #2: We've got a number of additional revenue and margin growth opportunities, and we have made very strong progress. So we're looking forward to a strong FY27.

Speaker #2: And stronger FY28 and FY29. So thank you very much. I look forward to catching up with many of you over the next few days.

Mike Emmett: Thank you very much. I look forward to catching up with many of you over the next few days.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.