2014 interim results

INTERIM RESULTS 2014


2014 Interim Results

Highlights

Organic revenue growth of 6%

Underlying PBT up by 15%

Strong performances from Asia, Latin America and International Employee Benefits

Good progress in Towers Watson Re integration

Continuing investment in the business through acquisitions in Hong Kong, Brazil and the UK and a start up operation in Argentina

Business Transformation Programme on track

Increased interim dividend


Growth

2014 Interim Financial Highlights

1 Total revenue comprises fees, commissions and investment income2 Underlying results exclude exceptional items 3 CRE = constant rates of exchange4 Organic growth is based on total revenue excluding the effect of currency, acquisitions, disposals and investment income

2014 2013 Actual CRE3 Organic46 months to June (£m)

Total revenue1 559.6 487.2 15% 22% 6%

Underlying trading profit2 110.5 92.8 19% 31%

Underlying profit margin2 19.7% 19.0%

Underlying PBT2 107.4 93.1 15%

Reported PBT 98.4 85.1 16%

Underlying EPS (diluted)2 33.6p 29.7p 13%

Reported EPS (diluted) 30.3p 26.9p 13%

Dividend per share 10.6p 10.1p 5%


Total Revenue and Trading Profit

Risk & Insurance 429.6 15% 24% 5% 94.9 104.6 82.7 22% 23% 22%

Employee Benefits 130.0 13% 18% 12% 26.0 27.5 21.1 20% 20% 18%

Central Costs - - - - (10.4) (10.4) (11.0) - - -

559.6 15% 22% 6% 110.5 121.7 92.8 19.7% 20.4% 19.0%

Trading Margin

2014 CRE2013

Total Revenue Trading Profit

2014 CRE2013

6 months to June (£m) 2014 Growth CREOrganic


Trading Margin

2014 CRE2013

Risk & Insurance

• Organic revenue growth of 4% • Lower trading profit due to tougher trading conditions • Notable new business wins and strong new business pipeline• Intensifying insurance rating and FX headwinds• 2014 full year overall financial performance anticipated to be broadly similar to 2013

JLT Specialty

Highlights


2014 CRE2013

JLT Specialty 112.3 2% 4% 4% 16.4 17.5 17.8 15% 15%

16%



• Good first trading period for combined business • Integration progressing well; encouraged by support of cedants and strength of sales

pipeline• Significant growth opportunity, that we are continuing to invest in• Expecting that full year trading margin will be broadly flat to the previous year due to:

– Ongoing investment– Sharp decline in reinsurance rating environment– Strengthening of sterling

Trading Margin

2014 CRE2013


2014 CRE2013

Highlights


Risk & Insurance

JLT Towers Re

JLT Towers Re 110.0 125% 137% 6% 33.2 35.6 14.7 30% 31%

30%


Risk & Insurance

JLT Australia & New Zealand

• Organic revenue growth of 7%, in part benefiting from phasing of business into 1H • Fall in revenue and trading profit due to adverse FX movements• A strong performance given fierce broker competition and fall in insurance rates• Public Sector business continues to perform well• Benefiting from aligning business along specialty lines to drive growth

Trading Margin

2014 CRE2013


2014 CRE2013

JLT Australia & NZ 64.5 (10%) 7% 7% 22.6 26.9 25.4 35% 35%

35%Highlights



Risk & Insurance

Lloyd & Partners

• Revenues decreased by 3%; flat at constant rates of exchange • Continuing to invest in building leading specialty capabilities• Surplus of capital in domestic markets currently impacting competitiveness of London,

European and Bermuda markets

Trading Margin

2014 CRE2013


2014 CRE2013

Lloyd & Partners 43.3 (3%) - (1%) 10.5 11.0 10.5 24% 25%

23%Highlights



• Strong organic revenue growth of 14%• Trading profit increased 9%, or 19% at constant rates of exchange • Specialty led strategy attracting clients and enabling us to continue to win market

share• Acquisition of Lambert Brothers adds to Marine and Corporate capabilities in

Hong Kong

Trading Margin

2014 CRE2013


2014 CRE2013

Highlights


Risk & Insurance

JLT Asia

JLT Asia 38.0 9% 20% 14% 7.0 7.7 6.4 18% 18%

18%


• Strong organic revenue growth of 17%• 6% reduction in trading profit due to adverse FX movements• Trading margin reduced as expected due to continuing investments• Launched new start-up operation in Argentina

Trading Margin

2014 CRE2013


2014 CRE2013

Highlights


Risk & Insurance

JLT Latin America

JLT Latin America 26.2 2% 19% 17% 6.8 7.9 7.3 26% 26%

28%


• Organic revenue growth of 1% in difficult market conditions• Continuing to win new clients and secure further business from existing clients• Building strong position in bulk-purchase annuity market including acquisition of Ensign

Pension Administration• Year-on-year financial progress anticipated in 2014

Trading Margin

2014 CRE2013


2014 CRE2013

Highlights


Employee Benefits

UK & Ireland

UK & Ireland 85.4 5% 5% 1% 12.3 12.3 12.9 14% 14%

16%


Employee Benefits

International

• Strong performance by JLT EB in Asia, with growing demand for healthcare in the region

• Asia high-net-worth life insurance broker maintains positive track record • Latin America benefiting from increasing corporate spend on healthcare• Acquisition of SCK during the period in Brazil

Trading Margin

2014 CRE2013

Trading Profit

2014 CRE2013


Total Revenue

Asia 30.6 35% 49% 42% 11.1 12.2 7.5 36% 36%33%

Latin America 9.3 39% 63% 30% 2.6 3.0 1.2 28% 27%17%

Australia & NZ 3.1 (7%) 12% 12% 0.3 0.3 (0.3) 10% 10%(9%)

Other 1.6 65% 98% 11% (0.3) (0.3) (0.2) (19%) (19%)(17%)

Highlights


Associates

6 months to June (£m) 2014 2013 Growth

Total contribution to JLT after tax 7.2 7.5 (4%)

Principal Associate Holdings

% = JLT equity interest

Highlights

Siaci Saint Honoré France 26%

GrECo Austria 20%

MAG-JLT Italy 25%

March-JLT Spain 25%

JLT Sterling Mexico 36%

Reduced contribution reflecting poor macro economic conditions across most of Europe

Weighting of contribution towards the first half of the year expected to continue in 2014


Total revenue 560 100% 487 100% 73

Operating costs:

Staff costs 320 57.2% 281 57.7% 39

Premises 28 5.0% 25 5.1% 3

Depreciation & amortisation 14 2.5% 12 2.4% 2

Travel & entertainment 23 4.0% 18 3.7% 5

Other operating costs 64 11.6% 58 12.1% 6

449 80.3% 394 81.0% 55

Underlying Operating Cost Ratio

6 months to June (£m) 2014 2013 Variance


USD Revenue Protection

USD hedging rates achieved 1.56 1.53 1.54

as at 28th July 2014

Current USD hedged positions 77% 48% 25%

Forward USD rates as at 28th July 2014 1.70 1.69 1.67

Blended USD rates post hedging 1.55 1.59 1.61 1.64

Value of 2014 revenue ($350m) £226m £220m £217m £213m

Approx YOY revenue impact (£6m) (£3m) (£4m)

Full Year Projections

Forward ratesActual

2013 2014 2015 2016


2014 impact of exchange rate movements

March guidance indicated that we were facing a potential £12.7 million reduction in profits due to the transactional and translational impact of adverse exchange rate movements

The impact at the half year was £11.2 million when compared to the same period in 2013

We expect further negative year-on-year impact if rates stay at current levels

Second half impact however likely to be less than first half as sterling strengthened significantly in the second half of 2013


Breakdown of exceptional items

6 months to June (£m) 2014 2013

Exceptional costs:

Acquisition and integration costs 6.2 3.9

Business Transformation Programme costs 2.8 3.8

St Botolph costs - 0.3

9.0 8.0

Taxation impact of exceptional items:

Tax on exceptional items 1.6 1.8


Balance Sheet

Goodwill and intangibles 523 341 182 499

Fixed assets 60 44 16 60

Associates and investments 108 109 (1) 107

Net working capital and other 233 177 56 137

Hedging contracts after deferred tax (5) (11) 6 (7)

Net pension deficit after deferred tax (120) (100) (20) (106)

Other deferred net tax assets 5 11 (6) 15

Net debt (436) (228) (208) (345)

Net assets 368 343 25 360

As at 30th June (£m) 2014 2013 Change 31 Dec 2013


Cash Flow (Operational Basis)

EBITDA 138 116

Deduct: Net interest (7) (3)

Tax paid (18) (20)

Net working capital increase (101) (62)

Annual capex (31) (33)

Net shares acquired (15) (18)

Pension deficit funding (1) (7)

Acquisitions/disposals (12) (11)

Dividends paid (41) (39)

Foreign exchange (1) 1

Associates & other (2) (9)

Net cash outflow (91) (85)

6 months to June (£m) 2014 2013


Group funding

Successful issue of additional long-term loan notes:

• £75 million of unsecured 2026 loan notes @ 4.27%

• Proceeds swapped to floating rate, currently @ 2.1%

• Used to refinance shorter term bank borrowings

• Extends debt maturity profile

Group committed debt facilities now total £636 million

Good balance between long and short term debt

Net debt/EBITDA ratio of 1.8:1


2014 Current estimate of full year exceptional items

£m2014

Acquisition and integration costs 12.2

Business Transformation Programme 8.5

20.7


(£m)

2014 Full YearForecast

Business Transformation Programme

Incremental:

One-off costs (9.5) (8.5)Associated benefits 7.3 4.7

Cumulative:

One-off costs (9.5) (18.0)

Recurring benefit 7.3 12.0

2013 Actual

2013Actual


Market Update

Speed of decline in insurance and reinsurance rating environment steepest since just before 9/11; pricing also fast approaching levels seen at that time

• Reinsurance rates fell by between 15-25% on average during the 1st June renewals

• Primary market seeing rating declines of 15-30% at present

Opportunistic buying environment for clients

Risk of a lack of underwriting discipline from certain capital providers poses threat to long term stability of the market

Brokers play an important role helping clients navigate current market

JLT’s long-term success tied more to economic growth than insurance rates


Outlook

We are confident that we can deliver year-on-year financial progress, but we are more cautious over the outlook for the remainder of the year given the marked decline in the insurance and reinsurance rating environment over the last quarter and the continued strength of sterling.

The strong organic revenue growth we achieved in the period despite these challenges, demonstrates the success of our strategy of focusing on our areas of specialisation and higher growth economies.


This presentation contains forward-looking statements with respect to the operations, performance and financial condition of Jardine Lloyd Thompson Group plc. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events.Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. Nothing in this presentation should be construed as a profit forecast.

2014 interim results

Documents

trading period

underlying trading profit2110

lower trading profit

year trading margin

phasing of business

combined business integration

underlying profit margin219

underlying pbt2107