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Jim Rush Group Finance Director Dominic Burke Group Chief Executive Interim Results for the six months to 30 th June 2007 1 st August 2007.

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Presentation on theme: "Jim Rush Group Finance Director Dominic Burke Group Chief Executive Interim Results for the six months to 30 th June 2007 1 st August 2007."— Presentation transcript:

1 Jim Rush Group Finance Director Dominic Burke Group Chief Executive Interim Results for the six months to 30 th June st August 2007

2 Todays Presentation Dominic Burke –Trading Highlights Jim Rush –Financial Review Dominic Burke –Building for the future –Outlook

3 Turnover % Underlying trading profit %18% Underlying profit before tax %21% Reported profit before tax % Underlying EPS (diluted)16.0p14.0p14% Reported EPS (diluted)28.4p14.8p92% Dividend per share8.5p8.5p 2007 Interim highlights £M Actualat CRE Growth CRE = Constant rates of exchange 2006 comparatives restated based on continuing operations 1H

4 Turnover % Underlying trading profit % Underlying PBT % Trading margin17%15% 2007 Interim highlights £MGrowth for 1H1H1H at CRE CRE = Constant rates of exchange

5 Group structure Risk & Insurance (83%) Employee Benefits (17%) Jardine Lloyd Thompson Group London Markets (53%) Jardine Lloyd Thompson Ltd Specialty 34% Lloyd & Partners Wholesale 8% JLT Re Reinsurance / Aviation 11% UK/ Europe 13% Australia & New Zealand 16% Latin America 5% Canada 5% Percentage shown is contribution to the Groups 2006 revenues. Retail & Overseas (47%) Asia 8%

6 2007 Interim highlights - Group 1H H 2006* Turnover Trading ProfitTrading MarginTrading Actual Growth at CREActual at CREActual at CREProfitMargin Risk & Insurance204.41%4% %22%38.619% UK Employee Benefits39.65%5% %17%5.916% Other0.7--(8.7)(8.8)--(7.7) % %17%36.815% *Underlying continuing operations £M Improving trading margins

7 Risk & Insurance 1H H 2006* Turnover Trading ProfitTrading MarginTrading Actual Growth at CREActual at CREActualat CREProfitMargin Retail & Overseas94.61%5% %19%19.921% London Market % %24%18.717% TOTAL204.41%4% %22%38.619% *Underlying continuing operations £M Creditable performance in difficult trading conditions

8 Actual Growth at CREProfitMarginProfitMargin Australia/NZ33.65%6%10.130%10.131% Asia17.11%9%4.225%3.823% UK & Europe25.5(1%)-2.18%4.216% Canada8.6(1%)9%0.89%0.78% Latin America8.1(5%)-1.012%1.113% Insurance Management1.710%18%(0.4)(21%)-(3%) TOTAL94.61%5%17.819%19.921% Retail & Overseas *Underlying continuing operations Strong contribution from Asia Pacific 1H H 2006* TradingTurnover £M Trading

9 Jardine Lloyd Thompson Limited61.07%9% %24%5.810% Lloyd & Partners22.6(5%) %24%6.728% JLT Re26.2(8%)(6%) %24%6.222% % %24%18.717% Actual Growth at CREActualat CREActualat CREProfitMargin London Market Operations 1H H 2006* Turnover Trading ProfitTrading MarginTrading *Underlying continuing operations £M Seeing benefits of recent reorganisation

10 Jardine Lloyd Thompson Ltd *Underlying continuing operations Back on the Front Foot Jardine Lloyd Thompson Limited61.07%9% %24%5.810% Lloyd & Partners22.6(5%) %24%6.728% JLT Re26.2(8%)(6%) %24%6.222% % %24%18.717% Actual Growth at CREActualat CREActualat CREProfitMargin 1H H 2006* Turnover Trading ProfitTrading MarginTrading £M

11 Lloyd & Partners *Underlying continuing operations Well positioned as Londons leading independent wholesale broker Jardine Lloyd Thompson Limited61.07%9% %24%5.810% Lloyd & Partners22.6(5%) %24%6.728% JLT Re26.2(8%)(6%) %24%6.222% % %24%18.717% Actual Growth at CREActualat CREActualat CREProfitMargin 1H H 2006* Turnover Trading ProfitTrading MarginTrading £M

12 JLT Re *Underlying continuing operations Increasing new business wins underlying prospects for 2008 and beyond Jardine Lloyd Thompson Limited61.07%9% %24%5.810% Lloyd & Partners22.6(5%) %24%6.728% JLT Re26.2(8%)(6%) %24%6.222% % %24%18.717% Actual Growth at CREActualat CREActualat CREProfitMargin 1H H 2006* Turnover Trading ProfitTrading MarginTrading £M

13 Employee Benefits Actual Growth at CREActualat CREActualat CREProfitMargin 1H H 2006* Turnover Trading ProfitTrading MarginTrading £M UK Employee Benefits39.65%5% %17%5.916% Opportunities in a rapidly changing marketplace

14 Financial Review Jim Rush Group Finance Director

15 £M 1H 20071H 2006Change Underlying trading profit Investment income / finance costs / other 1183 Underlying PBT Net exceptional items PBT Tax expense (15) - Discontinued operations -1(1) Minorities (1) - PAT Reported EPS (diluted) 28.4p14.8p13.6p Summarised Profit & Loss

16 Underlying results before exceptional items Underlying PAT £34m£30m£4m Underlying EPS (diluted)16.0p14.0p2.0p Interim dividend per share8.5p8.5p- 1H 20071H 2006Change

17 Underlying operating costs by category £M1H 20071H 2006Change % of Revenue % of Revenue Staff costs % %(5)(3%) Premises 166.3%145.9%27% Other operating costs %4016.3%13% Depreciation & amortisation 41.6%4 -3% % %(2)(1%)

18 £M Underlying operating costs by operation Jardine Lloyd Thompson Limited4752(5)(8%) Lloyd & Partners181714% JLT Re2022(2)(10%) 8591(6)(6%) London Market businesses: 1H 2007 Change %1H 2006 Retail & Overseas777344% Employee Benefits333214% Central costs and other1011(1)(13%) (2)(1%)

19 Cost reductions and efficiency improvements London markets restructuring completed (additional annualised savings of £2 million) IT improvements Core processing functions

20 Exceptional items – 1H 2007 £M Profit/(loss) before tax Cash inflow/ (outflow) SIACI – net gain 3014 London Market restructuring costs (4)(2) Net exceptional gain 2612

21 1H 20061H 2007 Actuals Average market rates$1.80$1.97 Hedging rates achieved as at 30 June 2007$1.77$ Revenue % - Hedged65%72% Market forward rates as at 30 June Revenue % - Un-hedged35%28% Actual achieved rates after hedging$1.79$1.86 Value of $125m revenue in £m£69£67 Approximate YOY revenue impact in £m(£2) USD/GBP achieved FX rates and hedging

22 Forward rates Average market rates $1.84 Hedging rates achieved as at 30 June 2007 $1.83$ Revenue % - Hedged 75%45% Market forward rates as at 30 June 2007 $2.01$ Revenue % - Un-hedged 25%55% Potential achieved rates after hedging $1.88$ Revenue % - Hedged + Un-hedged 100% Actual achieved rates after hedging $1.82 Value of $250m revenue in £m £138£133£128 Approximate YOY revenue impact in £m (£5) Full yearActual

23 £M 1H 20071H 2006Change Underlying EBITDA6163(2) Non recurring items paid / received(2)1(3) EBITDA5964(5) Interest paid / Tax / Other(14)(9)(5) Net Working capital and provisions(49)(34)(15) Issue of shares2-2 Net capex / acqs / disposals / ESOPS(13)(6)(7) Pension deficit funding(31)- (46)15(61) Dividends paid(25) - Exchange-(3)3 Net cash outflow(71)(13)(58) Cash flow

24 £M 30 June Dec 2006 Change Goodwill and intangibles Deferred net tax assets2239(17) Fixed assets24231 Investments Net working capital Provisions (37)(43)6 Pension deficit(37)(100)63 Net cash/(debt)(14)57(71) Balance sheet

25 Dominic Burke Group Chief Executive 1 st August 2007 Building for the future

26 Much improved collaboration across JLT Group Re-launched JLT Network Increased use of our speciality skills and placing capabilities in London Increased collaboration with SIACI and ACSH Use of our existing infrastructure to internationalise our employee benefits capabilities Maximising the return from what we already have

27 Building for the future Progress made with bolt-on acquisitions JLT viewed as an attractive partner offering scale and international reach Corporate activity

28 Building for the future Pavilion Progress with bolt-on acquisitions Combining JLTs established strengths with Pavilions specialist expertise in on-line distribution.

29 Building for the future Pavilion JLT Park Creating the largest independent broker in Bermuda dedicated to meeting the needs of independent brokers. Progress with bolt-on acquisitions

30 Building for the future Pavilion JLT Park Portland Pensions Progress with bolt-on acquisitions Building on JLTs existing strength as a leading third party pensions administrator.

31 Building for the future Pavilion JLT Park Portland Pensions JLT Private Client Sevices Progress with bolt-on acquisitions Building overseas Employee Benefits capabilities

32 Building for the future JLT Insurance Management –Restructure of our captive management operations as a global practice ICAP –Establishment of a joint venture company to operate in areas where the market for insurance, financial derivatives and securities are converging New opportunities in a changing market

33 Building the foundations for future success Our clear focus is on –Revenue growth through International collaboration Bolt-on acquisitions Being at the forefront of industry change Maintaining disciplined control of costs A collective ambition for future success

34 Building for the future Jardine Lloyd Thompson Group plc Interim Results 2007


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