AUB Group Limited Annual Report 2023

DIRECTORS’ REPORT YEAR ENDED 30 JUNE 2023

OPERATING AND FINANCIAL REVIEW (CONTINUED) Results by operating division

Tysers - Tysers performed above expectations, with revenue growth for the 9 months to 30 June 2023, up 5.4% vs initial forecast (Organic: 5.8%, FX: -0.4%). Underlying pre-tax profit contributed by Tysers for the 9 months to 30 June 2023 was $76.93m. Australian Broking – underlying pre-tax profit for the period increased by 21.59% to $104.75m (FY22: $86.15m). These increases were driven by organic and bolt-on acquisition growth. Growth drivers included: – Increased Commercial Lines premiums; – Growth in client and policy count; – Continued network optimisation; and – Increased interest income on trust accounts from higher interest rates. Agencies – underlying pre-tax profit for the period increased by 53.86% to $35.05m (FY22: $22.78m). Strong organic growth was partially offset by non-recurrence of some profit comissions. Acquisition-related profit growth included Strata Unit Underwriters (1 September 2022). New Zealand Broking – underlying pre-tax profit for the year increased by 59.35% to $14.27m (FY22: $8.95m) due to: – Revenue and profit growth for all businesses, supported by increased Commercial lines premiums; – BWRS Group merger with ICIB effective 1 December 2022; and – Step-up investment in AUB Group NZ to 100% from 1 July 2022. BizCover – underlying pre-tax profit for the year increased by 18.89% to $12.48m (FY22: $10.50m). This increase was due to organic profit growth assisted by operating leverage and scalability of the platform. FINANCIAL CONDITION Shareholders’ equity increased to $1,513.37m from $997.68m at 30 June 2023, due to the impact of the current year financial performance as well as issue of shares during the period. The Group generated positive cash flow from operating activities before customer trust account movements of $113.38m (2022: $101.96m). Cash outflow of $136.85m from investing activities in FY23 was due mainly to the purchase of Tysers. Cash flows from financing activities were $498.66m primarily from an increase in borrowings, see further detail outlined below. Other finance activity related cash flows were to increase our shareholding in controlled entities and to fund dividends paid to shareholders. Cash held at the end of the period totaled $260.35m (2022: $259.33m), excluding monies held in trust. Interest-bearing loans and borrowings increased by $536.43m to $584.23m. This is driven by the $675m syndicated debt facility entered into to fund the Tysers acquisition. Please see details of this facility outlined in Note 17 of the Financial Statements. Subsidiaries had debt of $63.01m (2022: $47.80m) and the look through share of borrowings by associates (including contingent obligations) of $25.52m (2022: $17.54m) 1 are not included in the Group balance sheet as these entities are not consolidated. The borrowings by subsidiaries and associates relate largely to funding of acquisitions, premium funding and other financing activities.

1 Total debt of associates, after considering AUB Group’s percentage shareholding.

AUB GROUP ANNUAL REPORT 2023

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