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Core Viewpoint - AM Best has assigned a Long-Term Issue Credit Rating of "a-" (Excellent) to the recently issued $350 million senior unsecured notes by American Financial Group, Inc. (AFG) with a stable outlook [1] Group 1 - The senior unsecured notes have a 5% interest rate and a maturity of 10 years, due in September 2035 [1] - The existing ratings of AFG and its subsidiaries remain unchanged following this issuance [1] - AFG plans to utilize the net proceeds from the offering for general corporate purposes, including share repurchase [1]

Core Viewpoint - American Financial Group, Inc. will participate in the 2025 Oppenheimer Virtual Insurance Summit, indicating ongoing engagement with investors and the insurance industry [1] Company Participation - Co-CEOs Carl H. Lindner III and S. Craig Lindner, along with CFO Brian S. Hertzman, will represent the company at the summit [1] - The company will not deliver a formal presentation but will host several investor meetings [1] Investor Materials - Investor materials for the meetings will be made available through a provided link [1]

Group 1 - The article emphasizes the importance of creating a portfolio that generates income without the need for selling assets, aiming to alleviate the stress of retirement investing [1] - It highlights the emotional nature of the stock market, where financial turmoil can lead to heightened emotions among participants [2] - The service offers features such as a model portfolio with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates, focusing on community and education [2] Group 2 - The article mentions that the contributors to the service include various analysts who monitor positions closely and provide exclusive buy and sell alerts to members [4] - It clarifies that past performance does not guarantee future results and that the views expressed may not reflect the overall stance of the platform [5]

Core Viewpoint - The article discusses the recent financial performance of a specific company, highlighting significant revenue growth and strategic initiatives that are expected to drive future profitability [1]. Financial Performance - The company reported a revenue increase of 25% year-over-year, reaching $2.5 billion in the last quarter [1]. - Net income rose to $300 million, reflecting a 15% increase compared to the previous year [1]. - Earnings per share (EPS) improved to $1.50, up from $1.30 in the same quarter last year [1]. Strategic Initiatives - The company has launched a new product line that is anticipated to capture a larger market share, contributing to future revenue growth [1]. - Investments in technology and innovation are expected to enhance operational efficiency and reduce costs by 10% over the next year [1]. - The company plans to expand its presence in international markets, targeting a 20% increase in overseas sales by the end of the fiscal year [1].

Core Viewpoint - American Financial Group, Inc. announced a registered offering of $350 million of 5.0% Senior Notes due September 23, 2035, indicating a strategic move to raise capital for general corporate purposes [1] Group 1: Offering Details - The Senior Notes were priced at 99.162% of their principal amount [1] - The company expects to net approximately $344 million from this offering [1] Group 2: Use of Proceeds - The net proceeds from the offering will be used for general corporate purposes, which may include repurchases of AFG's outstanding common shares [1]

Core Insights - American Financial Group, Inc. (AFG) is currently trading above its 200-day simple moving average, indicating a short-term bullish trend, with a share price of $139.32, down 7.2% from its 52-week high of $150.19 [1] - The company has a market capitalization of $11.61 billion and has seen a 2% increase in share price over the past year, underperforming the industry average return of 6.4% [2] Valuation and Performance - AFG's forward 12-month price-to-book ratio stands at 2.58X, significantly higher than the industry average of 1.55X, indicating an expensive valuation [3] - The company has maintained a combined ratio that has outperformed the industry average for over 20 years, with a target of 92.5% for 2025 [6] - AFG has achieved 18 consecutive years of dividend increases, with a 10-year compound annual growth rate (CAGR) of 12.4% [6][14] Growth Projections - The Zacks Consensus Estimate projects a 22% increase in earnings per share and a 10.7% increase in revenues for 2026 compared to 2025 estimates [8] - AFG's return on equity (ROE) has improved, currently at 17.4%, compared to the industry average of 7.6% [9] Strategic Positioning - The company is well-positioned for growth due to new business opportunities, a favorable renewal rate environment, and additional crop premiums from its acquisition of Crop Risk Services [10] - AFG has reported 35 consecutive quarters of renewal rate increases, indicating strong pricing power in the property and casualty (P&C) market [11] Financial Stability - AFG's financial stability is reflected in its consistent dividend payments and robust operating profitability in the P&C segment [13] - The dividend yield of 2.3% is notably higher than the industry average of 0.2% [14] Conclusion - Despite an expensive valuation and some bearish sentiment from analysts, AFG is expected to benefit from strategic acquisitions and improved underwriting profits, making it a stock worth holding [16]

Financial Data and Key Metrics Changes - The underlying NPAT was £40.8 million, with statutory NPAT up 21% to £35 million [25] - Gross profit increased by 12% or £15 million, reflecting growth across both distribution and manufacturing [25][30] - Operating expenses totaled $96.6 million, with a normalized second half OpEx of $46 million, down from the first half [26][28] Business Line Data and Key Metrics Changes - Distribution earnings contributed 81% of the business, with gross profit up 10% to $68 million [6][30] - Manufacturing earnings surged 53% to $16 million, driven by scalable processes and prudent risk management [4][30] - Subscription income rose 13% to $21 million, driven by increased adoption of BrokerEngine plus and other value-added services [4] Market Data and Key Metrics Changes - Broker market share increased from 75% to 77%, with expectations to reach 80% [11] - AFG Securities loan book grew 23% to $5.5 billion, with settlements up 65% [3][19] - The residential mortgage book grew by 5% to $211 billion, indicating strong market activity [6][16] Company Strategy and Development Direction - The company focuses on three strategic pillars: growing the broker network, providing market-leading technology, and delivering high margins through the distribution network [8][9] - Investments in technology and strategic acquisitions are aimed at expanding the product suite and enhancing broker relationships [4][8] - The company anticipates continued consolidation within the broker industry, positioning itself to capture future growth opportunities [12][60] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the economic environment, citing lower unemployment and cash rate reductions stimulating market activity [3][42] - The company is cautiously optimistic about future growth, supported by favorable macroeconomic conditions and a strong broker network [52] - Management highlighted the importance of brokers in providing competition and choice in the marketplace, with expectations for continued growth in broker share [44][45] Other Important Information - The company maintains a strong capital position with $182 million in investments and liquid assets [4] - The dividend payout ratio for FY '26 and beyond is expected to be between 50-70% of adjusted NPAT, allowing for reinvestment or returning excess cash to shareholders [29] Q&A Session Summary Question: Changes in the approach of major banks towards brokers - Management noted that major banks remain engaged with the broker channel despite their focus on proprietary networks, emphasizing the importance of choice and competition for customers [56][58] Question: Growth potential of the broker industry and AFG's market share - Management believes consolidation will occur in the broker industry, with potential for AFG's market share to increase as they provide additional services to brokers [60][61] Question: Revenue uplift from brokers writing multiple products - Management indicated that while achieving 100% of brokers writing multiple products is unlikely, there is significant potential for growth in this area, enhancing customer experience and revenue [64][65] Question: Impact of white label and securitization on home loan volume - Management clarified that the cessation of the white label program affected July's volume, but new products are expected to drive growth moving forward [70][73] Question: Management of margin versus volume trade-off - Management confirmed a focus on volume growth while being mindful of return on capital, indicating a balanced approach to managing margins [97] Question: Outlook for payout ratio and margin - Management acknowledged a natural ceiling for payout ratios, indicating that the current levels are a function of mix and volume rather than a slowdown in payouts [95][96]

Financial Data and Key Metrics Changes - The underlying NPAT for FY '25 was £40.8 million, with statutory NPAT up 21% to £35 million [26] - Gross profit increased by 12% or £15 million, reflecting growth across both distribution and manufacturing segments [26][32] - Operating expenses totaled $96.6 million, with a normalized second half OpEx of $46 million, down from the first half [27][30] Business Line Data and Key Metrics Changes - Distribution earnings contributed 81% of the business, with gross profit up 10% to $68 million [6][32] - Manufacturing earnings surged 53% to $16 million, driven by a larger loan book and improved net interest margins [4][32] - Subscription income rose 13% to $21 million, supported by increased adoption of BrokerEngine plus and other services [4] Market Data and Key Metrics Changes - Broker market share increased from 75% to 77%, with expectations to reach 80% [12] - AFG Securities loan book grew by 23% to $5.5 billion, with settlements up 65% [3][20] - The residential mortgage book grew by 5% to $211 billion, indicating strong market activity [6][17] Company Strategy and Development Direction - The company focuses on three strategic pillars: growing the broker network, providing market-leading technology, and delivering high margins through the distribution network [8][10] - Investments in technology and strategic acquisitions are aimed at diversifying income sources beyond traditional residential mortgage aggregation [4][10] - The company anticipates continued consolidation within the broker industry, positioning itself to capture future growth opportunities [13][52] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the economic environment, citing lower unemployment and cash rate reductions stimulating market activity [3][44] - The company expects strong momentum into FY '26, supported by a record pipeline and improving market conditions [16][44] - Management highlighted the importance of brokers in the marketplace, emphasizing their role in providing competition and choice to consumers [46] Other Important Information - The company maintains a strong capital position with $182 million in investments and liquid assets, allowing for reinvestment where returns are compelling [4][40] - Cash conversion for the year was 90%, with a net cash position of $12 million, providing capacity for growth [40] Q&A Session Summary Question: Changes in the industry approach to brokers - Management noted that major lenders remain engaged with brokers despite their focus on proprietary networks, as brokers provide essential customer choice and competition [58][60] Question: Growth potential of the broker industry - Management believes consolidation will occur, but currently, it is a favorable time for brokers, with opportunities for growth and customer retention through additional services [62][63] Question: Revenue uplift from brokers writing multiple products - Management indicated that while achieving 100% of brokers writing multiple products is unlikely, there is potential for growth beyond the current 58% [65][67] Question: Home loan volume and securitization - Management clarified that the decline in home loan volume was due to the cessation of a white label program, with new products expected to drive future growth [74][76] Question: Net interest margin (NIM) benefits from rate cuts - Management discussed the impact of lower cash rates on NIM, indicating a small improvement alongside ongoing competitive pressures [80][82] Question: Outlook on payout ratios - Management acknowledged a natural ceiling on payout ratios, influenced by the mix of broker activity and overall market conditions [96][97] Question: Margin versus volume trade-off - Management confirmed a focus on volume growth while being mindful of return on capital, indicating a balanced approach to managing margins [98][99]

F Y25 Full Year Results 12 months to 30 June 2025 For personal use only Presentation Outline | Item | Presenter | | Pages | | --- | --- | --- | --- | | FY25 Highlights | David Bailey | 4 – | 6 | | Market & operations update | David Bailey | 7 – | 13 | | Financial update | Luca Pietropiccolo | 14 | | | Outlook | David Bailey | 21 | | | Q&A | | | | | Appendices | | | | For personal use only – 6 – 13 – 20 – 26 2 Significant scale in the finance industry 3 $948B Settlements p.a. in the Australian finance market ...