Jardine Matheson : Lloyd Thompson Group plc Preliminary Results for the Year Ended 31st December 2016 (Unaudited)

To: Business Editor 28th February 2017

For immediate release

The following announcement was issued today by the Company's 42%-owned associate, Jardine Lloyd Thompson Group plc.

For further information please contact:

Brunswick Group

Tom Burns +44 20 7404 5959

28 FEBRUARY 2017

JARDINE LLOYD THOMPSON GROUP PLC

PRELIMINARY RESULTS

Jardine Lloyd Thompson Group plc ("JLT" or "the Group") announces its preliminary results for the year ended 31 December 2016.

Despite challenging trading and economic conditions, JLT demonstrated the fundamental strength and resilience of its global franchise in delivering a good performance.

• Revenue growth of 9% to £1,261.3m

• Organic revenue growth of 2%

  • 3% in JLT Specialty

  • 4% in JLT Re

  • 3% in International Employee Benefits

• Positive impact of foreign exchange movements

• Underlying* profit before tax of £172.6m, up 1%, reflecting US Specialty investment as planned **

  • Underlying profit before tax, excluding the US investment, up 5% to £199.6m

• Reported profit before tax down 13% to £134.9m

• Underlying profit margin down 80 bps to 15.4%

  • Underlying profit margin, excluding the US investment, down by 30 bps to 18.1%

• Reported diluted EPS down 21% from 48.0p*** to 37.8p

  • Underlying diluted EPS down 2% from 52.2p*** to 51.4p

• Final cash dividend of 20.6p bringing total dividend for 2016 to 32.2p, up 5%, reflecting the Board's confidence in the Group's underlying trading performance

  * Underlying results exclude exceptional items of £37.7m

  ** Net investment in US Specialty in 2016 was £27.0m (2015: £20.5m)

  *** 2015 comparatives revised

  BUSINESS HIGHLIGHTS

• Successfully completed turnaround of UK Employee Benefits business, which is now set for a return to growth in revenues and profits; second half revenues of £85.1m exceeded those in the same period last year (H2 2015: £82.4m).

• Build-out of US Specialty continued, delivering US$56m of revenues and on track to deliver profits in 2019. The peak of the investment programme was reached in 2016. The recent acquisition of Construction Risk Partners completes JLT's global Construction capability.

• Disposed of non-core Thistle UK business, which made an operating loss of £3.6m in 2016 in the parts which were divested.

Dominic Burke, Group Chief Executive, commented:

"JLT has delivered a good set of financial results in 2016, particularly when set against the continued, challenging trading environment. The Group entered 2017 in good shape, with momentum and confidence that JLT is well-positioned to deliver organic revenue growth more in line with historical rates. I am proud of the achievements and progress we made in 2016 across all of our businesses. The resilience we showed last year positions us very well for further growth."

A presentation to investors and analysts will take place at 9am today at The St Botolph Building, 138 Houndsditch, London, EC3A 7AW. A live webcast of the presentation can be viewed on the Group's website www.jlt.com and it will also be available after the event.

PRELIMINARY STATEMENT

JLT delivered a good set of financial results in 2016, when set against the continued challenging trading environment, which persisted throughout the year. This included the sustained softness in both the insurance and reinsurance rating environments, depressed commodity prices and lacklustre global GDP growth.

The weakness of sterling from June 2016 was a positive factor in the Group's results; the estimated impact of £22.2m at underlying profit before tax level provided a helpful offset to the challenging trading environment.

The Group entered 2017 with momentum intact and confidence that JLT is well positioned to deliver organic revenue growth and to grow earnings across the Group's businesses.

Total revenues increased by 9%, or 3% at constant rates of exchange ("CRE"), to £1.26bn with overall organic revenue growth of 2%, consistent with that of 2015, once again impacted by the decline in revenues in the UK and Ireland Employee Benefits ("UK EB") business.

Notes:

• CRE: Constant rates of exchange are calculated by translating 2016 results at 2015 exchange rates.

• Organic growth is based on total revenue excluding the effect of currency, acquisitions, disposals and investment income.

• Underlying results exclude exceptional items.

• Trading profit figures include central costs.

  JLT's Risk & Insurance businesses delivered revenue growth of 11% to £960.9m, of which 3% was organic. The rate of organic revenue growth was higher in JLT Re at 4%. The Group's emerging markets businesses in Latin America and Asia saw good organic revenue growth, as did the US Specialty business.

  Risk and Insurance trading margins contracted, primarily as a result of the US Specialty investment programme, but JLT Specialty maintained its trading margin and JLT Re grew to 21% (2015:19%).

  The full year results of the Employee Benefits businesses were impacted by the disappointing performance of the UK and Ireland business in the first half. The profits of UK EB rebounded in the second half of the year as anticipated and this provides confidence that the business is now firmly set for a return to growth.

  The Group's International Employee Benefits operations saw headline revenue growth of 16%, which was primarily driven by foreign exchange, while organic revenue growth was 3%. The trading margin rose 100 bps to 26%.

  £m

  2016

  2015

  Underlying trading profit	193.7	187.5
  Underlying share of associates	1.0	5.5
  Net finance costs	(22.1)	(22.9)
  Underlying profit before taxation	172.6	170.1
  Exceptional items	(37.7)	(15.1)
  Profit before taxation	134.9	155.0
  Underlying tax expense	(52.3)	(47.5)
  Tax on exceptional items	8.3	5.9
  Non-controlling interests	(9.4)	(10.3)
  Profit after taxation and non-controlling interests	81.5	103.1
  Underlying profit after taxation and non-controlling interests	110.9	112.3
  Diluted earnings per share	37.8p	48.0p♦
  Underlying diluted earnings per share	51.4p	52.2p♦
  Total dividend per share	32.2p	30.6p

  • Restated following revision to the calculation

The Group's underlying trading profit increased by 3% to £193.7m; at CRE it decreased by 9%. Underlying profit before tax increased by 1% to £172.6m. The trading profit margin reduced from 16.2% to 15.4%.

Excluding the US Specialty net investment of £27m, the Group's underlying profit before tax would have increased by 5% and the trading profit margin would have been broadly maintained at 18.1%, compared to 18.4% for 2015.

Reported profit before tax reduced by 13% to £134.9m, which includes the impact of exceptional costs of

£37.7m and, as a consequence, reported EPS decreased to 37.8p.

The Group operates two sets of businesses: Risk & Insurance and Employee Benefits. The results of the businesses within each of these areas are reported in more detail below:

JLT SPECIALTY

JLT Specialty generated a 5% increase in headline revenues to £327.5m, or a 3% increase both at CRE and on an organic basis. Trading profit increased by 7% to £73.1m, with the trading margin maintained at 22%.

This was a strong performance in challenging trading conditions which saw insurance rates continuing their downward trend across all Specialty lines. The business had to contend in particular with the reduced economic activity in the energy and marine sectors, which led to a lower total value of risk to insure. To put this in context, it has been reported that in excess of $1 trillion of oil and gas capital projects in 2015 and 2016 were deferred, delayed or abandoned. JLT's Energy and Marine divisions saw a £12m reduc- tion in year on year revenues, despite increasing their client bases and market shares, and an estimated

£8.5m negative impact on Group trading profit.