OREANDA-NEWS.

HIGHLIGHTS

o  Revenue 4.9bn pounds, up 7% at constant exchange rates (CER); up 3% at actual exchange rates (AER)

o  Underlying profit before taxation 253.3m pounds up 2% at CER (2014 HY: 248.1m pounds); down 3% at AER (2014 HY: 259.8m pounds)

o  Statutory profit before taxation 255.4m pounds down 4% at AER (2014 HY: 266.6m pounds)

o  25.3m customers, up 14%, including 5.4m from joint ventures and associates (2014 HY: 22.2m, 2014 FY: 28.7m)

o  Net cash flow from operations of 453.7m pounds down 16% at AER (2014 HY: 542.9m pounds)

Stuart Fletcher, CEO of Bupa, commented:

"We've made steady progress in the first half of 2015, despite a challenging backdrop, delivering revenue and underlying profit growth at CER and maintaining strong market positions underpinned by a robust balance sheet. This demonstrates the benefit of our diverse footprint spanning multiple geographies across health insurance and healthcare provision. Looking forward, while market conditions remain challenging in a number of our markets, our customer focus, international scale, market leading positions, and strong financial management mean we are positioned to deliver continued revenue and profit growth."

Market Unit performance

o  Revenue growth in our largest Market Units: Australia and New Zealand (up 9%); the UK (up 3%); and Spain and Latin America (up 17%). Underlying profits are down in Australia and New Zealand (down 8%) due to a non-recurring benefit in 2014, following a change in regulatory requirements, and in the UK (down 10%) reflecting market challenges. We continue to focus on improving customer experience and are working to address increasing affordability pressures.

o  Revenue growth of 6% in International Development Markets (IDM), with particular strength in Poland and Hong Kong. We are seeing strong sales growth across the Market Unit's insurance businesses, and are benefiting from our distribution partnerships.

o  In Bupa Global, following our 2014 decision to exit non-strategic geographies and re-price a number of loss-making corporate accounts, underlying profit increased 24% despite the decline in revenue of 6%.

Operational highlights

o  Bupa Chile integration completed.

o  Launched new tiered international health insurance products in the UK, Hong Kong, Mexico and Chile.

o  Ten-year distribution agreement with Hang Seng Bank in Hong Kong performing well.

o  Launched Bupa Boost in the UK, a digital platform designed for employers to engage their people in their personal health and wellbeing.

o  Expansion in dental with 12 new centres in Australia, six in the UK, and three in Spain, bringing our total to 426 globally.

o  Preparation for Solvency II is well underway and demonstrates that we will be well capitalised under the new regime.

o  In July we acquired Magodent, a specialist oncology provider in Poland that will strengthen LUX MED's ability to offer end-to-end cancer care.

Financial position

o  Strong capital position maintained with 321% coverage of Insurance Groups Directive (IGD) capital requirement (FY 2014: 319%).

o  Leverage ratio steady at 28.0% in the first half of the year (2014 FY 27.6%, HY 31.5%).

o  Key credit ratings maintained with Fitch (A-) and Moody's (Baa2).

o  Statutory profit has been adversely affected by foreign exchange losses primarily on the retranslation of our US dollar liabilities as a result of the strengthening of the dollar against sterling.

o  Net cash generated from operating activities of 453.7m pounds remains strong; 89.2m pounds reduction reflects non-recurrence of significant receipts in the first half of 2014, lower cash flows in the first half of 2015 following re-pricing in Bupa Global of a number of loss-making accounts and adverse foreign exchange impacts.