Storebrand Asa · OSL:STB
Storebrand Asa — Q1 2006 Earnings Presentation
46 slides from Storebrand Asa's earnings presentation, May 10, 2006
Slide 1: Results 1st Quarter 2006 Analyst Presentation
Storebrand Results 1st Quarter 2006 10 May 2006 Analyst Presentation Analyst Presentation 1st quarter 2006 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-11 3-22 Back-up: • Storebrand Group 12-17 23-34 • Storebrand ASA 18-19 35-38 • Storebrand Life Insurance 20-32 39-64 • Storebrand Inv
Slide 2: Highlights Q1 2006
Storebrand Results 1st Quarter 2006 10 May 2006 Idar Kreutzer Group CEO Highlights Q1 2006 Strong group profit: NOK 460 million in Q1 Good investment return further strengthens risk capital and gives a good result for the group’s customers and owners Significant growth in the group's business
Slide 3: Storebrand Group - good profit development
Storebrand Group - good profit development Q1 01.01-31.12 NOK million 2006 2005 2005 Life activities 299 255 1.217 Investment activities 20 8 24 Storebrand Bank 48 72 241 Other activities 94 -20 -41 Group profit 460 314 1.442 Q1 2006 5 Storebrand Livsforsikring - improved result 01.01.-31.03 Full ye
Slide 4: Storebrand Livsforsikring - systematically building buffer capital
Storebrand Livsforsikring - systematically building buffer capital NOK million 12000 Additional statutory reserves 10000 Market value adjustment fund 8000 6000 4000 2000 0 2002 2003 2004 2005 Q1 2006 NOTE: Excluding market value reserves in hold to maturity portfolio (NOK 2.8 billion at close of Q1
Slide 5: Storebrand meets our customers' needs
Storebrand delivers a competitive mandatory occupational pension (OTP) product Leading companies have chosen Storebrand as their mandatory occupational pension supplier - The two largest OTP customers, Norgesgruppen and Manpower both chose Storebrand - Confederation of Norwegian Enterprise (NHO) c
Slide 6: Delivers competitive return to the customers; new life insurance regulations
Storebrand delivers competitive return to the customers 18,0 % 16,0 % 2004* 14,0 % 12,0 % 2005 10,0 % 8,0 % Annual average* 6,0 % 4,0 % 2,0 % 0,0 % High interest Cautious Balanced Progressive Money market Cautious Balanced Progressive 2004* 1,6 % 4,4 % 7,0 % 8,4 % 2005 2,2 % 6,3 % 11,0 % 15,6 % Year
Slide 7: Effect of the draft regulations; Storebrand Bank - strong growth
Effect of the draft regulations Substantial part of the Group company's insurance pension - funds converted to a fee active Individual (Fee based) (Run-off or based model 27% modified) 28% Availability of flexible return guarantees and 18% performance based fees Group 27% for professional corpor
Slide 8: Storebrand Bank - development in net interest margin
Storebrand Bank - development in net interest margin Net interest income / avg. total assets Strong competition in the Norwegian market felt by NOK million most banks 2,00 % 28.000 27.000 1,50 % 26.000 Reduced risk in corporate 25.000 1,00 % 24.000 23.000 Pressure on margins 0,50 % * 22.000 ex
Slide 9: Storebrand Investments - improved result; Other activities
Storebrand Investments - improved result Q1 01.01- 31.12 NOK million 2006 2005 2005 Total income 74 67 242 Total costs -58 -61 -232 Net financial income/ other 3 2 15 Profit before tax 20 8 24 Strong return and increased assets under management Outperformance on 7 of 10 portfolios managed for St
Slide 10: New members of executive management
New members of executive management strengthens Storebrand's competency and competitiveness Klaus-Anders Nysteen Gunnar Rogstad New Managing Director in New Managing Director in Storebrand Bank Storebrand Skadeforsikring Background: CFO Posten Background: Head of If Skadeforsikring's Acting CEO Post
Slide 11: Storebrand shall be the leading and most respected institution
Storebrand shall be the leading and most respected institution in the Norwegian market for long-term savings and life insurance Q1 2006 21 (Page intentionally left blank) Q1 2006 22 11
Slide 12: Storebrand Group - IFRS accounting
Storebrand Group IFRS accounting Storebrand ASA’s group accounts are presented in accordance with the International Financial Reporting Standards (IFRS) approved by the European Union. Q1 2006 24 12
Slide 13: Group profit by sub-group; Operating Profit
Storebrand Group Group profit by sub-group Q1 01.01-31.12 NOK million 2006 2005 2005 Life activities 299 255 1.217 Investment activities 20 8 24 Storebrand Bank 48 72 241 Other activities 94 -20 -41 Group profit 460 314 1.442 Q1 2006 25 Storebrand Group Operating Profit Q1 01.01-31-12 NOK million 20
Slide 14: Earnings per share; Balance sheet
Storebrand Group Earnings per share Q1 01.01-31.12 NOK million 2006 2005 2005 Group profit 460 314 1.442 Changes in security reserve etc. - non life -2 -1 3 Profit before tax 459 314 1.445 Tax -32 -17 -41 Minority interests -1 0 -4 Profit for the year 426 297 1.400 - Change in security reserve etc.
Slide 15: Group profit by sub-group; Capital adequacy
Storebrand Group Group profit by sub-group 2006 2005 2004 NOK million Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Life activities 299 364 291 307 255 311 228 198 Investment activities 20 4 -2 14 8 8 7 15 Storebrand Bank 48 59 42 69 72 55 32 15 Other activities 94 -9 -13 1 -20 -3 -2 1.263 Group profit 460 418 318 392 31
Slide 16: Other activities; Shareholder structure
Storebrand Group Other activities Q1 01.01 - 31.12 NOK million 2006 2005 2005 Storebrand ASA *) 1.040 598 599 Fair Forsikring -1 0 22 Storebrand Skadeforsikring 48 -6 19 Other companies/elimintations **) -992 -612 -681 Total profit other activities 94 -20 -41 *) Including group contributions and div
Slide 17: Rating for Storebrand; Key figures
Rating for Storebrand as at 10 May 2006 Storebrand ASA Moody’s: Baa2 (S) S&P: BBB+ (S) Storebrand Storebrand Livsforsikring AS Bank ASA Moody’s: A2 (S) Moody’s: Baa2 (S) S&P: A (S) S&P: BBB+ (S) P=positive outlook, S=stable outlook, N=negative outlook Q1 2006 33 Storebrand Group Key figures Q1 01.01
Slide 18: Storebrand ASA - Profit for the year
Storebrand ASA Storebrand ASA Profit for the year* Q1 01.01-31.12 NOK million 2006 2005 2005 Group contributions and transfers 1.028 611 611 Interest income 16 18 58 Interest expense -17 -22 -53 Realized/unrealized gains/losses on securities 39 9 213 Other financial income/costs -3 2 -116 Net financ
Slide 19: Storebrand ASA Profit for the year; Balance sheet
Storebrand ASA Profit for the year 2006 2005 2004 NOK million Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Group contributions and transfers 1 028 0 0 0 611 0 0 0 Interest income 16 17 12 11 18 19 21 41 Interest expense -17 -17 -10 -4 -22 -14 -17 -43 Realized/unrealized gains/losses on securities 39 76 11 116 9 19 6 1 8
Slide 20: Storebrand Life Group - Highlights as at 31.03.2006
Storebrand Life Insurance Storebrand Life Group Highlights as at 31.03.2006 Operating profit in Q1 was NOK 1,033 million, an improvment from NOK 720 million in Q1 2005 Booked and value adjusted return on investments of 1.6 %, annualised 6.6 %, and 2.8 %, annualised 11.7 % respectively as at 31.0
Slide 21: Life Insurance Highlights; Life Group Results
Storebrand Life Insurance Highlights as at 31.03.2006 Total premium income (excluding transfers to/from) decreased by 35 % compared to Q1 2005 due to reduced sales of individual savings contracts without fixed contract periods Positive net transfer balance for life insurance in Q1 of NOK 2,839 m
Slide 22: Profit and loss; Satisfactory solidity
Storebrand Life Group Profit and loss 01.01.-31.03 Full year NOK Million 2006 2005 2005 Premiums written 4,504 6,941 16,000 Net transfers of premium reserve 2,839 328 546 Net income of financial investments 4,193 1,930 10,402 Claims paid -2,601 -1,776 -8,532 Change in technical reserves -5,668 -6,30
Slide 23: Allocation and policyholder's funds
Storebrand Livsforsikring AS Allocation and policyholder’s funds Allocation and policyholders' fund Q1-06 Q4-05 Q3-05 Q2-05 Q1-05 Q4-04 Q3-04 Q2-04 Equity Norwegian *) 7% 9% 6% 6% 6% 9% 8% 8% Equity Foreign*) 20 % 18 % 18 % 16 % 16 % 13 % 12 % 12 % Real Estate 10 % 10 % 9% 9% 9% 10 % 10 % 8% Money m
Slide 24: Development in return on capital; Unrealised gains
Storebrand Livsforsikring AS Development in return on capital 14 % 12 % 11,7 % Booked 11,2 % 10 % 9,3 % 8,8 % 8% 7,5 % Value adjusted 7,2 % 7,6 % 6,9 % 7,2 % excl. Bonds held 6,4 % 6,9 % 6% 6,6 % to maturity 4% Value adjusted 2,7 2,6%% incl. Bonds held 2% 1,9 % to maturity 0% 2002 2003 2004 2005 Q1
Slide 25: Premiums excl. reserves transferred to the company
Storebrand Life Group Premiums excl. reserves transferred to the company per 31.03.2006 Total premiums written NOK 4,504 million 5% 2% Group pension 20 % Group life Individual endowment Individual 8% 65 % pension Non-life insurance Q1 2006 49 Storebrand Livsforsikring AS Premiums excl. reserves tran
Slide 26: Premiums written, products without profit sharing
Storebrand Livsforsikring AS -premiums written, products without profit sharing as per 31.03 NOK million 600 550 500 450 400 350 Non-life insurance 300 Individual endowment 250 Group life 200 Group pension 150 100 *) Group pension applies to one year risk coverage related to 50 defined contribution
Slide 27: Net transfers; Operating costs as % of policyholders funds
Storebrand Life Group Net transfers of premium reserves in NOK million 2 839 1 493 380 564 2002 2003 2004 2005 Q1 2006 -758 Q1 2006 53 Storebrand Livsforsikring AS Operating costs as % of average policyholders funds 1,06 1,06 0,96 0,94 0,96 0,92 0,90 0,88 1999 2000 2001 2002 2003 2004 2005 per Q1 20
Slide 28: Profit analysis; Profit to owner
Storebrand Livsforsikring AS Profit analysis 01.01.-31.03 Full year NOK Million 2006 2005 2005 Interest result 1,046 719 4,359 Risk result 87 30 363 Administration result -90 -29 -330 Change in security and premium reserve -10 0 -11 Operating profit 1,033 720 4,381 Transferred to policyholders -732
Slide 29: Profit analysis - products without profit sharing; Balance sheet IFRS
Storebrand Livsforsikring AS Profit analysis -products without profit sharing 01.01.-31.03 Full year NOK Million 2006 2005 2005 Interest result 17 11 68 Risk result 48 40 197 Administration result -22 -16 -94 Change in security and premium reserve -6 0 -4 Operating profit 37 35 168 Q1 2006 57 Storeb
Slide 30: Life Group Balance sheet (continued)
Storebrand Life Group Balance sheet (continued) Share of Share of total assets total assets NOK Million 31.03.2006 31.03.2006 31.12.2005 31.12.2005 Equity 5,247 3% 5,724 3% Minority interests' share in equity 13 0% 19 0% Subordinated loan capital 2,860 2% 2,875 2% Market price adjustment reserve 5,7
Slide 31: Real estate fund; Profit analysis
Storebrand Livsforsikring AS Real estate fund Q1 Full year Key figures 2006 2005 2005 Portfolio allocation (Market value) The real estate fund: Growth in value 2.3% 1.8% 7.8% Shopping centres Booked yield *) 2.2% 1.7% 7.5% 39 % Office Direct yield 1.8% 1.7% 7.3% 58 % Revaluations 0.4% 0.0% 0.2% Tota
Slide 32: Storebrand Fondsforsikring - Summary profit and loss account
Storebrand Fondsforsikring AS Summary profit and loss account Q1 Full year NOK Million 2006 2005 2 005 Premiums written 490 203 992 Income of financial investments 13 13 43 Income - Unit Linked assets 306 111 721 Claims paid -132 -106 -416 Change in technical reserves -643 -194 -1 245 Operating expe
Slide 33: Storebrand Investments - Highlights Q1
Storebrand Investment Storebrand Investments Highlights Q1 Profit before tax NOK 20 million compared to NOK 8 million in Q1 2005 NOK 209 billion in assets under management as of Q1 7 out of 10 portfolios for Storebrand Life Insurance outperformed their benchmark indices year to date. 77% of St
Slide 34: Profit before tax for Q1 2006; Profit development
Profit before tax for Q1 2006 Q1 01.01- 31.12 NOK million 2006 2005 2005 Total income 74 67 242 Total costs -58 -61 -232 Net financial income/ other 3 2 15 Profit before tax 20 8 24 Increase in income is due to increased assets under management and good performance, which increases management fees
Slide 35: Contribution to Storebrand Life portfolio year to date
Contribution to Storebrand Life portfolio year to date Relative Return in %* performance Equity Norway 19,44 0,3% 19,07 Outperformance in Equity Europe 8,5 1,3% 7 out of 10 7,2 portfolios Equity North America 0,6 -0,5% (Portfolios for Equity 1,1 Europe and North America -0,3 and the respective Bonds
Slide 36: Market share Norwegian registered mutual funds
Market share Norwegian registered mutual funds All mutual funds (market share in %) 8,0 7,9 7,9 8,4 7,9 Nordea Market share Storebrand: 10,8 11,5 12,43 11,21 12,5 Odin As of Q4 (change since last quarter) Total: 10.8 % (0.0 percenage points) 11,9 12,6 13,9 14,4 16,7 Skagen Eqity funds: 11.7 % (-0.7
Slide 37: Assets under management; Profit development
Storebrand Investments Assets under management Total assets under management Allocation assets under management Real estat e Hold to 8% maturity Other 209,3 26 % 3% 204,9 20,3 21,1 Equit y Norway NOK billion 165,0 6% 158,8 29,4 29,7 15,8 139,7 13,2 14,6 15,9 9,7 10,6 25,3 12,9 M oney market 21,6 10,
Slide 38: Storebrand Bank - Highlights Q1 2006
Storebrand Bank Storebrand Bank Highlights Q1 2006 Storebrand Bank reports a profit of NOK 48 million in Q1 (NOK 72 million in Q1 2005) Growth in gross lending of NOK 500 million and growth in customer deposits of NOK 1.7 billion in Q1 Net income from loan loss provisions of NOK 15 million in
Slide 39: Profit and loss; Quarterly development in profit and loss
Profit and loss Q1 Full year NOK million 2006 2005 2005 Net interest income 106 120 451 Other income 24 41 102 Total income 131 161 553 Operating expenses -97 -88 -346 Operating profit before losses 34 72 207 Loan loss provisions 15 -1 34 Profit before tax 48 72 241 Note: Storebrand Bank Group Q1 20
Slide 40: Development in net interest income; Balance sheet
Development in net interest income Net interest income / avg. total assets Reduced risk in corporate NOK million 2,00 % 28.000 Pressure on margins 27.000 expected to continue in 1,50 % 26.000 both retail and corporate 25.000 1,00 % 24.000 23.000 0,50 % 22.000 21.000 0,00 % 20.000 Q2 2004 Q3 2004
Slide 41: Development in loan portfolio; defaulted loans
Development in loan portfolio Development in gross lending Gross lending by sector NOK billion 4% 27.3 Residential 26.8 mortgages 25.6 30% Other retail 24.5 23.8 24.0 23.6 23.0 55% 22.7 22.6 Real estate Other corporate Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 1
Slide 42: Development in customer deposits; Capital adequacy
Development in customer deposits NOK million 14 000 60 % Customer deposits has increased by NOK 1.7 12 000 50 % billion in Q1 10 000 40 % 8 000 30 % 6 000 The reduction in customer 20 % 4 000 deposits in Q4 2005 has 10 % more than recovered 2 000 0% Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 200
Slide 43: New accounts - 2004 to March 2006
New accounts - 2004 to March 2006 2.500 2004 2005 2006 2.000 1.500 1.000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 2006 85 (Page intentionally left blank) Q1 2006 86 43
Slide 44: Storebrand Non-Life - Highlights Q1 2006
Storebrand Non-Life Non-Life Highlights Q1 2006 Operating income in Q1 was NOK 48 million (minus NOK 5 million) Result from Fair in Q1 loss of NOK 1 million (NOK 0 million). Sale of the company to Gjensidige was completed with accounting effect from Q1 2006 Operating result in Oslo Re in Q1 wa
Slide 45: Non-Life Group Profit and loss; Balance sheet
Non-Life Group Profit and loss Q1 Full Year NOK million 2006 2005 2005 50% share of result from Fair -1 0 22 Operating result non-life insurance -1 0 22 Oslo Reinsurance Company ASA 1 -5 12 Storebrand Skadeforsikring AS 47 -1 52 Eliminations 0 0 -46 Operating result run-off non life insurance 48 -6
Slide 46: Oslo Reinsurance Company Profit and loss; Balance sheet
Oslo Reinsurance Company Profit and loss Q1 Full year NOK million 2006 2005 2005 Premiums for own account 1 3 5 Claims for own account 1 -1 0 Insurance related operating costs -7 -9 -22 Financial income 1 -1 14 Other income/costs 5 3 15 Operating result 1 -5 12 Changes in security reserve etc. - - 7