Aegon Ltd. · EURONEXT:AGN
Aegon — Shareholder Meeting (May 2015)
80 slides from Aegon's shareholder meeting presentation, May 20, 2015
Slide 1: Annual General Meeting of Shareholders Aegon N.V.
The Hague, May 20, 2015 Annual General Meeting of Shareholders Aegon N.V. Jaarlijkse Algemene Vergadering van Aandeelhouders Aegon N.V.
Slide 2: Welcome to the Annual General Meeting of Shareholders
Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering of Shareholders van Aandeelhouders In order to hear a Voor het beluisteren van simultaneous translation een simultaanvertaling into English, please in het Nederlands choose channel 11 kiest u kanaal 10 2
Slide 3: Chairman Supervisory Board Rob Routs
Picture Chairman Voorzitter Supervisory Raad van Board Commissarissen Rob Routs 3
Slide 4: Opening
Agenda item 1 / Agendapunt 1 Opening 4
Slide 5: Presentation on the course of business in 2014
Agenda item 2 / Agendapunt 2 Presentation on the Presentatie over de course of business gang van zaken in 2014 in 2014 5
Slide 6: Strong foundations for growth
Strong foundations for growth The Hague – May 20, 2015 Alex Wynaendts CEO & Chairman of the Executive Board
Slide 7: Aegon's purpose is to help people take responsibility for their financial future
Aegon’s purpose is to help people take responsibility for their financial future 7
Slide 8: Our products and services have never been more needed
Our products and services have never been more needed Trends Our expertise Changing Changing capital demographics requirements New Increased digital regulation technologies At & after Protection Accumulation Low retirement interest rates We support people throughout their working lives and into reti
Slide 9: Global aging and changing demographics
Global aging and changing demographics Aegon Retirement Readiness Index (ARRI) Hungary: 4.9 Spain: 5.0 United States India 6.2 7.0 Poland: 5.1 Netherlands 5.7 7 Turkey: 5.4 Sweden: 5.4 Japan France: 5.4 4.6 United Kingdom 6.0 Canada: 6.0 Germany: 6.1 China: 6.2 Brazil: 6.8 Global Retirement Readines
Slide 10: Growing importance of technology
Growing importance of technology 10
Slide 11: Persistently low interest rates
Persistently low interest rates 10-year government bond yields US NL 7% 6% 5% 4% 3% 2% 1% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 11
Slide 12: Regulatory changes with a significant impact on our industry
Regulatory changes with a significant impact on our industry Regulators seeking to strengthen consumer protection New laws on tax and data privacy Unprecedented reforms in some of our markets End of commissions to brokers in the UK and the Netherlands 12
Slide 13: New capital requirements to enhance risk management and governance
New capital requirements to enhance risk management and governance Implementation of Solvency II in 2016 Aimed at enhancing consumer protection Capital requirements linked to risks insurers take on Regulators will set the bar high 13
Slide 14: A clear framework to address global trends and developing customers' needs
A clear framework to address global trends and developing customers’ needs Purpose Help people take responsibility for their financial future Working Bringing Exceeding Company values together Clarity Expectations Strategic Objectives Ambition Leader in all of our chosen markets 14
Slide 15: Making the right choices
Making the right choices Optimize our portfolio Divestments Expanding distribution with strong local partners Canada Santander Totta (Portugal) Partnership with La Mondiale (France) La Banque Postale (France) Joint venture with Caja Badajoz BANCOOB (Brazil) (Spain) 15
Slide 16: Towards a more efficient and responsive company
Towards a more efficient and responsive company Pursue operational excellence Adjusted product offerings to Improved efficiency OpEx / (OpEx + UEBT) continued low interest rates 63% 63% Launched new products to meet customers’ needs 59% 59% 58% Established global IT framework Cost savings cr
Slide 17: Becoming a more customer-centric company
Becoming a more customer-centric company Customer loyalty Online offerings in nearly all Aegon’s Enhancing services of customer markets service centers ► Through launch of specialized Further enhancement of online software platforms & tools Customer loyalty measured with Launched Venture F
Slide 18: Empowered employees to help people take responsibility for their financial future
Empowered employees to help people take responsibility for their financial future Staff performance metrics Empower our employees Engagement 73 66 Broadening talent mix 69 73 67 63 ► Attracting talented people from a range of different industries 2011 2013 2014 2015 Talent Review Process Enablem
Slide 19: Organizational changes to take advantage of opportunities
Organizational changes to take advantage of opportunities Servicing US customers through a single investment & retirement division 3,300 I&R employees with Actively serving a national footprint 25,000+ plan sponsors Enhancing Introducing new Better connecting distribution investment solutions with o
Slide 20: Integrated solution to and through retirement in the UK
Integrated solution to and through retirement in the UK At-retirement Non-advised Workplace savings Capabilities for ‘Gated’ solutions for Self service adviser market employees Single investment & trading platform – offering a compelling solution to advisers, employers and their employees 20
Slide 21: Leadership positions in the Netherlands offer strong foundations for growth
Leadership positions in the Netherlands offer strong foundations for growth #1 #2 #1 Pensions Pension PPI provider with insurer* administrator 0.6 billion euro in Assets under Management** In millions of customers 4.4 Aegon Peer 1 2.5 2.8 1.9 2.3 Aegon PPI Peer 2 Peer 3 Peer 4 Peer 5 Cappital Others
Slide 22: New Markets' strategy driving continued growth
New Markets’ strategy driving continued growth Focus on protection Asia ► Leadership in risk/rider products in key CEE markets ► Strong growth in high-net-worth segments in Hong Kong and Singapore Central & Eastern Expanded distribution Europe ► Newly developed professional advisory channel in S
Slide 23: Our strategy is delivering results
Our strategy is delivering results Getting closer to Expanding digital Enhancing our customers capabilities distribution Customer focused Solid underlying earnings Continued strong Very strong before tax in 2014 sales in 2014 ratings Strong performance AA- EUR 1.9 billion EUR 8.6 billion 23
Slide 24: Sustainable dividend growth
Sustainable dividend growth Proposed final 2014 dividend of EUR 0.12 per share; total 2014 dividend of EUR 0.23 per share Continue to neutralize stock dividends to avoid dilution Future dividend growth dependent on strong capital position and cash flows Increasing dividends (EUR per share) 0.2
Slide 25: Creating value for all our stakeholders
Creating value for all our stakeholders Protection Investors Employees Customers Benefits Capital Talent Trust € Profits Society 25
Slide 26: Presentation on the course of business in 2014
Agenda item 2 / Agendapunt 2 Presentation on the Presentatie over de course of business gang van zaken in 2014 in 2014 26
Slide 27: Annual Report
Agenda item 3.1 / Agendapunt 3.1 Annual Report Jaarverslag 2014 2014 27
Slide 28: Creating and sharing value in 2014
Creating and sharing value in 2014 The Hague – May 20, 2015 Darryl Button CFO & Member of the Executive Board
Slide 29: Aegon performed strongly in 2014
Aegon performed strongly in 2014 Key figures Underlying Net income Operational Sales Revenue-generating earnings expenses investments - 5% +38% +1% + 20% +17% EUR 1.9 billion EUR 1.2 billion EUR 3.3 billion EUR 8.6 billion EUR 558 billion 29
Slide 30: Strong underlying trends masked by assumption changes and model updates
Strong underlying trends masked by assumption changes and model updates Underlying earnings before tax Net income (EUR million) (EUR million) 1,672 1,982 1,968 1,775 1,865 1,186 936 857 2011 2012 2013 2014 2011 2012 2013 2014 Underlying earnings impacted by assumption changes and model updates 30
Slide 31: Total sales growth of 20% driven by continued strong deposits
Total sales growth of 20% driven by continued strong deposits Strong gross deposits mainly driven by US pensions and variable annuities Stronger universal life production in US and Asia; higher pension production in the Netherlands Accident & health and general insurance sales exceed EUR 1 bil
Slide 32: Continued strong capital position and cash flows
Continued strong capital position and cash flows Operational free cash flows Return on equity (Excl. market impacts and one-time items, EUR bln) (%) 1.6 1.2 1.3 1.2 8.6% 8.6% 7.8% 6.7% 2011 2012 2013 2014 2011 2012 2013 2014 Excess capital at the holding Solvency ratio (EUR billion) (Insurance Group
Slide 33: Operational free cash flows and holding excess capital
Operational free cash flows and holding excess capital Operational free cash flows of EUR 1.2 billion excluding market impacts and one-time items ► Positive market impacts and one-time items largely offset by negative impacts from model updates and assumption changes Increase in free cash flows
Slide 34: Excess capital development
Excess capital development Holding excess capital declined following EUR 1.0 billion of senior debt redemptions 2013 2014 Starting position 2.0 2.2 Net dividend from units 1.0 0.9 Acquisitions & divestments 0.6 (0.0) Common dividends (0.4) (0.4) Funding & operating expenses (0.4) (0.4) Debt issuan
Slide 35: Leverage and fixed charge coverage targets achieved in 2014
Leverage and fixed charge coverage targets achieved in 2014 Gross financial leverage target range of 26-30% Gross leverage (EUR billion, %) ► Leverage cut by ~25% since 2011 34.0% 33.3% 32.0% 28.7% 9.2 8.7 7.7 7.1 2011 2012 2013 2014 Fixed charge coverage target range of 6-8x Funding costs (EUR
Slide 36: Q1 2015 earnings impacted by adverse claims experience
Q1 2015 earnings impacted by adverse claims experience Underlying earnings impacted by adverse claims experience and low interest rates in the US Sales growth across the group; new business remains profitable despite low interest rates Strong operational free cash flows and solid excess capita
Slide 37: Solvency II range confirmed; uncertainties remain
Solvency II range confirmed; uncertainties remain EEA Non-EEA Holding Group Netherlands (IM) Cash flows driven by United Kingdom (IM) Spain (SF) + US life RBC ratio conversion – Senior leverage net of excess capital = local ratios Non-regulated and Updated capital CEE (SF) Requir
Slide 38: Looking ahead
Looking ahead Persistently low interest rates Increased regulation of financial services 2015 Changing capital requirements Continued execution of our strategy Well-positioned to capture growth opportunities 38
Slide 39: Annual Report
Agenda item 3.1 / Agendapunt 3.1 Annual Report Jaarverslag 2014 2014 39
Slide 40: Remuneration Report
Agenda item 3.2 / Agendapunt 3.2 Remuneration Report Remuneratierapport 2014 2014 40
Slide 41: Main points from Aegon's Executive Board Remuneration Policy
Main points from Aegon’s Executive Board Remuneration Policy 2014 No changes to Executive Board Remuneration Policy since 2011 Executive Board policy aligned with Global Remuneration Framework Vesting according to sustained performance (ex-ante / ex-post) 2015 New type of contract for Alex W
Slide 42: 2014 Executive Board remuneration
2014 Executive Board remuneration Remuneration in 2014 ► Fixed compensation CEO increased with 10% compared to 2013 (After increase, Executive Board total compensation still below 25th percentile of peer groups) ► Deferred variable compensation from 2011 and 2012 paid out / vested ► Upfront variab
Slide 43: Executive Board remuneration – variable compensation indicators and results
Executive Board remuneration – variable compensation indicators and results Outcome 2014 Financial and non-financial Group targets (75% maximum) ► Underlying earnings after tax (15%) ► Return on equity (15%) ► Market consistent value of new business (18.75%) 55.38% ► Return on economic required capi
Slide 44: 2015 Executive Board remuneration – new contract for Alex Wynaendts
2015 Executive Board remuneration – new contract for Alex Wynaendts New contract Alex Wynaendts is a services agreement Clauses from previous employment contract that are no longer fitting or otherwise need updating will be amended New clauses will be included ► Severance payment in case of ea
Slide 45: Aegon's Remuneration Policy in general – going forward
Aegon’s Remuneration Policy in general – going forward Aegon’s policy takes into account both national and international circumstances and conditions Legislation and regulations impact remuneration policies ► Dutch government introduced maximum variable compensation in financial sector ► Limits
Slide 46: Variable compensation at Aegon Group and the new maximums
Variable compensation at Aegon Group and the new maximums Prior to 2015, some selected senior staff were eligible for variable compensation exceeding the new maximums Starting performance year 2015, variable compensation levels for these roles have been adjusted downwards to match applicable new
Slide 47: Annual Report
Agenda item 3.1 / Agendapunt 3.1 Annual Report Jaarverslag 2014 2014 47
Slide 48: Annual Accounts 2014
Agenda item 3.3 / Agendapunt 3.3 Annual Accounts 2014: Jaarrekening 2014: Proposal to Voorstel tot adopt the vaststelling van de Annual Accounts 2014 Jaarrekening 2014 48
Slide 49: Voting procedure
Voting procedure / Stemprocedure Prior to the voting Vóór de stemming Insert card with chip facing you Plaats kaart met chip naar voren Name appears on display Naam verschijnt in venster During the voting Tijdens de stemming Voting options appear in display Stemkeuzes verschijnen in vens
Slide 50: Voting on Annual Accounts 2014
Voting on agenda item 3.3 / Stemming over agendapunt 3.3 Annual Accounts 2014: Jaarrekening 2014: Proposal to Voorstel tot adopt the vaststelling van de Annual Accounts 2014 Jaarrekening 2014 50
Slide 51: Proposal to approve the final dividend 2014
Agenda item 4 / Agendapunt 4 Voorstel tot goedkeuring Proposal to approve the van het slotdividend final dividend 2014 over het boekjaar 2014 51
Slide 52: Aegon's dividend policy
Aegon’s dividend policy Cash flows upstreamed to the holding are available to execute our strategy, to fund operating expenses and to pay dividends to shareholders Aegon aims to pay a sustainable dividend to shareholders, which can grow over time if performance of the company allows so ► Balance
Slide 53: Aegon's dividend proposal
Aegon’s dividend proposal Proposed final dividend for 2014: Dividend EUR 0.12 per common share (EUR) ► Results in total dividend for 2014 of 0.22 0.23 EUR 0.23 per common share 0.12 To be paid in cash or stock Value of stock dividend approximately 0.11 equal to cash dividend 2013 2014 Final
Slide 54: Proposal to approve the final dividend 2014
Agenda item 4 / Agendapunt 4 Voorstel tot goedkeuring Proposal to approve the van het slotdividend final dividend 2014 over het boekjaar 2014 54
Slide 55: Voting on final dividend 2014
Voting on agenda item 4 / Stemming over agendapunt 4 Voorstel tot goedkeuring Proposal to approve the van het slotdividend final dividend 2014 over het boekjaar 2014 55
Slide 56: Release of Executive Board from liability
Agenda item 5 / Agendapunt 5 Proposal to release the Voorstel tot het verlenen members of the van kwijting aan de Executive Board from leden van de Raad van liability for their Bestuur duties 56
Slide 57: Voting on release of Executive Board from liability
Voting on agenda item 5 / Stemming over agendapunt 5 Proposal to release the Voorstel tot het verlenen members of the van kwijting aan de Executive Board from leden van de Raad van liability for their Bestuur duties 57
Slide 58: Release of Supervisory Board from liability
Agenda item 6 / Agendapunt 6 Proposal to release the Voorstel tot het verlenen members of the van kwijting aan de Supervisory Board leden van de Raad van from liability for their Commissarissen duties 58
Slide 59: Voting on release of Supervisory Board from liability
Voting on agenda item 6 / Stemming over agendapunt 6 Proposal to release the Voorstel tot het verlenen members of the van kwijting aan de Supervisory Board leden van de Raad van from liability for their Commissarissen duties 59
Slide 60: Proposal to reappoint Mr. Alex R. Wynaendts
Agenda item 7 / Agendapunt 7 Voorstel tot herbenoeming Proposal to reappoint van de heer Mr. Alex R. Wynaendts Alex R. Wynaendts to the Executive Board als lid van de Raad van Bestuur 60
Slide 61: Alex Wynaendts
Alex Wynaendts Age 54 Nationality Dutch Chairman Executive Profession/ Board and CEO Functie of Aegon N.V. Memberships other boards/ None Andere bestuursfuncties* Shares in Aegon N.V./ 295,734 common Aantal aandelen in Aegon N.V. shares 61 * Qualifying under Act Management and Supervision/Conform We
Slide 62: Proposal to reappoint Mr. Alex R. Wynaendts
Agenda item 7 / Agendapunt 7 Voorstel tot herbenoeming Proposal to reappoint van de heer Mr. Alex R. Wynaendts Alex R. Wynaendts to the Executive Board als lid van de Raad van Bestuur 62
Slide 63: Voting on reappointment of Alex R. Wynaendts
Voting on agenda item 7 / Stemming over agendapunt 7 Voorstel tot herbenoeming Proposal to reappoint van de heer Mr. Alex R. Wynaendts Alex R. Wynaendts to the Executive Board als lid van de Raad van Bestuur 63
Slide 64: Proposal to appoint Mr. Ben J. Noteboom
Agenda item 8 / Agendapunt 8 Voorstel tot benoeming Proposal to appoint van de heer Mr. Ben J. Noteboom Ben J. Noteboom to the Supervisory Board als lid van de Raad van Commissarissen 64
Slide 65: Ben Noteboom
Ben Noteboom Age 56 Nationality Dutch Profession/ Non-Executive Functie Director Former occupation/ CEO Randstad Vroegere functie: Holding N.V. Supervisory Board Memberships other boards/ member Ahold N.V. Andere bestuursfuncties* and Wolters Kluwer Shares in Aegon N.V./ 23,500 common Aantal aandele
Slide 66: Quote from Ben J. Noteboom
“Aegon plays a hugely important role not only in terms of providing financial security to millions of people, but also in the wider economy. The company has made exciting improvements to become more customer-centric. I hope to make a positive contribution by drawing on my own experience in this area
Slide 67: Proposal to appoint Mr. Ben J. Noteboom
Agenda item 8 / Agendapunt 8 Voorstel tot benoeming Proposal to appoint van de heer Mr. Ben J. Noteboom Ben J. Noteboom to the Supervisory Board als lid van de Raad van Commissarissen 67
Slide 68: Voting on appointment of Ben J. Noteboom
Voting on agenda item 8 / Stemming over agendapunt 8 Voorstel tot benoeming Proposal to appoint van de heer Mr. Ben J. Noteboom Ben J. Noteboom to the Supervisory Board als lid van de Raad van Commissarissen 68
Slide 69: Authorize Executive Board to issue common shares
Agenda item 9 / Agendapunt 9 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot uitgifte issue common shares van gewone aandelen 69
Slide 70: Voting on authorization to issue common shares
Voting on agenda item 9 / Stemming over agendapunt 9 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot uitgifte issue common shares van gewone aandelen 70
Slide 71: Authorize restriction of pre-emptive rights
Agenda item 10 / Agendapunt 10 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot beperking restrict or exclude of uitsluiting van pre-emptive rights voorkeursrechten bij upon issuing common de uitgifte van gewone shares aandelen 71
Slide 72: Voting on restriction of pre-emptive rights
Voting on agenda item 10 / Stemming over agendapunt 10 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot beperking restrict or exclude of uitsluiting van pre-emptive rights voorkeursrechten bij upon issuing common de uitgifte van gewone shares aandelen
Slide 73: Authorize issuing shares under incentive plans
Agenda item 11 / Agendapunt 11 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot uitgifte van issue common shares gewone aandelen in het under incentive plans kader van incentiveplannen 73
Slide 74: Voting on shares under incentive plans
Voting on agenda item 11 / Stemming over agendapunt 11 Voorstel tot machtiging Proposal to authorize the van de Raad van Executive Board to Bestuur tot uitgifte van issue common shares gewone aandelen in het under incentive plans kader van incentiveplannen 74
Slide 75: Authorize Executive Board to acquire shares
Agenda item 12 / Agendapunt 12 Proposal to authorize the Voorstel tot machtiging Executive Board to van de Raad van acquire shares in the Bestuur tot verkrijging Company van eigen aandelen 75
Slide 76: Voting on authorization to acquire shares
Voting on agenda item 12 / Stemming over agendapunt 12 Proposal to authorize the Voorstel tot machtiging Executive Board to van de Raad van acquire shares in the Bestuur tot verkrijging Company van eigen aandelen 76
Slide 77: Any other business
Agenda item 13 / Agendapunt 13 Any other Wat verder ter business tafel komt 77
Slide 78: Close of the meeting
Agenda item 14 / Agendapunt 14 Close of Sluiting van the meeting de vergadering 78
Slide 79: Thank you – Dank u wel
Thank you – Dank u wel 79
Slide 80: Please return your voting device and voting card before departing
Please return your Wilt u voor uw vertrek voting device and voting uw stemkastje en card before departing stempas inleveren 80