Storebrand Asa · OSL:STB
Storebrand Asa — Q1 2005 Earnings Presentation
47 slides from Storebrand Asa's earnings presentation, May 11, 2005
Slide 1: Results 1st Quarter 2005 Analyst Presentation
Storebrand Results 1st Quarter 2005 11 May 2005 Analyst Presentation Analyst Presentation 1st quarter 2005 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-11 3-22 Back-up: • Storebrand Group 12-18 23-36 • Storebrand ASA 19-20 37-40 • Storebrand Life Insurance 21-32 41-64 • Storebrand Inv
Slide 2: Highlights Q1 2005
Storebrand Results 1st Quarter 2005 11th May 2005 Idar Kreutzer Group CEO Highlights Q1 2005 § Group profit of NOK 314 million in Q1 compared to NOK 224 million for the same quarter in 2004 (excl. If) § Storebrand Life’s result characterised by high premium income and satisfactory investment returns
Slide 3: Storebrand Group Results; Storebrand Life Insurance - satisfactory results
Storebrand Group Results Q1 01.01-31.12 NOK million 2005 2004 2004 Life activities 255 194 931 Investment activities 8 17 47 Storebrand Bank 72 19 121 Other activities -20 188 1 446 Group profit 314 417 2 545 Note: Effect from If Skadeforsikring on group profit in 2004 has been booked under ’Other a
Slide 4: Life Insurance - growth in defined contribution pensions
Storebrand Life Insurance - growth in defined contribution pensions § 160 new defined contribution Number of persons with defined schemes in Q1, 1,200 schemes contribution pensions in Storebrand: in total 28 700 § Premium income of NOK 89 million in Q1 (+50%*). Pension 25 500 assets under management
Slide 5: Life Insurance - effects of low interest rate levels
Storebrand Life Insurance - effects of low interest rate levels INTEREST RATE LEVEL § Has the life company appropriate risk profile LIFE COMPANY’S FINANCIAL and adequate buffers? POSITION AND EARNING CAPABILITY § Will the life company maintain satisfactory profitability? EFFECT OF NEW § What are the
Slide 6: New regulatory framework - improved quality of earnings
RENTENIVÅ LIVSELSKAPETS FINANSIELLE POSISJON OG INNTJENINGSEVNE EFFEKTEN AV NYE RAMME- BETINGELSER New regulatory framework KUNDER, MYNDIGHETER OG KONKURRANSEFAKTORER - improved quality of earnings § Profit sharing interest result - For group pensions: Explicit price on interest guarantee - Modified
Slide 7: Effects of low interest rates - summary; Storebrand Bank - improved results
Effects of low interest rates - summary § Storebrand has a solid financial buffer and there is a comfortable distance between expected investment return and guaranteed return § New framework may improve quality of earnings § Customers and competitive situation affected by low interest rates in the l
Slide 8: Storebrand Bank - stable positive development; Storebrand Investments
Storebrand Bank - stable positive development § Improved net interest margin in Q1 § Strict cost control § Profit on sale of subsidiary after IFRS of NOK 17 million, in addition positive equity effect of NOK 18 million § Strong capitalisation, capital reduction of NOK 400 million will be carried out
Slide 9: Top ranking of Storebrand's mutual funds; Strengthened emphasis on retail market
Top ranking of Storebrand’s mutual funds Kilde: Global Investor Magazine April 2005 Q1 2005 17 Strengthened emphasis on retail market § Ambitious market and profile campaign Overview advisers and sales offices: § Charge-free bank Number: Advisers Offices Internal distribution* 165 40 External distri
Slide 10: Strong dynamics in pensions market; Summary
Strong dynamics in pensions market § Parliament is debating changes in state pensions § Compulsory employers’ pensions being considered - Approx. 600,000 employees may have new schemes - Increased annual premiums estimated at NOK 2.7 bn minimum § Competitive barriers in municipal market removed, KLP
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 2005 21 (Page intentionally left blank) Q1 2005 22 11
Slide 12: 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. The effects of the transition to IFRS are described in the notes to the interim report and in a separate note in th
Slide 13: IFRS accounting (continued); Group profit by sub-group
IFRS accounting (continued) Restating the opening balance sheet at 1 January 2004 in accordance with IFRS has reduced the group’s reported equity by NOK 323 million. The treatment of pensions for employees is the main reason for this change. Restating the balance sheet at 31 December 2004 in accorda
Slide 14: Group Operating Profit; Earnings per share
Storebrand Group Operating Profit Q1 01.01-31.12 NOK million 2005 2004 2004 Premiums for own account - insurance 8 359 6 075 18 740 Interests income 157 189 574 Financial income 2 104 2 555 10 469 Other income 166 342 648 Operating income 10 786 9 161 30 431 Profit associated companies 0 195 195 Ins
Slide 15: Storebrand Group Balance sheet
Storebrand Group Balance sheet 31.03 Share of 31.12 Share of NOK million 2005 totalt assets 2004 total assets Intangible assets 669 0% 720 0% Shares in associated companies 70 0% 70 0% Loans 23 261 13 % 24 124 14 % Bonds held to maturity 42 719 24 % 39 352 22 % Real estate at market value 12 211 7%
Slide 16: Capital adequacy; Other activities
Storebrand Group Capital adequacy Risk weighted Net primary Capital ratio NOK million assets 31.03.05 capital 31.03.05 31.03.05 31.12.04 Storebrand ASA 8 283 6 917 83,5 % 89,1 % Storebrand Life insurance 52 161 7 377 14,1 % 14,4 % Storebrand Non-life insurance 183 132 72,4 % 97,1 % Storebrand Bank 1
Slide 17: Shareholder structure; Rating for Storebrand
Shareholder structure May 6, 2005 20 largest shareholders By region Folketrygdfondet 10,01 Other countries Orkla ASA 9,94 12.1 % Skandinaviska Enskilda Banken 8,37 Storebrand ASA 6,36 Luxembourg Fidelity Funds - Europe 3,89 8.9 % JPMorgan Chase Bank (NOM) 2,57 Deutsche Bank AG (NOM) 2,38 USA Norway
Slide 18: Storebrand Group Key figures
Storebrand Group Key figures Q1 01.01 - 31.12 NOK milion 2005 2004 2004 Group Earnings per share 1,09 1,15 8,53 Capital ratio 14,6 % 14,7 % 15,3 % Life Insurance (Storebrand Livsforsikring) Policyholders' funds 127 199 112 630 121 099 Booked investment return 1,4 % 1,3 % 6,4 % Value adjusted investm
Slide 19: Storebrand ASA Profit for the year
Storebrand ASA Storebrand ASA Profit for the year Q1 01.01 - 31.12 NOK million 2005 2004 2004 Group contributions and transfers 611 535 568 Interest income 18 7 87 Interest expense -22 -39 -112 Realised/unrealised gains/losses on securities 9 58 1,945 Other financial income/costs 2 -7 -60 Net financ
Slide 20: Storebrand ASA Balance sheet
Storebrand ASA Balance sheet Share of Share of NOK million 31.03.2005 total assets 31.12.2004 total assets Shares in subsidiaries 6 132 53 % 6 244 58 % Financial assets at market value 3 974 35 % 4 042 37 % Other assets 1 404 12 % 533 5% Total assets 11 510 100 % 10 818 100 % Equity 8 863 77 % 8 417
Slide 21: Storebrand Life Group Highlights as per 31.03.2005
Storebrand Life Insurance Storebrand Life Group Highlights as per 31.03.2005 § Improved operating profit. Operating profit per Q1 was NOK 720 million, compared to NOK 511 million last year § Booked and value adjusted return on investments was 1.4 percent, annualised 5.7 percent and 1.4 percent, annu
Slide 22: Life Group Highlights; Results
Storebrand Life Group Highlights as per 31.03.2005 § Total premium income (excluding transfers to/from) increased by 47 percent compared to Q1 2004 - The sale of personal savings products was three times higher than in Q1 2004 - Premium income from group pensions decreased by 12 percent, as a result
Slide 23: Profit and loss; Satisfactory solidity
Storebrand Life Group Profit and loss Q1 Full year NOK Million 2005 2004 2004 Premiums written 6,941 4,711 15,293 Net transferes of premium reserve 328 -11 -588 Net income of financial investments 1,930 2,525 8,693 Claims paid -1,776 -1,587 -6,849 Change in technical reserves -6,303 -3,915 -11,243 O
Slide 24: Asset allocation and policyholders' funds
Storebrand Livsforsikring AS Asset allocation and policyholders’ funds Allocation and policyholders' fund Q1-05 Q4-04 Q3-04 Q2-04 Q1-04 Q4-03 Q3-03 Q2-03 Equity 22 % 22 % 22 % 20 % 19 % 17 % 16 % 14 % Real estate 10 % 10 % 10 % 8% 8% 8% 9% 9% Money market 13 % 13 % 13 % 11 % 15 % 20 % 18 % 23 % Bond
Slide 25: Unrealised gains; Premiums by product
Storebrand Livsforsikring AS Unrealised gains Q1 Full year Change NOK Million 2005 2004 2004 2005 Shares 2,371 2,312 2,137 234 Fixed interest investments 451 311 576 -124 Short term investments 2,822 2,623 2,712 110 Bonds held to maturity 3,860 4,378 4,213 -353 Total 6,682 7,000 6,925 -243 Q1 2005 4
Slide 26: Premiums excl. reserves transferred
Storebrand Livsforsikring AS Premiums excl. reserves transferred to the company Q1 Full year NOK mill. 2005 2004 2004 Group pension 2,583 2,922 6,326 Group life 296 314 490 Individual endowment 3,900 1,284 7,645 Individual pension 133 172 753 Non-life insurance 29 19 79 Sum 6,941 4,711 15,293 Q1 200
Slide 27: Net transfers of premium reserves
Storebrand Life Group Net transfers of premium reserves Q1 Full year NOK Million 2005 2004 2004 Premium reserves recieved Group pensions 1,096 1,056 2,299 Individual life insurance 61 63 345 Total 1,157 1,120 2,644 Premium reserves transferred Group pensions -798 -1,095 -3,103 Individual life insura
Slide 28: Operating costs; Profit analysis
Storebrand Livsforsikring AS Total operating costs as % of average policyholders funds 0,94 0,90 0,94 0,92 0,96 0,89 0,90 0,86 1998 1999 2000 2001 2002 2003 2004 per Q1 05 *) *) annualised Q1 2005 55 Storebrand Livsforsikring AS Profit analysis Q1 Full year NOK Million 2005 2004 2004 Interest result
Slide 29: Profit to owner
Storebrand Livsforsikring AS Profit to owner NOK Million Q1 Q1 PROFIT SHARING MODEL 2005 REGULATORY MAXIMUM 2005 Net return on company capital 87 Management fee charged from policyholders` fund 126 35% of profit from products Risk margin 12 with profit sharing adjusted for Products inside profit sha
Slide 30: Storebrand Life Group Balance sheet
Storebrand Life Group Balance sheet Share of Share of total assets total assets NOK Million 31.03.05 31.03.05 31.12.2004 31.12.2004 Immaterial assets 38 0% 42 0% Real estate 12.239 9% 12.236 9% Long term shares and interests from group comp 99 0% 95 0% Bonds held to maturity 42.719 30 % 39.352 29 %
Slide 31: Key figures; Real estate fund
Storebrand Livsforsikring AS Key figures Q1 Full year 2005 2004 2004 Booked return - year-to-date 1.41% 1.32% Booked return - annualised 5.74% 5.39% 6.39% Value adjusted return - year-to-date 1.43% 2.07% Value adjusted return - annualised 5.85% 8.53% 7.17% Value adjusted return - year-to-date -inclu
Slide 32: Storebrand Fondsforsikring Summary profit and loss account
Storebrand Fondsforsikring AS Summary profit and loss account Q1 Full year NOK Million 2005 2004 2004 Premiums written 203 198 619 Income of financial investments 53 15 45 Income - Unit Linked assets 132 266 409 Claims paid -106 -113 -422 Change in technical reserves -194 -273 -408 Operating expense
Slide 33: Storebrand Investments Highlights Q1 2005
Storebrand Investments Storebrand Investments Highlights Q1 2005 § NOK 171 billion in assets under management as of Q1, an increase of NOK 6 billion year to date. Net sales 1st quarter was NOK 0.5 billion. § Good investment returns in funds and portfolios with performance fees. § Eight out of ten po
Slide 34: Profit before tax for 1st quarter 2005; Profit development
Profit before tax for 1st quarter 2005 01.01- Q1 31.12 NOK mill. 2005 2004 2004 Total income 67 78 316 Total costs -61 -64 -278 Net financial income/Other income 2 2 10 Profit before tax 8 17 47 § The decline in income is due to relatively weaker investment results for portfolios with performance fe
Slide 35: Contribution to Storebrand Life portfolio performance; Mutual funds
Contribution to Storebrand Life portfolio performance Relative Return in percent year to date* performance Equities Norway 9,4 0,8% § Outperformance in 8 8,6 out of 10 portfolios Equities Europe 3,8 -0,9% 4,7 Equities North America 2,1 -0,2% 2,3 Equities Asia 2,6 0,1% 2,5 Bonds Norway 0,67 0,06% 0,6
Slide 36: Market share Norwegian registered mutual funds
Storebrand Investments again ranked as a top performer by Global Investor and Morningstar Source: Global Investor Magazine April 2005 Market share Norwegian registered mutual funds All mutual funds (market share in percent) 8,4 8,7 8,8 8,4 8,0 Nordea Market share Storebrand: 8,7 8,6 9,1 9,8 10,8 Odi
Slide 37: Sales development; Assets under management
Sales development Net sales/accepted offers NOK 0.5 billion i Q1 compared to NOK 0.7 billion last year Mutual fund market Storebrand (mutual funds and discretionary) § Net subscription (total mutual fund § 4 new institutional customers year to date market) 1st quarter is NOK 11.3 billion § Positive
Slide 38: Storebrand Bank Highlights Q1 2005
Storebrand Bank Storebrand Bank Highlights Q1 2005 § Storebrand Bank had a result of NOK 73 million in Q1 (NOK 19 million in Q1 2004) § Finansbanken AS (Denmark) has been sold with accounting effect from 01.01.05. The transaction gave a book profit of NOK 17 million according to IFRS. In addition th
Slide 39: Profit and loss; Development in net interest income
Profit and loss Q1 Full year NOK million 2005 2004 2004 Net interest income 120 108 427 Other income 24 91 274 Total income 144 199 701 Operating expenses -88 -167 -585 Operating profit before losses 56 33 116 Loan loss provisions -1 -14 7 Profit / losses on shares 17 -0 -3 Profit before tax 72 19 1
Slide 40: Other income; Positive development in costs
Other income NOK million 30 § Other income of NOK 24 25 million in Q1 20 11 § A proportion of other 15 income has been moved 24 Q1 to net interest income 10 from 01.01.05 according to IFRS 13 5 0 Net bank commission FX and securities Total Note: Storebrand Bank Group Q1 2005 79 Positive development
Slide 41: Balance sheet; Development in loan portfolio
Balance sheet 31.03.2005 Share 31.12.2004 Share NOK million Loans to central banks / credit institutions 279 1% 711 3% Net lending to customers 22 972 86 % 23 539 86 % Assets repossessed 0 0% 0 0% Securities and bonds 2 463 9% 2 140 8% Shareholdings in associated / group companies 324 1% 375 1% Fixe
Slide 42: Loan portfolio parent bank; NPLs and loss provisions
Development in loan portfolio – parent bank Development in gross lending Gross lending by sector NOK billion 15 % 25.2 24.1 Residential 23.6 mortgages 23.3 23.2 22.9 Other retail 22.4 22.0 21.7 21.6 23 % Real estate 57 % Other corporate Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 5% 2002 2003 2003 2003 2003 2004
Slide 43: NPLs and loss provisions; Customer deposits
Development in NPLs and loss provisions NOK million 3 000 100 % 90 % 2 500 80 % 70 % 2 000 60 % 1 500 50 % 40 % 1 000 30 % 20 % 500 10 % 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2003 2003 2003 2004 2004 2004 2004 2005 Gro ss d efault ed and lo ss p ro vid ed lo ans Defaulted lo ans ab o ve 9 0 d ays * L
Slide 44: Capital adequacy
Capital adequacy The capital adequacy is calculated according to NGAAP 31.03.2005 Change after since NOK million and % 31.03.2005 capital reduction 31.12.2004 31.12.04 Core capital 2.052 1.653 1.990 62 Subordinated loan capital 383 383 380 3 Total capital 2.435 2.036 2.370 65 Risk-weighted basis for
Slide 45: Storebrand Non-Life Highlights Q1 2005
Storebrand Non-Life Non-Life Highlights Q1 2005 § Operating income in Q1 2005 was minus NOK 5 mill. (NOK 198 mill.). Income adjusted for statutory insurance reserves amounts to NOK 4 mill. (NOK 209 mill.). Result from If in Q1 2004 was NOK 193 mill. § Result from Fair in Q1 was NOK 0,4 mill. (NOK 4
Slide 46: Non-Life Group Profit and loss; Oslo Re
Non-Life Group Profit and loss Q1 01.01. - 31.12. NOK million 2005 2004 2004 22.47 % share of result from If Skadeforsäkring *) 0 193 189 50% share of result from Fair 0 4 14 Operating result non-life insurance 0 197 203 Oslo Reinsurance Company ASA -5 9 23 Storebrand Skadeforsikring AS -1 -8 6 Elim
Slide 47: Oslo Re Balance sheet
Oslo Re Balance sheet Share Share NOK million 31.12.2005 31.12.2005 31.12.2004 31.12.2004 Deferred tax asset 14 2% 13 2% Financial assets 489 70 % 514 75 % Receivables 73 10 % 58 8% Other assets 126 18 % 104 15 % Total assets 701 100 % 689 100 % Equity 147 21 % 147 21 % Premium and claims reserve 37