Slide 1: FY18 Earnings
FY18 Earnings February 21, 2019
Slide 2: Important Legal Information and Cautionary Statements
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS AND THE USE OF NON-GAAP FINANCIAL MEASURES Certain statements contained herein may be forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, tr
Slide 3: Table of contents
Table of contents 1. Introduction & highlights A.04 Thomas Buberl, Group CEO 2. FY18 Business performance A.13 Gérald Harlin, Deputy CEO & Group CFO 3. FY18 Financial performance A.22 Gérald Harlin, Deputy CEO & Group CFO 4. Concluding remarks A.38 Thomas Buberl, Group CEO A3 Full Year 2018 Earnings
Slide 4: Introduction & highlights
FY18 Earnings February 21, 2019 Introduction & highlights 1 Thomas Buberl, Group CEO
Slide 5: Key highlights – FY2018
Key highlights – FY2018 ▶ Excellent year of operational performance ▶ High natural catastrophes at AXA XL in Q4 ▶ XL integration progressing well ▶ Strong dividend growth A5 Full Year 2018 Earnings | February 21, 2019 Back to agenda
Slide 6: Another year of strong earnings growth
Another year of strong earnings growth Even with reduced ownership of AEH and high natural catastrophes in the fourth quarter Underlying earnings1 Underlying earnings per share1 In Euro billion In Euro +6% +3% 6.0 6.2 2.40 2.48 FY17 FY18 FY17 FY18 A6 Full Year 2018 Earnings | February 21, 2019 All n
Slide 7: Attractive dividend growth
Attractive dividend growth Adjusted earnings per share Dividend per share In Euro In Euro +1% +6% 2.59 2.61 1.34 1.26 Adjusted earnings1 +3% FY17 FY18 FY17 FY18 Payout ratio2 49% 52% A7 Full Year 2018 Earnings | February 21, 2019 All notes are on pages 45, 46 and 47 Back to agenda Change at constant
Slide 8: Strong revenue growth, notably in preferred segments
Strong revenue growth, notably in preferred segments Health +7% 103 (11% of revenues1) Euro billion FY18 Gross revenues Protection (19% of revenues1) +3% +4% P&C Commercial +5% (26% of revenues1) A8 Full Year 2018 Earnings | February 21, 2019 All notes are on pages 45, 46 and 47 Back to agenda Chang
Slide 9: Key geographies continue to deliver excellent earnings growth
Key geographies continue to deliver excellent earnings growth FY18 Underlying earnings In Euro billion Euro 1.6 billion Euro 2.5 billion +10% France Europe +10% Euro 1.1 billion Euro 0.8 billion +5% Asia International and +24% Transversal1 Euro 1.1 billion Euro -0.2 billion includes +4% AXA Equitabl
Slide 10: AXA XL – Fast progress on integration and good business momentum
AXA XL – Fast progress on integration and good business momentum Earnings enhancement levers underway Supportive business momentum ✓ Integrated reinsurance program in place ▶ 10% revenues growth in 2018, with rate for 2019, aligned with AXA Group risk appetite increase leading the market ✓ Commercia
Slide 11: Scaling up on Payer to Partner innovations
Scaling up on Payer to Partner innovations Medical teleconsultation and services In-App travel insurance products and services A Kamet venture incubated in 2016 Launched in 2019 ▶ Fully digital healthcare solution now live in France and available in other countries for French expatriates 1 billion W
Slide 12: Ambition 2020 – well on track
Ambition 2020 – well on track Underlying earnings per share1 Free cash flows 4 In Euro In Euro billion Ambition Ambition +5% 2020 6.6 2020 6.2 6.3 2.40 2.48 2.16 2.24 3% - 7% 28 - 32 Euro billion UEPS CAGR2 cumulative FCF 2015-2020 FY15 FY16 FY17 FY18 FY16 FY17 FY18 2016-2020 Adjusted return on equi
Slide 13: FY18 Business performance
FY18 Earnings February 21, 2019 FY18 Business performance 2 Gérald Harlin, Deputy CEO & Group CFO
Slide 14: Underlying earnings
Underlying earnings In Euro million Underlying earnings Underlying earnings by geography FY17 FY18 Change +6% France 1,429 1,573 +10% 6,002 6,182 Europe 2,326 2,532 +10% Asia 1,089 1,101 +5% AXA XL 70 -233 - United States 1,135 1,125 +4% International 337 400 +28% Transversal 323 384 +20% Central Ho
Slide 15: France | Growth in preferred segments and strong results
France | Growth in preferred segments and strong results Underlying earnings Best in class profitability In Euro million +10% P&C CoR Health CoR NBV margin 1,573 92.3% 97.9% 29.5% 1,429 (-2.3 pts) (-0.8 pt) (-5.0 pts) Higher technical margin across all L&S + lines of business Strong growth in prefer
Slide 16: Europe | Growth and profitability from disciplined execution
Europe | Growth and profitability from disciplined execution Underlying earnings Highly profitable business In Euro million +10% P&C CoR Health CoR NBV margin 2,532 94.5% 94.8% 49.6% 2,326 (-0.1 pt) (-1.3 pts) (-3.6 pts) Spain Italy UK & + Higher technical margin notably in Ireland Switzerland (Life
Slide 17: Asia | Strong profitability in highly competitive markets
Asia | Strong profitability in highly competitive markets Underlying earnings Strong profitability… In Euro million +5% P&C CoR Health CoR NBV margin 1,089 1,101 97.1% 78.8% 62.2% (-0.5 pt) (+0.6 pt) (-7.4 pts) Japan Higher technical margin in Japan Life + …and successful new product launches + High
Slide 18: AXA XL | Two major Nat Cats in 4Q 2018
AXA XL | Two major Nat Cats in 4Q 2018, favorable business momentum Underlying earnings Strong business growth… In Euro billion Includes Hurricane Michael (Euro -0.3 billion)2 and California Wildfires (Euro -0.3 billion)2 Revenues +3% Specialty 0.2 +13% P&C Insurance +10% +16% P&C Reinsurance (Inclu
Slide 19: United States | Strong operating performance under IFRS
United States | Strong operating performance under IFRS Underlying earnings Growth in life and savings… In Euro million +4% APE NBV 1,135 1,125 +6% +4% Euro 1.5 billion Euro 0.3 billion + Higher Unit-Linked and mutual fund fees (Euro +0.1 billion) + Higher investment margin (Euro +0.1 billion) US Li
Slide 20: International | Building for growth and managing for profits
International | Building for growth and managing for profits Underlying earnings Improving profitability… In Euro million +28% P&C CoR Health CoR NBV margin 400 100.6% 99.6% 36.5% (stable) (-2.1 pts) (+7.9 pts) 337 + Mexico from higher net technical margin in P&C and Health …with strong growth in pr
Slide 21: AXA IM | Strong earnings growth and positive third party net flows
AXA IM | Strong earnings growth and positive third party net flows Underlying earnings Third party net inflows In Euro million 257 +6% 270 Euro +3 billion + Lower financial charges Continued growth in alternatives + Lower income tax expenses mainly linked to higher real estate performance fees + Hig
Slide 22: FY18 Financial performance
FY18 Earnings February 21, 2019 FY18 Financial performance 3 Gérald Harlin, Deputy CEO & Group CFO
Slide 23: Group earnings / Balance sheet
Group earnings Balance sheet A23 Full Year 2018 Earnings | February 21, 2019
Slide 24: Underlying earnings
Underlying earnings In Euro million Underlying earnings Underlying earnings by geography FY17 FY18 Change +6% France 1,429 1,573 +10% 6,002 6,182 Europe 2,326 2,532 +10% Asia 1,089 1,101 +5% AXA XL 70 -233 - United States 1,135 1,125 +4% International 337 400 +28% Transversal 323 384 +20% Central Ho
Slide 25: Adjusted earnings
Adjusted earnings In Euro million Adjusted earnings Details of adjusted earnings +3% FY17 FY18 6,457 6,489 Underlying earnings 6,002 6,182 Net realized capital gains/losses 455 307 o/w realized capital gains 674 841 o/w net impairments -127 -440 o/w hedging of equity portfolio -92 -94 Adjusted earni
Slide 26: Net income
Net income In Euro million Net income Details of net income FY17 FY18 6,209 Includes: Adjusted earnings 6,457 6,489 – Impairment of AEH goodwill (Euro -3.0 billion) – Impairment of intangible assets linked to the Change in fair value and Forex -134 -463 transformation of our Swiss Group Life busines
Slide 27: Improvement in profitability ratios across the board
Improvement in profitability ratios across the board P&C combined ratio – details AY CoR Excluding XL: 94.9% Health combined ratio (-1.2 pts vs. FY17) 94.4% Current year combined ratio + Prior year reserve developments All-year combined ratio (-0.4 pt) 99.1% 97.6% 97.0% 96.3% 2.5% 4.2% -2.1% P&C com
Slide 28: Strong reserving ratios supporting increased PYD guidance
Strong reserving ratios supporting increased PYD guidance P&C reserving ratio1 IFRS P&C reserves in excess of S-II BEL (Net technical reserve/Net earned premiums) In Euro billion 213% +7.1 209% +5.7 FY17 FY18 FY17 FY18 A28 Full Year 2018 Earnings | February 21, 2019 All notes are on pages 45, 46 and
Slide 29: Nat Cat impact – assuming XL included for the whole of 2018
Nat Cat impact – assuming XL included for the whole of 2018 Total FY18 Natural Catastrophes AXA Group earnings deviation Euro million (pre-tax net of reinsurance) with different levels of Nat Cat cost1 Total FY18 Natural Catastrophes +0.5 In Euro million (pre-tax) FY18 +0.5 France 268 More severe ye
Slide 30: Integrated reinsurance program for 2019, aligned with risk appetite
Integrated reinsurance program for 2019, aligned with risk appetite Simplified Group Cat reinsurance structure for AXA Group In Euro All Retention and basis risk (with €50m deductible) 1.75bn 2.65bn xs 1.45bn xs 750m Alternative Bespoke Capital & 1.0bn 1.0bn Alternative Cat Bonds xs 750m xs 750m Cap
Slide 31: Group earnings / Balance sheet
Group earnings Balance sheet A31 Full Year 2018 Earnings | February 21, 2019
Slide 32: High quality investment portfolio and resilient yield
High quality investment portfolio and resilient yield FY18 Total General Account invested assets FY18 New fixed income investments 81% in Fixed Income with long duration (7.9 years) 38% BIG credit (7%) Govies & related 19% Euro ABS (~7%) Euro ~57% Other1 615 70 Investment grade credit billion3 34% ~
Slide 33: Robust investment margin and yields – ahead of Ambition 2020 guidance
Robust investment margin and yields – ahead of Ambition 2020 guidance Spread above guaranteed rates1 L&S investment margin1 P&C yield2 -8 bps Average Yield on Spread above 69 bps 70 bps 3.3% FY18 guaranteed 3.2% assets guarantee rates Inforce 3.1% 1.8% +135 bps New business 2.5% 0.3% +220 bps • Sign
Slide 34: Shareholders’ equity
Shareholders’ equity In Euro billion 69.6 FY18 vs. FY17 62.4 + Net income for the period +2.1 + Forex and other +0.7 + Change in pension benefits +0.6 - Subordinated debt (incl. interest charges) -0.9 - Impact from AEH IPO and secondary offering* -2.8 - Dividends -3.0 - Change in net unrealized capi
Slide 35: Strong Solvency II ratio and debt levels within our guidance
Strong Solvency II ratio and debt levels within our guidance Solvency II ratio1 Debt gearing2 FY18 FY18 guidance guidance 205% 32% 200% ca. 32% 193% 25% 190% 25% - 28% 170% - 220% Target range Target range by 2020 FY17 FY18 FY17 FY18 A35 Full Year 2018 Earnings | February 21, 2019 All notes are on p
Slide 36: Solvency II ratio
Solvency II ratio Solvency II ratio1 Key sensitivities In Euro billion Ratio as of December 31, 2018 193% 205% 193% Interest rate +50bps 200% +7 pts 57.8 58.1 Interest rate -50bps 182% -11 pts 28.2 30.2 Corporate spreads +50bps 190% -3 pts Available capital Required capital Equity markets +25% 195%
Slide 37: Strong cash flow generation and remittance
Strong cash flow generation and remittance In Euro billion Operating free cash flows Cash remitted from entities 88% 116% 7.6 6.3 6.6 2.6 or 76% Remittance ratio 4.9 in line with our guidance of 75% - 85% (excluding Euro 2.6 billion cash linked to the pre-US IPO restructuring operations) 5.0 FY17 FY
Slide 38: Concluding remarks
FY18 Earnings February 21, 2019 Concluding remarks 4 Thomas Buberl, Group CEO
Slide 39: 2018 – A pivotal year in AXA’s transformation journey
2018 – A pivotal year in AXA’s transformation journey Simplified organization bearing fruit France Europe Key geographies continue to deliver excellent operational performance Asia International AEH Significant transformational leap AXA XL AXA Equitable Holdings <-> XL Group A39 Full Year 2018 Earni
Slide 40: We have clear priorities to create shareholder value
We have clear priorities to create shareholder value ▶ Deleveraging ▶ Delivery of Ambition 2020 ▶ XL integration ▶ Accelerate in Asia ▶ Further sell-downs of AEH ▶ Scaling up Payer to Partner innovations A40 Full Year 2018 Earnings | February 21, 2019 Back to agenda
Slide 41: Q&A
FY18 Earnings February 21, 2019 Q&A
Slide 42: AXA Investor Relations | Keep in touch
AXA Investor Relations | Keep in touch Call us Meet our management Investor Relations +33 1 40 75 48 42 Andrew Wallace-Barnett +33 1 40 75 46 85 March 19-20 Morgan Stanley European Financials Conference London Head of Investor Relations François Boissin +33 1 40 75 39 82 Vice President April 2 HSBC
Slide 43: Thank You
FY18 Earnings February 21, 2019 Thank You
Slide 44: Scope
Scope Note: Following the acquisition of XL Group in 2018, the segment reporting has been revised and retroactively restated in this presentation. ▪ France: includes insurance activities, banking activities and holdings in France. ▪ Europe: includes Belgium (insurance activities and holding), Italy
Slide 45: Notes (1/3)
Notes (1/3) Page A6 1. Underlying earnings and Underlying earnings per share are APMs. For further information, please refer to the reconciliation of Underlying earnings to the financial statements and to its definition in the Glossary, which are provided in AXA’s 2018 Activity Report (respectively,
Slide 46: Notes (2/3)
Notes (2/3) Page A18 1. The normalized level of Nat Cat charges for AXA XL is ca. 4% of Gross earned premiums. 2. Pre-tax and net of reinsurance charges: Euro 261 million for Hurricane Michael and Euro 335 million for California Wildfires Page A21 1. The acquisition of one of Quadrant’s US lines has
Slide 47: Notes (3/3)
Notes (3/3) Page A33 1. Group investment margin on total Life & Savings and Life-like Health business. 2. P&C gross asset yield including Health previously reported in the P&C segment and also includes Q4 investment income and one-fourth of the average Q4 assets from XL Group. 3. Hybrid products are