Scor SE · EURONEXT:SCR
Scor — FY2007 Earnings Presentation
46 slides from Scor's earnings presentation, Mar 19, 2008
Slide 1: Full-year 2007 Results
SCOR GROUP Full-year 2007 Results Record 2007 Results – SCOR entering a new dimension 19 March 2008
Slide 2: Notice
Notice Certain statements contained in this presentation are forward-looking statements, of necessity provisional, that are based on risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements. Additional information regarding ris
Slide 3: Two sets of financial data: Published accounts & Pro-forma information
Two sets of financial data will be used during the presentation: Published accounts & Pro-forma information Published annual accounts Æ Official company reviewed accounts Æ 145 days (08/08-31/12) of consolidated Converium figures and 104 days (26/04-08/08) of non-consolidated Converium income contri
Slide 4: Entering a new dimension
1 Entering a new dimension 2 Record 2007 published results 3 A pioneering organization: the hub company 4 Well on track to achieve 2010 targets
Slide 5: SCOR enters into a new global dimension with record earnings
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets SCOR enters into a new global dimension with record earnings... A powerful twin-engine Group “A” level financial 5th largest reinsurer strength ratings in the world 1st listed
Slide 6: A profitable and well-diversified Non-Life engine
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets ...with a profitable and well-diversified Non-Life engine... Key Data (2007, pro-forma) in €m Gross premiums written Operating result Is a leading P&C reinsurer with a focus
Slide 7: A Life engine which delivers consistent and solid earnings
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets ...and a Life engine which delivers consistent and solid earnings... Key Data (2007, pro-forma) in €m Gross premiums written Operating result Is a leading life reinsurer in
Slide 8: Providing shareholder value and a capital shield
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets … while providing shareholder value and a capital shield … Shareholder value Capital shield Strong earnings (pro-forma) Solid balance sheet (published) in €m 2007 2007 Net com
Slide 9: Strong Enterprise Risk Management approach in practice
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets …and proving its strong Enterprise Risk Management approach in practice Key Data Risk Enterprise (2007, pro-forma) Management The SCOR ERM framework… …applied in practice Exam
Slide 10: Record 2007 published results
1 Entering a new dimension 2 Record 2007 published results 3 A pioneering organization: the hub company 4 Well on track to achieve 2010 targets
Slide 11: Record 2007 published results
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Record 2007 published results A record year with EPS reaching € 2.79 – All business drivers performing strongly Strong top-line performance supported by acquisitions with
Slide 12: Premium doubled, net income tripled
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Strong business development over past three years: Premium doubled, net income tripled (published) 2007 2006 2005 in €m Gross written premiums 4 762 2 935 2 407 ~ doubled Net
Slide 13: Non-Life: Net combined ratio at 97.3%
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Non-Life: Net combined ratio at 97.3% (published) Gross written premiums in €m 2 329 +33% Overall business profitability and growth 1 754 451 in line with objectives and ach
Slide 14: Life: Business volume more than doubled
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Life: Business volume more than doubled thanks to acquisitions & strong underlying performance (published) Gross written premiums in €m Further reinforced competitive positi
Slide 15: Asset Management: Prudent strategy produces stable returns
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Asset Management: Prudent strategy produces stable returns Total investments € 19 billion Real 2007 2006 Equities Alternative Estate 6% Investments4) in €m, published Cash 2%
Slide 16: High quality structured product portfolio, 7% of total investments
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Well diversified & high quality structured product portfolio representing only 7% of total investments Structured product portfolio € 1.3 billion of high quality; 92% AAA rati
Slide 17: Claims supporting capital: € 4.4 billion
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Current rating level fully backed by “claims supporting capital” of € 4.4 billion – no financing needs in €m Financial leverage 32% is improving by 18% 14pts 206 + 521 - 114 -
Slide 18: Continued positive cash flow stream
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Continued positive cash flow stream 4 quarters of positive operating cash flows Operating cash flow reaches a record high Net operating cash flow development YTD 2007 in €m, Y
Slide 19: A pioneering organization: the hub company
1 Entering a new dimension 2 Record 2007 published results 3 A pioneering organization: the hub company 4 Well on track to achieve 2010 targets
Slide 20: The Hub Company: innovative and adaptive organisation
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets The Hub Company: creating an innovative and adaptive organisation Built around the respective strengths of 3 leading reinsurers Multi-centred Local operations and global m
Slide 21: Organisation principles of the Hub company
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Organisation principles of the Hub company: a functional approach HUB LIFE One single model implemented Business functions (UW / throughout the Group: actuarial pricing)
Slide 22: Synergies implementation is well on track
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Synergies implementation is well on track Pre-tax annual synergy targets of EUR 68m Synergies split per function confirmed (of which EUR 35m in 2008) (estimation as of March 2
Slide 23: Well on track to achieve 2010 targets
1 Entering a new dimension 2 Record 2007 published results 3 A pioneering organization: the hub company 4 Well on track to achieve 2010 targets
Slide 24: A Group ready for the challenges ahead
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Anticipating the market environment ahead (update) Managing higher capital Anticipating Non-Life market requirements development Major diversification effect due to: Clear
Slide 25: Delivering value to shareholders while providing optimal security to clients
Entering a new dimension | Record 2007 published results | A pioneering organization | Well on track to achieve 2010 targets Delivering value to shareholders while providing optimal security to clients In a challenging environment, SCOR aims over the next 3 years: To secure an ROE of 900 bps above r
Slide 26: Appendices
APPENDICES Appendix A: Key Figures Appendix B: Pro-forma versus published P&L Appendix C: Converium contribution to published Group net income Appendix D: Converium provisional purchase price allocation Appendix E: Revios acquisition P-GAAP adjustment Appendix F: Calculation of ROE, EPS and Book Val
Slide 27: Appendix A: Key Figures
Appendix A: Key Figures Published Accounts in €m Q4 2006 Q4 2007 2006 2007 Variation Gross written premiums 844 1 381 2 935 4 762 +62% Net earned premiums 808 1 307 2 643 4 331 +64% Current net investment income1) 145 192 430 676 +57% Operating income before FVI2) 122 152 380 558 +47% FVI2) investme
Slide 28: Appendix A: Non-Life operating results
Appendix A: Non-Life operating results Published Accounts in €m 2006 2007 Variation Gross written premiums 1 754 2 329 +33% Net earned premiums 1 522 2 140 +41% Net underwriting income 174 202 +16% Technical management costs 120 158 +32% Current net investment income1) 250 357 +43% Operating income
Slide 29: Appendix A: Non-Life geographic split
Appendix A: Non-Life geographic split Published Accounts Gross written premiums, in €m 2 329 +33% 468 1 754 406 492 Asia-Pacific /Rest of the World Americas 323 Europe 1 369 1 025 2006 20071) 1) including Converium from 08/08/2007 N.B: At constant exchange rates, Non-Life premium income is up 11% 29
Slide 30: Appendix A: Life – technical profitability
Appendix A: Life – technical profitability Published Accounts in €m 2006 2007 Variation Gross written premiums 1 181 2 432 +106% Net earned premiums 1 121 2 191 +95% Technical management costs 55 115 +109% Current net investment income1) 180 322 +79% 2) Operating income before FVI 77 158 +105% FVI i
Slide 31: Appendix A: Life geographic split
Appendix A: Life geographic split Published Accounts Gross written premiums, in €m 2 432 158 +106% 703 Asia-Pacific /Rest of the World Americas Europe 1 181 75 418 1 571 688 2006 2007 N.B: At constant exchange rates, Life premium income is stable 31
Slide 32: Appendix A: Cost ratio
Appendix A: Cost ratio Published Accounts Overheads, in €m 320 202 Overheads / gross written premiums ratio 6.9% in % 6.7% 20061) 2007 1) After integration of the Revios pro rata results overheads 32
Slide 33: Appendix A: Balance sheet
Appendix A: Balance sheet Total assets reach € 26 billion 31/12/06 31/12/07 in €m Intangible Assets 837 1 446 Investments 12 763 16 971 Assets Retrocessionaires’ Share of Technical Reserves 1 255 1 145 Other Assets 2 540 3 918 Cash and cash equivalents 1 241 2 052 Total assets 18 636 25 532 Sharehol
Slide 34: Appendix B: Pro-forma vs. published P&L
Appendix B: Pro-forma vs. published P&L Published Pro-forma Audited pro-forma presented to in €m U illustrate the effect as if the acquisition 2007 2007 has been made on 1/1/07 Gross written premiums 4 762 +1 091 5 853 Key adjustments for Converium related to event prior to August 8, Net earned
Slide 35: Appendix C: Converium contribution to Group net income
Appendix C: Converium contribution to Group net income Published Accounts in €m, at current exchange rates3) 2007 Gross written premiums 533 Net earned premiums 589 Current net investment income1) 94 Operating income before FVI2) 128 FVI2) investment income 3 Other income and expenses 0 Operating in
Slide 36: Appendix D: Converium provisional purchase price allocation
Appendix D: Converium Provisional purchase price allocation P-GAAP framework: revision of the provisional purchase price allocation in €m 30/09/07 4Q2007 31/12/07 Purchase price 1 868 8 1 876 Acquisition costs1) 11 1 12 Total cost of investment 1 879 9 1 888 IFRS Net asset at acquisition date 1 513
Slide 37: Appendix E: Revios acquisition – Badwill confirmed
Appendix E: Revios acquisition – Badwill confirmed P-GAAP framework: Final purchase price allocation in €m 12 months 31/12/06 31/12/07 adjustment Purchase price 605 0 605 Interim interest between the signing date and the payment date 9 0 9 Acquisition costs 10 0 10 Total cost of investment 624 0 624
Slide 38: Appendix F: Post-tax Return on Equity (ROE)
Appendix F: Post-tax Return on Equity (ROE) Published Accounts 2006 2007 in €m Net income 2521) 407 Opening shareholders’ equity 1 719 2 261 Weighted net income2) 1261) 171 Payment of dividends3) -30 -56 Increase in weighted capital4) 19 599 Translation differential2) -29 -71 Revaluation reserve and
Slide 39: Appendix F: Detail of Earnings Per Share calculation
Appendix F: Detail of Earnings Per Share calculation Published Accounts 2006 2007 in €m Net Income (A) 2521) 407 Number of opening shares (1) 96 876 907 118 405 108 Impact of the 64,321,886 shares 11 206 46 30 634 913 issued 26/04/07 and 08/08/2007 (2) Time Weighted Treasury Shares (3) - 1 5158 73 -
Slide 40: Appendix F: Detail of Book Value per Share calculation
Appendix F: Detail of Book Value per Share calculation Published Accounts 2006 2007 in €m Net Equity (A) 2 261 3 592 Number of closing shares (1) 118 405 108 182 726 994 Closing Treasury Shares (2) -2 410 091 -2 975 633 Basic Number of Shares (B) = (1)+(2) 115 995 016 179 751 361 Basic Book Value PS
Slide 41: Appendix G: Net liabilities relating to contracts
Appendix G: Net liabilities relating to contracts Published Accounts in €m (at current exchange rates) 19 192 +38% 13 937 47% Life Non-Life 57% 53% 43% 2006 2007 N.B: At constant exchange rates, Life premium income is stable 41
Slide 42: Appendix H: Investment portfolio by IFRS accounting classification
Appendix H: Investment portfolio by IFRS accounting classification Published Accounts Investments, in €m 19 093 +36% 1% 11% 14 029 2% Investment in associates 9% 39% Investment property 37% Cash 2% Deposits, loans & receivables 2% Fair value by income Available for sale 47% 50% 2006 2007 42
Slide 43: Appendix H: Unrealized gains & losses evolution
Appendix H: Unrealized gains & losses evolution YTD unrealized gains & losses €m 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 98 105 27 57 84 122 122 119 154 122 real estate1) 28 29 bonds 23 -14 -34 equities -52 -46 -51 -115 -36 1) estimates not included in the accounts 43
Slide 44: Appendix H: Estimated sensitivity to interest rates and equity market
Appendix H: Estimated sensitivity to interest rates and equity market Estimated sensitivity to interest rate & equity market movements on net income and shareholders’ equity 2007 2006 in €m Net Shareholders’ Net Shareholders’ Total Total income equity impact income equity impact Interest rates +100
Slide 45: Appendix H: Estimated sensitivity to FX movements
Appendix H: Estimated sensitivity to FX movements Estimated sensitivity to FX movements on shareholders’ equity 2007 2006 in €m FX Shareholders’ Shareholders’ movements equity impact equity impact USD/EUR +10% 138 72 in % of shareholders equity 3.8% 3.2% USD/EUR -10% -138 -72 in % of shareholders eq
Slide 46: Appendix I: Executive Management Team
Appendix I: Executive Management Team A combination of key talents Denis Kessler | 55 | French François de Varenne | 41 | French Group Chairman and Chief Executive Officer* Group Chief Operating Officer* Gilles Meyer | 50 | Swiss & French Benjamin Gentsch | 47 | Swiss Deputy Chief Executive Officer