Talanx Ag · XETR:TLX
Talanx — 6M 2024 Earnings Presentation
32 slides from Talanx's earnings presentation, Aug 14, 2024
Slide 1: 6M 2024 Results
6M 2024 Results Jan Wicke, CFO 14 August 2024
Slide 2: Exceptionally strong and profitable growth continues
Exceptionally strong and profitable growth continues Top line Bottom line Profitability Revenue growth Earnings growth Return on equity 6M 2024 vs 6M 2023 Net income 6M 2024 vs 6M 2023 1 +13 % +32 % 20.3 % (+1.8%pts. vs 6M 2023) 1 Currency adjusted:14% 2 6M 2024 Results | 14 August 2024
Slide 3: Agenda
Agenda 1 Group financials 2 Segments 3 Capital management 4 Group outlook 5 Appendix 3 6M 2024 Results | 14 August 2024
Slide 4: Strong double-digit top and bottom line growth
1 Strong double-digit top and bottom line growth Insurance revenue Group net income Return on equity in EURm in EURm +13% +32% +1.8% pts 1,090 23,606 827 91.2% 20.3%2 20,862 93.7% 18.5%2 514 +17% 11,886 +27% Q2 10,151 404 91.6% Q2 93.9% Q1 Q1 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Double-di
Slide 5: Reinsurance top-line strong - Primary Insurance even stronger
1 Reinsurance top-line strong - Primary Insurance even stronger… Primary Insurance Reinsurance Group Insurance revenue, in EURm +24%1 +5%3 +13%4 11,1882 12,916 23,604 12,273 ~1,200 20,862 9,031 +11% organic 9,988 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Note: Primary Insurance is the sum of I
Slide 6: … with even more pronounced bottom-line development
1 … with even more pronounced bottom-line development Primary Insurance Reinsurance Group Net income, in EURm +39% +21% +32% 529 585 1,090 484 380 827 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Note: Primary Insurance is the sum of Industrial Lines, Retail Germany and Retail International. 6 6M
Slide 7: Primary Insurance profit contribution moving closer to 50%
1 Primary Insurance profit contribution moving closer to 50% Primary Insurance Net income split contribution to group net income 6M 2024, in EURm Industrial 48% Lines 46% 223 (20%) 44% 585 Reinsurance (52%) 224 31% (20%) Retail International 82 (8%) … 2018 2023 6M 2023 6M 2024 Retail Germany Note: P
Slide 8: Going into hurricane season with large-loss buffer
1 Going into hurricane season with large-loss buffer TOP 3 large losses Net large losses Flood Germany EUR 174m Flood Brazil EUR 101m in EURm Riots New Caledonia EUR 82m 1,086 Man-made 5.5% NatCat 820 750 3.8% Baltimore1 Reinsurance within budget1 and 245 Primary Insurance EUR 84m 202 below budget 5
Slide 9: Guidance for FY 2024 to be reviewed post Q3
1 Guidance for FY 2024 to be reviewed post Q3 Insurance revenue Group Return growth net income on equity (FX-adjusted) in EURm 14% High >>1,700 20.3% single-digit 1,090 >15% 6M 2024 Outlook 2024 6M 2024 Outlook 2024 6M 2024 Outlook 2024 Note: All targets are subject to large losses not exceeding the
Slide 10: Agenda
Agenda 1 Group financials 2 Segments 3 Capital management 4 Group outlook 5 Appendix 10 6M 2024 Results | 14 August 2024
Slide 11: Industrial Lines: Continuous improvement of underwriting performance
Industrial Lines 2 Continuous improvement of underwriting performance Insurance Net Return revenue income on equity in EURm in EURm +14%1 +48% +2.8% pts 4,798 223 15.7% 4,221 12.8% 151 93.1%2 91.1%2 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Improved underwriting performance Double-digit growth
Slide 12: Retail International: Strong organic growth and profitability boosted by LatAm acquisition
Retail International 2 Strong organic growth and profitability boosted by LatAm acquisition Insurance Net Return revenue1 income on equity4 in EURm in EURm +49%2 +59% +2.7% pts 4,595 224 14.7% 12.0% 3,087 50% Europe 141 64% Europe 50% LatAm 95.4%3 92.4%3 36% LatAm 6M 2023 6M 2024 6M 2023 6M 2024 6M
Slide 13: Retail Germany: Mastering current headwinds
Retail Germany 2 Mastering current headwinds Insurance Net Return revenue income on equity2 in EURm in EURm -0.5% +4% -7% pts 1,722 1,795 88 82 12.5% 12.0% 96.1%1 99.7%1 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 More selective Technical profitability also impacted On track for underwriting by
Slide 14: Reinsurance: RoE over 20%, clearly beating ambition level
Reinsurance 2 RoE over 20%, clearly beating ambition level Insurance Insurance Return revenue service result (net) on equity in EURm in EURm +5%1 +31% +1.4% pts 12,273 12,916 1,411 21.5% 22.8% 1,079 91.7%2 87.8%2 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Continued growth in a favourable Attrac
Slide 15: Agenda
Agenda 1 Group financials 2 Segments 3 Capital management 4 Group outlook 5 Appendix 15 6M 2024 Results | 14 August 2024
Slide 16: Strong capital position
3 Strong capital position High solvency Strong ratings BOFCAR1 259% 208% 209% 215% 217%2 218%2 A+ (stable) Target range 150 – 200% A+ (stable) 31 Dec 31 Dec 31 Dec 31 Mar 30 Jun 2021 2022 2023 2024 2024 Note: Insurer Financial Strength Rating Note: Solvency 2 ratio of HDI Group as the regulated enti
Slide 17: Strong capital generation
3 Strong capital generation Shareholders’ Shareholders’ capital equity development components After taxes and minorities, in EURm After taxes and minorities, as of 30 Jun 2024, in EURm 2,381 19,006 Value 5,589 creation +1,196 11,036 11,036 10,447 -607 31 Dec 2023 Net income and OCI Dividends 2023 30
Slide 18: Implied Primary Group valuation has further increased in 2024
3 Implied Primary Group valuation has further increased in 2024 Development of market capitalisation In EURbn 20 17.31 18 +54% Primary Group 16 3.32 14 12 11.2 Hannover Re 14.0 10 (50.2%) 8 30 Dec 13 Aug 2022 2024 Source: FactSet | Note: Primary Group is here defined as Talanx market cap minus half
Slide 19: Primary Group valuation with more upside potential
3 Primary Group valuation with more upside potential 2024 P/E multiple peer benchmarking1 P/E 2024e, as of 13 August 2024 13.7x 12.2x 9.9x 10.2x 9.1x 9.1x 9.3x 9.4x 7.6x 5.9x 3.6x 2 Primary Group2 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Source: Ampega Asset Management GmbH | 1 Multip
Slide 20: Unchanged low-beta strategy with high quality investment portfolio
3 Unchanged low-beta strategy with high quality investment portfolio Investments for own risk Debt Instruments mainly (68%) 138.8 invested in government and 17% 113.6 113.6 covered bonds 1% 7% 17% 45% 20% 93% invest- Equity share in current year 82% ment 25% grade reduced by 26% 55% 31% Asset alloca
Slide 21: Group investment portfolio increasingly reflecting higher interest rate environment
3 Group investment portfolio increasingly reflecting higher interest rate environment Net insurance finance reinvestment yield3 and investment result1 in EURm Strong ordinary investment result +EUR 324m versus 6M 2023 mainly benefiting from 760 784 4.7% higher interest rates 4.3% Average portfolio
Slide 22: Insignificant fair value changes on FVPL assets in 6M 2024
3 Insignificant fair value changes on FVPL assets in 6M 2024 Actual P&L impact 6M 2024 P&L impact of “+/-10% scenario”1 Shareholder view: Without Primary Life, after taxes and without minorities 1, in EURm Total 28 Total +/-472 Thereof Thereof Private Private 25 +/-192 Equity Equity Equity securitie
Slide 23: Agenda
Agenda 1 Group financials 2 Segments 3 Capital management 4 Group outlook 5 Appendix 23 6M 2024 Results | 14 August 2024
Slide 24: Guidance for FY 2024 to be reviewed post Q3
4 Guidance for FY 2024 to be reviewed post Q3 Return Group Dividend on equity net income per share > 15% >> EUR 1,700m EUR 2.501 (to be paid in 2025) Note: All targets are subject to large losses not exceeding the large loss budget (EUR 2,435m for 2024), no turbulences on capital markets, and no mat
Slide 25: New financial mid-term targets @ CMD 2024
4 New financial mid-term targets @ CMD 2024 Capital Markets Day 2024 New financial mid-term targets Return on Equity Net income 11 December 2024 Dividend 25 6M 2024 Results | 14 August 2024
Slide 26: Agenda
Agenda 1 Group financials 2 Segments 3 Capital management 4 Group outlook 5 Appendix 26 6M 2024 Results | 14 August 2024
Slide 27: Talanx Primary Insurance and Reinsurance Contributions to net income
Talanx Primary Insurance and Reinsurance 5 Contributions to net income Net income attributable to Talanx AG shareholders, in EURm 1 2 3 4 5 6 7 8 Industrial Retail Retail ∑ Primary Reinsurance Corporate Conso- Talanx Lines Germany International Insurance Operations lidations Group 2018 -16 102 161 2
Slide 28: 6M 2024 and 6M 2023 results overview – Talanx Group
5 6M 2024 and 6M 2023 results overview – Talanx Group EURm 6M 2023 6M 2024 6M 2024 / 6M 2023 Insurance revenue (gross) 20,862 23,606 13.2% Insurance service result (net) 1,627 2,320 42.5% thereof Non-Life 1,064 1,724 62.0% Net investment income for own risk 1,726 2,186 26.6% Result from unit-linked
Slide 29: 6M 2024 results overview - Segments
5 6M 2024 results overview - Segments EURm Industrial Lines Retail Germany Retail International Primary Insurance Reinsurance 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 6M 2023 6M 2024 Insurance revenue (gross) 4,221 4,798 1,722 1,795 3,087 4,595 9,031 11,188 12,273 12,916 Insur
Slide 30: Large loss detail
Large loss detail 5 Large losses still below pro-rata budget Net losses Industrial Retail Retail ∑ Primary Corporate Talanx Reinsurance in EURm, 6M 2024 (6M 2023) Lines Germany International Insurance Operations Group TOP 10 NatCat Flood, Germany (May/June) 29.1 21.6 50.7 120.0 3.0 173.7 Flood, Braz
Slide 31: Contact us
5 Contact us Join us 21-22 August 2024 Hamburg Investors' Days, Hamburg 10 September 2024 Barclays Annual Global Financial Services Conference, New York Bernd Sablowsky Anna Färber Bernt Gade 23 September2024 Head of Investor Relations and M&A Event Management Equity & Debt IR Berenberg Goldman Sach
Slide 32: Qualifications and caveats
Qualifications and caveats This presentation contains forward-looking statements which are based on certain assumptions, expectations and opinions of the management of Talanx AG (the “Company”) or cited from third-party sources. These statements are, therefore, subject to certain known or unknown ri