Slide 1: Half Year 2018 Earnings presentation
Half Year 2018 Earnings presentation August 2, 2018
Slide 2: Important legal information and cautionary statements
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS Certain statements contained herein may be forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans, expectations or objectives. Un
Slide 3: Table of contents
Table of contents 1. Introduction & highlights A.4 Thomas Buberl, Group CEO 2. 1H18 Business performance A.16 Gérald Harlin, Deputy CEO & Group CFO 3. 1H18 Financial performance A.24 Gérald Harlin, Deputy CEO & Group CFO 4. Concluding remarks A.38 Thomas Buberl, Group CEO A3 Half Year 2018 Earnings
Slide 4: Introduction & highlights
1 Introduction & highlights Thomas Buberl, Group CEO
Slide 5: Half Year 2018 – Six months of strong delivery
Half Year 2018 – Six months of strong delivery Very strong operational performance (earnings and topline) Shifting our business mix through in-force transformation Successful US IPO and XL integration well underway Strong balance sheet with additional cash flexibility Clear vision for the future and
Slide 6: Very strong earnings growth
Very strong earnings growth Underlying earnings1 Adjusted earnings1 In Euro million In Euro million +9% +9% 3,628 3,478 3,171 3,298 1H17 1H18 1H17 1H18 Change at constant FX Change at constant FX A6 Half Year 2018 Earnings | August 2, 2018 All notes are on pages 44 and 45 Back to agenda
Slide 7: Strong earnings growth more than offsetting forex headwind
Strong earnings growth more than offsetting forex headwind Underlying earnings per share Adjusted earnings per share In Euro In Euro +6% +6% 1.47 1.39 1.33 1.26 1H17 1H18 1H17 1H18 Change on reported basis Change on reported basis A7 Half Year 2018 Earnings | August 2, 2018 Back to agenda
Slide 8: AXA's simplified organization is bearing fruit
AXA’s simplified organization is bearing fruit 1H18 underlying 1H18 underlying 1H18 top line 1H18 transformation earnings (Euro billion) earnings growth growth highlights +8% France 0.8 ✓ Strong growth dynamic in preferred segments +9% revenues ✓ Simplification programme : “EasyAXA” Europe ✓ Transfo
Slide 9: Delivering on preferred segments and technical profits
Delivering on preferred segments and technical profits Growth in preferred segments Higher profitability across all lines +7% Health Health Protection revenues Combined ratio Combined ratio 94.9% 96.2% (-0.3pt) (-0.6pt) Protection APE +10% P&C Combined ratio 95.0% P&C Commercial revenues +2% (-0.8pt
Slide 10: AXA's transformational asset swap well underway
AXA’s transformational asset swap well underway XL integration progressing well Successful IPO of AXA Equitable Holdings Reduced potential CAT impacts by Key milestone in the Group’s transformation ca. 40%1 relative to 2017 Overall proceeds2 of USD 4.0 billion and New leadership team secured financi
Slide 11: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Strong Solvency II ratio Significant cash flexibility Future sell downs of AEH 233% Strong operating cash generation up 28 points from FY17 + Cash upstream from Swiss transformation + Potential disposals (e.g. AXA Life Europe) Negative credit watches li
Slide 12: Transforming AXA towards a more attractive business profile
Transforming AXA towards a more attractive business profile Excellent dividend paying track record Moving towards a predominantly P&C, In Euro per share Health and Protection company 10% 4% Asset Health management4 1.26 1.10 1.16 0.95 14% 0.81 Savings 3 0.72 50% New AXA1,2 21% P&C Protection 2012 20
Slide 13: Leading the way in Health innovation and digital partnerships
Leading the way in Health innovation and digital partnerships Integrated digital platform and care coordination solutions Global digital affinity market place January 22, 2018 May 23, 2018 On-demand and embedded products Global insurance platform through digital partnership for ride-sharing platform
Slide 14: Half Year 2018: a major step across all our transformational goals
Half Year 2018: a major step across all our transformational goals HY 2018 > Focus on fewer countries, with Focus and emphasis on scale and potential Transform > Shift our portfolio towards preferred segments to grow > Improve the balance between technical and financial margin > Simplify the organiz
Slide 15: Ambition 2020 – Delivering on the upper end of the target ranges
Ambition 2020 – Delivering on the upper end of the target ranges Underlying earnings per share Free cash flows2 In Euro In Euro billion Ambition 6.3 Ambition +5% +6% 6.2 2020 2020 2.16 2.40 1.26 1.33 3% - 7% 28 - 32 Euro billion UEPS CAGR1 cumulative FCF 2015-2020 FY15 FY17 1H17 1H18 FY16 FY17 2016-
Slide 16: Business performance
2 Business performance Gérald Harlin, Deputy CEO & Group CFO
Slide 17: Underlying earnings
Underlying earnings In Euro million Underlying earnings by geography +9% 1H17 1H18 Change restated 3,171 3,298 France 749 816 +9% Europe 1,185 1,271 +10% Asia 576 544 +4% United States 565 465 -8% International 218 210 +2% Transversal 259 275 +8% Central Holdings -381 -282 +26% 1H17 1H18 Underlying
Slide 18: France | Growth fueled by preferred segments and technical expertise
France | Growth fueled by preferred segments and technical expertise Underlying earnings Market leader focused on profitability… In Euro million +9% P&C CoR Health CoR NBV margin 816 749 93.7% 98.7% 30.7% (-0.6 pt) (+0.7 pt) (-4.1 pts) L&S …growing across all lines + Higher technical margin in P&C,
Slide 19: 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 1,271 1,185 93.9% 96.2% 54.2% Italy (-0.6 pt) (-1.2 pts) (-1.0 pt) Spain UK & Ireland + Strongly higher technical Belgium margin mainly in Sw
Slide 20: Asia | Growing in competitive markets with strong profitability
Asia | Growing in competitive markets with strong profitability Underlying earnings Strong profitability… In Euro million +4% 576 P&C CoR Health CoR NBV Asia High 544 96.5% 77.7% €504m Potentials (-1.1 pts) (-0.7 pt) (+4%) Hong Kong + Higher technical margin in …while growing in competitive markets
Slide 21: United States | Strong operating performance under IFRS
United States | Strong operating performance under IFRS Underlying earnings Growth across all businesses… In Euro million -8% or +30% 565 adjusted for reduced ownership (Euro -41 APE AB revenues million) and 1H17 one-offs1 (Euro 0.1 billion) +4% +11% 465 Euro 0.8 billion Euro 1.3 billion + Higher Un
Slide 22: International | Building for growth and improving technical profitability
International | Building for growth and improving technical profitability Underlying earnings Managing for profits… In Euro million +2% 218 P&C CoR Health CoR NBV margin 210 100.1% 99.3% 33.5% (stable) (-3.1 pts) (+7.7 pts) + Increased profits from Russia, …and building for growth Turkey, the Gulf r
Slide 23: AXA IM | Strong earnings growth and new operating model announced
AXA IM | Strong earnings growth and new operating model announced Underlying earnings Continued growth in volumes… In Euro million +10% Net inflows revenues 139 129 Euro +13 billion +5% (third party Euro +4 billion) + Higher management fees …focusing on strategic priorities (new operating model anno
Slide 24: Financial performance
3 Financial performance Gérald Harlin, Deputy CEO & Group CFO
Slide 25: Group earnings
Group earnings Balance sheet A25 Half Year 2018 Earnings | August 2, 2018
Slide 26: Underlying earnings
Underlying earnings In Euro million Underlying earnings by geography +9% 1H17 1H18 Change restated 3,171 3,298 France 749 816 +9% Europe 1,185 1,271 +10% Asia 576 544 +4% United States 565 465 -8% International 218 210 +2% Transversal 259 275 +8% Central Holdings -381 -282 +26% 1H17 1H18 Underlying
Slide 27: Adjusted earnings
Adjusted earnings In Euro million Details of adjusted earnings +9% 1H17 1H18 3,478 3,628 Underlying earnings 3,171 3,298 Net realized capital gains/losses 307 330 o/w realized capital gains 415 447 o/w net impairments -66 -76 o/w hedging of equity portfolio -42 -41 Adjusted earnings 3,478 3,628 1H17
Slide 28: Net income
Net income In Euro million Details of net income -11% 1H17 1H18 Adjusted earnings 3,478 3,628 3,268 2,796 Change in fair value and Forex -154 -346 o/w gains/losses on economic hedges1 -281 -236 o/w change in fair value of assets accounted for as fair value option 127 -110 Exceptional and discontinue
Slide 29: Group | Underlying earnings by geography and details by business line
Group | Underlying earnings by geography and details by business line Underlying earnings 1 o/w o/w o/w o/w Asset Total Life & Savings Property & Casualty Health Management (In Euro million) 1H18 Change 1H18 Change 1H18 Change 1H18 Change 1H18 Change France 816 +9% 457 +17% 325 0% 39 -5% - - Europe
Slide 30: Improvement in profitability ratios across the board
Improvement in profitability ratios across the board P&C combined ratio – details Health combined ratio 94.9% Current year Prior year reserve All-year combined ratio + developments combined ratio (-0.3 pt) 96.6% 97.1% 95.7% 95.0% 0.1% 0.6% -0.8% -2.1% P&C all-year combined ratio 95.0% (-0.8 pt) 1H17
Slide 31: Reduced potential earnings impact from natural events
Reduced potential earnings impact from natural events Natural event costs in excess of normalized level1 In Euro billion, net of tax and reinsurance AXA + XL end 2017 AXA + XL June 2018 Significant reduction in potential negative earnings (standalone) (mutualized) impact from natural events relative
Slide 32: Balance sheet
Group earnings Balance sheet A32 Half Year 2018 Earnings | August 2, 2018
Slide 33: High quality investment portfolio and resilient yield
High quality investment portfolio and resilient yield 1H18 Total General Account invested assets 1H18 New fixed income investments 80% in Fixed Income with long duration (8.1 years) 38% BIG credit (8%) Govies & related 20% Euro Euro ABS (~8%) Other1 597 32 ~61% billion Investment grade credit billio
Slide 34: 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 -11 bps 3.4% 3.3% Average 71 bps 69 bps Yield on Spread above 1H18 guaranteed assets guarantee rates Inforce 3.2% 1.8% +140 bps New business 2.4% 0.3% +210 bps • Sig
Slide 35: Fast deleveraging – within our new target range by 2020 at the latest
Fast deleveraging – within our new target range by 2020 at the latest Debt gearing (in %) ca. 32% Euro +3.2 billion debt raised at AEH Euro +2.0 billion debt raised at AXA S.A. 29% 28% 25% Target range 25% irrespective of our level of future AEH sell-downs FY17 1H18 2018E 2020E A35 Half Year 2018 Ea
Slide 36: Shareholders' equity
Shareholders’ equity In Euro billion 1H18 vs. FY17 - Dividends -3.0 69.6 66.0 - Change in net unrealized capital gains -2.4 - Impact from US IPO* -2.1 - Subordinated debt (incl. interest charges) -0.1 + Net income for the period +2.8 + Forex and other +0.8 FY17 1H18 + Change in pension benefits +0.4
Slide 37: Solvency II ratio
Solvency II ratio Solvency II ratio1 Key sensitivities In Euro billion Ratio as of June 30, 2018 233% 205% 233% Interest rate +50bps 238% +5 pts 57.8 61.0 Interest rate -50bps 224% -9 pts 28.2 26.2 Corporate spreads +50bps 231% -2 pts Available capital Required capital Equity markets +25% 230% -3 pt
Slide 38: Concluding remarks
4 Concluding remarks Thomas Buberl, Group CEO
Slide 39: Half Year 2018 – Six months of strong delivery
Half Year 2018 – Six months of strong delivery Very strong operational performance (earnings and topline) Shifting our business mix through in-force transformation Successful US IPO and XL integration well underway Strong balance sheet with additional cash flexibility Clear vision for the future and
Slide 40: Q&A
Q&A
Slide 41: 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 +33 1 40 75 46 85 September 12 Barclays Global Financial Services Conference New York Andrew Wallace-Barnett Head of Investor Relations François Boissin +33 1 40 75 39 82 September 26 & 27 BoAML F
Slide 42: Thank you
AA Thank you
Slide 43: Scope
Scope 1H17 has been restated to reflect the new reporting which is aligned with the new operating model and organization announced on November 13, 2017. ▪ France: includes insurance activities, banking activities and holdings in France. ▪ Europe: includes Belgium (insurance activities and holdings),
Slide 44: Notes (1/2)
Notes (1/2) Page A6 1. Underlying earnings and adjusted earnings are non-GAAP financial measures. For further information, please refer to the reconciliations of these non-GAAP financial measures to the financial statements and to their definitions in the glossary, which are provided in AXA’s Half-Y
Slide 45: Notes (2/2)
Notes (2/2) Page A21 1. Includes Euro +0.2 billion from 1H17 positive tax one-offs and Euro -0.1 billion from both 1H17 unfavorable mortality model updates and AB 1H17 one-off charges linked to the reduction of real estate footprint. Page A28 1. Interest rate and foreign exchange economic hedges not