Storebrand Asa · OSL:STB
Storebrand Asa — Q1 2020 Earnings Presentation
31 slides from Storebrand Asa's earnings presentation, Apr 30, 2020
Slide 1: Storebrand Q1 2020
Storebrand Q1 2020 30 April 2020 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO
Slide 2: Highlights Q1 2020
Highlights Q1 2020 19% Unit Linked premium growth2 Group result1 14% AuM growth Asset Management2 254 MNOK -588 Disability insurance reserves strengthening -334 Q1 2020 172% Solvency margin3 Financial items and risk result life Operating profit 2 1 Result before amortisation and tax. Operating resul
Slide 3: Storebrand | Response to COVID19
Storebrand | Response to COVID19 1. Keep employees safe 2. Respond and allocate 7. Open to new opportunities resources to customers' partnerships and M&A needs Storebrand 6. Keep growing the core We're in this together 3. Operations are with the rest of society running close to normal 5. High degree
Slide 4: Update on Dividend, AGM and CMD in light of COVID-19
Update on Dividend, AGM and CMD in light of COVID-19 ▪ The Board withdraws the proposed dividend to the AGM. ▪ Pronounced expectation from regulator that dividends are suspended. Dividend ▪ Going forward, the Board reaffirms its commitment to return capital to shareholders in accordance with dividen
Slide 5: Our strategy: A compelling combination of self-funding growth and capital return
Our strategy: A compelling combination of self-funding growth and capital return from maturing guaranteed back-book 1 A B C D Asset manager with Build a world class Uniquely positioned in Leading position strong competitive Savings business growing retail savings Bolt-on M&A Occupational Pension pos
Slide 6: Strong growth y/y despite Q1 market turmoil
Strong growth y/y despite Q1 market turmoil Unit Linked Asset management +10% +14% 210 Reserve growth in local 829 191 currency: 729 ▪ Growing alternatives with successful €500mn ▪ 5% growth in Norway closing of Cubera IX ▪ 1% growth in Sweden ▪ Positive currency effect Q1 2019 Q1 2020 …despite mark
Slide 7: Premium and net flow development in pension savings
Premium and net flow development in pension savings Quarterly premium income, Unit Linked (NOK bn) Unit Linked flow (NOK bn) +19 % 3.3 5.0 5.0 220 4.2 -1.3 12.4 210 -29.1 AuM Premium Net transfers Claims/ Asset return Other/FX AuM 2019 Q1 2020 Q1 31.12.2019 income pension 31.03.2020 payments Net flo
Slide 8: Key figures
Key figures Group Result development1 Earnings per share2 Financial items and risk result life Operating profit MNOK Special items 1.68 Performance related result 1,026 730 700 1.26 1.21 1.22 579 319 202 105 114 251 0.82 546 568 635 456 265 -18 -44 -50 -49 -588 -11 -334 Q1 2019 Q2 2019 Q3 2019 Q4 20
Slide 9: Movement from Q4 2019 to Q1 2020
Movement from Q4 2019 to Q1 2020 Group Storebrand Group Solvency Ratio +174 % +17 % +172 % -1 % -3 % +5 % +155 % +1 % +1 % +149 % +19 % +5 % -19 % -1 % +7 % -13 % -20 % Q4 2019 Model and UFR Interest Credit Volatility Equity Equity Risk Bank Earnings Dividend Q1 2020 No Q1 2020 Transitionals Q1 2020
Slide 10: SII position Storebrand Group
SII position Storebrand Group Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 176 172 2 17 SII-margin Q1 155 17 172 174 Interest 155 rates -50bp 140 34 174 Interest rates +50 bp 166 1 167 Q4 2019 Q1 2020 Transitional rules SII standard model Equity -25% 145 23 168 Key take
Slide 11: Rating migration would have limited impact because of high asset quality
Rating migration would have limited impact because of high asset quality and relativly low credit duration Rating migration scenarios Estimated impact on solvency ratio (%) SII Q1 2020 172% 25% of bonds one notch down 166% 50% of bonds one notch down 161% 11 1 The analysis show the impact all else e
Slide 12: Storebrand Group
Storebrand Group Group Profit1 Q1 Full year NOK million 2020 2019 2019 Fee and administration income 1 349 1 215 5 308 Insurance result -71 245 1 005 Operational cost -1 024 -929 -4 015 Operating profit 254 531 2 298 Financial items and risk result life -588 202 739 Profit before amortisation -334 7
Slide 13: Storebrand Group
Storebrand Group Group Profit1 Q1 Full year NOK million 2020 2019 2019 Fee and administration income 1 349 1 215 5 308 Insurance result -71 245 1 005 Operational cost -1 024 -929 -4 015 Operating profit 254 531 2 298 Financial items and risk result life -588 202 739 Profit before amortisation -334 7
Slide 14: Storebrand Group
Storebrand Group Group Profit1 Q1 Full year NOK million 2020 2019 2019 Fee and administration income 1 349 1 215 5 308 Insurance result -71 245 1 005 Operational cost -1 024 -929 -4 015 Operating profit 254 531 2 298 Operating profit adjusted for performance related income and costs2 Q1 Full year NO
Slide 15: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Profit Q1 Full year NOK million 2020 2019 2019 Fee and administration income 1 043 896 3 996 Operational cost -669 -615 -2 621 Operating profit 375 281 1 375 Financial items and risk result life -98 9 -11 Profit before amortisation 276 290 1 364 Profit per product li
Slide 16: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Profit Q1 Full year NOK million 2020 2019 2019 Fee and administration income 1 043 896 3 996 Operational cost -669 -615 -2 621 Operating profit 375 281 1 375 Operating profit adjusted for performance related income and costs1 Q1 Full year NOK million 2020 2019 2019 B
Slide 17: Savings (non-guaranteed) - strong growth
Savings (non-guaranteed) Savings - strong growth Reserves and premiums Unit Linked Comments1 5.0 4.6 4.2 4.2 4.2 ▪ 19% growth in UL premiums 220 210 207 ▪ 10% growth in UL reserves 198 191 BNOK ▪ 14% growth in assets under management Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 ▪ Stable interest margin i
Slide 18: Insurance
Insurance Insurance Profit Q1 Full year NOK million 2020 2019 2019 Insurance premiums f.o.a. 1 019 948 3 909 Claims f.o.a. -1 090 -703 -2 904 Operational cost -175 -150 -648 Operating profit -246 95 357 Financial result -22 8 83 Profit before amortisation -268 103 439 Profit per product line Q1 Full
Slide 19: Insurance – reserve strengthening
Insurance – reserve strengthening Insurance Combined ratio Comments Combined ratio and results Claims ratio Cost ratio Combined ratio 124% ▪ 124% combined ratio 2019 due to reserve strengthening for contracts with disability coverage 90% 96% 89% 89% ▪ Good cost control with stable 17% cost ratio 107
Slide 20: Guaranteed pension
Guaranteed pension Guaranteed Profit Q1 Full year NOK million 2020 2019 2019 Fee and administration income 349 361 1 475 Operational cost -202 -186 -819 Operating profit 147 174 657 Risk result life & pensions -26 61 215 Net profit sharing -26 13 157 Profit before amortisation 95 249 1 029 Profit pe
Slide 21: Guaranteed pension - robust buffer situation
Guaranteed pension Guaranteed - robust buffer situation Reserves guaranteed products Comments 261 262 264 263 272 32 33 33 33 30 ▪ Result dampened by disability reserve strengthening 142 ▪ Last large Norwegian DB contract converted to BNOK 136 137 137 137 Hybrid plan, increases Paid up policies 12 1
Slide 22: Other
Other1 Other Profit Q1 Full year NOK million 2020 2019 2019 Fee and administration income 13 14 51 Operational cost -35 -33 -143 Operating profit -22 -19 -91 Financial items and risk result life -416 111 296 Profit before amortisation -437 91 205 Profit per product line Q1 Full year NOK million 2020
Slide 23: Appendix
1. Group Liquidity Appendix 2. Term structure Debt 3. Asset allocation shareholder exposed assets 23
Slide 24: Strong Group IFRS equity and capital structure – reduced financial leverage
Strong Group IFRS equity and capital structure – reduced financial leverage Group equity (NOK bn) Group capital structure2 42,323 43,163 40,821 34,090 35,258 32,873 33,398 32,567 27,637 27,250 24,741 33,398 34,090 32,873 (79%) (79%) 25,120 27,637 (81%) 20,175 24,795 25,748 24,741 (75%) (77%) (74%) (
Slide 25: Strong liquidity and low leverage
Strong liquidity and low leverage Net liquidity ratio Storebrand ASA (holding) 10% 10% ▪ Proceeds from subsidiaries have been used to pay dividends, reduce debt in the holding company -3% 0% and increase the liquidity buffer -5% -4% -8% -9% -9% -9% -13% -11% -12% ▪ Holding company net liquidity rati
Slide 26: Group Liquidity NOK bn
Group Liquidity NOK bn 6.271 2.2991 3.972 1.300 2.672 Liquidity Undrawn RCF Liquidity inc RCF Debt Financed Equity financed Total liquidty inc RCF 1 Revolving Credit Facility of EUR 300 Million, exchange rate 11.494 applied 26
Slide 27: Term structure debt
Term structure debt Term structure sub-debt Storebrand Livsforsikring1 (bn NOK) Term structure senior debt Storebrand ASA (bn NOK) 3.8 Perpetual Non- perpetual 2.2 1.1 1.1 0.8 0.9 0.8 0.5 1.1 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 1 EUR 300 Million. SEK 750 Million 1,0 BN, 1,0 B
Slide 28: Asset allocation shareholder exposed assets (1/2) – Asset classes
Asset allocation shareholder exposed assets (1/2) – Asset classes Guaranteed Pension1 Other: Company Portfolios Insurance Storebrand Norway Sweden SPP Storebrand ASA Livsforsikring AS Investment portfolio exposure Equity 4% 9% 0% 0% 0% 3% Fixed income M2M 12 % 74 % 59 % 96 % 97 % 25 % Fixed income a
Slide 29: Asset allocation shareholder exposed assets (2/2) – Fixed income portfolio ratings and duration
Asset allocation shareholder exposed assets (2/2) – Fixed income portfolio ratings and duration Guaranteed Pension1 Other: Company Portfolios Insurance Storebrand Norway Sweden SPP Storebrand ASA Livsforsikring AS Total bond split by rating AAA 32 % 48 % 34 % 37 % 25 % 24 % AA 23 % 21 % 17 % 37 % 17
Slide 30: Q&A
Q&A Please use the provided form in the webcast or follow the operator's instructions to ask questions in the conference call Group CEO Group CFO Head of Strategy & Finance Head of IR Odd Arild Grefstad Lars Aa. Løddesøl Kjetil R. Krøkje Daniel Sundahl 30
Slide 31: Investor Relations contacts
Investor Relations contacts Lars Aa. Løddesøl Group CFO lars.loddesol@storebrand.no +47 9348 0151 Kjetil R. Krøkje Group Head of Finance, Strategy and M&A kjetil.r.krokje@storebrand.no +47 9341 2155 Daniel Sundahl Head of Investor Relations and Rating daniel.sundahl@storebrand.no +47 9136 1899 This