Axa Sa · EURONEXT:CS
Axa Sa — FY2014 Earnings Presentation
121 slides from Axa Sa's earnings presentation, Feb 25, 2015
Slide 1: AXA Full Year 2014 Earnings Presentation
AXA FULL YEAR 2014 EARNINGS Presentation February 25, 2015
Slide 2: Forward-looking statements
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and
Slide 3: Table of Contents
TABLE OF CONTENTS INTRODUCTION & HIGHLIGHTS PAGE A4 Henri de Castries, Chairman & CEO FY14 FINANCIAL PERFORMANCE PAGE A18 Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO CONCLUDING REMARKS PAGE A47 Henri de Castries, Chairman & CEO A3 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 4: Introduction & highlights
Introduction & highlights Henri de Castries, Chairman & CEO
Slide 5: Our 2014 journey
Our 2014 journey DELIVERING – earnings growth in line with Ambition AXA DIVIDEND – growth boosted by a higher payout ratio DISCIPLINE – in operations and investments, for sustainable growth DIGITAL – fostering innovation and transforming for the future A5 | Full Year 2014 Earnings | Presentation | F
Slide 6: DELIVERING: Revenues and Earnings growth
DELIVERING: Revenues and Earnings growth +3% +8% Revenues Underlying Earnings growth growth In Euro billion In Euro billion 92.0 5.1 91.2 4.7 FY13* FY14 FY13 FY14 Change is on comparable basis Change is at constant Forex * Comparative information related to 2013 was restated for the retrospective ap
Slide 7: DELIVERING: Across all business lines
DELIVERING: Across all business lines FY14 FY14 Activity growth Underlying Earnings growth APE Continued resilience to low Life & Savings +6% +14% rates Revenues Or +13% Property & Casualty assuming +1% +2% normalized1 level of Nat Cat Net inflows Euro Excluding impact Asset Management from AXA Priv
Slide 8: DELIVERING: Growth in Adjusted Earnings and Net Income
DELIVERING: Growth in Adjusted Earnings and Net Income Adjusted Earnings Net Income In Euro billion In Euro billion +7% +12% 5.5 Including Euro 5.2 0.4 5.0 - 0.3 billion impairment of 0.4 4.5 part of the value of RESO FY13 FY14 FY13 FY14 Net realized capital gains Changes are at constant Forex A8 |
Slide 9: DELIVERING on Ambition AXA
DELIVERING on Ambition AXA UNDERLYING EARNINGS PER SHARE GROUP OPERATING FREE CASH FLOWS In Euro per share In Euro billion 5.2 5.5 Ambition Ambition 4.7 1.95 AXA 2010- 4.2 AXA 2011- 1.85 1.69 2015 2015 1.57 1.57 CAGR cumulative +5% Euro to 24 billion FY10 FY11 FY12 FY13 FY14 +10% FY11 FY12 FY13 FY14
Slide 10: DIVIDEND: Strong growth boosted by a higher payout ratio
DIVIDEND: Strong growth boosted by a higher payout ratio Dividend per share In Euro +17% 0.95 Payout ratio 0.81 40% 45% FY13 FY14 FY13 FY14 Dividend policy Long-term guidance unchanged Dividend Yield Payout ratio of 40-50% of Adjusted Earnings 4.0% 4.9% net of undated debt interest charges Based on
Slide 11: DISCIPLINE: Reshaping the Life & Savings product offer
DISCIPLINE: Reshaping the Life & Savings product offer Leading to higher capital efficiency Improved business mix and profitability APE In Euro billion NBV margin 6.5 12% +12pts 5.8 34% Mutual funds & other 13% 22% 35% Unit-Linked 31% FY10 FY14 published 15% Payback period G/A1 Savings 25% In years
Slide 12: DISCIPLINE: Property & Casualty profitable growth
DISCIPLINE: Property & Casualty profitable growth Growth in revenues While improving profitability Current year combined ratio In Euro billion +2% CAGR -5 points 29.5 102.6% 97.6% 27.4 27.8% 26.0% Expense ratio 74.8% 71.5% Loss ratio FY10 FY14 FY10 FY14 Changes are on a reported basis A12 | Full Yea
Slide 13: DISCIPLINE: Asset and Liability management
DISCIPLINE: Asset and Liability management Limited earnings sensitivity to low interest rates - benefiting from on-going management actions Assumed Estimated per annum impact reinvestment yield on Underlying Earnings* Ca. NOVEMBER 2014 2.4% Euro -0.1 billion FEBRUARY 2015 Additional ca. (POST ECB AN
Slide 14: DISCIPLINE: Balance sheet management
DISCIPLINE: Balance sheet management Economic Solvency1 Debt Gearing 28% 206% 26% 26% 199% 201% 24% 24% 172% 176% FY10 FY11 FY12 FY13 FY14 FY10* FY11* FY12* FY13* FY14 All ratios adjusted for subsequent year dividend payment * Published A14 | Full Year 2014 Earnings | Presentation | February 25, 201
Slide 15: DISCIPLINE: 2010-2014 Capital Allocation
DISCIPLINE: 2010-2014 Capital Allocation 1 Performed annual capital allocation and portfolio reviews, which led to Euro 8.91 billion of disposals since 2010 2 Less than Euro 1 billion spent per year on average for acquisitions since 2010, funded from disposals in line with our commitment 3 Reallocat
Slide 16: DISCIPLINE: on track to deliver cost saving
DISCIPLINE: on track to deliver cost saving COST SAVINGS ON TRACK 2011-2014 contribution Euro 1.6 billion savings achieved over 4 years 1 Increase distribution efficiency 30% In Euro billion 1.9 1.6 2 0.3 Improve operational performance 42% 1.2 3 Offset increased IT investments with 10% Business as
Slide 17: DIGITAL – fostering innovation and transforming for the future
DIGITAL – fostering innovation and transforming for the future Anticipating the evolving needs of our clients Boosting innovation Enhancing sales Increasing interactions & data analytics through multi-access with customers 28% of new personal MyAXA 30 projects launched across motor contracts the gro
Slide 18: FY14 Financial performance
FY14 Financial performance Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO
Slide 19: FY14 Financial performance: Group earnings
FY14 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A19 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 20: Underlying Earnings (1/2)
UNDERLYING EARNINGS (1/2) UNDERLYING EARNINGS UNDERLYING EARNINGS BY SEGMENT In Euro million Constant +8% In Euro million FY13 FY14 Forex 5,060 4,728 Life & Savings 2,793 3,132 +14% Or +13% with normalized Nat Property & Casualty 2,105 2,158 +2% Cat level Or +12% excluding impact Asset Management 40
Slide 21: Underlying Earnings (2/2)
UNDERLYING EARNINGS (2/2) Of which Euro -43 Of which Euro -44 million Mostly due to Adverse impact million due to the loss of due to the loss of 9 months investments in mostly from JPY 9 months of MONY1 of AXA Private Equity Brand and Digital depreciation contribution contribution +28 +49 +4 +394 0
Slide 22: Adjusted Earnings
ADJUSTED EARNINGS ADJUSTED EARNINGS DETAILS OF ADJUSTED EARNINGS In Euro million +7% In Euro million FY13 FY14 5,503 5,162 Underlying Earnings 4,728 5,060 Of which Euro 0.1 billion on Net realized capital gains/losses 434 442 fixed income o/w realized capital gains 801 760 o/w net impairments -301 -
Slide 23: Net Income
NET INCOME NET INCOME DETAILS OF NET INCOME In Euro million In Euro million FY13 FY14 +12% Adjusted earnings 5,162 5,503 5,024 Change in fair value & Forex -317 225 4,482 o/w gains/losses on derivatives not eligible for hedge -306 226 accounting under IAS 39 o/w gains/losses on Forex economic hedges
Slide 24: FY14 Financial performance: Life & Savings
FY14 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A24 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 25: L&S – New business sales and margins by market
L&S – NEW BUSINESS SALES AND MARGINS BY MARKET High growth Mature markets Total In Euro million markets Total +6% +4% 6,477 6,335 5,265 5,341 New business + = +14% sales (APE) 1,070 1,136 FY13 FY14 FY13 FY14 FY13 FY14 0 pt +1 pt 48% 49% +1 pt 32% 35% 34% 31% New business margin + = FY13 FY14 FY13 FY
Slide 26: L&S – New business sales and margins by business line
L&S – NEW BUSINESS SALES AND MARGINS BY MARKET APE NBV Net Flows (Euro million) margin (Euro billion) Business line FY14 change FY14 FY13 FY14 APE growth impacted by repositioning of Swiss Group G/A Protection & Health 2,395 +3% 55% +5.2 +5.2 Life business mix initiated in 1Q14 G/A Savings 999 +11%
Slide 27: L&S – Pre-tax underlying earnings by business
L&S – PRE-TAX UNDERLYING EARNINGS BY BUSINESS TOTAL G/A PROTECTION G/A SAVINGS UNIT-LINKED LIFE & SAVINGS1 & HEALTH In Euro million In Euro million In Euro million In Euro million +17% 4,105 3,787 +10% 2,066 2,133 +13% +37% 1,055 1,048 840 640 FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 + Higher fees an
Slide 28: FY14 Financial performance: Property & Casualty
FY14 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A28 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 29: P&C – Revenues by segment
P&C – REVENUES BY SEGMENT TOTAL PERSONAL LINES In Euro million In Euro million +1% +1% 16,867 17,162 28,763 29,460 • Average price increase of +1.5% • Motor revenues up 1% • Non-motor revenues up 2% FY13* FY14 COMMERCIAL LINES In Euro million +2% • Average price increase of +2.2% 11,682 12,104 • Rev
Slide 30: P&C – Price increases by country and segment
P&C – PRICE INCREASES BY COUNTRY AND SEGMENT PERSONAL LINES COMMERCIAL LINES FY14 Price Revenue Price Revenues Revenue increase growth increase1 growth growth FY15 market pricing trends +2.3% +3.3% +6.0% +2.8% • Price increases in both Personal lines and France Commercial lines Germany +3.8% +1.1% 0
Slide 31: P&C – Revenues and margins by market
P&C – REVENUES AND MARGINS BY MARKET High growth In Euro million Mature markets Direct Total markets +1% o/w Asia +7% 29,460 +1% o/w MedLa +2% 28,763 21,996 22,378 Revenues + + = +2% +5% 4,520 4,721 2,247 2,361 FY13 FY14 FY13 FY14 FY13* FY14 FY13* FY14 99.7% -0.2 pt 98.7% 99.4% 98.2% 97.8% 97.5% 97.
Slide 32: P&C – Underlying earnings
P&C – UNDERLYING EARNINGS P&C UNDERLYING EARNINGS COMBINED RATIO In Euro million Current year Prior year reserve All-year combined ratio + developments combined ratio + Price increases + Lower claims frequency and expense ratio +2% - Higher nat cat charge and claims severity 2,158 2,105 97.8% 97.6%
Slide 33: FY14 Financial performance: Asset Management
FY14 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A33 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 34: AM – Assets under management
AM – ASSETS UNDER MANAGEMENT Average AUM and net flows in Euro billion Revenues in Euro million Average AUM Net flows Revenues +5% +4% 554 +19 539 1,363 1,151 +12 FY13 FY14 FY13 FY14 FY13 FY14 Average AUM and net flows in Euro billion Revenues in Euro million Average AUM Net flows Revenues +4% +5% +
Slide 35: AM – Underlying earnings
AM – UNDERLYING EARNINGS ASSET MANAGEMENT In Euro million In Euro million Or +12% excluding impact from AXA +20% excluding Private Equity impact from AXA disposal* -4% Private Equity disposal* 0% 216 211 400 403 FY13 FY14 In Euro million +5% 185 193 FY13 FY14 FY13 FY14 * Sale of a majority stake in
Slide 36: FY14 Financial performance: Balance sheet
FY14 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A36 | Full Year 2014 Earnings | Presentation | February 25, 2015
Slide 37: Asset & Liability Management (1/4)
ASSET & LIABILITY MANAGEMENT (1/4) Diversified and resilient investment portfolio FY14 Total General Account Limited yield dilution invested assets 84% in Fixed income Fixed income Assets duration as at December 31, 2014 Life & Savings 7.6 years Real estate Alternative investments1 Property & Casual
Slide 38: Asset & Liability Management (2/4)
ASSET & LIABILITY MANAGEMENT (2/4) Life & Savings General Account investment spreads and margin Inforce business New business Spread above Resilient investment Spread above guaranteed rates margin* guaranteed rate +160 bps 80 bps 80 bps Guidance: 3.7% 70-80 bps +230 bps 2.7% 2.1% 0.4% FY14 FY13 FY14
Slide 39: Asset & Liability Management (3/4)
ASSET & LIABILITY MANAGEMENT (3/4) Well diversified and high quality new investments New fixed income investments in FY141 Resilient new investment yield ~9% Below Investment ~4% Grade credit* FY14 investment rate on Fixed Income assets ABS for Life & Savings and Property & Casualty entities FY14 ~3
Slide 40: Asset & Liability Management (4/4)
ASSET & LIABILITY MANAGEMENT (4/4) Earnings sensitivity to current economic environment Assumed Estimated impact on Underlying Earnings reinvestment yield Per annum Per annum cumulative impactsa non-cumulative impacts ca. NOVEMBER 2014 2.4% €-0.1bn FEBRUARY 2015 Additional ca. (POST ECB AND SNB 2.0%
Slide 41: Shareholders' Equity
SHAREHOLDERS’ EQUITY Shareholders’ Equity Key drivers of change In Euro billion In Euro billion FY14 vs. FY13 65.2 + Change in net unrealized capital gains +7.1 - Dividends -2.0 52.9 + Forex movements net of hedging +2.4 + Net income for the period +5.0 + Subordinated debt +0.6 * - Change in pension
Slide 42: Stable debt gearing at 24%
STABLE DEBT GEARING AT 24% Net debt Debt ratios In Euro billion Changes in 2014 FY13 FY14 Undated subordinated debt 12.3 13.5 Debt Placement of Euro 1 billion 24% 24% Gearing undated subordinated notes in May, 2014 7.8 9.1 Subordinated debt Interest 10.2x 9.9x Reimbursement of Euro 2.1 Cover
Slide 43: Economic Solvency
ECONOMIC SOLVENCY Economic Solvency ratioa Key sensitivities Economic Solvency Ratio as of Dec 31, 2014 201% 206% 201% ratio Interest rate +100 bps 210% Interest rate -100 bps 184% 50.8 54.4 Equity markets +25% 206% In Euro billion 24.7 27.1 Equity markets -25% 196% Available capital Required capita
Slide 44: Strong increase in Group operating free cash flow and remittance ratio
STRONG INCREASE IN GROUP OPERATING FREE CASH FLOW AND REMITTANCE RATIO FY14 vs. FY13 +9% +21% growth In Euro billion 5.5 5.2 4.7 Of which Euro 0.7 billion 3.9 repayment of US loan in the form of cash up- streamed to AXA Operating Free Cash Flows SA Cash remitted from entities1 FY13 FY14 73% excludin
Slide 45: L&S operating free cash flows and internal rate of return
L&S OPERATING FREE CASH FLOWS AND INTERNAL RATE OF RETURN Life & Savings Operating Free Cash Flows Expected inforce New business investments Operating Free surplus generation (capital and cash strain) Cash Flows +10% Improvement in free cash flows mainly 4.3 4.5 +18% driven by improved +1% busines
Slide 46: Group Embedded Value
GROUP EMBEDDED VALUE Group Embedded Value 19% operating return on Group EV from strong In Euro billion performance across all business segments 47.2 Key drivers of change in Group EV 43.0 In Euro billion FY14 + • Operating return € +8.0 billion + • Forex & other € +0.8 billion - • Non-operating vari
Slide 47: Concluding remarks
Concluding remarks Henri de Castries, Chairman & CEO
Slide 48: Concluding remarks
Concluding remarks Key takeaways Going forward Topline growth with improved Well positioned to achieve business mix Ambition AXA plan in 2015 Earnings growth Continued resilience to low interest rates Disciplined ALM Accelerate cultural and Increased dividend operational transformation
Slide 49: Q&A FY14 Earnings
Q&A FY14 EARNINGS
Slide 50: Notes
NOTES Page A7 1. Assuming Natural catastrophes contributing 1 point of combined ratio in FY13 (vs. actual 0.8 point) and in FY14 (vs. 1.9 points) 2. Or 0% including the impact on Underlying earnings growth of the sale of a majority stake in AXA Private Equity completed on September 30, 2013 Page A9
Slide 51: Definitions
DEFINITIONS AXA’s FY14 financial statements have been examined by the Board of Directors on February 24, 2015 and are subject to completion of audit procedures by AXA’s statutory auditors. AXA's FY14 results have been prepared in accordance with IFRS and interpretations applicable and endorsed by th
Slide 52: Appendices
AXA FULL YEAR 2014 EARNINGS Appendices February 25, 2015
Slide 53: Forward-looking statements
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and
Slide 54: Table of Content
TABLE OF CONTENT BUSINESS OVERVIEW B4 GROUP B9 LIFE & SAVINGS B13 PROPERTY & CASUALTY B29 ASSET MANAGEMENT B35 BALANCE SHEET B38 EMBEDDED VALUE AND CASH FLOWS B64 B3 | Full Year 2014 Earnings | Appendices | February 25, 2015
Slide 55: Business overview
Business overview
Slide 56: Life & Savings | Scope overview
LIFE & SAVINGS | Scope overview Global footprint Well balanced business mix FY14 APE by geography FY14 APE by business Unit-Linked G/A Protection & Health MedLA1 35% 37% 9% NORCEE2 France Mutual Funds & 14% 24% other G/A Savings 12% UK 15% 11% Total: Euro 6,477 million US 21% Strong proprietary netw
Slide 57: Property & Casualty | Scope overview
PROPERTY & CASUALTY | Scope overview Global footprint Strong presence in Motor FY14 Revenues by geography FY14 Revenues by business Health 11% Workers’ Asia compensation 3% 5% Other1 Motor 1% Property 42% 23% Direct business unit 8% France 20% Switzerland Liability 9% Construction 7% 2% Other UK & 9
Slide 58: AXA's footprint in high growth markets
AXA’S FOOTPRINT IN HIGH GROWTH MARKETS Life & Savings Property & Casualty FY14 APE by geography FY14 Revenues by geography Poland Hong Kong Other 4% 7% 3% Ukraine Czech Republic 1% 3% Mexico Malaysia Philippines 5% 5% Mexico 3% 31% Singapore Singapore 5% Hong Kong 5% 45% Colombia China 8% 8% Morocco
Slide 59: Asset Management | Scope overview
ASSET MANAGEMENT| Scope overview Complementary business models • Multi-expert model: structured by “Expertise” • Risk-reducing, return-seeking, diversifying • Expertise in fixed income, equities, strategies and customized solutions PRODUCT quantitative equities • Expertise in actively managed equity
Slide 60: Group
Group
Slide 61: Revenues
REVENUES Revenues by segment Change on a Change on a In Euro million FY13 FY14 reported comparable basis basis Life & Savings 55,331 55,345 0% +3% 1 Property & Casualty 28,763 29,460 +2% +1% Asset Management 3,461 3,326 -4% +4% International Insurance 3,143 3,292 +5% +3% Banking & Holdings 524 564 +
Slide 62: Underlying Earnings by geography
UNDERLYING EARNINGS BY GEOGRAPHY Underlying Earnings In Euro million Change on Change at FY13 FY14 a reported constant basis Forex Life & Savings 2,793 3,132 +12% +14% United States 559 760 +36% +37% France 708 768 +8% +8% 1 NORCEE 622 672 +8% +8% UK -12 28 na na Asia-Pacific (incl. Japan) 790 763 -
Slide 63: FY14 Key sensitivities
FY14 KEY SENSITIVITIES P&L Balance Sheet In Euro billion Impairments net of Change 1 in fair value Total impact in Net Net unrealized capital hedges through and Forex through Income (incl. Impact gains through through Adjusted Adjusted Earnings Net Income Earnings) Shareholders' Equity -25% -0.5 -0.
Slide 64: Life & Savings
Life & Savings
Slide 65: Life & Savings contents
LIFE & SAVINGS 1 REVENUES, NEW BUSINESS VOLUMES AND PROFITABILITY Page B15 2 UNDERLYING EARNINGS MARGIN ANALYSIS Page B16 3 UNDERLYING EARNINGS MARGIN ANALYSIS BY BUSINESS Page B22 4 FOCUS ON THE US Page B28 B14 | Full Year 2014 Earnings | Appendices | February 25, 2015
Slide 66: L&S | Revenues and net inflows
1 L&S | Revenues and net inflows FY14 L&S revenues by region L&S net inflows In Euro billion Net flows by country/region In Euro billion FY13 FY14 France +1.4 +2.5 MedLA NORCEE +0.6 +1.0 +10% 6.4 United States -1.8 -1.5 United Kingdom +0.4 +0.4 15.1 France +7% Asia Pacific (incl. Japan) +1.8 +1.6 Me
Slide 67: L&S | Underlying Earnings margin analysis
2 L&S | Underlying Earnings margin analysis Gross Margin Expenses In Euro million In Euro million FY 2014 Comp. FY 2014 Comp. 1 Change Change 1 Margin on revenues 2 4,735 +2% Acquisition expenses 3,873 -8% Margin on assets 5,335 +3% Admin. Expenses 2,852 +4% Technical margin 769 +13% VBI amortizatio
Slide 68: L&S | Margin on revenues
2 L&S | Margin Analysis Margin on revenues Details of margin on revenues Average margin on L&S revenues1 8.6% -0.1 pt -0.1 pt business mix Detail by product 0.0 pt country mix G/A Protection & Health: 14.5% G/A Savings: 1.9% Unit-Linked: 4.4% Mutual funds & other: 8.0% Margin on revenues 1 x Euro 4,
Slide 69: L&S | Unit-Linked management fees
2 L&S | Margin Analysis Unit-Linked management fees Details of margin on Unit-Linked assets Average management fees on Unit- Linked reserves 145 bps +1 bp Unit-Linked management 0 bp business mix +1 bp country mix fees x Euro 2,386 million +8% Margin on assets 1 Unit-Linked average reserves + Euro
Slide 70: L&S | Investment margin
2 L&S | Margin Analysis Investment margin Details of margin on General Account assets Unit-Linked management fees Euro 2,386 million +8% Average management fees on Margin on assets 1 + general account reserves Euro 5,335 million +3% 80 bps -3 bps General account -3 bps business mix 1. Includin
Slide 71: L&S | Technical margin
2 L&S | Margin Analysis Technical margin Details of technical margin Mortality & morbidity margin and other 1 Euro 1,324 million +49% Technical margin + Euro 769 million +13% GMxB Variable Annuity margin Euro -555 million n.a. (vs. Euro -217 million in FY13) In Euro billion o/w basis -128 o/w vo
Slide 72: L&S | Focus on gross technical margin
2 L&S | Margin Analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) In Euro million 1,324 FY14 mortality, morbidity and surrender margin evolution mainly explained by: 943 • Euro +0.3 billion in total in Japan and US, mainly due to non- repeat of unfavorab
Slide 73: L&S | FY14 Underlying Earnings by business
3 L&S | FY14 Underlying Earnings by business 1 Euro million FY13 FY14 % change on comp. basis G/A Protection & Health 2,066 2,133 +10% G/A Savings 640 840 +37% Unit-Linked 1,055 1,048 +13% Mutual funds & Other 26 85 n.a. Pre-tax Underlying Earnings 3,787 4,105 +17% Tax and Minority interest -994 -97
Slide 74: L&S | FY14 Margin analysis by business
3 L&S | FY14 Margin analysis by business G/A Protection Mutual Funds In Euro million G/A Savings Unit-Linked & Health & Other 9% Margin on 3,676 225 708 revenues % of GWP 80 bps Investment 876 1,579 107 margin of avge G/A reserves 145 bps Management 2,386 fees of avge UL reserves Technical 1,170 94
Slide 75: L&S | G/A Protection & Health
3 L&S | Margin Analysis by business G/A Protection & Health Technical result Net investment margin Comp. Comp. In Euro million FY14 1 In Euro million FY14 1 Change Change Protection & Health average Protection & Health GWP 25,438 +1% 150,905 +3% reserves x x Protection & Health Protection & Health 9
Slide 76: L&S | G/A Protection & Health combined ratio
3 L&S | Margin Analysis by business G/A Protection & Health – Details on Combined Ratio Combined ratio Expense ratio1 -0.9 pt Expense ratio deteriorated by 0.2 point mainly 95.6% 95.3% reflecting commercial efforts Expense 14.6% 14.4% Ratio Loss Loss ratio 81.0% 81.0% Ratio Loss ratio improved by 1.
Slide 77: L&S | G/A Savings
3 L&S | Margin Analysis by business G/A Savings In Euro million Comp. Comp. FY14 1 FY14 Change Change 1 G/A Savings G/A Savings 12,163 +14% 176,332 +2% Gross revenues Average reserves x x Margin on G/A Savings 1.9% -0.9 pt 90 bps +1 bp G/A Savings Investment spread Comp. FY14 Change 1 Margin on Tech
Slide 78: L&S | Unit-Linked
3 L&S | Margin Analysis by business Unit-Linked In Euro million Comp. Comp. FY14 FY14 change1 change1 Unit-Linked Gross Unit-Linked 16,178 0% 164,226 +7% revenues Average reserves x x Average margin on UL average 4.4% -0.1 pt 145 bps +1 bp UL revenues Management fees Comp. FY14 1 change Margin on Un
Slide 79: L&S | Focus on the US
4 L&S | Focus on the US US Variable Annuity GMxB Underlying Earnings In Euro million, net of DAC and tax1 FY122 FY13 FY14 Total Variable Annuity base fees & other, less expenses 270 338 2963 GMxB hedge margin -156 -50 -74 o/w Basis -16 -1 -26 o/w Volatility -59 -15 -7 o/w Interest rates, credit spre
Slide 80: Property & Casualty
Property & Casualty
Slide 81: P&C | Revenues and net new contracts
P&C | Revenues and net new contracts FY14 P&C revenues by region P&C personal net new contracts In Euro billion In thousands +25 Direct +5% +396 +506 France Asia 2.4 +3% +311 +7% 0.9 6.0 +444 +213 -18 MedLA 7.4 UK & Ireland -1% 4.0 +2% Of which -559k relating -814 to the exit from NORCEE partnership
Slide 82: P&C | Underlying Earnings analysis
P&C | Underlying Earnings analysis Net technical result Net investment income In Euro million In Euro million FY14 Change* FY14 Change* Revenues 29,460 +1% Average P&C assets 58,418 +2% x 3 x Combined ratio1 (in %) 96.9% +0.4 pt Average Asset Yield 3 3.7% +0.1 pt 1. Combined ratio calculated based o
Slide 83: P&C | Details on Combined Ratio
P&C | Details on Combined Ratio Combined ratio Expense ratio roll-forward 26.5% 26.0% -0.3pt -0.2pt 96.6% 96.9% Expense 26.5% 26.0% FY13 Acq. expenses Adm. Expenses FY14 Ratio -0.5 pt change on a comparable basis Loss ratio roll-forward Loss 70.1% 70.9% +0.6pt 70.9% Ratio 70.1% -0.8pt +1.1pts FY13 F
Slide 84: P&C | Focus on reserve developments
P&C | Focus on reserve developments Prior year reserve development level (in % of gross earned premiums) 5.4% 5.4% 3.1% 2.7% 1.4% 1.7% 0.9% 1.2% 1.2% 0.3% 0.6% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Reserving ratio (Net technical reserves/Net earned premiums) 193% 193% 186% 194% 187%
Slide 85: P&C | Details on current year loss ratios
P&C | Details on current year loss ratios Personal Motor Personal non motor +0.4pt 74.6% +0.5pt 74.0% +0.6pt 64.1% -0.2pt +0.8pt 63.2% -0.1pt -1.7pts -0.7pt FY13 Nat Cat Price effect Frequency & Other1 FY14 CY FY13 Nat Cat Price effect Frequency & Other1 FY14 CY CY loss ratio severity loss ratio CY
Slide 86: Asset Management
Asset Management
Slide 87: Asset Management | Underlying Earnings
ASSET MANAGEMENT | Underlying Earnings Details of Asset Management margin analysis Margin* Expenses* In Euro million In Euro million FY14 Change** FY14 Change** Asset Management Asset Management fees 3,050 +6% 2,215 -1% expenses Distribution revenues 671 -1% Investment result -19 +87% Distribution e
Slide 88: Asset Management | Revenues and AUM
ASSET MANAGEMENT | Underlying Earnings Details on Asset Management revenues Average Assets under Management 31 bps 0 bp Asset Management fees x Euro 2,325 million +8% o/w perfomance fees Euro 97 million ( -15% ) Average Assets under Management o/w research fees Euro 362 million ( +8% ) Euro 925 bi
Slide 89: Balance Sheet
Balance Sheet
Slide 90: Balance Sheet contents
BALANCE SHEET 1 GENERAL ACCOUNT INVESTED ASSETS PAGE B40 1.1 Government bonds & related B41 1.2 Corporate bonds B42 1.3 CDS B45 1.4 ABS B46 1.5 Equity B50 1.6 Real Estate B52 1.7 Hedge Funds B53 1.8 Private Equity B54 1.9 Mortgage loans B55 2 FOCUS ON NET UNREALIZED CAPITAL GAINS Page B56 2.1 Focus
Slide 91: General account invested assets
1 GENERAL ACCOUNT INVESTED ASSETS Invested assets (100% ) FY13 % FY14 % in Euro billion Changes in asset mix Fixed income 388 83% 437 84% Mark to market: positive impact on fixed income assets from interest o/w Govies and related 210 45% 246 47% rates decrease o/w Corporate bonds 144 31% 154 29% Net
Slide 92: Government bonds and related
1.1 GOVERNMENT BONDS AND RELATED Breakdown by segment Breakdown by segment Other2 Ireland 1% 2% P&C The Netherlands 11% Other 2% 7% Supranational Institutions 3% L&S Austria France 3% 88% 21% US 7% Spain Gross1 unrealized capital 6% gains and losses Switzerland Germany In Euro billion 7% 14% 43.9 It
Slide 93: Corporate bonds
1.2 CORPORATE BONDS Breakdown by industry Breakdown by segment Other2 Technology 2% 2% P&C Basic materials 5% 15% Other 2% Energy 6% L&S 83% Consumer cyclical Banks 7% 31% Industrial Gross1 unrealized capital 7% gains and losses Utilities In Euro billion 9% 8.9 Communications 9% Consumer non-cyclica
Slide 94: Focus on banking corporate bonds
1.2 FOCUS ON BANKING CORPORATE BONDS As of December 31, 2014 Gross market Senior debt Subordinated debt value Total Non Lower Upper in Euro billion Secured Tier 1 Preferred secured Tier 2 Tier 2 United States 0.3 8.5 1.1 0.0 0.1 0.0 10.1 France 3.1 3.5 1.1 0.0 0.0 0.0 7.7 UK 1.1 2.8 0.4 0.0 0.0 0.0
Slide 95: Corporate bonds breakdown by country and rating
1.2 CORPORATE BONDS BREAKDOWN BY COUNTRY AND RATING (including CDS) P = Participating NP = Non-participating in Euro billion France US Belgium Germany Switzerland Japan Other1 Total As of Dec. 31, 2014 P NP P NP P NP P NP P NP NP P NP P NP AAA 1.7 0.7 0.1 0.3 0.1 0.1 3.9 0.6 0.9 0.3 0.4 0.1 0.3 6.8
Slide 96: Focus on CDS
1.3 FOCUS ON CDS CDS mainly used as alternative to investment grade corporate bonds • Net CDS exposure excluding NBT strategy mainly corresponds to an “overlay” strategy (synthetically replicate corporate bonds by selling CDS on top of government bonds to enhance return) • NBT strategy: buy credit d
Slide 97: Asset backed securities
1.4 ASSET BACKED SECURITIES Breakdown by asset type1 Breakdown by rating Mortgage-backed Other asset-backed US Subprime, Alt-A & NC RMBS NR/Equity 10% 6% AAA Prime Residential Below 51% 4% investment grade CLO Commercial MBS 16% 66% 9% BBB 5% CDO 6% A Consumer ABS2 8% AA 5% 14% Total: Euro 9 billion
Slide 98: Credit risk management: ABS investments
1.4 CREDIT RISK MANAGEMENT: ABS INVESTMENTS Group ABS exposure decreased mainly driven by: Net outflows of Euro 1.6 billion, comprised of Euro 4.6 billion of redemptions and sales, partially offset by Euro 3.0 billion of purchases, mainly on CLOs and reinvestment of matured positions A positive mark
Slide 99: Focus on mortgage-backed securities
1.4 FOCUS ON MORTGAGE-BACKED SECURITIES Euro million Prime Residential US Subprime As of December 31, 2014 Commercial MBS UK & NC RMBS US Alt-A RMBS MBS RMBS (unless indicated) % of par @ 31/12/11 80% 59% 57% 45% 27% % of par @ 31/12/12 88% 61% 71% 52% 52% % of par @ 31/12/13 93% 85% 78% 63% 66% % o
Slide 100: Focus on CDO
1.4 FOCUS ON CDO Euro million High Other Investment grade Structured Finance Total As of December 31, 2014 Yield CDOs AAA - - - - - AA - 9 - 3 12 A 251 - - 1 252 BBB 41 - - 2 42 Below investment grade 0 11 22 15 48 Equity / Non rated 67 11 3 113 194 Total exposure 359 31 25 134 549 Shareholders’ exp
Slide 101: Listed equity portfolio overview
1.5 LISTED EQUITY PORTFOLIO OVERVIEW Breakdown by geography Breakdown by segment Other2 3% P&C Rest of the World 13% 23% Other Eurozone France L&S countries 21% 9% 75% Belgium 6% Gross1 unrealized capital gains and losses US UK 23% In Euro billion 5% Japan 3.4 3.2 5% Switzerland 8% Germany 10% Total
Slide 102: Shareholders' exposure to listed equity
1.5 SHAREHOLDERS’ EXPOSURE TO LISTED EQUITY Estimated shareholders’ exposure to equity (In Euro billion) FY13 FY14 18 18 7 7 Gross Group share Gross Group share nominal 100% net of hedge, nominal 100% net of hedge, tax & PB tax & PB B51 | Full Year 2014 Earnings | Appendices | February 25, 2015
Slide 103: Real estate investments
1.6 REAL ESTATE INVESTMENTS Defensive portfolio with good performance over the long term Key indicators Market value FY14 market value by country Split by type (in Euro billion) 9% 7% Others France Switz. Germany Belgium 261 US 8% 30% Office ~ 47% ~ 40% ~ 66% ~ 77% France Germany Residential ~ 10% ~
Slide 104: Hedge fund investments
1.7 HEDGE FUND INVESTMENTS Diversified portfolio of hedge funds Key indicators Market value Exposure and concentration risk (in Euro billion) • Management of diversified funds of hedge funds and Alternative Credit 5 • Top 10 fund managers in diversified portfolios represent ~55% of market value • Fo
Slide 105: Private equity investments
1.8 PRIVATE EQUITY INVESTMENTS Diversified portfolio built over the long run Key indicators Market value Breakdown by geography Breakdown by expertise (in Euro billion) 3% 6% 7% 6% Other Infrastructure Venture Japan 8 13% Private debt 32% US 59% Europe FY14 73% Buy-out Environment AXA portfolio retu
Slide 106: Mortgage loans & other
1.9 MORTGAGE LOANS & OTHER Low risk mortgage loan portfolio Key indicators Market value FY14 market value by country2 (in Euro billion) 6% Residential 10% Other 271,2 94% 88% Residential Very secured Commercial 10% 26% portfolio: Germany 12% Commercial France FY14 default rate 0.05% 53% Residential
Slide 107: Focus on net unrealized capital gains
2 FOCUS ON NET UNREALIZED CAPITAL GAINS Balance sheet net unrealized Off balance sheet net unrealized capital gains1 capital gains In Euro billion In Euro billion 15.3 2.0 2.4 Equities2 3 Real Estate and loans 8.4 Corporate bonds Government bonds 4.1 1.9 3.4 and related 1.5 10.9 5.0 FY13 FY14 FY13 F
Slide 108: Exposure to Eurozone peripheral countries government bonds
2.1 FOCUS ON EXPOSURE TO EUROZONE PERIPHERAL COUNTRIES GOVERNMENT BONDS Exposure by issuer Gross book value Gross book value Gross book value Gross market value in Euro billion December 31, 2013 June 30, 2014 December 31, 2014 December 31, 2014 Italy 19.1 19.5 19.4 23.2 Spain 10.7 11.2 11.3 14.1 Ire
Slide 109: Asset & Liability Management (1/2)
3 ASSET & LIABILITY MANAGEMENT (1/2) L&S General Account investment spreads and margin Inforce business New business Spread above Resilient investment Spread above guaranteed rates margin1 guaranteed rate +160 bps 80 bps 80 bps Guidance: 3.7% 70-80 bps +230 bps 2.7% 2.1% 0.4% FY14 FY13 FY14 FY14 Yie
Slide 110: Asset & Liability Management (2/2)
3 ASSET & LIABILITY MANAGEMENT (2/2) L&S General Account investment spreads for main entities Inforce New business 3.9% 310bps 2.4% 240bps • Average G/A reserves: Euro 100 billion • G/A Savings new business sales with France 0.8% 0.0% long term guarantees stopped in 1998 FY14 FY14 40bps 120bps • Ave
Slide 111: Solvency I
4 SOLVENCY I Solvency I ratio +49pts -10pts -15pts 233% 266% 221% +20pts 182% 188% FY10 FY11 FY12 FY13 Underlying URGL Dividend FX & other FY14 Earnings paid in 2015 Solvency I – Available and Required capital Solvency I ratio - Sensitivities Solvency I 221% 266% ratio Ratio as of Dec 31, 2014 266%
Slide 112: Solvency I AFR reconciliation to shareholders' equity
4 SOLVENCY I AFR RECONCILIATION TO SHAREHOLDERS’ EQUITY Solvency I Available Financial Resources1 (AFR) In Euro billion FY14 shareholders’ equity 100% 68 Intangibles -27 Admitted subordinated debt2 +4 Locally admitted assets +2 Dividend to be paid in 2015 -2 Real estate3 +9 Pension benefit +4 Other4
Slide 113: Economic capital model
4 ECONOMIC CAPITAL MODEL Economic Solvency ratio1 FY14 Economic capital by geography Holdings & Other 206% 201% 14% France UK 25% 5% Asia Pacific NORCEE 54.4 12% 50.8 30% US 6% MedLA 27.1 8% 24.7 FY14 Economic capital by risk Operational risk 5% Market risk FY13 FY14 P&C risk 49% 17% Available capit
Slide 114: Net financial debt - Long-term maturities
5 NET FINANCIAL DEBT - Long-term maturities Net financial debt Contractual maturity breakdown In Euro billion 12.3 13.5 2.2 2.8 7.8 9.1 6.3 0.3 2.0 2.3 0.2 1.0 0.2 2015 2016 2017-2020 2021-2025 2026-2040 Undated 7.8 6.8 Economic maturity breakdown 2.4 1.6 Pre-financed by the placement of Euro 1 -4.0
Slide 115: Embedded Value and Cash Flows
Embedded Value and Cash Flows
Slide 116: Operating free cash flow and cash remittance by segment
OPERATING FREE CASH FLOW AND CASH REMITTANCE BY SEGMENT Operating Free Cash Flows Life & Savings 2.3 2.5 2.5 1.7 +9% 5.5 5.2 FY13 FY14 Remittance ratio 75% 99%2 2.5 Life & Savings 2.3 Operating Free Cash Flows Cash upstreamed from entities Property & Casualty1 2.4 2.5 1.7 1.9 Property & Casualty1 2.
Slide 117: Life & Savings Embedded Value
Life & Savings Embedded Value Required L&S In Euro billion EV = VIF + ANAV capital FY14 Life & Savings Free Cash Flow (included in ANAV) breakdown Opening (FY13) 47.9 27.8 20.1 14.7 In Euro billion +0.6 3.9 Modeling adj. and (0.7) (0.6) (0.1) (0.1) -1.2 2.5 scope -0.7 Existing business 3.1 (0.8) 3.9
Slide 118: Life & Savings Embedded Value key sensitivities
Life & Savings Embedded Value key sensitivities Impact on L&S Impact on L&S NBV EEV Key sensitivities In Euro In Euro In % In % million million Closing 2014 original amounts 2,220 100% 49,535 100% Sensitivity to equity markets 10% increase +69 +3% +1,606 +3% 10% decrease -68 -3% -1,732 -3% Sensitivi
Slide 119: Life & Savings – IRR and new business investments
Life & Savings – IRR and new business investments FY13 FY14 New business New business In Euro million APE NB IRR1 APE NB IRR1 investments2 investments2 France 1,431 9.7% (543) 1,584 9.7% (556) US 1,322 16.4% (325) 1,355 24.2% (165) UK 647 6.0% (173) 704 6.3% (167) Japan 504 12.4% (296) 361 11.9% (22
Slide 120: Life & Savings – operating Free Cash Flows
Life & Savings – operating Free Cash Flows FY13 FY14 In Euro million Expected New business L&S Expected New business L&S inforce surplus operating free inforce surplus operating free investments 1 investments 1 generation cash flows generation cash flows France 1,179 (543) 635 1,306 (556) 750 US2 74
Slide 121: Life & Savings Free Cash Flows emergence
Life & Savings Free Cash Flows emergence from inforce and new business Expected undiscounted cash Expected undiscounted cash flows flows from 2014 inforce* from 2014 New Business In Euro billion In Euro billion 25 2.0 1.5 20 1.0 0.5 15 0.0 2014 1-5 6-10 11-15 16-20 21-25 26-30 31-35 -0.5 10 -1.0 5 -