Allianz SE · XETR:ALV
Allianz — Q1 2005 Earnings Presentation
44 slides from Allianz's earnings presentation, May 13, 2005
Slide 1: Group financial results for the first quarter 2005
Helmut Perlet - CFO Allianz AG Group financial results for the first quarter 2005 Analysts’ conference call May 13, 2005
Slide 2: A successful start in 2005
A successful start in 2005 Highlights 3M 05 Result evolution (EUR m) ! Operating discipline remains key Operating profit Net income - Combined ratio at 92.1% +49.1% - Dresdner Bank reduces CIR and loan loss provisions - Asset Management CIR of 60.9% 1,830 +32.6% ! Growth1 in L/H (+10.9%) and Asset M
Slide 3: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 2
Slide 4: Double-digit growth in L/H and Asset Management
Double-digit growth in L/H and Asset Management (EUR bn) 3M total revenues1 Total growth (%) Internal growth2 (%) Total 3M04 -0.7 2.4 27.2 28.3 Total 3M05 3.8 5.1 0.6 AM 7.0 10.7 0.6 1.6 1.6 Banking -1.1 -0.5 10.8 11.8 L/H 9.6 10.9 14.2 14.2 P/C -0.2 1.0 3M 04 3M 05 1) All figures fully consolidated
Slide 5: Operational discipline remains key
Operational discipline remains key “Cost control” (in %) “Careful risk selection” P/C Expense ratio 3M 04 25.5 3M 05 25.6 135 L/H Statutory expense ratio 70.4% 100 66.5% 3M 04 9.2 3M 05 6.61 Dresdner Bank Operating CIR 3M 04 81.4 3M 05 80.4 AM Operating CIR 3M 04 3M 05 3M 04 3M 05 3M 04 66.9 Dresdne
Slide 6: Operating profit further improved
Operating profit1 further improved (EUR m) 3M 05 ∆3M 05/04 Comments 3M 05 ! P/C: underwriting discipline pays off: P/C 1,004 507 CR 92.1% (-3.7%-p) ! L/H: on track to achieve target L/H 357 -14 ! Dresdner Bank +24%: - headcount reduction " lower Banking 238 59 administrative expenses - IRU wind down
Slide 7: Income from ordinary activities drives result
Income from ordinary activities drives result (EUR m) 3M 04 3M 05 ∆ 3M 05/04 Operating profit 1,227 1,830 +49.0% Net capital gains1 826 723 -12.5% Impairments -108 -92 -14.8% Other -394 -373 -5.3% Less capital Profit before taxes, 1,551 2,088 +34.6% gains than minorities, goodwill previous year Good
Slide 8: Shareholders' equity increased by 12%
Shareholders’ equity increased by 12% (EUR m) Comments ! Impact from „All-in-one“ +12.0% transaction in 1Q 05: - treasury shares: EUR +1.5bn 33,633 - option premium Unrealized 30,0261 +3.0% 5,833 from warrant: EUR +0.2bn gains / losses 5,661 1,184 ! F/X-impact: EUR +0.5bn Current profit ! Excluding
Slide 9: Accounting changes
Accounting changes (EUR m) Effect on net income Effect on shareholders’ equity 3M 04 12M 04 12M 04 Result according to “old” accounting treatment (until 12/04) 675 2,199 30,828 Adjustments ! IFRS 2: share-based compensation -34 -123 -249 ! IAS 39: reversal of impairments, fair -24 -61 -553 value opt
Slide 10: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 9
Slide 11: P/C overview: selective underwriting pays off
P/C overview: selective underwriting pays off (EUR m) Operating profit ! XXX +102% ! “No claims” bonus and selective underwriting limit growth ! Loss ratio down 3.9%-p to 66.5% 1,004 despite increase in large claim activity and harsh winter 497 ! Focus on efficiency maintained, 3M 04 3M 05 expense r
Slide 12: P/C: moderate internal growth
P/C: moderate internal growth Gross premiums written drivers Gross premiums written (EUR bn) ! Continued focus on profitability, not Internal growth rate +1.0% volume ! “No claims” boni reduce premium income Total growth rate -1.4% ! Due to favorable claims development rates increase were not necess
Slide 13: P/C: combined ratio excellence maintained
P/C: combined ratio excellence maintained (in %) Combined ratio 3M 04 3M 05 Combined ratio Loss ratio SGD (German P/C Group) 86.9 87.2 12M Expense ratio -3.7%-p rolling Allianz AG1 91.4 92.6 95.8 92.8 92.3 92.1 AGF2 100.6 98.4 90.9 12MR 92.0% RAS Group Italy 94.2 93.9 Lloyd Adriatico 90.0 88.4 70.4
Slide 14: P/C: less harvesting
P/C: less harvesting (EUR m) Inv. result drivers ! Current yield2: - F/I: 1.1% 488 1,3571 (unchanged) 1,215 -41 -1 - Equity: 0.4% -104 (-0.1%-p) 873 ! Harvesting rate2,3 1.9% on equity portfolio value (3M 04: 3.9%) Current Realized Write-ups/ Trading Expenses Net investm. Net investm. income gains/
Slide 15: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 14
Slide 16: L/H overview: on track to achieve target
L/H overview: on track to achieve target (EUR m) Drivers Operating profit ! Use of growth opportunities in European -3.8% pension market (AZ growth in Europe: 11.0%) 371 357 ! Operating profit in line with expectations ! Increase of net income: - net impact from capitals gains and 3M 04 3M 05 impair
Slide 17: L/H: double-digit growth continues
L/H: double-digit growth continues Drivers of statutory premiums1 Statutory premiums (EUR bn) Strong life growth in core markets: Internal growth rate +10.9% ! Germany +17.8% Total growth rate 9.6% ! Italy +21.4% (recovery of bancassurance channel) 11.8 10.8 ! USA + 21.9% (strong demand for Premiums
Slide 18: L/H: investment result increased by EUR 472m
L/H: investment result increased by EUR 472m Before policyholder participation (EUR m) Inv. result drivers ! Current yield2: - F/I: 1.2% 1,244 3,8701 (unchanged) 3,781 - Equity: 0.4% -13 -52 -58 (-0.1%-p) 2,659 ! Harvesting rate2,3 3.5% on equity portfolio value (3M 04: 1.8%) Current Realized Write-
Slide 19: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 18
Slide 20: Dresdner Bank overview: on track to earn cost of capital
Dresdner Bank1 overview: on track to earn cost of capital (EUR m) Drivers Operating profit ! Operating profit improved by 24% +24.1% ! No restructuring charges in 2005 expected 216 ! Net income more than quadrupled 174 - after consolidation of Munich Re sale contribution to Group 3M 04 3M 05 result
Slide 21: Dresdner Bank: revenues slightly decreased
Dresdner Bank1: revenues slightly decreased (EUR m) Operating revenue drivers Operating revenues ! Operating revenues slightly below 1Q 2004 Internal growth rate2 -2.3% due to lower fee and commission income Total growth rate -2.9% ! Net interest income increased due to higher contributions from cre
Slide 22: Dresdner Bank: favourable cost development
Dresdner Bank1: favourable cost development (EUR m) Operating expense drivers Administrative expenses ! Administrative expenses 4.1% -4.1% below 1Q 04 ! Cost-income ratio further improved to 80.4% 1,355 1,300 -4.6% ! Further cost reduction, both in Personnel 849 personnel and non-personnel expenses
Slide 23: Dresdner Bank: risk profile further improved
Dresdner Bank1: risk profile further improved (EUR m) Net loan loss provision Risk elements -25.9% -39.4% 10,932 Potential problem 1,720 loans 135 6,629 100 1,095 Non-performing 9,212 loans 5,534 3M 04 3M 05 3M 04 3M 05 Coverage ratio2 54.0% 61.9% 1) Dresdner Bank contribution to Allianz’ Banking se
Slide 24: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 23
Slide 25: Asset Management overview: continued double-digit earnings growth
Asset Management overview: continued double-digit earnings growth (EUR m) Drivers Operating profit ! Strong net inflows (3rd party AuM EUR +28.3% +17bn) in 1Q 05 driven by PIMCO ! Strong 3rd party AuM growth of 6.7% 231 180 ! Operating revenues: internal growth +12.5%1 3M 04 3M 05 ! CIR further impr
Slide 26: Asset Management: further high net inflows
Asset Management: further high net inflows Third-party AuM (EUR bn) Client and asset mix Third-party AuM (as of 31/03/2005 = EUR 624bn) Third-party AuM (as of 31/12/2004) 585 Retail Institutional Σ Net inflows 17 Equity 11% 11% 22% Fixed Market effects -1 27% 49% 76% income F/X effects 23 Other 2% 0
Slide 27: Asset Management: strong revenues and cost control
Asset Management: strong revenues and cost control (EUR m) Drivers Operating cost-income ratio (in %) Operating revenues Internal growth rate +12.5%1 Total growth rate +8.6% -6.0%-p 591 544 67.2 66.9 67.5 3M 04 3M 05 61.5 60.9 56.8 Operating expenses Internal growth rate +2.2%1 Total growth rate -1.
Slide 28: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 27
Slide 29: Asset allocation: 4% asset growth
Asset allocation1: 4% asset growth (EUR bn, in %) Group asset allocation Asset allocation P/C Real estate Other Total 348 (in %) 363 (in %) 5.1 (5.2%) 1.6 (1.6%) Other 16 4.7 2 0.5 14 3.9 Equity Real estate 14 3.9 53 14.62 18.4 (19.0%) Equity 51 14.6 F/I 71.7 (74.1%) Total: EUR 96.7bn (3M 04: EUR 92
Slide 30: Shareholders' equity strengthened further
Shareholders’ equity strengthened further (EUR m) 1,696 68 33,6331 1,184 30,0261 487 172 Unrealized Unrealized 5.7 5.8 gains/losses (EUR bn) gains/losses (EUR bn) Sh. equity Currency Change in Net „All-in-one“ Other Sh. equity 01/01/2005 translation unrealized income transaction 31/03/2005 gains / l
Slide 31: Summary
Summary ! Successful start in 2005 ! Continued operating discipline clearly demonstrated by favorable combined ratio, cost- income ratios and loan-loss provisions ! Dresdner Bank on track to earn cost of capital ! Dynamic growth in Asset Management and L/H 30
Slide 32: On course to attain 2005 targets
On course to attain 2005 targets Focus on profitable growth: Group-wide revenue increase in line with 2004 P/C L/H Banking Asset Mgmt. Strong combined Operating profit Earn cost of 10% increase in ratio below 95% of at least capital operating profit1 EUR 1.5bn Caveats, e.g.: - Nat Cat development un
Slide 33: Additional information
Allianz (i) Additional information
Slide 34: Group: result by segments overview
Group: result by segments overview (EUR m) Asset Con- P/C L/H1 Banking Mgmt. solidation Total 3M 3M 3M 3M 3M 3M 3M 3M 3M 3M 3M 3M 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 Total revenues (EUR bn) 14.4 14.2 10.8 11.8 1.7 1.7 0.5 0.6 -0.2 0.0 27.2 28.3 Operating profit2 497 1,004 371
Slide 35: Breakdown of profit consolidations
Breakdown of profit consolidations (EUR m) Profit before taxes, minorities and goodwill amortization (3M 05) 28 416 233 262 Banking 155 53 L/H 101 P/C Intra-group Gain from Other income/ Total dividends sale of expenses from consolidations MunichRe investments (DreBa) 1) Profit before taxes, minorit
Slide 36: Group: key figures per quarter
Group: key figures per quarter (EUR m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 ∆1Q 03 04 05/04 Total revenues1 (EUR bn) 27.4 22.0 21.6 22.8 27.2 22.2 23.1 24.3 28.3 1.1 Operating profit 839 1,395 938 894 1,227 1,994 1,875 1,759 1,830 602 Net capital gains2 867 -142 352 3,937 826 593 331 466 723 -103 Net impai
Slide 37: P/C: key figures and ratios per quarter
P/C: key figures and ratios per quarter (EUR m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 ∆1Q 03 04 05/04 Total revenues (EUR bn) 14.6 9.5 10.1 9.2 14.4 9.8 10.4 9.1 14.2 -0.2 Operating profit1 282 962 640 553 497 1,263 1,138 1,081 1,004 507 Net capital gains2 757 -197 404 4,162 671 379 168 346 467 -204 Net imp
Slide 38: L/H: key figures and ratios per quarter
L/H: key figures and ratios per quarter (EUR m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 ∆1Q 03 04 05/04 Total revenues (EUR bn) 10.7 10.4 9.5 11.7 10.8 10.3 10.8 13.2 11.8 1.0 Operating profit 455 292 135 383 371 298 378 370 357 -14 Net capital gains1 21 10 39 82 162 11 32 146 172 10 Net impairments -350 38 -
Slide 39: Dresdner Bank: key figures and ratios per quarter
Dresdner Bank1: key figures and ratios per quarter (EUR m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 ∆1Q 03 04 05/04 Net interest income2 506 628 489 768 517 584 657 517 534 17 Net fee and commission income 671 573 579 564 708 581 569 602 647 -61 Net trading income 610 468 319 97 439 473 253 343 435 -4 Operatin
Slide 40: Asset Management: key figures and ratios per quarter
Asset Management: key figures and ratios per quarter (EUR m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 ∆1Q 03 04 05/04 Operating revenues 488 544 632 574 544 556 564 644 591 47 Operating expenses -351 -361 -424 -369 -364 -375 -347 -366 -360 4 Operating profit 137 183 208 205 180 181 217 278 231 51 Goodwill amor
Slide 41: Group asset allocation: breakdown per segment
Group asset allocation1: breakdown per segment (EUR bn) 3M 05 Total in % P/C in % L/H in % Bank in % AM in % Equity 52.9 14.6 18.4 19.0 29.0 11.9 5.4 25.9 0.1 17.5 Fixed income 294.2 81.0 71.7 74.1 208.0 84.9 14.0 67.4 0.5 87.8 Real estate 14.3 3.9 5.1 5.2 7.8 3.2 1.4 6.6 0.0 0.1 Others 1.7 0.5 1.6
Slide 42: Investment result: breakdown per segment
Investment result1: breakdown per segment (EUR m) Total P/C L/H Banking AM 3M04 3M05 3M04 3M05 3M04 3M05 3M04 3M05 3M04 3M05 Current income 3,716 3,754 864 873 2,622 2,659 228 218 2 4 Realized gains/losses 1,381 1,826 786 488 639 1,244 -49 92 5 2 Write-ups/write-downs -114 -105 -65 -41 -2 -13 -48 -5
Slide 43: Reconciliation of P/C and L/H ratios
Reconciliation of P/C and L/H ratios P/C L/H Loss ratio Expense ratio Expense ratio (statutory) 8.1 Insurance benefits (net) 12.1 Acquisition costs & admini- 12.1 Acquisition costs & admini- (EUR m) strative expenses strative expenses 6,827 (EUR m) (EUR m) 6,160 2,730 163 2,609 1,110 - Change in 67
Slide 44: Disclaimer
Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current