Storebrand Asa · OSL:STB
Storebrand Asa — Q2 2007 Earnings Presentation
46 slides from Storebrand Asa's earnings presentation, Aug 8, 2007
Slide 1: Results 2nd Quarter 2007 Analyst Presentation
Storebrand Results 2nd Quarter 2007 8 August 2007 Analyst Presentation Analyst Presentation 2ndquarter 2007 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-12 3-24 Back-up: • Storebrand Group 13-18 25-36 • Storebrand ASA 19-20 37-40 • Storebrand Life Insurance 21-32 41-64 • Storebrand In
Slide 2: Highlights Q2 2007
Storebrand Results 2nd Quarter 2007 8 August 2007 Idar Kreutzer Group CEO Highlights Q2 2007 Group profit of NOK 599 million in Q2, NOK 987 million year to date Good return on investments in life insurance company Steady growth in core business Top score for customer satisfaction in survey of mandat
Slide 3: Storebrand Group - Good results
Storebrand Group - Good results Q2 01.01 - 30.06 01.01.-31.12 NOK million 2007 2006 2007 2006 2006 Life activities 463 282 734 586 1 198 Investment activities 64 32 95 52 156 Storebrand Bank 55 59 134 107 190 Other activities 17 -18 24 76 41 Group profit 599 355 987 821 1 585 Q2 2007 5 Storebrand Li
Slide 4: Life Insurance - competitive investment return
Storebrand Life Insurance - competitive investment return Relative Return in percent year to date1) return Exposure2) Equity Norway 21,5 % +6.18 % 4.4 % Equity Foreign 7,9 % 3) 21.5 % Private Equity 10,6 % 3.1 % Bonds Foreign -0,4 % +0.39 % 6.9 % Bonds Norway -0,7 % +0.73 % 10.1 % Moneymarket 2,1 %
Slide 5: Strong risk capital in life insurance
Strong risk capital in life insurance Risk capital as % of customers' 14 % NOK 16.9 funds 16.8 billion 12 % 13.6 Profit carried forward 10 % 11.1 8.9 11.4 8% Core capital margin 6% 4.8 Additional statutory 4% reserves* 2% Market value adj. res. 0% 2002 2003 2004 2005 2006 2.kv. 2. kv. -2 % 2006 2007
Slide 6: Storebrand Bank - Good growth and strong competition
Storebrand Bank Q2 01.01-30.06 Full Year NOK million 2007 2006 2007 2006 2006 Net interest income 102 102 194 209 419 Net fee and commission income 17 5 28 9 32 Other operating income 14 8 26 26 47 Total income 133 116 249 243 498 Operating expenses -83 -72 -164 -166 -355 Operating profit before los
Slide 7: Storebrand Investments - Good development in profit
Storebrand Investments - Good development in profit Q2 Year to date 01.01- 31.12 NOK million 2007 2006 2007 2006 2006 Total income 109 73 198 147 399 Total costs -72 -59 -137 -117 -280 Net financial income/ other 27 19 34 22 37 Profit before tax 64 32 95 52 156 Increased AuM give high income Excess
Slide 8: The margin improvement continues in 2007
The margin improvement continues in 2007 bp 16 14 12 10 8 6 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Income Cost Income = Income ex performance fees and SAI (12 month rolling) / AuM Cost = Total costs ex performance related pay (12 month rolling) / AuM Q2 2007 15 Storebrand P&C insurance - strong com
Slide 9: Operational excellence the #1 success criteria going forward
Operational excellence the #1 success criteria going forward Customers Processes Capital People Customer Lean project: capital Management satisfaction Increased . efficiency and employee Branding quality and Economic training Distribution speed capital and Employee strategy and Release product satis
Slide 10: Improved productivity strengthens Storebrand's competitiveness
Improved productivity strengthens Storebrand's competitiveness Productivity target Status Positive Positiveadministration administration result Work to improve resultto toowner owner following followingimplementation implementation competitiveness: of ofnew newlife lifeinsurance insurance - 14 proje
Slide 11: New initiatives in corporate social responsibility
New initiatives in corporate social responsibility Increased commitment to micro finance - Investment of up to NOK 500 million Will become emissions neutral from 2008 - Confirms our position on social responsibility Environmental initiatives in car insurance - Environmental and security classificati
Slide 12: Storebrand's objective
Storebrand's objective is to be the leading and most respected institution in the Norwegian market for long-term savings and insurance Q2 2007 23 (Page intentionally left blank) Q2 2007 24 12
Slide 13: Storebrand Group IFRS accounting
Storebrand Group IFRS accounting Storebrand ASA’s group accounts are presented in accordance with the International Financial Reporting Standards (IFRS) approved by the European Union. Q2 2007 26 13
Slide 14: Group profit by sub-group
Storebrand Group Group profit by sub-group Q2 01.01 - 30.06 01.01.-31.12 NOK million 2007 2006 2007 2006 2006 Life activities 463 282 734 586 1 198 Investment activities 64 32 95 52 156 Storebrand Bank 55 59 134 107 190 Other activities 17 -18 24 76 41 Group profit 599 355 987 821 1 585 Q2 2007 27 S
Slide 15: Earnings per share and balance sheet
Storebrand Group Earnings per share Q2 01.01. - 30.06 01.01.-31.12 NOK million 2007 2006 2007 2006 2006 Group profit 599 355 987 821 1 585 Changes in security reserve etc. - non life 3 3 3 2 0 Profit before tax 602 359 990 822 1 585 Tax - 18 - 20 - 42 - 53 - 79 Profit for the year 584 338 948 770 1
Slide 16: Group profit by sub-group and capital adequacy
Storebrand Group Group profit by sub-group 2007 2006 2005 NOK million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Life activities 463 272 362 250 282 304 376 291 Investment activities 64 31 67 38 32 20 4 -2 Storebrand Bank 55 79 36 47 59 48 59 42 Other activities 17 7 -21 -13 -18 94 -9 -13 Group profit 599 389 444 321
Slide 17: Other activities and shareholder structure
Storebrand Group Other activities Q2 01.01. -30.06 01.01.-31.12 NOK million 2007 2006 2007 2006 2006 Storebrand ASA *) 32 -14 1.083 1.025 1.012 Storebrand Skadeforsikring **) -17 -5 -31 43 21 Other companies/elimintations ***) 2 1 -1.029 -992 -991 Total profit other activities 17 -18 24 76 41 *) Inc
Slide 18: Rating for Storebrand and key figures
Rating for Storebrand as at August 8 2007 Storebrand ASA Moody’s: Baa2 (S) S&P: BBB+ (S) Storebrand Storebrand Livsforsikring AS Bank ASA Moody’s: A2 (S) Moody’s: A2 (S) S&P: A (S) S&P: BBB+ (P) P=positive outlook, S=stable outlook, N=negative outlook Q2 2007 35 Storebrand Group Key figures Q2 01.01
Slide 19: Storebrand ASA
Storebrand ASA Storebrand ASA Profit for the year *) Q2 01.01. - 30.06 01.01.-31.12 NOK million 2007 2006 2007 2006 2006 Group contributions and transfers 0 0 1 033 1 028 1 028 Interest income 30 21 48 37 73 Interest expense - 26 - 18 - 49 - 35 - 77 Realised/unrealised gains/losses on securities 44
Slide 20: Storebrand ASA quarterly development
Storebrand ASA Quartely development 2007 2006 2005 NOK million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Group contributions and transfers 0 1 033 0 0 0 1 028 0 0 Interest income 30 19 18 18 21 16 17 12 Interest expense -26 - 23 - 22 - 20 - 18 - 17 - 17 - 10 Realised/unrealised gains/losses on securities 44 44 21 13
Slide 21: Storebrand Life Group highlights
Storebrand Life Storebrand Life Group Highlights 30.06.2007 Operating profit in Q2 was NOK 3,082 million, compared to NOK 1,541 million in Q2 2006* Operating profit as at 30.06.2007 was NOK 3,890 million compared to NOK 2,573 million as at 30.06.2006 Effects from IFRS is 2 millions in Q2 and minus 8
Slide 22: Life Insurance highlights as at 30.06.2007
Storebrand Life Insurance Highlights as at 30.06.2007 Total premium income (excluding net transfers) increased by 74 % in Q2 compared to the same period last year and has increased by 29 % as at 30.06.2007. Positive net transfer balance for life insurance in Q2 of NOK 227 million and NOK 611 million
Slide 23: Storebrand Livsforsikring AS profit and loss
Storebrand Life Group Profit and loss Q2 01.01-30.06 Full year NOK Million 2007 2006 2007 2006 2006 Premiums written 3,548 2,040 8,982 6,987 13,069 Net transfers of premium reserve 227 636 611 3,475 5,260 Net income of financial investments 4,258 -466 7,556 3,741 12,687 Net incom Unit Linked asset 3
Slide 24: Asset allocation
Storebrand Livsforsikring AS Asset allocation Allocation and policyholders' fund Q2-07 Q1-07 Q4-06 Q3-06 Q2-06 Q1-06 Q4-05 Q3-05 Equity Norwegian 6% 6% 5% 5% 6% 7% 9% 6% Equity Foreign 24 % 24 % 24 % 22 % 19 % 20 % 18 % 17 % Real Estate 12 % 11 % 11 % 11 % 11 % 10 % 9% 9% Money market 4% 6% 4% 3% 5%
Slide 25: Return on main asset classes and unrealised gains
Storebrand Livsforsikring Return on main asset classes– Q2 2007 Relative Return in percent year to date1) return Exposure2) Equity Norway 21,5 % +6.18 % 4.4 % Equity Foreign 7,9 % 3) 21.5 % Private Equity 10,6 % 3.1 % Bonds Foreign -0,4 % +0.39 % 6.9 % Bonds Norway -0,7 % +0.73 % 10.1 % Moneymarket
Slide 26: Premiums excl. reserves transferred
Storebrand Life Group Premiums excl. reserves transferred to the company as at 30.06.2007 Total premiums written 8,982 million 8% 1% Group pension 3% Group pension defined contribution Group Life 20 % Individual endowment 54 % Individual endowment Unit Linked 5% Individual pension 9% Non-life insura
Slide 27: Premiums written, products without profit sharing
Storebrand Livsforsikring AS -premiums written, products without profit sharing as at 30.06.2007 NOK million 2000 1800 Non-life insurance 1600 Individual endowment Unit Linked 1400 Individual endowment 1200 Group life 1000 Group pension defined contribution 800 Group pension* 600 *) Group pension ap
Slide 28: Net transfers and new business premiums
Storebrand Life Group Net transfers of premium reserves in NOK million 5 260 1 493 564 611 2003 2004 2005 2006 6M2007 - 758 Q2 2007 55 Storebrand Livsforsikring AS New business premiums* H1 H1 NOK mill 2004 2005 2006 2006 2007 With profit business Regular premiums 616 647 942 446 272 - individual bu
Slide 29: Profit analysis
Storebrand Livsforsikring AS Profit analysis Q2 01.01-30.06 Full year NOK Million 2007 2006 2007 2006 2006 Interest result 3,085 1,561 3,955 2,608 5,523 Risk result 118 105 198 192 220 Administration result -117 -123 - 252 -218 -551 Change in security and premium reserve -3 -3 - 12 -12 -18 Operating
Slide 30: Storebrand Life Group Balance sheet IFRS
Storebrand Life Group Balance sheet IFRS Share of Share of total assets total assets NOK Million 30.06.07 30.06.07 31.12.06 31.12.06 Immaterial assets 9 0% 17 0% Real estate 18,336 10 % 17,447 10 % Long term shares and interests from group companies 209 0% 208 0% Bonds held to maturity 41,259 22 % 4
Slide 31: Profit to owner
Storebrand Livsforsikring AS Profit to owner NOK Million Q2 01.01-30.06 Q2 01.01-30.06 PROFIT SHARING MODEL REGULATORY MAXIMUM Net return on company capital 264 374 Management fee charged from policyholders` fund 159 308 35% of profit from products Risk margin 12 24 with profit sharing adjusted for
Slide 32: Real estate fund
Storebrand Livsforsikring AS Real estate fund 01.01.-30.06. Full year Key figures 2007 2006 2006 Portfolio allocation The real estate fund: (Market value) Growth in value 8.2% 4.5% 13.0% Booked yield *) 7.2% 4.2% 12.6% Direct yield 4.2% 3.5% 7.3% Shopping Office Revaluations 3.0% 0.7% 5.3% centres 5
Slide 33: Storebrand Investments Highlights Q2
Storebrand Investments Storebrand Investments Highlights Q2 Profit before tax NOK 64 million compared to NOK 32 million Q2 last year Increased asset under management contributes to the income growth as do the strong performance in the discretionary portfolio so far this year NOK 27 million in financ
Slide 34: Profit development
Profit Q2 2007 Q2 Year to date 01.01- 31.12 NOK million 2007 2006 2007 2006 2006 Total income 109 73 198 147 399 Total costs -72 -59 -137 -117 -280 Net financial income/ other 27 19 34 22 37 Profit before tax 64 32 95 52 156 The income growth deviates from increased asset under management – especial
Slide 35: Profit development and margin improvement
Profit development NOK million 500 498 480 460 Cost/income ratio 60 percent1 440 420 as of Q2 (63 percent1 as of Q1, 400 64% in 2006). 380 Increase in both fixed and 360 67 volume related income as well 340 64 as performance related 320 300 income. 38 287 280 Increased total costs is due to 32 31 26
Slide 36: Contribution to Storebrand Life portfolio
Contribution to Storebrand Life portfolio year to date Relative performance 16,4 % Equity Norway 15,2 % 1,2% -0,6 % Equity Global Active 3,6 % -4,2% 5,6 % Equity Global Quant 3,6 % 2,0% 2,3 % Money Market Norway 1,9 % 0,4% 2,1 % Money Market OECD 2,0 % 0,2% 1,8 % Money Market Foreign Credit 1,9 % -0
Slide 37: Market share Norwegian registered mutual funds
Market share Norwegian registered mutual funds Equity funds market in Norway All mutual funds (market share in %) 8,4 8,3 7,8 Norwegian equity funds exceed 7,2 6,8 11,6 12,0 NOK 257 billion in assets under 12,7 12,8 12,9 Nordea management. Odin 15,8 16,7 17,0 16,5 18,0 The overall market consist of
Slide 38: Assets under management
Storebrand Investments Assets under management Total assets under management Allocation assets under management Real estate 10 % Other 226 Hold to 217 6% 205 mat urity 30,4 24,6 23 % Equity Norway NOK billion 20,3 29,7 6% 159 165 30,3 29,4 15,8 22,0 13,2 20,0 9,7 14,6 25,3 12,9 M oney market 10,1 In
Slide 39: Storebrand Bank Group Highlights Q2 2007
Storebrand Bank Group Storebrand Bank Group Highlights Q2 2007 Storebrand Bank reported consolidated pre-tax profit of NOK 55 million for Q2 Strong growth in lending – lending to the retail market up by over 15% for the first six months Net fee and commission income of NOK 17 million for Q2 – reflec
Slide 40: Profit and loss
Profit and loss Q2 01.01-30.06 Full Year NOK million 2007 2006 2007 2006 2006 Net interest income 102 102 194 209 419 Net fee and commission income 17 5 28 9 32 Other operating income 14 8 26 26 47 Total income 133 116 249 243 498 Operating expenses -83 -72 -164 -166 -355 Operating profit before los
Slide 41: Balance sheet
Balance sheet Share Share NOK million 30.06.2007 30.06.2007 31.12.2006 31.03.2007 Cash and deposits with central banks 886 2,2 % 394 1,2 % Loans to and deposits with credit institutions 97 0,2 % 115 0,3 % Financial assets designated at fair value through p&l 3 936 9,8 % 2 350 6,9 % Net lending to cu
Slide 42: Development in loan portfolio and customer deposits
Development in loan portfolio Development in gross lending Gross lending by sector NOK billion 7% STB Life Insurance 2,3 (5 %) Corporate 2,7 Retail 2,3 1,7 1,8 Residential 1,5 0,6 12,2 mortgages 29 % 11,7 (32 %) 11,5 10,2 10,3 Other retail 10,5 10,2 59 % (54 %) Real estate 21,0 22,6 17,7 18,2 19,6 1
Slide 43: Capital adequacy
Capital adequacy NOK million and % 31.03.2007 31.12.2006 Core capital 1 960 1 926 Subordinated loan capital 634 484 Total capital 2 593 2 410 Risk-weighted basis for calculation 24 684 21 918 Capital ratio 10,5 % 11,0 % Surplus capital (*) 619 656 Core capital ratio 7,9 % 8,8 % Note: Storebrand Bank
Slide 44: Storebrand Non-Life Highlights Q2 2007
Storebrand Non-life Non-Life Highlights Q2 2007 Storebrand Non-Life reports an operating loss of NOK 17 million in Q2 (NOK 5 million) Operating loss in Storebrand Skade AS was NOK 13 million (NOK 1 million). The operating loss is due to the start-up costs in connection with the new non-life insuranc
Slide 45: Non-Life Group Profit and loss
Non-Life Group Profit and loss Q2 01.01- 30.06 Full year NOK million 2007 2006 2007 2006 2006 50% share of result from Fair 0 0 0 -1 -1 Storebrand Skadeforsikring AS -13 -1 -26 46 7 Oslo Reinsurance Company ASA (run-off) -4 -3 -5 -2 -2 Eliminations 0 0 0 0 16 Operating result non life insurance -17
Slide 46: Oslo Reinsurance Company Profit and loss
Oslo Reinsurance Company Profit and loss Q2 01.01 - 30.06 Full year NOK million 2006 2005 2007 2006 2006 Premiums for own account 0 0 1 2 3 Claims for own account -4 -4 -9 -4 -11 Insurance related operating costs -6 -7 -11 -14 -22 Financial income 4 7 9 6 18 Other income/costs 3 4 5 7 11 Operating r