Allianz SE · XETR:ALV
Allianz — Q2 2006 Earnings Presentation
46 slides from Allianz's earnings presentation, Aug 11, 2006
Slide 1: Group financial results for the second quarter 2006
Helmut Perlet, Member of the Board of Management Group financial results for the second quarter 2006 August 11, 2006
Slide 2: Highlights 2Q 2006
Group results 2Q 2006 Highlights 2Q 2006 Strong operating profit of EUR 2.8bn (+19.1%), all segments continue to improve ! 91.9% combined ratio in P/C ! Double-digit growth in Life operating profit, despite dip in sales ! Dresdner Bank grows revenues and profit dynamically ! AM delivers seventh cons
Slide 3: Group overview (1/2): excellent results but no room for complacency
Group results 2Q 2006 Group overview (1/2): excellent results but no room for complacency Internal Internal Quarterly results growth: YTD results growth: +1.7% +2.3% Total +1.6% +3.4% revenues 28.3 29.6 52.0 53.7 (EUR bn) 22.2 23.2 24.3 23.7 23.8 25.2 24.1 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2004 2005 2006 6
Slide 4: Group overview (2/2): excellent results but no room for complacency
Group results 2Q 2006 Group overview (2/2): excellent results but no room for complacency Quarterly results YTD result Net +64.0% +49.5% income 2,279 4,058 1,779 (EUR m) 1,390 2,714 1,324 649 794 872 468 296 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2004 2005 2006 6M 2005 6M 2006 Share- +2.1% AP2Q2006_FINAL holder
Slide 5: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 4
Slide 6: Banking and Asset Management grow dynamically
Group results 2Q 2006 Banking and Asset Management grow dynamically (EUR bn) Total revenues1 22.2 23.2 24.3 28.3 23.7 23.8 25.2 29.6 24.1 0.8 0.6 1.9 1.7 0.8 0.6 0.6 0.6 0.7 1.7 0.7 (in %) Total growth Int. growth2 0.5 1.5 1.4 1.6 1.7 1.6 12.8 1.8 11.9 Total 2Q 05 7.0 7.8 10.9 13.2 10.3 11.2 13.2 11
Slide 7: Operating profit: all segments continue to improve
Group results 2Q 2006 Operating profit1: all segments continue to improve (EUR m) Business segments 2Q 06 ∆ 2Q 06/05 Property/Casualty Life/Health P/C 1,845 +195 1,845 1,650 1,319 527 L/H 527 +55 472 363 Banking 266 +51 2Q 04 2Q 05 2Q 06 2Q 04 2Q 05 2Q 06 AM 297 +45 Banking Asset Management AP2Q2006
Slide 8: Non-operating items: ADAG restructuring fully funded
Group results 2Q 2006 Non-operating items: ADAG restructuring fully funded (EUR m) Breakdown of non-operating items 2Q 04 2Q 05 2Q 06 ∆2Q 06/05 Realized gains/losses 386 438 1,296 +858 ! High realized gains (equity and impairments of harvesting 2Q 06: 4.2%) driven investments (net) by disposal of Sc
Slide 9: 93% of pre-tax result stems from operating profit
Group results 2Q 2006 93% of pre-tax result stems from operating profit (EUR m) 2Q 04 2Q 05 2Q 06 ∆2Q 06/05 Operating profit 1,799 2,346 2,794 +448 Non-operating items -468 -212 198 +410 Income before income taxes, minority interests 1,331 2,134 2,992 +858 Income taxes -354 -405 -357 +48 Minority in
Slide 10: Strong capital base
Group results 2Q 2006 Strong capital base (EUR bn) Shareholders’ equity1 Conglomerate solvency Risk capital Requirement Solvency ratio Risk capital requirement Coverage ratio Available Funds Available risk-bearing funds +2.1% 120% 162% 166% 143% 157% 159% 39.5 40.3 57.3 56.0 30.0 50.1 41.4 39.3 36.6
Slide 11: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 10
Slide 12: P/C overview: continued underwriting excellence
Group results 2Q 2006 P/C overview: continued underwriting excellence (EUR m) Operating profit +11.8% 1,845 Operating profit drivers 1,650 1,445 1,386 1,319 1,286 +101 +71 +23 1,845 1,230 1,214 1,650 992 AP2Q2006_FINAL Operating Under- Operat. Other Operating profit writing1 inv. income2 profit 2Q 3
Slide 13: P/C: selective growth with focus on bottom-line
Group results 2Q 2006 P/C: selective growth with focus on bottom-line (EUR m) GPW Combined ratio 2Q 05 2Q 06 ∆06/051 Allianz Germany2 1,681 1,698 +1.1% AGF 1,172 1,132 -3.4% Gross premiums written Internal growth: RAS Group Italy 1,015 1,029 +1.4% +1.2% Lloyd Adriatico 340 343 +0.9% +0.9% Allianz UK
Slide 14: P/C: 91.9% combined ratio
Group results 2Q 2006 P/C: 91.9% combined ratio (in %) Comb. ratioratio2Q 04 2Q 05 2Q 06 Combined ratio Combined Allianz Germany1 86.1 89.4 92.8 AGF 102.0 101.9 98.6 RAS Group Italy 98.5 101.6 97.0 ted 94.7 YTD 98.6 p a 94.6 92.2 94.7 94.0 92.1 d 92.5 91.9 Lloyd Adriatico 82.7 81.9 83.5 e u 93.3 All
Slide 15: P/C: loss ratio relatively stable over time
Group results 2Q 2006 P/C: loss ratio relatively stable over time (in %) Accident year claims ratio 74.9 Major nat cat losses ! A.y. loss ratio relatively stable 69.7 70.4 +1.5%-p except for major nat 69.5 cat occurrence (2y Ø) 69.6 69.1 -1.5%-p 68.1 67.9 68.1 67.4 Run-off ratio (pos. value indicate
Slide 16: P/C: current income – increased volume and higher yield
Group results 2Q 2006 P/C: current income – increased volume and higher yield Average AuM (EUR bn) +2.8% 91.9 94.5 Interest and similar income (EUR m) 7.6 +14.6% 8.7 1,120 +12.2% 1,257 Other 14.2 +24.3% 17.6 Equities 106 +16.5% -2.8% 91 Debt 70.1 68.2 Other 405 +34.6% securities Equities 301 2Q 05 2
Slide 17: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 16
Slide 18: L/H overview: operating profit up 11.7%
Group results 2Q 2006 L/H overview: operating profit up 11.7% Operating profit (EUR m) ! Ongoing strong operating profit growth in +11.7% Europe and Asia-Pacific, lower operating result in US because of equity market 723 volatility 556 549 ! Operating margin on reserves1 increases 517 527 476 472 to
Slide 19: L/H: investment income drives operating profit improvement
Group results 2Q 2006 L/H: investment income drives operating profit improvement (EUR m) “Income” 15,221 15,606 Operating profit 13,124 Investment 3,385 3,916 +15.7% & other 3,181 income 527 11,836 11,690 -1.2% 472 Stat. prem. 9,943 earned 363 2Q 04 2Q 05 2Q 06 x (1-CIR) Cost-income ratio1 (in %) 97
Slide 20: L/H: dynamic growth in Asia-Pacific and Europe cannot fully compensate shortfall in US
Group results 2Q 2006 L/H: dynamic growth in Asia-Pacific and Europe cannot fully compensate shortfall in US (EUR bn) Stat. prem.ratio 2Q 05 Combined 2Q 06 ∆06/051 German Life 2,547 3,075 +20.7% Statutory premiums Internal AGF 1,379 1,474 +6.9% growth: -1.4% RAS Group Italy 1,984 1,983 -0.1% -1.2% L
Slide 21: L/H investment income: volume, yield and harvesting all increase
Group results 2Q 2006 L/H investment income: volume, yield and harvesting all increase Average AuM Current yield1 (in %) Interest and similar income (EUR bn) +5.4% (EUR bn) 3.7 3.3 2.3 2.6 2.7 2.0 265 251 1.2 1.2 -13.8% 6 0.8 0.5 Other 7 35 +29.2% Equities 27 05 06 05 06 05 06 05 06 05 06 2Q 2Q 2Q 2
Slide 22: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 21
Slide 23: Dresdner Bank overview: momentum sustained
Group results 2Q 2006 Dresdner Bank1 overview: momentum sustained (EUR m) Operating profit +55.6% Operating profit drivers 529 379 319 319 -206 211 209 205 225 -59 205 80 AP2Q2006_FINAL -36 -9 Operating Operat. Operat. LLP2 Operating profit revenues expenses profit 2Q 05 ∆ 2Q 06/05 2Q 06 2Q 3Q 4Q 1Q
Slide 24: Dresdner Bank: 28.5% revenue growth
Group results 2Q 2006 Dresdner Bank1: 28.5% revenue growth (EUR m) Operating revenues Net interest income Net fee & commission Net dealing income2 income +28.5% +17.9% +3.3% +200% 1,680 1,709 1,330 658 680 579 631 615 535 487 399 133 AP2Q2006_FINAL 2Q 04 2Q 05 2Q 06 2Q 04 2Q 05 2Q 06 2Q 04 2Q 05 2Q
Slide 25: Dresdner Bank: higher revenues on reduced fixed cost base
Group results 2Q 2006 Dresdner Bank1: higher revenues on reduced “fixed” cost base (EUR m) Half year cost-income ratio ex Cost-income ratio (in %) performance related expen.2 (in %) 102.4 97.9 93.7 91.2 88.6 76.3 82.5 81.0 81.0 69.1 73.7 59.4 AP2Q2006_FINAL 6M 04 6M 053 6M 06 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 26: Dresdner Bank: adequate provisioning for current risks offset by releases
Group results 2Q 2006 Dresdner Bank1: adequate provisioning for current risks offset by releases (EUR m) New provisions Loan loss provisions Non-performing loans 7,601 371 237 106 82 3,691 2Q 04 2Q 05 2Q 06 Releases/recoveries - 5 2,284 AP2Q2006_FINAL 289 291 30.06.04 30.06.05 30.06.06 101 -542 © Al
Slide 27: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 26
Slide 28: Asset Management overview: double-digit growth for seventh consecutive quarter
Group results 2Q 2006 Asset Management overview: double-digit growth for seventh consecutive quarter (EUR m) Operating profit +17.9% Operating profit drivers 85 349 297 300 304 297 252 265 252 -40 218 231 181 AP2Q2006_FINAL Operating Operat. Operat. Operating 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q profit revenu
Slide 29: Asset Management: positive net inflows in difficult market environment
Group results 2Q 2006 Asset Management: positive net inflows in difficult market environment (EUR bn) 3rd party net inflows 3rd party AuM1 - regional breakdown2 721 688 39 5.4% 16.9 17.1 Other3 34 4.9% 15.1 15.7 60 8.3% 13.6 Asia-Pacific 58 8.5% 10.5 80 97 13.5% Rest of Europe 11.6% 3.5 Germany 100
Slide 30: Asset Management: highly competitive CIR
Group results 2Q 2006 Asset Management: highly competitive CIR (EUR m) Operating expenses +10.3% Cost-income ratio (in %) 429 364 389 -1.6%-p 2Q 04 2Q 05 2Q 06 66.8 60.7 59.1 Operating revenues +13.3% AP2Q2006_FINAL 2Q 04 2Q 05 2Q 06 726 641 545 © Allianz AG 2006 2Q 04 2Q 05 2Q 06 29
Slide 31: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 30
Slide 32: Outlook 2006: we expect full-year operating profit to exceed EUR 9.0bn
Group results 2Q 2006 Outlook 2006: we expect full-year operating profit to exceed EUR 9.0bn Outlook higher than EUR 5.5 – 6.0 bn EUR 9.0 bn Merger plan EUR 8.7 bn EUR 4.9 bn AP2Q2006_FINAL Operating profit Net income © Allianz AG 2006 Caveats: - Nat Cat development unpredictable - Capital market ri
Slide 33: Agenda
Agenda Group P/C L/H Banking Asset Management AP2Q2006_FINAL Outlook Additional information © Allianz AG 2006 32
Slide 34: Result by segments overview
Group results 2Q 2006 Group: result by segments overview (EUR m) P/C L/H Banking AM Corporate Consolidation Total 6M 05 6M 06 6M 05 6M 06 6M 05 6M 06 6M 05 6M 06 6M 05 6M 06 6M 05 6M 06 6M 05 6M 06 Total revenues (EUR bn) 23.7 23.8 24.0 24.8 3.1 3.7 1.2 1.5 0 0 0 0 52.0 53.7 Operating profit 2,864 3
Slide 35: Key figures per quarter
Group results 2Q 2006 Group: key figures per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Total revenues 22.2 23.2 24.3 28.3 23.7 23.8 25.2 29.6 24.1 0.4 (EUR bn) Operating profit 1,799 1,978 1,679 1,887 2,346 1,864 1,906 2,677 2,794 448 Non-operating items -468 -795 -702
Slide 36: P/C: key figures and ratios per quarter
Group results 2Q 2006 P/C: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Gross premiums written (EUR bn) 9.6 10.2 8.9 14.1 9.6 10.4 9.6 14.1 9.7 0.1 Operating profit 1,319 1,445 1,230 1,214 1,650 992 1,286 1,386 1,845 195 Non-operating items 127
Slide 37: L/H: key figures and ratios per quarter
Group results 2Q 2006 L/H: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Statutory premiums (EUR bn) 10.3 10.9 13.2 11.9 12.1 11.2 13.2 12.8 11.9 -0.2 Operating profit 363 391 476 517 472 556 549 723 527 55 Non-operating items -60 -23 -68 88 37 2
Slide 38: Dresdner Bank: key figures and ratios per quarter
Group results 2Q 2006 Dresdner Bank1: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Operating revenues 1,680 1,497 1,463 1,623 1,330 1,510 1,576 1,884 1,709 379 Operating profit 211 80 -36 209 205 225 -9 529 319 114 Non-operating items -173 -74 -
Slide 39: Dresdner Bank: divisional reporting
Group results 2Q 2006 Dresdner Bank1: divisional reporting (EUR m) Private & Business Corporate & Corporate Other Clients Investment Banking 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 Operating revenues 730 774 558 979 42 -44 Operating expenses -553 -598 -477 -750 -149 -37 Cost-inc. ratio (in %) 75.8 77.3
Slide 40: Asset Management: key figures and ratios per quarter
Group results 2Q 2006 Asset Management: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Operating revenues 545 558 608 567 641 710 804 751 726 85 Operating profit 181 218 265 231 252 300 349 304 297 45 Non-operating items -276 -271 -276 -164 -173 -
Slide 41: Corporate segment: key figures per quarter
Group results 2Q 2006 Corporate segment: key figures per quarter (EUR m) 2004 2005 2006 Delta 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2Q 06/05 Operating profit -261 -159 -147 -267 -190 -223 -201 -180 -74 116 Non-operating items 35 -354 -66 -123 -381 -230 -384 -211 184 565 Income b/taxes, min. -226 -513 -213 -390
Slide 42: Asset allocation: breakdown per segment
Group results 2Q 2006 Group asset allocation1: breakdown per segment (EUR bn) P/C L/H Banking Asset Mgmt. Corporate Consolid. Group Balancesheet items 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 1 Investments Equities 14.4 16.2 27.9 35.0 5.1 4.1 0.1 0.1 4.2 6.
Slide 43: Average AuM P/C and L/H: basis for yield calculation
Group results 2Q 2006 Average AuM P/C and L/H1: basis for yield calculation (EUR bn) P/C L/H Balancesheet items 31.03.2006 30.06.2006 Avg. 31.03.2006 30.06.2006 Avg. 1 Investments Equities 19.1 16.2 17.7 35.6 35.0 35.3 Debt sec. 52.9 51.5 52.2 139.0 137.3 138.2 2 Other 8.9 8.5 8.7 6.2 5.9 6.1 Sum 80
Slide 44: Investment result: breakdown per segment
Group results 2Q 2006 Investment result1: breakdown per segment (EUR m) P/C L/H Banking AM Corporate Consolidation Group 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 2Q 05 2Q 06 Operating investment result 1 Interest and similar income 1,120 1,257 3,309 3,698 1,958 1,630 2
Slide 45: Revaluation reserve of EUR 23bn
Group results 2Q 2006 Revaluation reserve of EUR 23bn (EUR bn) Off balance sheet Revaluation reserve On balance sheet Shareholders’ Policyholders’ share share 1.8 (34.2%) 1.7 (34.0%) 23.0 Real estate Associated enterprises, joint ventures 5.1 0.04 9.0 Minorities AP2Q2006_FINAL 0.4 (8.7%) 0.8 0.7 7.4
Slide 46: Disclaimer
Group results 2Q 2006 Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on ma