Allianz Se · XETR:ALV
Allianz — Q2 2005 Earnings Presentation
50 slides from Allianz's earnings presentation, Aug 12, 2005
Slide 1: Group financial results for the second quarter 2005
Helmut Perlet - CFO Allianz AG Group financial results for the second quarter 2005 Analysts’ conference call August 12, 2005
Slide 2: Group overview: significant profitable growth (1/2)
Group overview: significant profitable growth (1/2) Total revenues (EUR bn) CAGR: 2.5% +5.1% ! Double-digit growth in Life and Asset 49.5 49.5 52.0 Management 2Q 23.7 22.0 22.2 Internal growth: 6.3% 1Q 6M 03 6M 04 6M 05 Operating profit (EUR m) CAGR: 37.1% +30.4% ! Dynamic growth combined with conti
Slide 3: Group overview: significant profitable growth (2/2)
Group overview: significant profitable growth (2/2) Net income (EUR m) CAGR: 142% +48.3% ! Improvement predominantly driven by 2,579 increased operating profit Pro forma1 1,739 1,395 2Q 439 572 1Q 6M 03 6M 04 6M 05 Shareholders’ equity2 (EUR bn) CAGR: 19.9% +22.4% ! 31% increase in shareholders’ equ
Slide 4: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 3
Slide 5: Double-digit growth in Life and Asset Management
Double-digit growth in Life and Asset Management (EUR bn) Total revenues 1 (in %) Total growth Internal growth2 Total 6M04 0.0 2.4 22.2 23.7 49.5 52.0 Total 6M05 5.1 6.3 1.3 AM 10.4 12.9 1.2 3.0 0.7 3.3 Banking -10.4 -9.9 0.6 1.3 1.7 L/H 12.9 13.9 21.1 23.8 10.3 12.0 23.9 23.8 P/C 0.0 1.3 9.7 9.7 2Q
Slide 6: Operational discipline remains key
Operational discipline remains key “Cost control” (in %) “Careful risk selection” – high quality portfolio P/C Expense ratio 2Q 04 24.9 Net release 2Q 05 24.7 of LLP 82 L/H Expense ratio1 67.9% 65.1% 2Q 04 9.2 2Q 05 8.22 Dresdner Bank Operating CIR 2Q 04 80.6 -54 2Q 05 83.6 2Q 04 2Q 05 2Q 04 2Q 05 A
Slide 7: Operating profit: all segments improve
Operating profit1: all segments improve (EUR m) 2Q 05 ∆ 2Q 05/04 6M 05 ∆ 6M 05/04 P/C 1,390 127 2,394 634 L/H 448 149 805 135 Banking 278 26 516 85 AM 255 74 486 125 Group 2,371 376 4,201 979 1) Operating profit is a measure which we believe highlights the underlying profitability of our operation.
Slide 8: Operating profit improvement drives bottom-line result
Operating profit improvement drives bottom-line result (EUR m) 2Q 05 ∆ 2Q 05/04 6M 05 ∆ 6M 05/04 Operating profit 2,371 +376 4,201 +979 Net capital gains1 304 -290 1,027 -393 Net Impairments -85 +373 -178 +388 Other -421 +198 -793 +220 EUR 1,395m quarterly Profit before taxes, 2,169 +657 4,257 1,194
Slide 9: P/C Holding activities: movement overview
P/C Holding activities: movement overview Pro Forma! 6M 05 P/C L/H Current New Current New ∆ ∆ Holding structure structure structure structure ! Current investment income ! Acquisition and admininstrative cost ! Other operating Operating 2,394 650 3,044 805 48 853 -698 Profit ! Net capital gains ! I
Slide 10: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 9
Slide 11: P/C overview: underwriting profitability further improved
P/C overview: underwriting profitability further improved (EUR m) Drivers Operating profit !! Operating XXX profit 2Q 05: +36.0% - Combined ratio at 89.8% - Current investment income up +10.1% 2,394 EUR 93m as dividend yield increases 1,760 1,390 ! Non-operating result 2Q 05: 1,263 - Lower realized
Slide 12: P/C: managed growth
P/C: managed growth Gross premiums written drivers Gross premiums written (EUR bn) ! Solid growth1 in important Internal growth rate +1.8% +1.3% markets: Switzerland (+10.1%), Italy (+3.1%),Spain (+4.5%), Total growth rate -0.5% -1.0% Australia (+11.8%) ! Willingness to forego volume 24.2 24.0 for p
Slide 13: P/C: 2Q 05 combined ratio below 90%
P/C: 2Q 05 combined ratio below 90% (in %) Combined ratio 6M 04 6M 05 Combined ratio Loss ratio SGD (German P/C Group) 86.0 87.5 12M Expense ratio -3.0%-p rolling Allianz AG1 88.4 92.8 92.8 92.3 92.1 AGF2 99.4 98.5 90.9 12MR 89.8 91.3% RAS Group Italy 94.9 95.1 67.9 66.3 66.5 Lloyd Adriatico 84.2 83
Slide 14: P/C: harvesting reduced
P/C: harvesting reduced (EUR m) Inv. result drivers 3,4241 ! Current yield2: 787 23 - F/I: 2.1% (-0.1%-p) -100 2,391 2,109 -159 - Equity: 2.6% -269 (+0.5%-p) ! Harvesting rate2,3 2.8% on equity portfolio value (6M 04: 5.4%) Current Realized Fair value Write- Trading Expenses Net investm. Net investm
Slide 15: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 14
Slide 16: L/H overview: on track to achieve target
L/H overview: on track to achieve target (EUR m) Drivers Operating profit ! Operating profit 6M 05 up EUR 135m: +49.8% +20.1% - Statutory premiums grew 13.9%1 - Current investment income up EUR 222m 805 - Acquisition and administrative expenses 670 448 decreased by EUR 154m 299 2Q 04 2Q 05 6M 04 6M
Slide 17: L/H: ongoing dynamic revenue growth in 2Q 05
L/H: ongoing dynamic revenue growth in 2Q 05 Drivers of statutory premiums 1 Statutory premiums (EUR bn) Strong 2Q 05 growth in core markets Internal growth rate +17.6% +13.9% ! USA +33.1% (strong demand Total growth rate 16.3% 12.9% for equity indexed products) 23.8 ! Life Germany +8.8% (ongoing 21
Slide 18: L/H: investment result improved by 12.2%
L/H: investment result improved by 12.2% Before policyholder participation (EUR m) Inv. result drivers ! Current yield2: 1,551 265 7,047 7,2761 - F/I: 2.3% -105 (-0.2%-p) 5,825 -347 -142 - Equity: 2.1% (unchanged) ! Harvesting rate2,3 4.6% on equity portfolio value (6M 04: 2.3%) Current Realized Fai
Slide 19: L/H: Profitable growth is one word
L/H: “Profitablegrowth is one word”1 Statutory premiums (EUR bn) Profit b/ taxes, minorities and goodwill (EUR m)2 CAGR CAGR 13.1% 13.3% 1,069 23.8 506 11.3 6M 99 6M 05 6M 99 6M 05 1) Quotation from Jan Carendi (board member responsible for Allianz Group’s America division) at an internal meeting 2)
Slide 20: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 19
Slide 21: Dresdner Bank overview: on track for profit target
Dresdner Bank1 overview: on track for profit target (EUR m) Drivers Operating profit ! Operating profit 6M 05 up EUR 79m +15.7% +19.3% ! XXX (2Q: EUR +37m) - operating revenues down 10.8% (in 6M) 488 - more than compensated by lower expenses 409 and decrease in net loan loss provisions 272 235 ! Non
Slide 22: Dresdner Bank: fee & commission income increased, trading income declined
Dresdner Bank1: fee & commission income increased, decline in trading income (EUR m) Operating revenue drivers 2Q05 Operating revenues ! Slight decrease in net Internal growth rate2 -18.4% -10.3% interest income due to further portfolio reductions in IRU as Total growth rate -18.7% -10.8% planned 1,
Slide 23: Dresdner Bank: expenses remain under control
Dresdner Bank1: expenses remain under control (EUR m) Operating expense drivers Administrative expenses ! Reduction in administrative -15.7% -9.8% expenses mainly from personnel expenses 1,321 2,676 - Lower performance-linked 2,413 accruals 1,113 - Revised anniversary payments (one-off effect) Perso
Slide 24: Dresdner Bank: coverage ratio improved despite net LLP releases
Dresdner Bank1: coverage ratio improved despite net LLP releases (EUR m) Net loan loss provision Risk elements -49.7% n.m. -78.8% Net release 9,360 of LLP 217 Potential problem 1,759 loans 82 4,712 Non- 7,601 1,021 performing loans 3,691 -54 46 2Q 04 2Q 05 6M 04 6M 05 6M 04 6M 05 Coverage New provis
Slide 25: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 24
Slide 26: Asset Management overview: strong revenue and profit growth
Asset Management overview: strong revenue and profit growth (EUR m) Drivers Operating profit ! Operating profit in 2Q 05 +40.9% +40.9% +34.6% - Strong net inflow (6M 05: EUR +32bn) - Operating revenues up 17%1 - Expenses remain flat 486 " CIR down to 59.8% 255 361 181 ! Net income 2Q 05 2Q 04 2Q 05
Slide 27: Asset Management: EUR 32bn net inflows
Asset Management: EUR 32bn net inflows Third-party AuM (EUR bn) Client and asset mix Third-party AuM (as of 30/06/2005 = EUR 688bn) Third-party AuM (as of 31/12/2004) 585 Retail Institutional Σ Net inflows 32 Equity 10% 11% 21% Fixed Market effects 16 26% 52% 78% income F/X effects 55 Other 1% 0% 1%
Slide 28: Asset Management: strong revenue growth while maintaining cost discipline
Asset Management: strong revenue growth while maintaining cost discipline (EUR m) Drivers Cost-income ratio (in %) Operating revenues Internal growth rate +17.0%1 +13.5%1 -7.7%-p Total growth rate +14.0% +11.4% 1,225 12M 1,100 rolling 556 634 66.9 67.5 12MR 59.7% 61.5 60.9 59.8 2Q 04 2Q 05 6M 04 6M
Slide 29: Asset Management: Germany, leveraging distribution power
Asset Management: Germany, an example of leveraging Allianz Group’s distribution power and superior products Operating Development of market shareprofit 1 for ADGI2 Germany (in %) Comment Mutual funds Allianz Dresdner Global Investors +2.7%-p Germany 15.9 ! Market leader in capturing net 13.2 inflow
Slide 30: Asset Management: impressive volume and profit growth
Asset Management: impressive volume and profit growth Third party AuM (EUR bn) Operating profit (EUR m) CAGR CAGR 15% 22% 688 486 398 220 6M 01 6M 05 6M 01 6M 05 8/11/2005 29
Slide 31: Agenda
Agenda Group P/C L/H Banking Asset Management Capital base and investments Additional information 8/11/2005 30
Slide 32: Asset allocation: 11% asset growth
Asset allocation1: 11% asset growth (EUR bn, in %) Group asset allocation Asset allocation P/C Real estate Other Total 342 (in %) 380 (in %) 5.1 (5.1%) 1.7 (1.7%) Other 162 4.7 22 0.5 15 3.9 Equity Real estate 14 4.1 55 14.43 18.9 (19.1%) Equity 51 14.8 F/I 73.3 (74.1%) Total: EUR 99.0bn (6M 04: EUR
Slide 33: Shareholders' equity increased by 22.4%
Shareholders’ equity increased by 22.4% (EUR m) +22.4% 36,7521 30,0261 7,259 +28.2% Unrealized gains / losses 5,661 +100% 9,886 Revenue reserves2 4,932 Paid-in capital 19,433 +0.9% 19,607 01.01.2005 30.06.2005 1) Excluding minority interest: 01.01.2005: EUR 7,702m; 30.06.2005: EUR 8,296m 2) Includin
Slide 34: Summary
Summary ! Earnings power further strengthened ! Continued operating discipline clearly demonstrated ! Further dynamic profitable growth in Life and Asset Management ! Dresdner Bank on track to achieve profit target ! Shareholders equity up by 22.4% 8/11/2005 33
Slide 35: We expect to outperform
We expect to outperform 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 unpredictab
Slide 36: Additional information
Allianz (i) Additional information
Slide 37: Group: result by segments overview
Group: result by segments overview (EUR m) Asset Con- P/C L/H1 Banking Mgmt. solidation Total 6M 6M 6M 6M 6M 6M 6M 6M 6M 6M 6M 6M 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 Total revenues (EUR bn) 24.2 24.0 21.1 23.8 3.4 3.1 1.1 1.2 -0.4 -0.1 49.5 52.0 Operating profit2 1,760 2,394
Slide 38: Breakdown of profit consolidations
Breakdown of profit consolidations (EUR m) Profit before taxes, minorities and goodwill amortization (6M 05) 35 1,392 233 1,124 277 Banking 154 L/H 961 P/C Intra-group Gain from Other income/ Total dividends sale of expenses from consolidations MunichRe investments (DreBa) 8/11/2005 1) Profit before
Slide 39: Group: key figures per quarter
Group: key figures per quarter (EUR m) 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 2Q 05 ∆ 2Q 03 04 05/04 Total revenues1 (EUR bn) 22.0 21.6 22.8 27.2 22.2 23.1 24.3 28.3 23.7 1.5 Operating profit 1,395 938 894 1,227 1,995 1,875 1,759 1,830 2,371 376 Net capital gains2 -142 353 3,936 826 594 331 466 723 304 -290 Net
Slide 40: P/C: key figures and ratios per quarter
P/C: key figures and ratios per quarter (EUR m) 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 2Q 05 ∆ 2Q 03 04 05/04 Total revenues (EUR bn) 9.5 10.1 9.2 14.4 9.8 10.4 9.1 14.2 9.8 0.0 Operating profit1 962 640 553 497 1,263 1,138 1,081 1,004 1,390 127 Net capital gains2 -197 405 4,161 671 380 167 346 467 66 -314 Net
Slide 41: L/H: key figures and ratios per quarter
L/H: key figures and ratios per quarter (EUR m) 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 2Q 05 ∆ 2Q 03 04 05/04 Total revenues (EUR bn) 10.4 9.5 11.7 10.8 10.3 10.8 13.2 11.8 12.0 1.7 Operating profit 292 135 383 371 299 378 370 357 448 149 Net capital gains 10 39 82 162 11 33 146 172 87 76 Net impairments 38 -23
Slide 42: Dresdner Bank: key figures and ratios per quarter
Dresdner Bank1: key figures and ratios per quarter (EUR m) 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 2Q 05 ∆ 2Q 03 04 05/04 Net interest income 628 489 768 517 584 657 517 534 541 -43 Net fee and commission income 573 579 564 708 581 569 602 647 663 82 Net trading income 468 319 97 439 473 253 343 435 127 -346 Ope
Slide 43: Asset Management: key figures and ratios per quarter
Asset Management: key figures and ratios per quarter (EUR m) 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 2Q 05 ∆ 2Q 03 04 05/04 Operating revenues 544 632 574 544 556 564 644 591 634 78 Operating expenses -361 -424 -369 -364 -375 -347 -366 -360 -379 -4 Operating profit 183 208 205 180 181 217 278 231 255 74 Goodwill
Slide 44: Group asset allocation: breakdown per segment
Group asset allocation1: breakdown per segment (EUR bn) 6M 05 Total in % P/C in % L/H in % Bank in % AM in % Equity 54.6 14.4 18.9 19.1 30.5 11.7 5.2 25.0 0.0 9.2 Fixed income 309.0 81.3 73.3 74.1 221.0 85.0 14.1 68.5 0.5 95.8 Real estate 14.7 3.9 5.1 5.1 8.3 3.2 1.4 6.6 0.0 1.2 Others 1.8 0.5 1.7 1
Slide 45: Investment result: breakdown per segment
Investment result1: breakdown per segment (EUR m) Total P/C L/H Banking AM 6M04 6M05 6M04 6M05 6M04 6M05 6M04 6M05 6M04 6M05 Current income 7,998 8,404 1,949 2,109 5,561 5,825 484 463 4 7 Realized gains/losses 2,461 2,582 1,409 787 854 1,551 193 239 5 5 Fair value option 45 289 7 23 37 265 0 0 0 1 W
Slide 46: Revaluation reserve around EUR 29.1 bn
Revaluation reserve around EUR 29.1 bn (EUR bn) Off balance sheet Revaluation reserve On balance sheet Shareholders’ share Policyholders’ share 1.5 (31.2%) 2.0 (40.6%) 29.1 4.8 Real estate Affiliated/associated enterprises, JV 0.04 12.8 Minorities 1.4 0.3 (7.0%) 2.5 Available 7.6 24.3 for sale Defer
Slide 47: 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 13,742 (EUR m) (EUR m) 12,640 616 314 5,274 5,506 - Change in - E
Slide 48: P/C-Holding activities: movement analysis
P/C-Holding activities: movement analysis (EUR m) Pro Forma! P/C-Hold. Con- 6M 05 L/H P/C activities solidation1 1 Net premiums earned +208 -208 0 0 Current invest. income +64 -109 +147 -102 Divid. & ins. benefits -172 +253 -82 +1 Transfer of L/H Transfer of Acq. & admin. costs -52 +350 -266 -32 rei
Slide 49: Segment overview after separating holding activities
Segment overview after separating holding activities (EUR m) Pro Forma! Asset Con- 6M 05 P/C L/H Banking Mgmt. solidation1 Group Combined ratio: Holding - 6M 05: 91.0% Insurance activities1 - Separating Holding activities: 90.4% Operating profit 3,044 -698 853 516 486 0 4,201 Net capital gains 607 -
Slide 50: 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