Axa Sa · EURONEXT:CS
Axa Sa — H1 2014 Earnings Presentation
101 slides from Axa Sa's earnings presentation, Aug 1, 2014
Slide 1: Half Year 2014 Earnings Presentation
Half Year 2014 Earnings August 1, 2014 Presentation
Slide 2: Cautionary note concerning forward-looking statements
Cautionary note concerning forward-looking statements Certain statements contained herein may be 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
Slide 3: Table of contents
Table of contents Introduction & highlights Page A3 by Henri de Castries, Chairman and CEO 1H14 financial performance Page A10 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A36 by Henri de Castries, Chairman and CEO A3 – AXA 1H14 Earnings – August 1, 2014
Slide 4: 1H14 – Strong growth in earnings
1H14 – Strong growth in earnings Underlying Earnings Adjusted Earnings In Euro billion In Euro billion +11% +8% 2.8 3.0 3.1 2.6 1H13 1H14 1H13 1H14 Change is at constant Forex Change is at constant Forex Net income In Euro billion Underlying Earnings per share +25% In Euro +9% adjusted for Forex eff
Slide 5: Selectivity: Delivering profitable growth in 2014
Selectivity Delivering profitable growth in 2014 Life & Savings Property & Casualty On track to grow APE in 2014 Portfolio growth In Euro billion Personal net new contracts -178k +328k 0% 3.3 3.2 Var. +2% 2Q13 16.5 16.8 2Q14 +8% Revenues In Euro billion 1Q13 1Q14 -6% 1H13 1H14 1H13 1H14 Profitabilit
Slide 6: Acceleration: Double-digit earnings development in high growth markets
Acceleration Double-digit earnings development in high growth markets In Euro million Life & Savings Property & Casualty Change is at constant Forex Underlying earnings Underlying earnings +19% +15% High growth 209 232 118 124 markets 1H13 1H14 1H13 1H14 ICBC-AXA Life AXA-Tian Ping* In Euro million
Slide 7: Efficiency: On track to deliver increased Euro 1.9 billion target
Efficiency On track to deliver an increased Euro 1.9 billion target In Euro billion 2011-2015E cost savings target (in mature Life & Savings and Property & Casualty entities) Further Euro 0.2 billion added to 1.9 the target, from Life & Savings 1.7 acquisition costs 1.5 Increased Sales support produ
Slide 8: Performing well in a low interest rate environment
Performing well in a low interest rate environment resulting from key management actions Well diversified Ca. of Group pre-tax Underlying Earnings1 coming from business mix reduces Property & Casualty and Protection & Health2, i.e. earnings volatility 70% businesses less sensitive to financial marke
Slide 9: Generating earnings and dividend growth
Generating earnings and dividend growth In Euro per share Delivering on 1.57 1.57 1.69 1.85 5-10% 1.02 1.08 Underlying EPS1 CAGR2 Sustained target FY10 FY11 FY12 published published published FY13 1H13 1H14 growth in dividend In Euro million Guidance of 437 297 434 375 335 Euro 300-500 million of Ne
Slide 10: Table of contents
Table of contents Introduction & highlights Page A3 by Henri de Castries, Chairman and CEO 1H14 financial performance Page A10 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A36 by Henri de Castries, Chairman and CEO A10 – AXA 1H14 Earnings – August 1, 2014
Slide 11: Ambition AXA: Delivering on financial objectives in 1H14
Ambition AXA Delivering on financial objectives in 1H14 Underlying Earnings per share Group operating free cash flows In Euro per share In Euro billion 1H14 in line with Ambition AXA objectives Ambition AXA 1.08 Ambition AXA 4.7 5.2 1.02 4.2 2011-2015 0.90 0.92 2010-2015 CAGR cumulative 0.85 +5% to
Slide 12: 1H14 financial performance
1H14 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A12 – AXA 1H14 Earnings – August 1, 2014
Slide 13: Underlying Earnings (1/2)
Underlying Earnings (1/2) Underlying Earnings Underlying Earnings by segment In Euro million Constant In Euro million 1H13 1H14 Forex +11% 2,777 Life & Savings 1,534 1,651 +13% 2,579 Property & Casualty 1,128 1,226 +9% International Insurance 103 135 +31% +11% on a comparable basis (excluding Asset
Slide 14: Underlying Earnings (2/2)
Underlying Earnings (2/2) In Euro million Of which Euro -26 million due to the loss of Mainly due to AXA Private Equity investments in Of which Euro -30 contribution Brand and Digital Adverse impact million due to the loss of mostly from JPY MONY contribution1 depreciation +32 +7 +105 -8 +198 -51 2,
Slide 15: Adjusted Earnings
Adjusted Earnings Adjusted Earnings Details of Adjusted Earnings In Euro million +8% In Euro million 1H13 1H14 3,112 2,954 335 Underlying Earnings 2,579 2,777 375 Net realized capital gains/losses 375 335 Net realized capital gains o/w realized capital gains 555 439 o/w net impairments -160 -91 o/w
Slide 16: Net Income
Net Income Net Income Details of Net income In Euro million +25% In Euro million 1H13 1H14 3,008 Adjusted earnings 2,954 3,112 2,467 Change in fair value & Forex -228 37 o/w gains/losses on derivatives not eligible for hedge -143 78 accounting under IAS 39 o/w gains/losses on Forex economic hedges n
Slide 17: 1H14 financial performance
1H14 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A17 – AXA 1H14 Earnings – August 1, 2014
Slide 18: L&S – New business sales and margins by market
L&S – New business sales and margins by market In Euro million Mature markets High growth Total markets o/w Asia1 up 12% o/w CEE2 down 20% 0% -1% 3,310 3,181 2,773 2,668 New business sales (APE) + 537 +7% 513 = 1H13 1H14 1H13 1H14 1H13 1H14 48% 45% 32% 34% 30% 31% New business margin + = 1H13 1H14 1
Slide 19: L&S – New business sales and margins by business
L&S – New business sales and margins by business Continued improvement in profitability APE NBV Net Flows (Euro million) margin (Euro billion) Business line 1H14 change 1H14 1H13 1H14 G/A Protection & Health 1,207 -4% 55% +4.4 +4.3 o/w Euro +0.7 billion from the exceptional sales of G/A Savings 479
Slide 20: L&S – Pre-tax Underlying Earnings by business
L&S – Pre-tax Underlying Earnings by business G/A Protection G/A Savings Unit-Linked Total & Health Life & Savings1 In Euro million In Euro million In Euro million In Euro million +11% 2,067 2,129 +8% 1,086 1,129 +8% +11% 440 466 533 485 1H13 1H14 1H13 1H14 1H13 1H14 1H13 1H14 + Higher technical mar
Slide 21: 1H14 financial performance
1H14 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A21 – AXA 1H14 Earnings – August 1, 2014
Slide 22: P&C – Revenues by segment
P&C – Revenues by segment Total In Euro million Personal lines In Euro million +1% 9,475 9,605 +2% • Average price increase of +1.7% 16,483 16,820 • Motor revenues up 1% • Non-motor revenues up 2% 1H13* 1H14 In Euro million Commercial lines +3% 7,155 6,944 • Average price increase of +2.2% • Revenue
Slide 23: P&C – Price increases by country and segment
P&C – Price increases by country and segment +1.9% price increases on average Personal lines Commercial lines 1H14 Price Revenues Price Revenues Revenues increase growth increase1 growth growth 2H14 market pricing trends • Price increases likely in both Personal lines France +2.3% +3.4% +5.9% +5.1%
Slide 24: P&C – Revenues and margins by market
P&C – Revenues and margins by market High growth In Euro million Mature markets Direct Total markets +2% +1% o/w Asia +8% o/w MedLA +4% 16,483 16,820 13,073 13,349 Revenues + +5% + = 2,272 2,269 +7% 1,138 1,202 1H13* 1H14 1H13* 1H14 1H13* 1H14 1H13* 1H14 99.9% -0.4 pt 99.7% 97.5% 97.5% 97.3% 97.3% 9
Slide 25: 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 and lower claims frequency +9% + Lower expense ratio - Higher claims severity 1,226 - Higher nat cat charges o/w €2
Slide 26: 1H14 financial performance
1H14 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A26 – AXA 1H14 Earnings – August 1, 2014
Slide 27: AM – Assets under management
AM – Assets under management Improving net flows Average AUM and net flows in Euro billion Revenues in Euro million Average AUM Net flows Revenues +3% +7% 545 +10 +11 694 540 563 1H13 1H14 1H13 1H14 1H13 1H14 Average AUM and net flows in Euro billion Revenues in Euro million Average AUM Net flows Re
Slide 28: AM – Underlying Earnings
AM – Underlying Earnings Asset Management In Euro million In Euro million +11% on a comparable basis +9% on a comparable (excluding AXA basis (excluding AXA Private Equity*) Private Equity*) -15% 118 -4% 101 194 184 1H13 1H14 In Euro million +14% 83 76 1H13 1H14 1H13 1H14 * Sale of a majority stake
Slide 29: 1H14 financial performance
1H14 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A29 – AXA 1H14 Earnings – August 1, 2014
Slide 30: Shareholders’ Equity
Shareholders’ Equity Shareholders’ equity Key drivers of change In Euro billion In Euro billion + Change in net unrealized capital gains +4.0 58.9 52.9 - Dividends -2.0 + Forex movements net of hedging +0.5 + Net income for the period +3.0 + Subordinated debt +0.8 * - Change in pension benefits -0.5
Slide 31: Stable debt gearing at 24%
Stable debt gearing at 24% Total net debt Debt ratios In Euro billion FY13 1H14 Changes in 1H14 12.3 12.4 Undated subordinated debt Debt 24% 24% 9 May 2014: placement of Gearing Euro 1 billion undated 7.8 8.8 subordinated notes Interest Subordinated debt Cover2 10.2x 11.0x 9 January 2014: placem
Slide 32: Economic solvency
Economic solvency Economic solvencya Key sensitivities Economic Solvency 206% 215% Ratio as of June 30, 2014 215% ratio Interest rate +100 bps 226% Interest rate -100 bps 202% 50.8 54.2 In Euro billion Equity markets +25% 219% 24.7 25.2 Available capital Equity markets -25% 211% Required capital Cor
Slide 33: Asset & Liability Management (1/3)
Asset & Liability Management (1/3) Diversified and resilient investment portfolio Investment portfolio overview Limited yield dilution 83% in Fixed income Fixed income Assets duration as at June 30, 2014 Alternative investments1 Real Estate 3% Life & Savings 7.2 years 5% Property & Casualty 5.0 year
Slide 34: Asset & Liability Management (2/3)
Asset & Liability Management (2/3) Limited earnings sensitivity to low interest rates environment Resilient asset yield and decreasing guaranteed rate 4.0% 3.9% Resilient investment margin 3.8% 3.7% 3.7% 4% Life 77bps 79bps & '170bps '150bps Asset yield1 Savings '150bps Average 1H13* 1H14* General 2
Slide 35: Asset & Liability Management (3/3)
Asset & Liability Management (3/3) Well diversified and high quality new investments New Fixed income investments in 1H141 Resilient reinvestment yield Below Investment Grade credit (mostly short duration high yield) ABS ~10% 1H14 investment rate on Fixed income assets ~3% for Life & Savings and Pro
Slide 36: Table of contents
Table of contents Introduction & highlights Page A3 by Henri de Castries, Chairman and CEO 1H14 financial performance Page A10 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A36 by Henri de Castries, Chairman and CEO A36 – AXA 1H14 Earnings – August 1, 2014
Slide 37: Concluding remarks
Concluding remarks Strong increase in earnings Deliver profitable growth across the board Accelerate growth through Topline growth on track investment in brand and digital Performing well in a low Maintain strong discipline in interest rate environment capital and risk management Delivering on Ambit
Slide 38: Q&A session
Q&A session Q&A session A38 – AXA 1H14 Earnings – August 1, 2014
Slide 39: Notes
Notes Page A8 1. Excluding holdings 2. Includes G/A Protection & Health, Property & Casualty and International Insurance 3. Estimated impact on Underlying Earnings from General Account only (G/A Savings, G/A Protection & Health and Property & Casualty) Page A9 1. Underlying EPS: Underlying Earnings
Slide 40: Definitions & Credits
Definitions & Credits Definitions 1H14 financial statements are subject to completion of limited review by AXA’s independent auditors. AXA's 1H14 results have been prepared in accordance with IFRS and interpretations applicable and endorsed by the European Commission at June 30, 2014. Adjusted earni
Slide 41: Half Year 2014 Earnings Appendices
Half Year 2014 Earnings August 1, 2014 Appendices
Slide 42: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B2 – AXA 1H14 Earnings – August 1, 2014
Slide 43: Life & Savings – Scope overview
Life & Savings – Scope overview Global footprint Well balanced business mix 1H14 APE by geography 1H14 APE by business Unit-Linked G/A Protection & 35% Health MedLA2 38% 9% NORCEE1 16% Mutual Funds & France other 24% G/A Savings 12% 15% Total: Euro 3,181 million Strong proprietary network 1H14 APE b
Slide 44: Property & Casualty – Scope overview
Property & Casualty – Scope overview Global footprint Strong presence in Motor 1H14 Revenues by geography 1H14 Revenues by business Construction Other 2% Asia 8% 3% Liability Other1 Motor 7% Direct Business Unit 1% 43% Property 7% 23% France Workers’ 20% Compensation Health Switzerland 6% 15% Total:
Slide 45: AXA’s footprint in high growth markets
AXA’s footprint in high growth markets Life & Savings Property & Casualty 1H14 APE by geography 1H14 Revenues by geography Poland Hong Kong Other 5% 8% 3% Ukraine Czech Republic 1% 3% Mexico Malaysia Philippines 3% 6% Mexico 3% 30% Singapore Singapore 6% 4% Hong Kong 44% Colombia China 6% 9% Morocco
Slide 46: Asset Management – Scope overview
Asset Management – Scope overview Complementary business models • Multi-expert model: structured by • Risk-reducing, return-seeking, diversifying strategies “Expertise” and customized solutions • Expertise in fixed income, equities, • Expertise in actively managed equity and fixed Product quantitati
Slide 47: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B7 – AXA 1H14 Earnings – August 1, 2014
Slide 48: Revenues
Revenues Revenues by segment Change on a Change on a In Euro million 1H13 1H14 comparable reported basis basis Life & Savings 29,603 29,039 -2% +2% 1 Property & Casualty 16,483 16,820 +2% +2% Asset Management 1,741 1,593 -9% +4% International Insurance 1,909 1,966 +3% +4% Banking & Holdings 293 287
Slide 49: Underlying Earnings by geography
Underlying Earnings by geography Underlying Earnings In Euro million Change on Change at 1H13 1H14 reported constant basis Forex Life & Savings 1,534 1,651 +8% +13% United States 311 431 +39% +45% France 353 397 +12% +12% NORCEE1 328 349 +7% +6% UK -9 13 -- -- Asia-Pacific (incl. Japan) 478 394 -17%
Slide 50: 1H14 key sensitivities
1H14 key sensitivities P&L Balance Sheet Impairments net of 1 Change in fair value Net unrealized capital In Euro billion hedges and Forex gains through through through Adjusted Earnings Net Income Shareholders' Equity -25% -0.5 -0.6 -1.1 Equities +25% 0.0 +0.2 +1.5 -100 bps +0.2 +8.4 Interest rates
Slide 51: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B11 – AXA 1H14 Earnings – August 1, 2014
Slide 52: Life & Savings
Life & Savings 1 Revenues, new business volumes and profitability Page B13 2 Underlying earnings margin analysis Page B14 3 Underlying earnings margin analysis by business Page B20 4 Focus on the US Page B26 B12 – AXA 1H14 Earnings – August 1, 2014
Slide 53: L&S – Revenues and net inflows
1 L&S – Revenues and net inflows 1H14 L&S revenues by region L&S Net inflows Net flows by country/region In Euro billion In Euro billion 1H13 1H14 France +0.8 +1.2 NORCEE +2.4 +2.1 MedLA France +10% United States -0.3 -1.2 +4% 3.4 United Kingdom +0.9 +0.1 7.5 Asia Pacific (incl. Japan) +1.1 +0.7 Med
Slide 54: L&S – Underlying Earnings margin analysis
2 L&S – Underlying Earnings margin analysis Gross Margin Expenses Comp. Comp. In Euro million 1H14 In Euro million 1H14 Change1 Change1 2 Margin on revenues 2,267 -2% Acquisition expenses 1,838 -5% Margin on assets 2,608 +5% Admin. Expenses 1,370 +3% Technical margin 461 +23% VBI amortization 57 +58
Slide 55: L&S – Margin analysis: margin on revenues
2 L&S – Margin analysis Details of margin on revenues Margin on revenues Average margin on L&S revenues1 7.8% -0.3 pts Ê -0.3 pt business mix Detail by product 0.0 pt country mix G/A Protection & Health: 12.6% G/A Savings: 1.6% Unit-Linked: 3.9% Mutual funds & other: 7.9% Margin on revenues 1 x Euro
Slide 56: L&S – Margin analysis: Unit-Linked assets
2 L&S – Margin analysis Details of margin on Unit-Linked assets Unit-Linked management fees Average management fees on Unit- Linked reserves Ê 72 bps +2 bps 144 bps annualized Unit-Linked management +2 bps business mix 0 bp country mix fees x Ê Euro 1,138 million +8% Margin on assets 1 Unit-Linked a
Slide 57: L&S – Margin analysis: General Account assets
2 L&S – Margin analysis Details of margin on General Account assets Investment margin Unit-Linked management fees Ê Euro 1,138 million +8% Average management fees on general Margin on assets 1 + account reserves Ê Ê Euro 2,608 million +5% 39 bps +1 bp 79 bps annualized 1. Including other fees (mainl
Slide 58: L&S – Margin analysis: technical margin
2 L&S – Margin analysis Details of technical margin Technical margin Mortality & morbidity margin and other 1 Euro 643 million +17% Ê Technical margin + Euro 461 million +23% Ê GMxB Variable Annuity hedge margin Euro -183 million -5% Ê (vs. Euro -183 million in 1H13) In Euro million o/w basis -39 o/
Slide 59: 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 602 643 1H14 mortality, morbidity & surrender margin evolution mainly explained by an improved claims experience in G/A Protection & Health notably in France and Japan 1H13
Slide 60: L&S – 1H14 Underlying Earnings by business
3 L&S – 1H14 Underlying Earnings by business Euro million 1H13 1H14 % change 1 on comp. basis G/A Protection & Health 1,086 1,129 +8% G/A Savings 440 466 +8% Unit-Linked 533 485 +11% Mutual funds & Other 13 48 - Pre-tax Underlying Earnings 2,067 2,129 +11% Tax and Minority interest -533 -478 - Under
Slide 61: L&S – 1H14 Margin analysis by business
3 L&S – 1H14 Margin analysis by business In Euro million G/A Protection Mutual Funds G/A savings Unit-Linked & Health & Other Margin on 8% 1,790 92 325 revenues % of GWP Investment 79 bps* 457 789 45 margin of avge G/A reserves Management 144 bps* 0 0 1,138 fees of avge UL reserves Technical 571 66
Slide 62: 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 1H14 1 In Euro million 1H14 Change Change 1 Protection & Health average Protection & Health GWP 14,170 0% 156,638 +3% reserves x x Protection & Health Protection & Health inv
Slide 63: G/A Protection & Health – Details on Combined Ratio
3 L&S –Margin analysis by business G/A Protection & Health – Details on Combined Ratio Combined Ratio Expense Ratio1 Mainly due to Forex • Expense ratio deteriorated by 0.4 point -0.5 pt mainly reflecting commercial efforts 95.5% 95.5% Expense 12.0% 12.2% Ratio Loss 83.4% 83.3% Loss Ratio Ratio • Lo
Slide 64: L&S – G/A Savings
3 L&S – Margin analysis by business G/A Savings In Euro million Comp. Comp. 1H14 1 1H14 Change Change 1 G/A Savings G/A Savings 5,822 +11% 177,244 -4% Gross revenues Average reserves x x Margin on G/A Savings 1.6% -1.2 pt 45 bps +3 bps G/A Savings Investment spread 89 bps Comp. annualized 1H14 Chang
Slide 65: L&S – Unit-Linked
3 L&S – Margin analysis by business Unit-Linked In Euro million Comp. Comp. 1H14 1 1H14 Change Change 1 Unit-Linked Gross Unit-Linked Average 8,285 -1% 157,607 +5% revenues reserves x x Average margin on UL average 3.9% -0.4 pt 72 bps +2 bps UL revenues Management fees 144 bps Comp. annualized 1H14
Slide 66: Focus on the US: Variable Annuity profitability
Focus on the US Continuous improvement in Variable Annuity profitability US Variable Annuity GMxB Underlying Earnings In Euro million, net of DAC and tax1 FY122 FY13 1H13 1H14 Total Variable Annuity base fees & other, less expenses 270 338 132 153 GMxB hedge margin -156 -50 -50 -35 o/w Basis -16 -1
Slide 67: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B27 – AXA 1H14 Earnings – August 1, 2014
Slide 68: P&C – Revenues and net new contracts
P&C – Revenues and net new contracts 1H14 P&C revenues by region P&C personal net new contracts In Euro billion In thousands Improved retention in the UK partly offset by slowdown in MedLA Direct -178 +328 +7% France Asia +4% +117 +22 +8% 1.2 +154 0.4 0.5 3.3 5.7 +241 +152 MedLA 3.7 +1% UK & Ireland
Slide 69: P&C – Underlying Earnings analysis
P&C – Underlying Earnings analysis Net technical result Net investment income In Euro million Comp. In Euro million Comp. 1H14 Change 1H14 Change Revenues 16,820 +2% Average P&C assets 57,152 +1% x x Combined ratio (in %) 1 95.8% +0.2 pt Average Asset Yield 3 3.9%* +11% 1. Combined ratio calculated
Slide 70: P&C – Details on Combined Ratio
P&C – Details on Combined Ratio Expense Ratio roll-forward 26.2% Combined Ratio 25.9% -0.3 pt 0.0 pt 95.8% 95.8% Expense Ratio 26.2% 25.9% 1H13 Acquisition Administrative 1H14 expenses expenses -0.4 pt change on a comparable basis Loss 69.5% 69.9% Ratio Loss Ratio roll-forward +0.5 pt 69.9% 69.5% +1
Slide 71: P&C – Focus on reserve developments
P&C – Focus on reserve developments Prior year reserve development level (in % of gross earned premiums) 6.0% 5.4% 5.4% 4.5% 2.7% 3.1% 2.0% 2.1% 1.8% 1.4% 1.7% 1.3% 0.9% 1.2% 1.2% 0.3% FY04 FY05 FY06 FY07 FY08 1H09 FY09 1H10 FY10 1H11 FY11 1H12 FY12 1H13 FY13 1H14 Reserving ratio (Net technical rese
Slide 72: P&C – Details on current year loss ratios
P&C – Details on current year loss ratios Personal Motor Personal non motor +0.5pt +0.9pt 74.6% +1.4pts 74.4% +0.8pt 64.2% -0.4pt 63.3% +0.6pt -0.7pt -2.0pts 1 1 1H13 CY Nat Cat Price effect Frequency & Other 1H14 CY 1H13 CY Nat Cat Price effect Frequency & Other 1H14 CY loss ratio severity loss rat
Slide 73: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B33 – AXA 1H14 Earnings – August 1, 2014
Slide 74: AM – Underlying Earnings margin analysis
AM - Underlying Earnings Details of Asset Management margin analysis Margin* Expenses* In Euro million 1H14 Change** In Euro million 1H14 Change** Asset Management fees 1,452 +5% Asset Management expenses 1,076 -2% Distribution revenues 324 +1% Investment result -8 -34% Distribution expenses 323 +2%
Slide 75: AM – Details on Asset Management revenues
AM – Underlying Earnings Details on Asset Management revenues Asset Management fees on Average Assets under Management 33 bps * +1 bp * Ò Asset Management fees Euro 1,452 million +5% Ò x Average Assets under Management o/w perfomance fees Euro 45 billion ( +42% ) o/w reserch fees Euro 177 billion (
Slide 76: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B36 – AXA 1H14 Earnings – August 1, 2014
Slide 77: Balance sheet
Balance sheet 1 General accounts invested assets Page B38 1.1 Government bonds & related page B39 1.2 Corporate bonds page B40 1.3 CDS page B43 1.4 ABS page B44 1.5 Equity page B48 1.6 Real Estate page B50 1.7 Hedge Funds page B51 1.8 Private Equity page B52 1.9 Mortgage loans page B53 2 Focus on ne
Slide 78: General Account invested assets
1 General Account invested assets Invested assets (100% ) FY13 % 1H14 % in Euro billion Changes in asset mix Fixed income 388 83% 406 83% • Net inflows, investment income and o/w Govies and related 210 45% 226 46% maturities: invested mainly in corporate and government bonds o/w Corporate bonds 144
Slide 79: 1.1 Government bonds and related
1.1 Government bonds and related Breakdown by geography Breakdown by segment Other2 Ireland 1% P&C 2% The Netherlands 11% 2% Other 7% Supranational Institutions 2% L&S Austria France 87% 3% 19% US 6% 1 Spain Gross unrealized capital 6% gains and losses Switzerland In Euro billion 7% Germany 15% 29.9
Slide 80: 1.2 Corporate bonds
1.2 Corporate bonds Breakdown by industry Breakdown by segment Other2 Technology 2% 2% Basic materials P&C 5% Other 15% 2% Energy 6% L&S Consumer 83% cyclical 6% Banks 32% Industrial 1 7% Gross unrealized capital gains and losses Utilities In Euro billion 9% Communications 8,2 9% 5,6 Consumer non-cy
Slide 81: 1.2 Focus on banking corporate bonds
1.2 Focus on banking corporate bonds As of June 30, 2014 Gross market Senior debt Subordinated debt value Total Non Lower Upper in Euro billion Secured Tier 1 Preferred secured Tier 2 Tier 2 France 4.7 3.3 1.0 0.0 0.0 0.0 9.0 United States 0.3 7.1 1.1 0.0 0.1 0.0 8.6 UK 1.2 2.8 0.4 0.0 0.0 0.0 4.5 S
Slide 82: Corporate bonds breakdown by country and rating
Corporate bonds breakdown by country and 1.2 rating (including CDS) P = Participating NP = Non-participating in Euro billion France US Belgium Germany Switzerland Japan Other1 Total As of June 30, 2014 P NP P NP P NP P NP P NP NP P NP P NP AAA 2.7 1.1 0.1 0.3 0.1 0.1 3.9 0.7 1.1 0.3 0.6 0.2 0.2 8.0
Slide 83: 1.3 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
Slide 84: 1.4 Asset Backed Securities by underlying type of asset
Asset Backed Securities by underlying type of 1.4 asset Breakdown by asset type1 Breakdown by rating Mortgage-backed Other asset-backed US Subprime, Alt-A & NC RMBS 11% NR/Equity 7% AAA Prime Residential 46% 5% Below investment grade Commercial MBS 17% 10% CLO BBB 62% 6% CDO 7% A AA 10% Consumer ABS
Slide 85: 1.4 Credit risk management: ABS investments
1.4 Credit risk management: ABS investments Group ABS exposure decreased mainly driven by: • Net outflows of Euro 2.0 billion, comprised of Euro 1.5 billion of purchases, mainly on CLOs and reinvestment of matured positions, and Euro 3.4 billion of sales and redemptions • Positive market effect of E
Slide 86: 1.4 Focus on Mortgage-Backed Securities
1.4 Focus on Mortgage-Backed Securities Euro million Prime Residential US Subprime As of June 30, 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% % of pa
Slide 87: 1.4 Focus on CDO
1.4 Focus on CDO Euro million High Other Investment grade Structured Finance Total As of June 30, 2014 Yield CDOs AAA - - - 2 2 AA - - - 3 3 A 248 9 - 1 258 BBB 50 - - 2 51 Below investment grade 0 10 19 10 39 Equity / Non rated 86 12 2 118 218 Total exposure 384 31 21 136 571 Shareholders’ exposure
Slide 88: 1.5 Listed equity portfolio overview
1.5 Listed equity portfolio overview Breakdown by geography Breakdown by segment Other2 3% Rest of the World P&C 13% 24% France L&S Other Eurozone 22% 73% countries 9% 1 Belgium Gross unrealized capital 6% US gains and losses 20% In Euro billion UK 6% 3.2 3.3 Japan 5% Switzerland Germany 8% 12% Tota
Slide 89: 1.5 Shareholders’ exposure to listed equity
1.5 Shareholders’ exposure to listed equity Estimated shareholders’ exposure to equity (In Euro billion) FY13 1H14 18 17 7 7 Gross Group share Gross Group share nominal net of hedge, nominal net of hedge, 100% tax & PB 100% tax & PB B49 – AXA 1H14 Earnings – August 1, 2014
Slide 90: 1.6 Real Estate investments
1.6 Real Estate investments Defensive portfolio with good performance over the long term Key indicators Market value 1H14 market value by Split by type (in Euro billion) country Others France Switz. Germany Belgium 7% 251 US Office ~ 47% ~ 39% ~ 67% ~ 78% 6% Germany Residential ~ 10% ~ 46% ~ 8% ~ 0%
Slide 91: 1.7 Hedge Fund investments
1.7 Hedge Fund investments Diversified portfolio of hedge funds Key indicators Market value (in Euro billion) Exposure and concentration risk 5 • Management of diversified funds of hedge funds and thematic programme • Top 10 fund managers in diversified portfolios represent ~60% of market value • Fo
Slide 92: 1.8 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) Japan Other Infrastructure Venture 2% 5% 9% 6% 8 Private debt 15% US Europe Buy-out 31% 62% 70% 1H14 Environment AXA portfolio retu
Slide 93: 1.9 Mortgage loans & other
1.9 Mortgage loans & other Low risk mortgage loan portfolio Key indicators Market value 1H14 market value by country2 (in Euro billion) Other Germany 13% Very secured 241, 2 25% 27% Residential portfolio: 91% 75% Belgium Residential 1H14 default rate Commercial 8% 9% Commercial 0.20% 1H14 loan to va
Slide 94: Focus on net unrealized capital gains
2 Focus on net unrealized capital gains Balance sheet net unrealized Off balance sheet net capital gains1 unrealized capital gains In Euro billion In Euro billion 12.5 3 2 Equities Real Estate and loans 2.0 Corporate bonds 8.4 2.4 Government bonds and related 1.9 3.4 3.7 1.5 8.2 5.0 FY13 1H14 FY13 1
Slide 95: 2.1 Exposure to Eurozone peripheral countries government bonds
Focus on exposure to Eurozone peripheral 2.1 countries government bonds Exposure by issuer Gross book value Gross book value Gross book value Gross market value in Euro billion June 30, 2013 December 31, 2013 June 30, 2014 June 30, 2014 Italy 18.2 19.1 19.5 22.3 Spain 9.6 10.7 11.2 13.0 Ireland 2.9
Slide 96: 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 +150 bps 79 bps 77 bps Guidance: 3.7% 70-80 bps +250 bps 2.9% 2.2% 0.4% 1H14* 1H13* 1H14* 1H14*
Slide 97: 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% 300bps 300bps 3.0% • Average G/A reserves: Euro 98 billion • G/A Savings new business sales with France 0.9% 0.0% long term guarantees stopped in 1998 1H14 1H14 20bps 130bps 3.7% 3
Slide 98: Solvency I
4 Solvency I Solvency I ratio +34pts -12pts 254% 233% 221% +11pts 182% 188% Business FY10 FY11 FY12 FY13 Underlying URGL 1H14 growth, Earnings forex & other Solvency I Sensitivities Solvency I Ratio as of June 30, 2014 254% 221% 254% ratio Interest rates +100bps 177% 62 Interest rates -100bps 310% 5
Slide 99: Solvency I AFR reconciliation to shareholders’ equity
Solvency I AFR reconciliation to shareholders’ 4 equity Solvency I Available Financial Resources1 (AFR) In Euro billion 1H14 shareholders’ equity 100% 62 Intangibles -26 Admitted subordinated debt2 +3 Locally admitted assets +2 Real estate3 +8 Pension benefit +3 Other4 +9 1H14 Available capital 62 1
Slide 100: Economic capital model
4 Economic capital model Economic Solvency1 FY13 Economic capital1 by geography Holdings & Other 15% France 206% 215% UK 25% 5% Asia Pacific NORCEE 12% 29% US 54.2 50.8 6% MedLA 9% 100% basis, before diversification 24.7 25.2 1H14 Economic capital1 by risk Operational risk 5% Market risk 47% FY13 1H
Slide 101: Net financial debt: Long-term maturities
5 Net financial debt Long-term maturities Total net debt Contractual maturity breakdown In Euro billion In Euro billion • Undrawn credit lines Euro 13 billion 2.2 • Cash & cash equivalent Euro 21 billion 12.3 12.4 2.7 7.8 8.8 6.1 0.3 2.0 2.2 0.8 1.0 0.1 0.2 2014 2015 2016 2017-2020 2021-2025 2026-20