Axa Sa · EURONEXT:CS
Axa Sa — H1 2013 Earnings Presentation
43 slides from Axa Sa's earnings presentation, Aug 2, 2013
Slide 1: Half Year 2013 Earnings Presentation
Half Year 2013 Earnings August 2, 2013 Presentation
Slide 2: Table of contents
Table of contents Introduction & highlights Page A4 by Henri de Castries, Chairman and CEO 1H13 financial performance Page A14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A40 by Henri de Castries, Chairman and CEO A2 – AXA 1H13 Earnings – August 2, 2013
Slide 3: Cautionary note concerning forward-looking statements
Cautionary note concerning forward-looking statements Certain statements contained herein are 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 be
Slide 4: Strong growth in 1H13
Strong growth in 1H13 Underlying Earnings Adjusted Earnings In Euro billion In Euro billion +26% Including +16% 3.0 exceptional €151m from 2.6 € 0.4 bn partial sale of 2.4 BNP Paribas 2.3 € 0.1 bn equity stake Net realized capital gains 1H12* 1H13 1H12* 1H13 Change is at constant Forex Change is at
Slide 5: Ambition AXA
Ambition AXA Financial objectives Underlying Earnings per share Group operating free cash flows In Euro per share Ambition AXA 1.02 Ambition AXA 1H13 in line with 2010-2015 2010-2015 CAGR Ambition AXA plan cumulative 0.90 0.92 0.85 +5% to +10% Euro 24 billion 1H10 1H11 1H12 published published publi
Slide 6: Selectivity
Selectivity We are reshaping the Life & Savings business and fostering P&C profitability Life & Savings: resuming APE growth (+9% YoY) P&C: continuing to grow the business while whilst increasing margins improving profitability In Euro million in Euro million Gross revenues 1H13 APE by product NBV m
Slide 7: Acceleration
Acceleration Pursuing an active capital management Investments in high growth markets €3.2 bn €0.5 bn €0.4 bn €0.5bn upfront + over 5 years ca. €0.3bn over 3 years 2010 2011 2012 2013 €3.3 bn €0.9 bn €1.3 bn €2.0 bn €0.2 bn €0.8 bn Disposals of mature entities and non-strategic partnerships * Transa
Slide 8: Acceleration
Acceleration Double-digit topline evolution in high growth markets Life & Savings APE P&C revenues in Euro million in high growth markets1 in Euro million in high growth markets1 2,272 1,829 1,564 537 1,417 481 474 298 1H10 1H11 1H12 1H13 1H10 1H11 1H12 1H13 Contribution Contribution 10% to Group 16
Slide 9: Efficiency
Efficiency We are on track to deliver our 2015 productivity gains Ambition AXA efficiency program Euro 0.9 billion savings achieved since 2011 in mature markets In Euro billion 1.7 Euro 0.6 billion from acquisition costs 0.2 ~0.3 P&C 0.5 ~ Euro 0.4 bn ~0.5 Additional cost Life & Savings saves announ
Slide 10: Our solvency level is comfortable, supported by strong operating return
Our solvency level is comfortable, supported by strong operating return Economic solvency ratio* +13 pts 206% 204% -8 pts -7 pt FY12 1H13 operating return Dividend Market effects & other 1H13 Debt gearing Solvency I ratio 26% 26% 233% 218% FY12 1H13 FY12 1H13 * Including US equivalence A10 – AXA 1H1
Slide 11: Last year's challenged businesses are recovering
Last year’s challenged businesses are recovering Net flows (In Euro billion) 10% De-emphasizing while 4% G/A Savings focusing on selectivity and 1H12* 1H12 1H13 improving profitability -2.6 -2.7 NBV margin 1H12 1H13 Net flows (In Euro billion) 2.1 Further growth 1.3 1.3 1.5 1.1 Unit-Linked in Unit-L
Slide 12: Continuing to deliver on Ambition AXA objectives whilst shaping AXA for the future
Continuing to deliver on Ambition AXA objectives whilst shaping AXA for the future Preparing for the world of tomorrow Ambition AXA Supplement Ambition AXA with: Strategic thinking to address long term mega trends Ambition AXA Selectivity Acceleration of digital investments and continues to Accelera
Slide 13: Table of contents
Table of contents Introduction & highlights Page A4 by Henri de Castries, Chairman and CEO 1H13 financial performance Page A14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A40 by Henri de Castries, Chairman and CEO A13 – AXA 1H13 Earnings – August 2, 2013
Slide 14: 1H13 financial performance
1H13 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A14 – AXA 1H13 Earnings – August 2, 2013
Slide 15: Underlying Earnings (1/2)
Underlying Earnings (1/2) Underlying Earnings Underlying Earnings by segment In Euro million Reported Constant In Euro million 1H12* 1H13 basis Forex +16% 2,579 Life & Savings 1,396 1,534 +10% +12% Property & Casualty 1,036 1,128 +9% +10% 2,263 Asset Management 159 194 +22% +24% International Insura
Slide 16: Underlying Earnings (2/2)
Underlying Earnings (2/2) In Euro million 93 12 2,579 99 -46 173 -14 2,263 1H12* Life & Savings P&C International Asset Holdings Forex & scope 1H13 insurance management, Banking * Retrospectively restated for the amendments to IAS 19 A16 – AXA 1H13 Earnings – August 2, 2013
Slide 17: Adjusted Earnings
Adjusted Earnings Adjusted Earnings Details of Adjusted Earnings In Euro million +26% In Euro million 1H12* 1H13 2,954 Underlying Earnings 2,263 2,579 € 375 m 2,386 Net realized capital 123 375 € 123 m gains/(losses)1 o/w exceptional gain from partial sale of - 151 BNP Paribas equity stake Net reali
Slide 18: Net Income
Net Income Net Income Details of Net income In Euro million In Euro million 1H12* 1H13 -1% 2,544 2,467 Adjusted Earnings 2,386 2,954 Change in fair value & Forex 291 -228 o/w gains (losses) on interest rate and Forex economic hedges not eligible for hedge accounting +50 -243 under IAS 39 o/w change
Slide 19: 1H13 financial performance
1H13 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A19 – AXA 1H13 Earnings – August 2, 2013
Slide 20: 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 24% +9% +8% o/w CEE2 down 29% 3,310 3,064 2,590 2,773 +15% New business 537 sales (APE) + 474 = 1H12 1H13 1H12 1H13 1H12 1H13 44% 41% 33% 29% 31% New business 27% margin + = 1H12 1H13
Slide 21: L&S – New business sales and margins by business
L&S – New business sales and margins by business Continued improvement in business mix APE NBV Net flows (Euro million) margin (Euro billion) YoY YoY Business line 1H13 1H13 1H13 change Change G/A Protection & Health 1,341 +9% 54% +4.4 +0.6 G/A Savings 442 -17% 10% -2.7 -0.1 Unit-Linked 1,138 +21% 2
Slide 22: L&S – Pre-tax Underlying Earnings by business
L&S – Pre-tax Underlying Earnings by business Total G/A Protection G/A Savings Unit-Linked Life & Savings & Health In Euro million In Euro million In Euro million In Euro million +15% -6% 2,067 1,187 1,836 1,086 +101% +15% 533 387 440 272 1H12* 1H13 1H12* 1H13 1H12* 1H13 1H12* 1H13 Higher fees & r
Slide 23: 1H13 financial performance
1H13 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A23 – AXA 1H13 Earnings – August 2, 2013
Slide 24: P&C – Revenues by segment
P&C – Revenues by segment Total Personal lines In Euro million +1% 9,424 9,489 • Average price increase of +3.0% +2% • Portfolio growth in Direct and high growth markets 16,173 16,497 • Volume decreases in mature markets 1H12 1H13 Commercial lines +4% 6,691 6,944 • Average price increase of +3.3% 1H
Slide 25: P&C – Price increases by country and segment
P&C – Price increases by country and segment 3.1% price increase on average Personal lines Commercial lines 1H13 Price Revenues Price Revenues Revenues Market pricing trends increase growth increase growth growth +1.7% +5.4% • Price increases likely to continue in France +0.3% +3.0% personal househo
Slide 26: P&C – Revenues and margins by market
P&C – Revenues and margins by market Improved current year combined ratio with strong sales in high growth markets and Direct In Euro million Mature High growth Direct Total markets markets +2% 0% 16,173 16,497 13,259 13,073 Revenues + + = +15% +7% 1,829 2,272 1,085 1,152 1H12 1H13 1H12 1H13 1H12 1H
Slide 27: P&C – Underlying Earnings
P&C – Underlying Earnings Improved combined ratio P&C Underlying Earnings Combined ratio In Euro million Improved current year Lower prior year reserve All-year combined ratio + developments combined ratio +10% + Price increases of 3% 1,128 + Lower claims frequency - Higher large claims - Higher nat
Slide 28: 1H13 financial performance
1H13 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A28 – AXA 1H13 Earnings – August 2, 2013
Slide 29: AM – Assets under management
AM – Assets under management Improving net flows In Euro billion Average AUM Net flows +6% 10 514 523 545 5 -2 1H12 2H12 1H13 1H12 FY12 1H13 In Euro billion Average AUM Net flows +5% 2 342 348 357 1 -5 1H12 FY12 1H13 1H12 2H12 1H13 A29 – AXA 1H13 Earnings – August 2, 2013 Changes are on comparable b
Slide 30: AM – Underlying Earnings and revenues
AM – Underlying Earnings and revenues Underlying Earnings Revenues In Euro million In Euro million +12% 1,741 +24% 1,575 194 1H12 1H13 Change is on a comparable basis Expenses In Euro million 159 +7% 1,378 1,303 1H12* 1H13 1H12* 1H13 Change is at constant Forex Change is at constant Forex * Retrospe
Slide 31: 1H13 financial performance
1H13 financial performance Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A31 – AXA 1H13 Earnings – August 2, 2013
Slide 32: Shareholders' equity
Shareholders’ equity Shareholders’ equity Key drivers of change In Euro billion 1H13 vs. FY12* Including €-0.1bn due to retrospective • Decrease in net unrealized € -2.5 billion restatement for the - capital gains amendments to IAS 19 53.6 € -1.7 billion 51.5 - • Dividends - • Forex movements net of
Slide 33: Economic solvency
Economic solvency Economic solvency1 Key sensitivities including US equivalence In Euro billion 206% 204% or 208% including proceeds from 49.2 closed MONY 47.3 portfolio Ratio as of December 31, 2012 204% Interest rate+100 bps 213% Interest rate -100 bps 190% 22.9 24.2 Equity markets +25% 208% Equit
Slide 34: Stable debt gearing at 26%
Stable debt gearing at 26% Net financial debt Debt ratios In Euro billion • Placement of USD 850m 13.0 12.9 perpetual subordinated notes in January 2013* • Early redemption of USD 7.8 7.9 500m undated subordinated FY12 1H13 fixed rate notes or 25% including Debt proceeds from • Placement of Euro 1bn
Slide 35: Asset & Liability Management (1/4)
Asset & Liability Management (1/4) Diversified and resilient investment portfolio Investment portfolio overview Asset yield* Life & Savings Property & Casualty Alternative investments1 3.8% 3.8% 3.9% 3.9% Real Estate 3% 5% Policy loans Listed equities 1% 4% FY12 1H13 FY12 1H13 Cash Govies and 5% AXA
Slide 36: Asset & Liability Management (2/4)
Asset & Liability Management (2/4) Current investment policy Current investment policy on Fixed income Diversification towards new asset classes ABS ~5% Loans Investments in higher yielding less liquid fixed ~10% income asset classes: Short duration high yield Government bonds ~8% ~41% Secured finan
Slide 37: Asset & Liability Management (3/4)
Asset & Liability Management (3/4) Life & Savings investment spreads and margin Inforce business New business Spread above Resilient investment Spread above guaranteed rates margin1 guaranteed rate +160bps 77 bps 72 bps Guidance: 3.8% 70-80 bps +240 bps 2.9% 2.2% 0.5% 1H13* 1H12* 1H13* 1H13* Yield o
Slide 38: Asset & Liability Management (4/4)
Asset & Liability Management (4/4) Expected positive impact from rising interest rates Interest rates sensitivity Main impacts • Limited short term sensitivity Underlying earnings • Progressive positive impact due to higher reinvestment yields • Unfavourable change in fair value of assets accounted
Slide 39: Table of contents
Table of contents Introduction & highlights Page A4 by Henri de Castries, Chairman and CEO 1H13 financial performance Page A14 by Denis Duverne, Deputy CEO & Gérald Harlin, Group CFO Concluding remarks Page A40 by Henri de Castries, Chairman and CEO A39 – AXA 1H13 Earnings – August 2, 2013
Slide 40: Main achievements in 1H13
Main achievements in 1H13 Ambition AXA: halfway there and well on track Growth and performance Ambition AXA: successful implementation APE +9% and P&C revenues +2% Selectivity with an improved business mix Underlying earnings +16% Acceleration in high growth markets organically and through a
Slide 41: Q&A session
Q&A session Q&A session A41 – AXA 1H13 Earnings – August 2, 2013
Slide 42: Notes
Notes Page A5 1. Compound annual growth rate 2. Adjusted ROE: Return corresponds to adjusted earnings net of interest charges on undated debt. Equity corresponds to average shareholders’ equity excluding undated debt and reserves related to change in fair value 3. Average shareholders’ equity exclud
Slide 43: Definitions
Definitions AXA's 1H13 results have been prepared in accordance with IFRS and interpretations applicable and endorsed by the European Commission at June 30, 2013 and are subject to completion of a limited review by AXA’s independent auditors. Adjusted earnings, underlying earnings and NBV are non-GA