Axa Sa · EURONEXT:CS
Axa Sa — Axa Sa Ord — FY2021 Earnings Presentation
44 slides from Axa Sa's earnings presentation, Feb 24, 2022
Slide 1: Full Year 2021 Earnings presentation
Full Year 2021 Earnings presentation February 24, 2022 GIE_AXA_Public
Slide 2: Important legal information and cautionary statements
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS AND THE USE OF NON-GAAP FINANCIAL MEASURES Certain stateme nts contained he re in may be f orward-look ing state me nts including, b ut not l imited to, state ments that are predictions of or indicate future
Slide 3: Table of contents
Table of contents 1. FY21 Highlights and Strategic Priorities A.04 Thomas Buberl, Group CEO 2. FY21 Business Performance A.12 Frédéric de Courtois, Group Deputy CEO 3. FY21 Financial Performance A.26 Alban de Mailly Nesle, Group CFO A3 Full Year 2021 Earnings | February 24, 2022 GIE_AXA_Public
Slide 4: FY21 Highlights and Strategic Priorities
1 FY21 Highlights and Strategic Priorities Thomas Buberl, Group CEO GIE_AXA_Public
Slide 5: Our strategy is producing results
Full Year 2021 | Our strategy is producing results €100bn 217% €6.8bn €1.2bn Revenues Solvency II ratio Group UE AXA XL UE +6% vs FY20 +61% vs FY20 +17pts vs FY20 Target achieved +4% vs FY19 +9% vs FY20 rebased Continued strong performance, across all dimensions “FY20 rebased” excludes Covid-19 clai
Slide 6: Strong earnings and dividend per share growth
Delivery | Strong earnings and dividend per share growth Underlying earnings Dividend per share per share +7% +8% 2.75 1.541 2.56 1.43 56% Payout ratio FY20 rebased FY21 FY20 FY21 “FY20 rebased” excludes Covid-19 claims in FY20 and excess Nat Cat charges in FY20 as defined on page 41 A6 Full Year 20
Slide 7: AXA is well positioned for sustained performance
Strategic overview | AXA is well positioned for sustained performance “The Group is now simplified and focused, with >90% earnings from technical Strategic transformation and fee-based businesses1, a leader in attractive European markets and 2016 – 2021 the leading global insurer for commercial line
Slide 8: AXA XL: Successful turnaround, geared for sustained performance
AXA XL | Successful turnaround, geared for sustained performance Insurance portfolio Repositioning re-underwritten Reinsurance portfolio Earnings delivery €1.2bn -5.1pts ca. -40% FY21 underlying earnings CY combined ratio Property Cat exposure1 in 2021 on 1 Jan 2022 renewals Restored profitability,
Slide 9: Earnings target: Clear levers delivering higher earnings growth
Earnings target | Clear levers delivering higher earnings growth Strong revenue growth momentum P&C Commercial, Health Unit-Linked and and Protection Asset Management +5% +24% Set to deliver towards the vs FY20 vs FY20 high-end of the target range2 Strengthening Enhancing +3% to +7% Underlying earni
Slide 10: Cash: Higher generation and continued discipline
Cash | Higher generation and continued discipline HoldCo cash Confidence in exceeding Committed to discipline €14bn upstream 2021-20233 on cash deployment €4.5bn as at FY21 Focus on Disciplined M&A Share buy-backs cash generative with high synergies business lines €1.7bn completed in February1 €0.5b
Slide 11: Outlook: The entire Group is well positioned
Outlook | The entire Group is well positioned for continued delivery €100bn 217% 3%-7% >€14bn Revenues Solvency II ratio UEPS CAGR Cash upstream Strong growth Excellent Set to deliver towards the Confidence in exceeding momentum balance sheet high-end of the target range the target Excellent outlook
Slide 12: FY21 Business performance
2 FY21 Business performance Frédéric de Courtois, Group Deputy CEO GIE_AXA_Public
Slide 13: Three key operational priorities
Three key operational priorities Capital Nat Cat exposure Business management reduction performance Enhancing cash fungibility Reducing earnings Excellent performance and remittance over time volatility from Cats across all lines in FY21 A13 Full Year 2021 Earnings | February 24, 2022 Back to agenda
Slide 14: Capital management: Successful in-force actions in 2021
Capital management | Successful in-force actions in 2021, strong pipeline In-force actions in 2021 in L&S Hong Kong Closed book reinsurance Strong pipeline of further €20-40bn reserves Switzerland Annuity transfer Reduced exposure to financial risks Belgium Closed book disposal Upstream of released
Slide 15: Enhanced cash fungibility from internal reinsurance
Capital management | Enhanced cash fungibility from internal reinsurance Transforming AXA SA into the Group’s internal reinsurer1 Additional available cash at Holding3 Merging AXA SA and existing internal Euro +2bn reinsurance captive over 2022-2026 Quota-share reinsurance treaties 2 with several AX
Slide 16: Reducing earnings volatility from Nat Cats
Nat Cat | Reducing earnings volatility from Nat Cats AXA XL Re is the main source of Cat volatility Major repositioning of AXA XL Re …Benefiting the Group’s Nat Cat actual charges vs load in FY21 (in CoR pts) portfolio in 2022… Nat Cat risk profile… +7.5pts 20% AXA XL AXA Reinsurance Group 15% 10% +
Slide 17: P&C Revenues: Favorable pricing momentum in Commercial lines
P&C Revenues | Favorable pricing momentum in Commercial lines In Euro billion Gross revenues Commercial lines pricing1: +7% +15% +3% +9% 48.7 49.3 +3% +3% AXA XL AXA XL Re2 France Europe Insurance2 Commercial 31.7 +5% 32.7 Personal lines pricing1: stable +0.2% +0.4% -0.8% Personal 17.0 +1% 16.6 Fran
Slide 18: P&C Profitability: Strong underwriting performance
P&C Profitability | Strong underwriting performance In Euro billion Underlying earnings All year combined ratio +151% (or +29% ex Covid in FY20) 99.5% 3.1% +49 4,059 96.4% 94.6% ex Covid -42 4.2% +862 5.7% +1,547 Underwriting Investment Tax, FX 94.3% result income and other 92.0% 1,644 Non-repeat of
Slide 19: L&S Revenues: Growing across markets
L&S Revenues | Growing across markets, with high quality mix In Euro billion Gross revenues Revenues by geography +9% +17% -5% 33.3 +16% 15.3 31.5 9.7 7.0 France Europe Asia Protection +5% 15.2 L&S net flows: +2.4bn 7.4 Unit-Linked +25% +3.4 +2.1 +2.2 Capital light1 G/A +15% 7.9 Traditional G/A -17%
Slide 20: APE and NBV: Growing profitable product mix
APE and NBV | Growing our highly profitable product mix In Euro billion APE1 +13% 5.9 5.3 NBV NBV1 NBV margin margin 1 +8% -1.9 pts Protection 3.7 and Health 2 +10% 53% 2.5 2.6 46.5% 43.9% +30% 1.0 40% Unit-Linked FY20 FY21 FY20 FY21 Capital light G/A +13% 0.8 30% Traditional G/A +3% 0.4 -1% FY20 FY
Slide 21: L&S profitability
L&S profitability | Resilient investment margin, higher Unit-Linked fees In Euro million Underlying earnings Net investment margin +3% (or +5% at constant scope1) +114 +87 2,338 2,380 67 bps 66 bps -46 -113 Above guidance of 55 – 65 bps 2021 - 2023E FY20 Technical Investment Fees & Taxes, FX, FY21 F
Slide 22: Health: Continued profitable growth
Health | Continued profitable growth Revenues in Euro billion Underlying earnings in Euro million Gross revenues Combined ratio Underlying earnings +5% +0.4pt +2% 14.7 15.2 94.5% 95.1% 693 684 Loss +1.0pt Expense -0.6pt FY20 FY21 FY20 FY21 FY20 FY21 A22 Full Year 2021 Earnings | February 24, 2022 Ch
Slide 23: Asset Management: Higher AuM with favorable business mix
Asset Management | Higher AuM with favorable business mix In Euro billion Net inflows by platform Average AuM +15.2 Incl. -4bn from HK reinsurance +5% +2.0 866 822 -5.0 JVs +12% Alts Core JVs Alts +9% Net inflows by client +11.6 Core +4% +2.0 -1.4 FY20 FY21 Third party Main fund JVs A23 Full Year 20
Slide 24: Asset Management: Earnings growth from margin expansion
Asset Management | Earnings growth from margin expansion In Euro million Gross revenues Cost income ratio Underlying earnings +0.7bp +20% mgt fee bps +25% -3.8pts 1,523 71.9% 348 68.1% 1,269 279 FY20 FY21 FY20 FY21 FY20 FY21 Change at constant scope and FX for revenues, at constant FX for A24 Full Y
Slide 25: Leading European franchise on Alternative assets
Asset Management | Leading European franchise on Alternative assets AXA IM Alts +12% CAGR 168 154 Real Assets #1 in Europe, #5 worldwide1 130 106 115 Average AuM (€bn) €54bn cumulative NNM since 2017 2017 2018 2019 2020 2021 High margin business Net New Money €8bn €6bn €12bn €12bn €15bn Strong pipel
Slide 26: FY21 Financial performance
3 FY21 Financial performance Alban de Mailly Nesle, Group CFO GIE_AXA_Public
Slide 27: Underlying earnings: Strong FY21 performance
Underlying earnings | Strong FY21 performance In Euro million +61% +9% 6,762 vs FY20 rebased FY20 FY21 Change Property & Casualty 1,644 4,059 +151% +29% 4,264 ex. Covid Life & Savings 2,338 2,380 +3% Health 693 684 +2% Asset Management 279 348 +25% Holdings & other -690 -710 - FY20 FY21 Underlying e
Slide 28: Net income: Strong growth from UE
Net income | Strong growth from UE and favorable market conditions In Euro million +135% 7,294 Underlying earnings 6,762 Gains/losses on financial assets +1,533 o/w Net realized capital gains +405 1 3,164 o/w Change in fair value and Forex +1,128 Exceptional and discontinued operations -456 Integrat
Slide 29: Shareholders' equity: ROE at 14.7%
Shareholders’ equity | ROE at 14.7%, at high-end of the target range In Euro billion 71.6 71.1 FY20 Shareholders' equity 71.6 Change in net unrealized capital gains 1 -6.1 Net income for the period +7.3 Dividend (paid in May 2021) -3.4 Share buy-back -0.9 FY20 FY21 Change in pension benefits +0.6 Fo
Slide 30: Solvency II: Ratio at 217%
Solvency II | Ratio at 217%, up 17pts vs FY20 In Euro billion Solvency II ratio1 Key sensitivities 200% 217% Ratio as of December 31, 2021 217% 62.0 55.0 Interest rate +50bps +9 pts Interest rate -50bps -14 pts2 Corporate spreads +50bps -1 pt 27.5 28.6 Euro Sovereign spreads +50bps3 -11 pts Credit m
Slide 31: Solvency II: Strong operating capital generation
Solvency II | Strong operating capital generation, above guidance In Euro billion FY21 dividend2: -3.6 +3.6 Share buy-back: -1.7 +6.4 +0.6 +1.7 62.0 -5.3 EOF 55.0 L&S +4.1 -0.1 P&C +3.0 Holdings and other -0.6 FY20 Regulatory and Normalized Operating Economic Dividend 2 and M&A, in-force, FY21 model
Slide 32: Cash at Holding: Strong cash position
Cash at Holding | Strong cash position, well above target range In Euro billion Main drivers of FY21 evolution +0.3 4.5 FY20 4.2 4.2 Net cash remittance from subsidiaries +4.4 Dividend (paid in May 2021) -3.4 Share buy-back -0.9 Holding costs and interests -1.0 Debt issuance +0.9 Disposals +1.4 1 Ot
Slide 33: Financial debt: Gearing in line with guidance
Financial debt | Gearing in line with guidance In Euro billion Gross financial debt Debt gearing 26.8% 26.4% 18.1 16.6 Guidance 25%-28% FY20 FY21 Debt transactions in 2022 FY20 FY21 ▶ Redemption of $850m Tier 1 debt (January 17, 2022) ▶ Issuance of €1.25bn Tier 2 debt (January 6, 2022) A33 Full Year
Slide 34: Investments: Resilient yields supported by Alternatives
Investments | Resilient yields supported by Alternatives FY21 Fixed Income P&C yield2 L&S investment margin3 reinvestment yield 2.4% 2.6% 2.6% 67 bps 66 bps 1.4% 1.0% Core Alternative1 FY21 FY20 FY21 FY20 FY21 Government bonds Average rating: AA Guidance Guidance Corporate bonds Average rating: A 10
Slide 35: Non-commission expenses: Delivering on cost efficiency
Non-commission expenses | Delivering on cost efficiency In Euro billion Non-commission expense reduction1 Expense ratio2 vs FY19 0.5 10.4% 9.8% 9.4% 0.3 Reduction achieved Target reduction 2019 2021 Target 2023 as at FY21 2023 A35 Full Year 2021 Earnings | February 24, 2022 All notes are on pages 42
Slide 36: Conclusion
Conclusion Thomas Buberl, Group CEO GIE_AXA_Public
Slide 37: Conclusion: The entire Group is well positioned
Conclusion | The entire Group is well positioned for continued delivery €100bn 217% 3%-7% >€14bn Revenues Solvency II ratio UEPS CAGR Cash upstream Strong growth Excellent Set to deliver towards the Confidence in exceeding momentum balance sheet high-end of the target range the target Excellent outl
Slide 38: Q&A Full Year 2021 Earnings
Q&A Full Year 2021 Earnings February 24, 2022 GIE_AXA_Public
Slide 39: AXA Investor Relations: Keep in touch
AXA Investor Relations | Keep in touch Meet our management Contact us Investor Relations +33 1 40 75 48 42 March 17 Morgan Stanley European Financials Conference Virtual anu.venkataraman@axa.com Head of Investor Relations (from March 1 st) remi.dousteyssier@axa.com April 6 HSBC West Coast Financials
Slide 40: Thank you
Thank you Full Year 2021 Earnings February 24, 2022 GIE_AXA_Public
Slide 41: Scope and definitions
Scope and definitions Scope ▪ France: includes insurance activities, banking activities and holdings in France. ▪ Europe: includes Switzerland (insurance activities), Germany (insurance activities, holding, and banking activities until its disposal on December 31, 2020), Belgium (insurance activitie
Slide 42: Notes
Notes Page A6 1. Dividend per share of €1.54 that will be proposed at the Annual General Meeting on April 28, 2022 and is expected to be paid on May 10, 2022 with an ex-dividend date of May 6, 2022. Page A7 1. Based on FY21 underlying earnings pre-tax excluding Holdings. Technical and fee-based line
Slide 43: Notes
Notes Page A17 1. Price effect is calculated as a percentage of total gross written premiums in the prior year. 2. Price increases on renewals, calculated as a percentage of renewable premiums. Page A19 1. General Account Savings products which, at inception, create more Eligible Own Funds (EOF) tha
Slide 44: Notes
Notes Page A31 1. Normalized capital generation refers to operating capital generation excluding operating variances. L&S includes Life-like Health. P&C includes P&C-like Health. 2. FY21 dividend (€1.54 per share) that will be proposed at the Annual General Meeting on April 28, 2022 and is expected