Aegon Ltd. · EURONEXT:AGN
Aegon — Q2 2009 Earnings Presentation
15 slides from Aegon's earnings presentation, Aug 13, 2009
Slide 1: Second quarter 2009 results
Second quarter 2009 results Media Conference Call Alex Wynaendts, CEO August 13, 2009
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Cautionary note regarding forward-looking statements The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following ar
Slide 3: Key messages
Key messages o Earnings improved substantially compared to previous quarters o Strong capital position – Aim to repay EUR 1 billion – Started to invest cash in higher yielding quality assets o Credit markets drive strong improvement of revaluation reserves o Continued profitable sales and deposits o
Slide 4: Execution of strategic priorities
Execution of strategic priorities o FY capital release target exceeded, realizing EUR 1.6 billion in 1H09 o Continuation of capital efficiency program Capital o Strong excess capital with EUR 3.5 billion in excess above AA o No interim dividend payment for 2009 – dividend policy unchanged o EUR 150
Slide 5: Improved earnings offset by impairments and sale of Taiwan
Improved earnings offset by impairments and sale of Taiwan o Positive effects strong equity markets in Q2, mainly reflected in fair value items o Losses due to valuation differences between guarantees at fair value and related interest rate hedges in the Netherlands o Impact of lower credit spread o
Slide 6: Substantially improved underlying earnings
Substantially improved underlying earnings o Underlying earnings substantially improved over recent quarters o Excluding exceptional items, underlying earnings of EUR 440 million: – US employee benefit plan accounting mismatch of EUR (15) million – Accelerated amortization of DPAC related to Univers
Slide 7: Additional equity market hedging in place
Additional equity market hedging in place o Macro equity capital hedge executed in early June o Americas product equity exposure reduced by 40% – Delta equity exposure reduced to USD 2.4 billion from USD 4 billion o Combination of one and two sided hedges – Out-of-the-money put option; USD 0.8 billi
Slide 8: Cost measure initiatives well on track
Cost measure initiatives well on track o Well on track to achieve EUR 150 million cost measure target o Operating expenses on a comparable basis* decreased by 5% o Headcount decreased by 2% Operating expenses* Headcount (EUR million) (Numbers excluding Taiwan) -5% -2% 1,654 1,570 29,933 29,463 H1 08
Slide 9: Excess capital supported by active capital management
Excess capital supported by active capital management o FY capital release target exceeded: EUR 1.6 billion in H1 09 – of which EUR 0.7 billion in Q2 2009 Excess capital development Q2 2009 (EUR billion) 2.7 (0.3) (0.1) 0.4 0.3 0.4 0.2 (0.1) 3.5 Q2 capital release of EUR 0.7 billion Q1 09 Excess Cre
Slide 10: Earnings impact from de-risking largely reversible
Earnings impact from de-risking largely reversible Capital released (EUR billion) o Capital efficiency – Ca. 60% of capital preservation initiatives 3.3 – Generally no material earnings impact 0.3 – High RoC benefit – More efficient use of capital without 0.4 1.3 meaningfully changing risk profile 0
Slide 11: Strong improvement in revaluation reserves
Strong improvement in revaluation reserves o Strong improvement in revaluation reserves driven by narrowing of credit spreads o Unrealized bond losses are not a good proxy for future credit losses o Revaluation reserves improved further in July by approximately EUR 1.6 billion Core capital* developm
Slide 12: Continued profitable sales
Continued profitable sales o New life sales of EUR 469 million, helped by increase in US retail life sales o Net deposits of EUR 0.9 billion, mainly as a result of strong sales of annuities and pensions and improved persistency o VNB declines mainly on lower sales volumes in Americas and UK, only pa
Slide 13: Aim to repay EUR 1 billion
Aim to repay EUR 1 billion o Economic benefits – Repurchase at EUR 1 - 1.13 billion in 2009 versus EUR 1.5 billion thereafter – Avoid future coupon payments of at least 8.5% on repurchased securities o Qualitative reasons – First step to full withdrawal from government support o Final decision not u
Slide 14: Key messages
Key messages o Earnings improved substantially compared to previous quarters o Strong capital position – Aim to repay EUR 1 billion – Started to invest cash in higher yielding quality assets o Credit markets drive strong improvement of revaluation reserves o Continued profitable sales and deposits o
Slide 15: Q&A
Q&A For questions or interview requests, please contact: Group Corporate Communications +31 70 344 8956 gcc-ir@aegon.com Local knowledge. Global power. 15