Storebrand Asa · OSL:STB
Storebrand Asa — Q1 2003 Earnings Presentation
45 slides from Storebrand Asa's earnings presentation, May 8, 2003
Slide 1: Storebrand Results 1st Quarter 2003 Analyst Presentation
Storebrand Results 1st Quarter 2003 Analystpresentation 1st quarter 2002 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer page 2-10 3-20 • Storebrand Bank page 11-15 21-30 Managing Director Per Kumle Backup • Storebrand Group page 16-19 31-38 • Storebrand ASA page 20-21 39-42 • Storebrand L
Slide 2: Highlights Q1 2003
Storebrand Results 1st Quarter 2003 8th May 2003 Idar Kreutzer CEO Highlights Q1 2003 § Life company with profit to customers and owners after transfers to disability reserves § The Group’s strong market position within long-term savings and pensions confirmed § Successful completion of bank merger
Slide 3: Group result and Life Insurance profit and loss
Group result Q1 01.01-31.12 NOK million 2003 2002 2002 Life activities 67 98 -304 Investment activities 6 10 -13 Storebrand Bank *) -36 18 -448 Non life activities 27 -86 -250 Other activities **) -112 -102 -686 Group profit -47 -62 -1.701 *) Numbers of comparsion for the merged bank is pro forma. *
Slide 4: Life Insurance profit and loss; booked versus value adjusted return
Storebrand Life Insurance Profit and loss Q1 01.01.-31.12. NOK Million 2003 2002 2002 Interest result 423 433 -1,094 Risk result 36 34 194 Administration result -39 -37 -112 Change in security and premium reserve -245 -164 -241 Operating profit 176 266 -1,253 From additional statutory allocations 1,
Slide 5: Life Insurance profit and loss; Storebrand Investments
Storebrand Life Insurance Profit and loss Q1 01.01.-31.12. NOK Million 2003 2002 2002 Interest result 423 433 -1,094 Risk result 36 34 194 Administration result -39 -37 -112 Change in security and premium reserve -245 -164 -241 Operating profit 176 266 -1,253 From additional statutory allocations 1,
Slide 6: Storebrand Investments profit and loss
Storebrand Investments Profit and loss Q1 01.01 – 31.12 NOK mill. 2003 2002 2002 Total income 58 72 248 Total costs -55 -65 -275 Net finance/other income 3 3 15 Profit before tax 6 10 -12 Asset management fees are down as a result of the prolonged downturn in equity markets Q1 2003 11 Storebrand Inv
Slide 7: Strong market position confirmed; Other activities
Strong market position confirmed Group pensions § Health insurance +59% 1) - transfer balance (NOK mill): § Group Life +42% 1) 637 § 67 new defined contribution 478 schemes § Coop moves to Storebrand § CAF mandate awarded § Life company’s portfolio and 70% of mutual funds and discretionary portfolio
Slide 8: Other activities incl. Storebrand ASA; If improvement in results
Other activities incl. Storebrand ASA Profit and loss Q1 01.01-31.12 NOK million 2003 2002 2002 Storebrand ASA (ecl. group contributions) Net financial income and expenses -71 -53 -455 Operating cost -34 -43 -204 Netting on consolidation / Other activities -7 -6 -26 Total profit other activities -11
Slide 9: Corporate Social Responsibility; International recognition
Corporate Social Responsibility Action Plan 2003-2004, Report on 2000-2002 § We base all our activities on economic, social and environmental criteria § Concrete targets, measures and indicators for reporting § Action plan focuses on stakeholders for whom we wish to create value Q1 2003 17 Internati
Slide 10: Summary
Summary § Unsatisfactory Group result § Risk management proving effective, stabilises results § Profitability and efficiency measures proceeding according to plan § Continued focus on corporate culture and development of employees’ expertise and motivation § Positioning to take advantage of market o
Slide 11: Storebrand Bank ASA 1st Quarter 2003
Storebrand Bank ASA 1st Quarter 2003 Per Kumle CEO Storebrand Bank ASA Storebrand Bank ASA § Merger is completed and the bank located in the Storebrand building § The merger signifies a cohesive banking strategy for the Storebrand Group, as well as more efficient operations § The Group’s new retail
Slide 12: Bank profit and loss; defaulted and loss provided loans
Profit and loss Q1 01.01.-31.12. NOK mill 2003 2002 2002 Net interest income 130.9 162.6 604.7 Other income 76.4 67.1 255.1 Total income 207.2 229.7 859.8 Operating costs -177.7 -176.6 -830.2 operating profit before losses 29.6 53.1 29.6 Loan loss provisions -65.2 -32.4 -411.8 Write down on shares -
Slide 13: Loan loss provisions and loss exposed loans; operating costs
Status loan loss provisions and loss exposed loans (NOK mill) Defaulted Defaulted loans loans Loans Loans not not in in default default 3,000 171 1.536 55 2,500 32 % 29 % 116 448 2,000 1,500 1,089 1,000 500 931 0 Defaulted loans, interest Defaulted loans, interest not Other exposures with loss accru
Slide 14: Strategy; Market position
Strategy § Build on the best from Storebrand Bank and Finansbanken § Primarily the bank will focus on growth in the retail market § Niche strategy towards the commercial market, with strong customer relationships and geographic proximity as a basis Q1 2003 27 Vadsø Alta Tromsø Finnsnes Market positi
Slide 15: Summary
Summary § Weak result in Q1 2003 due to volume of loans on which interest is not accrued, as well as loan loss provision § Costs considerably reduced § Storebrand’s banking activities brought together in one unit § Storebrand’s sales force towards the retail market and exisiting customer base give r
Slide 16: Storebrand Group profit by business area
Storebrand Group Storebrand Group Profit by business area Q1 01.01-31.12 NOK million 2003 2002 2002 Life activities 67 98 -304 Investment activities 6 10 -13 Storebrand Bank *) -36 18 -448 Non life activities 27 -86 -250 Other activities **) -112 -102 -686 Group profit -47 -62 -1.701 *) Numbers of c
Slide 17: Storebrand Group operating profit and loss; earnings per share
Storebrand Group Operating profit and loss Q1 01.01 - 31.12 NOK million 2003 2002 2002 Premiums for own account - insurance 4 713 4 417 10 170 Interests and similar income - banking 551 613 2 600 Financial income - insurance 3 948 4 885 20 470 Other income 185 158 471 Operating income 9 398 10 073 3
Slide 18: Storebrand Group balance sheet; capital adequacy
Storebrand Group Balance sheet 31.03 Share of 31.12 Share of NOK million 2003 totalt assets 2002 total assets Intangible assets 1 278 1% 1 268 1% Real estate 9 850 7% 9 850 7% Shares in associated companies 3 451 2% 3 296 2% Loans 25 501 17 % 26 160 18 % Bonds 58 068 39 % 56 602 38 % Short term debt
Slide 19: Group profit by business area; other activities
Storebrand Group Profit by business area 2003 2002 2001 NOK million Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Life activities 67 191 -99 -495 98 88 -407 97 Investment activities 6 -11 -9 -3 10 2 9 -4 Storebrand Bank *) -36 -100 -8 -359 18 54 0 -204 Non life activities other 27 58 -61 -161 -86 -277 -318 31 Other activ
Slide 20: Storebrand ASA balance sheet
Storebrand ASA Storebrand ASA Balance sheet Share of Share of NOK million 31.03.03 total assets 31.12.02 total assets Intangible assets 176 1% 144 1% Real estate 62 1% 62 1% Shares in subsidiaries 9 024 75 % 8 973 74 % Investments 1 975 16 % 2 187 18 % Other assets 783 7% 755 6% Total assets 12 020
Slide 21: Storebrand ASA profit and loss
Storebrand ASA Profit and loss Q1 01.01-31.12 NOK million 2003 2002 2002 Group contributions and transfers 0 0 268 Interest income 12 18 80 Realized/unrealized gains/losses on securities -8 1 -258 Interest expense -75 -72 -266 Other financial income/costs -1 -0 -11 Net financial items -71 -53 -455 T
Slide 22: Life insurance highlights as per 31.03.2003
Life insurance Storebrand Life Group Highlights as per 31.03.2003 § Realised return on investments of 5.54% § Value adjusted return on investments of 5.54%. If changes in the valuation reserve on hold to maturity assets are included, return on investments is 8.91% § Operating costs as % of customers
Slide 23: Trends – Storebrand Life; Life Group results
Trends – Storebrand Life § Premium income (excluding transfers to/from) increased by 4 % compared to Q12002 - Good sales in corporate segment - High growth in health insurance - Improvement in sales of personal risk products - Weak development in sales of savings products § Life company’s solidity i
Slide 24: Life Group profit and loss; satisfactory solidity
Storebrand Life Group Profit and loss Q1 01.01.- 31.12 NOK Million 2003 2002 2002 Premiums written 3,086 2,968 7,083 Net transferes of premium reserve 319 554 -381 Net income of financial investments 1,459 1,558 2,024 Claims paid -1,508 -1,551 -6,277 Change in technical reserves -2,854 -2,846 -3,348
Slide 25: Asset allocation; development in return on capital
Asset allocation 100 % 1% 1% 1% 1% 1% 1% 11 % 10 % 10 % 10 % 9% 9% 90 % 80 % 14 % 15 % 17 % 23 % 27 % 26 % 70 % 24 % 23 % Mortage and other loans 60 % 24 % 39 % Real estate 50 % 38 % Moneymarket 38 % 40 % Bonds hold to maturitye 27 % 29 % 30 % Bonds 25 % other financial assets 20 % 21 % 14 % 15 % Sh
Slide 26: Unrealised gains; premium income
Storebrand Livsforsikring AS Unrealised gains 31.03. 31.12. Change NOK Million 2003 2002 2003 Shares -771 -500 -271 Fixed interest investments 626 334 292 Short term investments -145 -165 20 Bonds held to maturity 1,617 731 886 Total 1,472 566 906 Q1 2003 51 Storebrand Life Group Premium excl. reser
Slide 27: Net transfers of premium reserves; operating costs
Storebrand Life Group Net transfers of premium reserves Q1 01.01. - 31.12 NOK Million 2003 2002 2002 Premium reserves recieved Group pensions 1,354 1,180 1,811 Individual life insurance 10 4 37 Total 1,848 1,848 1,848 Premium reserves transferred Group pensions -876 -409 -1,174 Individual life insur
Slide 28: Profit analysis; Life Group balance sheet
Storebrand Livsforsikring AS Profit analysis Q1 01.01.-31.12. NOK Million 2003 2002 2002 Interest result 423 433 -1,094 Risk result 36 34 194 Administration result -39 -37 -112 Change in security and premium reserve -245 -164 -241 Operating profit 176 266 -1,253 From additional statutory allocations
Slide 29: Life Group balance sheet (continued); key figures
Storebrand Life Group Balance sheet (continued) Share of Share of total assets total assets NOK Million 31.03.03 31.03.03 31.12.02 31.12.01 Immaterial assets 134 0% 140 0% Real estate 9,787 9% 9,787 9% Long term shares and interests from group companies 99 0% 102 0% Bonds hold to maturitye 40,620 37
Slide 30: Real estate fund; Fondsforsikring profit and loss
Storebrand Livsforsikring AS Real estate fund Q1 Full year Key figures 2003 2002 2002 Portfolio allocation The real estate fund: (Market value) Gross yield *) 2.0% 2.1% 8.6% Growth in value 1.8% 1.7% 7.0% Shopping centres Office The fund's properties: 47 % 49 % Operating result 1 **) 1.8% 1.8% 7.6%
Slide 31: Storebrand Fondsforsikring balance sheet
Storebrand Fondsforsikring AS Balance sheet Share Share NOK Million 31.03.03 31.03.03 31.03.02 31.03.02 Deferred tax allowances 16.1 0% 44.4 1% Bonds and other fixed income securities 37.2 1% 66.1 2% Assets - Unit Link 3,368.6 97 % 3,384.6 96 % Cash and bank 55.4 2% 26.9 1% Other receivables 4.1 0%
Slide 32: Storebrand Investments main features Q1
Storebrand Investments Storebrand Investments Group Main features Q1 • Cost reduction measures yields effect • New Active Global Fixed Income and Foreign Exchange mutual fund in place (Storebrand AGFIX) • Competitive relative performance also in Q1. Mutual fund ranking above average (Standard & Poor
Slide 33: Efficient cost control; profit development
Efficient cost control Storebrand Kapitalforvaltning * 1. quarter 01.01 – 31.12 NOK mill. 2003 2002 2002 Total income 57.7 72.1 247.8 Total costs -54.7 -65.0 -274.9 Net financial income 2.0 1.6 6.8 Storebrand Alternative Investments (SAI) 0.9 1.0 7.8 Profit before tax STB Investments 5.9 9.7 -12.5 P
Slide 34: Contribution to Life portfolio performance
Contribution to Life portfolio performance Return in %* Performance • Total out performance of 1.42 0.13% Total 1.29 0,13% -7.65 • Out performance relative to Equities Norway -7.68 0,03% index in all portfolios -3.08 Equities Europe 0,84% -3.92 • Total out performance for the Equities N-A 3.40 1,18%
Slide 35: Storebrand Fondene market share and sales
Storebrand Fondene Market share mutual funds All mutual funds (market share in %) 8.6 8.9 9.4 9.2 9.2 Market share Storebrand: 10.1 9.4 7.6 7.4 7.4 03-2003 10.5 10.3 10.2 10.8 11.0 Total: 11,0 % (+0.2 % i 2003) 20.4 20.3 20.9 20.1 20.1 Equity funds: 14.2 % (+0.2 % i 2003) Bond funds: 14.9 % (+0.7 %
Slide 36: Main features Storebrand Bank Q1 2003
Storebrand Bank Main features Storebrand Bank Q1 2003 § Continued build down of lending portfolio, primarily in real estate financing, retail and other lending. Marginal increase in shipping exposure due to foreign exchange movements § Low net interest income due to high volume of loans not accruing
Slide 37: Bank profit and loss; balance sheet
Storebrand Bank Profit and loss Q1 01.01.-31.12. NOK mill 2003 2002 2002 Net interest income 131 163 605 Other income 76 67 255 Total income 207 230 860 operating costs -178 -177 -830 Operating profit before losses 30 53 30 Loan loss provisions -65 -32 -412 Write down on shares - -3 -66 Profit befor
Slide 38: Lending volumes; development of portfolio new bank
Lending volumes 30,000 28,212 28,275 27,339 25,851 24,776 20,000 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q1 2003 75 Development of portfolio new bank (NOK mill) 16 000 14 325 14 000 13 591 12 000 10 000 8 000 6 100 5 905 6 000 4 000 2 100 2 041 1 900 1 400 1 461 1 778 2 000 - Private Real estate Shi
Slide 39: Defaulted and loss provided loans; loss provisions status
Development in defaulted and loss provided loans 4 000 Defaulted loans, interest not accrued Other loss provided loans 3 500 3 420 Defaulted loans, interest accrued 3 000 2 638 1 513 2 500 2 361 2 000 1 536 253 1 138 1 500 236 1 000 171 1 664 500 987 931 0 Q3 2002 Q4 2002 Q1 2003 Q1 2003 77 Status l
Slide 40: Development in loss provisions; capital adequacy
Development in loss provisions (NOK mill) 1,000 4% 900 4% 800 337 3% 337 700 313 311 3% 600 500 299 2% 400 2% 300 600 560 504 503 1% 200 348 1% 100 0 0% 1. Kv. 02 2. Kv. 02 3. Kv. 02 4. Kv. 02 1. Kv. 03 Specified Unspecified Total provisions/gross lending (right axis) Q1 2003 79 Storebrand Bank ASA
Slide 41: Defaulted loans and loss provisions
Storebrand Bank ASA Defaulted loans and loss provisions NOK million 31.03.03 31.12.02 30.09.02 Defaulted loans, interest accrued 931 987 1,665 + Defaulted loans, interest not accrued 1,537 1,139 1,513 = Total defaulted loans 2,468 2,126 3,178 - Specified loan loss provisions 448 435 554 = Net defaul
Slide 42: Main features Non-Life Q1 2003
Storebrand non-life Main features Non-Life Q1 2003 § Positive operating income in Q1 of NOK 27 million (minus NOK 86 million). Income adjusted for statutory insurance reserves in Q1 was NOK 38 million (minus NOK 72 million) § The positive development in If continues. Net result from If is minus NOK
Slide 43: Non-Life Group profit and loss and balance sheet
Storebrand Non-Life Group Profit and loss 01.01. - 31.03. 01.01. - 31.12 NOK mill. 2003 2002 2002 22,47 % share of result from If Skadeforsäkring -1 -78 -244 50% share of result from Fair -8 -14 -43 Operating result non-life insurance -9 -92 -287 Oslo Reinsurance Company ASA 2 -7 17 Storebrand Skade
Slide 44: Oslo Re profit and loss and balance sheet
Oslo Re Profit and loss 01.01 -31.03 01.01. 31.03 NOK million 2003 2002 2002 Premiums for own ac c ount 2 3 5 Claims for own acc ount -1 1 -25 Insuranc e related operating costs -11 -11 -10 Financ ial income 10 -13 47 Other income/costs 1 14 - Operating result 2 -7 17 Changes in security reserve etc
Slide 45: Share of result from If Skadeforsäkring AB
Share of result from If Skadeforsäkring AB (million) 31.03.03 31.03.02 Operating result If, SEK 284 - 541 Storebrands share (22.47%), SEK 64 - 122 Storebrands share, NOK 53 - 104 After tax (28%) NOK 38 - 75 Adjustments N GAAP * NOK - 39 - 3 Booked result from If NOK - 1 - 78 * Change in unrealized g