Aegon Ltd. · EURONEXT:AGN
Aegon — Shareholder Meeting (May 2019)
87 slides from Aegon's shareholder meeting presentation, May 17, 2019
Slide 1: Welcome to the Annual General Meeting of Shareholders
Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering van of Shareholders Aandeelhouders In order to hear a Voor het beluisteren van een simultaneous translation in simultaanvertaling in English please choose het Nederlands kiest u channel 2 kanaal 1 1
Slide 2: Welcome - Welkom
Welcome - Welkom Annual General Meeting of Shareholders Algemene Vergadering van Aandeelhouders The Hague, May 17, 2019 2
Slide 3: William L. Connelly, Chairman of the Supervisory Board
William L. Connelly Chairman of the Supervisory Board Voorzitter van de Raad van Commissarissen 3
Slide 4: Welcome to the Annual General Meeting of Shareholders
Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering van of Shareholders Aandeelhouders In order to hear a Voor het beluisteren van een simultaneous translation in simultaanvertaling in English please choose het Nederlands kiest u channel 2 kanaal 1 4
Slide 5: Opening
Agenda item 1 / Agendapunt 1 Opening 5
Slide 6: 2018 Business overview
Agenda item 2 / Agendapunt 2 2018 Business overview Presentatie van de gang van zaken in 2018 6
Slide 7: Growing and modernizing Aegon to create value
Growing and modernizing Aegon to create value Alex Wynaendts CEO & Chairman of the Executive Board The Hague, May 17, 2019 Helping people achieve a lifetime of financial security 7
Slide 8: Today's storyline
Today’s storyline • Our purpose and vision • Looking back: 2016-2018 • Looking ahead: targets & priorities Growing + modernizing = creating value 8
Slide 9: Our purpose and vision
Our purpose and vision Purpose Helping people achieve a lifetime of financial security Vision Financially secure and healthy lives Secure retirement and healthy aging in society Cleaner and healthier environment 9
Slide 10: To help people achieve a lifetime of financial security
To help people achieve a lifetime of financial security …through guidance …to trusted provider From working life and advice… of retail solutions Protection At & after retirement We protect what is important to We provide our customers with our customers, their families, retirement income, helping to
Slide 11: Growing and modernizing Aegon to create value
Growth and modernizing Aegon to create value Focusing on sustainable growth after simplifying the business and optimizing the portfolio 2011 - 2015 2016 - 2018 2019 > • Doubling of free cash flow • Improving operational • Profitable sales growth • Changing business profile performance • Sustainably
Slide 12: How our businesses have changed 2016 – 2018
How our businesses have changed 2016 – 2018 US Europe Asia AAM NL • Sold run-off businesses • Strengthened capital position • Focus on digital solutions • AAM earnings tripled over past • Invested in capital light activities − Aegon Life India 100% digital 8 years • Banking activities extended • Par
Slide 13: Delivery on targets 2016 – 2018
Delivery on targets 2016 – 2018 Significant expense savings and capital return; strong progress on return on equity Run-rate expense savings Capital return to shareholders Return on equity1 (EUR million) (EUR billion, cumulative) (%) 2.1 10.2 355 Target Target Target EUR 350 EUR 2.1 9.3 9.3 10% 280
Slide 14: Satisfied customers and committed employees
Satisfied customers and committed employees Despite profound changes in the company Customer Engagement score Net Promoter Score (Benchmarked; % of Aegon business in top half vs peers) 63 65 65 45 41 7 2016 2017 2018 Feb 2017 Nov 2017 Nov 2018 14
Slide 15: A sustainable business is a responsible business
A sustainable business is a responsible business For all our stakeholders Customers Employees Safeguarding Shareholders the value we create for our stakeholders through a responsible approach to business Community Business partners 15
Slide 16: Leverage fintech to accelerate our business needs
Leverage fintech to accelerate our business needs Investing in innovation and digitization Applying new technologies and skills to upgrade our existing businesses Digital-native initiatives that don’t rely on legacy Partnerships with fintechs through our corporate venture fund 16
Slide 17: Targets 2019 – 2021
Targets 2019 – 2021 Growth strategy will deliver sustainable and attractive returns to all stakeholders Sustainable business Normalized capital generation EUR 4.1 billion Cumulative for 2019 – 20211 Strong focus on customer centricity Dividend pay-out ratio 45 – 55 % Of normalized capital generation
Slide 18: Strategic categories
Active portfolio management Grouping our businesses in three distinct categories Normalized capital generation1 (in EUR billion, cumulative for 3 years) 4.1 Aegon’s growth strategy • Actively manage portfolio 3.1 Scale-up for Future Strategic categories • Distinct categories of businesses • Focused
Slide 19: Manage for Value
Manage for value Manage for Value Good stable businesses that require cost discipline and efficiency Life business Netherlands Existing Business UK Strong track record of expense Lowering cost base and making expenses savings variable Policy and participant count Improving customer experience expect
Slide 20: Drive for growth
Drive for growth Engaging large customer base, growing in core markets Customers Goals Focus • Broader and longer • Offer bundled products and advisory Benchmarked NPS1 relationship • Provide relevant guidance 2018 • Improved engagement • Use of data and data analytics Goals Focus Markets • Growth i
Slide 21: Drive for Growth: US Retirement Plans
Drive for Growth Growing US Retirement Plans business much stronger than the market Assets (USD billion) US Retirement Plans business 15,000 Account balance Transamerica (lhs) 225 227 • Strong asset growth since 2009 DC Market (rhs) 204 203 - Despite outflows in recent years • Management actions in
Slide 22: Drive for Growth: Aegon Asset Management
Drive for Growth Strong growth of attractive third-party business at Aegon Asset Management Account balances; net flows external third-party Aegon Asset Management (EUR millions) • 7th consecutive year of positive external third- 160,000 10,000 party net inflow 120,000 8,000 • Assets under managemen
Slide 23: Scale-up for the Future: Asia
Scale-up for the Future Continuing to grow in selected traditional insurance markets Underlying earnings Asia (USD millions) Aegon Asia Underlying earnings 65 • TLB serving the growing segment of high-net- 55 worth customers • Aegon THTF in China offers life and protection products across the larges
Slide 24: Scale-up for the Future: TKP
Scale-up for the Future Efficient service provider TKP leveraging technology 2018 36 Pension and social funds 3.7 million Participants 63,000 Employers EUR 124 billion Assets under administration 24
Slide 25: Scale-up for the Future: Spain and Portugal
Scale-up for the Future Scaling-up joint ventures in Spain and Portugal with significant growth potential Strongly growing business … New premium (in EUR million) Spain and Portugal 97 77 • Santander key strong strategic joint venture 63 54 partner • Extensive distribution network of 5,600 bank bran
Slide 26: Selective inorganic growth
Selective inorganic growth Adding scale Fee and protection businesses • Mercer’s US defined contribution business • Robidus acquisition expands Aegon NL’s position in income protection value chain • Leading platform business in the UK following acquisition of Cofunds • Expansion Santander partnershi
Slide 27: Focus 2019 – 2021
Focus 2019 – 2021 Attractive returns to shareholder based on a strong global franchise Large Strong Solid Active customer market capital portfolio base positions position management Focus on profitable growth and sustainable capital generation 27
Slide 28: Annual Report and annual accounts 2018
Agenda item 3 / Agendapunt 3 Annual Report and annual accounts 2018 Jaarverslag en jaarrekening 2018 28
Slide 29: Reports of the Boards for 2018
Agenda item 3.1 / Agendapunt 3.1 Reports of the Boards for 2018 Verslagen van de Raad van Bestuur en de Raad van Commissarissen over 2018 29
Slide 30: Our financial performance in 2018
Our financial performance in 2018 Matt Rider CFO & Member of the Executive Board The Hague, May 17, 2019 Helping people achieve a lifetime of financial security
Slide 31: Today's storyline
Today’s storyline • Our financial performance in 2018 • Strong improvement in return on equity despite market developments • Gross deposits remain at a high level • Delivered on expense savings target • Growing capital generation; increased dividend 31
Slide 32: Our financial performance in 2018
Our financial performance in 2018 Underlying Return on equity Gross deposits Solvency II ratio Normalized capital earnings generation1) EUR 2.1 billion 10.2% EUR 122 billion 211% EUR 1.4 billion -3% +0.9%-points -3% +10%-points +47% compared to 2017 compared to 2017 compared to 2017 compared to end
Slide 33: Earnings impacted by markets and outflows
Earnings impacted by markets and outflows Underlying earnings before tax Net income Composition of earnings (EUR million) (EUR million) (% of UEBT 2018) 2,140 2,361 EUR 2,074 45% 2,074 million 55% 744 2017 2018 2017 2018 Fee Rest 33
Slide 34: Net income amounts to EUR 744 million
Net income amounts to EUR 744 million Underlying earnings to net income development in 2018 (EUR million) UEBT 2018 2,074 • Fair value losses in Americas primarily related to hedge losses, reflecting equity market decline at the end of 2018, Fair value items (260) and losses on fair value investment
Slide 35: Gross deposits remain at a high level
Gross deposits remain at a high level Despite slight decrease for the year • Gross deposits down 3% compared with 2017 Gross deposits & new life sales - Lower platform deposits in UK and lower Asset Management deposits 1,104 New life sales (EUR millions) Gross deposits (EUR billions) 969 • Net outfl
Slide 36: Delivered EUR 350 million expense savings target
Delivered EUR 350 million expense savings target • Annualized run-rate savings of approximately Cumulative run-rate savings since year-end 2015 EUR 355 million in 2016-2018 • US short of target due to investments in operations and technology USD 270 million Americas ~ - TCS partnership generated ~1/
Slide 37: Capital levels above target
Capital levels above target Group Solvency II ratio1) Local solvency ratio by unit3) (EUR million) Year-end 2017 vs year-end 2018 211% • Group Solvency II ratio up 10%-points 201% US - RBC 200% 472% 465% 170% Target • Driven by strong capital generation zone 150% - EUR 1.4 billion in 20182) NL - SII
Slide 38: Returned EUR 2.1 billion capital over 2016 – 2018
Returned EUR 2.1 billion capital over 2016 – 2018 Free cash flows significantly increased Increasing dividends Growing capital generation (EUR per share) (in EUR million) +7% FY17 FY18 0.29 0.27 0.25 0.26 Capital generation 2,062 1,425 0.23 0.15 Market impacts and one-time items 763 -306 0.13 0.14 0
Slide 39: Conclusions
Conclusions Targets 2019 – 2021 • Strong progress on 2016 – 2018 targets Normalized capital generation1) EUR 4.1 billion Dividend pay-out ratio2) • Attractive new targets for 2019 – 2021 45 – 55 % Return on equity3) • Focus on growing capital generation > 10 % and dividends Gross remittance (2019 gu
Slide 40: Reports of the Boards for 2018
Agenda item 3.1 / Agendapunt 3.1 Reports of the Boards for 2018 Verslagen van de Raad van Bestuur en de Raad van Commissarissen over 2018 40
Slide 41: Remuneration report 2018
Agenda item 3.2 / Agendapunt 3.2 Remuneration report 2018 Remuneratierapport 2018 41
Slide 42: Ben Noteboom
Ben Noteboom Chairman of the Remuneration Committee Voorzitter van de Remuneration Committee 42
Slide 43: Executive Board Remuneration
Executive Board Remuneration Fixed compensation (annual salary) + Variable compensation (max. 100% of annual salary) + Benefits (e.g. pension) Fixed compensation • In 2018, the annual base salary’s of the CEO and CFO were increased with 2%. Variable Compensation • Conditionally allocated after compl
Slide 44: Executive Board 2018 Variable Compensation results
Executive Board 2018 Variable Compensation results Financial and non financial Group objectives 2018 Results Underlying Earnings After Tax (7.5%) Return on Equity (7.5%) Market Consistent Value of New Business (7.5%) 54.8% CEO (of 65% max) Normalized Capital Generation (5%) Return on Economic Requir
Slide 45: Executive Board Variable Compensation awards
Executive Board Variable Compensation awards Conditionally allocation 2018 variable compensation: • CEO: 82.05% of fixed compensation (2017: 90.36%, 2016: 82.25%). • CFO: 82.75% of fixed compensation (2017: 89.11%). Pay-out schedule: • 40% of variable compensation to be paid / vest in 2019. • 50% of
Slide 46: Remuneration report 2018
Agenda item 3.2 / Agendapunt 3.2 Remuneration report 2018 Remuneratierapport 2018 46
Slide 47: Annual accounts 2018 and report independent auditor
Agenda item 3.3 / Agendapunt 3.3 Annual accounts 2018 and report independent auditor Jaarrekening 2018 en rapport van de onafhankelijke accountant 47
Slide 48: Adoption of the annual accounts 2018
Agenda item 3.4 / Agendapunt 3.4 Adoption of the annual accounts 2018 Vaststelling van de jaarrekening 2018 48
Slide 49: Voting procedure / Stem procedure
Voting procedure / Stem procedure Prior to the voting Vóór de stemming • You have logged in to Lumi AGM • U heeft ingelogd bij Lumi AGM • Agenda item appears • Agenda item verschijnt automatically automatisch During the voting Tijdens de stemming • Voting options appear in display • Stemkeuzes versc
Slide 50: Voting procedure / Stem procedure
Voting procedure / Stem procedure Prior to the voting Vóór de stemming • Insert card with chip facing you • Plaats kaart met chip naar voren • Name appears on display • Naam verschijnt in venster During the voting Tijdens de stemming • Voting options appear in display • Stemkeuzes verschijnen in ven
Slide 51: Adoption of the annual accounts 2018
Voting 3.4 / Stemming 3.4 Adoption of the annual accounts 2018 Vaststelling van de jaarrekening 2018 51
Slide 52: Approval of the final dividend 2018
Agenda item 3.5 / Agendapunt 3.5 Approval of the final dividend 2018 Goedkeuring van het slotdividend over 2018 52
Slide 53: Aegon's dividend policy
Aegon’s dividend policy • Remittances to the holding are available to execute our strategy, to fund operating and funding expenses, to pay dividends to shareholders and/or to increase financial flexibility • Aegon aims to pay a sustainable dividend to shareholders, which can grow over time if perfor
Slide 54: Aegon's dividend proposal
Aegon’s dividend proposal • Proposed final dividend for 2018: Increasing dividends (EUR) EUR 0.15 per common share - Results in total dividend for 2018 of +7% EUR 0.29 per common share 0.29 0.26 0.27 0.25 0.22 0.23 • To be paid in cash or stock 0.21 0.15 0.13 0.14 0.13 0.11 0.12 0.11 • Value of stoc
Slide 55: Approval of the final dividend 2018
Agenda item 3.5 / Agendapunt 3.5 Approval of the final dividend 2018 Goedkeuring van het slotdividend over 2018 55
Slide 56: Approval of the final dividend 2018
Voting 3.5 / Stemming 3.5 Approval of the final dividend 2018 Goedkeuring van het slotdividend over 2018 56
Slide 57: Appointment of PricewaterhouseCoopers as independent auditor
Agenda item 4 / Agendapunt 4 Appointment of PricewaterhouseCoopers as independent auditor for the annual accounts 2019 and 2020 Benoeming van PricewaterhouseCoopers als onafhankelijke accountant voor de jaarrekeningen 2019 en 2020 57
Slide 58: Appointment of PricewaterhouseCoopers as independent auditor
Voting 4 / Stemming 4 Appointment of PricewaterhouseCoopers as independent auditor for the annual accounts 2019 and 2020 Benoeming van PricewaterhouseCoopers als onafhankelijke accountant voor de jaarrekeningen 2019 en 2020 58
Slide 59: Release from liability
Agenda item 5 / Agendapunt 5 Release from liability Kwijting 59
Slide 60: Release from liability for the Executive Board
Agenda item 5.1 / Agendapunt 5.1 Release from liability for the members of the Executive Board for their duties performed during 2018 Verlenen van kwijting aan de leden van de Raad van Bestuur voor de uitoefening van hun taak in 2018 60
Slide 61: Release from liability for the Supervisory Board
Agenda item 5.2 / Agendapunt 5.2 Release from liability for the members of the Supervisory Board for their duties performed during 2018 Verlenen van kwijting aan de leden van de Raad van Commissarissen voor de uitoefening van hun taak in 2018 61
Slide 62: Release from liability
Agenda item 5 / Agendapunt 5 Release from liability Kwijting 62
Slide 63: Release from liability for the Executive Board
Voting 5.1 / Stemming 5.1 Release from liability for the members of the Executive Board for their duties performed during 2018 Verlenen van kwijting aan de leden van de Raad van Bestuur voor de uitoefening van hun taak in 2018 63
Slide 64: Release from liability for the Supervisory Board
Voting 5.2 / Stemming 5.2 Release from liability for the members of the Supervisory Board for their duties performed during 2018 Verlenen van kwijting aan de leden van de Raad van Commissarissen voor de uitoefening van hun taak in 2018 64
Slide 65: Remuneration
Agenda item 6 / Agendapunt 6 Remuneration Remuneratie 65
Slide 66: Remuneration policy for Supervisory Board members
Agenda item 6.1 / Agendapunt 6.1 Adoption of the remuneration policy for members of the Supervisory Board Vaststelling van het remuneratiebeleid voor de leden van de Raad van Commissarissen 66
Slide 67: Proposed amendment remuneration policy members Supervisory Board
Proposed amendment remuneration policy members Supervisory Board Effective from January 1, 2019 • This proposal reflects the increase in complexity and workload of the Risk Committee and presents an update of the attendance and travel fees, after considering a peer review amongst comparable Dutch an
Slide 68: Adoption of the remuneration policy for Supervisory Board
Voting 6.1 / Stemming 6.1 Adoption of the remuneration policy for members of the Supervisory Board Vaststelling van het remuneratiebeleid voor de leden van de Raad van Commissarissen 68
Slide 69: Composition of the Supervisory Board
Agenda item 7 / Agendapunt 7 Composition of the Supervisory Board Samenstelling van de Raad van Commissarissen 69
Slide 70: Reappointment of Ben J. Noteboom
Agenda item 7.1 / Agendapunt 7.1 Reappointment of Ben J. Noteboom Herbenoeming van Ben J. Noteboom 70
Slide 71: Ben J. Noteboom
Ben J. Noteboom Age: 60 Nationality: Dutch Shares in the company: 23,500 (December 31, 2018) Main occupation: - Non-executive Director Membership of other Boards: - Chairman of the Supervisory Board of Royal Vopak N.V. - Member of the Supervisory Board of Royal Ahold Delhaize N.V. - Member of the Bo
Slide 72: Reappointment of Ben J. Noteboom
Voting 7.1 / Stemming 7.1 Reappointment of Ben J. Noteboom Herbenoeming van Ben J. Noteboom 72
Slide 73: Composition of the Executive Board
Agenda item 8 / Agendapunt 8 Composition of the Executive Board Samenstelling van de Raad van Bestuur 73
Slide 74: Reappointment of Alexander R. Wynaendts
Agenda item 8.1 / Agenda item 8.1 Reappointment of Alexander R. Wynaendts Herbenoeming van Alexander R. Wynaendts 74
Slide 75: Alexander R. Wynaendts
Alexander R. Wynaendts Age: 58 Nationality: Dutch Shares in the company: 494,779 (December 31, 2018) Profession: - Chairman of the Executive Board and CEO of Aegon N.V. Membership of other Boards (that qualify under the Act Management and Supervision): - Independent Director of the Board of Air Fran
Slide 76: Reappointment of Alexander R. Wynaendts
Voting 8.1 / Stemming 8.1 Reappointment of Alexander R. Wynaendts Herbenoeming van Alexander R. Wynaendts 76
Slide 77: Issuance and acquisition of shares
Agenda item 9 / Agendapunt 9 Issuance and acquisition of shares Uitgifte en verkrijging van aandelen 77
Slide 78: Authorization to issue common shares with or without pre-emptive rights
Agenda item 9.1 / Agendapunt 9.1 Authorization of the Executive Board to issue common shares with or without pre-emptive rights Machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen met of zonder voorkeursrechten 78
Slide 79: Authorization to issue common shares in connection with a rights-issue
Agenda item 9.2 / Agendapunt 9.2 Authorization of the Executive Board to issue common shares in connection with a rights-issue Machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in verband met een claim-emissie 79
Slide 80: Authorization to acquire shares in the Company
Agenda item 9.3 / Agendapunt 9.3 Authorization of the Executive Board to acquire shares in the Company Machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen door de Vennootschap 80
Slide 81: Issuance and acquisition of shares
Agenda item 9 / Agendapunt 9 Issuance and acquisition of shares Uitgifte en verkrijging van aandelen 81
Slide 82: Voting 9.1: Authorization to issue common shares
Voting 9.1 / Stemming 9.1 Authorization of the Executive Board to issue common shares with or without pre-emptive rights Machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen met of zonder voorkeursrechten 82
Slide 83: Voting 9.2: Authorization to issue shares in rights-issue
Voting 9.2 / Stemming 9.2 Authorization of the Executive Board to issue common shares in connection with a rights-issue Machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in verband met een claim-emissie 83
Slide 84: Voting 9.3: Authorization to acquire shares
Voting 9.3 / Stemming 9.3 Authorization of the Executive Board to acquire shares in the Company Machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen door de Vennootschap 84
Slide 85: Any other business
Agenda item 10 / Agendapunt 10 Any other business Wat verder ter tafel komt 85
Slide 86: Closing
Agenda item 11 / Agendapunt 11 Closing Sluiting 86
Slide 87: Thank you
Thank you Dank u wel Helping people achieve a lifetime of financial security