Slide 1: Half Year 2022 Earnings presentation
Half Year 2022 Earnings presentation August 3, 2022
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. 1H22 Highlights A.04 Thomas Buberl, Group CEO 2. 1H22 Business Performance A.10 Frédéric de Courtois, Group Deputy CEO 3. 1H22 Financial Performance A.18 Alban de Mailly Nesle, Group CFO A3 Half Year 2022 Earnings | August 3, 2022 GIE_AXA_Confidential
Slide 4: 1H22 Highlights
1 1H22 Highlights Thomas Buberl, Group CEO
Slide 5: Our strategy is delivering strong results
Half Year 2022 | Our strategy is delivering strong results Strong and consistent performance with +11% underlying EPS growth Euro 1 billion share buy-back announced Well positioned in the current environment with a 227% Solvency II ratio Continued progress on carbon footprint reduction targets A5 Ha
Slide 6: Our strategy is delivering a high-quality revenue mix
Our strategy is delivering a high-quality revenue mix Growth in technical and fee-based businesses Expanding our Employee Benefit franchise +4% +13% +4% Benefitting from pricing tailwinds in P&C Commercial lines and discipline in Retail P&C Commercial Health Asset lines Insurance2 Management Attract
Slide 7: Strong organic earnings growth in a challenging period
Strong organic earnings growth in a challenging period In Euro billion Underlying earnings +4% 3.9 ▶ Complementary mix of business delivering strong results 3.6 amid inflationary pressures and market volatility +7% ▶ Focus on technical excellence and costs from organic growth 1 driving earnings grow
Slide 8: Executing on our capital management strategy in 1H22
Executing on our capital management strategy in 1H22 Key milestones achieved Committed to discipline in 1H22 on cash deployment ▶ Announced disposal of Euro 16 billion Euro 1.0 billion in-force portfolio in Germany1 share buy-back announced today2 ▶ Successful completion of transformation of Additio
Slide 9: Looking forward: resilient and well-positioned
Looking forward | Resilient and well-positioned in the current environment, remaining vigilant to short-term challenges Business profile resilient to economic cycles +4% P&C CL1 Insurance revenues with favourable pricing, strong growth in Health revenues Strong position to withstand market volatilit
Slide 10: 1H22 Business Performance
2 1H22 Business Performance Frédéric de Courtois, Group Deputy CEO
Slide 11: Main operational priorities
Main operational priorities Progress on in-force management Managing inflation Impact of higher interest rates on our L&S business Maintaining the quality of our investment portfolio A11 Half Year 2022 Earnings | August 3, 2022 Back to agenda GIE_AXA_Confidential
Slide 12: Capital management: strong progress on our in-force ambition
Capital management| Strong progress on our in-force ambition Disposal of closed German life and pensions book €660 million consideration1, 18x P/E2 ▶ Clean disposal of Euro 16 billion reserves through the sale of a legal entity ▶ High guaranteed rate portfolio, leading to further reduction of the Gr
Slide 13: Inflation: proactively managing all levers (1/2)
Inflation | Proactively managing all levers (1/2) Pricing Reserves Taking actions to counterbalance Strength confirmed following inflationary trends in-depth inflation review AXA XL ▶ +9%2 pricing > ca. 5% loss trends ▶ Several inflation drivers not new, with limited direct (36% of P&C GWP1) ▶ Premi
Slide 14: Inflation: proactively managing all levers (2/2)
Inflation | Proactively managing all levers (2/2) Expenses Yields Continued focus on Capitalizing on higher efficiency initiatives reinvestment yields ▶ Further optimization of real estate footprint and ▶ Benefiting from higher yields with decommissioning of IT systems ca. €40bn of expected reinvest
Slide 15: L&S: our Savings strategy remains relevant even with higher rates
L&S | Our Savings strategy remains relevant even with higher rates Focus on AXA France 3.2% ▶ Book yield is competitive, reflecting 1.9% No change to our lapse disciplined management of our duration experience on G/A1 ▶ Low incentive to lapse (tax and inheritance benefits) 1H22 France 10-year OAT Bo
Slide 16: Assets: high quality across all asset classes
Assets | High quality across all asset classes High and stable rating of Limited exposure in listed Diversified Real Assets our Fixed Income portfolio equities and Private Equity1 portfolio 76% 7% 10% Total invested assets2 Total invested assets2 Total invested assets2 ▶ High quality portfolio ▶ Ver
Slide 17: Underlying Earnings: strong growth and attractive margins
Underlying Earnings | Strong growth and attractive margins In Euro million Property & Casualty Life & Savings Health Asset Management +4% +7% +2% +3% 2,209 2,374 1,216 1,325 386 402 194 203 1H21 1H22 1H211 1H22 1H21 1H22 1H21 1H22 Combined ratio NBV margin Combined ratio Cost income ratio 93.7% 40.3
Slide 18: 1H22 Financial Performance
3 1H22 Financial Performance Alban de Mailly Nesle, Group CFO
Slide 19: Group earnings by lines of business
Group earnings by lines of business Balance sheet A19 Half Year 2022 Earnings | August 3, 2022 Back to agenda GIE_AXA_Confidential
Slide 20: P&C Revenues: continued favorable pricing in Commercial lines Insurance
P&C Revenues | Continued favorable pricing in Commercial lines Insurance In Euro billion Gross revenues +1% Commercial lines Pricing 1 29.3 28.0 -1% +9%2 ▶ Growth in Commercial lines AXA XL Ins 8.4 Insurance from favorable pricing AXA XL Re 2.2 -21% +8%2 ▶ Continued selectivity at AXA XL Commercial
Slide 21: P&C Combined Ratio: excellent underwriting margin across the Group
P&C Combined Ratio |Excellent underwriting margin across the Group Incl. ca. -1.3pts from Motor +0.7pt frequency benefits in 1H21 at constant FX 93.3% 93.7% Combined ratio by geography Nat Cat 4.1% 4.2% Attritional 64.5% 65.9% ▶ Net impact relating to the war in Ukraine (€0.3bn) fully absorbed at AX
Slide 22: P&C Profitability: +4% earnings growth
P&C Profitability | +4% earnings growth with higher investment income and a resilient combined ratio In Euro million Underlying earnings +4% 2,374 100 -23 ▶ Lower underwriting result following the non- 2,209 repeat of elevated frequency benefits and the 216 impact of the Ukraine war -126 ▶ Higher in
Slide 23: L&S Revenues: high quality net flows
L&S Revenues | High quality net flows, revenues impacted by non-repeat of exceptional sales in 1H21 In Euro billion Gross revenues -5% 1H22 revenues by geography 16.9 16.0 ▶ Non-repeat of a large Unit-Linked France 7.0 -7% Group contract in France (€0.3bn) 5.0 -6% Europe ▶ Challenging market conditi
Slide 24: APE and NBV: resilient new business trends
APE and NBV | Resilient new business trends In Euro billion APE1 NBV1 0% +6% 1.3 1.3 3.3 NBV margin 1 3.0 ▶ APE growth from higher volumes 1H21 1H22 in Group Protection and Health Protection +11% 2.2 48% business, partly offset by and Health 2 exceptional sales in 1H21 in Unit- Linked and capital-li
Slide 25: L&S profitability: growth driven by higher fees
L&S profitability|Growth driven byhigher feesand strong investment margin In Euro million Underlying earnings +7% (or +9% at constant scope1) 60 19 1,325 35 -23 1,216 20 ▶ Higher fees net of expenses from growth in Protection and resilient Unit-Linked fees ▶ Resilient investment margin at 70bps ▶ Ad
Slide 26: Health Revenues: strong growth dynamics across all geographies
Health Revenues | Strong growth dynamics across all geographies In Euro billion Gross revenues +13% Group 8.8 ▶ Strong growth momentum in France 3.0 +28% 7.9 International Group business in Europe 0.8 +10% France driven by large contracts 4.5 ▶ Growth in Europe mainly from Asia 0.2 +11% Group +21% h
Slide 27: Health Profitability: strong volume growth partly offset by disposals
Health Profitability | Strong volume growth partly offset by disposals In Euro million Underlying earnings +2% 14 402 11 -4 -6 386 ▶ Higher technical result from strong volume growth, partly offset by higher Covid related claims in Japan ▶ Higher investment income mainly from Europe ▶ Impact from th
Slide 28: Asset Management: robust net inflows with a favorable mix
Asset Management | Robust net inflows with a favorable mix In Euro billion Assets under management Net inflows by platform -7% +8.7 +14 +7.8 910 JVs +6 844 +1.1 -86 AXA IM Alts -3.7 Alts Core JVs Architas AXA IM Core Net inflows by client +6.6 +7.8 Architas -0.6 FY21 Net flows Market FX 1H22 Third p
Slide 29: Asset Management: earnings growth from higher revenues
Asset Management | Earnings growth from higher revenues & cost discipline In Euro million Gross revenues Cost income ratio Underlying earnings +4% -1.1pts +3% 788 65.3% 64.7% 203 752 194 1H211 1H22 1H211 1H22 1H211 1H22 Management 17.1 17.8 fee bps Change at constant scope and FX for revenues, at co
Slide 30: Group Underlying earnings: strong 1H22 performance
Group Underlying earnings | Strong 1H22 performance Underlying earnings Underlying earnings per share In Euro million In Euro +4% at constant FX +11% 3,918 1.65 +4% 3,643 +7% 1.48 from organic growth from earnings growth Strong earnings growth across all lines of business +4% from capital management
Slide 31: Net income: above underlying earnings
Net income | Above underlying earnings In Euro million Stable at constant FX 3,996 4,108 Underlying earnings 3,918 Gains/losses on financial assets +490 o/w Net realized capital gains +279 1 o/w Change in fair value and FX +211 Exceptional and discontinued operations +41 Integration and restructurin
Slide 32: Balance sheet
Group earnings by lines of business Balance sheet A32 Half Year 2022 Earnings | August 3, 2022 Back to agenda GIE_AXA_Confidential
Slide 33: Shareholders' equity: higher interest rates impacting unrealized capital gains
Shareholders’equity|Higherinterestratesimpactingunrealizedcapitalgains In Euro billion 71.1 FY21 Shareholders' equity 71.1 1 52.6 Change in net unrealized capital gains -19.9 Net income for the period +4.1 Dividend (paid in May 2021) -3.5 Share buy-back -1.3 Change in pension benefits +1.7 FY21 1H22
Slide 34: Solvency II: ratio at 227%, up 10pts vs FY21
Solvency II | Ratio at 227%, up 10pts vs FY21 with reduced rate sensitivity In Euro billion Solvency II ratio1 Key sensitivities2 217% 227% Ratio as of June 30, 2022 227% 62.0 63.0 Interest rate +50bps +6 pts Interest rate -50bps -8 pts3 Corporate spreads +50bps -3 pt 28.6 27.7 Euro Sovereign spread
Slide 35: Solvency II: strong operating capital generation
Solvency II | Strong operating capital generation In Euro billion 1H22 accrued dividend: -1.8 3.0 +0.0 +0.3 Share buy-backs2: -0.5 and -1.0 0.6 63.0 0.4 EOF 62.0 -3.3 FY21 Regulatory and Normalized Operating Economic Dividend and M&A, in-force, 1H22 model changes capital variances variances and FX S
Slide 36: Investments: capitalizing on higher rates
Investments | Capitalizing on higher rates Reinvestment Yield P&C yield2 L&S investment margin3 3.4% 2.9% 67 bps 70 bps 2.6% 2.4% 1.9% Core Alternative1 1H22 1H21 1H22 1H214 1H22 Government bonds Average rating: AA Corporate bonds Average rating: A Alternative Average rating: A A36 Half Year 2022 Ea
Slide 37: Debt: credit rating upgraded
Debt | Credit rating upgraded reflecting the transformation of AXA SA into the Group’s internal reinsurer Rating agencies recognizing the benefits of AXA SA’s Debt gearing transformation in 1H22 AXA SA Financial 26.4% 26.9% Issuer credit Rating Strength rating From To A A+ AA- Stable outlook A2 A1 A
Slide 38: Conclusion
Conclusion Thomas Buberl, Group CEO
Slide 39: Confidence to deliver on our Driving Progress 2023 plan
Conclusion | Confidence to deliver on our Driving Progress 2023 plan, despite a challenging environment +11% 15.8% 227% €5-6bn UEPS growth Return on Equity Solvency II ratio Cash remittance vs 1H21 in 1H22 +10pts vs FY21 on track for 2022 Driving Progress 2023 Driving Progress 2023 Driving Progress
Slide 40: Q&A
Q&A Half Year 2022 Earnings August 3, 2022
Slide 41: 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 September 21 Bank of America 27th Annual Financials Conference London anu.venkataraman@axa.com Head of Investor Relations remi.dousteyssier@axa.com November 3 Nine Month 2022 Activity Indicator
Slide 42: Thank you
Thank you Half Year 2022 Earnings August 3, 2022
Slide 43: Scope and definitions
Scope and definitions Scope ▪ France: includes insurance activities, banking activities and holdings in France. ▪ Europe: includes Switze rland (insurance activities), Ge rmany (insurance activitie s and holdings), Belgium (insurance activ ities and holdings), United Kingdom and Ireland (insurance a
Slide 44: Notes
Notes Page A6 1. Source INREV Fund Manager Survey May 2021. 2. Commercial lines Insurance refers to P&C Commercial lines excluding AXA XL Reinsurance. 3. Expected average losses relating to natural catastrophes under AXA’s internal model. 4. General Accounts. Page A7 1. Excluding 2021 underlying ear
Slide 45: Notes
Notes Page A14 1. Versus 1H21. Non-commission expe nses is defined as total expenses (acquisition and administrative e xpense s) e xcluding (i) c ommissions, amortization & capital ization of intangibles (DAC/DOC) and policyholder bonus on e xpense s, (ii) distribution c osts that are proportionate
Slide 46: Notes
Notes Page A24 1. Annual pre mium equivale nt (AP E), NB V, and NB V margin are non-GAAP f inanc ial me asures. APE, NBV, and NBV margin and othe r non-GAAP f inanc ial me asures are defined in the Glossary set forth on pages 56 to 63 of AXA’s Half Year 2022 Activity Report. 2. Include Health “life-
Slide 47: Notes
Notes Page A34 1. The Solve ncy II ratio is estimated primarily using AXA’s internal model calibrated based on an adve rse 1 /200 ye ars shock. It also includes a the oretical amount f or dividends accrued f or the first half of 2022 , based on the full year dividend paid in 202 2 for FY21. Divide n