Allianz SE · XETR:ALV
Allianz — 9M 2004 Earnings Presentation
49 slides from Allianz's earnings presentation, Nov 12, 2004
Slide 1: Group financial results for the first nine months 2004
Helmut Perlet - CFO Allianz AG Group financial results for the first nine months 2004 Analysts’ conference call November 12, 2004
Slide 2: “3+one” drives results
Group financial results 9M 2004 “3+one” drives results ! Successful implementation Promise from 12M 2003 analyst meeting: continues to show results 5,007 3,117 -704 9M 2002 9M 2003 9M 2004 Operating profit1 (EUR m) 1) Operating profit is a non-GAAP measure which we believe highlights the underlying
Slide 3: The first nine months 2004: we are on track
Group financial results 9M 2004 The first nine months 2004: we are on track ! Operating profit1 up EUR 1.9bn to EUR 5.0bn: all segments further strengthened – P/C: combined ratio down 3.7%-p to 93.2% – L/H: operating profit increased by 32% – Dresdner Bank: 3rd consecutive quarter with positive re
Slide 4: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset Management Investments Protect and enhance capital base 3
Slide 5: Key financials: positive trend confirmed
Group financial results 9M 2004 Key financials: positive trend confirmed ! Total revenues Expenses 1 Operating profit Net income (EUR bn) (EUR m) (EUR m) (EUR m) 2.3% -9.5% 61% 150% 9,898 71.0 72.6 8,960 5,007 3,117 1,828 732 Internal growth: 5.1% 9M 2003 9M 2004 9M 2003 9M 2004 9M 2003 9M 2004 9M 2
Slide 6: Revenue development: managed growth
Group financial results 9M 2004 Revenue development: managed growth P/C Banking L/H AM 3Q total revenues1 (EUR bn) 9M total revenues1 (EUR bn) Total Internal Total Internal growth growth2 growth growth2 21.5 23.2 (%) (%) 71.0 72.6 (%) (%) 1.8 AM 8.7 17.0 0.6 1.7 AM 4.0 10.8 4.8 Banking -6.4 -2.1 0.6
Slide 7: Expenses: all segments improve
Group financial results 9M 2004 Expenses1: all segments improve P/C Banking L/H AM2 Evolution of expenses (EUR m) -20.3% -22.2% 3,769 11,521 327 1,000 3,251 9,898 302 3,003 903 8,960 273 833 1,804 5,485 1,541 4,564 1,313 4,062 455 1,375 399 425 1,250 1,194 1,183 1,009 992 3,661 3,181 2,871 3Q 2002 3
Slide 8: Operating profit: all segments improve
Group financial results 9M 2004 Operating profit1: all segments improve EUR m 3Q 2004 ∆3Q 04/03 9M 2004 ∆9M 04/03 Comments 9M 04 P/C Combined ratio down 1,168 541 2,910 967 3.7%-p to 93.2% L/H 345 195 946 231 32% improvement Revenues stabilized, costs Banking 142 188 573 642 reduced, risk profile im
Slide 9: Better quality of result
Group financial results 9M 2004 Better quality of result Evolution of income before tax (EUR m) Swing in taxes: Tax credit of 1,299 241 4,851 + 653m in 9M 03 Taxes -138 1,241 1,890 Minort./ Goodw. 1,782 1,559 Net income 1,828 Profit Operating Macro Net capital Other/ Profit b/ tax, profit hedge gain
Slide 10: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset Management Investments Protect and enhance capital base 9
Slide 11: P/C overview: focus on profitability pays off
Group financial results 9M 2004 P/C overview: focus on profitability pays off Operating profit (EUR m) Underwriting profitability signifi- 86% 50% cantly strengthened, combined ratio 1,168 2,910 now 93.2% (9M 03: 96.9%) 1,943 627 9M: strongly increased net income of EUR 2.2bn (+53%) reflects ope
Slide 12: P/C: further strict underwriting policy…
Group financial results 9M 2004 P/C: further strict underwriting policy… GPW drivers Gross premiums written (EUR bn) Focus on profitability has varying Internal growth rate implications in different markets1: Total growth rate Sound growth in both price and number of contracts (e.g. Australia 4.1%
Slide 13: P/C: ...leads to strongly improved combined ratio
Group financial results 9M 2004 P/C: ...leads to strongly improved combined ratio Combined ratio 9M 03 9M 04 Combined ratio (in %) Claims ratio Expense ratio Adjustments4 SGD (German P/C Group) 91.9 87.0 Allianz AG1 97.8 85.4 17.9%-p AGF2 103.7 99.1 108.8 105.7 4.4 4.0 RAS Group Italy 97.7 95.5 97.0
Slide 14: P/C: risk management limits hurricane exposure
Group financial results 9M 2004 P/C: risk management limits hurricane exposure (EUR) 3Q 2004: four hurricanes Insured loss1 industry-wide 16.0 – 24.0bn caused considerable damage in the Caribbean region and Allianz’ share (net) 216m the southern part of the US Charley 47m (esp. Florida) 100% Frances
Slide 15: AGF on track for attaining target 2004
Group financial results 9M 2004 AGF on track for attaining target 2004 Measures taken Evolution of combined ratio (in %) Claims ratio Expense ratio Selective tariff increases in inforce: - Motor (∅): 12M 03: 9%; 9M 04: 3% 1Q/ 2003: 105.4 - Commercial lines: 12M 03: 14% - 20%; 112.3 102.8 2Q/ 2003:
Slide 16: P/C: investment income significantly up
Group financial results 9M 2004 P/C: investment income significantly up EUR m Inv. result drivers Current yield2: 4,5361 – F/I: 3.2% 1,341 (-0.2%-p) – Equity: 2.5% -268 -138 3,222 (+0.5%-p) 2,787 -500 Harvesting rate2,3 5.8% on equity portfolio value Current Realized Write-ups/ Trading Expenses
Slide 17: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset Management Investments Protect and enhance capital base 16
Slide 18: L/H overview: net income increases by 58%
Group financial results 9M 2004 L/H overview: net income increases by 58% Operating profit (EUR m) Operating CIR1 improved by 130% 32% 1.2%-p, driven especially by: 946 - pricing of new business 345 715 - efficiency gains 150 - reduction of policyholder bonus 3Q 2003 3Q 2004 9M 2003 9M 2004 Kore
Slide 19: L/H: AZ Life drives growth
Group financial results 9M 2004 L/H: AZ Life drives growth Statutory premium drivers1 Statutory premiums (EUR bn) Internal growth rate Premiums from investment oriented products AZ Life: profitable growth (+36%) equally driven by variable and fixed Total growth rate IFRS premiums annuities Sound
Slide 20: L/H: investment income improved
Group financial results 9M 2004 L/H: investment income improved EUR m Inv. result drivers Before policyholder Current yield2: participation – F/I 3.6% 262 9,5181 (-0.2%-p) 1,008 30 9,226 8,174 – equity 2.6% -248 (+0.0%-p) Harvesting rate2,3 2.9% on equity portfolio value Current Realized Write-u
Slide 21: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset management Investments Protect and enhance capital base 20
Slide 22: Dresdner Bank overview: turnaround on track
Group financial results 9M 2004 Dresdner Bank1 overview: turnaround on track Operating profit (EUR m) Positive net income and operating profit for third consecutive quarter 542 Expenses further reduced, improved 133 risk profile -118 -163 Restructuring expenses (9M 04: EUR 3Q 2003 3Q 2004 9M 2
Slide 23: Dresdner Bank: revenue base secured
Group financial results 9M 2004 Dresdner Bank1: revenue base secured Operating revenue drivers Operating revenues (EUR m) Revenues stabilized Net interest income Net fee & commission income Volume reduction of banking book Net trading income -2.5% compensated by better interest margin 4,903 4,78
Slide 24: Dresdner Bank: ongoing cost reduction due to “New Dresdner”
Group financial results 9M 2004 Dresdner Bank1: ongoing cost reduction due to “New Dresdner” Operating expense drivers Operating expenses (EUR m) Cost savings still significant, fueled Personnel expenses -8.7% Non-personnel expenses by both personnel and non-personnel costs 4,344 3,968 -12.9% Al
Slide 25: Dresdner Bank: risk profile improved
Group financial results 9M 2004 Dresdner Bank1: risk profile improved Net loan-loss provision drivers Net loan-loss provisions (LLP) (EUR m) Total risk elements reduced by -62.5% 2, 27% (EUR -3.3bn) to EUR 9.0bn IRU contributes bulk of risk element 722 reduction (EUR -2.8bn) 130% Coverage ratio
Slide 26: Dresdner Bank: continued improvement in PBC
Group financial results 9M 2004 Dresdner Bank1: continued improvement in PBC (EUR m) Operating profit drivers 3Q 2004 ∆ 04/033 9M 2004 ∆ 04/033 PBC: 8.9% growth in net fee & com. overcompensates 76 24 371 214 reduction in NII (9M 04) CB: margins improved 154 22 366 72 DrKW: 8th consecutive qua
Slide 27: Dresdner Bank - IRU: substantial progress achieved
Group financial results 9M 2004 Dresdner Bank - IRU: substantial progress achieved (EUR bn, eop) Exposure1 RWA Risk cap. (EUR m) Coverage ratio Rest of world Today – 30/09/2004 1.6 1.0 231 56.9%2 Setup – 1/1/20033 15.4 10.5 1,172 Large transaction Latin America signed in Oct. 04: Today – 30/09/2
Slide 28: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset Management Investments Protect and enhance capital base 27
Slide 29: Asset Management overview: profitable growth continues
Group financial results 9M 2004 Asset Management overview: profitable growth continues Operating profit (EUR m) 9M-results improved for 3th 4.3% 9.5% consecutive year 578 528 Strong net inflows due to superior 208 217 performance in fixed income products Continued efficiency gains 3Q 2003 3Q 2
Slide 30: Asset Management: resilient AuM base
Group financial results 9M 2004 Asset Management: resilient AuM base Third-party AuM (EUR bn) Asset allocation Third-party AuM (as of 30/09/2004 = EUR 592bn) Third-party AuM 565 (as of 31/12/2003) Retail Institutional Σ Net inflow 14 Equity 12% 11% 23% (De)consolidation1 -12 Fixed 27% 48% 75% income
Slide 31: Asset Management: CIR further decreases
Group financial results 9M 2004 Asset Management: CIR further decreases Drivers Cost-income Operating ratio profit (%) Operating revenues -10.8% 1 0.0% 2 -23.2%-p 1,664 1,664 84.7 78.5 632 564 F/X adj. change: 7.3% 67.2 66.9 67.5 61.5 9M 65.3% 3Q 2003 3Q 2004 9M 2003 9M 2004 Operating expenses -18.2
Slide 32: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset management Investments Protect and enhance capital base 31
Slide 33: Asset allocation: breakdown
Group financial results 9M 2004 Asset allocation1: breakdown Group asset allocation (EUR bn) Asset allocation P/C (EUR bn, in %, 9M 2004) Other Total 342 (%) 356 (%) 10.4 (11.3) Real estate Other 11 3.1 15 4.2 4.9 (5.3) Real estate 15 4.4 15 4.1 Equity F/I Equity 54 15.8 51 14.2 16.7 (18.2) 60.0 (65
Slide 34: Agenda: where do we stand
Group financial results 9M 2004 Agenda: where do we stand Substantially strengthen operating profitability Group P/C L/H Banking Asset Management Investments Protect and enhance capital base 33
Slide 35: Positive result strengthens capitalization
Group financial results 9M 2004 Positive result strengthens capitalization EUR m 1,828 29,771 118 -551 -21 28,592 -195 4.2 Unrealized Unrealized gains/losses (EUR bn) gains/losses (EUR bn) 4.1 Sh. equity Currency Change in Net Dividend Other Sh. equity 31/12/2003 translation unrealized income paymen
Slide 36: Summary: quantity and quality of results clearly improved
Group financial results 9M 2004 Summary: quantity and quality of results clearly improved ! Highlights 9M 2004 Managed growth: strong in Life and Asset Management, disciplined in P/C, stabilized at Dresdner Bank Operational discipline: reduction of costs, reduction of claims, reduction of net lo
Slide 37: Additional information
Allianz Group Additional information
Slide 38: Group: result by segments overview
Group financial results 9M 2004 Group: result by segments overview (EUR m) Asset Con- Total P/C L/H1 Banking Mgmt. solidation 9M 9M 9M 9M 9M 9M 9M 9M 9M 9M 9M 9M 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 Total revenues (EUR bn) 34.2 34.6 30.6 32.0 5.2 5.0 1.6 1.6 -0.6 -0.6 71.0 72.
Slide 39: Breakdown of profit consolidations
Group financial results 9M 2004 Breakdown of profit consolidations Profit b/ goodwill amortization, taxes, minorities (EUR m) 104 1,340 1,210 26 74 Banking 162 L/H 1,104 P/C Intra-Group Gains from Other income/ Total dividends intra-Group expenses from consolidations transactions investments of shar
Slide 40: Group: key figures per quarter
Group financial results 9M 2004 Group: key figures per quarter (EUR m) 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 ∆3Q 04/03 Total revenues1 (EUR bn) 27.5 21.9 21.6 22.8 27.2 22.2 23.1 0.5 Operating profit 834 1,344 939 871 1,174 1,961 1,872 933 Net capital gains2 912 -173 262 3,756 768 513 325 63 Net
Slide 41: P/C: key figures and ratios per quarter
Group financial results 9M 2004 P/C: key figures and ratios per quarter (EUR m) 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 ∆3Q 04/03 Total revenues (EUR bn) 14.6 9.5 10.1 9.2 14.4 9.8 10.4 0.3 Operating profit1 364 952 627 558 459 1,283 1,168 541 Net capital gains2 727 -212 400 4,056 628 297 135 -265
Slide 42: L/H: key figures and ratios per quarter
Group financial results 9M 2004 L/H: key figures and ratios per quarter (EUR m) 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 ∆3Q 04/03 Total revenues (EUR bn) 10.7 10.4 9.5 11.7 10.8 10.3 10.8 1.3 Operating profit 264 301 150 396 356 245 345 195 Net capital gains1 98 -6 -5 52 151 38 71 76 Net impairmen
Slide 43: Dresdner Bank: key figures and ratios per quarter
Group financial results 9M 2004 Dresdner Bank1: key figures and ratios per quarter (EUR m) 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 ∆3Q 04/03 Net interest income2 611 581 491 729 517 584 658 167 Net fee & commission income 671 573 579 564 708 582 569 -10 Net trading income 611 466 320 97 440 472 25
Slide 44: Dresdner Bank: key figures by divisions
Group financial results 9M 2004 Dresdner Bank1: key figures by divisions (EUR m) 9M 2004 PBC CB DrKW Corp. DreBa ex IRU Total Other2 IRU 371 366 217 613 542 Operating profit -71 -3414 Net interest income 1,091 503 225 -333 1,486 272 1,758 Net fee & commission income 1,203 223 404 10 1,840 19 1,858 N
Slide 45: Asset Management: key figures and ratios per quarter
Group financial results 9M 2004 Asset Management: key figures and ratios per quarter (EUR m) 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 ∆3Q 04/03 Operating revenues 488 544 632 574 544 556 564 -68 Operating expenses -351 -361 -424 -369 -364 -375 -347 77 Operating profit 137 183 208 205 180 181 217 9
Slide 46: Group asset allocation: breakdown per segment
Group financial results 9M 2004 Group asset allocation1: breakdown per segment (EUR bn) 9M 2004 Total in % P/C in % L/H in % Bank in % AM in % Equity 50.6 14.2 16.7 18.2 26.4 11.2 7.5 27.2 0.1 9.3 Fixed income 276.3 77.5 60.0 65.2 198.0 83.7 17.8 65.0 0.5 90.0 Real estate 14.6 4.1 4.9 5.3 7.6 3.2 2.
Slide 47: Investment result: breakdown per segment
Group financial results 9M 2004 Investment result1: breakdown per segment (EUR m) Total P/C L/H Bank AM 9M 03 9M 04 9M 03 9M 04 9M 03 9M 04 9M 03 9M 04 9M 03 9M 04 Current income 11,534 11,799 2,738 2,787 8,093 8,174 693 832 11 6 Realized gains/losses 1,816 2,645 2,237 1,341 -595 1,008 168 292 5 4 W
Slide 48: Reconciliation of P/C and L/H ratios
Group financial results 9M 2004 Reconciliation of P/C and L/H ratios P/C L/H Loss ratio Expense ratio Expense ratio (statutory) 8.1 Benefits payable 12.1 Acquisition costs & admini- 12.1 Acquisition costs & admini- to policy holders strative expenses strative expenses (EUR m) 20,453 20,623 (EUR m) 7
Slide 49: Disclaimer
Group financial results 9M 2004 Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that ar