Phoenix Financial Ltd · TASE:PHOE
Phoenix Financial — Q3 2021 Earnings Presentation
40 slides from Phoenix Financial's earnings presentation, November 2021
Slide 1: 3Q 2021 Phoenix Holdings Financial Review
3Q 2021 Phoenix Holdings Financial Review
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer to purchase the Furthermore, the presentation includes data and assessments based Company’s securities or solicitation to receive such offers, and is on external sources, the contents of which were not independently designed solely to offer i
Slide 3: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary |3
Slide 4: Phoenix Holdings at a Glance
Phoenix Holdings at a Glance Leading Israeli insurance, asset management & TA35 index 9.8 NISb financial group Since 2018 Market cap(1) Proven and recognized experience 70+ AA- / AA+ Years of activity Holding / Insurance Rating >3m Top Ranked Trusted by millions of customers Clients in leaderboard f
Slide 5: 9M21 Performance Highlights
9M21 Performance Highlights 9M21 25.1% 1.6NISb 340NISb 9.1NISb 196% Comprehensive ROE AUM 1 Equity EPS Solvenc y2 Income Phoenix Holdings dividend announced 3Q21 19.5% 404NISm 200NISm 0.79NIS ROE Comprehensive Dividend Dividend per Income Announced Share • Performance driven by diverse businesses an
Slide 6: Income from Broad Activities
Income from Broad Activities Comprehensive Income NIS millions 1,557 130 1,353 » Continued growth driven by core 95 214 64 businesses and diverse sources of income Special Items: Insurance 664 » Continued strategic plan execution Special Items: 29 Core Fee Businesses 580 730 » Investment yields and
Slide 7: Long-Term Equity Generation
Long-Term Equity Generation Shareholders Equity 1 NISb 9.1 9.0 0.2 » Continued growth in 8.0 8.9 shareholder equity 0.4 6.6 driven by earnings 6.4 7.6 5.7 » 200 NISm interim 4.8 dividend from 2021 4.1 3.8 income announced after 9M21 reporting period » 74 NISm buyback executed during 9M21 2014 2015 2
Slide 8: Performance and Mid-term Targets
Performance and Mid-term Targets AUM Equity NISb 1 NISb 9.1 2 340 9.0 2 300 8.0 0.2 44 234 6.6 0.4 8.9 214 296 7.6 252 Dividend 30% of profits 2019 2020 9M/2021 Mid-term Target 2019 2020 9M/2021 Mid-term target Assessing 480 3 406 274 Dividend with buyback (NISm) multi-year plans and Comprehensive I
Slide 9: Strategy Implementation: Value Drivers
Strategy Implementation: Value Drivers 1 Accelerated growth in high-ROE activities 2 Innovation and efficiency • Asset management: Growth in AUMs to 340 NISb, customer • Innovation: leading electric car insurance market with key international acquisition in private brokerage accounts, restructuring
Slide 10: Looking Ahead
Looking Ahead Priorities • Implementing strategic plan to drive risk-adjusted returns • Accelerated growth for next • Innovation & efficiency quarters • Active portfolio / group management • Optimized capital deployment • Assessing multi-year plans and targets across group | 10
Slide 11: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 11
Slide 12: Accelerated Growth in AUMs
Accelerated Growth in AUMs Assets Under Management 340 NISb 44 Halman Corporate • Provident – organic as well as inorganic growth +16% CAGR* including Halman-Aldubi 64 Provident acquisition 234 +9% CAGR 215 • Excellence – growth 35 48 Pension driven by mutual funds and 34 ETFs 173 178 37 163 30 Nost
Slide 13: Continued Growth Across Activities
Continued Growth Across Activities Premiums, Benefit Contributions, & Investment Contracts NISb Provident Pension +6% CAGR* +18% CAGR* Investment contracts 21.4 Life 20.6 Growth driven by LTS Health 2.8 19.2 and investment P&C 18.1 3.5 contracts 17.5 2.3 2.5 4.1 • LTS: strong growth 15.4 2.9 14.7 4.
Slide 14: 9M21 Comprehensive Income
9M21 Comprehensive Income Comprehensive Income NISm +155 • 1.6 NISb +246 618- comprehensive income +173 93+ 1,557 41- • Systematic implementation of +910 strategic plan across segments 459 +180 • Strong performance across business P&C Health LTS AM Agencies Credit CO Tax Miniority 1-9/21 activities,
Slide 15: 9M21 Operational PBT Breakdown
9M21 Operational PBT Breakdown Comprehensive Income Before Tax NISm • Continued strategic growth 403 2,216 • Income generation from 63+ 11 128+ investment yields and 1,098 220+ +704 57- 68+ 5+ variable fees Profit from operations +226 13- +65 +1,557 Comprehensive Income • Unlocking portfolio value +
Slide 16: 3Q21 Comprehensive Income
3Q21 Comprehensive Income Comprehensive Income NISm • Continued performance across activities during quarter • LTS/Life contributed strong operating and investment results +10 +31 • Health includes partial 62+ 142- 32+ -18 404 recognition of Ad-120 +219 income from divestment +161 • Agencies continu
Slide 17: 3Q21 Operational PBT Breakdown
3Q21 Operational PBT Breakdown Comprehensive Income Before Tax NISm • Growth across core +210 113 564 operations Profit from operations 113+ 81 160 5- 5+ +84 Comprehensive • Continued investment 19+ 3- +404 +89 Income performance 131 57+ 10+ 25- 4- 56+ 37+ 53+ +142 Tax 32+ 46+ 18+ Miniority Insuranc
Slide 18: Select Expense KPIs
Select Expense KPIs P&C Health Life Pension & Provident 2020 5.08% 5.82% 0.49% 0.23% 9M2020 4.66% 5.80% 0.53% 0.26% 9M2021 4.57% 5.51% 0.49% 0.22% Expenses as % of Gross Earned Premiums Expenses as % of AUMs Note: Expenses include general and administrative expenses, as well as other expenses | 18
Slide 19: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 19
Slide 20: P&C
P&C P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm +199 (+77%) • Improvement in 9M2021 Compulsory motor -2 due to underwriting as well -74 459 Motor property as investments, with 9% Property and others 253+ growth in premiums Liability 22 compared to previous year 35+ +8 2
Slide 21: Health
Health P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm -110 )38%-( 290 12 -25 34 • Decrease in underwriting profit, -131 especially in LTC 180 • Return to growth in travel insurance • Special items income before tax of 63 NISm includes partial recognition of income from Ad-
Slide 22: LTS Combined – Life & Long-Term Savings
LTS Combined – Life & Long-Term Savings AM P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm • Provident and Pension segments reaching +834 (+1,100%) scale and growing profitability due to organic 910 growth and acquisition of Halman-Adlubi, 5 26 with continued synergy captur
Slide 23: LTS Breakdown: Life
LTS Breakdown: Life P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm 803+ (1,275%) 866 175 (72) • Performance in Life driven by investment yields and variable fees 711 • Special items include actuarial research at 9M21, compared to growth in reserves last year (due to 63 inf
Slide 24: LTS Breakdown: Pension and Provident Funds
LTS Breakdown: Pension and Provident Funds P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm +31 (+238%) 24- • Strong AUM growth including inflows, yields, and Halman acquisition +106 69- • Reaching scale and 44 profitability due to inflows +9 and organic growth as well +9 as
Slide 25: AM / Excellence Investment House
AM / Excellence Investment House P&C Health LTS AM Agencies Credit CO Comprehensive Income NISm -27 (-23%) 121 • Continued strong growth in AUMs to 64 (11) NISb at the end of 3Q21 as part of (16) 93 strategic plan implementation (includes Excellence as well as alternative funds) • Growth in private
Slide 26: Agencies
Agencies P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm 51+ (42%+) 173 11 • Accelerated growth in 40 proprietary distribution channels 122 / owned agencies • Driven by continued organic and inorganic growth • Growth across diverse base of agencies, including both LTS/Life
Slide 27: Credit (Gama)
Credit (Gama) P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax Transaction Volume Credit Portfolio (without credit cards) NISm NISb NISm +232 (+1,618%) 21%+ +40% 246 25 1,251 1,177 21 1,080 982 893 220+ 1-9.20 1-9.21 31.12.20 31.3.21 30.6.21 30.9.21 31.10.21 • 40% growth in credi
Slide 28: Corporate (CO)
Corporate (CO) P&C Health LTS AM Agencies Credit CO Comprehensive Income Before Tax NISm 310+ (200%-) 155 • Increase in income driven by investments and capital markets • Increase in financial expenses 353 as a result of CPI increase which were offset by investment income increase (2) 12 • Real esta
Slide 29: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 29
Slide 30: Market Indices – Highlights
Market Indices – Highlights CPI / FX Stocks Bonds 20.2% 18.6% 15.3% 14.7% • Strong capital 8.5% 10.6% 8.0% 7.6% 7.8% markets 7.1% 5.4% 6.0% 6.1% 4.1% 3.8% 4.3% 2.2% 2.5% 2.1% 2.7% 1.7% • Improved 9M21 0.1% 0.8% 0.4% 1.5% 0.2% 0.2% market )0.6%( )0.7%( )0.4%( )1.1%( )1.0%( )2.2%( performance )1.0%( )
Slide 31: Phoenix Investment Yields – Highlights
Phoenix Investment Yields – Highlights Q3/20 9M/20 Nostro Q3/21 9M/21 OPM 11.7% 11.6% 9.6% • Strong investment performance of Israeli 7.4% 7.7% asset managers 5.8% 4.6% 4.4% 4.2% • High rank compared to 3.7% market 2.4% 2.2% 2.4% 2.0% 2.0% 1.5% 1.6% 1.5% 1.3% 1.6% 1.6% 1.0% 1.2% 0.7% • Above average
Slide 32: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 32
Slide 33: Appendix A – 9M21 Balance Sheet Highlights
Appendix A – 9M21 Balance Sheet Highlights Assets Liabilities & Equity NISb NISb Tax & other 136.9 136.9 Accounts 15% payable 2.4 19% Diversified Investments Cash 9.4 Total equity1 Gama and other assets2 15.8 GAMA and Other Bonds – 13.5 Other liabilities 13.5 Alternatives & financial liabilities NIS
Slide 34: Appendix B – Profit 9M2021 vs 9M2020
Appendix B – Profit 9M2021 vs 9M2020 403 2,216 P&C AM 11 +128 +63 Health Credit 1,098 +220 +226 -57 +68 +5 LTS Agencies +65 -13 +1,557 CO +602 1-9/21: +26 -50 +205 454 +168 +106 Tax +233 +618 +109 Miniority +112 +41 Insurance AM Agencies Credit CO Investments Interest Special items Total profit unde
Slide 35: Appendix C – Profit 3Q2021 vs 3Q2020
Appendix C – Profit 3Q2021 vs 3Q2020 Q3'21: 113 564 81 +113 +113 160 +5 0 -5 -5 +19 -3 +84 +404 +89 131 +57 +10 -25 -4 +56 + +53 +32 +37 +142 +46 +18 Insurance AM Agencies Credit CO Investments Interest Special items Total profit underwriting income (*) Q3/21 profit +210 Profit from operations 184 4
Slide 36: Appendix D – Profit 2020 vs 2019
Appendix D – Profit 2020 vs 2019 277 2,040 154 +75 +74 729 +218 +62 +66 +151 -63 --1 +56 +1,353 +298 +224 +18 - -30 2020: +175 576 +141 +300 +647 +151 +125 +40 Insurance AM Agencies Credit CO Investments Interest special items Income 2020 underwriting income (*) profit 1,391 -17 - +237 -226 +220 - -
Slide 37: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 37
Slide 38: Glossary
Glossary AM Asset Management; i.e. Excellence Nessuah AUM Assets Under Management; the total market value of all the investments that are managed by the Group Bps Basis Points; 1 basis points is .01% CGU Cost Generating Unit CI Comprehensive Income CLR Combined Loss Ratio CO Corporate, Other and Con
Slide 39: Glossary
Glossary MF Management Fees; wages charged by a financial manager Moody’s A credit risk rating agency MSCI Morgan Stanley Capital International Emerging Markets Index; measures the performance in equity markets, specifically in global emerging markets Mutual Fund Open end, non-tradable basket of sec
Slide 40: 2021 Q3 Phoenix Holdings Financial Review
2021 Q3 Phoenix Holdings Financial Review Please contact us at IR@fnx.co.il