Axa Sa · EURONEXT:CS
Axa Sa — FY2010 Earnings Presentation
40 slides from Axa Sa's earnings presentation, Feb 17, 2011
Slide 1: Full Year 2010 Earnings
Full Year 2010 Earnings February 17, 2011 Media Presentation
Slide 2: Cautionary note concerning forward-looking statements
Cautionary note concerning forward-looking statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements be
Slide 3: Table of contents
Table of contents 2010 key highlights Page 3 by Henri de Castries, Chairman and CEO 2010 financial performance Page 8 by Denis Duverne, Deputy CEO Concluding remarks Page 35 by Henri de Castries, Chairman and CEO 3 – AXA FY10 Earnings – February 17, 2011
Slide 4: AXA's journey
AXA’s journey 2007 - 2009: Weathering the storm Resilience despite headwinds 2010: Setting the ground for our ambition Adapting to reflect lessons of the crisis and new market prospects 2011 and beyond: Ambition AXA Combining value and growth 4 – AXA FY10 Earnings – February 17, 2011
Slide 5: 2010 highlights
2010 highlights In 25 years, AXA brand has become the first brand of insurance worldwide Sale of part of the UK life operations AXA APH: expected to close 1H11 Implementation of new governance Renewal of Senior Management teams New JV with the 1st world bank to create a leading brand in China life i
Slide 6: Key financial highlights
2010 Key financial highlights Significant increase 9 Life & Savings: NBV margin strongly up from 18% to 22% in new business profitability 9 Property & Casualty: Current year combined ratio improved by 2 pts 9 Underlying Earnings: €3.9 billion (vs. €3.9 billion in FY09) Solid earnings 9 Adjusted Earn
Slide 7: 2011 and beyond: Ambition AXA
2011 and beyond: Ambition AXA Long term pillars of AXA’ strategy AXA’s key beliefs reaffirmed … Mature markets will still represent the majority of Focus on core businesses of insurance and global insurance revenues mid term, with some asset management worldwide segments growing faster than the
Slide 8: Table of contents
Table of contents 2010 key highlights Page 3 by Henri de Castries, Chairman and CEO 2010 financial performance Page 8 by Denis Duverne, Deputy CEO Concluding remarks Page 35 by Henri de Castries, Chairman and CEO 8 – AXA FY10 Earnings – February 17, 2011
Slide 9: 2010 financial performance
2010 financial performance Group Life & Savings Property & Casualty Asset Management Balance sheet 9 – AXA FY10 Earnings – February 17, 2011
Slide 10: Revenues
Revenues Insurance revenues* Revenues by segment by region In Euro billion Comparable In Euro million FY09 FY10 basis(1) Asia-Pacific (incl. Japan) Life & Savings 57,620 56,923 -3% 9.7 France Northern, 20.5 Property & Casualty 26,174 27,413 +1% Central Mediterranean & Eastern & Latin Amer. Asset Man
Slide 11: High growth markets
High growth markets Strong growth across segments and geographies Life & Savings Property & Casualty New business sales (APE) Revenues - High growth markets High growth markets In Euro million In Euro million +6% +25% 2,990 2,511 667 434 FY09 FY10 Property & Casualty Revenues - Direct In Euro millio
Slide 12: Underlying Earnings
Underlying Earnings Sustained performance Underlying Earnings Underlying Earnings by segment In Euro million Comparable In Euro million FY09 FY10 basis -3% Life & Savings 2,336 2,455 +1% 3,854 3,880 Property & Casualty 1,670 1,692 -2% Asset Management 355 269 -26% International Insurance 286 290 0%
Slide 13: Adjusted Earnings up 20%
Adjusted Earnings up 20% Net Income up 18% before impact of UK Life sale Adjusted Earnings In Euro million +20% 4,317 3,468 Higher net realized capital gains(2) and lower impairment charges FY09 FY10 ROE(1) 11% 12% Change is on a comparable basis Net Income In Euro million +18% 4,391 -26% 3,606 Net
Slide 14: Strong value creation
Strong value creation Proposed dividend up 25% Dividend per share In Euro +25% 0.69 Consistent dividend policy 0.55 Payout ratio of 40%* Dividend yield of 5.5%** * based on Adjusted Earnings net of undated debt interest charges ** based on share price at December 31, 2010 FY09 FY10 Group EV per
Slide 15: Increase in Operating Free Cash Flow
Increase in Operating Free Cash Flow Operating Free Cash Flow In Euro billion 3.7 3.1 Life & Savings 0.8 1.4 Strong increase in Life & Savings Operating Free Property & Casualty* 2.0 2.0 Cash Flow Asset Management** 0.4 0.3 FY09 FY10 From Operating Free Cash Flow In Euro billion to Group Net Free Ca
Slide 16: 2010 financial performance
2010 financial performance Group Life & Savings Property & Casualty Asset Management Balance sheet 16 – AXA FY10 Earnings – February 17, 2011
Slide 17: L&S – Scope overview
L&S – Scope overview DRAFT Global footprint Well balanced business mix FY10 APE by business G/A Protection Operations in over 30 countries Unit-Linked & Health # 1 global insurer(1) 31% 31% Over 40 million customers Mutual Funds FY10 APE by geography & other 13% G/A Savings Asia-Pacific 25% (i
Slide 18: L&S – New business sales and margins by business
L&S – New business sales and margins by business DRAFT Strong NBV margin increase benefiting from improved business mix APE (€m) NBV margin (%) FY09 FY10 % change FY09 FY10 G/A Protection & Mainly discontinuation of a lower 1,845 1,802 -4% 41% 47% margin protection product in Health Japan Discipline
Slide 19: L&S – Underlying Earnings by business
L&S – Underlying Earnings by business All segments contribute positively to underlying earnings G/A Protection G/A Savings Unit-linked Mutual Funds & Health & Other In Euro million In Euro million In Euro million In Euro million 0% 2,091 +3% 2,031 +17% 672 639 635 147 522 246 nm 101 10 FY09 FY10 FY0
Slide 20: L&S – Underlying Earnings
L&S – Underlying Earnings Key drivers Underlying Earnings of L&S Underlying Earnings In Euro million Higher investment margin (up 14%) primarily as a result of higher asset base and lower investment +1% income allocated to policyholders 2,455 2,336 Higher fees and revenues on assets & premiums (
Slide 21: 2010 financial performance
2010 financial performance Group Life & Savings Property & Casualty Asset Management Balance sheet 21 – AXA FY10 Earnings – February 17, 2011
Slide 22: P&C – Scope overview
P&C – Scope overview DRAFT Global scope Unique proprietary networks FY10 Revenues by channel Operations in over 30 countries(1) Agents Over 55 million customers 40% # 4 global insurer(2) #2 amongst non-local insurers(3) in high growth markets Direct & other 10% Brokers - IFAs FY10 Revenues b
Slide 23: P&C – Revenues by segments
P&C – Revenues by segments P&C Revenues Personal lines In Euro million In Euro million +4% Average price increase of +3.8% +1% Strong net new contracts of +1.4 15,824 16,893 million vs. +1.1 million in FY09 mainly 27,413 in high growth markets and direct 26,174 FY09 FY10 Commercial lines In Euro
Slide 24: P&C – Combined ratio
P&C – Combined ratio Improved current year …lower prior year All-year combined ratio… reserve developments combined ratio -2.0 pts 104.4%* -5.4%* 102.4% -3.3% 1.9% 99.0% 99.1% 1.7% + 102.6% 100.7% FY09 FY10 FY09 FY10 FY09 FY10 Natural Catastrophes * Harmonized presentation of current and prior year
Slide 25: P&C – Underlying Earnings
P&C – Underlying Earnings Underlying Earnings In Euro million Key drivers of P&C Underlying Earnings -2% Combined ratio up 0.1pt, reflecting strong 1,692 improvement of current year profitability, lower level 1,670 of prior year reserve development and a relatively high cost of natural catastrophe
Slide 26: 2010 financial performance
2010 financial performance Group Life & Savings Property & Casualty Asset Management Balance sheet 26 – AXA FY10 Earnings – February 17, 2011
Slide 27: AM – Scope overview
AM – Scope overview Complementary business models Multi-expert model: structured by Structured by “Investment Style” “Expertise” Focus on growth equities, value Expertise in fixed income, equities, equities, blend strategies, fixed Product quantitative equities income offer Focus on altern
Slide 28: AM – Assets under management roll-forward
AM – Assets under management roll-forward AUM up € 33 billion in 2010 In Euro billion • Of which €-29 billion at AXA Rosenberg • Net outflows mainly in 1H10 • Of which €-36 billion in • Forex impact due to the institutional Euro’s depreciation segment versus other currencies 53 (44) 44 878 (20) 845
Slide 29: AM – Average AUM and revenues
AM – Average AUM and revenues Revenue increase fuelled by higher average AUM Average Assets Asset Management Under Management Revenues In Euro billion In Euro million +3% +5% 878 863 3,328 845 845 816 3,074 810 269 FY09 FY10 FY09 FY10 Opening AUM Average AUM Closing AUM Changes are on a comparable b
Slide 30: AM – Underlying Earnings
AM – Underlying Earnings Underlying Earnings In Euro million -26% 355 Impact of one-offs: €-66 million net provision for AXA 269 Rosenberg coding error in 2010 and non-repeat of Underlying earnings FY10 Var €+62 million tax one-off at per asset manager in € million AllianceBernstein in 2009 AXA IM
Slide 31: 2010 financial performance
2010 financial performance Group Life & Savings Property & Casualty Asset Management Balance sheet 31 – AXA FY10 Earnings – February 17, 2011
Slide 32: Shareholders' equity
Shareholders’ equity Driven by net income and unrealized capital gains Shareholders’ equity Unrealized capital gains included in shareholders equity In Euro billion In Euro billion FY09 2.7 Equities FY10 3.1 49.7 46.2 FY09 2.0 Fixed income & others FY10 3.1 Off Balance sheet net unrealized capital g
Slide 33: General Account invested assets
General Account invested assets Invested assets (100%) In Euro billion FY09 % FY10 % Changes in asset allocation Fixed income 328 81% 370 83% Net inflows: mainly invested in o/w Govies and related 154 38% 191 43% Government bonds o/w Corporate bonds 146 36% 150 34% Mark to market: Fixed income a
Slide 34: Robust Balance Sheet
Robust Balance Sheet Solvency I ratio 182% 171% Mainly driven by sustained earnings contribution FY09 FY10 Economic capital model* Ca. 175% 167% Strong economic capital position FY09 FY10 Debt gearing 28% 26% Mainly due to unfavorable Forex impacts FY09 FY10 * AXA’s internal economic model calibrate
Slide 35: Table of contents
Table of contents 2010 key highlights Page 3 by Henri de Castries, Chairman and CEO 2010 financial performance Page 8 by Denis Duverne, Deputy CEO Concluding remarks Page 35 by Henri de Castries, Chairman and CEO 35 – AXA FY10 Earnings – February 17, 2011
Slide 36: 2011 Key objectives
2011 Key objectives Accelerate profitable growth, benefiting from more favorable financial markets and continuing strong performance in high growth markets Life & Savings Further drive our new business sales towards selected profitable segments, notably Protection & Health and Unit-Linked produc
Slide 37: Q&A session
Q&A session Q&A session 37 – AXA FY10 Earnings – February 17, 2011
Slide 38: SRI ratings
SRI ratings AXA is included in the three major global ethical indices DJSI STOXX and DJSI World (based on SAM research) FTSE4GOOD (based on EIRIS research) ASPI Eurozone (based on Vigeo research) Agency Theme AXA rating SAM (2010) General score 70% (sector avg.: 46%) Economy 80% (sector avg.:
Slide 39: Notes
Notes Page 10 (1) Change on a comparable basis corresponds to: For activity indicators, constant exchange rates, scope and methodology For earnings and profitability indicators, constant exchange rates Page 13 (1) ROE: Return corresponds to adjusted earnings net of interest charges on undated debt.
Slide 40: Definitions
Definitions 2010 financial statements are subject to completion of audit procedures by AXA’s independent auditors. AXA's FY10 results have been prepared in accordance with IFRS and interpretations applicable and endorsed by the European Commission at December 31, 2010. Adjusted earnings, underlying