Phoenix Financial Ltd · TASE:PHOE
Phoenix Financial — H1 2024 Earnings Presentation
44 slides from Phoenix Financial's earnings presentation, 2024
Slide 1: 2024 H1 Phoenix Financial
2024 H1 Phoenix Financial (Formerly Phoenix Holdings)
Slide 2: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary |2
Slide 3: Phoenix Financial – Overview
Phoenix Financial – Overview Leading Israeli 480 NISb TA-35 Phoenix Financial financials group AUM1 Leading index Insurance Asset Management, Agencies & Credit 19% 15% Distinctive AUM CAGR ROE P&C Retirement (Pension & Provident) performance 5-years2 5-year average2 Health & Travel Investment House
Slide 4: Israel Economic Trends
Israel Economic Trends Long-term positive GDP Growth 2 GDP per Capita 3 Long-Term Savings AUM 4 structural trends Percent USD ‘000 NIS Trillion 9.8% (e.g., wealth accumulation, 2023-24 Sweden 56 2.4 2.3 2.4 6.3% war impact 1.9 2.0 vibrant tech sector)1 4.3% 3.8% Germany 53 1.6 1.9% 1.2% 1.5% Israel
Slide 5: 2024 H1 & Q2 Highlights
2024 H1 & Q2 Highlights 12.8 667 Continued growth in core income with strong H1/24 % NISm 2.65NIS performance ROE Comprehensive Income Income per Share Resilience in face of continued uncertainty, maintaining strong Solvency position and ratings 191 270 Negative impact of non-operating activities %
Slide 6: Continued Growth in Core Activities
Continued Growth in Core Activities Income (Comprehensive, after Tax) NISm 2,316 1,450 1,353 1,093 1,124 H1 Q2 450 Core Asset Management, Agencies 752 390 667 Non-Operating & Credit 664 298 275 44 314 383 growth in fee income across segments 266 215 146 Core Asset Management 271 790 872 217 Core Ins
Slide 7: Investment Core Capabilities
Investment Core Capabilities Returns - Insurance Nostro / Corporate Account Asset Allocation - Corporate Account (Nostro) Percent (nominal) Percent (june 30, 2024) 10.6% Cash Alternatives & other 2% 12% 7.4% 5.8% Real estate Fixed income (Govt) 4.8% 4.5% 13% 35% 4.2% ~70% fixed 1.9% income Equities
Slide 8: Dividend Track Record
Dividend Track Record 2.3 NISb dividends + buybacks since 2020 while growing shareholders equity Building on Track-Record Shareholders' Equity NISm 270 NISm dividend (1.07 per share) from H1 10,580 10,849 earnings announced, in line with policy of at 10,145 9,653 least 40% from annual income - facil
Slide 9: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary |9
Slide 10: Proven Value Creation Strategy & Catalysts
Proven Value Creation Strategy & Catalysts Value Drivers Growth Engines 1 2 3 4 Multi-line Insurance Accelerated Innovation & Active Capital Growth Efficiency Management Management P&C Health Accelerating growth Deepening client-focus Optimizing group Deploying capital Life while shifting mix to & s
Slide 11: Group: Core Income Achieving & Surpassing Targets
Updated Group: Core Income Achieving & Surpassing Targets targets to be published September 9 Core Income NISm, before non-operating effects Phoenix Financial (formerly Phoenix Holdings) 1,300-1,500 Core income without 1,322 1,180 non-operating 866 869 effects (capital 601 markets, interest rates, &
Slide 12: Group: KPIs on Track to Achieve Targets
Updated Group: KPIs on Track to Achieve Targets targets to be published September 9 Group AUMs Shareholders’ Equity ROE NISb NISb 480 450-550 433 26.3% 11-13 369 371 10.1 10.6 10.8 9.7 18.5% 8.0 234 12.8% 12%-15% 8.9 11.4% 10.5% 7.6 2020 2021 2022 2023 6.24 2025 2020 2021 2022 2023 6.24 2025 2020 20
Slide 13: Insurance: Shifting Mix
Insurance: Shifting Mix Premiums & Contributions NISb +8% CAGR 19.7 19.1 17.5 7.3 14.5 7.8 5.2 Inflows to investment policies 3.2 12.4 (capital-efficient, high-margin) 12.1 11.3 2.0 1.9 Shift in premiums mix H1/24 1.6 toward capital-light P&C 4.5 5.6 8.9 9.0 5.2 5.4 4.8 5.1 2.5 3.4 5.1 Q2/24 3.3 3.1
Slide 14: Insurance: Surpassing Targets
Updated Insurance: Surpassing Targets targets to be published September 9 P&C Premiums G&A Expense Ratios2 Solvency1 Including Smart direct, NISb Ratio 4.5 4.5 P&C Health Life % of premiums % of AUM 3.7 211% 3.2 2019 4.10% 5.57% 0.50% 192% 190% 194% 191% 150-170% 2.5 2020 5.08% 5.82% 0.49% 2021 4.40
Slide 15: Asset Management & Credit (AM&C): Growing EBITDA
Asset Management & Credit (AM&C): Growing EBITDA Growth engines Asset Adjusted EBITDA – Asset Management, Agencies & Credit Management, Agencies & NISm, consolidated including minorities Credit producing significant EBITDA from non-insurance businesses 102% • Mostly fee-based income 926 • Spread inc
Slide 16: AM&C: Continued Growth in AUMs
AM&C: Continued Growth in AUMs Assets Under Management NISb 480 +19% CAGR 433 104 Retirement - Pension 369 371 92 53 Asset 67 116 Retirement - Provident Management 113 (off balance 234 117 111 sheet) 215 37 178 31 120 Investment House & Wealth 35 90 24 34 70 66 30 56 52 45 104 Insurance 97 95 102 In
Slide 17: AM&C: Retirement & Investment House
AM&C: Retirement & Investment House Updated targets to be published September 9 Retirement (Pension & Provident) Investment House & Wealth Contributions G&A Expense Ratio Revenues NISb Percent of AUMs NISm 763 750 19.0 2020 0.16% 666 15.7 13.1 2021 0.13% 502 463 454 10.8 8.5 2022 0.12% 6.8 2023 0.12
Slide 18: AM&C: Distribution / Agencies
Updated AM&C: Distribution / Agencies targets to be published September 9 Focused on stand-alone value creation: Assessing interest Distribution Revenues cash-generative & capital-light business from international NISm model, market leader but still low 6% market investors to unlock share1; value cr
Slide 19: AM&C: Private Credit (Business and Consumer)
Updated AM&C: Private Credit (Business and Consumer) targets to be published September 9 Phoenix-Gama Group Credit Activities 100% ownership following tender offer in 2023 NISb (continues to report with publicly traded bonds); 5.6 5.8 building platform for growth (e.g., balance 5.1 0.7 0.7 Investmen
Slide 20: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 20
Slide 21: Income by Source H1 2024
Income by Source H1 2024 Breakdown Before Tax – By Segment NISm H1/24 H1/23 Difference P&C 437 224 213 Health 198 95 103 Core Income Breakdown Before Tax (Comprehensive) Life & Savings 107 66 41 H1 2024, NISm 150 204 (54) Other Equity Returns Core Insurance 892 589 303 Retirement (Pension & Providen
Slide 22: Income by Source Q2 2024
Income by Source Q2 2024 Breakdown Before Tax – By Segment NISm Q2/24 Q2/23 Difference P&C 263 113 150 Health 163 59 104 Life & Savings 48 33 15 Other Equity Returns 127 95 32 Core Income Breakdown Before Tax (Comprehensive) Core Insurance 601 300 301 Q2 2024, NISm Retirement (Pension & Provident) 2
Slide 23: Income by Segment H1 2024
Income by Segment H1 2024 Segment Income Breakdown Before Tax (Comprehensive) H1 2024, NISm 1,026 71 (1) 155 (304) )42( 151 (121) (55) 667 259 47 507 P&C Health Life Other Equity Retirement Investment Agencies Credit Other Income Tax Miniority H1/24 Returns House & before Tax Wealth & Minority 603 4
Slide 24: Income by Segment Q2 2024
Income by Segment Q2 2024 Segment Income Breakdown Before Tax (Comprehensive) Q2 2024, NISm 41 573 40 (1) (262) 83 )165( 321 79 (25) 383 16 256 P&C Health Life Other Equity Retirement Investment Agencies Credit Other Income Tax Miniority Q2/24 Returns House & before Tax Wealth & Minority 356 217 Ins
Slide 25: Strong Balance Sheet
Strong Balance Sheet Financial Liabilities (NISm) Phoenix Holdings NISm 31/12/2023 30/06/2023 30/06/2024 Difference Bonds and Loans 30/06/2024 31/12/2023 Cash 3,053 2,713 2,660 -393 CPI Floating Fixed Intangible Assets 3,598 3,326 3,840 242 linked interest interest Total Total Deferred acquisition c
Slide 26: Active Solvency & Capital Management
Active Solvency & Capital Management Economic Capital & Solvency (Insurance Company, NISb) Solvency II implementation Cashflow and Liquidity (Holding Company) Solvency II implemented in Israel in line with Solvency ratio1 international standards, with strong regulatory Insurance subsidiary dividend
Slide 27: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 27
Slide 28: P&C Comprehensive Income Before Tax
P&C P&C Health Life Other RetirementInvestment Distribution Credit Equity House Other Comprehensive Income Before Tax NISm 507 (6) Continued growth and profitability despite challenging environment & high theft frequency 102 (26) Optimized use of machine learning for motor underwriting Positive seco
Slide 29: Health
Health P&C Health Life Other RetirementInvestmentDistribution Credit Equity House Other Comprehensive Income Before Tax NISm (20) 259 Increase in underwriting profit 79 Positive impact from LAT reserves mainly due to increase in 2 interest rates (no LAT reserve remaining at end of Q2) Maccabi HMO co
Slide 30: Life and Savings
Life and Savings P&C Health Life Other RetirementInvestmentDistribution Credit Equity House Other Comprehensive Income Before Tax NISm Underwriting profit improvement Negative non-operating effects mainly due to update of mortality tables (special items) and investment profit above 3%, partially off
Slide 31: Other Equity Returns (Insurance)
Other Equity Returns (Insurance) P&C Health Life OtherRetirementInvestmentDistribution Credit Other Equity House 150 NISm financial margin, Comprehensive Income Before Tax 54 NISm decrease due to NISm changes in CPI compared to H1 2023 Negative capital market effects (below 3% real yields) 150 of 28
Slide 32: Retirement (Pension & Provident)
Retirement (Pension & Provident) P&C Health Life Equity Investment Other Retirement House Distribution Credit Other Continued organic growth Comprehensive Income Before Tax NISm Focus on profitability including higher margin / efficient activities (12) 47 3 56 Core Income Investments Special items H
Slide 33: Investment House & Wealth (Financial Services)
Investment House & Wealth (Financial Services) P&C Health Life Equity House Distribution Credit Other RetirementInvestment Other Performance improvement from Comprehensive Income Before Tax strategic execution NISm Growth in brokerage business 4 151 7 (8) due to continued new client 8 acquisition, a
Slide 34: Distribution (Agencies, Planning, Benefits)
Distribution (Agencies, Planning, Benefits) P&C Health Life Equity House DistributionCredit Other RetirementInvestment Other Continued organic growth, Comprehensive Income Before Tax however growth rate impacted NISm by slower pace of hiring in the 155 (1) 0 market (including in tech sector) Acceler
Slide 35: Credit (Primarily Phoenix-Gama)
Credit (Primarily Phoenix-Gama) P&C Health Life Other RetirementInvestmentDistributionCredit Other Equity House Synergetic merger of Credit Portfolio Comprehensive Income Before Tax Phoenix Construction NISm, without credit card activity NISm Finance in January 2024, 71 2,736 (5) following successfu
Slide 36: Other
Other P&C Health Life Other RetirementInvestmentDistributionCredit Other Equity House Segment includes Comprehensive Income Before Tax Phoenix Financial NISm (formerly Phoenix Holdings) solo profits (including RT1 holding) as well as other items (44) 58 0 (15) 0 (1) Financial Interest Subsidiaries O
Slide 37: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 37
Slide 38: Phoenix Financial – Highlights
Phoenix Financial – Highlights Unique opportunity in a growing, underpenetrated market with barriers to entry 1 Strong long-term demographic & wealth trends with high compulsory savings rates, potential for greater penetration, and macro resilience Strong market position with distinctive growth & pe
Slide 39: Investment Returns – Explanation
Investment Returns – Explanation Reconciliation of investment returns above / below 3% real returns with financial statements NISm H1-24 H1-23 2023 P&L Items from Financial Statements Investment income 7,591 5,289 9,910 Share in profits of equity-accouted investees 40 43 42 Total components of net o
Slide 40: Agenda
1. Highlights 2. Strategy & Targets Agenda 3. Financial Results 4. Segment Breakdown Appendix Glossary Disclaimer | 40
Slide 41: Glossary
Glossary Adjusted EBITDA - calculated as income before finance, taxes, depreciation and amortization in the relevant areas of activity; adjustments as detailed below: Investment House - IFRS 16 adjustment and special items Adjusted EBITDA Retirement (Pension and Provident) - IFRS 16 adjustment and a
Slide 42: Glossary
Glossary LTS Long Term Services; including but not limited to Life, Provident and Pension funds Marketable Securities Liquid financial assets that can be quickly converted into cash; most are trading assets MF Management Fees; wages charged by a financial manager Moody’s A credit risk rating agency
Slide 43: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 43
Slide 44: 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 in