Storebrand ASA · OSL:STB
Storebrand ASA — Q1 2004 Earnings Presentation
52 slides from Storebrand ASA's earnings presentation, May 12, 2004
Slide 1: Results 1st Quarter 2004 Analyst presentation
Storebrand Results 1st Quarter 2004 Analyst presentation 1st quarter 2004 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-9 3-17 • Storebrand Bank Managing Director Per Kumle 10-14 19-28 Backup • Storebrand Group 15-20 29-39 • Storebrand ASA 21-23 41-45 • Storebrand Life Insurance 24-35
Slide 2: Highlights Q1 2004
Storebrand Results 1st Quarter 2004 12 May 2004 Idar Kreutzer Group CEO Highlights Q1 2004 § Group profit of NOK 413 million § Strong growth in premium income for Life Insurance company § Good performance in Investments § Moderate losses and positive result in Storebrand Bank § Sale of If shares com
Slide 3: Storebrand Group Results; Life Insurance Profit and loss
Storebrand Group Results Q1 01.01-31.12 NOK million 2004 2003 2003 Life activities 197 67 800 Investment activities 17 6 22 Storebrand Bank 21 -36 -109 Non life activities 198 29 348 Other activities *) -20 -114 -168 Group profit 413 -47 894 *) Including depreciation goodwill Storebrand Bank Q1 2004
Slide 4: Life Insurance unrealised gains and profit sharing model
Storebrand Life Insurance Unrealised gains in investment portfolio NOK billion HTM (not included in balance 7.0 sheet) Current assets (market value adjustment reserve) 5.1 4.2 4.2 4.4 1.6 0.7 2.6 -0.4 0.2 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q1 2004 7 Storebrand Life Insurance The profit
Slide 5: Life Insurance asset profile and premium income
Storebrand Life Insurance Asset profile Risk exposure in % 2002 2003 Q1 04 Equity 9 13 15 Bonds 14 17 23 Money market 27 20 15 HTM bonds 38 37 35 Real estate 9 8 8 Loans 1 1 1 Q1 2004 9 Storebrand Life Insurance Strong growth in premium income* § Premium income up by 53% for traditional life insuran
Slide 6: Storebrand Investments profit and loss and development
Storebrand Investments Profit and Loss Q1 01.01-31.12 NOK mill. 2004 2003 2003 Total income 78 58 274 Total costs -63 -55 -261 Net finance/other 2 3 9 Profit before tax 17 6 22 Increase in income driven by good relative performance and increased volumes. Increase in costs due to higher performance-r
Slide 7: Storebrand Bank profit and loss; If-sale completed
Storebrand Bank Profit and loss Q1 2004 Full year NOK mill. 2004 2003 2003 Net interest income 108 131 493 Other income 91 76 319 Total income 199 207 812 Operating expenses -165 -178 -709 Operating profit before losses 35 30 103 Loan loss provisions -14 -65 -174 Write down on shares -0 -38 Profit b
Slide 8: Group other activities and Summary
Storebrand Group Other activities Q1 01.01-31.12 NOK million 2004 2003 2003 Storebrand ASA Net financial income and expenses 20 -71 -62 Operating cost -35 -34 -113 Netting on consolidation / Other activities *) -5 -9 8 Total profit other activities -20 -114 -168 *) Including depreciation goodwill St
Slide 9: Storebrand shall be the leading and most respected institution
Storebrand shall be the leading and most respected institution in the Norwegian market for long-term savings and life insurance Q1 2004 17 (Page intentionally left blank) Q1 2004 18 9
Slide 10: Storebrand Bank
Storebrand Bank Results 1st Quarter 2004 12 May 2004 Per Kumle Managing Director Storebrand Bank ASA § A modern and reliable bank for the retail market and real estate related operations in eastern Norway § Storebrand’s distribution platform towards the retail market Banking services Retail Distribu
Slide 11: Strategy for profitable operations
Strategy for profitable operations § The foundation for profitability is made Profitability § Further simplification of product and service Simplification concepts Effectiveness and realisation § Focus on residential of synergies mortgages to retail customers and asset-backed Compliance and balance
Slide 12: Compliance and balance sheet management cont.
Compliance and balance sheet management cont. Development in NPLs § Development according NOK million to plan 4 000 60 % 3 500 55 % 3 000 50 % § Reduction in 2 500 45 % - Loss provided loans 2 000 40 % - Shipping 1 500 35 % - Total portfolio 1 000 30 % 500 25 % § 55% loss provisions / 0 Q3 Q4 Q1 Q2
Slide 13: Simplification; A better bank for the customer
Simplification § Reduction in number of customer concepts - From 5 to 2 service concepts § Less complex product range - From 10 to 2 account products - From 6 to 3 card products § Unprofitable products discontinued § Bank charges – harmonisation and positioning Q1 2004 25 A better bank for the custo
Slide 14: Profitability; Systematic work showing results
Profitability § Stable income Profit development (before tax) - Changed composition NOK million - Growth in lending to retail 100 market - High activity in corporate -100 - Strong sales of savings products -200 § Lower costs -300 - Operations -400 - Funding -500 - Reduction in NPLs 2002 2003 Q1 2004
Slide 15: Storebrand Group profit by sub-group
Storebrand Group Storebrand Group Profit by sub-group Q1 01.01-31.12 NOK million 2004 2003 2003 Life activities 197 67 800 Investment activities 17 6 22 Storebrand Bank 21 -36 -109 Non life activities 198 29 348 Other activities *) -20 -114 -168 Group profit 413 -47 894 *) Including depreciation goo
Slide 16: Group Operating Profit; Earnings per share
Storebrand Group Operating Profit Q1 01.01-31.12 NOK million 2004 2003 2003 Premiums for own account - insurance 6 075 4 713 13 806 Interests and similar income - banking 297 551 1 804 Financial income - insurance 4 345 3 948 17 981 Other income 211 143 645 Operating income 10 927 9 355 34 235 Insur
Slide 17: Storebrand Group Balance sheet
Storebrand Group Balance sheet 31.03 Share of 31.12 Share of NOK million 2004 totalt assets 2003 total assets Intangible assets 798 0% 891 1% Real estate 9 696 6% 9 699 6% Shares in associated companies 4 141 3% 4 045 3% Loans 23 243 14 % 23 327 15 % Bonds 71 805 44 % 64 788 41 % Short term debt ins
Slide 18: Capital adequacy; Other activities
Storebrand Group Capital adequacy Risk weighted Net primary Capital ratio NOK million assets 31.03.04 capital 31.03.04 31.03.04 31.12.03 Storebrand ASA 10 423 7 730 74,2 % 75,0 % Storebrand Life insurance 39 003 5 778 14,8 % 15,7 % Storebrand Non-life insurance 165 156 94,6 % 94,8 % Storebrand Bank
Slide 19: Shareholder structure; Rating
Shareholder structure as of 7th May 2004 20 largest shareholders By region % Other 41 Folketrygdfondet 9,98 countries Orkla ASA 9,94 Belgia 8 % 3% Skandinanviska Enskilda Banken 7,61 Luxembourg JPMorgan Chase Bank Client 3,40 4% Euroclear Bank S.A. (NOM) 3,33 USA JPMorgan Chase Bank Client 2,99 8% N
Slide 20: Storebrand Group Key figures
Storebrand Group Key figures Q1 01.01-31.12 NOK milion 2004 2003 2003 Group Earnings per share 1,13 -0,14 2,67 Capital ratio 14,7 % 15,5 % 14,9 % Life Insurance (Storebrand Livsforsikring) Policyholders' funds 112 579 101 440 108 760 Booked investment return 1,3 % 1,4 % 7,2 % Value adjusted investme
Slide 21: Storebrand ASA Profit for the year
Storebrand ASA Storebrand ASA Profit for the year Q1 01.01 - 31.12 NOK million 2004 2003 2003 Group contributions and transfers 0 0 537 Interest income 7 12 78 Realized/unrealized gains/losses on securities 58 -8 95 Interest expense -39 -75 -242 Other financial income/costs -6 -0 8 Net financial ite
Slide 22: Storebrand ASA Balance sheet; Exchangeable Bond
Storebrand ASA Balance sheet Share of Share of NOK million 31.03.2004 total assets 31.12.2003 total assets Intangible assets 235 2% 232 2% Real estate 32 0% 32 0% Shares in subsidiaries 8 724 73 % 8 724 75 % Investments 2 175 18 % 1 293 11 % Other assets 794 7% 1 319 11 % Total assets 11 960 100 % 1
Slide 23: Exchangeable Bond (cont.)
ILLUSTRATIVE Storebrand ASA Exchangeable Bond (cont.) § Strike on call option issued depends on Orkla share price and EUR/NOK exchange ratio. § Strike at conversion ratio per Q1 (43.54 Orkla shares per EUR 1000 principal), given EUR/NOK exchange rate of 8.4: = EUR 1000/43.54 x 8.4 = 193 § Orkla shar
Slide 24: Storebrand Life Group Highlights as per 31.03.2004
Storebrand Life Insurance Storebrand Life Group Highlights as per 31.03.2004 § Strong improvement in operating profit in Q1 of NOK 511 million. The operating profit for Q1 2003 is NOK 78 millions. Positive sales development in personal and corporate market § Realised and value adjusted return on inv
Slide 25: Life Group Highlights; Results
Storebrand Life Group Highlights as per 31.03.2004 § Total premium income (excluding transfers to/from) increased by 53% compared to Q1 2003 - Premium income increased of gruop pension by 13% - The sale of personal savings products is eight times higher § The sale of health insurance is still increa
Slide 26: Life Group Profit and loss; Satisfactory solidity
Storebrand Life Group Profit and loss Q1 01.01.- 31.12 NOK Million 2004 2003 2003 Premiums written 4,711 3,060 9,527 Net transferes of premium reserve -11 319 1,471 Net income of financial investments 2,525 1,459 9,391 Claims paid -1,587 -1,508 -5,960 Change in technical reserves -3,915 -2,854 -8,89
Slide 27: Allocation of policyholder's funds
Storebrand Livsforsikring AS Allocation of policyholder’s funds Allocation and policyholders' fund Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Equity 15 % 11 % 10 % 10 % 14 % 16 % 17 % 19 % Real estate 10 % 10 % 9% 9% 9% 9% 8% 8% Moneymarket 23 % 17 % 27 % 26 % 23 % 18 % 20 % 15 % Bonds held to
Slide 28: Unrealised gains; Premium by product
Storebrand Livsforsikring AS Unrealised gains 31.03. 31.12. Change NOK Million 2004 2003 2004 Shares 2,312 1,462 850 Fixed interest investments 311 228 83 Short term investments 2,623 1,690 933 Bonds held to maturity 4,378 3,394 984 Total 7,000 5,084 1,916 Q1 2004 55 Storebrand Life Group Premium ex
Slide 29: Premium excl. reserves transferred
Storebrand Life Group Premium excl. reserves transferred to the company Q1 01.01. - 31.12 NOK Million 2004 2003 2003 Group pension 2,922 2,596 5,465 Group life 314 230 475 Individual endowment 1,284 156 2,972 Individual pension 172 88 749 Critical illness etc. 19 16 67 Total premium income 4,711 3,0
Slide 30: Net transfers of premium reserves
Storebrand Life Group Net transfers of premium reserves Q1 01.01. - 31.12 NOK Million 2004 2003 2003 Premium reserves recieved Group pensions 1,056 1,354 3,173 Individual life insurance 63 10 202 Total 1,120 1,364 3,375 Premium reserves transferred Group pensions -1,095 -876 -1,551 Individual life i
Slide 31: Operating costs; Profit analysis
Storebrand Livsforsikring AS Operating costs as % of average policyholders funds 0,94 0,90 0,94 0,96 0,93 0,89 0,92 1998 1999 2000 2001 2002 2003 Q1 04 *) *) annualized Q1 2004 61 Storebrand Livsforsikring AS Profit analysis Q1 01.01.-31.12. NOK Million 2004 2003 2003 Interest result 510 423 3,613 R
Slide 32: Profit to owner; Profit analysis products without profit sharing
Storebrand Livsforsikring AS Profit to owner NOK Million 31.03.2004 31.03.2004 PROFIT SHARING MODEL REGULATORY MAXIMUM Net return on company capital 73 Management fee charged from policyholders` fund 111 35% of profit from products Risk margin 12 with profit sharing adjusted for Products inside prof
Slide 33: Life Group Balance sheet
Storebrand Life Group Balance sheet Share of Share of total assets total assets NOK Million 31.03.2004 31.03.2004 31.12.2003 31.12.2003 Immaterial assets 58 0% 62 0% Real estate 9,663 8% 9,661 8% Long term shares and interests from group companies 96 0% 95 0% Bonds hold to maturitye 41,411 33 % 42,3
Slide 34: Livsforsikring Key figures; Real estate fund
Storebrand Livsforsikring AS Key figures Q1 01.01.- 31.12 2004 2003 2003 Booked return - year-to-date 1.32% 1.36% Booked return - annualised 5.39% 5.54% 7.24% Value adjusted return - year-to-date 2.07% 1.36% Value adjusted return - annualised 8.53% 5.54% 8.82% Value adjusted return - year-to-date -i
Slide 35: Fondsforsikring profit and loss account; Balance sheet
Storebrand Fondsforsikring AS Summary profit and loss account Q1 01.01. - 31.12 NOK Million 2004 2003 2003 Premiums written 198.5 165.0 455.3 Income of financial investments ,15.4 8.9 47.2 Income - Unit Linked assets 266.1 144.9 902.6 Claims paid -113.2 -51.6 -322.4 Change in technical reserves -272
Slide 36: Storebrand Investments Highlights Q1
Storebrand Investments InvestmentsKapitalforvaltning Group Highlights Q1 § Increased performance fee contribute to improved income, NOK 16.9 million compared to NOK 5.9 million in Q1 last year § The basis for fixed and volume based income has improved § Successful sales development in the institutio
Slide 37: Profit Q1 2004; Profit development
Profit Q1 2004 NOK 16.9 million St o re b ra n d In ve st m e n t s * 1 st q u a rt e r 0 1 .0 1 – § Continued income growth NO K m ill. 20 0 4 20 0 3 3 1 .1 2 20 0 3 in Q1 Tot a l income 78.1 57.7 273. 6 - Total income increased by Tot a l cos t s -63.4 - 54.7 -260.7 35% compared to Q1 2003 Ne t fi
Slide 38: Contribution to Life portfolio performance; Fondene performance
Contribution to Life portfolio performance Differanse- Return in percent * avkastning § Outperformance in 6 15,00 out of 8 portfolios Equities Norway 1,09% 13,91 5,14 § Considerable Equities Europe 1,09% 4,05 outperformance both in Norwegian and 5,65 Equities North America 1,05% international equity
Slide 39: Mutual funds market share
Storebrand Fondene Market share mutual funds All mutual funds (market share in percent) 9,2 8,5 8,5 8,6 7,4 8 8,4 Nordea Market share Storebrand: 8,1 8,3 8,7 Odin As of Q1 (change since last quarter) 11,0 11,8 11,4 10,3 10,1 Storebrand Total: 10,1 % (-0.2 percentage points) 20,1 20,2 20,2 21,4 Equit
Slide 40: Assets under management
Storebrand Investments Assets under management Total asset under management Asset allocation Ho ld to NOK billion 165.9 maturity Real est ate 21,8 29 % 6 % Alp ha 17,2 2% 140.6 16,5 16,4 Eq uities 13,2 12,1 12,1 11,5 25,3 26,1 No rway 24,3 24,5 6% 21,0 20,9 21,6 21,3 10,1 10,2 9,9 10,0 10,1 10,9 10,
Slide 41: Storebrand Bank Highlights Q1 2004
Storebrand Bank Storebrand Bank Highlights Q1 2004 § Storebrand Bank delivers a profit of NOK 21 million § Reduction in NPLs continues § Loan loss provisions of NOK 14 million and strengthened total provisions to NPLs § Maintained net interest income / avg. total assets despite shift towards lower r
Slide 42: Profit and Loss; Development in net interest income
Profit and Loss Q1 2004 Full year NOK million 2004 2003 2003 Net interest income 108 131 493 Other income 91 76 319 Total income 199 207 812 Operating expenses -165 -178 -709 Operating profit before losses 35 30 103 Loan loss provisions -14 -65 -174 Write down on shares -0 -38 Profit before tax 21 -
Slide 43: Other income; Positive development in expenses
Other income NOK million § Good sales of 100 structured products in 90 Q1 8 80 24 70 60 § Fee income from life 50 and capital 91 40 management products 30 60 constitute 30% of total 20 income 10 0 Fee income from Net bank FX and securities Total § Very good life savings life and CM commission sales
Slide 44: Bank expenses; Balance sheet
Bank expenses include group retail distribution costs Employees Costs Bank 43 % 50 % 50 % Retail Sales 57 % Employees: 423 Costs: 154 million Note: Storebrand Bank ASA Q1 2004 87 Balance sheet 31.03.04 Share 31.12.03 Share NOK million Loans to central banks / credit institutions 446 2% 339 1% Net le
Slide 45: Development in loan portfolio
Development in loan portfolio Development in gross lending Gross lending by sector NOK billion 4% 12 % 25.9 Retail 24.8 24.1 Property 23.3 22.7 22.6 20 % Other corporate 64 % FB DK Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Note: Storebrand Bank Group Q1 2004 89 Development in portfolio Q1 2004
Slide 46: Residential mortgages; NPLs and loss provisions
Residential mortgages and other retail 9% 4% <60% of value 41 % 60% - 80% of value Residential 10 % mortgages (77%) >80% of value 1% Capital guaranteed products FX Other private 35 % Note: Storebrand Bank ASA Q1 2004 91 Development in NPLs and loss provisions NOK million § Development according 4 00
Slide 47: Customer deposits; Capital adequacy
Development in customer deposits § Customer deposits NOK million down by NOK 747 14 500 60 % million (-6%) since 14 000 58 % 2003. 13 500 56 % 54 % 13 000 52 % 12 500 50 % § Target of 60% deposits 12 000 48 % 11 500 to gross lending. 11 000 46 % 44 % 10 500 42 % 10 000 40 % § Fall in interest rates
Slide 48: Storebrand Non-Life Main features Q1 2004
Storebrand Non-Life Main features Non-Life Q1 2004 § Operating income NOK 198 mill. (NOK 29 mill.) § Result before taxes NOK 209 mill. (NOK 40 mill.) § Positive developement in If - operating result SEK 827 mill (SEK 284 mill). Storebrand’s share NOK 193 mill. (minus NOK 1 mill.) § Improved insuranc
Slide 49: Main features Non-Life; Profit and loss
Main features Non-Life Q1 2004 § The terms of the sales agreement for the sale of the shares in If to Sampo Oyj are fulfilled. The shares was transferred 6 May and Storebrand received SEK 5.4 mrd. § Result from Fair NOK 4 mill. (minus NOK 6 mill.) § Operating result Oslo Re NOK 9 mill. (NOK 2 mill.)
Slide 50: Non-Life Group Balance sheet; Oslo Re
Non-Life Group Balance sheet Share Share NOK million 31.03.2004 31.03.2004 31.12.2003 31.12.2003 Shares 9 1% 9 1% Bonds and other intrest bearing financial assets 687 66 % 770 69 % Other financial assets 22 2% 23 2% Other assets 328 31 % 307 28 % Total assets 1,046 100 % 1,109 100 % Equity 179 17 %
Slide 51: Oslo Re Balance sheet; If share profit
Oslo Re Balance sheet Share Share NOK million 31.03.2004 31.03.2004 31.12.2003 31.12.2003 Deferred tax asset 17 2% 16 2% Financial assets 569 75 % 605 78 % Receivables 73 10 % 75 10 % Other assets 104 14 % 79 10 % Total assets 763 100 % 775 100 % Equity 177 23 % 161 21 % Premium and claims reserve 3
Slide 52: Change in booked value If
Storebrand Skadeforsikring AS Change in booked value If § Change in booked value If 31.12.03 (NOK mill.) Booked value 31.12.02 3,912 22.47% share og operating result If 193 Currency adjustment - 70 Capital injection 0 Booked value 31.12.03 4,035 Q1 2004 103 52