Aegon Ltd. · EURONEXT:AGN
Aegon — Shareholder Meeting (May 2018)
91 slides from Aegon's shareholder meeting presentation, May 18, 2018
Slide 1: Welcome to the Annual General Meeting of Shareholders
Welcome / Welkom 1 Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering van of Shareholders Aandeelhouders In order to hear a Voor het beluisteren van simultaneous translation in een simultaanvertaling English please choose in het Nederlands kiest u channel 11 kanaal 10
Slide 2: Welcome – Welkom
Welcome – Welkom Annual General Meeting of Shareholders The Hague, May 18, 2018 Algemene Vergadering van Aandeelhouders Helping people achieve a lifetime of financial security
Slide 3: Rob Routs, Chairman Supervisory Board
Welcome / Welkom 3 Rob Routs Chairman Supervisory Board --- Voorzitter Raad van Commissarissen
Slide 4: Welcome to the Annual General Meeting of Shareholders
Welcome / Welkom 4 Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering van of Shareholders Aandeelhouders In order to hear a Voor het beluisteren van simultaneous translation in een simultaanvertaling English please choose in het Nederlands kiest u channel 11 kanaal 10
Slide 5: 1 Opening
Agenda item 1 / Agendapunt 1 5 1 Opening
Slide 6: 2 2017 Business overview
Agenda item 2 / Agendapunt 2 6 2 2017 Business overview Presentatie over de gang van 2 zaken in 2017
Slide 7: Becoming a Future Fit Aegon
Becoming a Future Fit Aegon Alex Wynaendts The Hague, May 18, 2018 CEO & Chairman of the Executive Board Helping people achieve a lifetime of financial security
Slide 8: Today’s storyline
Becoming a Future Fit Aegon 8 Today’s storyline Helping people to achieve a • Our operating environment lifetime of financial security • Aegon’s triple transformation - Strategic - Financial - Organizational/cultural • Conclusions
Slide 9: Operating in a fast-moving, highly regulated environment
Our operating environment 9 Operating in a fast-moving, highly regulated environment World economy Financial markets Regulation Political Our society • In 2017, continued • In 2017, markets • Data protection • Increased • Aging – living longer, improvement performed well due uncertainty in key healt
Slide 10: Triple transformation
Becoming a Future Fit Aegon 10 Strategic transformation Financial transformation Triple Organizational/cultural transformation transformation
Slide 11: From product manufacturer to financial services provider
Strategic transformation 11 From product manufacturer to financial services provider To help people achieve a lifetime of financial security From working life …through guidance …to trusted provider and advice… of retail solutions Protection Accumulation At & after retirement We protect what’s import
Slide 12: Expand relationship with our customers
Strategic transformation 12 Expand relationship with our customers Throughout their financial lifecycle Knab in the Netherlands Transamerica Aegon UK’s leading platform Knab has over 175,000 Transforming into a digital platform Offering funds, savings customers; 91% of whom are business providing cu
Slide 13: Increased focus on digitization and innovation
Strategic transformation 13 Increased focus on digitization and innovation • Established Center of Excellence for Digital to accelerate digitization Accelerate innovation • Roll-out of digital training programs to employees • Nearly USD 140 million committed to start-ups and new technologies • Great
Slide 14: An integrated responsible business
Strategic transformation 14 An integrated responsible business With the ambition to be a trusted partner for prosperous and healthy lives Our society benefits from healthy aging • Leading research on retirement readiness & well-being • EUR 325 million invested in elderly care homes NL and UK Making
Slide 15: Triple transformation
Becoming a Future Fit Aegon 15 Strategic transformation Financial transformation Triple Organizational/cultural transformation transformation
Slide 16: Changed company profile
Strategic transformation 16 Changed company profile As a result of execution of strategy While growing our business Optimized value of backbook Responded to changing environment Generated average Realized extensive annual sales growth of expense savings 15% from 2010 to 2017 Divested over EUR
Slide 17: Investing in growth opportunities
Strategic transformation 17 Investing in growth opportunities While divesting non-core businesses Exceeded • Pay-out annuity and BOLI-COLI, Transformation • Assets on platform reached a target to reduce Aegon UK to capital allocated as well as half of remaining life #1 platform record high of GBP 11
Slide 18: Management actions lead to tangible results
Financial transformation 18 Management actions lead to tangible results Strong deposits Fee-based earnings growth percentage increased 29% 3x 2011-2017 CAGR to 45% since 2010 Significant Total 2017 dividend improvement SII ratio 201% EUR 559m 6th consecutive +44%-points increase compared to end-2016
Slide 19: On track to deliver on key financial targets
Financial transformation 19 On track to deliver on key financial targets Run-rate annualized expense savings Strong sales momentum (EUR million) (EUR billion) 20 CAGR 300 +23% EUR 10 CAGR 200 350m* of 100 >10% 0 0 2015 2016 2017 2018 2016 2017 2018 Target TCS agreement Target Cumulative capital retu
Slide 20: Triple transformation
Becoming a Future Fit Aegon 20 Strategic transformation Financial transformation Triple Organizational/cultural transformation transformation
Slide 21: Seizing new opportunities and identifying areas of growth
Organizational/cultural transformation 21 Seizing new opportunities and identifying areas of growth • Future Fit cultural change program implemented - Adapting quickly to new opportunities - Owning problems and solutions Acting as One - One Aegon: building on others’ achievements within Aegon - Cust
Slide 22: Placeholder Future Fit video
22 PLACEHOLDER FUTURE FIT VIDEO
Slide 23: Customers and employees responding very positively
Financial transformationtransformation Organizational/cultural 23 Customers and employees responding very positively Customer Employee engagement Net Promoter Score (% per quartile) (% per quartile; versus peers) 61% 35% 48% 65 63 25% 13% 10% 2016 2017 Feb 2017 Nov 2017 1st Quartile 2nd Quartile Feb
Slide 24: Successful execution on our strategy
Conclusions 24 Successful execution on our strategy Becoming a Future Fit Aegon • Successfully changing the profile of the company • Transformation continues with increased focus on digitization • Well-positioned to deliver on key 2018 financial targets • Positive outlook for future growth
Slide 25: 3 Annual Report and annual accounts 2017
Agenda item 3 / Agendapunt 3 25 Annual Report and annual 3 accounts 2017 3 Jaarverslag en jaarrekening 2017
Slide 26: 3.1 Reports of the Boards for 2017
Agenda item 3.1 / Agendapunt 3.1 26 3.1 Reports of the Boards for 2017 Verslagen van de Raad van Bestuur 3.1 en de Raad van Commissarissen over 2017
Slide 27: Our financial performance in 2017
Our financial performance in 2017 Matt Rider The Hague, May 18, 2018 CFO & Member of the Executive Board Helping people achieve a lifetime of financial security
Slide 28: Today’s storyline
Our financial performance in 2017 28 Today’s storyline Helping people to achieve a • Year of strong growth in earnings lifetime of financial security and capital generation • Capital position significantly improved • Management actions drive quality of capital • Conclusions & key priorities
Slide 29: Year of strong earnings and sales growth
Our financial performance in 2017 29 Year of strong earnings and sales growth Capital position significantly improved Underlying Operating Sales Assets2) Solvency II ratio earnings expenses EUR 2.1 billion EUR 16 billion EUR 3.9 billion EUR 817 billion 201% + 10% + 36% + 3%1) + 10% + 44%-points comp
Slide 30: Strong earnings improvement
Our financial performance in 2017 30 Strong earnings improvement Underlying earnings Net income Return on equity Composition of earnings before tax (EUR million) (%) (% of UEBT) (EUR million) 58% 55% 1.913 2.103 2.361 8,0 8,2 42% 45% 586 2016 2017 2016 2017 2016 2017 2016 2017 Fee Rest
Slide 31: Continued strong gross deposits
Our financial performance in 2017 31 Continued strong gross deposits • Another year of record gross deposits Gross deposits & new life sales - 44% growth compared to 2016 1.138 1.104 - Driven by successful shift towards fee-based businesses New life sales (EUR millions) Gross deposits (EUR billions)
Slide 32: Significant shift to fee businesses
Our financial performance in 2017 32 Significant shift to fee businesses Development of fee-based balances and earnings (Balances in EUR billion; underlying earnings in %) 900 817 60% • Strong growth in fee-based earnings; percentage tripled to 45% since 2010 750 45% • Organic growth supplemented wi
Slide 33: Expense savings of EUR 350 million on track for 2018
Our financial performance in 2017 33 Expense savings of EUR 350 million on track for 2018 Declining core operating expenses (EUR million) • Continued execution of expense savings program 3.800 drives reduction in core operating expenses 3.650 • Annualized run-rate savings of approximately 3.500 EUR
Slide 34: Significant improvement in Solvency II ratio
Our financial performance in 2017 34 Significant improvement in Solvency II ratio Group Solvency II improvement 201% • Group Solvency II ratio increased 44%-points 200% 157% Target • Strong capital generation of EUR 2.1 billion in 2017 zone • Successfully recapitalized Dutch unit back to dividend 15
Slide 35: Management actions drive free cash flow growth
Our financial performance in 2017 35 Management actions drive free cash flow growth A growing and sustainable dividend Growing capital generation Increasing dividends* (EUR billion) (EUR per share; EUR million) 0.27 0.26 0.25 FY 2016 FY 2017 0.23 0.22 Capital generation 1.0 2.1 Market impacts and on
Slide 36: Long term care block developing in line with expectations
Our financial performance in 2017 36 Long term care block developing in line with expectations • We review our IFRS assumptions in detail annually Experience in line with • Over the last two years, actual experience has tracked well against management’s best estimate expectations • Assumptions under
Slide 37: Progress on financial targets
Our financial performance in 2017 37 Progress on financial targets Commitment 2017 status 2018 target Strong sales growth 23% CAGR of 10% 2015-2017 CAGR 2015-2017 Reduce operating EUR ~280 million EUR 350 million annualized run-rate annualized run-rate expenses savings savings Increase RoE 8.2% 10%
Slide 38: 3.1 Reports of the Boards for 2017
Agenda item 3.1 / Agendapunt 3.1 38 3.1 Reports of the Boards for 2017 Verslagen van de Raad van Bestuur 3.1 en de Raad van Commissarissen over 2017
Slide 39: 3.2 Remuneration report 2017
Agenda item 3.2 / Agendapunt 3.2 39 3.2 Remuneration report 2017 3.2 Remuneratierapport 2017
Slide 40: Ben Noteboom, Chairman of the Remuneration Committee
Agenda item 3.2 / Agendapunt 3.2 40 Ben Noteboom Chairman of the Remuneration Committee --- Voorzitter van de Remuneration Committee
Slide 41: Current Executive Board Remuneration
Agenda item 3.2 / Agendapunt 3.2 41 Current Executive Board Remuneration Fixed compensation (annual salary) + Variable compensation (max. 100% of annual salary) + Benefits (e.g. pension) Fixed compensation: • No changes to annual base salary in 2017 for Executive Board compared to 2016 Variable comp
Slide 42: Executive Board variable compensation 2017
Agenda item 3.2 / Agendapunt 3.2 42 Executive Board variable compensation 2017 Performance indicators and results Financial and non-financial Group targets Outcome 2017 Underlying earnings after tax (7.5%) Return on equity (7.5%) Market consistent value of new business (7.5%) 56.61% CEO (of 62.5% ma
Slide 43: Executive Board variable compensation 2017
Agenda item 3.2 / Agendapunt 3.2 43 Executive Board variable compensation 2017 Conditional variable compensation allocated: • CEO: 90.36% of fixed compensation (2016: 82.25%, 2015: 79.94%) • CFO: 89.11% of fixed compensation • 40% of variable compensation to be paid / vest in 2018 • 50% of this is i
Slide 44: 3.2 Remuneration report 2017
Agenda item 3.2 / Agendapunt 3.2 44 3.2 Remuneration report 2017 3.2 Remuneratierapport 2017
Slide 45: 3.3 Implementation Corporate Governance Code 2016
Agenda item 3.3 / Agendapunt 3.3 45 Implementation Corporate 3.3 Governance Code 2016 Implementatie van de Corporate 3.3 Governance Code 2016
Slide 46: General aspects of Corporate Governance Code 2016
Code 2016 & Aegon 46 General aspects of Corporate Governance Code 2016 • Code 2016 - four focus areas: - Long-term value creation in the company’s strategy and a culture that supports this long- term value creation - Adequate systems of control and risk management - Effective management and supervis
Slide 47: Long-term value creation
Code 2016 & Aegon 47 Long-term value creation Aegon’s purpose: to help people to achieve a life time of financial security • Our strategic objectives: Acting as One - Loyal Customers - Operational Excellence - Empowered Employees - Optimized Portfolio Customer • Enhancement of culture supportive to
Slide 48: Impact on Aegon
Code 2016 & Aegon 48 Impact on Aegon • Adequate systems of control and risk management - Risk Management - Internal Audit - External Audit • Effective management and supervision thereof, including remuneration - New requirements implemented - Charters of the Boards and the Committees adjusted • Func
Slide 49: 3.3 Implementation Corporate Governance Code 2016
Agenda item 3.3 / Agendapunt 3.3 49 Implementation Corporate 3.3 Governance Code 2016 Implementatie van de Corporate 3.3 Governance Code 2016
Slide 50: 3.4 Annual accounts 2017 and report independent auditor
Agenda item 3.4 / Agendapunt 3.4 50 Annual accounts 2017 and report 3.4 independent auditor Jaarrekening 2017 en 3.4 accountantsrapport
Slide 51: 3.5 Adoption of the annual accounts 2017
Agenda item 3.5 / Agendapunt 3.5 51 Adoption of the annual 3.5 accounts 2017 Vaststelling van de 3.5 jaarrekening 2017
Slide 52: Voting procedure: Voting App
Voting App / Stemmen met smartphone 52 Voting procedure / Stem procedure Prior to the voting Vóór de stemming • You have logged in to Lumi AGM • U heeft ingelogd bij Lumi AGM • Agenda item appears • Agenda item verschijnt automatically automatisch During the voting Tijdens de stemming • Voting optio
Slide 53: Voting procedure: Voting device
Voting device / Stemkastje 53 Voting procedure / Stemprocedure Prior to the voting Vóór de stemming • Insert card with chip facing you • Plaats kaart met chip naar voren • Name appears on display • Naam verschijnt in venster During the voting Tijdens de stemming • Voting options appear in display •
Slide 54: Voting: Adoption of the annual accounts 2017
Agenda item 3.5 / Agendapunt 3.5 54 Voting / stemming Adoption of the annual 3.5 accounts 2017 Vaststelling van de 3.5 jaarrekening 2017
Slide 55: 3.6 Approval of the final dividend 2017
Agenda item 3.6 / Agendapunt 3.6 55 3.6 Approval of the final dividend 2017 Goedkeuring van het slotdividend 3.6 over 2017
Slide 56: Aegon’s dividend policy
Agenda item 3.6 / Agendapunt 3.6 56 Aegon’s dividend policy • Cash flows upstreamed to the holding are available to execute our strategy, to fund operating expenses and to pay dividends to shareholders • Aegon aims to pay a sustainable dividend to shareholders, which can grow over time if performanc
Slide 57: Aegon’s dividend proposal
Agenda item 3.6 / Agendapunt 3.6 57 Aegon’s dividend proposal • Proposed final dividend for 2017: Increasing dividends (EUR) EUR 0.14 per common share +4% - Results in total dividend for 2017 of 0.27 0.26 EUR 0.27 per common share 0.25 0.22 0.23 0.21 • To be paid in cash or stock 0,13 0,14 0,13 • Va
Slide 58: 3.6 Approval of the final dividend 2017
Agenda item 3.6 / Agendapunt 3.6 58 3.6 Approval of the final dividend 2017 Goedkeuring van het slotdividend 3.6 over 2017
Slide 59: Voting: Approval of the final dividend 2017
Agenda item 3.6 / Agendapunt 3.6 59 Voting / stemming 3.6 Approval of the final dividend 2017 Goedkeuring van het slotdividend 3.6 over 2017
Slide 60: Release from liability
Agenda item 4 / Agendapunt 4 60 4 Release from liability 4 Kwijting
Slide 61: 4.1 Release from liability for the Executive Board
Agenda item 4.1 / Agendapunt 4.1 61 Release from liability for the members 4.1 of the Executive Board for their duties performed during 2017 Verlenen van kwijting aan de leden 4.1 van de Raad van Bestuur voor de uitoefening van hun taak in 2017
Slide 62: 4.2 Release from liability for the Supervisory Board
Agenda item 4.2 / Agendapunt 4.2 62 Release from liability for the members 4.2 of the Supervisory Board for their duties performed during 2017 Verlenen van kwijting aan de leden van 4.2 de Raad van Commissarissen voor de uitoefening van hun taak in 2017
Slide 63: Release from liability
Agenda item 4 / Agendapunt 4 63 4 Release from liability 4 Kwijting
Slide 64: Voting: Release from liability, Executive Board
Agenda item 4.1 / Agendapunt 4.1 64 Voting / stemming Release from liability for the members 4.1 of the Executive Board for their duties performed during 2017 Verlenen van kwijting aan de leden 4.1 van de Raad van Bestuur voor de uitoefening van hun taak in 2017
Slide 65: Voting: Release from liability, Supervisory Board
Agenda item 4.2 / Agendapunt 4.2 65 Voting / stemming Release from liability for the members 4.2 of the Supervisory Board for their duties performed during 2017 Verlenen van kwijting aan de leden van 4.2 de Raad van Commissarissen voor de uitoefening van hun taak in 2017
Slide 66: Composition of the Supervisory Board
Agenda item 5 / Agendapunt 5 66 Composition of the 5 Supervisory Board Samenstelling van de 5 Raad van Commissarissen
Slide 67: 5.1 Reappointment of Corien Wortmann-Kool
Agenda item 5.1 / Agendapunt 5.1 67 Reappointment of 5.1 Corien Wortmann-Kool Herbenoeming van 5.1 Corien Wortmann-Kool
Slide 68: Corien Wortmann-Kool
Agenda item 5.1 / Agendapunt 5.1 68 Corien Wortmann-Kool Age: 58 Nationality: Dutch Shares in the company: none Main occupation: - Chairman of the Board of Stichting Pensioenfonds ABP Membership of other Boards: - Member Supervisory Board of Het Kadaster - Member of Advisory Council of Centraal Bure
Slide 69: 5.2 Reappointment of Robert Dineen
Agenda item 5.2 / Agendapunt 5.2 69 Reappointment of 5.2 Robert Dineen Herbenoeming van 5.2 Robert Dineen
Slide 70: Robert Dineen
Agenda item 5.2 / Agendapunt 5.2 70 Robert Dineen Age: 68 Nationality: American Shares in the company: 10,000 Main occupation: - Non-Executive Director Main former occupation - Vice Chairman of Lincoln Financial Network Membership of other Boards: - Non-Executive Chairman of the Board of Aretec Inc
Slide 71: Composition of the Supervisory Board
Agenda item 5 / Agendapunt 5 71 Composition of the 5 Supervisory Board Samenstelling van de 5 Raad van Commissarissen
Slide 72: Voting: Reappointment of Corien Wortmann-Kool
Agenda item 5.1 / Agendapunt 5.1 72 Voting / stemming Reappointment of 5.1 Corien Wortmann-Kool Herbenoeming van 5.1 Corien Wortmann-Kool
Slide 73: Voting: Reappointment of Robert Dineen
Agenda item 5.2 / Agendapunt 5.2 73 Voting / stemming Reappointment of 5.2 Robert Dineen Herbenoeming van 5.2 Robert Dineen
Slide 74: 6 Authorization to issue shares replacing Solvency II grandfathered securities
Agenda item 6 / Agendapunt 6 74 Authorization of the Executive Board to issue 6 shares in the context of replacing Solvency II grandfathered securities Machtiging van de Raad van Bestuur tot uitgifte van aandelen ter vervanging van 6 effecten die onder de overgangsregeling (grandfathering) van Solve
Slide 75: Proposal summary
Agenda item 6 / Agendapunt 6 75 Proposal summary Replacement Solvency II grandfathered securities • Aegon has substantial amount of grandfathered restricted Tier 1 securities outstanding - To be replaced by a mix of Solvency II compliant securities and retained earnings - Replacement required before
Slide 76: Conversion
Agenda item 6 / Agendapunt 6 76 Conversion • Because of potential conversion, AGM approval needed Quality of capital (year-end 2017, in EUR billion and % of SCR) for issuance of common shares of up to 30% of capital for next five years 0.4 6% • Conversion would only take place if one of these 2.3 30
Slide 77: 6 Authorization to issue shares replacing Solvency II grandfathered securities
Agenda item 6 / Agendapunt 6 77 Authorization of the Executive Board to issue 6 shares in the context of replacing Solvency II grandfathered securities Machtiging van de Raad van Bestuur tot uitgifte van aandelen ter vervanging van 6 effecten die onder de overgangsregeling (grandfathering) van Solve
Slide 78: Voting: Authorization to issue shares, Solvency II securities
Agenda item 6 / Agendapunt 6 78 Voting / stemming Authorization of the Executive Board to issue 6 shares in the context of replacing Solvency II grandfathered securities Machtiging van de Raad van Bestuur tot uitgifte van aandelen ter vervanging van 6 effecten die onder de overgangsregeling (grandfa
Slide 79: Issuance and acquisition of shares
Agenda item 7 / Agendapunt 7 79 7 Issuance and acquisition of shares 7 Uitgifte en verkrijging van aandelen
Slide 80: 7.1 Authorization to issue common shares
Agenda item 7.1 / Agendapunt 7.1 80 Authorization of the Executive Board to issue 7.1 common shares Machtiging van de Raad van Bestuur tot 7.1 uitgifte van gewone aandelen
Slide 81: 7.2 Restrict or exclude pre-emptive rights
Agenda item 7.2 / Agendapunt 7.2 81 Authorization of the Executive Board to 7.2 restrict or exclude pre-emptive rights upon issuing common shares Machtiging van de Raad van Bestuur tot 7.2 beperking of uitsluiting van voorkeursrechten bij de uitgifte van gewone aandelen
Slide 82: 7.3 Common shares under incentive plans
Agenda item 7.3 / Agendapunt 7.3 82 Authorization of the Executive Board to issue 7.3 common shares under incentive plans Machtiging van de Raad van Bestuur tot 7.3 uitgifte van gewone aandelen in het kader van incentiveplannen
Slide 83: 7.4 Acquire shares in the Company
Agenda item 7.4 / Agendapunt 7.4 83 Authorization of the Executive Board to 7.4 acquire shares in the Company Machtiging van de Raad van Bestuur tot 7.4 verkrijging van eigen aandelen
Slide 84: Issuance and acquisition of shares
Agenda item 7 / Agendapunt 7 84 7 Issuance and acquisition of shares 7 Uitgifte en verkrijging van aandelen
Slide 85: Voting: 7.1 Issue common shares
Agenda item 7.1 / Agendapunt 7.1 85 Voting / stemming Authorization of the Executive Board to issue 7.1 common shares Machtiging van de Raad van Bestuur tot 7.1 uitgifte van gewone aandelen
Slide 86: Voting: 7.2 Pre-emptive rights
Agenda item 7.2 / Agendapunt 7.2 86 Voting / stemming Authorization of the Executive Board to 7.2 restrict or exclude pre-emptive rights upon issuing common shares Machtiging van de Raad van Bestuur tot 7.2 beperking of uitsluiting van voorkeursrechten bij de uitgifte van gewone aandelen
Slide 87: Voting: 7.3 Shares under incentive plans
Agenda item 7.3 / Agendapunt 7.3 87 Voting / stemming Authorization of the Executive Board to issue 7.3 common shares under incentive plans Machtiging van de Raad van Bestuur tot 7.3 uitgifte van gewone aandelen in het kader van incentiveplannen
Slide 88: Voting: 7.4 Acquire shares
Agenda item 7.4 / Agendapunt 7.4 88 Voting / stemming Authorization of the Executive Board to 7.4 acquire shares in the Company Machtiging van de Raad van Bestuur tot 7.4 verkrijging van eigen aandelen
Slide 89: Any other business
Agenda item 8 / Agendapunt 8 89 8 Any other business 8 Wat verder ter tafel komt
Slide 90: Closing
Agenda item 9 / Agendapunt 9 90 9 Closing 9 Sluiting
Slide 91: Thank you – Dank u wel
Closing / Sluiting 91 Thank you – Dank u wel Helping people achieve a lifetime of financial security