Aviva Plc · LSE:AV.
Aviva — UBS Global Financial Services Conference 2007
21 slides from Aviva's conference presentation, May 15, 2007
Slide 1: Mergers & Acquisitions: Curse or Cure?
Mergers & Acquisitions: Curse or Cure? Philip Scott, Group Executive Director, Aviva plc UBS Global Financial Services Conference 15 May 2007
Slide 2: Disclaimer
Disclaimer This presentation may contain “forward-looking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty beca
Slide 3: Agenda
Agenda 1. Overview of Aviva 2. M&A & organic growth 3. The international perspective 4. The UK perspective 5. Q&A UBS Conference 15/05/2007 page 3
Slide 4: Aviva – who are we?
Aviva – who are we? 2006 pro forma sales £43.4bn(1) An international company… 7% USA Life • European portfolio growing ahead of the market 54% International • 2006: 91% growth in the Asian portfolio Pro forma 37% Life (Ex USA) • Position in America has been EEV profit strengthened International 11%
Slide 5: The Aviva portfolio: scale & diversification
The Aviva portfolio: scale & diversification North America Europe Asia Pacific • Newly expanded business • Strong, mature businesses • High growth businesses across Europe & UK • 30% of world-wide savings • Accelerating growth in India • Southern Europe: fast and China • Demographics provide growing
Slide 6: Profitable growth across the portfolio
Profitable growth across the portfolio Full year 2006 unless otherwise stated Operating profit: EEV basis (1) £3,245m 5yr CAGR of 17.2% Operating profit: IFRS basis (1) £3,110m 5yr CAGR of 26.4% Property & Casualty COR 94% more than 20% ROE Dividend per share 30.0p +10% increase on 2005 Q1 2007 tota
Slide 7: The growth spectrum: M&A & organic growth
The growth spectrum: M&A & organic growth Inorganic Organic Russia Key valuation creation points • Financial Strength • Brand • Excellence in integration UBS Conference 15/05/2007 page 7
Slide 8: The international perspective
The international perspective
Slide 9: The 2006 AmerUs acquisition
The 2006 AmerUs acquisition • Acquired – Number 2 in Equity Indexed Annuities – Number 1 in Equity Indexed Life – Scaleable IT platform – Strong management team • Terms – Consideration of $3.1 billion – $45 million annual pre tax cost savings from 2008 – 10% return on investment by 2009 – IFRS / EEV
Slide 10: Aviva USA: the star performer
Aviva USA: the star performer • Exceptionally strong life & pensions sales of £837m, up 67% on a pro forma basis Aviva USA pro-forma quarterly sales growth* • Margins strong at 3.3% 750 700 • Indexed annuity product gaining market 650 share 600 £m 550 • Product enhancements & marketing 500 campaigns
Slide 11: Building our brand in the USA
Aviva Building our brand in the USA
Slide 12: Aviva: largest new business provider in Europe
Aviva: largest new business provider in Europe European Insurers' APE Sales in Europe Full Year 2006 • Record quarter for Europe with total sales up Aviva 7% to £7.6bn(1) Generali • Margins increased to 3.5% from 3.4%(1) Axa L&G • Excellent organic growth Std Life • Ireland up 80% Allianz Aegon • It
Slide 13: Europe: M&A playing a part alongside organic growth
Europe: M&A playing a part alongside organic growth M&A • Turkey: discussions with Aksigorta & Akbank to form new L&P business • Netherlands: Acquisition of Erasmus • Other ongoing discussions Organic • Russia – Achieve top 5 market position & 10% market share in 5 years – Provider of life insurance
Slide 14: Asia Pacific: M&A playing a part alongside organic growth
Asia Pacific: M&A playing a part alongside organic growth • Q1 2007 total sales up 34% to £700m • Particularly strong performance from Hong Asia Pacific £m Total Long Term Savings Sales Kong, India & China 3000 • China 2500 – New branch licence in Shijiazhuang – Operations in 17 cities 2000 • Malays
Slide 15: The UK perspective
The UK perspective Bi AVIVA
Slide 16: UK P&C: control & discipline
UK P&C: control & discipline UK P&C Combined Operating Ratio • Confident of meeting or beating 98% COR 102% 101% • A highly competitive business model 100% 99% COR Target 98% • Brand 97% 96% • Financial strength 95% 94% 93% • Operational excellence 92% 91% 2002 2003 2004 2005 2006 • New joint ventur
Slide 17: UK P&C: good acquisition track record
UK P&C: good acquisition track record • RAC acquisition • Consideration of £1.1 billion • £130 million cost savings from 2008 • £220 million contribution to profit by 2008 • On track to deliver 18.8% return on capital employed Momentum in 2007 • 3 year roadside assistance contract for HBOS customers
Slide 18: UK Life: brand, product & distribution
UK Life: brand, product & distribution • Total sales up 9% in Q1 building on the 34% growth in Q106 • Margins increased to 3.0% from 2.8% Market Share FY06 10.9% (FY05: 10.5%) 27.4% • Waterfront product range gives mix flexibility 13.6% 12.6% • Expecting 5 – 10% market growth in 11.6% 9.3% 9.2% 2007
Slide 19: UK Life: brand, product & distribution
UK Life: brand, product & distribution • No.1 in the adviser market with 12.1% market share • Leading provider to banks, building Bancassurance Corporate societies and the top 4 networks and Direct service providers • On 22 of 28 multi-tie panels IFA (Networks & Service Providers) IFA (Nationals & R
Slide 20: Consistently strong growth over time
Consistently strong growth over time Group Operating Profit* (EEV) Group Operating Profit** (IFRS) 3,500 3,500 3,000 % 3,000 R 17.2 £m CAG 6.4% 2,500 2,500 R2 £m C AG 2,000 2,000 1,500 1,500 1,000 1,000 500 500 35,000 Long term savings sales 800 Net Asset Value* (inc. goodwill) 30,000 Pence per shar
Slide 21: © Aviva plc
© Aviva plc
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