H1 2024 Earnings Release

AgeSA

H1 2024 Financial Results

Earnings Release

August 5, 2024

#1 Leadership in Pension AuM and Total Life & PA GWP markets

AgeSA strengthened its leadership in both Pension & AE AuM and Life & PA premium production among whole market with support of sustainable growth in Life business driven by the success of long term credit life product (Kredim Güvende) and strong RoP portfolio.

AgeSA reached successful and strong results in net profit, thanks to financial income increase regarding interest& f/x gains besides strong technical income growth resulting from high profitability in life and pension scalability.

FINANCIAL HIGHLIGHTS

• The Pension Assets under Management (AuM) has grown by 89% yoy and reached 195.7 billion TL as of H1 2024.
• Auto Enrolment AuM increased by 92% yoy resulting mainly from the increasing inforce volume. AgeSA is one of the leader companies in terms of private sector participants and AuM.
• Total Life&PA premiums grew by 103% yoy, driven by both 106% growth in credit-linked production and 99% growth in stand-alone(non-credit linked) life underpinning AgeSA's diverse business model and product positioning.
• Inflation accounting is not applied for 30 June 2024 Financial Statements, all financial figures represent Management Reporting (IFRS Financials excluding inflation accounting effect)
• 629 mTL has been paid as capital advance to MediSA (Sabancı Health insurance company), in April. AgeSA has become the main shareholder with 80% share.
• Both AgeSA Management reporting and SFRS financial figures are shown before MediSA consolidation.
• Management Reporting Net Profit is significantly higher than prior year by 90% at 1.768 mTL mainly due to high increase in technical income regarding strong growth in all major business lines (Pension, Credit Life and RoP) despite limited growth on financial income regarding lower f/x gains.
• Total technical profit has increased by 132% yoy driven by the growth in life protection volumes and pension AuM.
• RoE is 63.0% as of H1 2024.
• 300 mTL dividend has been paid in March
• Statutory profit is 1.305 mTL with an increase of 67% mainly due to both higher technical and financial income. MediSA consolidation P/L impact is -30 mTL.
• Share buyback program has been started in 2023 April. Within the scope of the program, as of June 2024 1.403k shares were bought with an average price of 48,76 TL

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

Şirkete Özel

• Total technical income grew by 132% driven by all business lines profitability growth.
• • Pension technical profit increased by 153% mainly due to higher total fund management fee regarding AuM increase
  • Credit linked Life technical profit increased by 141% mainly due to increase in premiums
  • RoP & Savings technical profit increased by 107% thanks to strong RoP portfolio.
  • Other Life & Personal accident technical profit increased by 81% due to mainly higher premiums.
• General expenses are 1.822 mTL with a yoy increase of 100% mainly due to high inflationary environment for major cost items (i.e. Personnel, IT, Marketing, Outsourcing, Consultancies)
• Total investment and other income is 954 mTL with a yoy increase by 29% mainly due to higher financial income regarding interest gains, despite lower increase in f/x gains.

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

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AGESA STATUTORY / SFRS SEGMENT RESULTS

• Net profit for the period is 1.305 mTL with an increase of 67% mainly due to higher technical profit thanks to life business in addition to higher financial income regarding interest gains.
• Total net technical profit increase;
• • Life net technical profit is higher than prior year by 187% due to increasing volume; even though the SFRS profitability is negatively impacted from the commissions paid which are not deferrable in SFRS.
  • Non-life(personal accident) net technical profit after general expenses is higher than prior year by 11 mTL.
  • Due to higher expense allocation, which is done according to the local regulation rules, pension net technical profit after general expenses is lower than prior year. Since new business sales commissions are not deferrable in SFRS, higher NB results in lower SFRS profit for the year.

BRIDGING FROM MANAGEMENT REPORTING TO STATUTORY PROFIT

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

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REGULATION HIGHLIGHTS

Inflation Accounting

• IAS29 Financial Reporting in Hyperinflationary Economies applies where an entity's functional currency is that of a hyperinflationary economy. The reason is to show how much purchasing power the company lost on monetary items and gained on non-monetary items.
• Main Monetary Items; Cash and Banks, Receivables, DIR Assets, Loans, Payables, Borrowings, Math Reserves, OS Claims, Tax payable
• SEDDK made an official announcement that insurance companies are exempted for IAS29 compliance as of 1.1.2025.
• AgeSA provides IAS 29 compliant audited financials to Sabancı Holding for consolidation purposes.

IFRS 17

Main purposes of IFRS 17

• Enhance comparability between companies/products and also between sectors
• Increase disclosures so movements in key metrics are clearly understood
• Recognize profit in line with service provision

Enhancements

• Relevance and accuracy: Market rates and current assumptions
• Profitability: introduce a revenue recognition approach that is more consistent with that of other industries
• Comparability: a consistent framework for reporting insurance contracts

AgeSA's Current Position:

• Transition to IFRS 17 has been postponed to 1.1.2025 by local regulator. 2024 will be parallel reporting period in terms of regulatory reporting.

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

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NEW BUSINESS RESULTS

• Value of new business (VNB) and present value of new business premiums (PVNBP) have increased by 236% year-on-year as a result of significantly higher Pension, Credit-linked Life and new ROP product sales.
• The Savings product launched in 2022 contributed 1.584m TRY to the PVNBP total while the new ROP product added 3.904m TRY of PVNBP. With the launch of the new ROP product in Q3 23, the NBM for the ROP & Savings line of business more than tripled to 16,4%.
• Credit-linkedLife VNB increased by 224%, helped by higher volumes, new pricing, and strong rider penetration levels.
• Pension PVNBP increased by 50%, as regular contributions were up 113% compared to H1 2023. PVNBP was further boosted by 11,6 billion TL of lump-sum payments (up 178% compared to H1 2023).

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

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DISCLAIMER

The information and opinions contained in this document have been compiled by AgeSA Hayat ve Emeklilik A.Ş. (the "Company" or "AgeSA") from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness.

This document is an accompanying part of consolidated financial statements available in AgeSA Investor Relations website and public disclosure platform.

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Note: Management Reporting: IFRS Financials excluding inflation accounting effect

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