AXA MORGAN STANLEY CONFERENCE

Transcription

1 AXA MORGAN STANLEY CONFERENCE THOMAS BUBERL Member of the AXA Management Committee CEO of AXA Germany, CEO of AXA Health Global Business Line and CEO of AXA Global Life & Savings March 15, 2016

2 Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to the section Cautionary statements in page 2 of AXA s Document de Référence for the year ended December 31, 2014, for a description of certain important factors, risks and uncertainties that may affect AXA s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise.

3 Key highlights Strong 2015 earnings and dividend per share Successful delivery of Ambition AXA Life & Savings growth in line with strategic objectives Resilience to market-related shocks 3 Morgan Stanley Conference March 15, 2016

4 Agenda highlights and Ambition AXA completion focus on Life & Savings Resilience to market-related shocks 4 Morgan Stanley Conference March 15, 2016

5 STRONG EARNINGS GROWTH IN 2015 UNDERLYING EARNINGS In Euro billion ADJUSTED EARNINGS In Euro billion +2% +2% % Reported growth +9% Reported growth 5 Morgan Stanley Conference March 15, 2016 Changes are at constant Forex unless otherwise specified

6 INCREASED DIVIDEND PER SHARE UNDERLYING EARNINGS PER SHARE In Euro DIVIDEND PER SHARE In Euro +10% +16% ADJUSTED EARNINGS PER SHARE In Euro % 2.34 Payout ratio 45% 47% Payout ratio range guidance 45 55% of adjusted earnings net of undated debt interest charges 6 Morgan Stanley Conference March 15, 2016 Changes are on a reported basis

7 AMBITION AXA HAS SUCCESSFULLY TRANSFORMED THE GROUP AMBITION AXA PRIORITIES HAVE LED TO... Selectivity High Return on Equity Strong balance sheet Acceleration Resilient earnings Efficiency Diversified footprint Digital momentum 7 Morgan Stanley Conference March 15, 2016

8 AXA DELIVERED ON ITS AMBITION AXA KEY OBJECTIVES UNDERLYING EARNINGS PER SHARE In Euro per share 1.57 FY FY FY FY Ambition AXA CAGR +5% to +10% GROUP OPERATING FREE CASH FLOWS In Euro billion Cumulative operating Free Cash Flows: Euro 25.4 billion 4.2 FY FY FY Ambition AXA cumulative Euro 24 billion ADJUSTED RETURN ON EQUITY 2 In % Average adjusted shareholders equity 3 (in Euro billion) % 10.0% 13.3% 14.8% 14.5% 14.1% 13-15% DEBT GEARING In % 28% 26% 26% 24% 24% 23% 23-25% FY10 FY11 FY12 FY13 Ambition AXA 2015 FY10 FY11 FY12 FY13 Ambition AXA 2015 All numbers are as published 8 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

9 AXA S DIGITAL TRANSFORMATION IS GATHERING MOMENTUM INVESTING ACROSS THE VALUE CHAIN SCOUT Distribution, multichannel 30% 15% Offer design Euro 950 million ENGAGE Customer analytics 22% 34% Automation and process SEEDING THE FUTURE Euro 230 million in Euro 100 million in Euro 75 million in INVEST KAMET 1 9 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

10 AXA IS WELL SET FOR THE FUTURE BALANCED BUSINESS MIX in % of Group pre-tax underlying earnings 1 TOP GLOBAL BRAND 5 25% Protection & Health 2 36% Savings 3 & Asset Management 39% Property & Casualty 4 STRONG BALANCE SHEET Solvency II ratio - TOP INNOVATIVE INSURANCE COMPANY 205% 230% Target range 170% N 1 insurance company in the Top 50 Most innovative companies 6 10 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

11 Agenda highlights and Ambition AXA completion focus on Life & Savings Resilience to market-related shocks 11 Morgan Stanley Conference March 15, 2016

12 STRATEGIC REPOSITIONING WITH INCREASED PROFITABILITY Annual Premium Equivalent NBV margin In Euro billion In % % 34% 13% 5% 6% 5.8 Mutual funds & other 13% 38% 23% 31% Unit-Linked 31% Lower expenses Ceased sales of capital intensive products 13% -1% 19% Reduced guaranteed and crediting rates G/A 1 Savings 25% G/A Protection & Health 31% 36% 47% 52% FY10 published FY10 12 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

13 ROBUST AND BALANCED FOOTPRINT Global footprint Strong proprietary networks APE by geography APE by channel France 24% US 22% Partnerships 18% Agents & salaried sales force 48% UK 13% MedLA 1 8% Asia (incl. Japan) 22% NORCEE 2 12% Brokers IFAs & others 34% Total APE: Euro 7,376 million 13 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

14 STRONG LIFE & SAVINGS NET FLOWS Total net flows In Euro billion Net flows by product 1 in line with strategic focus In Euro billion Unit-Linked G/A Protection & Health G/A Savings Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

15 CONTINUED EARNINGS MOMENTUM TOTAL LIFE & SAVINGS 1 In Euro million G/A PROTECTION & HEALTH In Euro million G/A SAVINGS In Euro million UNIT-LINKED In Euro million 4,105 +3% 4,518 2,133 +2% 2, % 840-4% 822 1,048 1,296 + Higher mortality margin in France Lower administrative expenses Higher fees due to increased + + and the US sales and higher average asset base - Accelerated amortization of - Lower investment margin from deferred premium loadings and lower reinvestment yields DAC in the US + Higher result from US VA GMxB - Annuitization assumption changes in Japan Changes are on a comparable 2 basis 15 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

16 Agenda highlights and Ambition AXA completion focus on Life & Savings Resilience to market-related shocks 16 Morgan Stanley Conference March 15, 2016

17 ASSET & LIABILITY MANAGEMENT (1/4) Resilient investment margin with high quality asset portfolio Limited yield dilution Resilient L&S General Account investment margin Fixed income Assets duration as at December 31, 2015 Spread above guaranteed rates Investment margin 1 Life & Savings Property & Casualty 8.0 years 5.0 years +160bps 3.6% 2.0% 80 bps 79 bps Long asset duration leading to a slow yield dilution Yield on total L&S asset base Life & Savings L&S average guaranteed rate 4.0% 3.9% 3.8% 3.7% 3.7% 3.6% FY10 FY11 FY12 FY13 Property & Casualty Resilient Fixed income new investment yield (2.1% 2 in ) Average rating of corporate bonds maintained in the A range 4.0% 4.0% 3.9% 3.9% 3.9% 3.6% Significant buffer in L&S to cover guarantees and to manage crediting rates in order to preserve investment margin FY10 FY11 FY12 FY13 17 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

18 ASSET & LIABILITY MANAGEMENT (2/4) High quality Fixed income portfolio Government and related bonds rating 41% of total General Account invested assets in Corporate bonds rating 1 34% of total General Account invested assets in 42% AA AA 15% 33% A AAA 22% Euro 225 billion AAA 11% Euro 190 billion Non rated 3% Below investment grade 1% 17% BBB 14% A Below investment grade 8% 33% BBB Average rating of government and related bonds maintained in the AA range Average rating of corporate bonds maintained in the A range 18 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

19 ASSET & LIABILITY MANAGEMENT (3/4) Diversified investment portfolio and high quality new investments Total General Account invested assets New fixed income investments in 83% in Fixed income Other 1 17% Investment Grade credit Average rating: A Government bonds & related Average rating: AA Other fixed income 2 7% Euro 552 billion 3 41% ~57% new investments ~27% Corporate bonds 34% Government bonds and related ~12% Below Investment Grade credit 1 ABS ~5% 2% 1% Investment Grade new investments 84% Corporate bonds Other loans Commercial Real Estate loans 10% 5% 19 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

20 ASSET & LIABILITY MANAGEMENT (4/4) Sensitivities to market conditions LIMITED INTEREST RATE SENSITIVITY Per annum cumulative impacts confirmed Assumed reinvestment yield 2.0% 2.4% Estimated impact on Underlying Earnings 1 ca. -0.2bn ca. -0.1bn LIMITED EQUITY SENSITIVITY RESILIENT SOLVENCY II RATIO Underlying earnings impact through separate account fees from a -10% movement in equity markets 2 Solvency II ratio estimated as at February 24, 2016 ca. -0.1bn ca. 190% 20 Morgan Stanley Conference March 15, 2016 All notes are on page 23 of this document

21 CONCLUDING REMARKS Key takeaways Going forward Successful Ambition AXA delivery Well positioned for future growth Strong and resilient Balance Sheet Accelerate transformation Further improved business mix Resilience to market conditions High quality invested assets Sustainable dividend Earnings and dividend growth Next strategic plan reveal on June 21, Morgan Stanley Conference March 15, 2016

22 Q&A

23 NOTES (1/2) Page 8 1. Compound annual growth rate, on a reported basis 2. Adjusted ROE: return corresponds to adjusted earnings net of interest charges on undated debt. Equity corresponds to average shareholders equity excluding undated debt and reserves related to change in fair value 3. Average shareholders equity excluding undated debt and reserves related to change in fair value Page 9 1. Transaction pending, subject to customary closing conditions Page Before holding costs 2. General Account Protection & Health 3. General Account Savings and Unit Linked businesses. Also includes Banking 4. Including International Insurance 5. Source: Interbrand 2015 Best Global Brands ranking 6. Source: 2015 Most innovative companies tenth annual survey from the Boston Consulting Group s (BCG) Page General Account Page Mediterranean and Latin American Region: Italy, Spain, Portugal, Greece, Turkey, Mexico and Morocco 2. Northern, Central & Eastern Europe: Germany, Belgium, Switzerland, Poland, and Czech Republic Page Mutual Funds & other net flows increased from Euro +0.1 billion in to Euro +0.4 billion in Page Including Mutual Funds & Other. Pre-tax Underlying Earnings for Mutual Funds & Other amounted to Euro 85 million for and Euro 97 million for 2. Changes are adjusted for Forex and changes related to scope with the acquisition of Colpatria in Colombia in 2014 Page Group investment margin on total General Account business 2. investment rate on Fixed Income assets for Life & Savings and Property & Casualty entities Page Non rated by external rating agencies corporate bonds reallocated under AXA s internal ratings: AAA: Euro 0.4 billion / AA: Euro 1.6 billion / A : Euro 3.4 billion / BBB: Euro 4.4 billion / BIG: Euro 2.1 billion 23 Morgan Stanley Conference March 15, 2016

24 NOTES (2/2) Page Other includes real estate, listed equities, cash and alternative investments (mainly Private Equity and Hedge Funds) and policy loans 2. Other fixed income include Asset backed securities (Euro 9 billion), residential loans (Euro 12 billion), commercial & agricultural loans (Euro 18 billion) and agency pools (Euro 1 billion) 3. invested assets referenced in page 57 of the financial supplement are Euro 779 billion, which include notably Euro 195 billion of Unit-Linked assets and Euro 36 billion related to the banking segment Page Includes post tax recurring cumulative impacts mainly on P&C investment income and Life & Savings investment margin 2. Assuming an upfront 10% drop in equity markets compared to 2015 average level 24 Morgan Stanley Conference March 15, 2016