AXA. Bank of America Merrill Lynch 21st Annual Financials CEO Conference London September 29, Thomas Buberl Chief Executive Officer

Transcription

1 AXA Bank of America Merrill Lynch 21st Annual Financials CEO Conference London September 29, 2016 Thomas Buberl Chief Executive Officer

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, 2015, 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 TAKEAWAYS Earnings and balance sheet resilient to low interest rates Diversified business mix, disciplined risk management and high quality new business Transparent, realistic and credible Ambition 2020 plan Clear underlying assumptions and management levers for growth Emphasis on execution and operations Efficiency, business growth and technical margin improvement 3 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

4 KEY TAKEAWAYS Earnings and balance sheet resilient to low interest rates Diversified business mix, disciplined risk management and high quality new business Transparent, realistic and credible Ambition 2020 plan Clear underlying assumptions and management levers for growth Emphasis on execution and operations Efficiency, business growth and technical margin improvement 4 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

5 MOST DIVERSIFIED COMPOSITE INSURER Geographical diversification 18% Asia 3 15% US 7% Others 2 22% France 1H16 Insurance Underlying Earnings 1 13% Switzerland > > > 103 million clients worldwide 4 Euro 54 billion 1H16 Revenues Euro 3.1 billion 1H16 Underlying earnings 24% Other Europe > #1 insurance brand worldwide 5 5 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

6 LIMITED SENSITIVITY TO INTEREST RATES Well balanced earnings mix Strong and resilient Solvency II Ratio 4,5 41% Property & Casualty and International Insurance Ratio as of June 30, 2016 Interest rate +50bps 170% Target range 230% 197% 202% 24% Protection & Health 2 1H16 pre-tax Underlying Earnings 1 35% Savings & Asset Management 3 Interest rate -50bps Corporate spreads +75bps Equity markets +25% Equity markets -25% 192% 196% 200% 188% 6 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

7 HEALTHY AND SUSTAINABLE L&S BUSINESS 78% of L&S gross margins less sensitive to interest rates and investment margin remains resilient L&S Investment margin E 2017E 78% Technical margin, margin on revenues and management fees FY2015 Life & Savings Gross Margin (Euro 11.8 bn) 22% Investment margin bps 2018E 2020E bps Benefitting from long-term ALM discipline 7 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

8 AND HIGH QUALITY L&S NEW BUSINESS MIX Mature markets APE (excl. UK) In Euro billion 4.6 CAGR G/A Protection & Health 34% +3% 35% NBV margin 22% 35% Unit-Linked, Mutual funds & other 35% +9% 47% FY10 FY15 G/A Savings 31% -9% 12% 5% Capital light G/A 2 Traditional G/A FY10 FY15 8 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

9 KEY TAKEAWAYS Earnings and balance sheet resilient to low interest rates Diversified business mix, disciplined risk management and high quality new business Transparent, realistic and credible Ambition 2020 plan Clear underlying assumptions and management levers for growth Emphasis on execution and operations Efficiency, business growth and technical margin improvement 9 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

10 AMBITION 2020 PRIORITIES FOCUS TRANSFORM Selective growth New customer experience Efficiency and margins From Payer to Partner Capital and cash Adapt capabilities 10 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

11 AMBITION 2020: KEY OBJECTIVES UNDERLYING EARNINGS PER SHARE 3-7% CAGR E GROUP OPERATING FREE CASH FLOWS EUR bn Cumulative 2016E-2020E ADJUSTED RETURN ON EQUITY 1 SOLVENCY II RATIO 12% - 14% 2016E-2020E 170% - 230% Target range 11 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

12 CLEAR UNDERLYING ASSUMPTIONS 10Y German Bund 10Y US Treasuries 3% 5% 4% 1.5% 3% 2% 0% 0% June June 2016 Scenarios: Favourable Base Unfavourable 2020 Equities 0% p.a. cautious assumptions used for plan projection (6% p.a. remains long term view) We target 3 7% Underlying Earnings per share CAGR over E 1 In Euro per share % 3% CAGR E FY13 FY14 FY15 Ambition AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

13 EARNINGS GROWTH DESPITE INTEREST RATE HEADWINDS Uncertainties -5 to -1% UEPS CAGR Under management control 8% UEPS CAGR Ambition % to +7% CAGR Interest rates headwinds 2% 1% 2% + = 3% 3% - 7% -5% ; -1% Efficiency Growth Technical margin M&A E UEPS CAGR 13 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

14 KEY TAKEAWAYS Earnings and balance sheet resilient to low interest rates Diversified business mix, disciplined risk management and high quality new business Transparent, realistic and credible Ambition 2020 plan Clear underlying assumptions and management levers for growth Emphasis on execution and operations Efficiency, business growth and technical margin improvement 14 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

15 EFFICIENCY A KEY DRIVER OF EARNINGS Cost savings In Euro billion In Euro billion 2.1 Net of Euro 3 billion investments redirected to transformation initiatives o/w Administrative expenses o/w Claims handling costs o/w Acquisition expenses Ambition 2020 Life & Savings Property & Casualty +3% UEPS CAGR E 15 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

16 SELECTIVE BUSINESS GROWTH Selective growth examples from today (ca. 55% of revenues 1 ) Sustained growth in other operations (ca. 45% of revenues 1 ) Savings in mature markets +3-5% NBV CAGR E P&C commercial lines +3-5% revenues CAGR E Asia % Underlying Earnings CAGR E Health +3-5% revenues CAGR E +2-3% revenues CAGR E mostly Protection and P&C retail +2% UEPS CAGR E with potential upside 16 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

17 WHILE ENHANCING TECHNICAL MARGIN Property & Casualty Current Year Loss ratio 71.2% 70% Life & Savings Protection & Health Loss ratio 80.9% 80% FY15 Ambition 2020 FY15 Ambition 2020 All year combined ratio All year 96.2% 95-94% combined 95.4% 94-93% ratio +2% UEPS CAGR E 17 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

18 STRONG CASH GENERATION AND HIGH DIVIDEND COVERAGE 2016E 2020E cumulated cash, in Euro billion % - 85% remittance ratio + capital management actions % - 55% of Adjusted Earnings net of undated debt charges 2-5 Leaves room for ca. Euro 1 billion spending in M&A p.a Group Operating FCF Cash remitted to Group holding Holding costs & debt interests Stable gearing at 26% Dividends 1 Cumulative cash at Holding 18 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016 All notes are on page 22 of this document

19 SUSTAINABLE DIVIDENDS Resilient Adjusted EPS growth 3-7% UEPS growth target Euro million Net Realized Capital Gains guidance Flexibility within payout ratio 45% - 55% target range 47% payout ratio at FY15 LEAVES ROOM FOR THE BOARD TO INCREASE DIVIDEND 19 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

20 KEY TAKEAWAYS Earnings and balance sheet resilient to low interest rates Diversified business mix, disciplined risk management and high quality new business Transparent, realistic and credible Ambition 2020 plan Clear underlying assumptions and management levers for growth Emphasis on execution and operations Efficiency, business growth and technical margin improvement 20 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016

21 Thank You

22 NOTES Page H16 insurance underlying earnings (Life & Savings ; Property & Casualty ; International Insurance). 2. Others: Includes MedLA high growth markets, Direct, International Insurance. 3. Including Japan 4. As reported in 1H Interbrand ranking. Page 6 1. Pre-tax 1H16 underlying earnings, excluding holdings. 2. General Account Protection & Health. 3. Including G/A Savings, Unit-Linked, Mutual Funds & other and Banking. 4. The Solvency II ratio is based on AXA s internal model calibrated based on adverse 1/200 year shock and assuming US equivalence. AXA s internal model was approved by ACPR on November 18, Solvency II took effect from January 1, Solvency II ratio is estimated including a theoretical amount for dividends accrued for the first semester of 2016 based on half of the full year dividends paid in 2016 for FY Dividends are declared by the Board at its discretion based on a variety of factors described in AXA s Annual Reports and then submitted to AXA s shareholders for approval. This estimate should not be considered in any way to be an indication of the actual dividend amount, if any, for the financial year Page 7 1. L&S Investment margin in base case scenario as reported in the June 21, 2016 IR Day presentation. Page 8 1. Compound annual growth rate. 2. G/A Savings products which, at inception, create more AFR than the economic capital they consume. Page 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. Page Average annual growth over the 5 year plan period; period-to-period results may vary. Page As of FY15. Page Euro 16 billion of dividends taking 50% payout ratio of Adjusted Earnings net of undated debt charges as an assumption, in the middle of the 45-55% payout range. Dividends are declared by the Board in its discretion based on variety of factors described in AXA s Annual Reports and then submitted to AXA s shareholders for approval. The estimate should not be considered in any way to be an indication of the actual dividend amount, if any, for future financial years. 22 AXA BofAML 21st Annual Financials CEO Conference London September 29, 2016