Aegon Ltd. · EURONEXT:AGN
Aegon — Investor Day (January 2016)
31 slides from Aegon's investor day presentation, Jan 13, 2016
Slide 1: Accelerate, connect, deliver
Accelerate, connect, deliver Alex Wynaendts CEO Analyst & Investor Conference - London - January 13, 2016
Slide 2: Today’s storyline
Today’s storyline • Transformed the profile of the company by focusing on fee business Achievements • Substantially improved the strength of our balance sheet since 2010 • Doubled free cash flows after holding expenses • Broaden relationships with our customers throughout their financial lifecycles
Slide 3: Achievements since 2010
Achievements singe 2010 Conference
Slide 4: Changed profile of the company by executing on our strategy
Changed profile of the company by executing on our strategy While growing our fee business Optimized value Generated average annual of backbook sales growth of 12% since Addressed Realized material cost 2010 legacy issues savings in established Invested in digital business markets models Div
Slide 5: Maintained a strong capital position and returned capital
Maintained a strong capital position and returned capital Solid group Solvency II ratio ~160% end-2015 Robust balance sheet Strong ratings S&P AA- financial strength rating Operational free cash flow growth Growing Doubled free cash flows since 2010 cash flows Reduced holding expenses Growing cash d
Slide 6: Not all targets have been met despite management actions
Not all targets have been met despite management actions 2015 Target Delivery Key drivers • Impact of low rates, including on policyholder behavior Return on equity >10% and old-age mortality • Significant adverse impact from Earnings growth of 7-10% - Regulatory changes in the UK - Portfolio ch
Slide 7: Priorities going forward
Priorities going forward Conference
Slide 8: Aegon’s strategic priorities
Aegon’s strategic priorities • Offer solutions throughout the lifecycle • EUR 200 million expense reduction program in US, NL and holding • Provide omni-channel distribution • Simplifying our business by digitizing • Expand guidance and advice processes and increasing capabilities self-service • Eng
Slide 9: Well positioned to benefit from global trends
Well positioned to benefit from global trends Persistently low interest rates Shift from state and corporate benefits to individual responsibility for financial security Increased competition as a result of blurring boundaries in the financial services industry Reduced accessibility to traditional a
Slide 10: Living up to our purpose
Living up to our purpose ‘to help people achieve a lifetime of financial security’ Develop longer-term relationships Offer more simple, convenient solutions Provide more Getting closer to relevant information, guidance and advice our customers 10
Slide 11: Opportunity to serve along customer lifecycles
Opportunity to serve along customer lifecycles …to trusted provider of …through guidance retail solutions and advice… From worksite relationship… At & after retirement Situation Retirees looking for income and wealth transfer Wealth accumulation Situation Increasingly focusing on retirement Primary
Slide 12: Capturing more of the value chain to fulfill customer promise
Capturing more of the value chain to fulfill customer promise Protection Product administration Asset Advice and and guarantees and platforms management customer experience • Selectively provide protection and guaranteed solutions • Further digitize product administration and drive scale on platform
Slide 13: Connecting with our customers digitally
Connecting with our customers digitally IT systems Digital platforms Digital services • Modular IT architecture • Customer portals • Customer guidance and advice, combining • Modernize and merge • Direct-to-consumer technology and remote existing infrastructure propositions human interaction • Sourc
Slide 14: Reducing expenses by simplifying the business
Reducing expenses by simplifying the business Strong expense track Additional cost savings …by simplifying record 2010-2015 in 2016-2018… the business Expenses up only 1% per USD 150 million savings • Reduce complexity year while growing sales by 8% per year* • Taking out management layers • Straigh
Slide 15: Increasing amount of capital allocated to core businesses
Increasing amount of capital allocated to core businesses Optimized Portfolio Divest non-core business Enhance backbook value Optimize capital allocation • Exploring options for UK • Operationally separate UK • Grow asset management annuity book backbook from platform earnings by another 20% by busi
Slide 16: Improving performance through business growth and cost savings
Improving performance through business growth and cost savings • RoE of 10% by 2018 through organic growth, cost savings and capital return Increasing - Achieve growth in asset management, administration and guidance & advice profitability - EUR 200 million expense reduction program in US, the Nethe
Slide 17: Cultural transformation program to improve delivery
Cultural transformation program to improve delivery Key themes Actions • Clear accountability Structure Ownership Additions to management board • Balancing new initiatives and execution on inforce reflect key strategic priorities • More experimentation and ‘fast fails’ Agility Leadership • Fact-base
Slide 18: Additions to management board reflect key strategic priorities
Additions to management board reflect key strategic priorities Existing members Chief Executive Chief Financial Chief Risk CEO CEO CEO CEO Officer Officer Officer Americas NL UK CEE Alex Darryl Allegra Mark Marco Adrian Gábor Wynaendts Button van Hövell-Patrizi Mullin Keim Grace Kepecs Additions CEO
Slide 19: Execution in the units
Execution in the units Conference
Slide 20: Transforming the US business to improve performance
Transforming the US business to improve performance Management actions Delivering results Operational excellence • Reduce expenses by • Restructure into functionally organized Life & USD 150 million by 2018 business to get closer to our customers Protection Transamerica Business Services • Deliver o
Slide 21: Accelerating shift towards fee-based business in Dutch market
Accelerating shift towards fee-based business in Dutch market Management actions Delivering results Strong position Operational excellence in pensions • Reduce expenses by • Leverage pension leadership position EUR 50 million by 2018 • Simplify and digitize products and processes • Generate annual c
Slide 22: Delivering on UK platform promise as #1 retirement specialist
Delivering on UK platform promise as #1 retirement specialist Management actions Delivering results Existing business Operational excellence • Generate annual cash flows Pro- • Maintain cost base at competitive level tection of ~GBP 100 million • Continue upgrading clients to platform Annuity Pensio
Slide 23: Continuing strong growth in Asset Management
Continuing strong growth in Asset Management Management actions Delivering results Operational excellence • 20% increase in underlying • Optimize product development across units earnings by 2018 • Focus on technology convergence, data and • Third-party assets under centers of excellence management
Slide 24: Achieving scale in other markets
Achieving scale in other markets Management actions Delivering results Expanding Operational excellence • Meaningful contributions to direct offerings • Optimize operating model in CEE the group by 2018 • Invest to support value creating growth • EUR 200 million underlying earnings by 2018 Loyal cus
Slide 25: Strong earnings growth supports 10% RoE target
Strong earnings growth supports 10% RoE target Strong increase in earnings driven by Earnings growth supports RoE target organic growth and EUR 200 million cost savings • Americas: Cost savings and growth of fee businesses • Europe: Cost savings in the Netherlands as well as earnings growth in CEE a
Slide 26: Concluding remarks
Concluding remarks Conference od ~
Slide 27: Accelerate, connect, deliver
RoE target of 10% Accelerate € 400 million dividend share buyback growth Accelerate, connect, deliver Better Cultural connect with transformation customers Capture more of value chain 27
Slide 28: Appendix
= ¥ Appendix Conference
Slide 29: Main economic assumptions
Main economic assumptions Overall assumptions US NL UK Exchange rate against Euro 1.10 N.a. 0.71 Annual gross equity market return 8% 7% 7% (price appreciation + dividends) Main assumptions for financial targets US NL UK 10-year government bond yields Develop in line with current forward curves Main
Slide 30: For Investor Relations please contact [email protected]
For Investor Relations please contact +31 70 344 8305 [email protected] For Media Relations please contact +31 70 344 8344 [email protected] Analyst & Investor Conference - London - January 13, 2016
Slide 31: Disclaimer
Disclaimer Cautionary note regarding non-IFRS measures This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax and income before tax. These non-IFRS measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and assoc