Allianz SE · XETR:ALV
Allianz — Allianz Global Investors — Investor Presentation (March 2006)
51 slides from Allianz's investor presentation, Mar 22, 2006
Slide 1: Allianz Global Investors Press Briefing, London
Allianz Global Investors Press Briefing, London March 22, 2006 Joachim Faber CEO
Slide 2: On May 18, 2005, we left you with the following message
On May 18, 2005, we left you with the following message…. Three main goals for 2005 and beyond........ Top-Quartile investment performance Continue global market penetration Top-Quartile business returns …. and today we are here to update you on what happened since…. 2
Slide 3: Profitability growth continues
Profitability growth continues ALLIANZ GLOBAL INVESTORS KEY FINANCIALS, 2005 vs. 2004 AuM (EUR bn) Operating Profit (EUR m) CIR +23% +32% 942 1,124 764 851 +63.0% -4.6%-p. +58.4% 2004 2005 2004 2005 Net inflows (EUR bn) Net income (EUR m) +108% 69 +EUR 513m 233 33 -280 2004 2005 2004 2005 3
Slide 4: Summary of recent business highlights
Summary of recent business highlights (Examples) PIMCO awarded “European Bond Manager of the Year” and “Nordic Asset Management Firm of the Year”, ADGI Germany awarded “German Asset Management Firm of the Year” (Financial News Awards for Excellence in Institutional Asset Management – Europe 2005) PI
Slide 5: Critical factors for Allianz Global Investors' future success
Critical factors for Allianz Global Investors‘ future success 1 Product performance 2 Leveraged distribution 3 Market presence 5
Slide 6: AllianzGI is delivering outstanding investment performance
1 AllianzGI is delivering outstanding investment performance ACCOUNT BASED ASSET-WEIGHTED PRODUCT PERFORMANCE OUTPERFORMANCE OF THIRD PARTY ASSETS Percent 89 82 73 AllianzGI’s goal is to have 70% of assets ahead of benchmark on a 3-year basis - Consistently outstanding fixed income performance far a
Slide 7: ADGI Germany as an example of leveraging Allianz Group's distribution power
2 ADGI Germany as an example of leveraging Allianz Group’s distribution power and superior products DEVELOPMENT OF GERMAN BUSINESS** Comment Net inflows* AuM market share* EUR billion Percent Allianz Dresdner Global Mutual funds Σ EUR bn 311 418 Investors Germany ADGI G 13,8 25,0 23,9 Market leader
Slide 8: In US Retail, AllianzGI has grown its assets and client base
2 In US Retail, AllianzGI has grown its assets and 2 client base using a common distribution platform USD billion US distribution US market position Net inflows* Common platform: Allianz Global Investors 2001 2002 2003 2004 2005 Distributors LLC, Stamford 1 Vanguard American American American Americ
Slide 9: AGI grew its third party assets by 11% over past three years
Despite adverse currency effects, AGI grew its third 3 party assets by 11% over past three years, driven by a strong growth in Asia and Europe MARKET PRESENCE CAGR AuM BY REGION - AGI THIRD PARTY 2002-05 (%) EUR billion, 2002-2005 707 Σ 11 63 Asia Pacific 27 550 513 523 201 Europe 15 46 31 34 132 14
Slide 10: Europe as a growth market in Asset Management
Europe as a growth market in Asset Management 10
Slide 11: Europe ex Germany market assets large with attractive growth rates
Europe ex Germany market assets large and with attractive growth rates Worldwide Assets in 2005: ~35tn EUR* CAGR 05-09E Asia Pacific 12% Europe ex Asia Pacific 4.8% Germany 30% Germany 5.8% Germany US 7.3% 3% US Europe ex 55% 8.7% Germany Total net sales 2005*** Europe: 365 bn € thereof Ger: 40 bn €
Slide 12: Substitution of savings products in favor of old-age provisions expected
Substitution of savings products in favor of old-age provisions expected • Increase in savings expected … • … with shift towards old-age provisions CAGR Financial assets of 100% 100% 100% 100% private households 28.5 6.1% EUR trillions Life insurance/ 28% 33% 10.1 7.4% pension 35% 39% funds 20.2 Lif
Slide 13: Pension reforms open the European pension opportunity
Pension reforms open the European pension opportunity The size of the bubbles reflects the estimated asset volume in 2015 CAGR 2004- 2015 14% 12% 1076 bn CAGR 2931 bn CAGR NO ES IT 10.4% 9.6% 10% FR FI PT SE 8% BE AT DK 1967 bn CAGR NO NL DE 6.5% UK 6% CH 4% 4966 bn CAGR 6.5% 2% 0% 0 500 1.000 1.500
Slide 14: Efficiency potential in Europe
Efficiency potential in Europe Number of mutual funds Europe (UCITS) vs. US (mutual funds) 1998 - 2004 28.923 28.502 28.484 27.250 Ø size per fund 25.446 22.034 EU: 143 mn € 20.069 8.305 8.244 8.155 8.126 8.044 7.791 Ø size per fund 7.314 US: 739 mn € 1998 1999 2000 2001 2002 2003 2004 Europe USA 14
Slide 15: Capturing European business opportunity of major strategic importance
Capturing European business opportunity of major strategic importance for AllianzGI Attractiveness of Importance of European European AM market markets for AllianzGI Overall, fastest growth of regions Europe as home region of projected Allianz Group Especially strong growth of cross- Opportunity to
Slide 16: Allianz Global Investors Press Briefing: Marna Whittington, COO
Allianz Global Investors Press Briefing, London March 22, 2006 Marna Whittington COO
Slide 17: Allianz Group among the world's leading asset managers
Allianz Group has fully established itself among the world’s leading asset managers with Allianz Global Investors managing EUR 942bn (74%) ALLIANZ AuM vs. PEERS AND BREAKDOWN AuM of world’s largest asset managers AuM Allianz Group EUR bn, end-2005 EUR bn, 2005 1.862 1,266 Equity 1 UBS 2 Barclays GI
Slide 18: Consistently competitive in capturing net flows
Allianz Global Investors has consistently proven to be competitive in capturing net flows % AuM bop ALLIANZ GLOBAL INVESTORS THIRD-PARTY NET FLOWS* EUR billion 65 Outstanding record of capturing net flows 43 Achieving positive net flows each quarter since it was 26 28 29 founded Collecting higher ne
Slide 19: Delivering increasing profitability
Delivering increasing profitability ALLIANZ GLOBAL INVESTORS OPERATING PROFIT AND COST INCOME RATIO Operating profit CIR EUR million % +24% p.a. -22.3%-pts 1.124 80.7 78.5 851 67.8 716 63.0 58.4 469 495 2001* 2002 2003 2004 2005 2001* 2002 2003 2004 2005 * Dresdner Bank asset management pro-forma in
Slide 20: Strengthening profitability driven by revenue growth and cost management
Strengthening profitability driven by revenue growth and cost management NET REVENUES & OPERATING EXPENSES* YoY change in % 16,3 16,3 13,3 Comment Leverage of worldwide CAGR +11.3% distribution power Net Best practice sharing revenues 0,0 Efficiency improvements/ streamlining of processes 8,3 6,1 **
Slide 21: AllianzGI operating earnings and CIR improvement vs. peers
AllianzGI shows remarkable improvement of operating earnings and CIR since 2002; most other peers strongly improved profitability, too ALLIANZGI vs. GLOBAL PEERS, OPERATING PROFIT vs. CIR, 2005 vs. 2002 Operating profit in EUR m 1200 AllianzGI 2002 1000 2005 800 600 ∅ 2005: 627 400 200 ∅ 2005: CIR b
Slide 22: Net income turned positive in 2005
Net income turned positive in 2005 ALLIANZ GLOBAL INVESTORS NET INCOME, 2005 vs. 2004 EUR million 2004 2005 Operating 851 Operating 1,124 Profit Profit Acquisition-related Acquisition-related -751 -713 expenses expenses Amortization Amortization -380 0 of Goodwill of Goodwill Taxes 52 Taxes -130 Min
Slide 23: AuM development 2005
Net flows, currency effects and market return with strong contributions to growth of AllianzGI’s AuM ALLIANZ GLOBAL INVESTORS AuM DEVELOPMENT, 2005 EUR billion +23.3% 942 -5 67 47 707 764 69 +28.5% 550 External clients +9.8% 235 214 Allianz Group assets 2004 Net Inflows Market FX effects* Decon- 200
Slide 24: Allianz Global Investors' focus going forward
Allianz Global Investors' focus going forward Main goals for 2006 and beyond Financial goals** Top-Quartile investment performance, targeting ≥ 70% of assets outperforming* Further improve client satisfaction AuM / Revenue growth: 8-12% p.a. Profitable growth by Third-party net flows: ≥ 5% p.a. Leve
Slide 25: Allianz Global Investors Press Briefing: Elizabeth Corley
Allianz Global Investors Press Briefing, London March 22, 2006 Elizabeth Corley, CEO Allianz Global Investors Europe
Slide 26: Trends in the European Asset Management Industry
Trends in the European Asset Management Industry 1 Guided architecture 4 Mutual funds as vehicle for institutional clients Institutional buying 2 5 Specialist products/ behavior for funds Core-Satellite approach Increasing importance 3 6 Alternative strategies of Consultants 26
Slide 27: European customer needs focus on investment performance and service
European Customer Needs Focus on Investment Performance and Service What do you consider most important when selecting a fund manager? Number of responses 164 85 55 41 38 35 34 32 27 21 18 16 13 12 10 Investment Style Innovation Manager/Team Performance Transparency Communication Reputation Fund Siz
Slide 28: Performance: Best of Allianz Global Investors
Performance: Best of Allianz Global Investors Rankings Investment focus Ratings Awards (S&P)1 Category Equity Funds Convincing Euro Equity /Europe without UK investment results over Growth in the time period 1 and 3 years over 3 years European Equity Growth European Small Cap Best Fund US Equity ove
Slide 29: Service: Leverage Local Resources
Service: Leverage Local Ressources Belgium/ Nordics Netherlands Client Service (1) Client Service (1) UK Client Service (6) France Germany covered by dit Allianz Global Austria Client Service (6) Client Service (5) Investors Switzerland Client Service (5) Spain Client Service (4) Italy Client Servic
Slide 30: Experienced Management Team and Organisational Set-Up in Place
Experienced Management Team and Organisational Set-Up in Place Allianz Global Investors Allianz Global Investors Europe GmbH Europe Holding GmbH Board: Board: Elizabeth Corley (CEO) Elizabeth Corley (Co-Chair) Michel Haski (Head of Business Development) Dr. Markus Rieß (Co-Chair) Dr. Christian Finck
Slide 31: Goals 2006 and beyond
Goals 2006 and beyond Goals 2006 Diversify growth across Europe Expansion of pan-European fund platform And beyond Make a significant contribution to AllianzGI’s profitability and growth Make Allianz Global Investors a recognized leader in investment management across Europe 31
Slide 32: AllianzGI Equity Performance & Investment Outlook Equity
AllianzGI Equity Performance & Investment Outlook Equity Andreas Utermann, Press Conference Allianz Global Investors March 22 2006, London
Slide 33: Update on AllianzGI Equity Performance
Update on AllianzGI Equity Performance In early 2003, demanding performance targets were set for AllianzGI - a). 60% outperformance in any single year b). 70% outperformance over rolling 3 years At the end of January 2006 AllianzGI Equity companies exceeded the 1 year performance targets significant
Slide 34: S&P Micropal Rankings of selected Equity funds
S&P Micropal Rankings of selected Equity funds Predominantly within the first and second quartile NAV Investment 1 Year 3 Years in Focus EUR m dit-Concentra Germany 43,0% 29,7% 1.860 dit-Vermögensbildung Deutschland Germany 7,5% 15,4% 770 st dit-Wachstum Deutschland Germany 9,7% 5,5% 182 1 Quartile
Slide 35: Base Scenario and risks around it
Base Scenario and risks around it • Our base case (>50% probability): •The global economy is expected to grow at around potential over the coming quarters, but global imbalances persist. • Currently, we see a global cyclical acceleration with growth dynamics differing across regions. • US growth sof
Slide 36: Economic and Capital Markets Outlook
Economic and Capital Markets Outlook • Cheap macro liquidity has lead to a rise in prices of basically all major asset classes globally (equities, bonds, real estate, commodities) and to a pick-up in economic activity, which itself has further supported prices for risky assets. Goods prices have ris
Slide 37: Regional economic outlook
Regional economic outlook • USA: • Early signs for a housing market slowdown, but no signs so far for a sharp correction. Lower house price inflation is likely to dampen personal consumption via the wealth effect and lower mortgage equity withdrawals. • Investment activity ex housing is expected to
Slide 38: Strategic asset allocation
Strategic asset allocation • Overweight equities over bonds: • Global economic growth is currently accelerating and expected to be at around potential over the coming quarters – our expected macro backdrop favours equities over bonds. • Expected average return for global equities is between 5 and 10
Slide 39: Style and sector preferences
Style and sector preferences • Growth stocks preferred over value: • relative valuation of growth stocks is low compared to value stocks in a historical comparison. • valuation differentials across sectors are minor, hence, higher earnings growth rates are not sufficiently rewarded. • growth stocks
Slide 40: Investment Outlook Fixed Income
Investment Outlook Fixed Income Scott Mather, Press Conference Allianz Global Investors March 22 2006, London
Slide 41: Euroland Outlook
PIMCO Euroland Outlook Allianz @) Global Investors 41
Slide 42: Current Conditions
A Booming Economy as Measured by the IFO Index… German German Business Business Cycle: Cycle: IFOIFO Index Index 3 Downswing Boom 2 Feb 06 Current Conditions 1 0 Aug 01 -1 -2 Recession Upswing -3 -3 -2 -1 0 1 2 3 Expectations SOURCE: PIMCO and IFO Institute. Expressed in standard deviation from mean
Slide 43: But really a German IP and Export Story
… But really a German IP and Export Story Business Surveys in the Euro Area Industrial Production 2.5 10 2.0 8 1.5 6 1.0 Standard Deviation 4 Percent (%) 0.5 0.0 2 -0.5 0 -1.0 -2 -1.5 -4 -2.0 -2.5 -6 95 96 97 98 99 00 01 02 03 04 05 06 95 96 97 98 99 00 01 02 03 04 05 Germany Germany France / Italy
Slide 44: Eurozone Investment Remains Unexciting
Eurozone Investment Remains Unexciting Non-Residential Construction (% of GDP) Residential (% of GDP) 8 8 7 7 Percent (%) Percent (%) 6 6 5 4 5 80 85 90 95 00 05 80 85 90 95 00 05 E12 E12 Capital Goods (% of GDP) 12 11 Percent (%) 10 9 8 80 85 90 95 00 05 E12 SOURCE: Barclays Capital 44 SOURCE: Barc
Slide 45: Employment Remains Weak
Employment Remains Weak… E12 Hiring Intentions 0.9 2 0.7 0.5 1 Standard Deviation Percent q/q (%) 0.3 0 0.1 -1 -0.1 -2 -0.3 -0.5 -3 86 88 90 92 94 96 98 00 02 04 Employment (4q ma) (lhs) EC hiring intentions, 3m ma (st. dev. from mean, rhs) 45 SOURCE: Datastream, Barclays Capital
Slide 46: And Wages are not Growing
And Wages are not Growing… Eurozone Wages 14 12 10 Percent y/y (%) 8 6 4 2 0 -2 81 83 85 87 89 91 93 95 97 99 01 03 05 Nominal Wage Growth Real Wage Growth SOURCE: HSBC SOURCE: HSBC 46
Slide 47: Reflected in Weak Consumption
…Reflected in Weak Consumption Euroland Consumer 5 3.0 2.5 4 2.0 Percent y/y (%) Percent y/y (%) 3 1.5 2 1.0 0.5 1 0.0 0 -0.5 In Real Terms -1 -1.0 99 00 01 02 03 04 05 Consumption (lhs) Compensation (lhs) Employment (rhs) SOURCE: Eurostat, Barclays Capital 47
Slide 48: Global Growth should Slow as Stimulus is Removed from the U.S. Consumer
Furthermore, Global Growth should Slow as Stimulus is Removed from the U.S. Consumer Actual Stimulus From Housing-Related Factors Realized Home Residual Wealth Cash- Investment Nominal Share of Capital Equity Total Effect Outs 1 2 3 Amount over GDP Growth Gains Loans 5% of GDP4 2001 0,6 0,4 0,1 0,1
Slide 49: What About Inflation? Not a Problem
What About Inflation? Not a Problem Headline Headline vs. vs. CoreCore CPICPI 4 3 Percent (%) 2 1 0 95 96 97 98 99 00 01 02 03 04 05 06 Headline CPI Core CPI SOURCE: Bloomberg Financial Markets SOURCE: Bloomberg Financial Markets 49
Slide 50: However, Money Supply is the ECB's Concern
However, Money Supply is the ECB’s Concern E12 Bank Lending and M3 Growth 12 10 Percent y/y (%) 8 6 4 2 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 Bank lending to the private sector M3 SOURCE: Datastream, Eurostat, Barclays Capital 50
Slide 51: Euroland Cyclical Outlook
Euroland Cyclical Outlook Business sentiment and export strength has improved on resilient global growth and German industrial strength However, domestic consumption remains weak on sluggish employment and wage growth Weakness in global growth could tame further Euroland expansion Inflation remains
Allianz Global Investors — Investor Presentation (March 2006) on 6ix