Scor Se · EURONEXT:SCR
Scor — Merger or Acquisition (March 2007)
27 slides from Scor's merger presentation, March 2007
Slide 1: Dynamic Lift: SCOR and Converium creating together a Top 5 reinsurer
“Dynamic Lift” SCOR and Converium creating together a Top 5 reinsurer INVESTOR PRESENTATION March 2007 Eurolist: SCR www.scor.com
Slide 2: Disclaimer
Disclaimer This communication is not a pre-announcement within the meaning of Swiss takeover regulations and only the terms and conditions set forth in SCOR’s formal pre-announcement (the “Pre-announcement”) have any legal effect and relevance. This communication is fully qualified by the terms, con
Slide 3: Disclaimer
Disclaimer U.S. Restrictions The Tender Offer will not be made in or into the United States of America and may only be accepted outside the United States. Accordingly, the information contained herein is not for publication or distribution in, into or from the United States, and persons receiving su
Slide 4: Executive summary
Executive summary 27% premium on last unaffected share price (4 January 2007) Price equivalent to 1.3x Converium 2006 book value and 40% premium to analyst’s A very fair offer consensus before announcement on 16 February 2006 Equivalent terms and conditions as in block acquisitions Realising estimat
Slide 5: A very fair offer
A very fair offer A very fair offer A full premium offer at equivalent terms to block acquisitions Voluntary tender offer on 67.1% of Converium share capital Main 80% in exchange for SCOR shares and 20% in cash Offer Terms For every 1 Converium share, 0.5 SCOR newly issued share plus CHF4 cash Equiv
Slide 6: Attractive to Converium shareholders
A very fair offer Attractive to Converium shareholders Premium offered in excess of 26% to last unaffected share price Converium Implied share price premium Last 4 January 2007 * 16.65 +26.8% Close 16 February 2007 18.80 +12.3% 1 month prior ** 18.25 +15.7% 3 months prior ** 17.57 +20.2% 6 months pr
Slide 7: A very fair offer in terms of valuation multiples
A very fair offer A very fair offer in terms of valuation multiples Premium offered above 50% on sector P/E and approx. 20% on P/BV ratios 36% 53% 5% 18% 16 1.5 1.6 0.15 13.6 1.34 14 12.1 1.4 1.19 12 1.2 1.14 P/BV 2007E P/E 2008E 10 8.9 1 8 0.8 6 0.6 4 0.4 2 0.2 0 0 1 Converium as of offer price as
Slide 8: A very fair offer in terms of premium to consensus Price Targets
A very fair A very fair offer in terms of premium to offer consensus Price Targets Premium offered to price targets above 40% Converium - Share price 01/01/06 -16/02/07 In CHF 20.0 Speculative movements 18.0 16.0 14.0 12.0 10.0 01/06 02/06 03/06 04/06 05/06 06/06 07/06 08/06 09/06 10/06 11/06 12/06
Slide 9: A very fair value according to analysts
A very fair offer A very fair value according to analysts Research analysts comments further support the valuation Pre Converium’s roadmap Post Converium’s roadmap announcement announcement “ SCOR bid fully values Converium Merrill Lynch 21 February 2007 ” “ We value a standalone Converium on our ba
Slide 10: €65m annual pre-tax cost synergies
Value creation for all shareholders €65m annual pre-tax cost synergies Synergies fully implemented by 2009 Breakdown of synergies Phasing of estimated synergies Total €65m and integration costs (€m) 70 65 65 Non Life 50 IT & Others admin., local 38 28% offices 30 32% 10 - (€m) (10) 2007 2008 2009 20
Slide 11: Additional synergy potential
Value creation for all shareholders Additional synergy potential We would expect significant further value creation in addition to the quantified €65m of savings Additional cost synergies Revenue synergies Tax optimisation Improved pricing power Retrocession cost optimisation Leveraging of best unde
Slide 12: Acceleration of SCOR's objective of RoE
Value creation for all shareholders Acceleration of SCOR’s objective of RoE1 SCOR has consistently improved its RoE1 since 2004 and delivered on targets SCOR RoE 2004 – 2006 9M 2008 – 2010 “Dynamic Lift” 2005 – 2007 16 “Moving Forward” Since the turnaround, SCOR New SCOR has continuously improved it
Slide 13: Resilience of franchises
Value creation for all shareholders Resilience of franchises SCOR and Converium share similar experiences and have both successfully rebounded from historical difficulties… although at different paces Operating profits and key rating events 400 300 200 A- Aug-05 A- Mar-07 “ …with Converium about 18
Slide 14: Attractive to SCOR shareholders
Value creation for all shareholders Attractive to SCOR shareholders Value enhancing to SCOR shareholders 2008 2009 Estimated EPS accretion* Neutral +6% Estimated RoE increase* Neutral +30bps * Estimates based on market consensus for both companies as of 19 February 2007 Generating better quality and
Slide 15: SCOR strong balance sheet post combination
Value creation for all shareholders SCOR strong balance sheet post combination Financing of the transaction designed to strengthen balance sheet with 74%* of the overall consideration paid in shares for 100% of Converium A total purchase price for 100% of Converium’s share capital: Total considerati
Slide 16: SCOR strong balance sheet post combination
Value creation for all shareholders SCOR strong balance sheet post combination Positioning the combined Group for maximum diversification benefit according to Solvency II requirements Enhanced financial strength for the combined Group: target A+ security entails an enhancement compared to Converium’
Slide 17: Expected positive impact on ratings criteria
Accelerating a proven strategy Expected positive impact on ratings criteria Significant boost to existing strategies combined Management & Corporate Strategy with a larger pool of talents Competitive Position Enhancement of already solid market positions by geography and business lines Improvement o
Slide 18: Creating a Top 5 global multi-line risk carrier
Accelerating a proven strategy Creating a Top 5 global multi-line risk carrier Top Global Reinsurers 2005 NWP, in USD billion 30 25 20 15 10 5 0 e e e rR in m e R e e e ar w re R R R R e iu ve y m R M ha hi e t h r ve + ay n r es no riu ne ve ss ic on R R e ea s at s o R is H erk C O O er ki un dy o
Slide 19: Accelerating a proven strategy
Accelerating a proven strategy Accelerating a proven strategy SCOR has a proven Accelerating SCOR’s successful strategy and strategy setting new ambitions 9 Achieving adequate critical mass for the expanding risk environment To be a leading risk carrier and 9 Building on the new Group franchise pric
Slide 20: SCOR + Converium business model
Accelerating a proven strategy SCOR + Converium business model Pursuing the “Twin- Widening the spectrum of Broadening geographic Engine” model for lower Non Life business lines diversification volatility and services SCOR + Converium, GWP (2006) SCOR + Converium, GWP* (2005) SCOR + Converium, GWP (
Slide 21: Total overlap less than 10% of the combined book
Total overlap less than 10% of the combined book Manageable overlaps Complementary Overlapping lines Additive lines lines of business Life reinsurance Treaties all lines but Cat European Cat US Business Large Facultatives Japanese Cat Space Credit & Surety Inherent Defects Agribusiness Insurance Avi
Slide 22: Converium roadmap: alignment of interests but optimistic on a standalone basis
A stronger Converium roadmap: alignment of interests Group than Converium standalone but optimistic on a standalone basis Value orientation and recent rating upgrade demonstrate increasing alignment between SCOR and Converium SCOR believes that Converium’s recently released roadmap further confirms
Slide 23: SCOR is currently delivering Converium's 2009 roadmap targets
A stronger SCOR is currently delivering Converium’s Group than Converium standalone 2009 roadmap targets 9M 2006 SCOR track record before Revios integration shows that it is already achieving performance as good as Converium 2009 roadmap objective SCOR 9M 2006 results Æ 9M growth rate P&C: 28% Æ Net
Slide 24: Together we will accelerate
A stronger Group than Converium standalone Together we will accelerate With assumptions in line with SCOR 9M 2006 and 2007 renewals, hence more prudent than Converium’s 2009 roadmap… Æ P&C annual growth rate less than 10% Æ net combined ratio all inclusive of c.97% Æ annualised return on Investments
Slide 25: The combined entity will move faster, go further and with greater security
A stronger The combined entity will move faster, Group than Converium standalone go further and with greater security… … than Converium on a standalone basis The 2008-2010 “Dynamic Lift” strategic plan will define the overall objectives, set precise targets and present the ways and means to reach th
Slide 26: Current milestones
Current milestones 26 February 2007 Pre-Announcement of the voluntary tender offer of Directors and Management 2 April 2007 Publication of the Swiss offer prospectus 18 April 2007 Beginning of the Swiss offer period 24 May 2007 SCOR EGM to approve issuance of new SCOR shares 1 June 2007 Expiration o
Slide 27: Conclusion
Conclusion A very fair offer Value creation for all shareholders Accelerating a proven strategy A stronger Group than Converium standalone 27 Dynamic Lift, March 2007