Aegon Ltd. · EURONEXT:AGN
Aegon — Q1 2017 Earnings Presentation
23 slides from Aegon's earnings presentation, May 11, 2017
Slide 1: 1Q 2017 Results
1Q 2017 Results Alex Wynaendts Matt Rider The Hague – May 11, 2017 CEO CFO candidate Helping people achieve a lifetime of financial security
Slide 2: Highlights 1Q 2017 results
Overview 2 Highlights 1Q 2017 results • Underlying earnings up due to expense reductions and higher account balances • Solvency II ratio remains stable; capital generation of EUR 0.3 billion excluding market impacts and one-time items • Strong sales increase driven by higher UK platform deposits fol
Slide 3: Earnings up due to expense reductions and higher balances
Earnings 3 Earnings up due to expense reductions and higher balances • Lower expenses as a result of strong execution on expense reduction program • Higher account balances in US and UK resulting in increased fee-based earnings • Adverse mortality experience in the US in line with seasonal expectati
Slide 4: Expense reductions of EUR 350 million on track for 2018
Earnings 4 Expense reductions of EUR 350 million on track for 2018 Declining core operating expenses (EUR million – rolling 4 quarters ) 3,850 • Successful expense savings program drives 3,700 reduction in core operating expenses • Acquisitions in US and UK in key business lines 3,550 add to scale.
Slide 5: Strong net income driven by favorable non-underlying earnings
Earnings 5 Strong net income driven by favorable non-underlying earnings Underlying earnings to net income development in 1Q 2017 (EUR million) UEBT 1Q 2017 488 Loss from fair value items Loss was mainly driven by hedges which are in place Fair value items (53) to protect capital position Realized g
Slide 6: Record revenue-generating investments of EUR 847 billion
Sales 6 Record revenue-generating investments of EUR 847 billion • Gross deposits up to EUR 34 billion mainly due to the Cofunds acquisition • Net outflows of EUR 6 billion mainly driven by the loss of one asset management contract in the UK related to the previous Guardian divestment • Revenue-gene
Slide 7: Creation of leading platform in the UK benefitting deposits
Sales 7 Creation of leading platform in the UK benefitting deposits UK platform assets & gross inflows (GBP billion) 15 #1 retail platform and #3 in workplace savings market Assets of GBP 102bn Servicing over 1.2 million customers on our platform, out of a total of 3 million 87 Aegon Cofunds 1.9 Lea
Slide 8: Improving margin on new life sales
Sales 8 Improving margin on new life sales • Lower sales driven by lower US term life and indexed universal life sales, the divestment of the UK annuity book and lower pension sales in NL partly offset by higher sales in Asia • Pricing discipline and higher interest rates lead to increased MCVNB • A
Slide 9: Solvency II ratio remains stable
Capital 9 Solvency II ratio remains stable • Capital generation excluding market impacts and one-time items amounted to EUR 0.3 billion in 1Q 2017 • Market impacts mainly related to positive credit spreads and interest rate movements in the Netherlands • Positive impact from capital efficiency measu
Slide 10: Update on NL capital position
Capital 10 Update on NL capital position • Recognize need to improve Dutch solvency position Dutch SII ratio • Downstreamed EUR 100 million from the Dutch holding into Aegon Leven in 1Q 2017 • Dutch capital ratio would be impacted by potential lowering of UFR • Committed to decisive management actio
Slide 11: Progress on financial targets
Strategy 11 Progress on financial targets Year-end Commitment 1Q 2017 results 2018 target Strong sales growth CAGR of 10% >10% Reduce operating expenses EUR 350 million EUR ~160 million Increase RoE 10% 7.2% Excess capital at Holding EUR 1.0 – 1.5 billion EUR 1.4 billion Return capital to shareholde
Slide 12: Appendix
12 Appendix For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O. Box 85 2501 CB The Hague The Netherlands
Slide 13: Aegon at a glance
Strategy support 13 Aegon at a glance Focus Sales Asia Life insurance, pensions & Total sales of asset management for over € 3.9bn 26 million customers (March 31, 2017) 2% Europe Americas 32% 59% History Employees Our roots date back to the Over 29,000 employees 7% first half of the 19th century (Ma
Slide 14: Americas: expense savings drive earnings increase
Financials 14 Americas: expense savings drive earnings increase • Underlying earnings increase to USD 333 million, as expense reductions and favorable equity markets more than offset adverse mortality experience and one-time items • Operating expenses declined by 7% as a result of continued executio
Slide 15: Europe: net deposits increase due to Cofunds acquisition
Financials 15 Europe: net deposits increase due to Cofunds acquisition • Underlying earnings remain stable at EUR 169 million • Operating expenses increased by 10% due primarily to the acquisitions in the UK • New life sales declined by 21% due to lower pension sales in NL as a result of the continu
Slide 16: Asia: strong new life sales
Financials 16 Asia: strong new life sales • Underlying earnings increased to USD 13 million, mainly due to the HNW business and China • New life sales increased by 36% as a result of strong demand for new critical illness product in China • Net deposits decreased mainly due to lower Japanese Yen-den
Slide 17: Asset management: lower performance fees
Financials 17 Asset management: lower performance fees • Underlying earnings declined by 17% as lower expenses were more than offset by lower performance fees compared with last year’s high level • Operating expenses decreased by 6% as investment in growth was more than offset by favorable currency
Slide 18: General account investments
Financials 18 General account investments March 31, 2017 amounts in EUR millions, except for the impairment data Americas Europe Asia Holding & other Total Cash/Treasuries/Agencies 18,929 16,099 323 97 35,448 Investment grade corporates 41,915 5,336 3,618 - 50,869 High yield (and other ) corporates
Slide 19: Capital generation and excess capital
Capital and assumptions 19 Capital generation and excess capital • Capital generation excluding market impacts and one-time items of EUR 0.3 billion • Holding excess capital decreased slightly to EUR 1.4 billion due to normal funding & operating expenses - EUR 500 million of holding excess capital i
Slide 20: Capital allocated to run-off businesses
Capital and assumptions 20 Capital allocated to run-off businesses 1Q 2017 Duration Comment Payout annuities USD 0.5 billion > 15 years • Seeking to accelerate release of capital and reduce ALM mismatch • Deals likely to be executed together due to offsetting IFRS and capital impacts • Potential imp
Slide 21: Main economic assumptions
Capital and assumptions 21 Main economic assumptions Overall assumptions US NL UK Exchange rate against euro 1.10 n.a. 0.85 Annual gross equity market return (price appreciation + dividends) 8% 7% 7% Main assumptions for financial targets US NL UK 10-year government bond yields Develop in line with
Slide 22: Investing in Aegon
22 Investing in Aegon Aegon’s ordinary shares Ticker symbol AGN NA • Aegon ordinary shares ISIN NL0000303709 - Traded on Euronext Amsterdam since 1969 SEDOL 5927375NL and quoted in euros Trading Platform Euronext Amsterdam Country Netherlands • Aegon New York Registry Shares (NYRS) Aegon’s New York
Slide 23: Disclaimer
23 Disclaimer Cautionary note regarding non-IFRS measures This document includes the following non-IFRS-EU financial measures: underlying earnings before tax, income tax, income before tax, market consistent value of new business and return on equity. These non-IFRS-EU measures are calculated by con