9m results 2011
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9MPeriodic Financial
Information
109 November 2011 I
Insurance net result affected by financial turmoil**, Intrinsic performance remains solid
Group net loss at EUR 534 mio
Strong balance sheet despite impairments
Highlights 9M 2011*
Excl. negative impact financial turmoil net result at EUR 406 mio, +22%
Incl. turmoil at EUR 209 mio negative (vs.EUR 334 mio) Group combined ratio at 101.2%, vs.104.5% Inflows at EUR 12.9 bn, -6% Funds under management at EUR 70.2 bn, stable
General Account net loss at EUR 325 mio EUR 258 mio legacy related charges Fortis Bank Tier 1 fair value at 80% of par
Insurance solvency ratio resilient at 210%, Group solvency at 270%
Shareholders’ equity at EUR 3.15 per share
* All 9M11 data are compared to the 9M 10 figures unless otherwise stated** Financial turmoil defined as the impact of the impairments on equities and fixed income after tax, non-controlling interests and profit sharing
209 November 2011 I
615
334
(209)
406
9M 10 9M 11
646
312
(325)
334
(209)
(534)
9M 10 9M 11
9M 10 FY 10 H1 11 9M 11
Impairment charges cloud the insurance performanceBalance sheet remains strong & stable
Solid Insurance resultIn EUR bn In EUR mio
Strong Insurance solvency*, not impacted by impairments
S-E exposure further reducedIn EUR bn*
Combined ratio stable on H1 Group : General Account volatile
Insurance General Account
226% 227% 208% 2.89 3.153.19
FY 10 H1 11 9M 11
Shareholders’ equity upIn EUR per share
5.53.6
12.9
FY 09 H1 11 9M 11* at amortized cost, after non-controlling interests
FY 10 H1 11 9M 11
101.2%101.2%107.3%
210%
* Based on regulator’s view
Reported Ins resultAdjusted Insurance resultImpairments Greece & equities
309 November 2011 I
Overview impact impairments on net resultSituation as per 30 September 2011
Greek bonds Equities TotalEUR mio H1 Q3 9M H1 Q3 9M H1 Q3 9M
Belgium Life (117) (332) (449) (19) (67) (86) (136) (399) (535)Non-Life (8) (13) (21) (2) (7) (9) (10) (20) (30)Total (125) (345) (470) (21) (74) (95) (146) (419) (565)
UK LifeNon-LifeTotal
CEU Life (25) (7) (32) (7) (11) (17) (31) (18) (49)Non-Life (0) (0) (1) 0 0 0 (0) (0) (1)Total (25) (8) (33) (7) (11) (17) (32) (18) (50)
Asia LifeNon-LifeTotal
Ageas Life (142) (339) (481) (26) (78) (103) (168) (417) (584)Non-Life (8) (14) (22) (2) (7) (9) (10) (21) (31)Total (150) (353) (503) (28) (85) (112) (177) (438) (615)
Impairments
*
* Consolidated entities
409 November 2011 I
Key financials 9M 2011
* Based on average number of outstanding shares** Adjusted for the reclassification of Fortis Luxembourg Vie and Ageas Deutschland to “Assets & Liabilties Held for Sale”
10/03/2010 I page 4
Eur mio 9M 11 9M 10 Q3 11 Q3 10 Q2 11
Gross inflows (EUR bn) 12.9 13.7 (6%) 3.9 4.1 4.2
Net profit Insurance (209) 334 (163%) (320) 153 (24)Belgium (331) 205 (261%) (354) 117 (59)UK 62 16 299% 31 7 4Continental Europe (12) 27 (143%) (15) 10 (14)Asia 72 86 (16%) 18 19 24
Net profit General Account (325) 312 (204%) (155) 37 118Net profit attributable Group (534) 646 (183%) (475) 191 95
Funds under management (EUR bn)** 70.2 70.1 0% 70.8
Net shareholders' equity 7,930 9,649 (18%) 7,477Belgium 2,730 3,508 (22%) 2,234UK 941 609 55% 859Continental Europe 862 1,004 (14%) 774Asia 1,549 1,515 2% 1,398General Account 1,847 3,013 (39%) 2,213
Net equity per share (EUR) 3.15 3.90 (19%) 2.89
Earnings per share (EUR) * (0.21) 0.26 (181%) *
Net cash (EUR bn) 0.8 2.3 (65%) 2.0
509 November 2011 I
Eur mio 9M 11 9M 10 9M 11 9M 10 9M 11 9M 10
Belgium 75% 3,305 3,824 1,293 1,231 4,598 5,055
United Kingdom 100% 36 19 1,523 821 1,559 840
Continental Europe 1,692 2,790 394 325 2,086 3,115 Consolidated entities 1,692 2,790 328 325 2,020 3,115
Portugal 51% 864 1,364 180 175 1,044 1,539 France 100% 229 290 0 0 229 290 Luxembourg 50% 568 1,051 0 0 568 1,051 Ukraine 100% 0 2 0 0 0 2 Germany 100% 31 32 0 0 31 32 Turkey 100% 0 51 0 0 0 51 Italy 25% 0 0 148 150 148 150
Non-consolidated partnerships 0 0 66 0 66 0 Turkey (Aksigorta) 31% 0 0 66 0 66 0
Asia 4,178 4,340 463 385 4,641 4,725 Consolidated entities 248 237 0 0 248 237
Hong Kong 100% 248 237 0 0 248 237 Non-consolidated partnerships 3,930 4,103 463 385 4,393 4,488
Malaysia 31% 435 577 368 303 803 880 Thailand 31%/13% 701 529 95 82 796 611 China 25% 2,700 2,897 0 0 2,700 2,897 India 26% 94 100 0 0 94 100
Total 9,211 10,973 3,673 2,763 12,884 13,736
Life Non-Life Total
Detailed overview inflows 9M 2011By segment/ country/business
609 November 2011 I
Lower Life inflows, Non-Life up across all segmentsTotal inflows at EUR 12.9 bn, -6%; Non-Life up 33%
Asia* :Life : EUR 4.2 bn, -4% Increased focus on regular premiums Banks across Asia focus on liquidity & growing deposit baseNon-Life : EUR 0.5 bn, +21% +20% growth in Malaysia
Continental Europe* :Life : EUR 1.7 bn, -38% Portugal, -37% due to macro-economic environment Luxembourg, -46%, due to lower benefit FoS regulationNon-Life : EUR 0.4 bn, +21% Portugal : further up in Healthcare driven by strong Médis brand Italy : slightly down continuing focus on profitability Turkey : included since August 11, EUR 66 mio in 2 months
Belgium :Life : EUR 3.3 bn, -14% Strong competition from banks in savings Lower appetite for unit-linked productsNon-Life : EUR 1.3 bn, +5% Growth outperforms the market Mix of portfolio growth & tariff increases
UK :Non-Life : EUR 1.5bn, +86% Tesco Underwriting : EUR 579 mio YTD Ageas Insurance : Inflows +15% Household +29%; Commercial lines +13% Life : EUR 36 mio, +89% Increasing market share of Ageas ProtectOther : EUR 207 mio, +71% Rias, KFFS & Castle Cover drive growth
* incl. Non-controlling interests at 100%
709 November 2011 I
InsuranceLife underlying resilient, Non-Life strongly improved
Net loss of EUR 209 mio (vs. EUR 334 mio positive) Negative impact financial turmoil of EUR 615 mio, impacting mainly
Belgium & Continental Europe, incl. EUR 503 mio impairment charge on Greek bonds (EUR 353 mio in Q3)
Life at EUR 288 mio negative (vs. EUR 283 mio positive) Impairment Greek bonds & equities of EUR 584 mio
Belgium & Continental Europe hit by impairments; Belgium includes EUR 15 mio for newly introduced State contribution;
Non-Life at EUR 57 mio (vs. EUR 41 mio) Impairment Greek bonds & equities of EUR 31 mio hitting mainly
Belgium
Strong performance in UK & Asia : EUR 53 mio net contribution
Total 9M 11 adverse weather related costs of EUR 30 mio of which EUR 12 mio in Q3 11;
Other at EUR 23 mio (vs. EUR 9 mio) KFIS & Castle Cover contribution of EUR 6.6 mio
EUR 7 mio amortisation costs on intangible assets & EUR 1 million acquisition and financing costs Castle Cover earlier this year.
EUR mio 9M 11 9M 10
Gross inflow 8,425 9,248
Operating costs 628 588
Technical result 257 374
Operating margin (316) 360
Profit before tax (340) 583
Net profit after tax & non-controlling interests (209) 333
Life FUM (EUR bn)* 70.2 70.1
* Adjusted for the reclassification of Fortis Luxembourg Vie & Ageas Deutschland to ‘Assets and Liabilities held for sale’
809 November 2011 I
248 244
2,309 2,075
488223
780763
3,8243,305
9M 10 9M 11
359 362
396 420
370 399106 113
1,231 1,293
9M 10 9M 11
(14%)
Life In EUR mio
Non-LifeIn EUR mio
Unit-Linked
Savings
Traditional
Other
Fire
Accident & Health
Motor
+5%
Group Life
BelgiumContinued lower inflows in Life, while Non-Life inflows confirm positive trend
Individual Life YTD down to EUR 2.5 bn vs. EUR 3.0 bn in 2010, due to
lower sales in Unit-Linked and savings products Bank channel at EUR 2.0 bn YTD, well below last year’s
levels (EUR 2.5 bn) due to competition from banking products Broker channel at EUR 0.5 bn YTD, -11%, similar trends bank
channel
Group Life At EUR 0.8 bn YTD, -2%, due to timing differences
Funds under Management Stable at EUR 48.6 bn vs. end of June 2011 Non UL-linked funds up to EUR 42.6 bn; UL funds down to
EUR 6.0 bn, -7%
Property and Casualty (Fire, Motor & others) Inflows up 5%, all product lines contributing well, especially
Fire (+8%) and Motor (+6%) Growth driven by a combination of tariff increases and
portfolio growth
Accident & Health Health Care +1% driven by new production & medical
indexation impact
909 November 2011 I
BelgiumImpairments cloud Life performance; Intrinsic performance Non-Life on track
10/03/2010 I page 9
Net profit at EUR 331 mio negative (vs. EUR 205 mio) 9M 11 impairment charge on Greece & equities of EUR 565
mio of which EUR 419 mio in Q3
9M 11net profit excluding impairments on Greek sovereigns at EUR 139 mio
Positive evolution Non-Life performance confirmed despite adverse weather impact August storms in Fire
Strong IFRS Solvency ratio at 176 %
Life at EUR 329 mio negative (vs. EUR 186 mio) 9M 11 impairment charge on Greece & equities of EUR 535
mio of which EUR 398 mio in Q3
Life FUM at EUR 48.6 bn, +2% vs. 2010, stable vs. end of June
Non-Life at EUR 2 mio negative (vs. EUR 19 mio) 9M 11 impairment charge on Greece & equities of EUR 30 mio
of which EUR 21 mio in Q3
Net impact adverse weather events of August of EUR 12 mio; 9M 11 impact of EUR 18 mio
Further improvement Motor and strong performance Health; Fire withheld by impact August storms
EUR mio 9M 11 9M 10
Gross inflow 4,598 5,055
Operating costs 343 329
Technical result 198 284
Operating margin (364) 223
Profit before tax (495) 378
Net profit after tax & non-controlling interests (331) 205
Life FUM (EUR bn) 48.6 47.9
1009 November 2011 I
61.6 63.6 64.9 66.5
37.4 36.7 35.9
99.0% 100.3% 100.8% 103.1% 107.4% 105.6% 103.3%
71.0 69.366.3
36.4 36.836.336.8
2006 2007 2008 2009 2010 9M 10 9M 11
Combined ratio AG Insurance FY 06 – 9M 11
Belgium, combined ratio improved on last yearImprovement thanks to sound technical performance in Motor and Liability
Expense ratioClaims ratio
Strong Motor and Health performance Excluding Workmen’s Compensation, Combined Ratio at
100.3% YTD vs.102.5%
Motor segment further improved to 94.9% YTD (Q3 11 at 91.4%)
Fire combined ratio at 111.5% YTD with August storms as main factor explaining a Q3 combined ratio of 119.7%
Solid claims result in Health (combined ratio at 96.1%)
Workmen’s Compensation remains high at 128.0%; Q3 11 at 122.8%. Weak performance still related to exceptional high number of deceased and permanent disability claims.
Corrective set of measures taken Non-Life implements new tariff increases as of 1st January
2012, including a Natural Catastrophe tariff increase representing a premium growth of 6% in the Fire portfolio
Motor : review of material damage offer implemented as from January 2011 is paying off
Workmen's Compensation: on going corrective measures including a new tariff structure and pruning of portfolio
1109 November 2011 I
821
1,523840
1,55936
19
9M 10 9M 11
52 56
445
982207
352
118
133
821
1,523
9M 10 9M 11
Motor
United KingdomInflow levels substantially increased
Non-Life
Life
Other
Property
Accident & Health
+85%
+86%
Total In EUR mio
Non-LifeIn EUR mio
* including other income
Life Successful roll out of its proposition across the IFA
market (7.8% market share)
Launch of new distribution partnerships
175,000 customers, up 69% on Q3 2010
Non-Life Up 85%, driven by successful launch of Tesco
Underwriting partnership & organic growth in both Commercial and Personal lines
Within Personal lines, Household +29%; Private car and Travel slightly up (excl. Tesco)
Commercial lines +13%, growth resulting fromexpanding product range via brokers
Partnership with Tesco Bank started underwriting as of mid October 2010; Inflows of EUR 680 mio & 1.4 miocustomers in year 1
Other Insurance (including Retail) YTD total income of EUR 207 mio up 71%;
Acquisition Castle Cover late March 2011 will further strengthen Retail capability & add together with KFIS an extra 1 mio customers
1209 November 2011 I
United KingdomBetter overall financial performance despite exceptional claims in Household
10/03/2010 I page 12
Net result at EUR 62 mio (vs. EUR 16 mio) Improved performance overall but especially in private Motor
Robust return from Retail activities
Life at EUR -1.3 mio (vs. EUR -2.8 mio) Continued progress in roll-out of protection business; 7.8% market
share among IFAs end Q3
Non-Life at EUR 40 mio (vs. EUR 9 mio) Improved Motor result through positive impact of management
actions
9M 11 impact adverse weather events of EUR 12 mio, related to adverse weather events end 2010
Other Insurance at EUR 23 mio (vs. EUR 9 mio) Strong commission income and partnership growth
KFFS & Castle Cover contributed EUR 6.6 mio, including EUR 7 mioamortisation of intangible assets & acquisition and financing costs Castle Cover earlier this year
EUR mio 9M 11 9M 10
Gross inflow 1,559 840
Operating costs 119 85
Technical result 43 (1)
Operating margin 48 2
Profit before tax 90 19
Net profit after tax & non-controlling interests 62 16
1309 November 2011 I
UK, continued improvement confirmedContinental Europe and Asia remain below 100%
Expense ratioClaims ratio
Combined ratio UK FY 06 – 9M 11UK : continued positive impact from corrective measures Improved overall combined ratio at 99.9% including Tesco
Underwriting
Motor : Selected tariff increases in 2010 in line with underlying risk led to an improved combined ratio (98.2% vs 106.9% at 9M 10)
Household : combined ratio at 100.4%, PY loss ratio of 5.8%; continued improvement quarter on quarter (Q1 11 121.9%; H1 11 104.4%; 9M 10 98.9%).
Travel : combined ratio for 9M 11 (106.3%) improved from 9M10 (122.0%) due to management actions over the last 12 months and Volcanic ash event in 2010
Continental Europe: 97.5% vs. 99.0% (9M10) Portugal : combined ratio at 93.3% vs 90.5% in 9M10
Italy : first impact of implemented corrective measures noticeable
Asia : 93.0% vs 96.2% (9M10)
70.279.7 73.1
28.227.7
28.827.7 28.0
29.5 26.4
98.4%107.4%
101.9%108.1% 109.5% 104.9%
99.9%
73.580.4 75.481.5
2006 2007 2008 2009 2010 9M 10 9M 11
1409 November 2011 I
174 185
77107
455730
44326394
9M 10 9M 11
194 162
1,086
276
1,418
1,161
93
92
2,791
1,691
9M 10 9M 11
Life Portugal, -37% : Difficult economic environment continues,
inflow level evolution in line with Portuguese market. Remains domestic market leader based on FuM with 26% share
Luxembourg, -46% : related to lower sales of FOS (Freedom of Services) product benefiting less from European Savings Directive but also in line with market
France, -21% : decrease due to disappearance distribution network Fortis Banque France & worsening market
Unit-linked business sales EUR 1.2 bn, Savings products at EUR 0.3 bn
Funds under Management At EUR 14.1 bn vs. EUR 23.1 bn end 10; Luxembourg &
Germany reclassified into ‘Held for Sale’
FuM down 7%, following lower inflows & negative market value adjustment
Non-Life GWP up 23% year-to-date, thanks to first time inclusion
Turkey (EUR 66 mio)
Portugal : +3% thanks to strong performance Healthcare (Médis), in a stagnating market amidst economic uncertainty
Italy :almost unchanged with last year, focus on increasing profitability in Motor remains;
+23%
Accident & Health
Motor
Unit-LinkedSavingsTraditional
Group
(-38%)
OtherFire
Life In EUR mio
Non-LifeIn EUR mio
Continental EuropeInflows impacted by adverse evolution financial markets
1509 November 2011 I
Continental EuropeNet profit impacted by impairments; underlying performance remains strong, particularly in Non-Life
10/03/2010 I page 15
Net result at EUR 12 mio negative (vs. EUR 27 miopositive)
Life at EUR 17 mio negative (vs. EUR 22 mio) 9M11 impairment charge on Greek bonds & equities of EUR 50
mio of which EUR 18 mio in Q3
Additional losses realized on sale equities & fixed income
Operating costs further down on continued streamlining insuranceportfolio
Non-Life at EUR 6 mio (vs. EUR 5 mio) Operating margin +46% driven by better technical performance &
higher financial income
Operating costs +8%
Net result Turkey (AKsigorta) : EUR 1.2 mio (2 months contribution)
EUR mio 9M 11 9M 10
Gross inflow 2,020 3,116
Operating costs 140 146
Technical result (4) 76
Operating margin (22) 81
Profit before tax (9) 99
Net profit after tax & non-controlling interests (12) 27
Life FUM (EUR bn)* 14.1 23.2
* Adjusted for the reclassification of Fortis Luxembourg Vie and Ageas Deutschland to “Assets & Liabilities Held for Sale”
1609 November 2011 I ** MAT: Marine Aviation & Transport
AsiaStable commercial performance, very close to last year’s record first quarter
Life Hong Kong, +5%, Solid growth of 23% in new business on APE
basis, following improved productivity in agency channel and growth in emerging IFA channel.
China, -7%, Because of new banca regulations and monetary tightening, last year’s single premium campaign was not repeated this year. Good persistency resulted in strongly increased renewal premiums, compensating for the shortfall in single premiums. Regular premium up 29% vs 9M 2010.
Malaysia, -25%, Lower single premiums in wake of monetary tightening. Regular premiums up+4%
Thailand, +33%, Continued strong growth in both bank and agency channel
India, -6%, New business down 29% following regulatory changes. Renewals up 35%
Funds under Management Hong Kong : EUR 1.4 bn,+2% vs. end 10 Incl. partnerships (at 100%): EUR 18.5 bn, +9% vs. end 10
Non-Life Malaysia, +22%, driven by Motor and Corporate MAT** lines. Thailand, +17%, across all lines and distribution channels.
179
3,8253,969
217173 13318 3
Q3 10 Q3 11
251288
134176
Q3 10 Q3 11
(4%)
Non-Motor*
Motor
SavingsGroup
Traditional
* Non-motor includes Fire, MAT, Accident & Health and other lines
Life
Non-LifeIn EUR mio
In EUR mio
4,340 4,178
+21%385
464
Unit-Linked
1709 November 2011 I
10/03/2010 I page 17
EUR mio 9M 11 9M 10
Gross inflow* 248 237
Operating costs 27 28
Technical result 19 16
Operating margin 22 54
Profit before tax* 74 87
Net profit after tax & non-controlling interests* 72 86
Life FUM (EUR bn)** 1.4 1.3
Net profit of EUR 72 mio (vs. EUR 86 mio) 9M10 net profit included EUR 35 mio capital gains on sale of Fortis
Centre in Hong Kong; 9M11 net profit includes EUR 10 mio capital gains on disposal of Taiping Pension
Hong Kong : Net profit slightly down on a comparable basis
Non-consolidated partnerships : EUR 61 mio vs. EUR 39 mio, driven by organic growth and non-recurring items
Life net profit at EUR 59 mio (vs. EUR 78 mio) Hong Kong : EUR 19 mio vs. EUR 56 mio;
Excl. last year’s EUR 35 mio capital gain on sale of Fortis Centre, net result is -6%, due to strong new business growth and impacted by adverse markets and currency rates
Non-consolidated partnerships : EUR 49 mio vs. EUR 30 mio;
+60%, driven by EUR 10 mio capital gains from disposal Taiping Pension & organic growth.
Regional costs : stable at EUR 8 mio.
Non-Life net profit at EUR 13 mio (vs. EUR 8 mio) Relates to operations in Malaysia and Thailand.
Both the intrinsic operational performance and technical resultsremained strong, plus tax recoveries in Malaysia (EUR 3 mio).
AsiaNet profit significantly up on a comparable basis
* Including Inflow (100%) & Profit (Ageas share) from partnerships respectively**** Including partnerships, FUM increased to EUR 18.5 bn
1809 November 2011 I
Investment portfolio at fair value on 30 September 11 Equity investments down, other asset classes fairly stable
Investment portfolio (EUR 59.5 bn) Fixed Income
No major shifts in composition
90% portfolio rated A or higher, 94% investment grade
Gross unrealized gains amounted to EUR 1.4 bnvs. EUR -0.6 bn end of June
Equities
Down to EUR 1.7 bn (vs. EUR 2.6 bn end of June) following divestments and lower fair value
Gross unrealized loss of EUR 24 mio (pre-tax)
Real Estate
Gross unrealized gains slightly up to EUR 1.2 bnSovereign bonds55%
Real Estate7%
Equities3%
Corporate bonds
34%
Structured Credit Inst1%
Gross unrealized gains on total investmentportfolio of EUR 2.6 bn
As at 30 September 2011
1909 November 2011 I
Government bonds EUR 33.0 bn Corporate bonds EUR 20.1 bn
Investment portfolio : Fixed Income at EUR 53.5 bn at fair valueSituation as per 30 September 2011
Gross unrealized gains before tax and shadow accounting (UCG) of EUR 0.9 bn vs EUR (0.5) bn end 2010
Disposal of S-E government bonds mainly reinvested in Belgium & The Netherlands
Gross unrealized gains of EUR 0.5 bn
Quality of corporate bond portfolio remains high with 95% investment grade, 84% rated A and 62% rated AA or AAA
Banking/ Other financials : 80% single A or higher; 57% ratedAA or higher; no single position > EUR 0.3 bn
Hybrid securities: down to below EUR 0.6 bn* Classified partly as ‘Available for Sale’ and partly as ‘Held to Maturity’
Austria2.5
Banking5.0
Othercorporates4.9
Other financials1.7
Government related8.5
Greece0.6
Belgium14.0
Spain1.1
Italy 2.0
Germany2.7
The Netherlands
1.6
Portugal*1.0
France4.3
Ireland0.5
Others2.7
2009 November 2011 I
3.2
6.2
2.62.5
1.7
1.4
1.31.2
0.8
2.1
0.80.7
0.6
(0.8)(0.2)
1.41.31.3
FY 09 H1 10 H1 11 9M 11
Impairment Greece Italy Spain Portugal
Exposure on Southern European sovereigns further reduced…Exposure at amortized cost and after non-controlling interests of EUR 3.6 bn
Exposure on S-E souvereigns at amortized cost ,after impairments and non-controlling interests further reduced to EUR 3.6 bn
Additional reduction of primarily Italian & Spanish sovereigns since end June 11 of EUR 1.3 bn
Net exposure (after non-controlling interests) at fairvalue of EUR 3.2 bn
Additional gross impairment on Greek sovereigns of EUR 754 mio based on fair value in Q3 on entire portfolio
Q3 11 net impact of EUR 353 mio (after profit sharing, tax and non-controlling interests)
9M 11 net impact of EUR 503 mio
Net of impairments, Greek bonds held at 38% of historical/amortized cost.
12.9
5.5
3.6
6.1
In EUR bn
2109 November 2011 I
10/03/2010 I page 21
Equity funds0.1
Equities0.8
Mixed funds & others0.2
Real Estate funds0.6
Investment portfolio : Equities at EUR 1.7 bn at fair value Situation as per 30 September 2011
Equity investments at amortized cost down to EUR 2.0 bn vs. EUR 2.6 bn end of June (vs. EUR 2.3 bn end 10) due to divestments and lower fair value of equities and equity funds
Limited unrealized loss (EUR 24 mio) vs. EUR 108 mio unrealized gains end of June (vs. EUR 139 mio gain end 10)
Net impairment charge of EUR 112 mio taken in Q3 following declining equity markets
Ageas’ impairment policy of equities
If fair value <75% of average purchase price of the particular equity
OR
If fair value is consistently below the purchase price during 4 quarters
Equity portfolio (EUR 1.7 bn)
2209 November 2011 I
General AccountNegative net result driven by EUR 258 mio legacy related charges
Net loss of EUR 325 mio driven by legacy issues
RPN(i) liability at EUR 145 mio EUR 320 mio positive impact on 9M fair value RPN(I) liability,
driven by decreased market price CASHES (from 50% to 33%)
Positive quarterly impact of EUR 438 mio
Equity value RPI at EUR 850 mio, down EUR 83 mio Net 9M result EUR 315 mio negative (EUR 140 mio Ageas’s
share)
Revaluation interest rate swaps lead to a EUR 128 mio positive result at RPI at 100%, accounted via equity (EUR 57 mio for Ageas)
Call option BNP Paribas shares valued at EUR 361 mio Down EUR 248 mio vs. FY 10 ( down EUR 333 mio vs. end
June) mainly due to lower BNP Paribas share price (EUR 30.05 vs. EUR 47.68)
Additional fair value adjustment of EUR 150 mioon Fortis Tier 1 Debt Securities 9M11 impact of EUR 190 mio; Securities valued @ 80% of par
accounted under “Loans & receivables”
Other items Net interest margin of EUR 9 mio negative
Operating expenses slightly down to EUR 38 mio
EUR mio 9M 11 9M 10
Net interest income (9) (10)
Capital gains (130) (224)
Result of associates (139) 183Change in impairments & provisions (0) 1
Total expenses (38) (40)
Profit before tax (326) (97)Net profit after tax & non-controlling interests (325) 312
Balance sheet items 9M 11 FY 10
RPI 850 933
Call option BNP Paribas 361 609
RPN(I) (145) (465)
Tier 1 760 -
Net cash/deposits 827 2,210
2309 November 2011 I
General AccountComposition of the net result remains very diverse and volatile
Net profit
Q3 11 : EUR (155) mioIn EUR mio
(83) (140)(150)
(190)
(333)(248)
438320
(27) (67)
9M 11 : EUR (325) mioIn EUR mio
Other items
RPN(i)
Tier 1 provision
Call option BNPP
RPISum of legacy issues:
EUR (128) mio
Sum of legacy issues:
EUR (258) mio
2409 November 2011 I
Balance sheet valueIn EUR bn
Net result impactIn EUR mio
Valuation Call option BNP Paribas shares at 30 September 2011Value down mainly due to lower BNP Paribas share price
-6.8%-10.4%Dividend yield +1%
+3.75% +11.9% Dividend yield -1%
-24.6%-26.3%Implied volatility -5%
+25.8%+26.7%Implied volatility +5%
9M 11H1 11Sensitivities
Valuation
EUR 66.672
5.29%
33%
EUR 47.69
FY 10
Strike price/share
Dividend yield
Volatility
BNP share price
Model parameters(Black & Scholes)
EUR 66.672
4.95%
30%
EUR 53.23
H1 11
EUR 66.672
8.76%
49%
EUR 30.05
9M 11
85
(248)(271)
FY 10 H1 11 9M 11
694
361
609
FY 10 H1 11 9M 11
2509 November 2011 I
(118)
273
320
(149)
2720
FY 10 H1 11 9M 11
Net result impact
Balance sheet valueIn EUR bn
In EUR mio
Valuation RPN(I) as at 30 September 2011Fair valuation liability down on lower market price CASHES
Valuation
57.8%
410 bps
41%
4.3%
EUR 1.87
H1 11
33.2%
685 bps
69%
6.1%
EUR 1.31
9M 11
Price CASHES (% of par)
Discount rate
Share price volatility
Dividend yield
Ageas’s Share price
Assumptions
Detailed sensitivity analysis
- EUR 97 mioPrice CASHES from 33% 23%
+ EUR 88 mioPrice CASHES from 33% 43%
9M 11Sensitivities
Guarantee Belgian State Value RPN(i)
See IFS Q3 2011
Variance Cashes priceHigher spreads
Other
(501)
(127)
(66)
(82)(465)(583)
(399)
(18)(145)
FY 10 H1 11 9M 11
2609 November 2011 I
Ageas’s equity Value Net book value assets RPI*In EUR bn
In EUR bn
In EUR bn In EUR bn
Principal & interest collections In EUR mio
Fair value - IFRS
Valuation items Royal Park Investments as at 30 September 2011Equity value down on lower marked-to-market value
Net result impact – part AgeasIn EUR mio
Commercial paper Other Senior + Super Senior
Principal collections Interest collections* Net book value = Economic recovery value as of 31 December 31 under B-GAAP, 2010minus Redemptions until September 30, 2011
(57)
(140)
131
FY 10 H1 11 9M 116.6
6.4
7.0
FY 10 H1 11 9M 11
581919
169
71
1,709
6521,540112
1,031
FY 10 H1 11 9M 11
4.3 4.6
2.51.8
7.16.1
4.6
1.6
6.2
FY 10 H1 11 9M 11
8.8
9.1
10.0
FY 10 H1 11 9M 11
899
850
933
FY 10 H1 11 9M 11
Outstanding debt
2709 November 2011 I
Financial implications at 30 September 2011
Discretionary capital
Solvency
Net cash General Account
Net result
Ageas acquired Fortis Bank Tier1 Debt Securities95% of outstanding debt acquired at par, fair value at 80%
Background In 2001, Fortis Bank SA/NV issued a EUR
1 bn subordinated Tier 1 securities* with a support agreement granted by Fortis parents (now Ageas)
Tier 1 securities included incentives to call at first call date (year 10): a 100 bps step-up feature and, via the support agreement, holders could exchange par amount for stock ( ageas shares) if not called
Events in 2011 27/28 April: Ageas AGM does not grant authorized shares for the support, only exchange in cash possible
27 May : Non-call Fortis Bank SA/NV
18 August : NBB grants consent to exchange securities for cash
H1 11 : Ageas records EUR 40 mio provision for difference par value versus fair value
26 September : Ageas acquires EUR 953 mio Tier 1 securities which yield at 3m-EURIBOR + 237 bps after first call date; call possible at every quarterly coupon
30 September : Ageas records EUR 150 mio additional charge to reflect estimated fair value
Financial instrument accounted at fair value
Fair value estimated at +/- 80% of nominal value (incl. illiquidity premium (8%))
Total charge of EUR 190 mio at 30 September
95% of outstanding debt acquired at par, cash out EUR 953 mio
Besides P&L charge, not affected
Concept replaced by net cash position as of Q3
* 6.5% Redeemable Perpetual Cumulative Coupon Debt Securities
2809 November 2011 I
0.08.28.0Liabilities held for sale0.08.48.2Assets held for sale
17.1
2.21.30.60.5
2.41.6
0.3H1 11
17.10.40.70.9
0.3
2.41.60.02.4
H1 11
9.5
2.51.30.60.7
2.41.7
0.5Q4 10
9.50.50.60.9
0.7
2.41.70.02.7
Q4 10
In EUR bn
0.2RPN(I)
15.9
1.91.3
0.2
2.41.6
0.39M 11
15.90.40.40.9
0.1
2.41.60.81.1
9M 11
Tier 1 debt securities
Net equityFRESH
Other
Provision Dutch StateNITSH I, II & Hybrone
ST (EMTN )Liabilities
Loan to operating ciesBalance sheet total
Call option on BNP P sharesRoyal Park Investments
Other
Claim ABN AMRO BankDue from Fortis Bank & AG Ins
Cash & Deposits at banksAssets
Cash position of the General AccountAs per Q3 11, discretionary capital concept abandoned
9M 11 evolutions:Net cash at EUR 0.8bn, down on acquisition Tier 1 Debt securities (EUR 1.0bn), acquisition AKSigorta (EUR 0.2bn) dividend payments (EUR 0.1bn) and other (EUR 0.1bn).
Q3 11 evolutions:Decrease net cash due to acquisition Tier 1 Debt Securities (EUR 1.0bn), acquisition AKSigorta (EUR 0.2bn) and share buy-back programme (EUR 0.1bn)
2909 November 2011 I
(170)
8,247
7,477
7,928
7,477(358)
(320) (155)
(92)(197)
(157)
126111
892
0
FY 10Net re
sult I
nsura
nce
Net resu
lt Gene
ral Acc
ount
Change
unrealize
d gain
s
Divide
nd
Foreign
exch
ange &
Othe
r
H1 11Net re
sult I
nsura
nce
Net resu
lt Gene
ral Acc
ount
Change
unrealize
d gain
s*
Buy-ba
ck
Foreign
exch
ange &
Othe
r
9M 11
FY 10 H1 11 9M 11EUR 3.19 EUR 2.89 EUR 3.15
Shareholders’ equity / share
Shareholders’ equity up to EUR 7.9 bn vs. H1 11Improved unrealized gains on investment portfolio
* including charge related to reclassification of Portuguese sovereigns as ‘Held to Maturity’
Shareholders’ equity by segment Belgium : EUR 2,730 mio
Continental Europe : EUR 862 mio
United Kingdom : EUR 941 mio
Asia : EUR 1,549 mio
General Account : EUR 1,846 mio
3009 November 2011 I
Ageas announced a share buy-back programme on 24 AugustAgeas currently owns 4.6% of its outstanding shares
Buy-back programme of up to EUR 250 mio of its outstanding shares
Buy-back programme launched as of 24 August For a period ending 23 February 2012
Independent broker mandated to execute the programme
Shares to be held as treasury shares until further notice
On 30 September, Ageas bought back 69 mio shares (2.62%)
As per 4 November, Ageas acquired120 mio shares for a total amount ofEUR 158 mio (corresponding to 4.6% of the total amount of outstanding shares)
3109 November 2011 I
3.9
2.20.8 1.0 1.2
6.9
3.42.1
3.4
0.30.5
0.4
9.3
0.37.2
Total available capital
Solvency remains well above required minimumImpact fixed income valuation on Belgium & CE, Tesco inclusion on UK
* Under local Asian solvency regulation, different valuation rules apply leading to a solvency ratio for AICA of 468% end of March 11.
Required Regulatory minimum
Insurance General AgeasExcess capital Account
EUR 3.7 bn EUR 2.1 bn EUR 5.9 bn
176% 230%Solvency Ratio
Actual / Min Actual / Min Actual / Min Actual / Min Actual / Min Actual Actual / MinBelgium United Continental Asia Insurance General Ageas
Kingdom Europe Account
*
201% 310% 210%
End September 2011
270%
Consolidation adjustments
3209 November 2011 I
7.2 7.2
0.7
3.4
0.9 0.9
7.6
(0.2)(0.9)
net impact of stress test on solvency ratiocombining theoretical losses on sovereign bonds:
70% on all Greek 50% on all Portuguese & Irish 30% on all Italian & Spanish
Total available capital
Ageas’s Insurance solvency ratio resilientBuffer unrealized gains can absorb impact severe stress tests
Required Minimum Margin (RMM)
210% Solvency Ratio 210%
Based on data end of September 11
Actual
EUR 3.7 bn excess capital
Actual Minimum
completely absorbed by buffer of unrealized gains
Filters: EUR 0.7 bn revaluation
investment property (EUR 0.9 bn) revaluation
AFS investments (EUR 0.2 bn) other
Insurance total equity
Regulatory capital
3309 November 2011 I
InsuranceNet results marked by impairments following recent
events in financial markets
Intrinsic performance remains solid
Excluding impairments, performance up vs. last year
GroupVolatility due to accounting impact legacy issues
remains
Earlier 2011 result outlook not maintained Inflows : close to 2010 levels
Result : impact impairments & uncertainty financial markets make it difficult to provide updated 2011 forecast
Conclusions
3409 November 2011 I
Financial Calendar 2012
30 April Ex-dividend date – Start dividend election period
25 AprilAnnual shareholders’meeting Brussels
20 FebruaryAnnual results 2011
26 April Annual shareholders’meeting Utrecht
14 May 3M results 2012
31 May Payment 2010 dividend
21 May End of dividend election period
6 August 6M results 2012
7 November 9M results 2012
3509 November 2011 I
Disclaimer
Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Future actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in Ageas’score markets, (ii) performance of financial markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) increasing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the Economic and Monetary Union, (x) changes in the policies of central banks and/or foreign governments and (xi) general competitive factors, in each case on a global, regional and/or national basis.
In addition, the financial information contained in this presentation, including the pro forma information contained herein, is unaudited and is provided for illustrative purposes only. It does not purport to be indicative of what the actual results of operations or financial condition of Ageas and its subsidiaries would have been had these events occurred or transactions been consummated on or as of thedates indicated, nor does it purport to be indicative of the results of operations or financial condition that may be achieved in the future.
3609 November 2011 I
Investor Relations
Tel:
E-mail:
Website:
+ 32 2 557 57 34+ 31 30 2525 305
ir@ageas.com
www.ageas.com
Investor Relations
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