ageas (AGS) H2 2014 earnings summary

Executive summary

• Insurance net profit rose 13% to EUR 737m; Group net profit fell 16% to EUR 476m, reflecting a EUR 261m General Account loss, including RPN (i) revaluation and a FortisEffect provision.

• Gross inflows increased 11% to EUR 25.8bn, led by Life growth in Asia and Continental Europe; proposed gross cash dividend rose 11% to EUR 1.55 per share.

• Underlying progress continued across most activities, while management identified areas for improvement and planned an Investor Day on Solvency II and “Beyond 15.”

Financial highlights

• FY 14 gross inflows were EUR 25.781bn, up 11%; inflows from non-consolidated partnerships reached EUR 15.382bn, up 21%.

• Insurance net profit was EUR 737m, up 13%; Life contributed EUR 533m, up 22%, while Non-Life contributed EUR 154m, down 24%.

• Group net profit was EUR 476m, down 16%; Q4 net profit was EUR 194m versus EUR 57m in Q4 13.

• Shareholders’ equity reached EUR 10.223bn, up 20%; net equity per share rose to EUR 46.60 from EUR 37.65.

• Unrealized gains and losses reached EUR 2.6bn, or EUR 11.84 per share, a historical high; FY 14 included EUR 192m of net realized capital gains.

Outlook and guidance

• Vision 2015 measures: Life/Non-Life mix 67/33; combined ratio 99.6% versus 99.1% in FY 12, above the <100% target; emerging-market capital share 17.5% versus 12.1%.

• Insurance ROE was 8.8%, below the >11% target; ROE excluding unrealized gains/losses was 11.4%, versus 10.7% in FY 12.

• Guaranteed operating margin was 0.89%, within the 85–90 bps target range; Non-Life’s 97% combined-ratio objective for a low-rate environment was not reached.

• Proposed EUR 1.55 gross cash dividend per share, within the 40–50% Insurance-result payout policy; AGM approval scheduled for 29 April, with ex-dividend on 6 May and payment on 8 May.