Post on 14-Jan-2016
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EUREKO
1
Eureko 2006 Interim Results
“Strong financial performance sustained ”
“New organisation and management team in place”
Gerard van Olphen
Chief Financial Officer
17 August 2006
EUREKO
www.eureko.net 22006 INTERIM RESULTS 17 AUGUST 2006
Disclaimer
This document contains certain forward-looking statements with respect to certain of the plans and objectives of the Company and its subsidiaries (together the “Group”) and to the Group’s current expectations relating to its future financial condition and performance. The Group may also make forward-looking statements in other written materials. In addition, the Group’s senior management may make forward-looking statements orally to analysts, investors, representatives of the media and others. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations and revenues are forward-looking in nature. These forward looking statements are based on management’s current views, estimates and assumptions about these future events. By their nature, forward-looking statements are subject to certain risks and uncertainty that may cause the Group’s actual results to differ materially from those set forth in the Group’s forward-looking statements. The Company undertakes no obligation to update the forward-looking statement contained in this presentation or any other forward-looking statement made in any form by the Group.
The information contained herein is not an offer of securities for sale in the United States of America or any other country. Eureko B.V. has not registered and will not register any securities under the U.S. Securities Act of 1933, as amended, and securities may not be offered, sold or delivered in the United States of America absent registration or an exemption from registration.
EUREKO
www.eureko.net 32006 INTERIM RESULTS 17 AUGUST 2006
1. Main developments
2. Financial highlights per business line
3. New organisation and management team in place
4. Summary and Outlook
Appendix
Agenda
EUREKO
www.eureko.net 42006 INTERIM RESULTS 17 AUGUST 2006
Development of key financial indicators, June 2006
• Net profit almost doubled to € 669 million, from € 338 million at June 2005
• Profit before tax increased 119% to € 849 million from € 387 million
• Gross written premiums up to € 7,910 million, from € 3,471 million, (+128%)
• Total equity remained stable at € 8.5 billion, compared to December 2005
• Debt leverage slightly increased to 10.9% from 9.6% at December 2005
• Return on adjusted equity satisfactory at 17.7% from 19.2% at June 2005
• Earnings per ordinary share increased by 36% to € 2.28 from € 1.68 at June 2005
• Proposed interim dividend per ordinary share at € 0.31
Notes: All financials are statutory: Interpolis is included in the Balance Sheet for 2005 and 2006 and included in the
Income Statement for 2006. Return on adjusted equity is measured excluding goodwill, hybrid capital and preference
shares
EUREKO
www.eureko.net 52006 INTERIM RESULTS 17 AUGUST 2006
Profit before tax improved 119% …… from € 387 million to € 849 million
170
387
84970
300
1407 10 31
Profit beforeTax H1 2005
Delta Life Delta Non-Life Delta Health Delta Banking DeltaAssociateCompanies
and StrategicInvestments
Delta Holding &Other
Profit beforeTax H1 2006
€ million
Life Non-Life Health Banking Associates Hold./Other Total
2006 H1 348 304 152 5 150 -110 849
2005 H1 48 164 82 12 160 -79 387
Delta 2006 - 2005 300 140 70 -7 -10 -31 462
557
Pro forma profit
before tax includes
Interpolis
EUREKO
www.eureko.net 62006 INTERIM RESULTS 17 AUGUST 2006
Total equity remained stable at € 8.5 billion
8,5188,525 270
669
178499
85
Total equity Dec. 2005 Issue of new shares Net profit 2006 H1 Dividend 2005 incl.dividend on prefs
Revaluations (-270), FXdevelopments & Other
(-85)
Total equity J une 2006
€ million
355
EUREKO
www.eureko.net 72006 INTERIM RESULTS 17 AUGUST 2006
Gross written premiums increased by 128% …… from € 3,471 million to € 7,910 million
3,471
1,314 1,227930
7,910
3,712
2,633
1,565
Life Non-Life Health Total
203%
68%
100%
H1 2006
H1 2005
€ million
1%
16%
7%
7,371
= Pro forma 2005 includes GWP for Interpolis for Life, Non-Life and Health and the former Public Health Funds for Health
0%2,638
1,544
3,189
EUREKO
www.eureko.net 82006 INTERIM RESULTS 17 AUGUST 2006
1. Main developments
2. Financial highlights per business line
3. New organisation and management team in place
4. Summary and Outlook
Appendix
Agenda
EUREKO
www.eureko.net 92006 INTERIM RESULTS 17 AUGUST 2006
Life insurance continues recovery: positive VNB
2,633
1,314
1,324
2005 H1 2006 H1
180
6
2005 H1 2006 H1
Technical results strongly increased resulting from the merger with Interpolis and the release of a provision for low interest rates of € 65 million. Excluding the one-off effects, growth was at 103% from € 56 million to € 115 million
Gross written premiums increased in all countries, but mainly in the Dutch market because of the inclusion of Interpolis. Excluding the contribution from Interpolis, premium growth in The Netherlands remained stable. Achmea re-entered, this Summer, the market for annuities with a value adding product. Besides growth of GWP, Friends First, grew in investment-only contracts, which, under IFRS, do not contribute to the premium collection. Interamerican showed a 2% growth in a competitive market
€ million
1.3%
-3.0%
2005 H1 2006 H1
New business margin increased as a result of the acquisition of Interpolis, selling more profitable products; at Achmea a lower expense ratio; at Achmea and Interamerican lower acquisition costs and more new value creating product launches by Friends First. Improvements also experienced as a result of the adoption of the European Embedded Value Principles
+100%
2,638Pro forma
GWP includes
Interpolis
EUREKO
www.eureko.net 102006 INTERIM RESULTS 17 AUGUST 2006
Non-Life performance remains very strong
614
1,565
930
2005 H1 2006 H1
24.9% 27.0%
62.3% 58.7%
2005 H1 2006 H1
232
163
2005 H1 2006 H1
Technical results improved as a result of the inclusion of Interpolis, but also because of a lower combined ratio and increased investment results
The combined ratio further decreased as a result of lower claims (e.g. increased congestion, more roundabouts), whilst the expense ratio increased due to commissions paid by Interpolis and higher allocated expenses.
Gross written premiums strongly increased in the Dutch market, at Achmea, as a result of the inclusion of Interpolis, a strong commercial campaign, innovative products and a strong product range, despite pricing pressure experienced
85.7%87.2%Expense
Ratio
ClaimsRatio
€ million
+42%
+68%
1,544Pro forma
GWP includes
Interpolis
EUREKO
www.eureko.net 112006 INTERIM RESULTS 17 AUGUST 2006
Health: strong growth in premiums; modest profitability
1,9623,292
1,003
420
224
2005 H1 2006 H1
7163
2005 H1 2006 H1
The technical result increased by € 8 million compared to the first six months of 2005. The inclusion of Interpolis and positive run-off results from the Occupational Health business are largely offset by the investments in the new basic health insurance both in the Netherlands and Slovakia
The combined ratio increased by additional provisioning for the new basic health insurance. With the introduction of the new basic health system, the claims ratio has become less important due to equalisation of claims between insurance companies, as acceptance of insured is legally required. Main drivers for results are expenses per insured and procurement efficiency for health expenses, the claims on supplementary health insurance and occupational health
Gross written premiums increased by the inclusion of the public health insurance funds per 1 January 2006 (new Dutch health insurance system) from € 1,003 million to € 3,292 million for Health insurance. The number of insured increased by 569,000 to 3.5 million across all our distribution channels, mainly brokers, group contracts and the Rabobank channel
Occupational health insurance grew strongly 87% from € 224 million to € 420 million by the inclusion of Interpolis, which gives Achmea a very strong position in this market
87.8% 92.8%
7.7%9.1%
2005 H1 2006 H1
100.5%
3,712
ClaimsRatio
€ million
+203%
13%
96.9%Expense
Ratio
3,189Pro forma GWP incl. Interpolis,
and Public Health Funds
EUREKO
www.eureko.net 122006 INTERIM RESULTS 17 AUGUST 2006
Health Services: fierce price competition and low absenteeism
153131
2005 H1 2006 H1
-7
8
2005 H1 2006 H1
Strong decline of profit before tax as a result of fierce price competition and lower absenteeism (due to low sickness of clients’ employees). Following the completed restructuring at Achmea, last year, Interpolis subsidiary Commit will start a restructuring programme to improve efficiency. The Interamerican Health Clinics in Greece are all profitable in 2006
Revenues increased by inclusion of Interpolis. Fierce price competition and lower absenteeism in The Netherlands, have a negative impact on the revenues
€ million
17%
EUREKO
www.eureko.net 132006 INTERIM RESULTS 17 AUGUST 2006
Banking experiences pressure on margins
7081
2005 H1 2006 H1
12,64913,234
2,3842,082 1,3171,143
2005 H1 2006 H1
5
12
2005 H1 2006 H1
The profit before tax of Achmea Mortgage Bank decreased from € 18 million to € 16 million, as a result of lower production and declining margins. The main decline in profit before tax comes from Staalbankiers due to strong competition. Friends First Finance continues to grow, supported by the economic development within Ireland
The banking credit portfolio slightly decreased by a decrease at the Achmea Mortgage Bank. The mortgage portfolio at the Achmea mortgage bank decreased by -4%. Growth was established at Staalbankiers (+15%), Achmea Retailbank (+29%) and Friends First Finance (+14%)
Net interest margin declined due to smaller portfolio at Achmea Mortgage Bank and pricing pressure on interest margins
€ million
-58%
-1% 16,35016,459
StaalbankiersOther
Achmea Hypotheekbank
-14%
EUREKO
www.eureko.net 142006 INTERIM RESULTS 17 AUGUST 2006
PZU Figures has been based upon Eureko expectation as limited information has been received from PZU
Other The other associates include contribution from MillenniumBCP and F&C and the sale of Friends Provident and Bank Millennium shares
Associate Companies and Strategic Investments
€ million 2005 H1 2006 H1 delta
PZU 133 116 -13%
Other Associates 27 34 26%
Total 160 150 -6%
EUREKO
www.eureko.net 152006 INTERIM RESULTS 17 AUGUST 2006
1. Main developments
2. Financial highlights per business line
3. New organisation and management team in place
4. Summary and Outlook
Appendix
Agenda
EUREKO
www.eureko.net 162006 INTERIM RESULTS 17 AUGUST 2006
Merger Achmea – Interpolis is progressing fast
21 September 2005Signing of merger Achmea – Interpolis
31 October 2005Economic closing of the merger
15 November 2005Legal closing of the merger
8 December 2005Combined strategy memo approved
16 January 2006Assignments of managers for Holding & Service units
13 February 2006Assignments of Dutch Division managers
22 February 2006Press release on expected FTE reduction
20 March 2006New Division structure approved
May 2006Union and Workers Council approval
1 July 2006Appointment of full management teams for Dutch Divisions
17 July 2006Announcement on reducing the Executive Board per 1 October 2006
EUREKO
www.eureko.net 172006 INTERIM RESULTS 17 AUGUST 2006
Management Team in place per 1 October
• On 18 July, Eureko announced the resignation of Kick van der Pol (Vice-Chairman), Gert van Arkel and Margriet Tiemstra from the Eureko Executive Board, as from 1 October 2006
• From 1 October 2006, the Executive Board will consist of:
- Maarten Dijkshoorn (Chairman and CEO)
- Ernst Jansen (Vice-Chairman)
- Willem van Duin
- Huub Hannen
- Gerard van Olphen (CFO)
- Roel Wijmenga
EUREKO
www.eureko.net 182006 INTERIM RESULTS 17 AUGUST 2006
1. Main developments
2. Financial highlights per business line
3. New organisation and management team in place
4. Summary and Outlook
Appendix
Agenda
EUREKO
www.eureko.net 192006 INTERIM RESULTS 17 AUGUST 2006
Summary and Outlook
We have no reason to re-state or qualify earlier assessments, but:• Pricing pressure is expected to impact Gross Written Premiums in the second half of
2006• Health experiences an uncertain market environment• Integration of Achmea and Interpolis is expected to lead to cost reductions
• Strong sustained financial performance• Life insurance continues recovery with a positive Value of New Business• Non-Life insurance performance remains strong• Health insurance shows strong premium growth with modest profitability• Banking experiences pressure on margins• Associates and strategic investments continue to make an important
contribution
• New organisation and management team in place
OUTLOOK
SUMMARY
EUREKO
www.eureko.net 202006 INTERIM RESULTS 17 AUGUST 2006
1. Main developments
2. Financial highlights per business line
3. New organisation and management team in place
4. Summary and Outlook
Appendix
Agenda
EUREKO
www.eureko.net 212006 INTERIM RESULTS 17 AUGUST 2006
Division
Occupational Health
Division
Health
Division
Direct
Division
Bank
Division
Broker
Product Divisions
Channel Divisions
New organisational structure as per 1 July
Eureko
Development
and distribution
of specific
service
concepts via
independent
brokers,
networks &
authorised
agencies
Business partner
for all Rabobank
group units
in non-life,
pensions,
occupational
health and
health
Direct writing
of insurance
and banking
products
Insurance
solutions and
services in the
areas of
absenteeism
prevention,
health and
re-integration
Group and
individual
products that
provide financial
security for the
future
Increase the
emphasis on
international
expansion and
development
outside
The Netherlands
Solutions and
expertise in
the areas of
work, health
and income
protection
Achmea
Division
Pensions
Division
Europe