Conference Call for Analysts & Investors Annual Report 2015 W&W AG 31 March 2016

Transcription

1 W&W Group with new profit record Conference Call for Analysts & Investors Annual Report W&W AG 31 March 2016

2 Agenda 1. Group Highlights 2. Financial Results 3. Key Figures of our Segments 4. Strategy Programme 5. Outlook page 2

3 1. Group Highlights W&W with record in Group net profit 274mn Group net profit 4bn Gross premium written (Life, Health, P/C) 14bn 5.5bn New home loan savings, gross Group contruction financing business (including brokering for third parties) 355mn Sale of own and third-party investment funds Highest Group net result ever in W&W history. page 3

4 1. Group Highlights Assessment : Positive Developments W&W again posts record profit At 274mn, highest profit in the Group s history: clearly above the original profit target of approx. 200mn. Effects: Positive claims developement, success on the part of our smaller Group companies, increases in stock prices, prior-period tax effects and sale of investments. Sales year : W&W continues on growth course Strategic enhancement and digitalisation being pushed forward Further challenges need to be overcome Home loan savings, gross + 2.5% Group construction financing % Call deposits + 7.2% New business in health insurance % P/C gross premium written + 3.7% Specification of growth strategy, digitalisation, leaner group structures Formation of W&W Digital GmbH; New Digital Customer Office (DCO) to bundle, manage and implement digital matters across business lines. New online services (opening an account by video legitimation, video consultations, online financial check. Further expansion of capital market acitivites to increase the appeal of W&W stock (listing on the SDAX index, employee stock programme). Solvency II: Successul preparation of Day1 Reporting. Continued low interest rate level increases burden for interest rate commitments by home loan and savings banks as well as life insurance. Advances in portfolio management in the Home Loan and Savings Bank division, but more are needed. Further cost management and efficiency boosts: annual increase in productivity of 5% planned. page 4

5 1. Group Highlights Strong track record of stratey programmes secures a solid basis Consolidated net profit (IFRS), in mn 300 Annual figures Multi-year average Forecast 2016: > 220mn W&W 2009 Restructuring programme W&W 2012 Expansion programme W&W Programme to reinforce our strengths W&W@2020 Strategy programme Clear increase in net profit despite financial markets crisis and continuing period of low interest rates. page 5

6 1. Group Highlights Share with potential: Prime Standard, SDAX, dividend increase Dividend policy: We want to at least maintain our dividend 2.63% 3.50% 3.23% 2.89% 2.81% +20% 3.01% Earnings per share Dividend per share Dividend yield Institution Analyst Date Rating Bankhaus Lampe Andreas Schäfer 15/03/2016 Buy; Price Target: Montega Frank Biller 02/11/2016 Buy; Price Target: Berenberg Peter Eliot 18/08/ Buy; Price Target: DZ-Bank Thorsten Wenzel 14/08/ Buy; Price Target: LBBW Werner Schirmer 14/08/ Buy; Price Target: Dividend rises in from 0.50 to page 6

7 Agenda 1. Group Highlights 2. Financial Results 3. Key Figures of our Segments 4. Strategy Programme 5. Outlook page 7

8 2. Financial Results Consolidated Income Statement Selected items mn Net financial result 2,031 2,241 Net income from investment property Net comission income Premiums/contributions earned (net) 3,983 3,939 Insurance benefits (net) -4,284-4,426 General aministrative expenses -1,108-1,108 Other operating income Consolidated net income from continues operations before income taxes Income taxes Consolidated net profit On whole, declining financial results due to lower interest income and lower income from disposals. Earnings per share Higher income from investment property due to increased sales and rental income. Higher net premium earned due to portfolio increase in property/casualty Despite higher bank levy and marketing expenses, general administrative expenses at the level of the previous year due to tenacious cost management. Clear exceeding of targets and highest profit in the Group s history. page 8

9 2. Financial Results Consolidated Balance Sheet Selected items in mn A. Financial assets available for sale 24,260 25,613 B. Receivables 42,699 44,316 First-rate receivables from institutional investors 15,689 16,520 Building loans 24,293 25,127 C. Reinsurers' portion of technical provisions A. Liabilities 31,828 35,647 Liabilities to credit institutions 4,123 6,401 Miscellaneous liabilities 1,285 2,337 B. Other provisions 32,861 32,909 C. Equity 3,644 3,674 Total 74,087 78,536 Focus on value-enhancing new financing business and tightening of regulatory capital requirements result in lower total assets. As a result, further optimisation of regulatory indicators. Replacement of a quota share reinsurance contract at the end of the year also reduced total assets. Lower total assets essentially due to deleveraging at the Home Loan and Savings Bank segment. page 9

10 Agenda 1. Group Highlights 2. Financial Results 3. Key Figures of our Segments 4. Strategy Programme 5. Outlook page 10

11 3. Key Figures of our Segments Results of Group segments Group segments (IFRS) in mn Delta Segment Home Loan and Savings Bank Segment Life and Health Insurance ,4 Segment Property/Casualty Insurance Others / consolidation Group net profit Segments Home Loan and Savings Bank, Life and Health Insurance posted stable income development Main profit driver is P/C, but only limited comparability with the previous year due to one-off effects Others/consolidation with one-off effect from the sale of Slovak Bausparkasse Results consistanty reflect value orientation and increasing cost efficiency. page 11

12 3. Key Figures of our Segments Segment Home Loan and Savings Bank New home loan savings in mn +2.5% 13,736 14,082 11,533 11,676 New contruction financing in mn 2,376 1, % 2,741 1,897 in % +1.5%p Capital ratios* % 11.4% gross net market share (net) BSW WBP Core capital ratio BSW Capital ratio BSW Core capital ratio WBP Capital ratio WBP Active customers -3% Gross margin new business construction financing in % +0.08%p in % Leverage ratio* 0.54%p BSW WBP *after approval by Supervisory Board page 12

13 3. Key Figures of our Segments Segment Life and Health Insurance Gross premium written in mn Valuation reserves WL (local GAAP) in mn , % ,085 Single premiums Regular premiums Return new Invests 3.1% 2.3% 6% Capital Investments Net return 19% 4.6% 4.9% 42% New Business* Duration 33% % 25% 38% 31% Unit linked Classic products Risk life Occupational disability Administrative expense ratio WL (local GAAP) 2.8-4% 2.7 * WONS: The value-oriented net valuation amount of new business weights the new business in each product group using value-oriented factors. page 13

14 3. Key Figures of our Segments Segment Property/Casualty Insurance Gross premium written in mn +3.71% Insurance contracts WV in mn pieces +0,69% 1,580 1,639 8,65 8,71 Claim ratio (gross, domestic, local GAAP) in % +1.2%p Combined ratio in % -4.2%p Cost ratio WV (local GAAP) in % -0.1%p Seite 14

15 Agenda 1. Group Highlights 2. Financial Results 3. Key figures of our Segments 4. Strategy Programme 5. Outlook page 15

16 4. Strategy Programme Investments of 650mn planned through 2018 Marketing, customers, sale Efficiency Improvement of skills and profitability Including 120mn investments in digitalisation 240mn 260mn 150mn 650mn Regulatory requirements 75mn Total investments include 120mn for digitalisation projects page 16

17 4. Strategy Programme Digital transfer of know-how in the W&W Group Wüstenrot Bank I. Customers have online experience with banking CUSTOMERS Need for financial planning: Security Home ownership Risk protection Wealth creation Württembergische Versicherung II. Customers become familiar with the insurance company's online offer Lead generation transactional: daily payment transactions, direct custodial account largely free, low threshold, little connection with customer service flexible, no traditional branch network but: more local points of contact than any other major bank Online financial check traditional service-oriented long-term customer relationship few, important customer contacts: contract conclusion, claims adjustment Conference Call for Analysts & Investors, 31 March 2016 page 17

18 4. Strategy Programme Wüstenrot Bank as catalyst for digitalisation of W&W Group Wüstenrot Bank Group company; Digital spearhead W&W Digital Interface of W&W to Berliner Fintech und Insuretech startups Catalyst for digitalisation page 18

19 4. Strategy Programme Shareholder value: Enhancing efficiency gains through digitalisation Behavioural change through new technology CUSTOMERS New products / services on the market PRODUCTS New business models COMPANIES New requirements for customer interactions New requirements for products and services New requirements for development speed Enhancing efficiency gains in the company Faster claims adjustment More efficient portfolio management Lowering costs + Making operations lean and fast through process optimisation + More self-service Higher customer loyalty Customers buy more products Efficiency gains increase company value. Conference Call for Analysts & Investors, 31 March 2016 page 19

20 Agenda 1. Group Highlights 2. Financial Results 3. Key figures of our Segments 4. Strategy Programme 5. Outlook page 20

21 5. Outlook W&W stock remains an attractive investment Procuring customer business and growth, as well as increasing productivity, efficiency and innovative power remain our focus. Digitalisation provides us with great opportunities for development and the potential for adding value. Outlook W&W Group (IFRS) 2016 The record results for will not be able to be repeated in 2016 due to the low interest rate levels and an expected normalisation of claims development. Depending on developments in interest rates and the capital markets, we are striving for consolidated net profit of at least 220mn. Objective for W&W: Create assets and secure assets in the interest of all stakeholders. page 21

22 Thank you for your kind attention! For further information please contact: Michael Ellwanger Head of Investor Relations internet: ww-ag.com, phone: page 22

23 Disclaimer This presentation and the information contained herein, as well as any additional documents and explanations (together the material ), are issued by Wüstenrot & Württembergische AG ( W&W ). This presentation contains certain forward-looking statements and forecasts reflecting W&W management s current views with respect to certain future events. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without limitation, those regarding W&W s future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where W&W participates or is seeking to participate. The W&W Group s ability to achieve its projected results is dependent on many factors which are outside management s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions. The following important factors could cause the Group s actual results to differ materially from those projected or implied in any forward-looking statements: the impact of regulatory decisions and changes in the regulatory environment; the impact of political and economic developments in Germany and other countries in which the Group operates; the impact of fluctuations in currency exchange and interest rates; and the Group s ability to achieve the expected return on the investments and capital expenditures it has made in Germany and in foreign countries. The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. All forward-looking statements included herein are based on information available to W&W as of the date hereof. W&W undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to W&W or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The material is provided to you for informational purposes only, and W&W is not soliciting any action based upon it. The material is not intended as, shall not be construed as and does not constitute, an offer or solicitation for the purchase or sale of any security or other financial instrument or financial service of W&W or of any other entity. Any offer of securities, other financial instruments or financial services would be made pursuant to offering materials to which prospective investors would be referred. Any information contained in the material does not purport to be complete and is subject to the same qualifications and assumptions, and should be considered by investors only in light of the same warnings, lack of assurances and representations and other precautionary matters, as disclosed in the definitive offering materials. The information herein supersedes any prior versions hereof and will be deemed to be superseded by any subsequent versions, including any offering materials. W&W is not obliged to update or periodically review the material. All information in the material is expressed as at the date indicated in the material and is subject to changes at any time without the necessity of prior notice or other publication of such changes to be given. The material is intended for the information of W&W s institutional clients only. The information contained in the material should not be relied on by any person. In the United Kingdom this communication is being issued only to, and is directed only at, intermediate customers and market counterparties for the purposes of the Financial Services Authority s Rules ("relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. To the extent that this communication can be interpreted as relating to any investment or investment activity then such investment or activity is available only to relevant persons and will be engaged in only with relevant persons. page 23