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MarketScreener Homepage  >  Equities  >  Xetra  >  Allianz SE    ALV   DE0008404005

ALLIANZ SE

(ALV)
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Allianz : reports 2.3 billion euros operating profit in 1Q 2020

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05/12/2020 | 01:10am EDT

Quarterly Earnings Release

Allianz reports 2.3 billion euros operating profit in 1Q 2020

  • Internal revenue growth of 3.7 percent in 1Q 2020
  • 1Q 2020 operating profit of 2.3 billion euros
  • 1Q 2020 net income attributable to shareholders down 28.9 percent to 1.4 billion euros
  • Solvency II capitalization ratio of 190 percent
  • 2020 operating profit outlook 12 billion euros, plus or minus 500 million euros, has been withdrawn due to COVID-19 uncertainties

Management Summary: Resilient performance in adverse conditions

The COVID-19 induced turmoil in the financial markets and a slowing economy have clearly aggravated business conditions for the financial services industry. However, Allianz with its well-diversified business portfolio and a robust balance sheet is well prepared to manage the Corona crisis and has achieved good results in the first quarter of 2020.

Internal revenue growth, which adjusts for currency and consolidation effects, amounted to 3.7 percent, driven in particular by our Life/Health business segment but also supported by our other business segments. Total revenues increased 5.7 percent to 42.6 (1Q 2019: 40.3) billion euros. Operating profit declined 22.2 percent to 2.3 (3.0) billion euros. Our Asset Management business segment reported a strong increase in operating profit due to a rise in assets under management driven revenues. Our Property-Casualtybusiness segment saw a decrease of the operating profit due to higher claims from natural catastrophes, as well as COVID-19-related losses. Operating profit fromour Life/Healthbusiness segment also declined mainly driven by the market downturn, which impacted the investment margin and deferred acquisition costs. Net income attributable to shareholders decreased 28.9 percent to 1.4 (2.0) billion euros mostly driven by the lower operating profit. The non-operating result also worsened as realized gains from the sale of Allianz Popular were more than offset by COVID-19-related market impacts. A lower tax rate had a partly offsetting effect.

Basic Earnings per Share (EPS) decreased 27.8 percent to 3.36 (4.65) euros. Annualized Return on Equity (RoE) amounted to 9.3 percent (full year 2019: 13.6 percent). The Solvency II capitalization ratio was at 190 percent at the end of the first quarter of 2020, compared to 212 percent at year-end 2019.

Allianz SE Koeniginstr. 28

80802 Munich; Germany Phone: +49 89 3800 18475 Fax: +49 89 3800 2114 www.allianz.com/ne ws

Chairman of the Supervisory Board: Michael Diekmann.

Board of Management: Oliver Bäte, Chairman; Sergio Balbinot, Jacqueline Hunt,

Dr. Christof Mascher, Niran Peiris, Dr. Klaus-Peter Röhler, Iván de la Sota, Giulio Terzariol, Dr. Günther Thallinger, Renate Wagner (Release / Stand 04.2020).

For VAT-Purposes:VAT-Registration Number: DE 129 274 114; Insurance services are exempt from VAT.

Allianz SE, Munich, Comm.Reg.: Munich HRB 164232

In light of the uncertainties for the macroeconomic development caused by the current pandemic and the now available updated financial plans of the operating entities of the Group, as already announced in the media release from 30 April 2020, the Board of Management does not assume that Allianz Group can achieve the target range for the operating profit for 2020 in the amount of 12 billion euros, plus or minus 500 million euros. A new profit target for 2020 will be announced by the Board of Management upon completion of the revised planning once the impact of the Corona crisis can be better assessed.

"The first quarter of 2020 showed the resilience of Allianz in these unprecedented circumstances," said Oliver Bäte, Chief Executive Officer of Allianz SE. "I am very proud of the operational preparedness of Allianz, the dedication of our employees and our IT that ensures the highest service levels for our customers evenin this challenging situation. These are very testing times for us all, but I believe that together we will rise to this challenge."

Property-Casualty insurance: Combined ratio burdened by COVID-19 and natural catastrophe claims

  • Total revenues rose by 4.2 percent to 20.3 (19.5) billion euros in the first quarter of 2020. Adjusted for foreign currency translation and consolidation effects, internal growth totaled 1.8 percent, driven by a positive price effect of 3.3 percent and a negative volume effectof 1.4 percent. AGCS, Allianz Asia Pacific, and Allianz Turkey were the main growth drivers.
  • Operating profit decreased strongly by 29.1 percent to 1.0 billion euros in the first quarter of 2020 compared to the year-earlier period. The underwriting result was pressured by an increase in losses from natural catastrophes and COVID-19 impacts. Higher claims were partly offset by a strong im- provement of our expense ratio.
  • The combined ratio rose 4.1 percentage points to 97.8 percent in the first quarter of 2020 com- pared to the year-earlier period.

"COVID-19 has aggravated operating conditions in our Property-Casualty business segment," said Giulio Ter- zariol, Chief Financial Officer of Allianz SE. "Our combined ratio adjusted for natural catastrophes and COVID-19 impacts remains at 94 percent as we continue to focus strongly on technical excellence in underwriting and claims management in order to navigate successfully through this crisis jointly with our custom- ers."

Life/Health insurance: Resilient results in times of financial market headwinds

PVNBP1, the present value of new business premiums, increased to 18.0 (17.6) billion euros in the first quarter of 2020. This was largely driven by higher sales of unit-linked products in Italy, as well as of capital-efficient products in the German life business. Weakened sales of savings products in France partly offset this development.

The new business margin (NBM) decreased to 2.7 (3.5) percent due to the impact of lower interest rates in the first quarter of 2020. The value of new business (VNB) dropped to 494(609) million euros in the first quarter of 2020. The negative effects from the worsening of the interest rate environment were partly offset by increased sales, improved products and the continued shift to preferred lines of business.

Operating profit decreased to 0.8 (1.1) billion euros in the first quarter of 2020. This was mainly due to a lower investment margin, driven predominantly by higher impairments following the market

1 PVNBP is shown after non-controlling interests, unless otherwise stated.

2

downturn. Further contributing factors were higher hedge costs and increased deferred acquisition costs (DAC) true-up mainly in theUnited States. The negative effects werepartly compensated by an improved technical margin.

"New business margin in our Life/Health business segment held up very well during the first quarter of 2020 and sales were concentrated on our preferred lines," said Giulio Terzariol. "On the other hand, our operating result reflects the turbulences in financial markets. We continue to manage actively our product range and asset base to ensure the resilienceand value proposition of our Life/Health business segment."

Asset Management: Operating profit increased by 19 percent

  • Third-partyassets under management (AuM) decreased by 129 billion euros to 1,557 billion euros in the first quarter of 2020, compared to the end of 2019. This development was driven by negative market effects of 107.6 billion euros and net outflows of 46.4 billion euros, mostly in March. Positive foreign currency translation effects of 25.0 billion euros could not outweigh the aforementioned neg- ative effects.
  • Total assets under management decreased to 2,134 billion euros in the first quarter of 2020.
  • The cost-incomeratio (CIR) went down by 2.0 percentage points to 61.7 percent in the first quarter of 2020 compared to the first quarter of 2019. This was due to higher net fee and commissionincome, largely driven by higher average AuM, supported by an increase in AuM-driven margins. As a result, operating profit increased by 18.6 percent to 679 (573) million euros in the first quarter of 2020 com- pared to the year-earlier period.

"I am pleased with the operating performance of our Asset Management business segment," said Giulio Ter- zariol. "We observed headwinds from financial markets towards the end of the first quarter of 2020 which might persist in the coming quarters. As the fundamentals of our business are very solid, I am confident about the mid- and long-term value creation of our Asset Management franchise."

3

Allianz Group - key figures 1st quarter 2020

Total revenues

  • Property-Casualty1
  • Life/Health
  • Asset Management
  • Corporate and Other
  • Consolidation
    Operating profit / loss
  • Property-Casualty
  • Life/Health
  • Asset Management
  • Corporate and Other
  • Consolidation

Net income

  • attributable to non-controlling interests
  • attributable to shareholders

Basic earnings per share

Diluted earnings per share

Additional KPIs

-

Group

Return on equity2,3

-

Property-Casualty

Combined ratio

-

Life/Health

New business margin

-

Life/Health

Value of new business

-

Asset Management

Cost-income ratio

Shareholders' equity3

Solvency II capitalization ratio4

Third-party assets under management

1Q 2020

1Q 2019

Delta

€ bn

42.6

40.3

5.7%

€ bn

20.3

19.5

4.2%

€ bn

20.5

19.3

6.5%

€ bn

1.8

1.6

12.5%

€ bn

0.1

0.1

5.4%

€ bn

-0.1

-0.1

-4.9%

€ mn

2,304

2,962

-22.2%

€ mn

1,032

1,455

-29.1%

€ mn

819

1,096

-25.3%

€ mn

679

573

18.6%

€ mn

-228

-164

38.4%

€ mn

2

4

-47.9%

€ mn

1,483

2,051

-27.7%

€ mn

84

82

2.4%

€ mn

1,400

1,969

-28.9%

3.36

4.65

-27.8%

3.21

4.65

-30.9%

%

9.3%

13.6%

-4.3%-p

%

97.8%

93.7%

4.1%

-p

%

2.7%

3.5%

-0.7%-p

€ mn

494

609

-18.9%

%

61.7%

63.7%

-2.0%-p

03/31/2020

12/31/2019

Delta

€ bn

69.4

74.0

-6.2%

%

190%

212%

-23%-p

€ bn

1,557

1,686

-7.6%

Please note: The figures are presented in millions of Euros, unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

1_ Total revenues comprise gross premiums written and fee and commission income.

2_ Represents the annualized ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning and at the end of the period. Annualized figures are not a forecast for full year numbers. For 1Q 2019, the return on equity for the respective full year is shown.

3_ Excluding non-controlling interests.

4_ Risk capital figures are group diversified at 99.5% confidence level.

Munich, May 12, 2020

For further information, please contact:

Holger Klotz

Tel. +49

89 3800 90921

Daniela Markovic

Tel. +49

89 3800 2063

Aurika von Nauman

Tel. +49

89 3800 16052

4

A bout Allianz

The Allianz Group is one of the world's leading insurers and asset managers with more than 100 million retail and corporate customersinmore than 70countries.Allianzcustomersbenefitfromabroadrange of personal andcorporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world's largest investors, managing around 740 billion euros on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage almost 1.6 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold the leading position for insurersinthe Dow JonesSustainability Index.In2019,over 147,000employeesachievedtotal revenuesof142billion euros and an operating profit of 11.9 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements, such as prospects or expectations, that are based on management's current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements. Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Al lianz Group's core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) the frequency and severity of insured loss events, including those resulting from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistencylevels, (vi) particularlyin the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates, most notably the EUR/USD exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions including and related integration issues and reorganization measures, and (xi) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.

No duty to update

The Allianz Group assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.

Other

The figures regarding the net assets, financial position and results of operations have been prepared in conformity with International Financial Reporting Standards. This Quarterly Earnings Release is not an Interim Financial Report within the meaning of International Accounting Standard (IAS) 34.

This is a translation of the German Quarterly Earnings Release of the Allianz Group. In case of any divergences, the German original is binding.

Pr ivacy Note

Allianz SE is committed to protecting your personal data. Find out more in our Privacy Statement.

5

Disclaimer

Allianz SE published this content on 12 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2020 05:09:04 UTC

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Financials
Sales 2020 143 B 161 B 161 B
Net income 2020 6 355 M 7 179 M 7 179 M
Net Debt 2020 21 681 M 24 491 M 24 491 M
P/E ratio 2020 11,6x
Yield 2020 5,30%
Capitalization 75 209 M 85 088 M 84 956 M
EV / Sales 2019
EV / Sales 2020 0,68x
Nbr of Employees 147 268
Free-Float 99,8%
Chart ALLIANZ SE
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Technical analysis trends ALLIANZ SE
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TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 204,98 €
Last Close Price 182,68 €
Spread / Highest target 41,2%
Spread / Average Target 12,2%
Spread / Lowest Target -9,68%
EPS Revisions
Managers
NameTitle
Oliver Bäte Chief Executive Officer
Michael Diekmann Chairman-Supervisory Board
Christof Mascher Chief Operating Officer
Giulio Terzariol CFO, Head-Finance, Controlling & Risk
Gabriele Burkhardt-Berg Vice Chairman-Supervisory Board
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