GRUPA PZU | Factsheet 1Q 2022

#1

PLN 425 bn

40 tys.

22 mln

99%

STRONG

largest insurance

aktywów

employees

clients

most recognizable

BALANCE SHEET

BALANCE SHEET

brand in Poland

Solvency II ratio above

and banking

average for insurance

group in CEE

groups in Europe

The Powszechny Zakład Ubezpieczeń Group is the largest financial conglomerate in Poland and Central and Eastern Europe. The Group is headed by PZU, which has the status leading entity in the conglomerate. PZU's traditions dating back to 1803. PZU's stock are listed on the Warsaw Stock Exchange (WSE) being part of the WIG20 index and WIG ESG (sustainability) index. PZU is one of the most highly valued companies and heavily traded stocks on the Polish stock exchange. At the end of March2022, PZU's market capitalization amounted to PLN 29.2 bn. The State Treasury with a 34.19% equity stake is PZU's main shareholder.

The Group companies offer not only in life, non-life and health insurance but also in banking, investment, pension and health care products. They also render assistance services to retail clients and businesses through strategic partnerships. The Group's operations are founded on clients' trust. The Group places the client in the center of attention and integrates all areas of activity around the client. The Group's strategic ambition is to develop ecosystems, which will provide comprehensive solutions to institutional as well as individual clients. They will create new opportunities to build long-lasting relations with clients in daily life. The key elements that contribute to building an entrenched technological advantage in integrated client service include further digitization, use of artificial intelligence (AI), big data and advanced analytics, as well as mobile and omni-channel solutions. The technological transition will be supported by the use of cloud computing.

The PZU Group is committed to the development of a responsible organization, strongly emphasizing the ESG (environment, social and governance) factors in its strategy. The priority for the PZU Group is to generate benefits for its shareholders and clients in a sustainable and responsible manner. The success of the PZU Group will be built based on contemporary business models widely incorporating ESG criteria. The Group supports the development of low-carbon economy, is committed to just energy transition and encourages communities to adopt sustainable and safe lifestyles and builds a modern, responsibly-managed organization.

BUSINESS MODEL

MARKET POSITION

Smart client needs analysis

Utilization of Big Data

Solutions based on artificial intelligence

Robotics

Advanced under writing and tariff- -setting methods

Insurance

Protection against the effects of events of chance - risk valuation, premium calculation and investment, payment of claims

Health

Health care - offering health insurance and medical care services, prophylactics, prevention, promoting a healthy lifestyle

Investments

Financial security protection - growing savings, capital accumulation programs

Comprehensive offer based on client knowledge and their real needs

Long-term partnership

Products and services accessible to clients whenever and wherever they want them

Risk mitigation

Safeguarding

#1

#1

#2

#8

TFI PZU

#3

OFE PZU

#3

Pekao TFI

#5

#3

non-life insurance

life insurance

ESTONIA

LATVIA

LITHUANIA

POLAND

UKRAINE

#7

#3

market position in terms of assets in management

market position in terms of assets

#4

#1

#1

#6

market position in terms of revenue from medical activities

Flexible and multi-channel distribution network

Innovative mobile solutions

Fast and efficient service

Banking

Conducting banking activities, including taking deposits, extending credits and loans, running bank accounts, handling cash settlements and rendering payment services

financial security needs

MARKET SHARE in Poland (4Q 2021)

Life protection (group 1)

PZU 54.80%

Life periodical premium

PZU 43.70%

Motor

PZU 33.50%

Non-life

PZU 32.30%

0%

20%

40%

60%

80%

100%

FINANCIAL HIGHLIGHTS

PLN million

2020

2021

1Q 2021

1Q 2022

A) PZU GROUP NET OF ALIOR BANK AND BANK PEKAO

Gross written premiums

23,866

25,080

6,148

6,253

Net result on investing activity including interest

2,044

2,012

720

105

expenses

Net insurance claims and benefits paid

(15,580)

(15,731)

(3,926)

(3,690)

Acquisition expenses

(3,317)

(3,572)

(837)

(917)

Administrative expenses

(1,801)

(1,734)

(437)

(437)

Operating profit

3,941

3,635

1,035

675

Net profit attributable to equity holders of the

3,106

2,732

794

517

parent company

B) Impairment attributable to equity holders of the

(1,343)4

-

-

-

parent company

C) BANKS: ALIOR BANK AND BANK PEKAO

Net profit attributable to equity holders of the

149

604

86

241

parent company

(A+B+C) NET PROFIT ATTRIBUTABLE TO

1 912

3 336

880

758

EQUITY HOLDERS OF THE PARENT COMPANY

Total assets

378,974

402,129

395,418

424,559

Equity attributable to the owners of the parent

18,777

17,080

19,374

16,967

company

Robust net result in challenging market conditions

PLN m

-13.9%

880

758

383

+52.5%

497

1Q21

1Q22

Adjusted net profit

Effects of the measurement of the logistics company

Business profitability surpasses strategic ambitions

GWP

Net result

6.3 bn PLN

758 m PLN

(versus 6.1 in 1Q21)

(versus 880 in 1Q21)

Gross Written Premium structure (1Q 2022)

ROE

17.8%1

Non-life

Operating margin2

Combined ratio3

57.2%

13.1%

90.0%

Baltic States

(versus 10.2% in 1Q21)

(versus 89.1% in 1Q21)

Poland

and Ukraine

9.8%

90.2%

Life

33.0%

Financial strength rating and credit rating

awarded to PZU by S&P

Percentage share of business segments in the operating result

A-

(adjusted for PZU's shares in banks in 1Q 2022)

/STABILNA/

63.0%

INSURANCE

investment and pension products

2.1%

INSURANCE

Baltic

States

1.4%

33.5%

INSURANCE

BANKING

Poland

Ukraine

PZU'S STOCK

Number of shares

863,523,000

P/E

9.1x

Average trading value

PLN 90.0 mł

per session

Free float (%)

65.81%

P/BV

1.7x

Average number of

7,009

trades per session

Market capitalization

PLN 29.2 bn

D/Y

5)

Average trading

2,670,584 shares

volume per session

Shareholder structure (31 December 2021)

Recommendations statistics (31 March 2022)

International

32.8%

-0.5 p.p.

Poland

+ 0.5 p.p.

67.2%

change 2021/2020

State Treasury

34.2%

0.0 p.p.

Institutional investors

24.1%

+0.1 p.p.

Individual investors

+0.4 p.p.

8.8%

3

Buy, Outperform

9

4

Neutral, Hold

2

Underperform, Reduce

Highest target price

PLN 50.0

Average target price

PLN 40.3

Lowest target price

PLN 32.0

PZU's share performance - min/max share price at session closing

60 zł

3 000 pkt

50 zł

37.82

2 750 pkt

2 500 pkt

40 zł

2 250 pkt

30 zł

2 000 pkt

20 zł

29.21

1 750 pkt

10 zł

1 500 pkt

1 250 pkt

0 zł

05.2010 - 2015

2016-2020

2021

1 000 pkt

Min/max

2022

PZU

WIG 20

PZU's earnings per share and dividend per share

92%

83%

79%

89% 5

87%

77%

62%

75%

75%

5.4

3.8

3.8

3.7

3.8

3.9

3.4

3.4

3.5

6

2.8

2.6

2.7

3.0

3.0

2.7

2.5

2.8

2.3

2.2

2.2

2.1

1.4

2021

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

7

Earnings per share (EPS) attri. to the parent company for a given year (PLN)

Dividend per share (in PLN) from the profit for a given year (DPS)

Ratio of dividend payment for a given year

STRATEGY EXECUTION- FINANCIAL MEASURES

ROE (%)8

1Q

18.6

+6.5 p.p.

17.8

17.4

10.9

18.5

8.0

2.9

2022

2020

2021

2024

PZU'S GROSS WRITTEN PREMIUM9

PZU'S NET PROFIT10 (BN PLN)

(BN PLN)

23.9

25.1

26.2

3.3

3.4

17.8

18.9

1.9

2.5

6.3

+1.7%

1.8

0.8

-13.9%

0.9

6.1

6.1

0.1

2020

2021

2022

2024

2020

2021

2022

2024

SOLVENCY II RATIO (%)

HEALTH PILLAR REVENUE (BN PLN)

236

221

≥ 200%

1.7

0.9

1.2

0.9

0.3

0.7

+14.7%

0.2

0.3

2020

14

2024

2020

2021

2022

2024

2021​

BANKS' CONTRIBUTION TO PZU GROUP'S

ASSETS UNDER MANAGEMENT13

NET RESULT 11 (BN PLN)

(BN PLN)

+700.0%

+81.8%

0.8

0.6

35.1

60.0

33.0

32.7

0.1

0.5

0.2

5.8

0.1

35.0

Q1

0.1

+180.2%

27.2

0.1

0.1

2020

2021

2022

2024

202012

2021

2022

2024

STRATEGY EXECUTION- ESG INDICATORS

Implementation 2021

ESG targets

in Senior

Management

objectives

55%

500 m

70%

scope

of emis-

sions

1 and 2

70%

10-15

m

Giving consideration to ESG targets in the Company's strategic objectives and handing them over for execution by Senior Management

ESG assessment of 55% of the biggest corporate insurance clients from sectors sensitive to ESG risks

Increase of the current exposureto investments supporting climate and energy transition by 500 m PLN in 2021- 2024

Percentage of key procurement processes which give consideration to ESG criteria

Reaching climate neutrality of own operations thanks to reduction of emissions, purchase of green energy and offsetting CO21 emissions15

Percentage of employees covered by the #Well-being program

Number of recipients of social activities in the area of safety and sustainable lifestyle during the year

  • Targets were allocated to all WKK involved in strategy execution
  • Execution of 100%
  • Assessment methodology developed
  • The level of the indicator will be reported from 2022
  • An investment was made for 450 m PLN
  • Supplier segmentation was conducted
  • The level of the indicator will be reported from 2022
  • Reduced emissions16: 26,2%
  • Electricity from RES (~80%)
  • Offsetting 17 thousand tons of CO2 by purchasing carbon dioxide units from the State Forests
  • The #DobryStan (#Well-being) strategy was developed and implemented
  • The level of the indicator will be reported from 2022
  • 10 million recipients
  • Execution of 100%

PRZYPISY:

  1. ROE attributed to equity holders of the parent company, annualized; 2) Margin in 1Q21 and 1Q22 for the group and individually continued insurance segment;
  1. Non-lifeinsurance in the PZU Group (Poland); 4) including the impairment loss on goodwill arising from the acquisition of Alior Bank (PLN 746 million) and Bank Pekao (PLN 555 million) and the impairment loss on assets arising from the acquisition of Alior Bank (i.e. trademark and relations with clients, after incorporating the impact of deferred tax and minority interest) in the amount of PLN 42 million; 5) The payout ratio net of the dividend payout from excess capital (PLN 2 per share); 6) On 26 March
    2020, the Polish Financial Supervision Authority (KNF) issued a decision prohibiting the disbursement of dividends in 2020 by insurance companies and banks from their
    2019 profits. On 16 December 2020 the Polish Financial Supervision Authority (KNF) issued a decision allowing the disbursement of dividends in an amount equal to 100% of the 2019 profit and 50% of the 2020 profit. On 12 May 2021 the Supervisory Board issued a positive opinion on the Management Board's motion to the OGM for dividend payment of PLN 3.5 per share; 7) Up to the date of preparing Report for Q1 2021, the Management Board has not adopted a resolution concerning the proposed distribution of profit for 2021; 8) Przypisane właścicielom jednostki dominującej; 9) PZU Group's gross written premium; 10,11) Net profit attributable to equity holders of the parent company;
  1. Net of the impairment loss for goodwill on the acquisition of Bank Pekao and Alior Bank; 13) Third party assets under management TFI PZU, Pekao TFI i Alior TFI; 14) It does not incorporate the new rules set forth in the Polish FSA's circular to insurance undertakings dated 16 April 2021; 15) Climate neutrality in PZU and PZU Życie in terms of emissions unders scope 1 and scope 2; 16) PZU and PZU Życie, location-based method

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Disclaimer

PZU - Powszechny Zaklad Ubezpieczen SA published this content on 25 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2022 18:28:02 UTC.