Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : Factsheet - PZU Group financial results (Q2 2022)

GRUPA PZU | Factsheet 2Q 2022

#1	PLN 430 bn	40 thou.	22 mln	98%	STRONG
largest insurance	assets	employees	clients	most recognizable	BALANCE SHEET
BALANCE SHEET
			brand in Poland
and banking				Solvency II
group in CEE					on safe level

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 June 2022, PZU's market capitalization amounted to PLN 25.9 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.

FINANCIAL HIGHLIGHTS

PLN million		2021	2Q 2021*	1Q 2022	2Q 2022
A) PZU GROUP NET OF ALIOR BANK AND BANK PEKAO
Gross written premiums		25 080	6 194	6 253	6 394
Net result on investing activity including interest		2 012	597	105	(157)
expenses
Net insurance claims and benefits paid		(15 731)	(4 144)	(3 690)	(3 426)
Acquisition expenses		(3 572)	(867)	(917)	(959)
Administrative expenses		(1 734)	(420)	(437)	(456)
Operating profit		3 635	751	675	795
Net profit attributable to equity holders of the		2 732	589	517	556
parent company
B) Impairment attributable to equity holders of the		-	-	-	-
parent company
C) BANKS: ALIOR BANK AND BANK PEKAO
Net profit attributable to equity holders of the		604	165	241	166
parent company
(A+B+C) NET PROFIT ATTRIBUTABLE TO		3 336	754	758	722
EQUITY HOLDERS OF THE PARENT COMPANY
Total assets		402,129	391,305	424,559	429,936
Equity attributable to the owners of the parent		17,080	16,879	16,967	14,969
company

*Restated data

Gross Written Premium structure (2Q 2022)

Robust net result1 in challenging market conditions

PLN m

754	-4.2%
	722
	164
	203
2Q21	2Q22

Net profit

Higher provisions in individual continuation due to higher indexation 2 Protection system and CHF legal risk in banks

Business profitability surpasses strategic ambitions

GWP	Net result
6.4 bn PLN	722 m PLN
(versus 6.2 in 2Q21)	(versus 754 in 2Q216)

ROE

18.1%3

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		Non-life	Operating margin4	Combined ratio5
responsible manner. The success of the PZU Group will be built based on contemporary business models widely incorporating ESG criteria.		12.3%	87.7%
	58.5%
The Group supports the development of low-carbon economy, is committed to just energy transition and encourages communities to adopt	Baltic States	(versus 10.0% in 2Q21)	(versus 87.1% in 2Q21)
Poland
sustainable and safe lifestyles and builds a modern, responsibly-managed organization.			and Ukraine
							9.6%	90.4%
BUSINESS MODEL			MARKET POSITION				Life	Financial strength rating and credit rating
								31.9%	awarded to PZU by S&P
Smart client needs				#1	ESTONIA	#3			A-
analysis
	Protection against the			#1	LATVIA	#1	Percentage share of business segments in the operating result
Utilization of Big Data	Insurance				LITHUANIA	(adjusted for PZU's shares in banks in 1H 2022)	/STABLE/
chance - risk valuation,				#1
	effects of events of
	premium calculation			#2
	and investment,					#6
Solutions based on artificial	payment of claims							69.7%
			#8	POLAND
intelligence
		Comprehensive offer	TFI PZU	#3	UKRAINE			INSURANCE
		OFE PZU	#3			investment and pension products	3.5%
	Health
	based on client	Pekao TFI	#5
	Health care - offering	knowledge and their							INSURANCE
	health insurance and
	medical care services,	real needs
Robotics	prophylactics,			#3	#8
	prevention, promoting	Long-term partnership
	a healthy lifestyle
					#4
		Products and services
		accessible to clients
		whenever and
	Investments	wherever they want						Baltic
	them		non-life insurance	market position in terms of
		assets in management	market position in terms		States	-2.2%
	Financial security
	protection - growing					of revenue from medical
Advanced under	savings, capital	Risk mitigation		life insurance	market position in	activities		29.0%	INSURANCE
accumulation programs		terms of assets
writing and tariff-								BANKING
-setting methods		Safeguarding
		financial security
		needs						Poland
Flexible and multi-channel	Banking								Ukraine
distribution network	Conducting banking
	activities, including
	taking deposits,
Innovative mobile	extending credits and
loans, running bank
solutions	accounts, handling cash
	settlements and
	rendering payment
Fast and efficient	services
service

PZU'S STOCK

Number of shares	863,523,000	P/E	8.1x	Average trading value	PLN 52.3 m
per session
Free float (%)	65.81%	P/BV	1.7x	Average number of	4,319
trades per session
Market capitalization	PLN 25.9 bn	D/Y	5.57)	Average trading	1,678,273 shares
				volume per session

Shareholder structure (31 December 2021)

Recommendations statistics (30 June 2022)

STRATEGY EXECUTION- FINANCIAL MEASURES

ROE (%)

1H		18.6	+6.5 p.p.
					17.4
10.9	18.3	18.5
		7.3
3.6
2020	2021	2022	2024

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 39.0
Lowest target price		PLN 31.0

PZU'S GROSS WRITTEN PREMIUM10	PZU'S NET PROFIT11 (BN PLN)
(BN PLN)

	23.9		25.1		26.2								3.3		3.4
	12.2		12.7	12.6					1.9			1.7
				+2.5%				1.5		-9.4%
			12.3						1.6
	11.7									1.6
										0.3

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

60 PLN

3,000 pts

							2,750 pts
50 PLN	.
	.
40 PLN	.				.	37.82	2,500 pts
				2,250 pts
30 PLN							2,000 pts

2020	2021	2022	2024	2020	2021	2022	2024

SOLVENCY II RATIO (%)

HEALTH PILLAR REVENUE (BN PLN)

29.21

1,750 pts

20 PLN

10 PLN

.

1,500 pts

1,250 pts

0 PLN

05.2010 - 2015

2016-2020

2021

1,000 pts

PZU

WIG 20

Min/max

2022

PZU's earnings per share and dividend per share

236	221	222	≥ 200%
2020	2021	2022 12)	2024

					+79.8%
						1.7
				1.2
	0.9		0.7
	0.6
	0.5				+15.6%
		0.6
	0.4
	2020		2021	2022	2024

BANKS' CONTRIBUTION TO PZU GROUP'S	ASSETS UNDER MANAGEMENT15
NET RESULT13 (BN PLN)	(BN PLN)

92%		83%	79%	89%8)	87%	77%	62%	75%	75%
				5.40
			3.77	3.82	3.44			3.35	3.72	3.82	3,5	9)	3.90
				2.97
2.83	2.60	2.71		3.00	2.71		2.50	2.80
2.24			2.25		2.22
					2.08					1.94
								1.40

		7.5x
			0.8
	0.6
	0.4	0.4
0.1		+62.2%
0.3
0.2
H1	-0.1
202014	2021	2022	2024

					+81.8%
					60.0
		35.1
33.0	30.8
	4.2

28.8 36.5 -1.4

2020

2021

2022

2024

2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
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- 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 emissions16

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 emissions17: 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%

CONTACT FOR INVESTORS::
Magdalena Komaracka, CFA, IR Director	[phone]	[e-mail]

ANNOTATION:

1. Net profit and equity attributable to equity holders of the parent company, 2Q21 net profit adjusted; 2) Recognition in the mathematical provisions of the impact exerted by higher indexation rates on the sums insured in the individually continued portfolio in the next 12 months (impact exerted by rising inflation); 3) ROE in 2Q22 attributed to equity holders of the parent company, annualized; 4) Margin in 2Q21 and 2Q22 for the group and individually continued insurance segment; 5) Non-life insurance in the PZU Group (Poland); 6) Adjusted result; 7) stopa liczona jako dywidenda (wg daty ustalenia prawa do dywidendy) wobec ceny akcji na koniec poprzedniego raportowanego roku; 8) The payout ratio net of the dividend payout from excess capital (PLN 2 per share); 9) 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; 10) PZU Group's gross written premium; 11, 13) Net profit attributable to equity holders of the parent company; 12) Data as of March 31, 2022, not subject to audit or auditor's review,
   indicator in accordance with the FSC circular letter to insurance companies dated 16.04.2021; 14) Net of the impairment loss for goodwill on the acquisition of Bank Pekao and Alior Bank; 15) Third party assets under management TFI PZU, Pekao TFI and Alior TFI; 16) Climate neutrality in PZU and PZU Życie in terms of emissions unders scope 1 and scope 2; 17) PZU and PZU Życie, location-basedmethod.

Piotr Wiśniewski, IR Manager

[phone]

[e-mail]

PZU SA

al. Jana Pawła II 24 00-133 Warszawa [e-mail]

www.pzu.pl/ri