NN Group posts strong 4Q14 and 2014 results en andernieuws.

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Overig advies 11/02/2015 07:32
- 2014 operating result up 20%; strong capital position
4Q14 operating result ongoing business of EUR 260 million, up 18.2% from 4Q13. Full-year 2014 operating result ongoing business of EUR 1,086 million, up 20.0%
Net result improved to EUR 197 million versus a net loss of EUR 157 million in 4Q13. Full-year 2014 net result up 82.6% to EUR 588 million
Strong capital position; IGD ratio up at 303% supported by market movements. Holding company cash capital up at EUR 1.4 billion
NN Group Solvency II capital ratio (Standard Formula) estimated to be in a range around 200% at 31 December 2014, remains subject to significant uncertainties
Dividend proposal: EUR 0.57 per ordinary share, or EUR 200 million in total, related to second half of 2014
New sales (APE) EUR 264 million, down 8.0% from 4Q13; Full-year 2014 sales up 12.9% to EUR 1,315 million, both at constant currencies
AuM at Investment Management increased to EUR 186 billion driven by strong market performance
NN Group businesses to be rebranded from ING to the NN brand; expected rebranding expenses of approximately EUR 135 million in total over 2015 and 2016
Statement of Lard Friese, CEO

"In 2014 NN Group became a standalone company, separate from ING Group. The successful initial public offering last July marked a new beginning. Although we are still at the start of our journey, we are pleased with the strong performance we are reporting today. The full-year results, with a net result of EUR 588 million, demonstrate the progress we have made so far in achieving our objectives to generate capital and improve earnings, while delivering excellent service and products to our customers.

Our focus on our customers remains our driving force, which is demonstrated by strong new sales growth in 2014. At the same time we continue to strive for more effective and efficient operations which have resulted in a reduction of EUR 142 million in expenses in the Netherlands, showing good progress towards our target of EUR 200 million by 2016. Thanks to our multi-access distribution network, customers can reach us wherever and whenever they want and we will continue to develop this further throughout all regions.

With the strong capital generation of our businesses and our solid solvency ratios we are well prepared for Solvency II. In line with our focus on returning capital to our shareholders we will propose a dividend at our Annual General Meeting in May of approximately 50% of the net operating result of the ongoing business for the second half of 2014.

While we are further shaping our company, we will rebrand our businesses in 2015 and 2016 to the NN brand. A clear and recognisable identity that further unites our businesses and almost 12,000 employees. Over the years, Nationale-Nederlanden, ING Investment Management and ING Insurance, have built leading positions with a strong presence in more than 18 countries. The new branding represents another important milestone, and will further define the profile of NN Group as an international insurance and investment management company."

NN Group key figures
In EUR million 4Q14 4Q13 Change FY14 FY13 Change
Operating result ongoing business 260 220 18.2% 1,086 905 20.0%
Net result 197 -157 588 322 82.6%
Net operating ROE 7.6% 7.4% 8.6% 8.9%
IGD Solvency I ratio 303% 250% 303% 250%
New sales life insurance (APE) 264 292 -9.6% 1,315 1,227 7.2%
Investment Management AuM (End of period, in EUR billion) 186 174 6.9% 186 174
6.9%

Strategy and business highlights
NN Group's strategy is to deliver an excellent customer experience, based on great service and long-term relationships. We aim to achieve this by offering transparent products and services that serve customers' lifetime needs. We do this by making our multi-access distribution network available to customers wherever and whenever they want, and by maintaining effective operations that deliver an excellent customer service.

Netherlands Life
In the Netherlands Life segment, the focus is on expense reductions and a gradual shift to higher-yielding assets, such as mortgages and loans. Furthermore, NN Life aims to benefit from its strong position in the pension market and to selectively capture growth opportunities. The operating result of Netherlands Life decreased in 2014 as fees and premium-based revenues and technical margin were adversely impacted by the run-off of the individual life closed book and a decrease in interest rates. These impacts were partly offset by a reduction in administrative expenses and a higher investment margin. Administrative expenses were down for the full year, reflecting the positive impact of the transformation programme in the Netherlands. The investment margin in the fourth quarter increased, driven by higher dividends from private equity, the positive effects of increased allocation to higher-yielding assets and higher invested volumes. In 2014, new sales (APE) increased, mostly due to pension contract renewals. In the Dutch pension market, pension fund buy-outs are an opportunity for growth. In January 2015 the ENCI company pension fund, with EUR 420 million of assets and around 2,200 participants, transferred its accumulated pension benefits to NN Life. In addition, ENCI chose NN Life's defined contribution PPI solution with additional risk protection insurance for future pension accumulation. The capital position of NN Life improved further, with a Solvency I ratio of 260%, after deduction of a dividend of EUR 350 million paid by NN Life to NN Group in February 2015. Excluding the deduction of this dividend, the Solvency I ratio of NN Life as at 31 December 2014 would be 272%.

Netherlands Non-life
Netherlands Non-life aims to improve underwriting performance and to expand in specific market segments where there are clear opportunities for profitable growth. The operating result increased, reflecting favourable claims experience, lower administrative expenses and management actions taken to improve profitability. The combined ratio for 2014 improved to 99.4% from 101.5% over 2013. In 2014, Nationale-Nederlanden received recognition for its innovative car insurance 'Fairzekeren' with smart technology that helps drivers to improve their driving behaviour and as a result reduce the risk of damages for which they can earn a discount on their premium.

Insurance Europe
Insurance Europe is moving its business mix towards protection products and repositioning its savings and retirement products for the low interest-rate environment. In 2014, the operating result decreased due to a lower investment margin and the impact of the pension reforms in Poland, partly offset by higher fees and premium-based revenues. New sales (APE) were up 7.7%, compared with 2013 at constant currencies driven by higher life sales in most countries, with new sales of protection products up 16.9%. An example of a successful new service is "Improve your life style". In the Czech Republic and Slovakia this interactive campaign was launched with a special website where visitors can fill in a health test, developed by well-known nutrition specialists, and receive a personalised health evaluation and some tips, via email, on how to improve their lifestyle. On the same website they can set up an appointment with a financial advisor to discuss health protection.

Japan Life
In 2014 Japan Life increased its agency productivity and diversified its distribution channels by substantially expanding its bancassurance channel. It recruited 16 new bank distribution partners over the year and, in order to further improve the service to its distribution partners, the commercial network agents have been equipped with tablets to ensure flexible and more effective support. In line with this, and supported by improved business sentiment, new sales (APE) increased 20.1% from 2013, excluding currency effects.

Investment Management
Assets under Management increased to EUR 186 billion driven by strong market performance. Investment Management aims to grow its third-party business by following a tailored approach for each client segment. In its retail business and in its home markets, Investment Management plans to protect and further expand its leading positions and continues to develop a more distinct range of equity products. Investment Management continues to invest in building and broadening the capabilities of the business, such as the hiring of investment professionals in the convertible bond team in the fourth quarter of 2014. In line with the ambition to grow its third-party business, Investment Management was appointed fiduciary manager of health insurer DSW with 530,000 customers in January 2015, a mandate that underscores its expertise in the insurance industry.

NN Bank
NN Bank continued to grow with the expansion of its mortgage and customer savings activities, and contributed positively to NN Group's results in 2014. In line with its strategy, NN Bank's mortgage portfolio increased to EUR 7.9 billion from EUR 6.2 billion at the beginning of 2014. Customers and financial advisors granted NN Bank an award for mortgage suppliers 'Gouden Spreekbuis Hypotheekverstrekkers 2014' in December, because it 'reinvented itself as a mortgage provider'. NN Bank also expanded its product offering in 2014, with the introduction of a consumer lending product in February and a credit card in October. Consumer savings continued to grow by offering attractive products under the strong Nationale-Nederlanden brand, leading to total customer deposits of EUR 7.0 billion at the end of 2014.

Rebranding from ING to the NN brand
Over the years, the Nationale-Nederlanden, ING Insurance and ING Investment Management businesses have built leading positions in Europe and Japan. In 2014 these businesses came together under the holding company name NN Group. After the successful IPO of NN Group in July 2014, which represented the final step in becoming a standalone company separate from ING Group, the businesses will be rebranded in line with the NN brand identity. The operational and legal entity rebranding will take place in 2015 and will be supported by marketing campaigns in the various markets in 2015 and 2016. Over these two years, NN Group expects to incur rebranding expenses of approximately EUR 135 million in total, which will be reported as special items, with the majority of rebranding activities expected to be completed in 2015.

Solvency II
NN Group continues to prepare for Solvency II. The NN Group Solvency II capital ratio (based on our current interpretation of the Standard Formula) is estimated to be in a range around 200% at 31 December 2014. NN Group is considering to apply for the usage of a Partial Internal Model. The Solvency II capital ratio remains subject to significant uncertainties, including the final specifications of the Solvency II regulations and the regulatory approval process.

Dividend proposal
An important financial objective is to generate capital and pay dividends to our shareholders. In line with that, at the Annual General Meeting (AGM) on 28 May 2015, a dividend will be proposed of EUR 0.57 per ordinary share, or approximately EUR 200 million in total based on the current number of outstanding shares. This is equivalent to a dividend pay-out ratio of around 50% of NN Group's net operating result of the ongoing business related to the second half of 2014. The final dividend will be paid in cash or ordinary shares at the election of the shareholder. NN Group will neutralise the dilutive effect of the stock dividend on earnings per ordinary share through repurchase of ordinary shares, which may include a repurchase of part of ING Group's shareholding in NN Group. Going forward, and barring unforeseen circumstances, NN Group intends to pay ordinary dividends on a semi-annual basis. In line with NN Group's stated dividend policy, capital generated in excess of NN Group's capital ambition is expected to be returned to shareholders unless it can be used for any other appropriate corporate purposes, including investments in value creating corporate opportunities. NN Group is committed to distributing excess capital in a form which is most appropriate and efficient for shareholders at that specific point in time, such as special dividends or share buy backs which may include a repurchase of part of ING Group's shareholding in NN Group.

NN Group Profile
NN Group is an insurance and investment management company with a strong, predominantly European presence in more than 18 countries. With around 12,000 employees the group offers retirement services, insurance, investments and banking to more than 15 million customers. NN Group includes Nationale-Nederlanden, ING Insurance Europe, ING Investment Management and ING Life Japan, and is listed on Euronext Amsterdam (ticker: NN).

NN Group rebrands its businesses
International ING insurance businesses to be rebranded to NN or Nationale-Nederlanden
ING Investment Management to be rebranded to NN Investment Partners
Nationale-Nederlanden logo in the Netherlands to be aligned with NN Group logo

After the successful Initial Public Offering of NN Group on 2 July 2014, which represented the final step in becoming a standalone company apart from ING Group, the businesses of NN Group will be rebranded in line with the NN brand identity. The new branding will further shape the profile of NN as an international insurance and investment management company, offering retirement services, insurance, investments and banking to more than 15 million customers.

Statement of Lard Friese, CEO
"The rebranding of our businesses marks another important milestone since we became a standalone listed company last July. The NN brand balances our rich 170 year heritage and Dutch roots, with the requirements of a new and international company. It further unites our businesses and employees, and gives our company a clear and recognisable identity. To underscore the importance of our customers, we also introduce a new tagline 'You matter'. More than a slogan, 'You matter' is a promise to our customers, because what matters to them, matters to us. Throughout the rebranding process, our customers will continue to be at the heart of everything we do. We are proud of the progress we have made in shaping NN Group, and we want to thank our customers, employees, distribution partners and other stakeholders for their ongoing commitment throughout this period of change."

Over the years, Nationale-Nederlanden, ING Investment Management and ING Insurance, have built leading positions in Europe and Japan, with a strong presence in more than 18 countries. In 2014, these businesses came together under the holding name NN Group. The operational rebranding process will take place between February and July 2015.

The international ING insurance businesses will be rebranded to NN, except for Spain and Poland. The businesses in these countries will be named Nationale-Nederlanden. ING Investment Management, will change its brand to NN Investment Partners, a clear member of NN Group, but with an emphasis on its distinct business proposition. The logo of Nationale-Nederlanden in the Netherlands will be aligned with the overall NN brand.

Our business in Turkey will be the first to start with the rebranding process in February. Our customers, partners and other stakeholders will be kept informed in a timely manner about the rebranding activities. The operational and legal entity rebranding will be followed by name change and marketing campaigns in the various markets in 2015 and 2016. Today's announcement has no impact on the branding of ING Bank's operations in the countries involved.


tijd 09.16
De Midcap 677,75 +1,89 +0,28% NN Group EUR 24,87 +1,03 vol. 50.000



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