NN Group posts strong 4Q14 and 2014 results
(Thomson Reuters ONE) -
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, 186 174 6.9% 186 174 6.9%
in EUR billion)
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).
Investor conference call and webcast
Lard Friese and Delfin Rueda will host an analyst and investor conference call
to discuss the 4Q14 results at 10:30am CET on Wednesday 11 February 2015.
Members of the investment community can join the conference call at
+31 20 531 5865 (NL), +44 203 365 3210 (UK) or +1 866 349 6093 (US) or webcast
on www.nn-group.com.
Press conference and webcast
Lard Friese and Delfin Rueda will host a press conference to discuss the 4Q14
results and elaborate on the rebranding of the businesses in 2015. The
conference will be held at 12.30pm CET on Wednesday 11 February 2015 at NN
Group's head office, Amstelveenseweg 500, Amsterdam. The press conference will
also be webcasted live. You can join in listen-only mode on + 31 20 531 5863 or
watch the webcast on www.nn-group.com.
Financial calendar
* Publication 1Q15 results: Thursday, 7 May 2015 (provisional)
* Annual General Meeting: Thursday, 28 May 2015
* Publication 2Q15 results: Wednesday 5 August 2015 (provisional)
* Publication 3Q15 results: Wednesday 4 November 2015 (provisional)
Contact information
------------------------------- ----------------------------------
Press enquiries Investor enquiries
Ingeborg Klunder Investor Relations
+31 20 541 6526 +31 20 541 5464
mediarelations(at)nn-group.com investor.relations(at)nn-group.com
------------------------------- ----------------------------------
Additional information on www.nn-group.com
* NN Group 4Q14 Financial Supplement and NN Group 4Q14 Analyst Presentation
* Photos of NN Group executives, buildings and events are available for
download at Flickr
Important legal information
NN Group's Annual Accounts are prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS-EU").
In preparing the financial information in this document, the same accounting
principles are applied as in the NN Group N.V. condensed consolidated interim
financial information for the period ended 30 June 2014. The Annual Accounts for
2014 are in progress and may be subject to adjustments from subsequent events.
All figures in this document are unaudited. Small differences are possible in
the tables due to rounding. Certain of the statements contained herein are not
historical facts, including, without limitation, certain statements made of
future expectations and other forward-looking statements that are based on
management's current views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or events to
differ materially from those expressed or implied in such statements. Actual
results, performance or events may differ materially from those in such
statements due to, without limitation: (1) changes in general economic
conditions, in particular economic conditions in NN Group's core markets, (2)
changes in performance of financial markets, including developing markets, (3)
consequences of a potential (partial) break-up of the euro, (4) the
implementation of the EC Restructuring Plan, (5) changes in the availability of,
and costs associated with, sources of liquidity as well as conditions in the
credit markets generally, (6) the frequency and severity of insured loss events,
(7) changes affecting mortality and morbidity levels and trends, (8) changes
affecting persistency levels, (9) changes affecting interest rate levels, (10)
changes affecting currency exchange rates, (11) changes in investor, customer
and policyholder behaviour, (12) changes in general competitive factors, (13)
changes in laws and regulations, (14) changes in the policies of governments
and/or regulatory authorities, (15) conclusions with regard to accounting
assumptions and methodologies, (16) changes in ownership that could affect the
future availability to us of net operating loss, net capital and built-in loss
carry forwards, (17) changes in credit and financial strength ratings, (18) NN
Group's ability to achieve projected operational synergies and (19) the other
risks and uncertainties detailed in the Risk Factors section contained in recent
public disclosures made by NN Group and/or related to NN Group (such as the most
recent annual report of ING Groep N.V.). Any forward-looking statements made by
or on behalf of NN Group speak only as of the date they are made, and, NN Group
assumes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or for any other reason. This
document does not constitute an offer to sell, or a solicitation of an offer to
buy, any securities.
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Source: NN Group NV via GlobeNewswire
[HUG#1893418]
Unternehmensinformation / Kurzprofil:
Datum: 11.02.2015 - 07:01 Uhr
Sprache: Deutsch
News-ID 370698
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